Public Utilities, Second Edition

Public Utilities, Second Edition

Old Problems, New Challenges

David E. McNabb

A thoroughly updated introduction to the current issues and challenges facing managers and administrators in the investor and publicly owned utility industry, this engaging volume addresses management concerns in five sectors of the utility industry: electric power, natural gas, water, wastewater systems and public transit.

Chapter 11: Public utility marketing

David E. McNabb

Subjects: economics and finance, public sector economics, politics and public policy, public policy


This chapter describes the changes that have occurred in the marketing of public utilities since the big environmental protection movement that began in the 1960s. The marketing function in public utilities occurs at two levels: wholesale and retail. At the retail level, utilities divide their customers into three broad classes: residential, commercial, and industrial. The average of the service demands by all customers in each of three classes of customers over a given period is the utility’s average or base service load. The utility must be prepared to meet all average load requirements—and maintain a reserve for contingencies. Utility wholesaling is the sale of the electricity, gas, or water in bulk to a down-channel organization that will then resell the product on to another channel member or to final customers. Utility retail marketing refers to the activities involved in facilitating the sale of utility products and services to customers who actually use the product.

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