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Public power systems first formed in the United States more than 100 years ago, when communities created electric utilities to provide light and power to their citizens.

Although electricity in homes and businesses was first seen as a luxury, it soon came to be widely accepted as a public service to be enjoyed by all. As the use of electricity grew so did the number of utilities and by the 1920s, the public and private sectors of the industry each had more than 3,000 utilities.

Today, more than 2,000 communities in 49 states (except Hawaii) and Puerto Rico own and operate public power systems. These systems are an important part of the electric utility industry in the United States, providing an essential service at a not-for-profit rate.

Now there are 196 investor-owned utilities that serve 68 percent of all customers and 874 rural electric cooperatives that serve about 12 percent of electricity customers. The 2,000 public power systems serve about 14 percent of all customers.

Most public power entities are created by municipalities, state government or are special districts. There are also regional organizations that are formed by individual utilities called joint action agencies, which achieve efficiencies by bringing together the purchasing power of several utilities.

Operating on sound business principles, not-for-profit public power systems can provide quality and reliable service to homes and businesses for less. Lower electric rates help attract new businesses into communities and keep existing ones while reducing consumer costs and allowing citizens to spend more on other goods and services. Additionally, because public power systems are community owned, citizens have a voice in utility policies.


“Getting to Know Public Power” published by the National Energy Foundation, (1996).

“Annual Electric Power Industry Report,” US Energy Information Administration, (2010).