Are Power Companies Private? Ownership of Electricity Companies

Electricity is delivered by private, for-profit companies owned by investors for 70 percent of the country. The other 30 percent are served by customer-owned utilities. The US grid is a complex network of over 7,300 power plants and transformers connected by over 450,000 miles of transmission lines, serving 145 million customers. Having two companies with their own lines would lead to near doubling of price. In most countries, grids are state owned but in the US, it is nearly all privately owned.

Profit Margin and Business Models

The average profit margin in the utility sector was 10.41 percent in the first quarter of 2021. A government corporation does not have shareholders whereas a private corporation does. With a buyout, external acquirers purchase shares. Private companies have boards with shareholders profiting.

Power generation cost is at least 3 cents per kilowatt-hour, but consumers are charged less than 1 cent per kilowatt-hour. Low tariffs and currency market volatility have put producers under pressure. Producers who borrowed from the National Development Fund of Iran to build plants are unable to settle their debts.