ACE Class Report # 79: Economic Theory Part 3.
Begin: 8/27/2024
Finish: 10/17/2024
Title: Economic Theory Part 3
Instructor: Farhad Nafeiy
Why I choose to take this class:
To learn more about economy. Basic understanding about economic theory will help me understand about the business world, improve my analytical and critical thinking skills. In this section we will look at public utilities and monopoly business.
What I learned from this class:
Public Utility:
Is a company that provides an essential service to the public. Public utilities include firms that offer electric power, natural gas, telephone, telegraph, water, sewerage. Airlines, bus lines, railroad and other transportation systems are also public utilities. Most public utilities are privately owner, in other countries they are owned by the government. Government ownership in US is chiefly in the local level, cities, towns and counties own most airport and transit, sewerage disposal and water supply systems. Most public utilities enjoy protection from competition. A protected utility often can provide a service more efficiently and at a lower price than could several companies competing with each other. Competition may result in higher prices because each competing company may have to buy same type of expensive equipment while serving fewer customers than would be served by a single protected company.
Government Regulation:
Public utilities that enjoy protection from competition must be regulated to ensure they charge reasonable rates and provide adequate service to the public. Utilities have certain rights. They are entitled to rates that covers their operating costs an yield a reasonable profit. Utilities are regulated by commission primarily at the state and federal levels.
Source of Electric Power:
Source of electric power generation: coal fire, nuclear, geothermal, biodiesel. These plants use steam to generate electric power, the steam passed through a steam turbine, which turns a rotor to generate electricity. Hydroelectric power plan use water pressure to turn the water turbine to generate electricity. Other sources include: wind turbine, ocean tides and solar power.
Transmitting and Distributing Electric Power:
Electric power generated by power plants usually is transmitted too nearby cities and other areas. From this area it is distributed to near by homes. The electric distribution is called a power grid. A power plant produce power up to 22,000 volts and they use a step-up-transformer to boost the voltage to 765,000 volts for transmission. As electric current moves along transmission line, the line resist the current flow. The resistance cause the current to lose energy by heating the lines. Power plant limit energy loss by transmitting electric power at high voltage.
Distribution:
Some large industries require high voltage current and receive it directly from transmission lines. But high-voltage is unsafe in homes, offices and most factories. The voltage must therefor be decreased before electric power is distributed to them. High voltage electric current is carried by the transmission lines to sub transmission substation, these substations have step -down transformer to reduce the voltage down. The voltage is then further reduced at distribution substation. Distribution lines carry electric power to distribution transformer on poles. Distribution transformer reduce the voltage to the levels needed by most users. Wire from the transformers run to homes, stores, offices and other users. There is a high capital cost to build the generation plant, transmission and distribution infrastructure, thus the protection given to public utilities.
Deregulation:
In the US, generation of electric power has been partially deregulated. Independent power producers generate and supply wholesale to utilities, so do individual home owner with solar panels on their roof top. Electric power company rely on computerized control system. Power lines are interconnected among electric company. The advent of alternate energy especially solar has changed the distribution of energy. Other public utilities have been deregulated. The 70′ and 80’s – deregulation of railroad, airlines, trucking, natural gas and telephone. 1990 deregulation in electricity has increased competition among providers of electric power.
How will this class contribute to my success upon release:
This class improves my analytical and critical thinking skills. It taught me a lot about public utilities and the protection by government to ensure a fair rate and an adequate level of service to the public. This information will be shared with communities which I hope to volunteer my teaching, tutoring and mentoring services.
