Public Services: Introduction
Segments
Electric Power Distribution
Companies in this segment generate, transmit, and distribute electric power. Major services include electric power transmission, control, and distribution.
Natural Gas Distribution
Companies in this segment operate gas distribution systems, buy gas from the well and sell it to a distribution system, arrange the sale of gas over distribution systems operated by others, and transmit and distribute gas to final consumers.
Public Education
Regulated by the government and paid for partially or in whole by taxation, this segment generally includes primary or secondary schools which are mandated to all children.
Transportation Services
Companies in this segment provide air, rail, truck, and waterborne transportation.
Waste Management
Companies in this segment collect, treat, and dispose of garbage and other waste materials. They also recover reusable materials through recycling operations and provide remediation services.
Water and Sewer Utilities
Companies in this segment operate water treatment and water supply systems as well as sewer systems and treatment facilities.
The Public Services industry is Fragmented. The production in this industry is divided among a few different companies, however, no single firm has large enough share of the market to be able to influence the industry's direction or price levels.
Primary Demand Drivers
- Commercial, industrial, and residential needs, which are related to population growth and to the level of economic activity
- The ability of business and government agencies to comply with and accurately predict cleanup costs
- Ability to secure contracts with large organizations
Profitability Drivers
- Efficiency of operations, because prices are fixed by public utility commissions
- Government regulations
- Fuel costs
- Favorable labor costs
From the Blog 
Pensions have become an increasingly talked about topic of late. With bankruptcies of cities, and most notably of Detroit, it is unsure whether people who worked their entire lives with the promise of a retirement will actually receive such. The trick with pensions is how does a company or city adequately plan for retirement costs decades into the future?
Last week, the City of Detroit became the largest city to file for bankruptcy in the history of the United States. The once vibrant city, whose roots came from automobiles and music, fell-victim to its financial situation, which includes between $18 to $20 billion in debt. Along with a large amount of debt, Detroit has encountered problems with underfunded pensions, diminishing population, and poor public services. As a result of the bankruptcy, Detroit could experience large legal fees and cuts in its public services and bondholders will be left with pennies on the dollar. Is Detroit just the tip of the iceberg for cities that may file for bankruptcy?
Sources
- PricewaterhouseCoopers (Date Accessed: 6/1/2017)