To address these problems, utility companies have atttempted to diversify their operations. In general, utility companies will attempt purchase natural gas and water utilities, geographic expansion, and ancillary services. Each utility company must have a reserve margin of extra production capability to allow for maintenance, equipment outages, and unexpected variations in usage. Hotter temperatures cause customers to use their air conditioners more which subsequently causes a boost to utility company earnings. However ,colder weather tends to have a marginal impact on earnings.
Most customers use their electricity to start their heaters and oil and gas to provide heat.
This is particularily evident in northeastern cities. The power generation industry relies on different fuel sources to generate electricity. Fuel sources include coal, nuclear power, gas ,oil, and hydrelectric power. An important barometer that must be constantly measured is a utility's load factor. This metric measures actual electrical energy consumption and consumption at full peak demand level.