A utility owned by private investors, as opposed to one owned by a public trust or agency; a commercial, for-profit utility as opposed to a co-op or municipal utility. IOU is rarely used in the energy industry to refer to a promissory note, and utility by itself typically refers to a public utility.
While IOUs comprise only a small minority of the total number of utility companies in the US, they serve more than two-thirds of the US population. IOUs are usually subject to different regulations than publicly-owned utilities and co-ops, and they pay taxes as corporate citizens.
The term may become less common in the near future, as recent energy industry research suggests that a more appropriate term would be private power company.
See also:holding company, public utility, co-op