The Act covers four aspects of electricity supply, democratic approval, practical problems of providing a supply (e.g. no overhead cables and don't mess with the canals), abuse of markets and ownership.
The act places the administration of the electricity supply with the local authority, which itself could also become a supplier. Before an electricity supply could be established, meetings had to be held and elected representatives had to approve. If a potential supplier could not get approval from the local authority there was a provision to seek parliamentary approval. In practice the local authority had to be involved because they were responsible for the management of the streets which had to be broken up to install cables. Local authorities had considerable freedom in the way they organised the supply. They could, subject to controls, allow a private company to provide a supply, but they were also allowed to borrow money and build power stations and create supply networks themselves. In Brighton, they first electricity company was a commercial enterprise, then the council set up in competition. In neighbouring Hove, the council opted to pass the undertaking to a private company. Where a private company had established a supply, local authorities had an option to buy it back for a fair price after 21 years. This must have been a disincentive for private investors as the Act of 1888 increased this to 42 years. Random reading of parliamentary debates suggests that there has been a distrust of commercial energy companies for at least a couple of centuries. Based on very limited research, it seems that municipal gas and electric companies were the preferred option and this is reflected in the 1882 Act. However, in giving local authorities the power to borrow, it recognised the need for private finance.
Fear of market abuse is reflected in the clauses which prevent the supplier specifying special lamps, the right of anyone living in specified area to a supply and no special deals. It also gives some protection to the supplier by defining by-passing the meter as theft of electricity and making it an offence to damage equipment. Meters and similar equipment belonged to the electricity supplier, not the consumer and could not be taken away by bailiffs.
At the same time it protects the Post Office's telegraph monopoly, power networks could not be used to transmit information. It was realised that electric lighting would eventually displace lamps. In places where it would become uneconomic for a gas company to maintain a statutory supply, there was provision for the electric company to pay compensation.
The Act is a practical document and it built on the experience of administering the gas industry by incorporating the legislation drawn up in 1847 for gas works. Even in 1882, there was a lot happening under the streets, there might be pipes for sewerage, water, gas and telegraphs and by adding some more, it was necessary to provide the freedom to move things where necessary, at the expense of the of electricity company and to provide compensation for disturbance. It was realised that overhead power lines in urban areas were a potential danger, so it was specified that local distribution must use underground cables.
The 1882 Act contributed to an energy economy which is different from that of today. In 1882 electricity was a luxury product (1 kwh cost approx. £1 in today's money) with a few well-off consumers which were supplied from generating sets which were small and inefficient, with a name plate rating of a few hundred horsepower, machinery which would not be out of place in the workshop area of a big town. As demand grew, the size of plant increased and it moved from the town centre towards the coal mines and ports. By 1948, the industry would be nationalised, this was part of a wider trend. Many institutions established in second half of the 19th century, such as schools, hospitals, electricity works etc. were administered by some form of local body, a hundred years later, central or remote control was becoming the norm (e.g. the Central Electricity Generating Board). There merits of central or local control vary according to situation. Most councils would have had something like an "electric light committee", some more able than others. This would have provided a larger pool of knowledge and experience than maybe exists today.
A link to the document is provided at the bottom of the page. Some parts are clear to the lay reader, others less so thus my comments should be treated with caution.
Link to legislation:
