Cost of Quality evaluation has become popular in many industries to decrease cost and maintain the quality of products and services. Cost of Quality evaluation is easier to perform in manufacturing industries compared to service industries. The cost of quality of service is more difficult and challenging to evaluate. Cost of quality has been evaluated in some service industries like the water utility. The electric utility industry is one of the more important service industries in industrialized countries where the cost of quality evaluation has not been performed. The objective of this study is to examine the major problems of cost of quality evaluation in the electric utility industry. This study presents a literature review on the major problems of cost of quality evaluation in service industries and compares it with manufacturing industries. This paper also lists the major problems of cost of quality evaluation in the electric utility industry. Copyright, American Society for Engineering Management, 2011.