Utilities have taken a beating this year. The normally lower-volatility stocks have been the opposite. They've plunged by 20% on average, with half that decline coming in the past week.

Surging long-term interest rates have weighed heavily on the sector. That's because utilities tend to borrow lots of money to fund their capital programs. Furthermore, they've lost value because lower-risk income investments like government bonds now offer higher yields. Investors now demand higher yields from utilities to compensate them for their higher risk profiles. 

A silver lining to the sell-off in the utility sector is that several high-quality companies now trade at much lower valuations. That makes them look like bargain buys for long-term investors.

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Source Fool.com