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The US Electric Power Industry

Little more than a century ago, there were no motors, lightbulbs, refrigerators, air conditioners, or any of the other electrical marvels that we think of as being so essential today. Indeed, around 750 million people around the globe still live without the benefits of such basic energy services (IEA et al. 2021). The electric power industry has since grown to be one of the largest enterprises in the world—but also one of the most polluting.

In 2021, power generation accounted for 40% of all energy‐related carbon dioxide (CO2) emissions on the planet (IEA 2022), contributing to the challenge of climate change. In the United States, the sector is associated with one‐third of such emissions. Over the years, pollution controls have reduced other air pollutants, but domestically, they are still responsible for 40% of sulfur dioxide (SO2) emissions, 10% of nitrogen oxides (NOx) emissions, and the release of many toxic heavy metals, including mercury (EPA 2020, 2022a,b,c). However, the use of renewable energy has been rapidly growing, achieving more than a 20% share of electricity in the United States (EIA 2022a) and nearly 29% globally (IEA 2022), engendering hopes for a more climate‐friendly future.

The electricity infrastructure providing power to North America includes over 200,000 miles (∼322,000 km) of high‐voltage transmission lines, along with 1,374,000 MW of U.S. generating capacity to serve a customer base of nearly 400 million people spanning in the United States and parts of Canada and Mexico (EIA 2021a, NERC 2022a). While its cost has been staggering—over $1 trillion, including additional tens of billions of dollars authorized by infrastructure legislation in 2021—its value is incalculable. Providing reliable electricity is a complex technical challenge that requires real‐time control and coordination of thousands of power plants to move electricity across a vast network of transmission lines and distribution networks to exactly meet the constantly varying power demands of those customers.

Though this book is concerned with renewable and efficient alternatives to the large, centralized power systems that rely on fossil‐fuel combustion, we must first understand how conventional systems work. This chapter explores the history of the electric utility industry, the basic systems that provide the generation, transmission, and distribution of electric power, and some of the regulatory issues that govern the buying and selling of electric power.

1.1 Electromagnetism: The Technology Behind Electric Power

In the early nineteenth century, scientists such as Hans Christian Oersted, James Clerk Maxwell, and Michael Faraday began to explore the wonders of electromagnetism. Their explanations of how electricity and magnetism interact made possible the development of electric motors and generators—inventions that have transformed the world.

Early experiments demonstrated that a voltage (originally called an electromotive force, or emf) could be created in an electrical conductor by moving it through a magnetic field, as shown in Figure 1.1a. The opposite effect was also observed; that is, if current flows through a wire located in a magnetic field, the wire will experience a force that wants to move the wire as shown in Figure 1.1b. This is the fundamental principle by which electric motors are able to convert electric current into mechanical power.

Note the inherent symmetry of the two key electromagnetic phenomena: moving a wire through a magnetic field causes a current to flow while sending a current through a wire in a magnetic field creates a force that wants to move the wire. A single device can thus be built that could act as a generator if you applied force to it, or act as a motor if you put current into it. For example, the electric motor in today's hybrid electric vehicles does exactly that. In normal operation, the electric motor powers the car, but when the brakes are engaged, the motor acts as a generator, slowing the car by converting the vehicle's kinetic energy into electrical current that recharges the vehicle's battery system.

Figure 1.1 Moving a conductor through a magnetic field creates a voltage (a). Sending current through a wire located in a magnetic field creates a force (b).

Figure 1.2 Gramme's “electromotor” could operate as a motor or as a generator.

A key to the development of electromechanical machines, such as motors and generators, was finding a way to create the required magnetic field. The first electromagnet is credited to the British inventor William Sturgeon, who in 1825 demonstrated that a magnetic field could be created by sending current through a number of turns of wire wrapped around a horseshoe‐shaped piece of iron.

The first practical direct current (DC) motor/generator, called a dynamo, was developed by a Belgian engineer, Zénobe Gramme. His device, shown in Figure 1.2, consisted of a ring of iron (the armature) wrapped with wire, which was set up to spin within a stationary magnetic field. The magnetic field was based on Sturgeon's electromagnet. The key to Gramme's invention was his method of delivering DC current to and from the armature using contacts (called a commutator) that rubbed against the rotating armature windings. Gramme startled the world with his machines at the Vienna World's Fair in 1873. Using one dynamo to generate electricity, he was able to power another, operating as a motor, three quarters of a mile (1.2 km) away. The potential to generate power at one location and then transmit it through wires to a distant location, where it could do useful work, stimulated imaginations everywhere. An enthusiastic American writer, Henry Adams, in a 1900 essay called “The Dynamo and the Virgin” even proclaimed the dynamo as “a moral force” comparable to European cathedrals.

1.2 The Early Battle Between Edison and Westinghouse

While motors and generators quickly found application in factories, the first major electric power market developed around the need for illumination. Although many others had worked on the concept of electrically heating a filament to create light, it was Thomas Alva Edison who created the first workable incandescent lamp in 1879. He soon launched the Edison Electric Illuminating Company, a full‐service company that provided the electricity and the lightbulbs themselves. In 1882, his company's Pearl Street Station in Manhattan went into operation as the first commercial power plant in the United States, to power lights as well as electric motors.

Edison's system was based on DC electricity, which he preferred because it provided flicker‐free light and also enabled easier speed control of DC motors. The downside of DC, however, was that in those days, it was very difficult to change the voltage from one level to another. DC electricity was transmitted at low voltages, so Edison's customers had to be located within just a mile or two of a generating station. In contrast, after the invention of the transformer in 1883, changing voltages was simple to do with alternating current (AC) electricity. Later, we will show how power line losses are proportional to the square of the current flowing through them, whereas the power delivered is the product of current and voltage. By doubling the voltage, the same power can be delivered using half the current, which cuts power line losses by a factor of four.

George Westinghouse recognized the advantages of AC for transmitting power over greater distances and, utilizing AC technologies developed by Nicola Tesla, launched the Westinghouse Electric Company in 1886. Within just a few years, Westinghouse was making significant inroads into Edison's electricity market, and a bizarre feud developed between these two industry giants. Rather than hedge his losses by developing a competing AC technology, Edison stuck with DC and launched a campaign to discredit AC, condemning its high voltages as a safety hazard. To make the point, Edison and his assistant, Samuel Insull, began demonstrating its lethality by coaxing animals, such as dogs, cats, calves, and even a horse, onto a metal plate wired to a 1000‐V AC generator and then electrocuting them in front of the local press (Penrose 1994). Edison and other proponents of DC continued the campaign by promoting the idea that capital punishment by hanging was horrific, and could be replaced by a new, more humane approach based on electrocution. The result was the development of the electric chair, which claimed its first victim in 1890 in Buffalo, New York.

However, the advantages of high‐voltage transmission were overwhelming. The first transmission line in the United States went into operation in 1889, connecting a hydroelectric station on the Willamette River in Oregon to the city of Portland 14 miles (22.5 km) away using DC transmission at 4000 V (4 kV). After an 1890 flood, the power station switched to experimental AC generators from Westinghouse (Willamette Falls Heritage Foundation 2008). Another important demonstration using AC electricity to deliver power over large distances occurred in 1891 when a 109‐mile (175 km), 30,000‐V transmission line carried 75 kW...