for-profit corporations that were given legal rights to be the exclusive provider of electricity in a specified geographic area. In exchange for these franchise rights, the utility typically agreed to (1) pay franchise taxes based on assets in place within the area and (2) serve all customers reliably at a reasonable cost. In most jurisdictions these franchises are exclusive, thereby granting a monopoly status to the supplier, but in some states it is possible to grant multiple franchises to serve the same location.

After World War II, the process of interconnection and integration continued—leading to extensive integrated systems and large regional interconnections between electrical zones. The combination of economies of scale in generation, achieved by building larger units that were frequently grouped in larger power stations, with scale economies in transmission, gained through the use of higher transmission voltages, that facilitated this integration and allowed the delivery of large amounts of power over great distances at low cost. These cost reductions spurred demand and provided a ready market for the increased supply capacity, thus setting the stage for the next wave of cost-reducing innovation. Thus it frequently proved economical to locate large generating plants close to fuel sources, rather than transport fuel to generators located near customers. This trend was facilitated also by the lower land costs and easier approvals to locate power plants in rural areas. But it was the large interconnected systems that made possible these economies of scale in providing both energy and reliability. Thus, over time very large power markets and huge interconnected regions have developed in the United States and elsewhere in North America.


Overview Description

The power delivery system includes four components: (1) the grid, or high-voltage transmission system that connects the bulk power generation system with the distribution systems; (2) the distribution system, which delivers power to consumers (or electrical “loads”); (3) the operations system, which handles interconnections; and (4) the customers or consumers. (Some large industrial consumers are connected directly to the grid.) In North America, the system contains more than 200,000 miles of lines operating above 230 kV serving over 120 million customers and nearly 300 million people.

Electricity is generated at 13 to 25 kV from a variety of energy sources. Most U.S. electricity is generated from coal, nuclear energy, natural gas, and hydro power; but recently wind generation has been growing rapidly.

Alternating current (AC) circuits predominate in the U.S. power delivery system. AC circuits allow the use of transformers to step up voltage to a higher level for economical transmission with small losses and to step the voltage down for distribution to consumers. U.S. transmission voltages are typically 115, 230, 345, or 500 kV. Voltages of 765 kV and higher are considered extra-high voltage (EHV). In most regions of the United States, 230-500 kV systems are the backbone of the U.S. electricity grid, although in some areas, lines with voltages up to 765 kV are employed.

Prior to the 1960s, the loosely connected, cohesive electrical zones offered modest reliability at a reasonable cost to the nation's consumers. But following a massive blackout in the Northeast in 1965, an increasing concern evolved among policy makers and industry executives alike about the power system's reliability. In response, the electric utility industry voluntarily formed regional reliability organizations to coordinate activities related to the transmission system's performance, most notably the North American Electric Reliability Council (NERC). Reliability is now administered by over 100 control area operators in North America and coordinated by regional reliability organizations (RROs) as members of NERC, which has established operating and planning standards based on seven concepts:

•  Keep generation and demand in balance continuously.

•  Balance reactive power supply (necessary to maintain system voltage) and demand.

•  Monitor flows over grid circuits.

•  Maintain system stability.

•  Operate the system so it is able to sustain stability even if one component fails.

•  Plan, design, and maintain the system to operate reliably.

•  Prepare for emergencies.

Controlling the dynamic behavior of interconnected electricity systems presents a great engineering and operational challenge. Demand for electricity is constantly changing as millions of consumers turn on and off appliances and industrial equipment. The generation and demand for electricity must be balanced over large regions to ensure that voltage and frequency are maintained within narrow limits (usually 59.98 to 60.02 Hz). If not enough generation is available, the frequency will decrease to a value less than 60 Hz; when there is too much generation, the frequency will increase to above 60 Hz. If voltage or frequency strays too far from its prescribed level, the resulting stresses can damage power systems and users” equipment, and may cause larger system outages.

A variety of techniques and processes are used to keep the system safe—such as sensors, circuit breakers, and relays—to ensure that component failures and electrical faults are quickly isolated. If protection systems are poorly designed or do not operate properly, faults or equipment failures can cause outages and may cascade or propagate into blackouts. Once an overloaded circuit or transformer in the system either fails or is intentionally removed from service, the power flows through other available circuits in proportion to

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