For most Americans, their interactions with electricity and the electric grid consist of plugging appliances into electrical sockets and paying a local utility each month for the electricity that comes out of those sockets. People do not come in contact with the power plants that generate their electricity because these massive plants have been built far from residential communities and transmit the produced electricity over long distances. Before delving into how that model may be changing, we should understand how the grid got this way in the first place.
The electric grid was built in small sections, slowly building into the behemoth of a network that crisscrosses the country today. One of the first generating stations was built in 1882 in Manhattan. The first generator served 85 customers in the local area and was used to light 400 electric lamps. It was a simple single line concept: one generator, one set of distribution lines, one set of consumers. But demand for electricity increased quickly and soon power stations were becoming too large to situate in local neighborhoods and required multiple generators and line networks to produce and transport all this electricity.
In the early days of the grid, there were no government organizations regulating the companies providing power. Private companies competed against each other for customers often setting up rival distribution lines in the same area (much like the competition among cable and Internet companies of today). Thousands of individual power companies sprang up. As these growing power corporations sought economies of scale, they continued to build bigger, more efficient power plants and increase their network of power lines. The advent of high voltage transmission lines allowed these plants to be hundreds of miles away from cities they served.
In addition to building larger power plants, around 1920, companies began to merge in order to create larger transmission and distribution networks. All of these factors drove down the cost of electricity and drove up demand. However, the large mergers also lead to monopolistic holding companies that controlled all of the power lines in some areas. In 1935 the government stepped in by issuing the Public Utility Holding Company Act, essentially ushering in the era of the regulated monopoly electric utility. One utility would supply power to each region, with oversight from local government.
At this point, the electric grid featured a large amount of individual transmission and distribution lines that had been cobbled together to create what could only very loosely be called a national network. Since the 1930s the grid has expanded where demand has grown and become the grid we know today. The U.S. grid is divided into three major sections that control the flow of electricity independent of each other: The Eastern Interconnection (broken up further into individual controlling organizations), the Western Interconnection, and the Texas (or ERCOT) Interconnection.
While many people imagine the electric grid like the interstate system (completely connecting every state to the entire country), the grid cannot transmit electrons generated in California across the country to New York. In fact there are almost no connections between the states west of the Rocky mountains to those in the East. Lack of ubiquitous interconnection has led to problems in maintaining a stable and economical supply of electricity.
One recent example was during the California energy crisis of the early 2000s. In 2000, with a growing population, California’s electricity demand rose beyond the capacity of local power plants, requiring large amounts of power to be purchased from Oregon and Washington. However, there was only a single transmission line that could bring that power from the Northwest into California, the Path 15. While the line should have been able to handle the large amounts of power flowing south, energy companies in control of the line manipulated the electricity markets to drive up the price electricity flowing through the interconnect causing California utilities and government to rack up billions of dollars in debt, while rolling blackouts covered the region. Ultimately market manipulation by companies like Enron (one of many unethical practices by that company) was the main cause of trouble, but inability to transfer power between cities and states shows the weakness of the current electric grid.
The major reason the grid is not thoroughly connected is because it continues to be built by individual entities without the large federal backing the interstate highway system received. In an attempt to help spur activity, Congress passed the Public Utility Regulatory Policies Act of 1978 (which began allowing non-utility power producers) and the Energy Policy Act of 1992 (which started real deregulation of the energy markets). These acts were meant to alter the electricity market from a regulated monopoly toward more of a free market, where many companies could sell power, and customers would determine the market.
In conjunction with the Energy Policy Act of 1992, a series of Independent System Operator (ISO) organization were created to essentially manage the new electricity market. It was hoped that these ISOs would help maintain and build an even better grid. However, many states chose not to adopt deregulation or only adopt partial deregulation. As a consequence, many of the hopes from the Energy Policy Act have yet to be realized, because it was never implemented to fruition.
For all the changes the grid has gone through in the last 140 years, it looks very similar to its 19th-century predecessors, and while many people continue to champion a unified integrated solution to solving our country’s electrical needs, the grid remains a loosely connected network that operates on much more of a, regional, than national level. That may soon change, in several ways.
We’ll explore these changes in The Future of Electricity Part 2: Shrinking generation and Part 3: Microgrids.
