U.S. Electric Power Industry - Context and Structure
U.S. Electric Power Industry - Context and Structure Authored by Analysis Group for Advanced Energy Economy November 2011 Industry Organization The electric industry across the United States contains Figure 1 significant variations from the perspectives of structure, A History of the U.S. Electric Industry organization, physical infrastructure characteristics, 1870 cost/price drivers, and regulatory oversight. The variation stems from a mix of geographical influences, population Thomas Edison demonstrates the electric light bulb and generator and industry make up, and the evolution of federal and 1880 state energy law and policy. Edison launches Pearl Street station, the first modern electricity generation station th In the early part of the 20 century, the electric industry 1890 evolved quickly through the creation, growth and Development begins on the Niagra Falls hydroelectric project consolidation of vertically-integrated utilities – that is, Samuel Insull suggests the utility industry is a natural companies that own and operate all of the power plants, 1900 monopoly - electric industry starts to become vertically transmission lines, and distribution systems that generate integrated and deliver power to ultimate customers. At the same Wisconsin enacts first private utility regulation and 30 states time, efficiency of electricity generation dramatically follow suit shortly thereafter 1910 improved, encouraging growth, consolidation of the industry, and expansion into more and more cities, and The Federal Power Act created the Federal Power Commission across a wider geographic area. Over time, consolidated (now FERC) utilities were granted monopoly franchises with exclusive 1920 service territories by states, in exchange for an obligation to serve customers within that territory at rates for service 1 1930 based on state-regulated, cost-of-service ratemaking.
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