Electricity sector of the United States

Main article: Energy in the United States

See also: Energy policy of the United States

United States electricity generation by fuel

The electricity sector of the United States includes a large array of stakeholders that provide services through electricity generation, transmission, distribution and marketing for industrial, commercial, public and residential customers. It also includes many public institutions that regulate the sector. In 1996, there were 3,195 electric utilities in the United States, of which fewer than a 1,000 were engaged in power generation. This leaves a large number of mostly smaller utilities engaged only in power distribution. There were also 65 power marketers. Of all utilities, 2,020 were publicly owned (including 10 Federal utilities), 932 were rural electric cooperatives, and 243 were investor-owned utilities. The electricity transmission network is not owned by individual utilities, but by Independent System Operators or Regional Transmission Organizations, which are not-for-profit organizations that are obliged to provide indiscriminate access to various suppliers in order to promote competition. They are associated in the North American Electric Reliability Corporation and are typically jointly owned by the utilities in their service area.

The four above-mentioned market segments of the U.S. electricity sector are regulated by different public institutions with some functional overlaps: The federal government sets general policies through the Department of Energy, environmental policy through the Environmental Protection Agency and consumer protection policy through the Federal Trade Commission. The safety of nuclear power plants is overseen by the Nuclear Regulatory Commission. Economic regulation of the distribution segment is a state responsibility, usually carried out through Public Utilities Commissions; the inter-state transmission segment is regulated by the federal government through the Federal Energy Regulatory Commission.

Sources of electricity in the U.S. in 2011 fossil fuel generation (mainly coal) was the largest source.

Of the electricity generated in the United States in 2006, 70% was produced from fossil fuels (mainly coal and natural gas), almost 20% came from nuclear power, 7% from hydropower and 3% from other forms of renewable energy such as wind and solar energy. The share of renewable energy, in particular wind and solar energy, has increased substantially since 2006 and is expected to increase further.

In 2008 the average electricity tariff in the U.S. was 9.82 Cents/kilowatt-hour (kWh). In 2006-07 electricity tariffs in the U.S. were higher than in Australia, Canada, France, Sweden and Finland, but lower than in Germany, Italy, Spain and the UK. Residential tariffs vary significantly between states from 6.7 Cents/kWh in West Virginia to 24.1 Cents/kWh in Hawaii. The average residential bill in 2007 was US$ 100/month. Most investments in the U.S. electricity sector are financed by private companies through debt and equity. However, some investments are indirectly financed by taxpayers through various subsidies ranging from tax incentives to subsidies for research and development, feed-in tariffs for renewable energy and support to low-income households to pay their electric bills.

Electricity consumption

Electricity consumption per person (per capita) is based upon data mined from US DOE Energy Information Administration/Electric Power Annual 2011 files Data was obtained from the most recent DOE Energy Information Agency (EIA) files. Population data is from Demographics of the United States. Per capita consumption in 2011 is essentially the same as in 2001.

Yearly US Per capita Consumption (kWh) by Fuel Source 1999-2011

Year	Population(M)	Fossil Fuel				Nuclear	Renewable							Misc	Total
		Coal	Oil	Gas	sub total		Hydro	Geo Thermal	Solar	Wind	Wood	Bio other	sub Total
2011	313.85	5,523	96	3,267	8,886	2,518	1,018	49	6	383	119	61	1,636	147	13,187
2010	309.33	5,972	120	3,230	9,321	2,609	841	49	3.9	306	120	61	1,382	108	13,419
2009	307.01	5,719	127	3,034	8,881	2,602	891	49	2.9	241	117	60	1,361	135	12,978
2008	304.38	6,524	152	2,939	9,616	2,649	837	49	2.8	182	123	58	1,252	126	13,642
2007	301.58	6,686	218	3,018	9,922	2,674	821	49	2.0	114	129	55	1,170	121	13,887
2006	298.59	6,666	215	2,782	9,663	2,636	969	49	1.7	89	130	54	1,292	83	13,675
2005	295.75	6,806	413	2,618	9,838	2,644	914	50	1.9	60	131	52	1,209	105	13,796
2004	293.05	6,751	413	2,475	9,639	2,691	916	51	2.0	48	130	53	1,199	58	13,588
2003	290.33	6,798	411	2,292	9,502	2,631	950	50	1.8	39	129	54	1,224	41	13,397
2002	287.80	6,717	329	2,441	9,486	2,710	918	50	1.9	36	134	52	1,193	90	13,479
2001	285.08	6,679	438	2,274	9,390	2,697	761	48	1.9	24	123	51	1,009	88	13,185
2000	282.17	6,968	394	2,179	9,542	2,672	977	50	1.7	20	133	82	1,263	117	13,594
1999	279.04	6,741	423	2,045	9,209	2,610	1,145	53	1.8	16	133	81	1,430	96	13,345

1. Gas includes Natural Gas and Other Gases.
2. Solar includes Photovoltaics and Thermal.
3. Misc includes Misc generation, Pumped storage, and Net imports.
4. Bio Other includes Waste, Landfill Gas, and Other.
5. Hydro excludes pumped storage (not an energy source, used by all sources, other than hydro).
6. Total includes Net imports.

Electricity generation

  coal, oil, natural gas

  nuclear

  hydroelectric

  Other renewables

In 2011 the total installed electricity generation summer capacity in the United States was 1,050.9 Gigawatts. The main energy sources for electricity generation include:

• Thermal/Fossil 786 GW
• Nuclear 101 GW
• Hydropower 79 GW
• Wind 46 GW

Actual USA electricity generation in 2011 of 4,100.7 Terawatt hours. The USA also imported 52 Terawatt hours and exported 15 Terawatt hours making a total of 4138.7 Terawatt hours for consumption. Electricity generation was primarily from the following sources:

• Thermal/Fossil 2,789 TWh
• Nuclear 790 TWh
• Hydropower 319 TWh
• Other renewables 194 TWh (including landfill gas, geothermal energy, solar and wind)

The share of coal and nuclear in power generation is much higher than their share in installed capacity, because coal and nuclear plants provide base load and thus are running longer hours than natural gas and petroleum plants which typically provide peak load, or than wind turbines or solar plants that cannot produce electricity continuously.

Yearly Electric Energy (B KWh (or Twh) per year) by Fuel Source

Year	Fossil Fuel				Nuclear	Renewable							Misc	Total
	Coal	Oil	Gas	sub total		Hydro	Geo Thermal	Solar	Wind	Wood	Bio other	sub Total
2012	1,517.2	22.9	1,241.9	2,788.9	769.3	276.5	16.8	4.34	140.1	?	?	?	?	4054.5
2011	1,733.4	30.2	1,025.3	2,788.9	790.2	319.4	15.3	1.82	120.2	37.4	19.2	513.32	46	4138.4
2010	1,847.3	37.1	999.0	2,883.4	807.0	260.2	15.2	1.21	94.7	37.2	18.9	427.4	33.3	4,151.0
Proportion	44.5%	0.9%	24.1%	69.5%	19.4%	6.3%	0.37%	0.029%	2.3%	0.9%	0.5%	10.3%	0.8%	100.0%
2009	1,755.9	38.9	931.6	2,726.5	798.9	273.4	15.0	0.89	73.9	36.1	18.4	417.7	41.4	3,984.4
2008	1,985.8	46.2	894.7	2,926.7	806.2	254.8	14.8	0.86	55.4	37.3	17.7	380.9	38.3	4,152.2
2007	2,016.5	65.7	910.0	2,992.2	806.4	247.5	14.6	0.61	34.5	39.0	16.5	352.7	36.6	4,188.0
2000	1,966	111	615	2,692	754	260	14	0.49	5.6	37.6	23	318.7	38.6	3,836
Proportion	51.3%	2.9%	16.0%	70.2%	19.7%	7.2%	0.37%	0.013%	0.15%	1.0%	0.6%	9.3%	0.9%	100.0%
1999	1,881	118	57l	2,570	728	319.5	14.8	0.50	4.5	37	22.6	392.8	55	3,723.8

1. Gas includes Natural Gas and Other Gases.
2. Solar includes Photovoltaics and Thermal.
3. Misc includes Misc generation, Pumped storage, and Net imports.
4. Bio Other includes Waste, Landfill Gas, and Other.
5. Hydro excludes pumped storage (not an energy source, used by all sources, other than hydro).
6. Total includes Net imports.

The following tables summarize the electrical energy generated by fuel source for the USA. Data was mined from Electric Power Annual 2011].

Electrical Production in the United States for 2011

Power Source	Plants	Power Capacity (GWe)	% of total Capacity	Capacity factor	Annual Energy (billion kWh)	% of annual production
Coal	589	317.6	30.2	0.623	1,733	41.9
Nat Gas	1,687	417.1	39.7	0.281	1025	24.8
Nuclear	66	101.4	9.7	0.889	790	19.1
Hydro	1,436	78.7	7.5	0.463	319	7.7
Renewables	1,582	64.3	5.8	0.362	194	4.7
Petroleum	1,145	51.2	4.9	0.069	31	0.7
Misc	94	23.7	2.2	0.041	8	0.2
Import					38	0.9
Total	18,528	1050.9	100	0.449	4,138	100

Coal and Gas

See also: Coal power in the United States

Fossil fuels – mainly coal and natural gas – remain the backbone of electricity generation in the U.S., accounting for 68% of installed generation capacity in 2010.

In 2007 the Department of Energy estimated the planned additional capacity for 2008-12 at 92 GW, most of which to be fueled by natural gas (48 GW) and coal (19GW).

Nuclear power

See also: Nuclear power in the United States

As of 2007 in the United States, there are 104 commercial nuclear reactors in the US, generating approximately 20% of the nation's total electric energy consumption. For many years, no new nuclear plants have been built in the US. However, since 2005 there has been a renewed interest in nuclear power in the US. This has been facilitated in part by the federal government with the Nuclear Power 2010 Program of 2002. and the Energy Policy Act. As of March 9, 2009, the U.S. Nuclear Regulatory Commission had received applications for permission to construct 26 new nuclear power reactors

Renewable energy

See also: Renewable energy in the United States, Solar power in the United States, Wind power in the United States, List of reservoirs and dams in the United States, and Category:Hydroelectric power plants in the United States

Electrical Production by Renewables in 2011

Power Source	Plants	Power Capacity (GW)	% of total Capacity	Capacity Factor	Annual Energy (billion kWh)	% of annual production
Hydro	1,434	78.7	7.5	0.463	319.4	7.7
Wind		45.7	4.3	0.30	120.2	2.9
Wood		7	0.7	0.6	37.5	0.9
Biomass		4.5	0.4	0.48	19.2	0.46
GeoThermal		2.4	0.2	0.73	15.3	0.37
Solar		1.5	0.15	0.14	1.8	0.04
Total	3016	139.9	13.3	0.419	513	12.4

The development of renewable energy and energy efficiency marks "a new era of energy exploration" in the United States, according to President Barack Obama. In a joint address to the Congress on February 24, 2009, President Obama called for doubling renewable energy within the next three years.

Renewable energy accounted for more than 10 percent of the domestically-produced energy used in the United States in the first half of 2008, consisting mainly of large hydropower. According to a report by the Interior Department, U.S. wind power – including off-shore turbines – could more than meet U.S. electricity needs. The Department of Energy has said wind power could generate 20% of US electricity by 2030.

Several solar thermal power stations, including the new 64 MW Nevada Solar One, have also been built. The largest of these solar thermal power stations is the SEGS group of plants in the Mojave Desert with a total generating capacity of 354 MW, making the system the largest solar plant of any kind in the world. The largest solar photovoltaic plant in the U.S. is the 14 MW Nellis Solar Power Plant, located near Las Vegas, Nevada, which is expected to produce more than 30 million kWh/year for Nellis Air Force Base.

Energy efficiency and conservation

The federal government promotes energy efficiency through the Energy Star program. The Alliance to Save Energy, an industry group, also promotes energy efficiency.

Responsibilities in the electricity sector

Policy and regulation

Policy. Policy for the electricity sector in the United States is set by the executive and legislative bodies of the federal government and state governments. Within the executive branch of the federal government the Department of Energy plays a key role. In addition, the Environmental Protection Agency is in charge of environmental regulation and the Federal Trade Commission is in charge of consumer protection and the prevention of anti-competitive practices.

Key federal legislation related to the electricity sector includes:

• the Federal Power Act of 1935 that promoted hydropower and increased the role of the federal government in the sector,
• the National Energy Act of 1978, including the Public Utility Regulatory Policies Act (PURPA), which required utilities to provide residential consumers with energy conservation audits and other services to encourage slower growth of electricity demand, and was intended to promote renewable energy with the result of promoting mainly co-generation;
• the Energy Policy Act of 1992 which provided further incentives for energy efficiency and removed obstacles to wholesale competition; and
• the Energy Independence and Security Act of 2007 which phased out incandescent light bulbs.

Many state governments have been active in promoting renewable energy. For example, in 2007 25 states and the District of Columbia had established renewable portfolio standards (RPS). There is no federal policy on RPS.

See also: List of United States Energy Acts

Regulation. The Federal Energy Regulatory Commission is in charge of regulating interstate electricity sales, wholesale electric rates, and licensing hydropower plants. Rates for electricity distribution are regulated by state-level Public Utilities Commissions or Public Services Commissions.

See also: Category:Public utilities commissions of the United States

Deregulation and competition

Deregulation of the electricity sector consists in the introduction of competition and the unbundling of vertically integrated utilities in separate entities in charge of electricity generation, electricity transmission, electricity distribution and commercialization. The deregulation of the electricity sector in the U.S. began with the Energy Policy Act of 1992 which removed obstacles for wholesale competition. In practice, however, regulation has been unevenly introduced between states. It began in earnest only from 1996 onwards when the Federal Energy Regulatory Commission issued orders that required utilities to provide transmission services "on a reasonable and non-discriminatory basis". In some states, such as in California, private utilities were required to sell some of their power plants to prevent concentration of market power.

By 2008 only about a dozen states had deregulated their electricity markets introducing competition for industrial and commercial customers, as well as for residential customers served by private utilities.^{[citation needed]} The Deregulation of the Texas electricity market in 2002 is one of the best known examples.

Service provision

Electric utilities in the U.S. can be both in charge of electricity generation and electricity distribution. The electricity transmission network is not owned by individual utilities, but by companies and organizations that are obliged to provide indiscriminate access to various suppliers in order to promote competition. In 1996, there were 3,195 electric utilities in the United States and 65 power marketers. Of these, 2,020 were publicly owned (including 10 Federal utilities), 932 were rural electric cooperatives, and 243 were investor-owned utilities. Fewer than 1,000 utilities are engaged in power generation.

See also: List of United States electric companies

Generation

About 80% of the electricity in the U.S. is generated by private ("investor-owned") utilities. The remaining electricity is produced by federal agencies such as the Tennessee Valley Authority (producing mainly nuclear and hydropower), the Bonneville Power Administration (in the Pacific Northwest) and the Power Marketing Administration of the Department of Energy(hydropower), municipal utilities and utility cooperatives.

The largest private electric producers in the United States include:

• AES Corporation
• Southern Company, 42 GW
• American Electric Power, 38 GW
• Duke Energy, 36 GW
• Luminant, 18 GW
• Reliant Energy, 14 GW
• Pacific Gas and Electric Company
• Allegheny Energy

Transmission

There are two major alternating current (AC) power grids in North America, the Eastern Interconnection and the Western Interconnection. Besides this there are two minor power grids in the U.S., the Alaska Interconnection and the Texas Interconnection. The Eastern, Western and Texas Interconnections are tied together at various points with DC interconnects allowing electrical power to be transmitted throughout the contiguous U.S., Canada and parts of Mexico. The transmission grids are operated by transmission system operators (TSOs), not-for profit companies that are typically owned by the utilities in their respective service area, where they coordinate, control and monitor the operation of the electrical power system. TSOs are obliged to provide non-discriminatory transmission access to electricity generators and customers. TSOs can by of two types:Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). The former operate within a single state and the latter cover wider areas crossing state borders.^{[citation needed]}

In 2009 there were four RTOs in the U.S.:^{[citation needed]}

• ISO New England (ISO-NE, which is an RTO despite its name);
• Midwest Independent Transmission System Operator;
• PJM Interconnection in the Mid-Atlantic region; and
• Southwest Power Pool (SPP) covering Oklahoma, Kansas and parts of Arkansas, Missouri, Texas and New Mexico.

There are also three ISOs:

• California Independent System Operator (California ISO);
• New York Independent System Operator (NYISO);
• Electric Reliability Council of Texas (ERCOT, an ISO).

The three major and two minor NERC Interconnections, and the nine NERC Regional Reliability Councils.

RTOs are similar, but not identical to the nine Regional Reliability Councils associated in the North American Electric Reliability Corporation, a non-profit entity that is in charge of improving the reliability and security of the bulk power system in the U.S., Canada and the northern part of Baja California in Mexico. The members of the Regional Reliability Councils include private, public and cooperative utilities, power marketers and final customers. The Regional Reliability Councils are:

• Eastern Interconnection
  • Florida Reliability Coordinating Council (FRCC)
  • Midwest Reliability Organization (MRO)
  • Northeast Power Coordinating Council (NPCC)
  • ReliabilityFirst Corporation (RFC)
  • SERC Reliability Corporation (SERC)
  • Southwest Power Pool (SPP)
• Western Interconnection
  • Western Electricity Coordinating Council (WECC)
• Texas Interconnection
  • Electric Reliability Council of Texas (ERCOT)

The FERC distinguishes between 10 power markets in the U.S., including the seven for which RTOs have been established, well as:

• Northwest
• Southwest (covering Arizona, most of New Mexico and Colorado)
• Southeast

ISOs and RTOs were established in the 1990s when states and regions established wholesale competition for electricity.

See also: Category:Electric power transmission systems in the United States

Distribution

About 75% of electricity sales to final customers are undertaken by private utilities, with the remainder being sold by municipal utilities and cooperatives.

See also: List of United States electric companies

Economic and financial aspects

Tariffs and affordability

In 2008 the average electricity tariff in the U.S. was 9.82 cents/kWh, up from 6.9 cents/kWh in 1995. Residential tariffs were somewhat higher at 11.36 cents/kWh, while commercial tariffs stood at 10.28 cents/kWh and industrial tariffs at 7.01 cents/kWh. The cost of supplying high-voltage power to high-volume industrial customers is lower than the cost of providing low-voltage (110 V) power to residential and commercial customers.

In 2006-07 commercial electricity tariffs in the U.S. (9.28 cents/kWh) were higher than in Australia (7.1 cents/kWh), Canada (6.18 cents/kWh) that relies mainly on hydropower or in France (8.54 cents/kWh) that relies heavily on nuclear power, but lower than in Germany (13.16 cents/kWh), Italy (15.74 cents/kWh) or the UK (11.16 cents/kWh) that all rely to a larger degree on fossil fuels, all compared at purchasing power parity.

Residential tariffs vary significantly between states from 6.7 cents/kWh in West Virginia to 24.1 cents/kWh in Hawaii. An important factor that influences tariff levels is the mix of energy sources used in power generation. For example, access to cheap federal power from hydropower plants contributes to low electricity tariffs in some states.

Average residential electricity consumption in the U.S. was 936 kWh/month per in 2007, and the average bill was US$ 100/month. Average residential consumption varies considerably between states from 530 kWh/month in Maine to 1344 kWh/month in Tennessee. Factors that influence residential energy consumption are climate, tariffs and efforts to promote energy conservation.

Revenues

Total revenue from the sale of electricity in 2008 was US$344bn, including US$148bn from residential customers, US$129bn from commercial customers and US$66bn from industrial customers. Many large industries self-generate electricity and their electricity consumption thus is not included in these figures.

Financing

Most investments in the U.S. electricity sector are financed by private companies through debt and equity. However, some investments are indirectly financed by taxpayers through various subsidies.

Subsidies and tax incentives

There is a large array of subsidies in the U.S. electricity sector ranging from various forms of tax incentives to subsidies for research and development, feed-in tariffs for renewable energy and support to low-income households to pay their electric bills. Some subsidies are available throughout the U.S., while others are only available in some states.

Tax incentives include federal and state tax deductions and tax breaks. Tax incentives can be directed at consumers, such as for the purchase of energy-efficient appliances or for solar energy systems, small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems. Tax incentives can also be directed at electricity producers, in particular for renewable energy.

The Low Income Home Energy Assistance Program (LIHEAP) received federal funding of $5.1 billion in Fiscal Year 2009. It is funded mainly by the federal government through the U.S. Department of Health and Human Services, Administration for Children and Families, and is administered by states and territories. While some of its funding is for fuel for heating, some is also used to cover electricity bills for both heating and cooling.

In April, 2009, 11 U.S. state legislatures were considering adopting feed-in tariffs as a complement to their renewable electricity mandates.

See also

• Energy in the United States
• California electricity crisis (2001)
• Northeast Blackout of 2003
• Energy Information Administration

External links

• U.S. Department of Energy (DoE)
• Energy Information Administration