The Changing Structure of the Electric Power Industry 2000: An ... - EIA

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Figure 4. Electric Power Industry Capability and Generation by Energy Source, 1998 12 Gas 23% Petroleum 8% Net Summer Capability (776 thousand megawatts) Nuclear 13% Coal 40% Renewables and Other 3% Hydro (Conventional and Pumped Storage) 13% Renewables: Renewable generating units use energy sources that are judged to be inexhaustible including solar, wind, geothermal, municipal solid waste, and biomass fuels such as landfill methane gas, wood byproducts, and waste. (Hydroelectric power is also considered a renewable resource.) Many wind and solar plants are intermittent in nature, depending on the availability of their energy source. In 1998, renewables other than hydropower represented 3 percent of capacity and 1 percent of generation, as they are typically used only intermittently. Regional Variation The type of energy source used for generating electricity varies in the United States by region and is usually dictated by the availability of natural resources (Figure 5). The Pacific Northwest generates most of its power at large hydroelectric projects owned by the Federal Government. The Nation’s coal-producing States and regions are the location of the majority of coal-fired plants, and consequently the source of much of the air emissions resulting from the combustion of coal. Ohio, West Virginia, Kentucky, and Tennessee are the largest users of coal for electricity generation in the Nation. Texas, Louisiana, and Oklahoma are rich in natural gas, and make use of it for electricity generation. Much of the Nation’s petroleum-fired generation is concentrated in Florida and New York. Figure 5. Energy Sources for Electricity Generation by Region Energy Information Administration/ The Changing Structure of the Electric Power Industry 2000: An Update Million megawatthours 2,000 1,500 1,000 500 0 52% Coal Natural Gas Petroleum Nuclear Hydroelectric Electric Power Industry Net Generation (3,620 million megawatthours) 4% 15% Coal Gas Petroleum 19% Nuclear 9% 1% Hydro Renewables and Other Source: Capacity: Form EIA-860A, “Annual Electric Generator Report-Utility” and Form EIA-860B, “Annual Electric Generator Report � Nonutility.” Generation: Form EIA-860B, “Annual Electric Generation Report � Nonutility” and Form EIA-759, “Monthly Power Plant Report.” Note: The large icons on this map represent about 10 GW of capacity, not individual plants, in a regional area for each fuel source. Smaller icons represent about 5 GW capacity. Where less than 5 GW of capacity for a fuel type exists for an individual region or State, generating plants are not represented on this map. Source: Form EIA-860A, “Annual Electric Generator Report � Utility” and Form EIA-860B, “Annual Electric Generator Report � Nonutility.”
California’s tight restrictions on air emissions discourage coal-fired generation. Natural gas, which burns more cleanly than coal, is used by many California plants for electricity generation. However, California utilities purchase electricity from outside of the State, some of which is generated from coal as the main fuel source. The energy source available for electricity generation is a factor in the disparity of retail prices across the Nation. For example, the Northwest enjoys the low cost of hydropower, while some Northeast States depend heavily on petroleum and nuclear power. Regulation of Generation The foundation for strong Federal involvement in the electricity industry was established in the early 1900s. The electric power industry became recognized as a natural monopoly due to its production of a product most efficiently provided in a specific location by one supplier. Because monopolies in the United States were outlawed by the Sherman Antitrust Act, regulation of the utilities was a necessity. Interstate wholesale markets and transmission became regulated by the Federal Power Commission. In 1997, regulatory authority was given to the Federal Energy Regulatory Commission (FERC). Today, FERC has jurisdiction over interstate movement of electricity by private utilities (investorowned utilities), power marketers, power pools, power exchanges, and independent system operators (ISOs). FERC approves rates for wholesale sales of electricity and reviews rates set by the Federal Power Marketing Administrations (PMAs). FERC also confers Exempt Wholesale Generator status (a classification of generator created by the Energy Policy Act of 1992 (EPACT)) and certifies qualifying small power producers and cogeneration facilities under provisions of PURPA. An additional responsibility of FERC is licensing the construction and operation of hydroelectric power projects and enforcing the provisions of the licenses. The State Public Utility Commissions (PUCs) have jurisdiction over intrastate trade of electricity. The PUCs regulate retail rates for customers, approve sites for generation facilities, and issue State environmental regulations. The Environmental Protection Agency (EPA) is charged with implementing the provisions of Title IV of the Clean Air Act. The EPA establishes rules requiring fossil-fueled power plants to reduce the air emissions and pollutants that are a primary cause of acid rain, sulfur dioxide, and nitrogen oxides. Carbon dioxide (CO 2) emissions are tracked, but no regulations exist at this time for CO 2 emissions. The Nuclear Regulatory Commission licenses the construction and operation of nuclear power plants and fuel cycle facilities, inspects licensed nuclear facilities and oversees decommissioning, and enforces the provisions of nuclear licenses. Transmission Electric power transmission is the transportation of large blocks of power over relatively long distances from a central generating station to main substations close to major load centers or from one central station to another for load sharing. The transmission grid consists of high voltage (between 138 and 765 kilovolts) overhead and underground conducting lines made of either copper or aluminum. High-voltage transmission lines are used because they require less surface area for a given carrying power capacity, and result in less line loss. Because of resistance in the conductors, some power is “lost” as dissipated heat during transmission. At the generating station, the voltage of the three-phase alternating current output from the generator is increased to the required transmission voltage by a step-up transformer. The high-voltage alternating current is then transmitted through the transmission grid to the load center where it is again transformed (stepped down) to lower voltages required by distribution lines. In the United States, investor-owned utilities (IOUs) own 73 percent of the transmission lines, Federally owned utilities own 13 percent, and public utilities and cooperative utilities own 14 percent (Figure 6). 20 Not all utilities own transmission lines (i.e., they are not vertically integrated), and no independent power producers or power marketers own transmission lines. Over the years, these transmission lines have evolved into three major networks (power grids), which also include smaller groupings or power pools. The major networks consist of extra-high-voltage connections between individual utilities designed to permit the transfer of electrical energy from one part of the network to another. These transfers are restricted, on occasion, because of a lack of contractual arrangements or because of inadequate transmission capability. The three networks are the Eastern Interconnect, the Western Interconnect, and the Texas Interconnect (Figure 7). The 20 Refer to Table 2 for a definition of the types of utilities and other entities involved in electricity supply. Energy Information Administration/ The Changing Structure of the Electric Power Industry 2000: An Update 13
Page 1 and 2: DOE/EIA-0562(00) Distribution Categ
Page 3 and 4: Section 205(a)(2) of the Department
Page 5 and 6: Contents (Continued) Page Appendice
Page 7 and 8: The U.S. electric power industry, t
Page 9 and 10: Figure ES2. Status of State Electri
Page 11 and 12: egulation coexist. Chapter 2 presen
Page 13 and 14: 2. Historical Overview of the Elect
Page 15 and 16: Table 1. Percentage Change Between
Page 17 and 18: Generation of electricity 3. The U.
Page 19: Figure 3. Prime Movers of Electrici
Page 23 and 24: follow the directions of NERC. The
Page 25 and 26: Table 2. Major Characteristics of U
Page 27 and 28: Table 4. Energy Supply Participants
Page 29 and 30: from other utilities and market lar
Page 31 and 32: Figure 13. Shares of Nonutility Nam
Page 33 and 34: Figure 15. Total Utility and Nonuti
Page 35 and 36: Figure 17. Electric Utility Wholesa
Page 37 and 38: 33 PUHCA and PURPA are now being ta
Page 39 and 40: (2) such holding company is predomi
Page 41 and 42: a new avoided cost for purchased po
Page 43 and 44: Major Federal Legislation Affecting
Page 45 and 46: a SEPA markets power in West Virgin
Page 47 and 48: Part II: The U.S. Electric Power In
Page 49 and 50: Figure 23. Status of State Electric
Page 51 and 52: Figure 25. Average Revenue per Kilo
Page 53 and 54: 6. Federal Legislative Initiatives
Page 55 and 56: for establishing the reliability st
Page 57 and 58: Those who are against outright repe
Page 59 and 60: The Comprehensive Electricity Compe
Page 61 and 62: Table 8. Proposed Legislation Influ
Page 67 and 68: 62 Table 9. Overview of the Federal
Page 69 and 70: on the same basis and under the sam
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and a half. 86 The overwhelming maj
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transmission system, and achieve fu
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70 Table 12. Summary of Major Provi
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72 Table 12. Summary of Major Provi
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company (Transco) model. With the I
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Table 13. Selected Information on I
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78 � Recently, � In FERC accept
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approved more than 850 applications
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up, and, at the same time, deregula
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is publicly available. The PX then
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companies were required to report t
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price that each utility pays for su
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Kentucky In December 1999, Kentucky
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92 Energy Information Administratio
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Figure 29. Concentration of Ownersh
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100 Energy Information Administrati
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Table 17. Overview of Strategic Ben
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Table 18. Government Agencies Respo
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competition. Some States have passe
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expected as some of the pending mer
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Appendix A History of the U.S. Elec
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areas and towns with populations un
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New technology introduced during th
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From 1980 through 1984, net electri
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Appendix C Pending Federal Restruct
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� Establishes a fund within the D
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mation and that prohibit discrimina
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dioxide, mercury, and sulfate fine
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H.R. 2944 Electricity Competition a
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� Prescribes specifics regarding
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if conflict arises. Authorizes TVA
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� Directs the Department of Energ
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Appendix D Electric Power Industry
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on a number of subject areas, inclu
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Table D1. Electric Power Industry S
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