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Electric Utility Wholesale Power Purchases by Ownership Type, 1996 (billion kilowatthours) |
- The wholesale market encompasses electric trade and is an important part of the electric power industry.
- Approximately half of all electricity generated is purchased (or traded) in the wholesale (or bulk power) market before being sold to ultimate consumers.
- Wholesale transactions allow utilities to reduce power costs and increase power supply options.
- During contingency and emergency situations, overall electric system reliability is maintained as utilities cooperate in wholesale trade.
| Interconnections of the North American Electric Reliability Council in the Contiguous United States, 1996 |
- The bulk power system has evolved into 3 major networks (the interconnected Eastern, Western, and Texas power grids) which 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.
- While utilities have dominated the industry, nonutilities have been increasing their role due to new regulatory orders and Federal laws which have opened transmission lines and encourage greater wholesale trade.