History of Energy in the United States: 1635-2000
	Electricity
	Electric power arrived barely a hundred years ago, but it has radically transformed and expanded our energy use. To a large extent, electricity defines modern technological civilization.
	The reasons may not be easy to appreciate for those who have never known the filth, toil, and danger historically associated with obtaining and using such fuels as wood, coal, and whale oil. By contrast, at the point of use electricity is clean, flexible, controllable, safe, effortless, and instantly available. In homes, it runs everything from toothbrushes and televisions to heating and cooling systems. Outdoors, electricity guides traffic, aircraft, and ships, and lights up the night. In business and industry, electricity enables virtually instantaneous global communication and powers everything from trains, auto plant assembly lines, and restaurant refrigerators to the computers that run the New York Stock Exchange and the automatic pin-setting machines at the local bowling alley.
	Electric power developed slowly, however. Humphrey Davy built a battery-powered arc lamp in 1808 and Michael Faraday an induction dynamo in 1831, but it was another half-century before Thomas Edison's primitive cotton-thread filament burned long enough to prove that a workable electric light could be made. Once past that hurdle, progress accelerated. Edison opened the first electricity generating plant (in London) less than 3 years later, in January 1882, and followed with the first American plant (in New York) in September. Within a month, electric current from New York's Pearl Street station was feeding 1,300 lightbulbs, and within a year, 11,000--each a hundred times brighter than a candle. Edison's reported goal was to "make electric light so cheap that only the rich will be able to burn candles."
	Though Edison fathered the electric utility industry, other companies surpassed him in building central power stations and his stubborn faith in direct current (DC) betrayed him. DC could only be transmitted 2 miles, while a rival alternating-current (AC) system developed by George Westinghouse and Nikola Tesla (whom Edison had fired) enabled long-distance transmission of high-voltage current and stepdowns to lower voltages at the point of use--essentially the system in place today. Edison even subsidized construction of an AC-powered electric chair to convince the public that AC was dangerous, but to no avail.
	The process of electrification proceeded in fits and starts. Industries like mining, textiles, steel, and printing electrified rapidly during the years between 1890 and 1910. Electricity's penetration of the residential sector was slowed by competition from gas companies, which had a large stake in the lighting market. Nevertheless, by 1900 there were 25 million electric incandescent lamps in use and homeowners had been introduced to electric stoves, sewing machines, curling irons, and vacuum cleaners. Generating equipment and distribution systems developed in parallel to meet the rising demand. By 1903 utility executive Samuel Insull had commissioned a 5 megawatt steam-driven turbine generator--the first of its type and the largest of any generator then built--and launched a revolution in generating hardware.
	The cities received electric service first, because it has always been cheaper, easier, and more profitable to supply large numbers of customers when they are close together. High costs and the Great Depression, which dried up most investment capital, delayed electric service to rural Americans until President Franklin Roosevelt signed into law the Rural Electrification Administration (REA) in 1935. The REA loaned money at low interest and helped to set up electricity cooperatives. Though interrupted by World War II, rural electrification proceeded rapidly thereafter. By 1967 more than 98 percent of American farms were using electricity from central station power plants.
	The depth of electricity's penetration into our economy and way of life is reflected in the fact that, over the last half century, annual increases in total electricity end-use faltered only twice, in 1974 and 1982. From 1949 to 2000, while the population of the United States expanded 89 percent, the amount of electricity use grew 1,315 percent. Per-capita average consumption of electricity in 2000 was more than seven times as high as in 1949. Electricity's broad usage in the economy can be seen in the sector totals, which were led in 2000 by the residential sector, followed closely by the industrial sector, and then the commercial sector (Figure 24).
	Figure 24. Electric Utility Retail Sales by Sector
	Where does all this electricity come from? In the United States, coal has been and continues to be the source of most electricity, accounting for over half of all electricity generated by the electric power sector in 2000 (Figure 25). Hydroelectric power was an early source of U.S. electricity--accounting for almost a third of all generation in 1949--and remains a dependable contributor (over 7 percent of the total in 2000). Natural gas and petroleum grew steadily as sources of electricity in the late 1960s. Their combined usage peaked at 37 percent of the total in 1972 and stood at 19 percent in 2000. Meanwhile, a new source entered the picture: nuclear electric power. A trickle of nuclear electricity began flowing in 1957, and the stream widened steadily except for downturns in 1979 and 1980, following the accident at Three Mile Island, and again in 1993 and 1997. In 2000 nuclear power accounted for 20 percent of total electricity generation.
	Figure 25. Electricity Net Generation by Source for 2000
	Just as electricity's applications and sources change over time, so is the structure of the electric power sector itself evolving. The sector is now moving away from the traditional, highly regulated organizations known for decades as electric utilities and toward an environment marked by lighter regulation and greater competition from and among nonutility power producers. In 2000, nonutility power producers (such as independent power producers and nonutility cogenerators) accounted for 26 percent of total net summer capability, up from 20 percent in 1999 (Figure 26).
	Figure 26. Electric Power Sector Net Summer Capability
	Electricity's great assets as a form of energy are reflected in its cost to the end user. The price paid by the consumer includes the cost of converting the energy from its original form (such as coal) into electricity and the cost of delivering it. In 2000 consumers paid an average of $24.06 per million Btu for the electricity delivered to their residences (Figure 27). In contrast, consumers paid an average of only $7.49 per million Btu for the natural gas used in their homes and an average of $12.58 per million Btu for the motor gasoline to fuel their vehicles.
	Figure 27. Consumer Prices for Electricity, Natural Gas, and Motor Gasoline for 2000
	The unit cost of electricity is high because most of the energy that must be purchased to generate it does not actually reach the end user but is expended in creating the electricity and moving it to the point of use. In 2000, for example, approximately 40 quadrillion Btu of energy were consumed by the electric power sector to generate electricity in the United States, but only 12 quadrillion Btu worth of electricity were actually used directly by consumers. Where did the other 28 quadrillion Btu go? Energy is never destroyed but it does change form. The chemical energy contained in fossil fuels, for example, is converted at the generator to the desired electrical energy. Because of theoretical and practical limits on the efficiency of conversion equipment, much of the energy in the fossil fuels is "lost," mostly as waste heat. (The overall energy efficiency of a system can be increased through the tandem production of electricity and some form of useful thermal energy. This process, known as cogeneration, reduces waste energy by utilizing otherwise unwanted heat in the form of steam, hot water, or hot air for other purposes, such as operating pumps or for space heating or cooling.)
	In addition to the conversion losses, line losses occur during the transmission and distribution of electricity as it is transferred via connecting wires from the generating plant to substations (transmission), where its voltage is lowered, and from the substations to end users (distribution), such as homes, hospitals, stores, schools, and businesses. The generating plant itself uses some of the electricity. In the end, for every three units of energy that are converted to create electricity, only about one unit actually reaches the end user.