Electricity is delivered to consumers through a complex network
Electricity is generated at power plants and moves through a complex network, or grid, of electricity substations, power lines, and distribution transformers before it reaches consumers. In the United States, the entire grid consists of more than 7,300 power plants, nearly 160,000 miles of high-voltage power lines, and millions of low-voltage power lines and distribution transformers connecting about 145 million customers.
Electricity comes from various sources and kinds of providers
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Some residential, industrial, commercial, and institutional users of electricity produce electricity for themselves and then sell excess electricity to their utility.
The utility, distribution company, or retail service provider selling you power may be a not-for-profit municipal entity; an electric cooperative owned by its members; a private, for-profit company owned by stockholders (often called an investor-owned utility); or a power marketer. Some federally owned authorities—including the Bonneville Power Administration and the Tennessee Valley Authority, among others—also buy, sell, and distribute power.
The origin of the electricity that customers consume may vary. Utilities may generate all the electricity they sell using just the power plants they own. Utilities may also purchase some of their supply on the wholesale market from other utilities, power marketers, independent power producers, or from a market based on membership in a regional transmission reliability organization.
How the grid is organized
Most of the existing grid was built during a highly-structured, highly regulated era. The existing grid was designed to ensure that everyone in the United States had reasonable access to electricity service. Utility customers, through fees authorized and regulated by state regulatory commissions, generally pay for developing and maintaining the grid.
Many local grids are interconnected for reliability and commercial purposes, forming larger, more dependable networks that maximize coordination and planning of electricity supply. These networks extend throughout many states.
The North American Electric Reliability Corporation (NERC) was established to ensure that the grid in the United States was reliable, adequate, and secure. Some NERC members have formed regional organizations with similar missions.
These regional organizations are referred to as Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). These regional organizations are part of a national standard design advocated by the Federal Energy Regulatory Commission (FERC). Some organizations have members who connect to lines in Canada or Mexico. Most organizations, depending on the location and the utility, are indirectly connected to dozens and often hundreds of power plants. Some electricity consumed in the United States is imported from Canada and Mexico.