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Electric Power in General
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Last Updated: January 2008
Next Update: November 2008 Changing structure of the electric power industry Electric utilities.1 Traditional electric utilities in the United States are responsible for ensuring an adequate and reliable source of electricity to all consumers in their service territories at a reasonable cost. These include investor-owned, publicly-owned, cooperative, and Federal utilities and are regulated by local, State, and Federal authorities.Transition from highly regulated to a less regulated industry. The electric power industry is evolving from a highly regulated, monopolistic industry with traditionally structured electric utilities to a less regulated, competitive industry including nonutility power producers:2
The Public Utility Regulatory Policies Act of 1978 (PURPA) opened up competition in the generation market with the creation of qualifying facilities. Later, the Energy Policy Act of 1992 (EPACT) removed some constraints on ownership of electric generation facilities and encouraged increased competition in the wholesale electric power business.
Production of electricity 2006 electricity capacity and generation. Total electric power generating capacity (the maximum output that generating equipment can supply to system load) as of year-end 2006, totaled 986 thousand megawatts of which 57.6 percent was attributed to utilities and 42.4 percent was attributed to non-utilities. In 2006, total electric power industry net generation was 4,065 billion kilowatthours. Utilities provided 2,484 billion kWh, and net generation from non-utilities was 1,581 billion kWh.
Price of electricity 2006 electricity prices per kilowatthour. The average price of electricity in the United States in 2006 was 8.90 cents per kilowatthour. The three states with the highest average price of electricity were:
The three lowest states were:
1. Electric utility: Any entity that generates, transmits, or distributes electricity and recovers the cost of its generation, transmission or distribution assets and operations, either directly or indirectly, through cost-based rates set by a separate regulatory authority (e.g., State Public Service Commission), or is owned by a governmental unit or the consumers that the entity serves. Examples of these entities include: investor-owned entities, public power districts, public utility districts, municipalities, rural electric cooperatives, and State and Federal agencies. Electric utilities may have Federal Energy Regulatory Commission approval for interconnection agreements and wholesale trade tariffs covering either cost-of-service and/or market-based rates under the authority of the Federal Power Act. 2. Nonutility power producer: A corporation, person, agency, authority, or other legal entity or instrumentality that owns or operates facilities for electric generation and is not an electric utility. Nonutility power producers include qualifying cogenerators, qualifying small power producers, and other nonutility generators (including independent power producers). Nonutility power producers are without a designated franchised service area and do not file forms listed in the Code of Federal Regulations, Title 18, Part 141.
More information on this subject can be found in the following EIA publications:
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