Overview - Power Transactions & Interconnected Networks
Electric Power Transactions & The Interconnected Networks
Although, due to its physical characteristics, electricity flows along all available paths, it follows the path of least resistance. Consequently, the flow of electricity within the electric power system must be closely monitored to ensure that sufficient generating capacity is available to satisfy the demand or load for it. For purposes of reliability and standardization, the flow of electricity within the system is maintained at a frequency of 60 cycles per second. Transmission and distribution lines and associated facilities are used to transmit electricity from its origin (the generator) to the ultimate consumer.
The bulk power system makes it possible for utilities to engage in wholesale (sales for resale) electric power trade. Wholesale trade has historically played an important role, allowing utilities to reduce power costs, increase power supply options, and improve reliability. Since 1986, the total amount of wholesale power trade (as measured by purchased power plus exchange received) among utilities and nonutilities has grown at an average annual rate of 2.7 percent, which is the same as the rate of growth for retail sales by utilities.
Electric Power Transactions
The electric power system in the United States is maintained and monitored by dispatch centers. In the past, these centers:
- inventoried and prioritized available generating capacity,
- tracked transactions (the buying and selling of either electricity or capacity)
- monitored current demand (load)
- anticipated future demand.
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In the future, however, the responsibility for monitoring and maintaining the electric power system may be handled differently under the restructured electric power industry. For example, presently the authority for transactions (buying and selling electricity) is based on preapproved interconnection agreements (contracts) between physically interconnected electric utilities (and those that have coordination agreements with physically interconnected utilities). Such agreements may include purchases, sales for resale, exchanges, and wheeling of energy. In the future, however, the buying and selling of power resources may be conducted in a competitive market and with independent pricing. Also, exchange transactions are slowly being replaced by "spot" and "futures" markets.
| For a more detailed discussion on the subject of electric power transactions (including power pools, regulation of electric utility transactions, and international transactions, see the chapter titled, "U.S. Electric Power Transactions" in Electric Power Annual Volume II. |
The Interconnected Networks
The U.S. bulk power system has 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 (1) the Eastern Interconnected System, consisting of the eastern two-thirds of the United States; (2) the Western Interconnected System, consisting primarily of the Southwest and areas west of the Rocky Mountains; and (3) the Texas Interconnected System, consisting mainly of Texas. (Figure 15).
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Figure 15. North American Interconnected Networks Map |
The latter is not interconnected with the other two networks (except by certain direct current lines). The other two networks have limited interconnections to each other. Both the Western and the Texas Interconnect are linked with different parts of Mexico. The Eastern and Western Interconnects are completely integrated with most of Canada or have links to the Quebec Province power grid. Virtually all U.S. utilities are interconnected with at least one other utility by these three major grids. The exceptions are in Alaska and Hawaii. The interconnected utilities within each power grid coordinate operations and buy and sell power among themselves.
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For an indepth study on the issue of U.S. electric power system
reliability, see Performance Issues for a Changing Electric Power Industry. |
Overall reliability planning and coordination of the interconnected power systems are the responsibility of NERC, which was voluntarily formed in 1968 by the electric utility industry as a result of the 1965 power failure in the Northeast. NERC's ten regional councils cover the 48 contiguous States and portions of Canada and Mexico (see Figure 8 in the Introduction). The councils are responsible for overall coordination of bulk power policies that affect the reliability and adequacy of service in their areas. They also regularly exchange operating and planning information among their member utilities. The boundaries of the NERC regions follow the service areas of the electric utilities in the region, many of which do not follow State boundaries.
In the past, wholesale trade has been dominated by utility purchases from other utilities. Wholesale power sales by nonutilities to utilities and wheeling (the transmission of power from one point to another) by utilities have both grown vigorously since the mid-1980's. Whether this growth will be sustained is uncertain. The rate of growth has slowed considerably between 1990 and 1995. Historically, almost all wholesale trade was within National Electric Reliability Council (NERC) regions. Utilities, however, are expanding wholesale trade beyond those traditional boundaries, and wholesale trade between NERC regions is also growing.
U.S. international trade in electricity is mostly imports. The majority of the nation's international electricity trade (95 percent of total gross imports in 1995) is transacted with Canada--the remainder is with Mexico.
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For a more detailed discussion on this subject, see the last section of
Chapter 3 in The Changing Structure of the Electric Power Industry: An Update. |
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