Things grew complicated in 1996 when the Federal Energy Regulatory Commission issued Order 888, allowing states to restructure their electric power industries to promote more competition. Thomas Edison created the model for the traditional electric utility at his Pearl Street Station in New York City. Regulators also determined whether the costs that utilities proposed to pass on to customers – such as building new generating plants – were just and reasonable. Since the utilities knew more about their costs and abilities than anyone else, the burden was on regulators to decide whether the utility was operating efficiently. Each utility had a monopoly on serving customers in its area and reported to a public utility commission, which told the company what rates it could charge. The scope and scale of electric utilities grew rapidly from those humble beginnings, but this underlying, vertically integrated structure remained intact for more than 100 years.
Edison was America’s first investor-owned electric utility – a company that generated electricity, moved it over transmission lines and delivered it to individual customers. The electric age began in 1882 when the Edison Illuminating Company sent power over wires to 59 customers in lower Manhattan from its Pearl Street Generating Station. It also shows how arcane features of energy markets can have big effects at critical moments. The current power crunch in Texas and other affected states highlights the delicate balancing act that’s involved in providing safe, reliable electricity service at fair, reasonable rates. electricity industry, I know that rules set by entities like ERCOT have major effects on Americans’ energy choices. power supply.įrom my research on the structure of the U.S. Together, ERCOT and similar organizations manage about 60% of the U.S.
The recent cold wave and storm in Texas have placed considerable focus on the Electric Reliability Council of Texas, or ERCOT, the nonprofit corporation that manages the flow of electricity to more than 26 million Texans. Americans often take electricity for granted – until the lights go out.
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