Assignment
iMozzie
EECS4460.28.13.19.pptx
Power System Management
EECS 4460/5460-901
Lecture #2
Utility Business Structures and Economics
Current Utility Structures
Investor Owned Utility Companies (IOU’s)
Owned by Shareholders
Publicly Traded on Stock Market
State Regulated – profits and reliability
May include unregulated subsidiaries (“Hybrids”)
Produce about 80% of U.S. electricity
Typically strong local “brand” presence for distribution companies
Large Investor-Owned Utilities
| Company | Stock Symbol | Revenue ($B) | Customers (Million) | Generation (Mwe) | Employees |
| Duke | DUK | $24.5 | 7.7 | 51,000 | 30,000 |
| NextEra | NEE | $16.6 | 5.0 | 46,000 | 14,700 |
| Dominion | D | $13.0 | 5.0 | 27,000 | 16,200 |
| Southern | SO | $23.8 | 9.0 | 46,000 | 32,000 |
| Exelon | EXC | $35.9 | 10.0 | 32,000 | 33,500 |
| FirstEnergy | FE | $13.0 | 6.0 | 4,000 | 12,000 |
Data as of year end 2018
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Current Utility Structures
Public Power: Federal Agencies
Established by the Federal Government (1930’s/40’s)
Originally to develop and market hydro power
Generation and/or Transmission Function
Provide power to Cooperatives, Municipals, Public Districts and IOU’s
Give preference to Non-Profits
Not for Profit, Rates based on Cost of Service
Owned by the Federal Government
Federal Power Agencies*
| Agency | Known As | Generation (Mwe) | Transmission (Miles) | Revenue ($Million) |
| Bonneville Power | BPA | 10,000 | 15,200 | $3,700 |
| Southeastern Power | SEPA | 3400 | Nominal | $314 |
| Southwestern Power | SWPA | 2200 | 1,380 | $207 |
| Western Area Power** | WAPA | N/A | 17,000 | $900 |
| Tennessee Valley Authority* | TVA | 19,600 | 16,200 | $10,700 |
*All are Agencies under the Department of Energy except TVA, which is now self-funded
**Founded in 1977 , primarily Power Marketing
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Current Utility Structures
Public Power: Municipal and Regional Utilities
Established and Owned by the Local Government(s)
Originally to develop and control service
Typically lower rates (10-15%)
Tax-Exempt Financing
Lower Property Taxes
Typically Distribution and Customer Service Functions
Over 2000 Public Power Entities in the U.S.
Large Public U.S. Power Companies
| Company | Revenue ($B) | Customers (Thousands) | Generation (MMwHrs) |
| LA Dept of Water & Power | $3.4 | 1,460 | 20.7 |
| Long Island Power Authority | $3.3 | 1,122 | 1.82 |
| Salt River Project | $3.0 | 1,030 | 28.8 |
| CPS Energy | $2.4 | 794 | 23.4 |
| Santee Cooper (S.C.) | $1.7 | 177 | 20.1 |
| NY Power Authority | $1.6 | 1* | 29.3 |
| Sacramento Municipal Power | $1.4 | 620 | 7.9 |
* Sales to approx. 1000 Muni’s /Coop’s
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Select Ohio Municipal Utilities
Amherst
Bowling Green
Bryan
Carey
Dover
Cleveland
Genoa
Hudson
Huron
Lodi
Milan
Monroeville
Montpelier
Napolean
Newton Falls
Niles
Oak Harbor
Oberlin
Orrville
Painesville
Pemberville
Shelby
Westerville
Interconnection(s)
Contract for Generation
Distribution System
Local Maintenance
Local Billing
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Current Utility Structures
Co-Operatives
Rural Electrification Act of 1936
Provided Federal Loans
Channeled through member-owned Cooperatives
Act amended in 2014 for broadband network
Rural supply viewed as uneconomic
3% farms served in 1936; 90% by 1959
Built initial 7.2Kv distribution system
REA teams wired houses
63 Generation and Transmission (G&T) co-ops
834 Distribution co-ops
Deliver 11% of the total kwhrs sold in the U.S. to 19 million customers; 56% of the U.S. land mass
Ohio Utility Territories
Established by Law
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Current Utility Structures
Stand-Alone Generating Companies
Some investor-owned companies focus on Generation
Calpine
NRG Energy
Also provide energy services
Some Nuclear Operating Companies
Wolf Creek Generating Company
South Texas
Structural Overview (2016 Data)
| IOU’s | Public Power* | Co-Op’s | Total | |
| Organizations (no.) | 200 | 2000 | 900 | 3100 |
| Assets ($B) | $1025 | $280 | $169 | $1474 |
| Total Revenue ($B) | $284 | $60 | $45 | $389 |
| Customers (million) | 107 | 22 | 19 | 148 |
| Sales (B Kwhr) | 2700 | 574 | 432 | 3706 |
| Market Share (%) | 73 | 15 | 12 | 100 |
| Distribution Miles (%) | 50 | 7 | 42 | 100 |
| Density (cust/mi) | 34 | 48 | 7.4 | - |
* Excluding Federal Agencies
The Physical Power System
The Analytical Power System
Power System Business Structure
Customer
Generation
Transmission
Distribution
Shareholders
Banks
Rating
Agencies
State
Regulators
Federal
Regulators
Regulated Utility Model
Investor-Owned
“Vertically Integrated”
Common structure
Utility Organization Structure
Shareholders
Board of Directors
Chief Executive Officer (CEO)
Generation
Transmission
Distribution
Office Functions
Pick one alternative: A or B
Due a week from today
Worth 5% of total grade
Homework #1
Select a patent or a contributor from the early years and write a brief paper (2-3 paragraphs/100-200 words) on the significance of the contribution or person to the development of the U.S. electric system.
Examples include:
Homework #1(alternative A)
Patents*:
Induction Coil
Electric Arc Lamp
Telegraph
Railway Telegraphy
Street Lighting Arc Lamp
Carbon Filament
Electric Lamp
*A good source is the National
Inventors Hall of Fame website
Contributors:
Nikola Tesla
Michael Faraday
Thomas Edison
George Westinghouse
Charles Brush
Lucien Gaulard
John Gibbs
Humphry Davy
Joseph Henry
Thomas Davenport
Charles Batchelor
Thomas Murray
Select a city (such as your hometown, nearby community, any city etc.) and write about the historical development of the electric system. Include whether the city is served by an IOU, Municipal, etc.
Discover whether there was an early DC system, the transition to AC, and whether the system was owned and operated by the city.
Two or three paragraphs is sufficient (100-200 words).
Homework #1(alternative B)
