EECS5460.18.1.201.pptxPower System Management
EECS 4460/5460-901
Gary R. Leidich
Lecture 1
Evolution of the Industry
JP Morgan & Thomas Edison
Separate local utility companies
Integration for reliability
The “Natural Monopoly”
Changing Regulation
Today
Markets/Merchants
Regulated Utilities
Static charges have been observed for thousands of years
1600: Dr. Wm Gilbert wrote “Magneticisique Corporibus” in Latin. (“On the Magnet”). Coined the word “electrica”. Subsequent developments in Europe.
1745 – The Leyden Jar
1792 – Ben Franklin: “lightning is electricity”
“Electricity”
The Early Years
Late 1700’s/Early 1800’s: theories
1825 – Electromagnet
1830’s – DC Motor/Generator/AC Transformer
1850 – AC Generator
1840’s – Telegraph
1866 – TransAtlantic Telegraph
1870s – Arc Lamps/First Incandescent Light Bulb
1878 – First Hydroelectric Plant
1879 – Long lasting filament by Edison
1882 – First Thermal Power Plants
1890 – Edison invents the fuse
1900 – Marconi builds the first radio
Pearl Street Station
4
Thomas Edison (1847-1931)
Born in Milan, Ohio
Age 16: Telegraph “Automatic Repeater)
NYC: Stock-ticker repair
Menlo Park/West Orange N.J. Labs (1874/1887)
Brockton, Mass. Power Station (1882)
Many inventions: Phonograph, Incandescent Bulb……
Patents: 1093 of them and many disputes
The Early Years – Key Players
Nikola Tesla (1856-1943)
Austrian (today’s Croatia)
Came to U.S. in 1884
Edison Machine Works
Developed AC induction motor and polyphase AC system
Consultant for Niagara Falls
Celebrity status
Wireless Communication
Waredenclyff Tower project
Many patents and disputes
The Early Years – Key Players
George Westinghouse (1846-1914)
New York native
Invented rail car air brakes @ 22
Interest an AC systems
Obtained rights to Tesla motor and other patents
Ames Hydro Plant in Colorado (1890)
2-100hp alternators, 3kv 133Hz line
Columbian Exposition in Chicago (1893)
Niagara Falls Project (1895)
Patent disputes with GE
Settlement in 1896
The Early Years – Key Players
The Early Years – New York City
Pearl Street: First Commercial U.S. Central Power Station
Began Operating September 4, 1882
6 x 100Kw Dynamos (D.C system)
82 customer/ 400 lamps
Grew to 508 customers / 10,164 lamps by 1884
High speed steam engines @ 175hp, 700 RPM
Replaced by Armington & Sims machines in 1886
1898 - 775 Power Stations in Manhattan and the Bronx
1901 to 1910 – Price in NYC drops from 20 to 10 cents/kwhr
($2.70 today)
Pearl Street Station
The Early Years – “Current Wars”
By 1887:
Edison built 121 DC-based systems
Westinghouse built 68 AC-based systems
Thomson-Houston Co. built 22 AC-based stations
Public safety campaign/Electric Chair Demonstration (1890)
JPMorgan pushed AC option
General Electric formed in 1892 (Edison out)
Westinghouse won bid for Columbian Exposition and (later) Niagara Falls
| Utility | Industrial | Total | Utility% Of Total | % Investor-Owned | |
| 1902 | 1200 | 1800 | 3000 | 40 | 91 |
| 1907 | 2700 | 4100 | 6800 | 40 | 92 |
| 1912 | 5200 | 5800 | 11,000 | 47 | 92 |
| 1917 | 9000 | 6500 | 15,500 | 58 | 94 |
| 1922 | 14,200 | 6300 | 20,500 | 69 | 95 |
| 1927 | 25,100 | 9500 | 34,600 | 73 | 93 |
| 1932 | 34,300 | 8500 | 42,800 | 80 | 93 |
Electricity Generating Capacity, 1902-1932 (Mwe)
Source: EEI Pocketbook (1979)
The Early Years – Growth
The Early Years - Efficiency
| Production per Kw (inKWhr) | Avg Plant Size(KW) | Coal Burned/KWhr (lbs.) | Percent Hydro | ||
| 1902 | 2068 | 539 | 6.5 | 24 | |
| 1907 | 2164 | 847 | 5.5 | 33 | |
| 1912 | 2240 | 1467 | 4.0 | 33 | |
| 1917 | 2838 | 2061 | 3.5 | 31 | |
| 1922 | 3074 | 3813 | 2.5 | 29 | |
| 1927 | 3007 | 6765 | 1.8 | 27 | |
| 1932 | 2309 | 8539 | 1.5 | 27 |
Electricity Generation Operating Statistics, 1902-1932
Source: Historical Statistics
The Early Years – Price
Commonwealth Edison
Samuel Insull
Secretary to Edison
Moved to Chicago
Eight holding companies
Controlled 75% industry
$500M value/$28M Equity
Depression/ ComEd collapse
1935 – Public Utility Holding Company Act
The Early Years
The Early Years
Great Depression Impacts
Federal Power Commission (later FERC) -1930
“Just and reasonable cost-based rate regulation
to the wholesale power market”
Tennessee Valley Authority (TVA) -1933
Bonneville Power (BPA) – 1937
Rural Electrification Act (REA)
Federal Loans to Cooperatives
Rural areas – 7200v system
Added Phones in 1949/Internet in 2008
Current Utility Structures
Investor Owned
Publicly Traded, SEC Regulated
Fully State Regulated or “Hybrid”
Public Power
Federal and Municipal
“Cooperative” Companies
Owned by Members
“Generation Only” Companies
Investor – owned or privately held
Stand-Alone Companies
Current Utility Structures
Investor Owned Utility Companies (IOU’s)
Owned by Shareholders
Publicly Traded on Stock Market
State Regulated – profits and reliability
May include unregulated subsidiaries (“Hybrids”)
Produce about 80% of U.S. electricity
Typically strong local “brand” presence for distribution companies
Large Investor-Owned Utilities
| Company | Stock Symbol | Revenue ($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 | $13.0 | 6.0 | 4,000 | 12,000 |
Data as of year end 2018
Current Utility Structures
Public Power: Federal Agencies
Established by the Federal Government (1930’s/40’s)
Originally to develop and market hydro power
Generation and/or Transmission Function
Provide power to Cooperatives, Municipals, Public Districts and IOU’s
Give preference to Non-Profits
Not for Profit, Rates based on Cost of Service
Owned by the Federal Government
Federal Power Agencies*
| Agency | Known As | Generation (Mwe) | Transmission (Miles) | Revenue ($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 | $10,700 |
*All are Agencies under the Department of Energy except TVA, which is now self-funded
**Founded in 1977 , primarily Power Marketing
Current Utility Structures
Public Power: Municipal and Regional Utilities
Established and Owned by the Local Government(s)
Originally to develop and control service
Typically lower rates (10-15%)
Tax-Exempt Financing
Lower Property Taxes
Typically Distribution and Customer Service Functions
Over 2000 Public Power Entities in the U.S.
Large Public U.S. Power Companies
| Company | Revenue ($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 | $1.4 | 620 | 7.9 |
* Sales to approx. 1000 Muni’s /Coop’s
Current Utility Structures
Co-Operatives
Rural Electrification Act of 1936
Provided Federal Loans
Channeled through member-owned Cooperatives
Act amended in 2014 for broadband network
Rural supply viewed as uneconomic
3% farms served in 1936; 90% by 1959
Built initial 7.2Kv distribution system
REA teams wired houses
63 Generation and Transmission (G&T) co-ops
834 Distribution co-ops
Deliver 11% of the total kwhrs sold in the U.S. to 19 million customers; 56% of the U.S. land mass
Structural Overview (2016 Data)
| IOU’s | Public Power* | Co-Op’s | Total | |
| Organizations (no.) | 200 | 2000 | 900 | 3100 |
| Assets ($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
