The electricity industry has three main components: the power plants, the transmission lines, and the distribution to you through utilities.


Mostly, three different entities operate these components. A power company owns a plant, some non-profit transmission company is responsible for the transmission, and a utility distributes the electricity to users.

Transmission may seem boring and straightforward — just a bunch of wires — but transmission is probably the most complex and sophisticated part of electricity.



We only have the capacity to store the tiniest fraction of electricity produced in a single day. Electricity has to be generated within moments of when its used.

Many thousands of megawatts of power plant capacity are operating right now, and all that power has to be delivered to the right place, right now, too. It’s happening every day, even as individual power plants are pulled off line for service, even as fuel prices fluctuate, or weather conditions change and there’s a heat wave and everyone cranks up their air conditioning, or a major line goes down and there’s suddenly far too much electricity being generated.

Imagine what happens when your source of energy is wind, and the wind dies down. How do you fill the hole? How do we plan for that? It’s all part of the complexity of transmission, and the authorities in charge of it, who also are responsible for reliability and operating the power markets.

The price of electricity fluctuates by hour, as electricity demand rises and falls throughout the day [link to MM if it's ever constructed]. It can be ten times the price in the middle of the day, when air conditioners and industries are running full blast. But did you know that the price is also different depending on where you are geographically?

Imagine if a single, high voltage line goes down. It’s not only that the people expecting that power won’t get it. Physics dictates that the surrounding lines will instantly be carrying more, and they may go down too, or their flows may change direction. Suddenly, in that instant, the price of electricity on one end of the line become sky high as there’s a lack of electricity, and the price at the other end drops down to nearly zero because there’s too much electricity going there.

Many of these details – energy market administration, the reliability of the power, the price – hinge on the electricity grid and how it’s run and where the lines are.



There is no national electricity grid. The country is divided into the Eastern Interconnected System, the Western Interconnected System, and the Texas Interconnected System. Our grids also interact with the Mexican and Canadian grids in some places.

To complicate matters, a large number of authorities are in charge of electricity transmission, and the authorities don’t all work the same way. There are Independent System Operators in some regions and Regional Transmission Organizations in others, and there are many tiny municipalities all over the country. There are eight regional reliability councils, map here, and the whole smorgasbord is overseen by the Federal Energy Regulatory Commission.



On top of the regulatory diversity, which is not really divided by state, energy markets rules are divided by state. For example, all of New England is lumped together when it comes to transmission, under the New England Independent System Operator. Yet, each state in New England has different environmental laws, electricity rate rules, and so forth. For more about electricity markets, go here.

Each region has different rules about when or if it publishes data about how much electricity was used, who used it, and when it was used. But these regions aren’t divided exactly along state lines.

To track how much electricity individual homes used yesterday is almost impossible. Electricity load numbers are all mixed up with industrial and municipal uses, divided along regions that aren’t quite counties or states. Furthermore, in some parts of the country, authorities claim that the electricity demand data is confidential, at least until it has to be submitted to the Federal Energy Regulatory Commission once per year.  That makes it hard for the public, the government, and research institutions to get information about how we use energy.



When electricity leaves the power plant, we don’t know exactly where it goes, and as stated before, the authorities who know anything are diverse and follow different rules. Yes, we have extremely complex math to model where it is. Yes, we can go out and measure the lines. Yes, individual power plant companies know how much they’re producing. But do we have a national ability to know what is going on everywhere on the grid? No.

But we could.

That is the idea behind the smart grid: know what is going on instantaneously. The idea encompasses technologies for high voltage lines and for low voltage and individual users. It includes tracking electricity and also handling data wirelessly.

Applications for this information could be endless, from encouraging less energy use during peak hours to sociological studies and beyond.



We are only tracking the total energy used over a month. If there aren’t special meters and ways to relay information, we don’t know how much an individual or a neighborhood is using right now. Someone from the electric company would have to get in a truck and go to your home or your neighborhood and measure.

Instead, with smart meters, information about hourly use can be read instantly by the power company and by you, the user.

Having a meter connected to a pleasant interface like a monitor or a webpage allows an individual to take control of their own energy use in a way that was vague and theoretical before.

We can track when people use electricity, where and when there are inefficiencies, pinpointing power outages and how widespread they are. Lumping geographical hourly data together, there’s no end to interesting aspects to study, even into the realms of sociology and psychology.

However, smart meters are new, and the technology is still developing, which means there’s opportunities for many mistakes or poorly functioning equipment. In 2011 a California utility found that a small proportion of meters were malfunctioning if the internal temperatures rose too high.


For more information about the electricity market see here.

Also see the Basics of Electricity.