The electricity grid: A history

Drawing by Thomas Edison in 1880 patent file. From the U.S. National Archives.

In the early days of electricity, energy systems were small and localized. The Pearl Street Station in New York City, launched in 1882, was the first of these complete systems, connecting a 100-volt generator that burned coal to power a few hundred lamps in the neighborhood. Soon, many similar self-contained, isolated systems were built across the country.

During this era, two major types of systems developed: the AC and DC grids. Thomas Edison, who designed Pearl Street, was a proponent of direct current (DC). In a direct current, the electrons flow in a complete circuit, from the generator, through wires and devices, and back to the generator.

William Stanley, Jr. built the first generator that used alternating current (AC). Instead of electricity flowing in one direction, the flow switches its direction, back and forth. AC current is what is used almost exclusively worldwide today, but in the late 1800s it was nearly 10 years behind DC systems. AC has a major advantage in that it is possible to transmit AC power as high voltage and convert it to low voltage to serve individual users.

From the late 1800s onward, a patchwork of AC and DC grids cropped up across the country, in direct competition with one another. Small systems were consolidated throughout the early 1900s, and local and state governments began cobbling together regulations and regulatory groups. However, even with regulations, some businessmen found ways to create elaborate and powerful monopolies. Public outrage at the subsequent costs came to a head during the Great Depression and sparked Federal regulations, as well as projects to provide electricity to rural areas, through the Tennessee Valley Authority and others.

By the 1930s regulated electric utilities became well-established, providing all three major aspects of electricity, the power plants, transmission lines, and distribution. This type of electricity system, a regulated monopoly, is called a vertically-integrated utility. Bigger transmission lines and more remote power plants were built, and transmission systems became significantly larger, crossing many miles of land and even state lines.

As electricity became more widespread, larger plants were constructed to provide more electricity, and bigger transmission lines were used to transmit electricity from farther away. In 1978 the Public Utilities Regulatory Policies Act was passed, making it possible for power plants owned by non-utilities to sell electricity too, opening the door to privatization.

By the 1990s, the Federal government was completely in support of opening access to the electricity grid to everyone, not only the vertically-integrated utilities. The vertically-integrated utilities didn’t want competition and found ways to prevent outsiders from using their transmission lines, so the government stepped in and created rules to force open access to the lines, and set the stage for Independent System Operators, not-for-profit entities that managed the transmission of electricity in different regions.

Today’s electricity grid – actually three separate grids – is extraordinarily complex as a result. From the very beginning of electricity in America, systems were varied and regionally-adapted, and it is no different today. Some states have their own independent electricity grid operators, like California and Texas. Other states are part of regional operators, like the Midwest Independent System Operator or the New England Independent System Operator. Not all regions use a system operator, and there are still municipalities that provide all aspects of electricity.

Who has the authority over transmission is also equally convoluted. Individual states control some aspects of the lines on their soil, but the rules are implemented by the operators. And others are managed by the North American Reliability Council, the Federal Energy Regulatory Commission, and the Department of Energy.

In today’s market, some states are deregulated and some are not. Even in non-deregulated states, different companies own the power plants and the utilities to which you write your monthly checks.


Check out BURN’s special, The Switch: The Story of America’s Electrical Grid.

For details about how electricity gets to you today, see Power Grid Technology and the Smart Grid.

For more information about how electricity is bought and sold, see the Electricity Marketplace.


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Basics of Electricity and Circuits: How Energy Moves Through the Home


The first major use of electricity began in 1879, when Thomas Edison began installing incandescent lighting in notable locations like Wall Street in New York City. Edison wasn’t alone in his pursuit of electricity development, but he was the first to install integrated systems in conspicuous places.

At that time, Americans used various other light sources, like oil lamps, candles, and fires. A candle gives off only around a single watt’s worth of light. Calcium (or lime) lights could provide a lot of light, but it was a harsh light and reserved for conditions like the theater, hence the term in the limelight.

Most lighting was very poor – and often dangerous – in comparison to fluorescent bulbs, and electricity became popular quite quickly. By the turn of the century, other electric devices began to become available, and by the 1920s, Americans could purchase electric refrigerators, dishwashers, and washing machines.

The first electrical systems depended on extremely local power plants, within a few blocks, or even within the building. As time passed, electricity development became a regional responsibility, and today, the United States is split into many different systems of electricity distribution, including both regulated municipalities and for-profit utilities.



Electricity isn’t merely the existence of electrons but the flow, and it is their flow that provides power. It’s a little bit like gravity and the flow of water downhill. Water will move spontaneously downhill because of gravity. Electrons (like other charged particles) move spontaneously when they are in electric fields. An electric field is generated when there’s a difference in electric potential – called a voltage – just like a hill exists when there’s a difference in altitude.

Electricity is the flow of electrons, which themselves are small charged particles associated with atoms. Under neutral conditions, electrons stay with the atom or group of atoms that make up a compound. However, one electron is indistinguishable from another and can move from one atom to an adjacent one if the atoms make up a conducting material, like various metals.

Voltage can be thought of as the height of the hill. The bigger the voltage, the more electrons want to move, and the more power can be delivered.

Cataract Falls, Mount Tamalpais, California

Electrons moving can be diverted to do work, sort of in the same way that water traveling downhill can be diverted to run a mill or turbine.

The water’s kinetic energy is lost as it is used up in the turbine. Likewise, the electrons’ kinetic energy is lost when they are put to work in a device. The electrons don’t get destroyed in the process of losing energy, just as the water wouldn’t be destroyed.



When you plug in something like a light, electrons flow from the plug, through the light, and back out through the plug. However, it’s not that simple, since we use what’s called alternating current, or AC, which means that the electrons flow one direction and then reverse direction. Alternating current makes it easy to change from a high voltage to a lower voltage. This change is made through a transformer.



Today, inside the home, electricity powers computers, televisions, telephones, lights, refrigerators, heaters, air conditioning, healthcare-related devices, video games, rechargeable toys, stereos, alarm systems, garage doors, ovens, stovetops, dishwashers, clothes washers, routers, can openers, DVD players, DVRs, and countless rechargeable devices like phones and electronic tablets.

Computers, televisions, and handheld electronic devices have become increasingly popular, while refrigeration, heating, and cooling have become more efficient. These recent trends in home electricity use have shifted the greater part of home energy needs from climate control to electronics.



Today, most households have more than two televisions, with 88 percent of homes have two or more televisions in 2009. The average household had 2.5 televisions. In the same year, 79 percent had DVD players, 43 percent had DVRs, and 86 percent of households had one or more computers. Nielson reported in May, 2011 that for the first time in 20 years, television ownership is slightly down, perhaps in part because computers may be replacing the use of televisions, DVDs, VCRs, and video games.


More about home energy in the energy efficiency section.

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