|
Four main types of electric utilities operate in the United States.
Investor-owned utilities (IOUs) are for-profit companies owned by their shareholders. These utilities may have service territories in one or more states. Each state provides them a "franchise" or "certificate of public convenience and necessity" to operate in specific areas of the state under certain terms and conditions. Their generation, bulk power sales, and transmission are regulated by the Federal Energy Regulatory Commission (FERC) and their distribution system and rates are regulated by the states.
Public power utilities are not-for-profit utilities owned by cities, counties, and Indian tribes. City-owned utilities are referred to as municipal utilities, or "munis". In some cases universities or military bases own and operate their own utilities. These are generally not regulated by FERC or by states, since their own local government has a legally devised system for their operation and management.
Cooperatives, or coops, are not-for-profit entities owned by their members. These include traditional rural utilities created by groups of farmers and ranchers who needed a way to get service to their sparsely populated areas. Historically, federal policies supported these (often more expensive) infrastructure developments through low-interest federal loans, which are now administered by the U.S. Department of Agriculture's Rural Utilities Service.
Federal utilities include the Bonneville Power Administration (BPA), the Tennessee Valley Authority (TVA), and the Western Area Power Administration (WAPA). All three of these are wholesale-only utilities that provide electricity to other (primarily municipal) utilities for distribution to customers. BPA and WAPA are also called Power Marketing Administrations (PMAs). BPA and TVA own both generation and transmission facilities. WAPA is a transmission-only utility providing power from federal hydroelectric facilities in the West (operated by the U.S. Army Corps of Engineers, the U.S. Bureau of Reclamation, and the International Boundary and Water Commission) to other retail utilities.
Governing Bodies
The activities of electric utilities are governed by a variety of international, national, regional, and state bodies. International treaties govern certain electrical entitlements and operational matters between the United States, Canada, and Mexico.
The Federal Energy Regulatory Commission was created by the Federal Power Act and has jurisdiction over interstate transactions and facilities. Even if they are within one state, high-voltage facilities are generally deemed to be interstate facilities because of the interconnected nature of the grid. FERC approves utility tariffs, establishes regulatory policies governing the grid, and decides general policy matters through rulemakings in which all interested parties may voice their opinions. FERC also approves company tariffs and agreements and rates of return on transmission transactions. FERC resolves disputes by hearing protests and interventions of interested parties in FERC dockets. FERC also approves the rates of the federal Power Marketing Administrations, which distribute power generated from large government-owned hydropower plants.
The North American Electric Reliability Council (NERC) is a voluntary association of utilities that governs technical electrical engineering standards to make sure the grid is reliable. Regional NERC bodies, such as the Western Electrical Coordinating Council (WECC), set standards for each interconnected grid and oversee engineering studies for system changes and additions. This is because any change to the system has the potential to impact all other system operations.
States control the siting of transmission and generation projects and matters that are particular to the state. This includes the distribution of energy from the transmission system.
|
