I know that the US has three or four major electricity networks (East, West, Texas, Hawaii) but I dont understand how they are they are regulated or operated.
In many countries there are generators who produce power, retailers who sell power to retail customers and network operators who ‘move’ power between generators and consumers either through high voltage or local transmission lines but these roles are separate and you pay a separate fee for the connection/transmission vs the power you buy. Retailers pay to ‘move’ power from where its produced to where their customers are.
The transmission companies in most cases regulated natural monopolies. Retailers and producers can be the same company.
How does it work in the United States? Does one company own everything in some areas? Do you usually have a choice of energy retailer?
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Regulated private monopolies
Sorry not very ELI5 I’m seeing now
More simply private companies own the transmission and generator sections and are regulated to standard rates set by local governments
chat gpt read your pdf and produced this:
Alright, here is a very simplified summary of the document for a five-year-old:
Imagine you have a toy box that only you can use, and you get to decide what toys everyone can play with. This is like how some companies control the electricity that comes to our homes. They are the only ones allowed to do it, and they make sure it’s fair and everyone gets what they need. Sometimes, special people called regulators help these companies to make good decisions so that everyone has electricity at a good price and new ideas can still be used.
I’m no expert, but I might be able to help. Generally and historically in the U.S. one electric company (often called power companies) would handle the entire operation for a local area. They own the generators, long distance transmission lines, and the “last mile” connection to consumers, whether residential, commercial, or industrial. These are expensive systems to build so it doesn’t really make sense to have more than one company providing this service to an area. The power companies are granted a monopoly for whatever area they serve by the state, but in return they are also closely regulated by the state for the business side of the operation, such as how much they can charge for electricity but also making sure they have enough generation capacity and that the distribution system is adequately maintained. They are also regulated by the federal government to make sure they meet technical standards for compatibility. The regulation ensures the companies make a profit by try to keep it relatively small since electricity is a basic necessity. Power company stocks are generally considered a stable, reliable investment. They won’t necessarily grow much, but they should always make a profit.
Each power company is responsible for their own area and the network they operate, often called a grid. However, for resilience they’re usually connected to neighboring grids so that they can get extra electricity if needed. This isn’t free; they will have to buy the electricity from the neighboring grid but it will probably be at a discounted rate. They might also sell electricity to a neighboring grid, of course. I don’t know why they aren’t all just connected to each other in one big grid, though.
So in an area its almost completely vertically integrated? Wow.
