“We’re going to see a revolution in the electrical utility industry that we haven’t seen since its inception.”     Jason Handley, Director of Smart Grid Technology and Operations at Duke Energy

The U.S. electric utility industry is undergoing revolutionary structural and institutional change. Not since Thomas Edison’s Edison Electric Illuminating Company was supplanted by Westinghouse with Nikola Tesla’s AC generators has the electric utility industry undergone such infrastructure and business transformation. The century-old electric utility paradigm (i.e., monolithic, centralized generation and transmission infrastructure and cost-plus monopoly business model) is rapidly eroding. Profound new developments in energy technologies and new market participants make planning, construction, operations, and management more complex and difficult. This is particularly true for electric distribution cooperatives because they operate the distribution edges of the electric utility infrastructure where distributed energy resources are proliferating.

It will not be possible for electric distribution cooperatives to continue to operate as they always have if they are to provide acceptable electric energy service. Thy will require new smart grid capabilities: real time monitoring, analysis, and control from the substation all the way to the customers’ premises. Fortunately, similarly profound new developments in energy, communications, information, and operations technologies can better enable this kind of grid operations and management in the new electric utility industry.

A modern, intelligent electric distribution grid will require high speed, two-way, digital communications from the utility to the meters and on to premises devices. For the same reasons that electric utilities use fiber optic communications for SCADA, it will be essential for electric cooperatives to have fiber optic networks to the meter to operate a smart distribution grid. And, for the same reasons that people increasingly connect more and more of the electric devices that they use to the Internet of Things, electric utilities will need to accommodate them and add their own devices as well, further increasing the need for fiber optic speed, latency, reliability, signal quality, security.

“ We met world needs for cheap and clean INFORMATION by building the Internet. We will meet world needs for cheap and clean ENERGY by building the ENERNET.” Robert Metcalfe, co-inventor of the ethernet & Professor of Innovation at the University of Texas.


The Beginning of the U.S. Electric Grid

The U.S. electric grid began in 1882 with Thomas Edison’s six 100 kW coal fired steam turbine generation units at his Pearl Street Station in New York City. They generated electricity at 110VDC with just over 3% thermal efficiency. This grew into the Edison Electric Illuminating Company, eventually the Consolidated Electric Company (ConEd).


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Edison’s grid model waned after 1893 when the Chicago World’s Fair chose Westinghouse instead of Edison for lighting, using Nikola Tesla’s polyphase AC generation. In 1895 Nikola Tesla’s 3.7 MW of polyphase AC generation went into service at the Niagara Falls Adams Station.


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By 1907 Adam’s Station was producing one fifth of all electricity being used in the U.S. Ironically, given today’s electric grid developments, it was 100% renewable, sustainable energy.

Today’s Legacy U.S. electric grid

The U.S.bulk electric system, now more than a century old, has some 20,000 generating units with a capacity of a MW or more in almost 7,000 large, centralized power plants. Less than 20% of the electricity produced comes from renewable, sustainable distributed resources.


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The energy that they produce flows one way to retail load centers through about 300,000 miles of transmission lines and some 75,000 transmission substations. This bulk electric system is owned and operated by investor owned electric utilities (IOUs), federal and state agencies, electric cooperatives, and municipally owned public power systems. The energy is ultimately carried through 5.5 million miles of distribution lines to some 140 million metered customers. This has long been considered the largest and most complex machine ever created by man.


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In Part 3 I will describe the legacy electric cooperative part of the U.S. electric grid.