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As Joseph Swidler, former Chairman of the Federal Power Commission (predecessor
of FERC) often stated, “There are many disagreements about the
best electric power policy for the USA, but there is no disagreement it is often
being established without adequate analyses.” Government and business decisions
on electricity supplies often fail to recognize how power systems work
and the uncertainties involved. Those involved do not always mean the same
thing although they use identical words. Incorrect assumptions have been
made about the operation of the electric system and continue to be made
based on the operation of telephone systems, gas systems, and other physical
systems that are not applicable to electric power systems.

The purpose of this book is to help those in government, business, educational
institutions, and the general public have a better understanding of electric
power systems, institutions, and the electric power business. The first nine
chapters focus on the technology of electric power; the last eight cover the
institutions and business practices. Why must business practices be included
in such a text? Because technical and institutional practices need to be coordinated
to meet our needs. New technologies require new institutional
approaches; new institutional mechanisms require new technology. Both must
be understood.
The original text for this book was written in 1984. It was used for instructional
purposes in a number of courses for electrical engineers who were not
power systems engineers, for lawyers, accountants, economists, government
officials, and public interest groups. Since then some technological changes and
many institutional changes have occurred. With the advent of the internet,
many new and valuable publications and information sources have become
available and were used in its preparation. It includes ideas and information
from many segments of the industry and many knowledgeable people in the
industry, and is based on educational programs of the American Education
Institute (AEI).

The book covers such subjects as electric power systems, their components
(generation, transmission, distribution), electricity use, electric system operation,
control and planning, power system reliability, government regulation,
utility rate making, and financial considerations. It describes the “six netsource

works”: (1) the physical network, (2) the fuel/energy network, (3) the money
network, (4) the information, communication, and control network, (5) the
regulatory network, and (6) the business network, which are interconnected
in the provision of electric power. It provides the reader with an understanding
of the equipment involved in providing electric power, the functioning of
the electric power system, the factors determining the reliability of service, the
factors involved in determining the costs of electric power, and many other
technical subjects. It provides the engineer with background on the institutions
under which power systems function. It can be used as a classroom text, as
well as a reference for consultation.While a book of this length cannot provide
in-depth discussions of many key factors, it is hoped it provides the broad
understanding that is needed. Ample references are provided for those who
wish to pursue important points further. The index facilitates the location of
background material as needed.The authors welcome comments, suggestions,
additional information and corrections.They hope you, your company, and all
consumers benefit from it.

1 History of Electric Power Industry 1
Origin of the Industry / 1
Development of the National Electric Power Grid / 3
Industry Ownership Structure / 6
Legislation and Regulation / 8
Blackouts and the Reliability Crisis / 8
Environmental Crisis—The Shift to Low-Sulfur Oil / 9
Fuel Crisis—The Shift from Oil / 9
Financial Crisis / 9
Legislative and Regulatory Crisis / 10
2 Electric power system 13
Customers / 14
Sources of the Electric Energy—Generation / 15
Delivery System / 17
Interconnections / 19
Grid / 21
3 Basic Electric Power Concepts 23
Electric Energy / 24
Concepts Relating to the Flow of Electricity / 26
Direct Current / 27
Alternating Current / 27
Three Phases / 29
Synchronism / 29
Characteristics of AC Systems / 29
Resistance / 29
Induction and Inductive Reactance / 30
Inductive Reactance / 30
Capacitance and Capacitive Reactance / 30
Capacitive Reactance / 31
Reactance / 31
Impedance / 31
Ohm’s Law for Alternating Current / 33
Power in Alternating Current Circuits / 33
Real Power / 34
Reactive Power / 34
Advantages of AC over DC Operation / 35
Transformers / 36
Power Flow / 37
Division of Power Flow Among Transmission Lines / 37
Voltage Drop and Reactive Power Flow / 37
Power Flow and Phase Angle Differences / 37
Stability / 38
Results of Instability / 40
4 Electric Energy Consumption
End-Uses for Electricity / 41
Customer Classes / 42
Rate Classes / 43
Demand and Energy / 44
Energy / 44
Effects of Load Diversity / 45
System Load / 47
Load Management / 48
Reactive Power / 50
Forecasts / 50
Losses and Unaccounted-for Energy in the Delivery System / 52
5 Electric Power—Generation 55
Types of Generation / 56
Steam Turbines / 56
Combustion (Gas) Turbines / 57
Hydro Turbines / 57
Pumped Storage / 58
Nuclear Units / 58
Reciprocating Engines / 58


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