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Chapter3
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"3. Development of Independent Transmission System Operators
Introduction
The
electric power industry has three major components: power generation, the
bulk power transmission grid, and local distribution grids. Power generation
plants produce electric power, bulk power transmission systems route the
electric power to distribution systems, and distribution systems deliver
electricity to retail customers. Power generation is the most expensive
component, representing 55 percent of major investor-owned utilities' plant
investment. Transmission represents 12 percent and distribution 29 percent
( Figure 12 ). Although power generation is the largest
investment, all components are integral. The bulk power transmission system
is necessary because it enables utilities to deliver power over long distances.
This capability increases the potential for competition by providing electricity
customers an opportunity to purchase less expensive power from distant
suppliers. A market in which customers have a choice of electricity suppliers
is essential for a competitive industry to flourish.
An Overview of the Bulk Power Transmission System
As discussed previously (see Chapter 2), the U.S. bulk power transmission
system is directly serviced by three of the five electric networks (power
grids) in North America, consisting of extra-high-voltage lines designed
to permit the transfer of electric energy across the network. The three
networks are: the Eastern Interconnected System, consisting of the eastern
two-thirds of the United States; the Western Interconnected System, consisting
primarily of the Southwest and areas west of the Rocky Mountains; and the
Texas Interconnected System, weakly interconnecting with the others by
direct current lines. The other two networks have limited interconnections.
Both the Western and Texas Interconnects are linked with parts of Mexico.
The Eastern and Western Interconnects are integrated with most o"
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