Understanding the basics of any subject is crucial to more advanced learning. Similarly, in the workplace, knowing the basics of your job can help you get the most out of your career.
Many factors can impact your electricity bill. The two main parts of a utility bill are supply and delivery services.
Basics of Power Supply
A power supply converts the electric current from a source (such as a wall outlet, energy storage devices like batteries or fuel cells, generators, or solar cell panels) into power that can power electronic devices. It also regulates the voltage passed through to prevent excessive amounts of current that could cause damage or overheating. Power supplies are commonly found inside computers and other electronics. They may be external, such as those found in laptop and phone chargers, or internal, such as those found in desktop computers.
A traditional linear regulated power supply consists of a transformer, rectifier, and filter to convert AC line voltage into DC. Then, the DC output is regulated by a transistor circuit, which drops any excess input voltage to maintain a steady output. The transistor circuit uses a significant amount of energy as heat, so the power supply design must be efficient and small.
A switched-mode power supply, or SMPS, is a recent design that utilizes electronic switching to convert AC into DC and back to AC at a high frequency (typically from 10 kHz to 1 MHz). This allows the use of smaller, lighter, and cheaper transformers and capacitors than those required by the older linear designs. The same transistor circuit regulates the SMPS as a linear regulated power supply and can perform many other functions.
Basics of Power Pricing
While many consumers may be familiar with paying a flat rate for electricity each month (often based on their meter location), the cost to produce power is dynamic. Power prices change based on the time of day and demand. This is why many energy providers, like the electric company in Carrollton, Texas, offer variable rates such as TOU or tiered rates.
In areas that are still regulated, investor-owned utilities operate as vertically integrated monopolies in their service territory and receive oversight from public utility commissions. These utilities must recover their operating and investment costs alongside a small return on their investments (a concept called “rate base”). They do this by setting retail electricity rates passed on to consumers.
On the wholesale side, electricity is sold on day-ahead and intraday markets. In these markets, resources (both generation and demand-side) submit offers to supply or reduce a particular load at a specified price. The ISO/RTO then “clears” the market when the total amount offered matches the available gear. In the clearing process, each resource is paid for the megawatts it sells and charged for the megawatts it buys.
Power plants with favorable variable production costs set prices in these markets, and gas and coal-fired facilities are among the most dominant. Wind, solar, and nuclear power plants have meager variable costs and are often called “price takers.” In addition to these forces, the power system is inherently non-storable, and the ISO/RTO must balance production and consumption daily to meet reliability requirements.
Basics of Power Distribution
The distribution system is the first step in getting power to your home or business. This is the network of lines that transports electricity from the transmission system to your specific location.
In some areas, this is called the “electric grid.” Most people recognize it as a series of wires that run overhead or through the ground, connecting your local area to the larger electrical grid that powers your region. The primary difference between transmission and distribution is the voltage at which electricity moves in each stage.
Electricity from the transmission line travels to a device called a substation located closer to consumers. This reduces the voltage levels to the distribution level, which means it is ready for direct use by homes and businesses. The electricity is then sent to a group of devices called transformers, which decrease the voltage even further. Once these lower voltages are reached, they can be used for specific lighting and interior wiring applications.
In most cases, one company handles the transmission and distribution of the power they deliver to customers. In deregulated markets, however, consumers can select their electricity supplier instead of receiving it through their utility company. These new power suppliers compete for customers by offering competitive prices. Your monthly electric bill will still include two fees — one for the electricity supply and one for delivering that energy to your location.
Basics of Power Transmission
The bulk movement of electricity over long distances requires transmission lines. These are the large towers with wires you see on trips, and they transport electricity at a very high voltage level – 100 kilovolts (or kV) or more, depending on the route and other factors. This part of the system is sometimes called the “electric highway.”
Electric power is sent to the transmission network at generating plants via transformers that raise or “step up” the voltage to levels suitable for the long haul. At the transmission network’s numerous substations, it is moved to distribution lines that carry power closer to homes and businesses.
These lines are generally overhead because they’re cost-effective and easy to maintain, but some can also be underground. The conductors that transmit the electrical power are insulated to prevent electricity from jumping from one conductor to another over long distances. The insulators are also made to resist weather effects, such as snow or rain.
The companies that own and operate transmission lines are usually separate from the generating companies that supply them, though, in some regions of the United States, vertical integration still exists. The transmission and distribution networks are interconnected to form the power grid operated by local electric utilities. These are not-for-profit municipal electric utilities; electric cooperatives owned by their members; private, for-profit electric utilities owned by stockholders; or public power authorities.