How The System Works

Delivering electricity is a complex task. Behind it lies a series of highly technical functions such as the generation of power, its transmission, and its final distribution to the customer.

Step 1: Generation

Unlike natural gas or oil, electricity cannot be stored easily and must be generated the moment it is needed. Demand for electricity fluctuates depending on the time of day, weather conditions, and other factors. Different kinds of power plants are used to generate power depending on the level of demand.
  • Nuclear, hydro, coal-based, and combined-cycle natural gas power plants typically work around the clock to provide a steady supply of power.
  • Pumped storage hydro, natural gas- or oil-based, and renewable (wind and solar) plants provide supplemental electricity during periods of high demand. These generators can be started and stopped quickly, but in many areas these fuels are too expensive or variable to be relied on for a constant supply of power.
  • Fuel Diversity
    Learn more about how the different fuels used to generate electricity are key to affordable and reliable electricity.

Step 2: Transmission and Distribution

  • Electricity leaves the power plant.
  • At a step-up substation near the generator, voltage is increased to 69,000-765,000 volts. Voltage depends on the distance the power will travel and the amount desired.
  • Electricity enters the transmission system, traveling at nearly the speed of light over heavy cables strung between tall towers.
  • A step-down transformer located at a substation near the final destination reduces the voltage so that electricity can be carried on smaller cables.
  • Distribution lines carry electricity to the customer. Small transformers on poles or underground reduce the voltage to 120-240 volts for residential customers.
  • Electric companies serve consumers in three major groups: residential (35.6% of sales), industrial (25.9% of sales), and commercial​ (38.2% of sales).