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Electric Utilities: Background and Overview
Table of Contents
Background and Overview
Reasons for Change
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The purpose of this web site is to educate the public about the potential and the benefits of renewa...

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Through the course of human achievement, there is little doubt the ?harnessing? of electricity ranks as one of the greatest successes ever. Its discovery eventually shaped the course of industrialization by making large-scale manufacturing possible. It increased the rate of production in all factories and allowed for greater efficiency in industrial operations. In addition, electricity changed and improved the face of our municipalities by affecting, in one way or another, modern architecture (skyscrapers), population growth, employment opportunities, mass communication, and the overall quality of our life.

Today, the electric utility industry in the United States can be traced to the invention of the practical light bulb, by Thomas Edison (1879). Always looking toward the marketplace, Edison realized that his light bulb would be meaningless unless he developed an entire electric power system that generated and distributed electricity. So by 1882, Edison realized his vision by developing the first central generating plant in New York.? His design was simple and bold. Reciprocating steam engines provided the motive power to generators, which produced direct-current (DC) electricity to customers. Surrounding merchants, businesses and homes immediately began using electricity offered by the plant, being the first to taste the advantages and pleasures of electric current.

However, Edison?s power plant was very limited. It could only provide electricity to those entities that were close to the power plant itself, due to distribution limitations from DC current. Electricity, by its very nature, loses current while traveling to further distances. Therefore, over the years, other scientists and engineers began improving on the distance capacity of electricity, so that individuals and facilities would not be so dependent on the proximity of the power plant. As electricity distribution evolved, some successes began to emerge. The independent works of two engineers, Nicola Tesla and Charles Steinmetz, ultimately made the commercialization of alternate current (AC) ubiquitous, which ultimately made the transmission of electricity over long distances possible. That very moment resulted with an acceleration of the industrial movement in the United States. Electricity could now be delivered almost anywhere in the United States and could be used by anyone and/or anything, once the power grids were set in place.

Today, the generation of electricity has undergone tremendous change, in terms of the way it is created and the way it is regulated (it is regulated in some states only). Environmental and market factors now play a critical role in how electricity is generated. And, in some cases, regulation continues to confine utilities (in various states) in the manner in which they generate electricity as well.


A utility power producer is generally defined as any person, corporation, municipality, state political subdivision or agency, irrigation project, federal power administration, or other legal entity that is primarily engaged in the retail or wholesale sale, exchange, and/or transmission of electric energy. In 1995, there were 3,199 utilities in the United States; however, only 700 of these utilities generated electric power. The remainder were electric utilities that purchased wholesale power from others for the purpose of distribution over their lines to the ultimate consumer. The 700 utilities that generated power had a total of 3,094 power plants or stations.

A nonutility power producer is defined as any person, corporation, municipality, state political subdivision or agency, federal agency, or other legal entity that either (1) produces electric energy at a qualifying facility (QF) as defined under the Public Utility Regulatory Policies Act (PURPA) or (2) produces electric energy but is primarily engaged in business activities other than the sale of electricity. In 1995, there were 4,190 nonutility power-generating facilities. Generation by nonutility power producers accounted for approximately 12 percent of the total U.S. electric generation. Fifty-six percent of the electricity generated by nonutilities was sold to electric utilities.

How Does Electric (Power) Generation Affect The Environment? Since the 1960s, the United States has witnessed a growing concern over the degradation of the environment. This concern resulted in passage of The National Environmental Policy Act (NEPA) of 1969, the first major Federal initiative to protect the environment and to reduce pollution to non-threatening levels. That effort was followed by major laws that address air and water pollution, solid waste recovery, pesticide and toxic substance regulation, resource conservation, noise abatement, endangered species protection, and other areas of concern. The electric utility, like all other emitting industries, was subject to the confinements of this Act as well.

Electricity constitutes a critical input in sustaining the Nation?s economic growth and development and the well-being of its inhabitants. However, there are by-products of electricity production that have an undesirable effect on the environment. Most of these are emissions introduced by the combustion of fossil fuels, which accounts for nearly 70 percent of the total electricity generated in the United States. It is common knowledge that electric generators are contributors to acid rain, global warming, and visibility impairment. For these reasons, the electric utility industry has come under serious scrutiny. As a result, the question regarding power generation has become: ?Is it possible to continue providing electricity on a consistent and growing basis and, at the same time, reduce the harmful effects its generation may have on the environment?? The straight answer to this question is ?yes?.

Major conservation efforts are currently being undertaken by many utilities to significantly reduce air emissions while generating power.? How do they achieve this? By beginning to incorporate integrated resource planning (integrating supply-side resources, demand-side management and environmental considerations) tools into their overall strategic plan for future power generation efforts (Renewable energy sources (wind, solar and hydroelectric) are important components of the supply side options and environmental management systems (ISO 14000) are important environmental tools that must be considered).? In addition to setting goals for the near future, utilities are developing or expanding pollution prevention options for existing coal, natural gas and oil-fired utility operations.

Why This Hub? While many U.S. industries have been subject to the Emergency Planning and Community Right-to-Know Act (EPCRA), electric utilities had historically been exempt, until 1997.? EPCRA data has been gathered on regulated industries since 1987, which included both quantities of pollution generated and pollution prevention programs established.? Unfortunately, baseline pollution data and pollution prevention programs for the utility industry is relatively new and thus little data is available.?? This sector hub is a critical step to filling part of that gap.

This hub is intended to serve electric utility professionals, researchers, academics, and others with industry information that deals with environmental aspects. It promotes the implementation of an environmental management system (EMS) in power plant operations including pollution prevention alternatives as its basis. In a world that continues to grow in terms of population, compounded with the decline of natural resources and an increasing public concern over the state of our environment, it is critical that information regarding the conservation and efficient use of natural resources be readily available to the public. Thus, we would like to welcome you to the electric utility sector hub so that you can familiarize yourself with the general operations of power generating plants and some of the pollution prevention alternatives that various electric utility entities have recently implemented in their plant processes and management.?

Standard Industrial Codes (SIC)

North American Industrial Classification System (NAICS)

1987 SIC

U.S. SIC Description

1997 NAICS

NAICS Description


Electric Services: Establishments that are engaged in the generation, transmission, and/or distribution of electric energy for sale.


Fossil fuel electric power generation.


Combination Electric and Gas, and Other Utility Services:

Establishments providing electric or gas services in combination with other services. Establishments are classified here only if one service does not constitute at least 95 percent of revenues.




The Electric Utilities Topic Hub™ was developed by:

Southwest Network for Zero Waste
Southwest Network for Zero Waste
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Hub Last Updated: 3/5/2009