U.S. Department of Energy - Energy Efficiency and Renewable Energy

Tribal Energy Program

Electricity Grid Basics

The U.S. electric energy industry is the largest "machine" in the world, comprising more than 850,000 megawatts of generation and more than 160,000 miles of high voltage (above 230 kilovolt) transmission lines. In 1998, the North American retail natural gas and electricity market was $305 billion dollars. This is more than three times the market for local telephone, and more than seven times the U.S. cattle market. Primary energy consumption (including petroleum, natural gas, electricity and coal) rose from about 45 quadrillion Btu (or 45 "Quads") in 1960 to about 95 Quads in 1999. The U.S. Energy Information Administration projects that U.S. primary energy consumption will increase to 130 Quads in 2020. More than one-third of the primary energy in the United States is used to generate electricity.

Since the 1960s, electricity prices have declined in relationship to the gross domestic product, meaning that production and delivery of electricity is now more efficient than ever. The use of electricity is projected to grow significantly over the next decades. The use of natural gas to generate electricity has also increased significantly, even though U.S. production of natural gas has remained stagnant.

The energy industry will continue to be a backbone of the U.S. economy both in terms of its weight in the markets, and in terms of the importance of energy supply and infrastructure to drive all other economic engines. Energy availability and cost are critical to the economic growth of our country and of local tribal economies.

This section provides background material on the fundamentals of the electrical grid, including: