Electric Transmission 101: How the Grid Works

Speakers (l-r): Jim Hoecker, Wayne Galli, Greg Ioanidis, and Kevin Kelly

Electric Transmission 101: How the Grid Works

Thursday, January 15, 2009
2:00 - 3:30 p.m.
210 Cannon House Office Building


On January 15, the Environmental and Energy Study Institute (EESI) and the Working Group for Investment in Reliable and Economic Electric Systems (WIRES) held the first of two briefings designed to explore key issues associated with the planning, construction, operation, and regulation of the nation’s high voltage interstate electric transmission network. Transmission issues have emerged as a major concern to policymakers and a broad variety of stakeholders over the past few years. As the new Congress and Administration prepare to take action on matters involving clean energy development, the reduction of greenhouse gas emissions, energy independence, and the reliability and security of electricity supplies, the investment in the “grid” has become an increasingly important matter of national energy policy. The physics and evolution of modern transmission systems are complex. An understanding of grid operations, planning, facilities siting, finance, and regulation nevertheless starts with these basics.

This session provided a basic explanation of how the high-voltage “grid” actually works, what it accomplishes, and how it is regulated. A panel of experts on electric transmission operations and regulation addressed the history and basic components of the grid, how electric power flows are controlled, the basics of grid interconnection and operations, the limitations of the system, and how operators address those limitations. This briefing also covered the fundamentals of rate regulation and cost allocation, organized (Regional Transmission Organizations, or RTO) and bilateral (non-RTO) markets, regional transmission planning, siting, and reliability concerns.

Speakers for this event included:

  • James Hoecker, former Chairman, Federal Energy Regulatory Commission (FERC), and Counsel to WIRES
  • Wayne Galli, PhD, Director, Transmission Development, NextEra Energy Resources (formerly FP&L Energy)
  • Gregory Ioanidis, Vice President, Business Strategy, ITC Holdings
  • Kevin Kelly, Director, Policy Analysis and Rulemaking, FERC

Click here to download the presentation used by all four speakers.

Extra copies of the handout Electricity Transmission: A Primer, published by the National Council on Electricity Policy, are available here for a $20 fee.



Briefing Highlights

  • Today's transmission grid is a highly integrated, interconnected system that transmits electricity from the site of generation—where electricity is "created"—to the load—where it is used by "consumers."
  • Transmission moves power long distances from generators to load with some loss of energy. High interconnectivity increases reliability.
  • Unlike highways, pipelines, and telecom, the flow of electricity cannot be routed or controlled. Power flows via the path of least resistance. This is a critical difference in how the grid differs from other transportation mechanisms.
  • Power systems are interconnected across large areas. There are 8 regions and 135 balancing authorities within the three major interconnections: Western (West of the Rockies), Eastern (East of the Rockies), and Ercot (Texas).
  • Transmission is regulated by a number of federal, regional, state and local entities. These entities oversee operations, development, planning, siting, reliability, and ratemaking. State regulations play a very significant role, and vary state-to-state.
  • The transmission system is essential to delivering remote clean energy resources, where the site of generation is often rural landscapes with good sun or wind resources far from electricity demand.
  • Billions of dollars of transmission investment will be needed to keep up with the predicted short-term electricity demand and to provide interconnection for expanded electricity generation from both renewable and conventional sources.


This briefing was the first in a series cosponsored by EESI and WIRES. Subsequent briefings include "Policy Challenges to Grid Expansion", "Upgrading the Grid", "Cost Allocation", "Integrating Variable Renewable Resources" and "Planning and Expanding the Grid".


For more information, contact Laura Parsons at (202) 662-1884 or lparsons [at] eesi.org.


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