How is electricity "sold"?

[sethdallob]

How does one company “sell” electicity to another company? Obviously, the money part is easy to figure out, and I know that the electrical grid connects everybody together.

But I remember from high school electricity class (they called me “Sparky” for a reason ) that in a wire, the electrons just kinda wiggled back and forth really quickly, and appliances and the like just slowed down the wiggling.

Anyhoo, how do they “move” power across thousands of miles? And, where do they store this newfound power? Batteries and capacitors are not very practical (or are they?)…

[bouv]

Well, first off, I am only slightly knowledgable on the subject, and will try as best I can to explain.
First off, electricity is the movement of electrons that have become ‘free’ (i.e., not involved in bonding atoms together) moving around inside a piece of material. They become ‘free’ when a certain amount of energy is applied. In the case of power generators, a moving magnetic field supplies the energy (I think, I did say I was only slightly knowledgeable.
Now, the electrons move from power station to your house. First it goes to that little grey box mounted on the side. This box records all the pertinent information (volts, amps, etc…)
When you use an electrical device, it takes a certain voltage and amps. I believe this has something to do with the watts, which is the actual measurement of the electricity used.
Now, the grey box measures how many kilowatts you use, and for how many hours, and calls them kilowatthours (original, huh?)
Power companies then usually charge you a flat fee plus a fee per kilowatthour used.
Simple, no?

[The_Ryan]

I read once that power companies should be called energy companies, because they sell energy, not power. But I disagree. When, for instance, a food company sells food, it hands over some food, en masse. Power companies don’t sell energy en masse; they sell power. I would imagine that it would work the same for inter company sales; if company A sells company B 1GWh, then company A will supply 1GW to company B for one hour. Of course, company B doesn’t have any direct use for 1GW, so instead of directing the electricity to company B, they direct it to the customers of company B.

[Arjuna34]

*Originally posted by The Ryan *
**I read once that power companies should be called energy companies, because they sell energy, not power. But I disagree. When, for instance, a food company sells food, it hands over some food, en masse. Power companies don’t sell energy en masse; they sell power. I would imagine that it would work the same for inter company sales; if company A sells company B 1GWh, then company A will supply 1GW to company B for one hour. Of course, company B doesn’t have any direct use for 1GW, so instead of directing the electricity to company B, they direct it to the customers of company B.
**

Saying they sell power over a certain time is the same as saying they sell energy. People in the industry think of it as energy- they don’t buy 1 MW, they buy 1 MHh (mega-watt-hour), which costs about $1 in bulk.

Arjuna34

[Balthisar]

*Originally posted by The Ryan *
**I read once that power companies should be called energy companies, because they sell energy, not power. But I disagree. When, for instance, a food company sells food, it hands over some food, en masse. Power companies don’t sell energy en masse; they sell power. I would imagine that it would work the same for inter company sales; if company A sells company B 1GWh, then company A will supply 1GW to company B for one hour. Of course, company B doesn’t have any direct use for 1GW, so instead of directing the electricity to company B, they direct it to the customers of company B.
**

Actually, Watts are a unit of power. Watt-hours are units of energy. Thus it’s correct that electric companies can be called “energy companies.”

On that note, why “electric company”? Doesn’t that imply a company that’s electric, in the sense of, say, an “electric light bulb”? Why not “Electricity Company”? Maybe Power Company makes a lot more sense!

And…

Originally posted by bouv
**Well, first off, I am only slightly knowledgable on the subject, and will try as best I can to explain.
First off, electricity is the movement of electrons that have become ‘free’ (i.e., not involved in bonding atoms together) moving around inside a piece of material. They become ‘free’ when a certain amount of energy is applied. In the case of power generators, a moving magnetic field supplies the energy (I think, I did say I was only slightly knowledgeable.
Now, the electrons move from power station to your house. First it goes to that little grey box mounted on the side. This box records all the pertinent information (volts, amps, etc…)
When you use an electrical device, it takes a certain voltage and amps. I believe this has something to do with the watts, which is the actual measurement of the electricity used.
Now, the grey box measures how many kilowatts you use, and for how many hours, and calls them kilowatthours (original, huh?)
Power companies then usually charge you a flat fee plus a fee per kilowatthour used.
Simple, no? **

Not too bad, bouv. A moving magnetic field is it. That’s why generators spin. That little grey box (“the meter can”) houses the “meter,” which is pretty much an inductive motor attached to the gears that make the big wheel and all the little dials turn. The more current that is being consumed in your house, the stronger the magnetic field is in the meter can. The stronger the magnetic field, the faster the motor can spin. This is all calibrated to indicate “watt-hours” (usually KILO-watt-hours) based on the draw you use.

Around here (Metropolitan Detroit, MI) my power company (Detroit Edison) does NOT charge me a flat fee – only the amount of energy I use. I didn’t know this was uncommon elsewhere. I get EXTREMEMELY upset that my gas company (“Consumers Energy” formerly “Consumers Power”) charges me a flat fee plus usage. It makes me want to buy a huge propane tank, even if it costs more (rather be right than dead than wrong an alive, eh?).

You could argue, probably unsuccessfully, that the electric meter is ripping you off, since it does consume a miniscule amount of energy in order to operate.

You could get revenge for this ripoff by (DANGEROUS–ILLEGAL) cutting your electricity bill almost exactly in half by installing heavy guage jumpers inside your meter can – then only half of the electricity you use would pass through the meter!

[sethdallob]

I must have not been clear in my question. Let me try once more:

How do power companies sell power to each other? How does the electric potential get from Washington to California (as happened recently to satisfy high demand)?

Sorry for the bump, but I’m still curious.

[hotmamma]

circuits… I’m guessing most companies have closed circuits that they can allow others to tap into when authorized

[jayjay]

I’ve been wondering this, too. Here in Pennsylvania, we moved to “electricity choice” three years ago, where homeowners can choose an electricity-producing company from a list that the state utilities commission distributes. But regardless of who makes your electricity, it’s still coming to your house over the same lines that everyone else in the neighborhood is getting their electricity from (and billed as “delivered by” the local utility). How does this work? How do they tell the difference between Southern Alleghenies Electric Company electricity and Penelec electricity when the wires that deliver the stuff are the same ones?

[Balthisar]

*Originally posted by jayjay *
**I’ve been wondering this, too. Here in Pennsylvania, we moved to “electricity choice” three years ago, where homeowners can choose an electricity-producing company from a list that the state utilities commission distributes. But regardless of who makes your electricity, it’s still coming to your house over the same lines that everyone else in the neighborhood is getting their electricity from (and billed as “delivered by” the local utility). How does this work? How do they tell the difference between Southern Alleghenies Electric Company electricity and Penelec electricity when the wires that deliver the stuff are the same ones?
**

Here in my part of Michigan we have some type of “Gas Choice” pilot program. It may work the same. Essentially, the “gas company” (in my case Consumers Energy) actually sends their very own case through their very own lines to my house. All Consumers charges me for is “delivery” at the same rate they charge delivery for their own customers. But really, it’s still the same gas as my neighbors receive. However, my gas company delivers to Consumers the gas that I consume. This setup is all terribly complicated, so the previous description isn’t really my personal situation – I just use Consumers for being easier.

As for how companies sell electricity to other electricity companies, this is according to my friend who is a Consumers Energy Power Controller (this is the electric part of the company this time, not the gas part). I’m paraphrasing:

Every plant that produces electricity is on the same network of electrical grids, i.e., lots of electrical corridors all connected to each other at some point or another via huge switches. Any particular plant can be “on the grid” or “off the grid” as necessary, but they’re generally always on the grid unless the reactor is being refueled (in the case of a clean, efficient, nuclear plant). In addition, parts of the grid can be “isolated” or “switched in” to other parts of the grid. Thus, parts of the grid are all owned by different companies, but Power Controllers can close some switches making smaller parts of the grid into bigger small pieces of grid (with me?). Because the individual plants know how many megawatthours they’re sending out, and the Power Controllers know where it’s going, they know whom to charge for their electricity. For example, if they’re selling only to their own customers, there’s no added book keeping. But if they’re helping a heavy load to a competitor (such as selling to another state), they know how much is being switched to the competitor, and charge them a regulated bulk rate (even in so-called “unregulated” states). When you get electricity at your home, there’s no difference between where your neighbors’ electricity comes from and your own. The power companies just swap it back and forth.

I think I covered the basics. If you have more specific questions, I think I can remember the details, or I can ask my friend again.

[Billdo]

I know something about this, but not much. However, I think that this grossly oversimplified answer will be helpful. I’d be happy to answer more detailed questions to the best of my ability.

Spanning the country is a set of high voltage wires known as the transmission grid. Actually, the nationwide grid is divided up into many sub-grids each controlled by an electric company or another organization. Between each of the sub-grids are links to adjacent sub-grids.

Attached to the transmission grid are a whole bunch of generation stations (including both those owned by the owner of the sub-grid and those owned independent of that sub-grid owner). Also attached to the grid are the users of high voltage electricity, including industrial plants and local distribution systems, which step down the high voltage electricty and distribute it to homes and businesses.

Each of the generators linked to the grid, users linked to the grid, and links between the subgrids have meters indicating the electricity flowing through the links.

Because of the nature of electrictity, you cannot tag electrons and figure out where they were generated and where they were used.

Rather, if one major electric supplier sells to a major user who needs the electricity, the parties arrange to have sufficient transmission capacity on the links that connect their respective sub-grids, and the supplier simply pumps the required energy onto its sub-grid and the user draws the power off of its sub-grid.

Now issues of how the electricity actually flows, how to reserve transmission capacity, how to buy and sell wholesale electricity, safety and reliability, how all of this is controlled and paid for, and other related issues are horribly complex and rapidly changing with electricity deregulation, but the basic answer is that in a wholesale sale of electricity one company puts an amount of electricity onto the grid and another draws it off.

As for retail electric choice, the oversimplified answer is that the various electric companies agree to put sufficient electricity onto your local distribition system to cover the demand of their customers, and the local electric company is reqired to deliver that electricity to the retail custimers (homes and businesses) on their distribution sustem for a regulated fee.