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Electric Energy Distribution Industry Profile Excerpt
| SIC Codes: 4911 NAICS Codes: 22112 Page Length: 10-12 Last Quarterly Update: 7/7/2008 View Sample Industry Profile |
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Over 6,000 companies in the US are involved in the wholesale trade and retail distribution of electricity, with combined annual revenue of more than $220 billion. Companies include owners of high-voltage transmission lines and retail distribution systems, and intermediaries like energy dealers and brokers. The US consumes close to 4 billion megawatt hours (MWh) of electricity per year, about 50 percent of which is bought and sold on the wholesale market.
COMPETITIVE LANDSCAPE
The electric energy industry in the US is currently in a state- and federally-sponsored transition, or Electric Restructuring. The traditional electricity industry consists of large investor-owned utilities (IOUs); municipal utilities; rural cooperatives; and government entities, like the Tennessee Valley Authority (TVA), that own the generation, transmission, and retail distribution facilities within a limited area, and serve all customers within that area as tightly regulated "natural monopolies." Under restructuring, the generation, transmission, and distribution operations are carried out by separate companies, and the owners of local distribution lines make their lines available to competitors. About half the states have adopted restructuring legislation, but only a third are actively engaged in restructuring.
The intended purpose of moving toward a less regulated electricity market is to decrease the cost of electricity by fostering competition among producers. The practical effect of federal and state legislation has been the divestment of generation facilities by local utilities. Despite restructuring, many local electricity distributors are owned by utility ...
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