

 It has been shown how the maximum demands not

only of individual consumers, but also of their effect
collectively on the maximum demand, impose on the
conductors and equipment of a distribution system.
Measures to reduce these maximum demands result
in a lesser need for costly generating facilities with
further reductions realized from decreased losses in
both transmission and distribution systems.
 
 In some instances, they may be metered separately.
These meters, as well as some of the relays, may be
operated by radio signals or other type control at
Figure 7-8. Diversity factor.
 
 . And many of the measures also include reductions
in consumers’ consumptions by replacement of
lighting, heating, air-conditioning, and some power
devices with more efficient units. In general, the
reduction in demands, sometimes also called peak
shaving, is accomplished by dropping interruptible
loads, and by controlling major load units by means
of relays and circuitry that restricts their coincidental
energization.
 
 Concentration on large industrial and commercial
consumers not only produces larger results but may
be more quickly and easily achieved. Similar
measures are taken in the case of residential
consumers. Major appliances such as clothes and
dish washers, air conditioners, water heaters, and so
on, may also be wired through relays so that they do
not turn on at the same time.
 
 Service Factors 153 regularly scheduled time periods
or predetermined demand levels. In all cases,
promotional rates (for decreased consumption and
demand) may be employed
 Factors that impact
electricity demand

Some of the key factors that impact the industry are:
 Economic growth
 Housing and population growth
 Income growth
 Weather

 
Economic growth
 High economic activity creates demand for electricity
consumption. An economic contraction affects
consumption negatively.
 
Housing and population growth
 Housing growth means that there are a higher
number of residential connections for the industry.
This increases the need for electricity.
 
Income growth
 The most important factor that affects electricity
demand is household income. According to the U.S.
Energy Information Administration (or EIA),
between 1981 and 2001, household real disposable
income increased by 49%—from $17,217 to $25,698.
As income increased, so did the demand for larger
homes and new appliances. This increased the
demand for electricity.
 
Weather
 Higher variations in temperature mean higher
electricity consumption. More electricity is to heat
and cool buildings. As a result, weather plays an
important role in electricity demand.
 The structure of the electric
utility industry

 Industry structure
The U.S. electric industry includes over 3,000 public,
private, and cooperative utilities. It also includes more
than 1,000 independent power generators, three
regional synchronized power grids, eight electric
reliability councils, ~150 control-area operators, and
thousands of separate engineering, economic,
environmental, and land-use regulatory authorities.

 
Investor-owned utilities
 Investor-owned utilities (or IOUs) are private
companies. They’re subject to state regulation. IOUs
are financed by a combination of shareholder equity
and bondholder debt. Most IOUs are large. Many of
them have multi-fuel—electricity and natural gas—
generation and multi-state operations.
 
Publicly-owned utilities
 Publicly-owned utilities (or POUs) are government
or municipally-owned utilities. Publicly-owned
utilities are generally exempt from regulation by
state regulatory commissions. It’s assumed that
POUs keep customers’ interests in mind when they
set rates and service standards.
 
Cooperative utilities
 Cooperative utilities are owned by the customers.
They’re regulated by the board of directors. The
board consists of ten elected individuals.
Cooperative utilities are usually formed in rural
parts of the country where the customer base is low.
 
Federal power agencies
 Federal power agencies consist of four power
marketing agencies (or PMAs). PMAs market
wholesale power. They usually play a role in
transmission and electric power systems. Some
agencies also own power plants.
 
Power marketers
 Hundreds of companies are registered as wholesale
power suppliers. They don’t own power plants.
Instead, they buy power from multiple suppliers on
a long-term or spot-market basis and then resell it.
Brokers arrange transactions, but never actually take
ownership of the electricity.
 
Independent power producers
 Independent power producers (or IPPs) generate
electricity from their own power plants, but don’t
provide retail service. An IPP may sell its power
through brokers. It sells its power to utilities or
marketers. An IPP can also sell its power directly to
consumers. IPPs operate in the unregulated power
generation space. They sell power at market prices.