Generation
Unlike some commodities like natural gas or oil, electricity cannot be stored easily and must be generated at the moment it is needed. Also, the demand for electricity constantly changes. This changing demand depends on the time of day, time of year, weather conditions and other factors.
Different kinds of power plants are used to generate power depending on the level of demand and when it is needed. In Oklahoma, coal-based and combined-cycle natural gas power plants work around the clock to provide a steady supply of power. These are referred to as “baseload plants.” Other renewable plants, which convert wind, solar and hydroelectric energy into electricity, and natural gas plants provide supplemental electricity during periods of high demand. Some of these generators can be started and stopped quickly, but the setypes of generation can sometimes be too expensive or variable to be relied on for a constant supply of power.
A diversity of generation options protect electricity customers from power disruption and cost increases that could arise if one fuel source becomes unavailable or experiences price spikes. Fuel diversity also helps to ensure stability and reliability in electricity supply and strengthens national security.
In Oklahoma, electric utilities seek to maintain a balanced amount of fuel diversity. Oklahoma has many forms of renewable energy, including wind, solar and hydroelectric, as well as many different types of fossil-fuel based generation, including natural gas and coal. No individual fuel is capable of providing the energy to meet Oklahoma’s total electricity demands.
The Oklahoma Corporation Commission (“OCC”) regulates the types of electric generation that regulated utilities maintain. The OCC requires utilities to engage in integrated resource planning to ensure they are properly considering all factors when planning their generation portfolios. The OCC also ensures that utilities use competitive bidding in most instances when constructing or purchasing new generation assets. All costs associated with constructing and operating generation facilities are reviewed by the OCC to ensure those costs are reasonable and able to be recovered through customer rates.
Power Delivery
Once electricity is created in a power plant, it needs to be immediately delivered to customers. At a step-up substation near the generator, voltage is increased to between 69,000-765,000 volts. Electricity enters the transmission system, traveling at nearly the speed of light over heavy cables strung between tall towers. This all requires careful coordination between the utility generators and the operators of the transmission grid.
At various points on the transmission grid, there are “exits” where power is “stepped-down” at a substation near the final delivery destination. These step-down transformers reduce the voltage so electricity can be carried on smaller wires through cities and neighborhoods. Distribution lines carry electricity to the customer. Small transformers on poles or underground reduce the voltage to a safe 120-240 volts for residential customers.
