The Grid: Electrical Infrastructure for a New Era

by Gretchen Bakke

Any sufficiently advanced technology is indistinguishable from magic. —ARTHUR C. CLARKE

The grid was right there and it didn’t even disturb the view.

It cannot be boxed or stored or shipped. It is always used the same instant it is made, even if the person using it is a thousand miles from the source. If electricity is made, it’s shipped; if it’s shipped, it’s used. And all of this happens in the same singular millisecond.

That finally changed during the Great Depression, when the government intervened and brought the grid and electricity to the rural folks whom capitalism would have happily left behind.

Before grid-scale wind and solar power came online, slow and steady always won the race. There was no competition in electricity, a protection enshrined in law that made each utility the unique master of its realm. They made our power and they always knew how much of it there would be, where it would come from, and where it would be used.

As a result the electricity we use, day in and day out, is always fresh. So fresh, that less than a minute ago, if you live in wind farm territory, that electricity was a fast-moving gust of air. And if you live in coal country, it was a blast of pulverized coal dust being blown into a “firebox”—a huge, industrial, flash-combusting furnace. If you live in hydro country it was a waiting rush of water dammed up by a massive concrete wall. Picture it. The electricity you are using right now was, about a second ago, a drop of water.

Power lines are there to channel or direct broad halos of electromagnetism in a direction determined by something as simple as someone depressing the lever on their toaster. Suddenly a pathway opens up, one that wasn’t there an instant before, and electricity follows it, moving into and through the toaster, where it is slowed down as it passes. This slowing down, or resistance, produced by the device causes electrons to release heat, which toasts the bread. After a certain number of seconds the lever pops back up, ejecting the toast and closing off the toaster channel, and electricity must find another way.

This is our grid in a nutshell: it is a complex just-in-time system for making, and almost instantaneously delivering, a standardized electrical current everywhere at once.

Response time is limited by human and mechanical capabilities, but wind speed and lightning storms are not. There are predictive mechanisms in place. The man in front of those screens sees lightning strikes move their way across a map drawing closer and closer to repair crews until he picks up the phone and makes the call: “Get out of there, shut it down.”

The fact that we don’t yet have a good means of storing electricity doesn’t just mean that we have little backup power on hand to deal with shortages; it also means that it is difficult to dispose of surplus power when it’s produced in excess.

Power production isn’t just an industry, it’s an ecology.

That this is how electricity works in America and pretty much everywhere else in the industrial world is not the logical outcome of physics, it’s the product of cultural values, historical exigencies, governmental biases, and the big money dreams of financiers.

Electricity is not like anything else. It’s not a solid, or a liquid, or a gas. It isn’t quite like light or heat. It doesn’t move like the wind or the tides. It doesn’t combust like oil or burn like wood. If it resembles anything at all from the world we know, it is in some way like gravity. Which is to say, it is a force to be reckoned with.

In the early days of the grid, people didn’t even change their own bulbs for fear of electrocution. Instead, a trained bulb replacer was dispatched on a bicycle balancing a giant sack of hand-blown vacuum-filled ampules on his back to replace all the bulbs that had burned out during the previous weeks.

Odd as it may seem, the most accurate of these for explaining voltage is the highly anthropomorphic notion of “desire”: electrons that have been artificially split from atoms (which is what an electromagnetic generator does) “want” to resolve themselves back into whole atoms again.

What an electric grid does, then, is first forcibly divorce happy electrons which hold a negative charge from their atoms which hold a positive charge (generation) and then provide an easy route (the wires) for them to reunite again. As the electrons travel along these wires they pass through all the things we put in their way—things like incandescent lightbulbs. And as they pass they encounter resistance. A filament in a bulb is less conductive than the lines into and out of the device. Some of the electrons’ potential—the push it has to reunite—is thus expended in getting through this resistive material.

one. If we want the grid to work for us, the relative vehemence of the electric flow must be controlled.

In other words, the notion of consumer or mass culture, in which all people are promised access to all things, was in part the result of the universalization of electricity and not the other way around.

America was in this brief moment before the arrival of the rotary converter in danger of having nothing like a national grid, nothing like municipal grids, but just a mess of competing interests and inventions, mechanical systems, and investor preferences.

Perhaps most important to America’s future, it was in Buffalo, with the force of Niagara’s own power, where the manufacture of aluminum first became a profitable enterprise. Finally we had a light, strong metal for our airborne and land-bound engines; the era of the automobile was officially begun with air travel soon to follow.

The hydroelectric plant at Niagara Falls was thus the closing bell on the effervescent, chaotic, immensely creative and inventive activity of the previous seventeen years: 1879, the first arc light grid in San Francisco; 1882, the first low-voltage direct current grid in New York; 1887, the first alternating current grid; 1891, proven long-distance high-voltage transmission. And in 1896, the completion of the first large-scale generating station at Niagara Falls, together with the first long-distance transmission wires in constant use, the total adoption of parallel circuits, incandescent lighting, and the equally near total adoption of alternating current. America had her grid.

In 1901 there were only eighteen refrigerators in all of Manhattan, and a decade later, in 1910, though there were close to 45,000 electrical appliances in Southern California, 80 percent of these were irons, all of which screwed into light sockets. Nor was the dearth of electric lamps, electrified motors, electric refrigeration, electric outlets, and the plugs that fit into them only about personal preference or technological lag.

Rockefeller’s sprawling vertically integrated corporation perfectly captured the trend in the late 1800s of replacing many small companies in competition with one another with single large entities capable of producing and moving products to market at a scale inconceivable to family businesses or local undertakings.

According to the historian Richard Hirsh, in the years immediately following the creation of the Standard Oil Trust, more than 4,000 businesses in the United States were combined into 257 corporations, and “by 1904, one percent of American companies controlled 45 percent of manufactured products.”

The most important thing about a monopoly or other organization of companies that colludes to fix prices is that the price of a good or service need not be related to the cost of producing it. A farmer with grain to sell also needs to transport and store it. He either pays what the elevator cartel is asking or his grain rots and he loses everything. Or, if he is slightly better off, he can build a silo of his own. For that, he needs steel; he pays the price Mr. Morgan is asking, or he doesn’t use that metal in his construction. A customer’s choice is limited to paying the price on offer, regardless of how arbitrary or exorbitant, or not partaking of that particular good or service and thus courting his own ruin.

Despite Edison’s dream of creating an electric grid that was both vertically and horizontally integrated, his DC network was the exact opposite—decentralized, small, unwieldy, and prohibitively expensive to scale up. As such, electric companies provided very poor fodder for the processes of monopolization so popular in other industries at the time.

The thrust of the 1935 Public Utility Holding Company Act was, as its title makes clear, to make it illegal for any company to hide their debts in “holding companies”—special shell corporations that made the actual worth of an enterprise impossible for investors to determine.

Given all of this, electricity was at the very least an extremely unwieldy commodity; at worst it was an almost impossible one to stay in business supplying. This was one reason why many early electric companies were so eager to sell and install private plants: it was an easier route to sure income than convincing a whole neighborhood to buy their product and then building the necessary infrastructure and maintaining the necessary workforce to supply central station power.

Thus, though Insull proceeded like other monopolists in his dealings with competitors—mostly by buying them, or running them out of business, or buying the companies that supplied them (and thus running them out of business)—the secret to making a fortune off of electricity was not simply to have lots of customers but to have lots of different kinds of customers in order to provide sufficient demand to run a large, centralized generating station 24/7.

What Insull wanted and strove to build was an infrastructure the inverse of what he was saddled with upon his arrival in the Midwest. Instead of many little generating stations, with many owners, running intermittently, he wanted one that he owned and which ran all the time. In order to do this he needed to acquire “load” for each time period during the day. He needed streetcar companies to buy from him at dusk and dawn, residential customers for the late evenings and early nights, municipal street lights for nighttime, businesses for the late afternoons and early evenings, and most important of all, industry for midday. He wanted to make a lot more power, make it round the clock, and to sell it all—every last watt.

One of the reasons that electric cars have received such public praise is that they can be programmed to charge almost exclusively at night and thus provide that rarest of beasts—substantial midnight load.

Progressives and utility company managers thus found each in the other an ally, and what was born of their alliance was an agreement to monopoly; if the utilities accepted to be heavily regulated, the government at the state and federal levels agreed to grant them a guaranteed service area, within which no other electric utility would be issued a charter to function.

In 1892 the Pearl Street Station ran at 2 percent efficiency—which is to say, it transformed about 2 percent of the potential energy in the coal it burned into electricity—twelve years later the Harrison Street Station had an efficiency rating of 12 percent and Fisk Street, Chicago’s first AC power plant, completed in 1903, did even better. By 1940 even average power plants were running at 20 percent efficiency.

system like this, that converts a fuel—any fuel, coal, plutonium, oil, gas, biomass, or trash—into heat, is going to top out at about 50 percent efficiency. This is an inevitable law. No power plant built by man or some yet-to-be-invented machine intelligence will ever do better than just under 50 percent.

By the mid-1960s it had become clear to utility men that a plant run at just over 30 percent efficiency was both the most reliable and the most cost-effective way to make electricity.

The second law of thermodynamics has been known since 1824 and taught to electrical engineers since the profession emerged in the late 1880s.

What was shaken by this rather rude intrusion of Carnot’s theorem into the business of making and selling electricity in America was that indefinite growth—as a business strategy—was no longer the only, nor even the best, way to proceed.

Simultaneously, the shortages of the 1970s that pushed electricity prices up also produced a new relationship between Americans and their patterns of consumption. “Conservation” and “efficiency” became the watchwords of the 1970s. I remember being trained at school, in the middle of this decade, how to conserve electricity: the last kid out of the room always turned off the lights, the hallways were never lit, the heat was down in sweater territory, and the girls were encouraged to wear pants rather than tights under their dresses.

The reason for this long-standing state support was that electricity was deemed that peculiar kind of public good whose price is driven up rather than down by competition and whose availability is disturbed rather than assured by multiple, competing providers. In the 1970s, however, it slowly became clear that the supposed deleterious effect of competition was less a natural law than a bureaucratically enshrined functional reality.

Samuel Insull didn’t just build an infrastructure, he didn’t just make a monopoly enterprise out of the most unlikely of candidates, he didn’t just figure out how to fold government regulation into the very heart of a utility’s finances, he also conceived of and pushed a dedicated propaganda machine, funded by customer rates, to ensure that investor-owned (for-profit) utilities remained the way the America made, distributed, and ran the business of electricity.

Growth was not so much an industry watchword as a dogma that would carry it, and us, forward until, bit by bit, in the late 1960s and early 1970s, all the truths of the electricity business began to break down.

In many ways it is more correct to say that Samuel Insull, and not Thomas Edison or Nikola Tesla or even George Westinghouse, made America’s grid. He normalized and rendered profitable the central stations without which we would have no grid at all, just a bunch of factories, municipal buildings, and homes with little electricity plants in their basements. He imagined electric light and power as products for the masses not the few; he made it seem natural that the electricity business could only work as a monopoly, and he ushered in an era in which one of the most powerful things one could do with money, and to make money, was to use information to manipulate public opinion and influence public investment.

To modern ears, an executive call for a politics of thrift, moderate privation, cooperation between neighbors, and adjusting to (rather than mastering) circumstances sounds a bit tinny. So long have we been enjoined to consume our way out of economic crises, to buy more and spend more in order to stimulate manufactories to produce more and thus hire more, that the very notion that a sitting president might encourage us to do less of any of these things is kind of a shock. But Carter meant it. He wanted people to wear sweaters.

If its nesting efficiencies suited the prevailing attitudes of the 1970s, cogeneration also maintains a solid fan base among electrical engineers because its double use of the same heat increases plant efficiency to over 50 percent, leaving Carnot’s theorem in the dust. Existing means for increasing power plant efficiency cannot be made to do better than cogeneration does by its very nature.

Though the integration of cogeneration into the national grid was clearly wise, PURPA also made it explicit that alternative renewable power projects would also be granted the right to sell their power to the local utility. As long as these generators remained smaller than 80 megawatts and produced electricity for less than the avoided costs of the utility then they would, just like the cogeneration plants, be guaranteed a buyer and a fair price for their electric power.

The utilities quickly found themselves with a plethora of new problems. Never before had they had to deal with variable generation, never before had they had to deal with distributed generation, and never in the seventy years of their existence had they lost control over the production side of their business. At issue wasn’t that they suddenly had to integrate a massive amount of new power but that they weren’t getting to decide how much, where, or when relatively small amounts of electricity would come streaming onto their power lines. They just had to pay for it and distribute it when it got there. Their business model had no provisions for this new reality.

The level of flexibility that the utilities found themselves needing, most especially in their attempts to link pricing models with time-of-day rates, would not be realized until the Internet would bring real-time arbitrage to electricity markets almost fifteen years in the future.

Unwittingly Ronald Reagan had created one of the weirdest marriages American business has ever seen, as Manhattan investment bankers scrambled to buy up wind turbines made by commune-living, Vietnam-era draft dodgers. The result was that California, by the mid-1980s, had a massive wind bubble, ripe for popping.

Texas is aiming for 75 percent renewable power generation by 2050. The United States as a whole has a more modest goal of 20 percent by 2030, though a recent report from NREL, the National Renewable Energy Laboratory that President Carter helped to establish, holds that we are already capable, with existing technology, of making 80 percent of American power from renewable sources.

The Cardigan Path, on the surface of things, had been utterly erased by Duran Duran, crack cocaine, and the drive to deregulate and make a profit off everything.