The United States, the world’s largest economic power, is also by far the leading country for the production and consumption of electricity.

Responding to a continuous increase in demand, which has doubled in the space of thirty years, electricity production reached nearly 3,800 TWh at the end of the 1990s, that is to say more than seven times the French consumption for a population approximately five times larger.

This is to say if the American economy and the lifestyles of the inhabitants are “energy intensive”.

Most of the electricity production comes from national coal (around 52%), the balance comes from nuclear (20%), gas, hydraulics and renewable energies (28%).

Since the beginning of the 1990s, gas has tended to take an increasingly important place in the production of electricity: most of the new needs are met by power stations using this type of fuel.

Nuclear power, which had greatly developed in the 1960s and 1970s, particularly stimulated by the rise in oil prices following the first oil shock, is no longer making progress. No power plant has been commissioned for a long time, with the Three Miles Island incident (1979) contributing to the freezing or abandonment of many projects.

Finally, it should be noted that some states are engaging in proactive and ambitious policies for the development of renewable energies, mainly in solar and wind power (California, Texas).

The United States has an industrial structure that is not very comparable to that which has developed in most European countries.

While from the post-war period onwards, Europe gradually acquired large-scale players, often state-owned, with monopolies over large territorial areas, the American electricity industry grew organized around smaller firms, active in restricted areas, and mostly private.

This industrial configuration is the result, on the one hand, of the regulations which imposed themselves on the various players throughout the 20th century and, on the other hand, of the particular methods of involvement of the public authorities in the American electricity sector.

The history of the American electricity sector is inextricably linked with that of utilities, these vertically integrated companies specializing in the production, transmission and sale of electricity.

At the start of the 20th century, utilities provided only 2/5th of electricity production, the rest being supplied by self-generators, that is to say manufacturers who acquire means of electricity production to satisfy their own needs and resell the surplus.

Then, in a general movement, utilities begin to develop, buy production units from manufacturers, attract new customers and grow with the spread of uses of electricity.

They soon had exclusive franchises and enjoy a monopoly position, the geographical boundaries of which are often initially defined by the boundaries of the municipalities. To this exclusive franchise is attached an obligation to serve all consumers in the said territory.

Utilities activities are supervised and controlled at state level: the first regulatory bodies (Public Utility Commission) were created in 1907 (Georgia, New York, Winsconsin), soon followed by others. In the following decade, twenty-four states set up regulatory bodies; in 1930, all except Delaware were provided.

To prevent utilities from selling excessively expensive electricity especially with the rise of solar energy, the Public Utility Commissions themselves determine the prices that firms will be able to charge (“rate-based regulation”).

Tariffs are set at a level that covers supply costs and also incorporates a rate of return on capital employed, high enough to encourage the investment necessary to meet demand. This type of regulation, which provides utilities with regular income and a low-risk framework for action, attracts investors.

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