HISTORY & ANALYSIS OF
THE US POWER INDUSTY
Introduction
The power industry is a big and growing industry and consists of electricity, oil, gas,
coal, and alternative sources of power such as solar, wind, and a possible new energy source,
called fusion. The power industry is important to consumers and is a basic necessity in everyday
life. Power provides heating and cooling in homes, buildings, automobiles, it provides power for
day-to-day electronic devices, such a cell phones and laptops, and “powers the machines that
manufactures the services or goods we work with (Energy Premier).” The world is dependent on
the power industry, and the consumption of energy is growing fast. What would the world do
without power? In order to understand and appreciate the power industry, it is important to know
its history, how it works, and what happens “behind the scenes” in the power industry.
History
“The history of power generation is long and convoluted, marked by myriad
technological milestones, conceptual and technical, from hundreds of contributors (Power).” The
power industry can be traced back to 1740 in Leyden, Germany with the demonstration of
electricity by Englishmen Stephen Gray, using glass friction generators. This demonstration is
said to have inspired many experiments and inventions, such as Alessandro Volta’s invention of
battery in 1800, and Benjamin Franklin’s famous experiments. In 1879, Thomas Edison invented
the light bulb, but Edison realized “that his light bulb would mean nothing unless he developed
an entire electric power system that generated and distributed electricity (American History).” In
1882, Edison developed the world’s first central generating plant on Pearl Street in lower
Manhattan. The generators were powered by steam engines, “which produced direct-current
(DC) electricity to shop owners and other businesses that used electric lighting as a novelty to
attract customers (American History).” “Electricity won popular praise as a new technology that
would revolutionize home and industrial life (AH).” Entrepreneurs saw a large market for
electricity consumption and sought franchises from municipal governments to build power
stations. Because of the technological constraint of direct-current transmission, numerous
companies produced power for consumers. Consumers needed to be within one mile of a
generating power plant to receive power.
Costs & Pricing
According to U.S. Energy Information and Administration, several key factors influence
the pricing of power. For example, electricity prices are reflected in the cost to build, finance,
maintain and operate power plants and the electricity grid. “The cost of generating electricity is
the largest component of the price of electricity (EIA).” Electricity prices are usually higher in
the summer because the demand for electricity is higher causing more expensive generation
