The electricity production and distribution infrastructure is colloquially known as "The grid." The grid consists of transmission lines, power transformers, metering equipment, and electric generation control systems.
The Electric Grid
- The three main components of a grid are generation, transmission, and distribution of electricity.
- Most grids have a "radial structure" which is like a tree shape where energy is distributed- or branches out- from the generating source (e.g. coal plant) to the users.
- The voltage steps down as it branches out from the source as follows: extra high voltage, high voltage, medium voltage, and low voltage. (The US has 157,000 miles of extra high / high voltage line. See "Table 2" below.)
- Transmission "losses" to inefficiency is around 9.5%, and is highest when the system is congested.
- The "losses" in an AC power transmission line are from an increased amount of current (i.e. more electricity being sent through the lines) and causing the transmission lines to heat up. See the "definitions" page.
This picture from Wikipedia shows how grids are set up. To see the picture in more detail... Wikipedia: Grid (electricity)
Overview of the US grid:
The US / Canada grid is considered one large network but is basically in 3 large "#interconnect" sections as shown in the map below. The three are the Eastern, which includes the eastern 2/3 of both the US and Canada; the Western, which includes most of what's left, and ERCOT (Electric Reliability Council of Texas) which includes most of Texas.
As you can see, the Eastern section actually has several sections; per #Wikipedia, these are either Regional Transmission Operators (RTOs), or Independent System Operators (ISOs). RTOs and ISOs manage the electricity transmission systems for an area, RTOs usually for a group of states and ISOs usually for a single state. For example, Iowa is part of Midwest Transportation System Operators, or MISO. See the website (listed below) for further definition of the sections.
There are AC lines within the interconnect and DC lines between them. For example, the Western section connects to the Eastern section at six points. Within each interconnect, "the generators are all tightly synchronized to the same 60-Hz cycle". (From: The Industrial #Physicist)
The picture below shows where the AC and DC lines are ran between each area in the network.
Prior to 1992, electric utilities were regulated in order to prevent an abuse of their monopoly status. Each monopoly had its own generation and distribution. In 1992 the Energy Policy Act started the #deregulation process, making the generation part of the chain separate and therefore open for competition. There has been a trend toward consolidation into power generating holding companies, and in fact the ten largest companies generate 50% of the power, and the top 20 companies have 75% of the power. This leaves significant pricing control in the power of the generators, as evidenced by the Enron-facilitated California blackouts in 2001. Companies are able to set prices too high, knowing that consumers will have no choice but to pay.
Some large providers exist as a public corporation tied to the government. For example, the Nebraska Public Power District (#NPPD), which provides most of Nebraska's power, is a "corporation" tied to the Nebraska government. The Tennessee Valley Authority (#TVA) is a public "corporation" tied to the Federal government. The TVA also covers parts of Alabama, Kentucky, and Mississippi, and is the largest organization of its kind.
California has even gone so far as to deregulate use of the transmission lines, which are now managed by a non-profit, and require that electric companies divest of any generation business. The state also temporarily traded energy in a market called PX, but the drawbacks led to it being shut down. Other states have done some regulating, but none with as dramatic of an impact. It is believed that states are choosing to stay away from regulation, even if it would be a good idea, because there are no crisis issues that require being addressed. So we could expect that as the country's energy issues come to a head, the government may turn back to regulation for answers.
In terms of accommodating alternative energy, one #study presented to Congress said that "outdated laws that govern our electricity grid are standing in the way of America's energy goals." The study suggested that regulation needed to help pave the way by making industry participation mandatory in regional planning authorities and to aggressively pursue "electric grid interconnection across the country".
Wikipedia's page about the grid
The Industrial Physicist, "What's Wrong With The Electric Grid?"
Below are a couple documents that do a good job to give a brief overview of what "the grid" is and some of the things that make it up.
Transmission Line Components:
US Department of Energy - Factsheet:
Economics of The Electric Grid
Transmission Line Overview
When we think about electrical transmission lines we typically think of the ones we see in the air around town, by our houses, or along side the highways. Those transmission lines are typically 120v and 240v AC lines.
From the picture shown, you can see there are many more types of transmission lines necessary to take energy from the generating source (coal plant, hydro plant, wind farm, solar farm, etc.) to the outlets in our house.
When looking at the cost of electrical transmission lines there are a few different factors to consider: transmission line voltage, distance from generating stations, overhead transmission lines vs. underground transmission lines, AC Vs. DC, etc.
Source: "Electricity Transmission A Primer"
Transmission Line Costs
The first thing to look at is the typical overhead transmission line cost. When connecting a house to the grid, the transmission lines are 120v and 240v AC lines, the cost can range from $20,000 - $30,000 per mile. In the remote parts of Texas, extending transmission lines over 1/4 mile usually costs $5 per foot. At that rate, a 1-mile transmission line extension will cost more than $25,000.
The table below shows the cost per mile for the different types of overhead AC transmission lines.
Source: "Electricity Transmission A Primer"
Overhead Transmission Lines Vs. Underground Transmission Lines
(Source: "Out of Sight, Out of Mind?")
A report filed for the Edison Electric Institute in 2006 looked the costs, pro's and con's associated with Overhead Transmission Lines and Underground Transmission Lines. The report was based on the state of Virginia's study of changing its overhead transmission lines to underground transmission lines. The state was looking to see if there was a savings in using the underground lines because of the typical costs (maintenance, performance issues such as blackouts, broken lines, etc.) associated with overhead lines. A summary of the report is given below.
Cost per mile: $1,000,000 (Total State Cost $94 billion)
_ *Note: The table shows the estimated cost of moving these entire sytems underground._
Cost per mile: $120,000
Annual Estimated Cost Savings for Underground Lines (day-to-day outages, 100-yr storm outages, motor vehicle accident related outages)+
The Virginia commision looked at the costs and benefits, and the benefits would only make up about 38% of the total investment cost. Because of the expensive cost, long payback period, and additional cost to the customers, they decided not to proceed with the project.
The study also included a similar case of underground transmission lines vs. overhead transmission lines from a study performed by Australia in 1998. The Australian study had a similar cost per mile for running underground electrical lines, approximately $1.05 million (U.S. exchange rate) and their study concluded that the benefits for underground lines would only offset the cost by 11%.
Other Underground Line Costs
The Virginia study included some data that shows what costs made up underground lines, the investment cost for the companies (per customer), and a breakdown for the cost for urban, suburban, and rural costs.
Cost Breakdown (labor, material, etc.)
Investment Costs for new underground plant vs. existing overhead plant
Cost Breakdown for Urban, Suburban, & Rural
AC Vs. DC - High Voltage Lines
Quick history and explanation of AC/DC... and we don't mean the band.
What's the difference between AC and DC? Alternating Current (AC) oscillates back and forth at 60 Hz, the frequency which everything in the grid operates on and what most of the product in our house are. Direct Current (DC) flows in one direction and it must be converted to AC if it is to be used. 
Back in the time of Thomas Edison, they were trying to figure out whether to use AC or DC for electricity. One of the biggest issues was trying to figure out a way to effectively step-up and step-down DC voltage without loosing quite a bit of it in the process; it seemed AC voltage was easy to do so and didn't have much loss during the conversion processes.  Therefore the electric grid started out as an AC system, until technology came along to help make DC conversion more efficient and cost effective. So what does it matter then? The problem with the electric grid/network as it stands today is that it is unable to transmit large amounts of electricity across large distances without excessive loss and at a high cost to the customer; it also makes using alternative energy difficult and less efficient.
Technology has improved to make DC more efficient and cost effective. Typically when AC or DC lines are discussed they are talking about the High Voltage. The acronym for high voltage DC line is HVDC. The high voltage in these lines can be 345 kV - 765 kV. These are the power lines that go from the generating plant to transmission customer; see the picture at the start of the page for an idea which lines these are.
The biggest drawback to HVDC has been that the step-up/step-down process is still inefficient. The new technology over the years has made the AC/DC & DC/AC conversion terminal (or stations) more effective in cost and amount of voltage loss ; the only draw back is that they can run up to $250,000 per end (the system would require two for every DC line ~ total cost of $500,000). Besides technology, the physics of DC vs. AC are better.
An AC line can have a loss of 50% depending on the amount of load put on it because of the resistance in the line due to the increased load. The resistance is from the current oscillating back and forth 60 times a second. This moving back and forth causes the electricity to go to the outside of the line, which is referred to as the "skin effect". A DC line does not have this issue. Because the electricity flows one direction, the electricity flow evenly across the entire wire, reducing the amount of resistance in the line. When comparing the losses of an AC line and a HVDC line, the HVDC line can have less than 50% the losses of the AC line. 
A cost comparison in a World Bank-ABB paper, looked at the cost of a 2000 MW line. The paper showed that an AC transmission line is less expensive below 700 km and a DC transmission line is less expensive above 700 km. 
(Source: "Technical Aspects of Grid Interconnection")
That same paper showed a map that showed other HVDC lines being installed in the world.
(Source: "Technical Aspects of Grid Interconnection")
What does DC mean for alternative energy?*
Most alternative energy systems produce DC electricity and that electricity must be converted to AC in order to work in the grid at it's 60 Hz frequency. Because of this there is some power loss because of the conversion. If there were HVDC lines, then the alternative energy systems would not need to convert the electricity and that would be one more component that wouldn't be necessary and ultimately reduce the cost of the system.
What this all means is that HVDC has the ability to cost less to install over long distances, able to provide more power over longer distances, able to provide more stable power, and able to work better with alternative energy generation sources. This doesn't mean that there is no need for AC transmission lines, this means that for the HVDC lines to be effective, they should be utilized to be like the intertstate highway system connecting from place to place at large distances.
Lifespan Of The Components Used In "The Grid"
The information below is a typical estimate for high voltage overhead transmission lines, it does not take into consideration any excessive use, excessive loads, wear, maintenance, environmental issues, etc.
- Steel Tower: 55 - 60 years
- Steel Pole: 55 years
- Concrete Pole: 55 years
- Wood Pole: 45 years
Transmission Cables:* 40 - 45 years
Substation Switch Bays:* 45 - 50 years
Substation Establishment:* 50 - 60 years
Power Transformers:* 45 years
Capacitors:* 40 years
Circuit Breakers:* 45 years
Current Transformers:* 45 years
Voltage Transformers:* 45 years
15 - 30 years
SCADA System:* 15 years
Communications Equipment:* 10 - 12.5 years
 "Living Off Grid"
 "Electricity Transmission A Primer"
 "Out of Sight, Out of Mind?"
 Texas Cooperative Extension, "Using Renewable Energy to Pump Water"
 "High Voltage Direct Current"
 "Back to DC?"
 "Electric Transmission?"
 "Technical Aspects of Grid Interconnection"
 "Typical Economic Life Span of Major High Voltage Electrical Equipments"