How do power companies handle their own power in terms of billing and other things?


Do they have to be registered to a power company like other businesses? Do they bill themselves? Does it differ between nuclear, wind, electrical, water?

In: 11

All companies have divisions with internal invoices and purchase orders etc. The lighting and heating / cooling for industrial areas and offices will have meters which will be entered into the accounts in some description and have a budget assigned.

Nuclear power plants require large amounts of energy to get up to speed. This will be enough for the grid to need prewarning and coordination. This energy will be subtracted from what is added to the grid in the accounts.

It’s a really cool system!

In the US, there are power *generation* companies, who own power plants, power *transmission* companies, who own high-voltage lines that move power from city to city, and power *distribution* companies, who own the local utility poles that deliver it to customers. Some of these might overlap — a big power distribution company might own some transmission lines and some power plants — but not necessarily. There are dozens of different generation, distribution, and transmission companies just in my region (New England).

Electricity in a region is controlled by an Independent System Operator, or ISO. The ISO runs an eBay-style auction every day for the next day’s power needs. Each power plant on the grid submits a bid for the right to sell power at a certain time tomorrow. The lowest bids win the right to run their plants and get paid; the high bids have to shut down.

So today, a coal power plant may not be able to outbid cheaper gas and wind power plants, and will be shut down. But tomorrow, perhaps the wind is calm, so the auction price will be higher and the coal power plant might win the right to generate.

Billing-wise, I believe the distribution companies pay the ISO, and the ISO pays the generation companies, but I’m not sure.

This all relies on very good prediction of what tomorrow will bring, both in terms of weather and human behavior. (What if there’s a heat wave or a Superbowl?). And sometimes these predictions are wrong, so there’s also a real-time auction, in which companies bid minute-by-minute to meet any excess demand that might crop up. Some companies earn a profit as “peaking” plants, that stand idle most of the time and jump in to provide emergency power on short notice at a premium price.

As for the transmission companies, the price of electricity varies from city to city within a region, and they make money by buying electricity where it’s cheap and selling it where it’s expensive.

Anyway, it’s all a giant exercise in capitalism, where the government sets up the rules but hands off day-to-day authority to the ISO, a nonprofit organization.

Here’s a link to the real-time status page for [ISO New England]( which serves my region.

I work as power plant operator. Our site generates power onto transmission lines that we own. We account for out net and gross power, but don’t meter it in the way that another business would. We also maintain equipment that would allow us to start up in the event that our connection point to the grid was deenergized and we were unable to draw the power necessary.