Capstone Energy Services

Energy Basics

Electricity Source

The process begins with the raw fuel, whether that’s coal, natural gas, petroleum, biomass, wind, solar, hydro or nuclear.

The largest source of raw material for electricity in the United States is coal which is cheap and abundant. Renewable resources have been steadily growing as a percentage of the total based on consumer demand, the current political environment and the increasing cost efficiency of "green" sources.

Electricity Source Chart

Electricity Generation

The raw materials are used to generate electricity, normally at large power plants.

Generation capacity varies according to local demand. Facilities have traditionally been built to meet the needs of specific communities, creating an electricity infrastructure in the United States that is extremely varied and segmented.

Electricity Generation Map

Electricity Transmission

Electricity is transmitted through high voltage lines to local substations.

Interstate transmission is under the jurisdiction of the Federal Energy Regulatory Commission, which also sets all rates and charges.

Major Sectors of the U.S. Electrical Grid

Electricity Distribution

Low voltage lines distribute the electricity locally along distribution networks owned and operated by local utilities.

Electric utilities range from large publicly traded corporations to small municipally owned power systems to electric cooperatives in rural areas.

New York Electric Utilities Service Areas

Electricity Delivery

The cost of delivering electricity across utility networks is established by the local utilities but is subject to the approval of state regulators.

Utilities are required to deliver electricity to all customers in their local service areas and to serve as the suppliers of last resort in open access states. This means that even when customers buy electricity supply from third party companies, they never carry any supply interruption risk based on the financial or operating condition of their third party supplier.

Components of Typical Electricity Price

Natural Gas Production

Raw natural gas comes from oil fields, natural gas fields, offshore rigs and coal beds. 87% of natural gas is produced domestically, with imports primarily from Canada.

U.S. Natural Gas Supply, 2008 (Billion Cubic Feet)

Natural Gas Processing

During processing, natural gas liquids including propane, butane and ethane are removed and sold separately. The dry gas is then returned to the pipeline for market delivery.

Natural Gas Processing Chart

Natural Gas Transportation

Natural gas is predominantly transported by interstate pipelines which are regulated by the Federal Energy Regulatory Commission (FERC).

Due to geographical and volume limitations on pipeline infrastructure, natural gas prices vary dramatically across the country.

U.S. Natural Gas Pipeline Network

Natural Gas Distribution

Local Distribution Companies (LDCs) ensure the gas moves from the interstate pipelines to the consumer. LDCs vary from large, publicly-traded corporations serving customers in many states to small, municipally-owned companies serving only their local communities.

Virginia Natural Gas Service Areas

Natural Gas Delivery

Most customers receive their gas from Local Distribution Companies (LDCs), which are regulated by the state utility commissions. Consumers use gas for many different applications including heating, cooking, chemical or other manufacturing processes, fertilizer production and as a component of automotive fuels.

Natural Gas Average Delivery Cost Components