How Utilities Work

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• Colorado Public Utilities Commission
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The Governor's Energy Office (GEO) created this section to help Coloradoans understand the electric utility industry.

How do electric utilities operate?

Electric utilities are private or public facilities that provide electricity services to communities. The utilities either generate electricity or purchase electricity from other utilities or independent power producers. Electric power is created from fossil fuels like coal and gas and renewable resources like water, wind, and the sun. Often times one electric utility will generate and transmit to other distribution utilities.

The electric utility industry is divided into three parts:

• Generation - Utilities use a variety of fuel sources to generate electricity. Major sources of generation in Colorado are coal, natural gas, and wind.
• Transmission - Once the power is generated, it is sent to substations via a transmission system of towers and wires. The system moves high voltage electricity from the generation source to population centers where the electricity is distributed. Transmission lines include both high voltage direct current (DC) lines and alternating current (AC) lines which transmit electricity from substation to substation. Due to drawbacks, there are no DC lines in Colorado, and none are planned.
• Distribution - To get to your home or business, the power travels through a distribution system of transformers, substations and electric lines, which deliver the power to the end user. Distribution lines connect to transmission lines at local substations.

In Colorado, electricity is produced primarily from coal, natural gas, and hydroelectric power. A growing fraction is being generated from wind power. Smaller amounts come from solar and petroleum. After electricity is produced by these sources at a generating plant, it is sent through a transformer and through the transmission system to substations, where it is converted from high voltage to low voltage. The lower voltage electricity is distributed via transmission lines to homes, offices and factories.

The United States is divided into three electric grid systems: the Eastern Interconnected System, the Western Interconnected System, and the Electric Reliability Council of Texas.