We could spend an entire course on the history of the electric industry alone. But since we have a lot of ground to cover, we're going to do more of a crash course of the most important milestones and how they influence us today. A lot of people credit Ben Franklin as being the first to discover electricity. But it was actually English scientist, William Gilbert, in 1600 who conducted the first experiments with electricity and magnetism. He came up with the term Electricus from the Greek work Elektron. This became Electricity, the term we still use today. Fast forward to the mid 1700s. That's when Ben Franklin conducted his electricity experiments. I'm sure you know the most famous one where he attached the key to a kite and flew it into the thunderstorm. But what was he trying to prove? He hypothesized lightning was an electrical phenomenon and the electrical aspect of it might be transferable to another object and produce an effect that could be recognized as electricity. Since then other less fortunate souls try to replicate the experiment with sometimes fatal results. Today, building lightning protection uses the same principle. Jumping ahead 80 years later, British scientist Michael Faraday discovered the basic principles of electricity generation. He was able to transmit electric current by moving magnets inside copper wire coils. This same concept is still seen in today's power plants, of course on a much bigger scale. 1879, Thomas Edison created the first incandescent light bulb with staying power. And then a few years later, he teamed up with J.P. Morgan to create what we now know as General Electric. He also opened the first US central power plant. Pearl Street Station in Manhattan, New York. This was the first time the world saw a large central power source instead of small generation that was performed at various locations. Unfortunately that station burned down in 1890. The late 1800s is when the industry leap rock because of some pretty cool engineering advances. These changes brought electricity into everyday life and paved the way for the second industrial and technological revolution. This meant access to electricity on a large scale, which made assembly lines and mass production possible. At the same time there was a mass expansion of the telegraph and railroad lines, which allowed globalization to really take off. At first, the industry wasn't regulated. Because of electric utilities competed with local fuel sources including peat, yep, I said peat, coal and bio-mass. Cities often had franchise terms, meaning they charged utilities for the privilege of running pipes and wires over and under city streets. Franchise agreements still exist today. Check your bill out and you may even see a franchise fee. Towards the end of the century, Samuel Insull became President of Chicago Edison. Later becoming Commonwealth Edison or ComEd, now an Exelon company and still one of the largest US utilities. Insull was Edison's personal assistant and he was passionate about the fact that electric monopolies would benefit everyone. He bought out the small utility operations and soon it became an area monopoly. If you've taken economics you know the more customers you got, the less money it cost per customer to produce power. This safety customer's money and they told their friends and other customer joined in. This started the electric monopoly paradigm that still exist today and turned electricity from a luxury into something very essential. [MUSIC] The first state regulations came into early 1900s in Wisconsin and New york. Over the next decade, 43 other states did the same and the structure of state regulation commissions are still around today. In the roaring 20s, the Federal Power Commission was established. Now, the Federal Energy Regulatory Commission, FERC. It's an independent agency that regulates transmission of electricity, natural gas, and oil in the US. Regulation within the states for retail electricity sales is handled by the states themselves. Sounds smooth, but there have been some areas where federal or state agencies may not exactly be in sync over what each of them oversees. Enter the 70s, more federal groups were formed, in part because of citizen concern about how more people were using electricity and it's environmental impact, specifically the Environmental Protection Agency and the Department of Energy were both formed during this time. These two entities continue to play a significant role in the industry today. The mid-70s oil crisis was caused by the oil embargo of the organization of Arab petroleum countries. It significantly impacted US electric plants' fuel use and efficiency. Looking for a way to reduce the US's petroleum dependence, interest in renewable energy soared, especially in solar and wind. The interest in renewable energy continues today for both financial and environmental reasons. In fact, a lot of companies have increased pressure on the EPA to more strongly support renewable energy. Now lets time travel into the 80s and 90s. In the 90s natural gas became more popular because of technology enhancements and increased interest in environmental protection. Electricity prices increase as a new generation, no pun intended, a power plants came on board. At the same time, there was structural changes in the natural gas and telecommunications industries that inspired large industrial users to seek the ability to buy electricity wholesale. Some states unbundled energy supply and distributions. Some big industrial users were able to negotiate directly with wholesale power suppliers. In other states the utilities divested power plant ownership. Either way, utilities kept the natural distribution monopoly. While it's been around a while, more nuclear power came online in the 1980s, but construction slowed in the 2000s due to tightening regulations. More recently, the Fukushima tragedy has raised public concern regarding the safety of nuclear, and this has divided some countries' support of it. Some countries have halted their efforts entirely and others are moving ahead. Fast forward to today. In many countries, including the US, we are fortunate enough to take for granted that our lights come on at the flip of a switch. That's not the case everywhere around the globe. This century old industry as we know it is now rapidly changing. Electricity is no longer just flowing from power plants to electricity users, but it's multi-directional, evolving to a more distributed network, with multiple generation sources and a much broader choice of resources. With smart grid, micro grids, electric vehicles, storage, and sophisticated information based-energy efficiency here now In improving on the horizon,we are lucky to have a close up view and be part of history as we watch the industry evolve. [MUSIC].
