In 1832, Faraday demonstrated that electricity induced from a magnet, electricity from a battery, and static electricity were in fact all the same. Virtually all electric power is produced using Faraday’s principles, whether the energy source is coal, oil, gas, nuclear, hydro or wind. The fuels are used to drive a generator or turbine. Electromagnetic generators use an electromagnet, a magnet produced by electricity, not a traditional magnet. A flow of current in a wire creates a magnetic field around it. As that field expands or collapses, it acts on the electrons in a second wire nearby and creates a new flow of current. A current induced in a nearby wire only happens when the voltage is changing, such as when power is snapped on and the voltage rises from 0 to its peak. Electrical signals move very rapidly, but the individual charges that make up the current move much more slowly on average.

In 1881, in Paris, Lucien Gaulard and John Dixon Gibbs demonstrated the first commercially successful transformer. In 1882, Edison’s Pearl Street Station in New York City began sending out electricity. Edison’s direct current (DC) was not easily converted to higher or lower voltages, while alternating current (AC) reverses direction 60 times a second in the U.S. and can be converted with a transformer. While still a student, Nikola Tesla became convinced that AC was far more effective and less costly than direct current, which was more common at the time. In 1885, George Westinghouse imported AC equipment from Europe and set up an AC electrical system in Pittsburgh. George Westinghouse and Nikola Tesla won electric companies’ support for alternating current, which could carry high voltages long distances and then be transformed into lower voltages for customers. Westinghouse’s win over direct current was symbolized by his lighting of the 1893 Columbian Exposition in Chicago and by the rights he secured to develop Niagara Falls through AC generators. On Nov. 16, 1896, Buffalo was lit up by the alternating current from Niagara Falls.

At the beginning of the 20th century, more than 4,000 isolated electric utilities operated in the United States. Connecting utilities’ transmission systems also reduced the extra generating capacity each utility had to have available to ensure reliable service during peak demand. Utilities sought a “regulatory compact” granting them monopoly status from state governments, with limits on how rates would be set. From roughly 1920 to 1980, that approach was locked in place. The U.S. grid in the Lower 48 states has three main interconnections: Eastern, Western, and the Electric Reliability Council of Texas (ERCOT). The day-to-day operation of the electric system within regions is managed by balancing authorities, which ensure electricity supply constantly matches power demand. The North American Electric Reliability Corporation develops and enforces mandatory grid reliability standards, which are approved by the Federal Energy Regulatory Commission (FERC).

For the electricity grid to stay stable, the amount of electricity supplied must match the electricity demanded. If they fall out of balance, local or even widespread blackouts can happen. Wind and solar power plants generate electricity only when wind and solar energy resources are available. Energy storage systems use electricity to charge, and the amount of electricity they can supply is less than the amount they use for charging. New power lines are needed to keep the grid reliable and to connect new wind and solar resources, which are often located far from cities where demand is highest. As of November 2026, photovoltaic power plants are one of the fastest-growing sources of electricity generation around the world. Many utilities now use electronic smart meters, which wirelessly send power usage data in real time, as of November 2026.

In 2025, net generation of electricity from utility-scale generators in the United States was about 4,429 billion kilowatt-hours, or about 4.43 trillion kWh. About 58% of U.S. utility-scale electricity came from fossil fuels, about 18% from nuclear energy, about 19% from nonhydroelectric renewables, and about 24% from renewable sources. U.S. electricity transmission and distribution losses averaged about 5% of the electricity transmitted and distributed in 2018 through 2022. All three figures are as of November 2026. Transmission power lines typically have high voltages, up to 750,000 volts, but relatively low currents, up to 1000 amperes. A transformer steps up the voltage before transmission, so lower currents can carry the same energy and less is lost. Because direct current is more stable, companies are finding ways to use high voltage direct current (HVDC) to carry electricity long distances with less loss.

Words to know

• electromagnet: electric magnet
• transformer: voltage changer
• utilities: power companies
• photovoltaic: sunlight to power
• monopoly: sole provider