Wheeling Power

The first sector of the electric utility industry to be deregulated was the network of high-voltage transmission wires, which were designed to make bulk power transfers, over relatively short distances, from large power-generating plants to the cities and towns where the power was needed. They were built by the utility company that had built the power plant, and as the grid grew, local lines were connected to other utilties' power lines to be available in case of emergencies. During the 1977 blackout in New York, for example, power was transferred in from the Tennessee Valley Authority system in the Southeast, to restabilize the grid.
After the mid-1970s Middle East War and orchestrated "oil crisis," which quadrupled prices, the Carter Administration proposed, and Congress passed, the 1978 Public Utility Regulatory Policies Act, which promoted "conservation," and poured billions of wasted Federal dollars into the development of small non-utility power generators, using "non-traditional" sources of power, such as biofuels, solar, and wind energy. This insane turning back the clock to pre-industrial 19th Century methods was reinforced by attacks on nuclear power, reversing the policy of massive additions of new nuclear plants then underway. The 1978 law required the traditional utility companies to purchase power from these expensive "alternative" power sources.
The utility companies objected to this potential anarchic use of the transmission grid, and refused to provide these non-utility generators access to their systems. So, the Federal Energy Regulatory Commission, which had been established to restructure the industry, promulgated a superceding Federal rule forcing "open access" for these new non-utility generators to the transmission system.
This "open access" rule was the foot in the door for the chaos and congestion in the transmission system that exists today. One of the huge electric industry conglomerates, American Electric Power, is an instructive case in point.
On Dec. 20, 1906, a certificate of incorporation was filed in Albany, New York for the American Gas and Electric Company. Over the ensuing 30 years, the company began electric, gas, water, steam, transit, and even ice services, in New Jersey, New York, Pennsylvania, West Virginia, Virginia, Ohio, Indiana, Michigan, and Illinois.
In 1928, the Federal Trade Commission launched a comprehensive inquiry into the entire electric power industry, as abuses mounted, from financial pyramid schemes and the stock market speculation of the "Roaring Twenties." The investigations culminated in the 1935 passage of President Franklin Roosevelt's Public Utility Holding Company Act, which forced the breakup of many holding companies, and several of American Electric Power's holdings were divested. Other legislation made it incumbent upon utilities to provide universal service, and gave the states overall regulatory oversight. While what became American Electric Power still maintained operations stretching from Virginia to Michigan, each state regulated its utility companies, defined the level of reliability to be maintained, and, in return, assured each company a modest return on investment.
AEP built the first high-voltage transmission line, between Muncie and Marion in Indiana in 1911, the first long-distance line, transmitting electricity from a coal mine mouth plant, and the first commercial nuclear power plant on Lake Michigan, at the two-unit Donald Cook station, in the early 1970s. The wheeling of power, which is the transfer of electricity from one supplier over the transmission lines of another system, to where it was needed by a third customer, was used by regulated utilities to increase the reliability of regional grids, in case of an unscheduled shutdown of large generating units, such as from storms or other acts of nature.
But deregulation was marching on.