Your lights might turn on at the flick of a switch, but it’s definitely more complicated than that. The power grid is where the electricity rubber meets the road and gets to your home. Three electricity grids span the entirety of the United States, and Texas is the only state with its own. All three connect to provide a constant, never-ending stream of power to more than 300 million Americans every single day. 

Though this massively complex system may seem like a gargantuan undertaking, understanding how each electrical grid works at a high level is fairly straightforward. It all boils down to one simple economic principle: the law of supply and demand. 

First, let’s start with what power grids are, then we’ll dive into how they work.

What is a Power Grid?

A power grid (also called an electric grid or electricity grid) is the collective network of electric generators, transmission lines, towers and distribution lines that delivers electricity to consumers. Wind and solar farms, nuclear power plants, power lines and transmission towers are all pieces that comprise the United States electrical grid puzzle. 

The contiguous United States has only three grids: the Eastern Grid, the Western Grid and the Texas Grid, which is sometimes called the ERCOT Grid. Since Chariot Energy operates within the Texas power distribution grid, we’ll focus on that one to explain how they all work.

How Does the Power Grid Work?

When it comes to the electricity grid, supply must always meet the demand. In other words, however much power the Texas population needs, it gets. And unless there is a major shortage or energy crisis, there are almost no exceptions to this rule. Almost. 

Why? Because the entire electric grid must operate at the same exact frequency. This frequency can vary from country to country. In the UK, for example, it’s 50 Hz; for the U.S., it’s 60 Hz. Whatever the frequency, it must be maintained at all costs. Though there are those exceptions we mentioned earlier:

  1. Suppose the grid is stressed due to supply being less than demand. In this case, the frequency can slightly drop to compensate. 
  2. There is more electricity on the grid than people need. The frequency can then rise slightly. 
  3. If the grid gets stretched too thin or if it becomes overloaded with power, it can cause significant damage on a national scale, leaving millions of Americans without power in the form of blackouts and brownouts. This could be catastrophic.

Maintaining this frequency is both an art and a science, and it all starts with the birthplace of electricity: generators. 

Solar Panels Meadow


Solar farms, wind farms, hydropower plants, nuclear power plants, and coal-fired plants are all examples of generation stations, places where electricity is created. In fact, any device that converts energy into electricity and adds it to the grid is considered a generation station, including homes with rooftop or ground-mounted solar panels. When any device generates an electric current, it’s transformed into a usable medium and added to the grid. 

But when generators create too much power, that power either gets lost or has to go elsewhere. This is especially true at renewable energy generation stations where they can’t control when the wind blows or the sun shines. In this case, energy can be stored for future use when the electric power supply is less than demand. 

High voltage electric lines


Once the electricity has been generated, it has to be converted into a transportable means. So, before it’s added to power transmission lines, electricity has to be upped to a significantly higher voltage. Those giant metal towers with wires you often see on road trips are what utilities use to transport that high-voltage power to consumers across the country. Once it’s on those lines, electricity can travel for significantly long distances — often hundreds of miles and with little power degradation — before reaching its final destination. 

A dinner party


Once that high voltage power reaches your area, it then has to be “stepped down” to safer levels at places called substations. Once the electricity has been lowered to a usable voltage, only then can it travel along the local lines called “feeders” and into your home. All of this has to occur so you can simply flick a switch and turn on the lights. 

The work of the power grid never ends. It is a continuous process that must be regulated at all times to ensure there are no “blips” in the electricity system. You don’t want your lights to turn on whenever you want right?

What About the Step Where I Buy Electricity?

Our discussion of how the electricity is physically delivered to your home doesn’t include how it’s bought. The electricity grid is not only a network of lines, poles, and stations. It’s an entire marketplace where people buy, sell, and trade electricity both in the present and in the future, typically using estimates of how much people might use. However, everyday consumers like you cannot directly buy from the electricity grid. You must go through a retail electric provider, like Chariot Energy. 

The beauty of this system is that you can choose where your power comes from. You don’t have to settle for fossil fuel generators if you don’t want to! You have the power to choose solar energy, wind energy, or any other type of electricity out there. You can also choose how you want to pay for it, whether you want a fixed rate, variable rate, wholesale rate, or any other plan that’s offered in the marketplace. 

There’s More to Learn

Now having learned how the electric grid works, you’re probably hungry for more. The next step is to learn about energy choice — the power to choose how you pay for electricity — and how that works. We have an article on that, too!

Click here to learn more about energy choice, and visit our Chariot University page to learn even more about energy, sustainability and green living.