The generation and transmission of electrical power is the central element of a $300 billion energy value chain that converts the potential energy of natural resources to electrical energy. This value chain extends from the exploration and production of fossil and fissionable fuels to delivery of wholesale and retail power to consumers. Electrical power is produced and delivered through a patchwork of public and private entities operating in regional markets that are linked by transmission interconnects of various capacities. The continental U.S. electric power system has a generating capacity of approximately 800,000 MW that are transmitted over about 160,000 circuit miles of predominately high voltage AC transmission lines.

Owing to historical regulatory development of electric utilities, the U.S. power market consists of separate regions with limited interregional transfer capacity. There are three principal AC electrical networks in the United States: the Eastern Interconnect, consisting of the eastern two-thirds of the country; the Western Interconnect, serving areas west of the Rocky Mountains; and the Texas Interconnect. Within each region are individual transmission and distribution systems, developed mostly by the utilities, with links between utilities that were originally designed to connect generators with local load centers. Each of the three regions operates independently and only limited direct current (DC) ties interconnect the regions. This system is used to transmit large power flows across regions, duty for which it was not designed. Presently, regional transfer capacity between the Eastern and Western Interconnects is limited to approximately 1,000 MW.