The U.S. electric grid is incredibly complex. It consists of thousands of power plants, hundreds of thousands of miles of high-voltage power lines, and millions of low-voltage power lines and distribution transformers.
So, who or what is making sure that power is reliably delivered to America’s homes and businesses? That responsibility falls to the more than 60 balancing authorities (BAs) across the U.S.
In this blog post, we’ll explain what balancing authorities are, how they work, and why they’re so important when it comes to maintaining the health of our electric grid.
What is a balancing authority?
Let’s start with the basics. The grid powering the lower 48 states is split into three physical areas called interconnections:
- The Eastern Interconnection covers almost everything east of the Rocky Mountains, including a portion of North Texas
- The Western Interconnection covers everything west of the Rockies
- The Electric Reliability Council of Texas (ERCOT) covers most of the state of Texas
Within each of these interconnections are multiple balancing authorities of various sizes.
For example, the Eastern Interconnect has 36 balancing authorities while the Western Interconnect has 34. ERCOT in Texas is an island unto itself with just one.
Each BA is responsible for managing the grid operations of its specific region, as shown in this balancing authority map from the U.S. Energy Information Agency (the larger the circle, the larger the region).
A BA can be a utility, a power market administrator (PMA), a regional transmission organization (RTO), or an independent system operator (ISO).
Regardless of its organizational structure, the BA is responsible for making sure the power supply and demand are always in balance in accordance with the mandatory reliability standards established by the North American Electric Reliability Council (NERC), a not-for-profit international regulatory authority responsible for the reliability and security of the North American power system. The U.S. Federal Energy Regulatory Commission (FERC) also approves these standards.
A NERC balancing authority, by definition, is also tasked with maintaining system frequency within specified limits and for providing reliable power at the lowest possible cost.
How balancing authorities work
To guarantee that electricity supply and demand are always in balance, frequencies are within limits, and to minimize real-time costs, a BA optimizes the use and dispatch of its different generating units. BAs can also purchase electricity from other balancing authorities to meet demand. This is done in both the day-ahead and real-time markets.
If demand significantly exceeds supply, BAs may also call on utilities to shed load by activating demand response programs, or in severe cases, by initiating rolling blackouts.
Why grid balancing is critical
If electricity supply and demand are out of balance, the grid becomes unstable and unreliable. For example, if supply doesn’t meet demand, as happened in Texas during 2021’s Winter Storm Uri, electric equipment can suffer permanent physical damage, potentially leading to a grid collapse and extended outages.