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Consumers

The electric utility industry began in 1882 with the establishment of Thomas Edison power station in New York City [1]. Today, there are approximately 138 million unique electric power consumers in the United States alone [2]. Consumers of electric power differ widely depending on their requirements for power. Electric utilities typically categorize consumers into four broad groups: residential, commercial, industrial, and other [3, 4]. An electric utility may classify commercial and industrial consumers based on either North American Industry Classification System (NAIC) codes, or demand and/or usage falling within specified limits [4].

Some utilities may also identify other classes such as “whole sale power customers.” These customers would include any other generating and non-generating utilities, which generally resell the purchased power to their own retail customers [3]. Even further classification may be divided into street lighting systems, electric rail systems, and government users of electricity [3].

Within the aforementioned classes of service, consumers may be further segregated on the basis of technical and administrative parameters, such as: demand levels, rate schedules, voltage level of service; whether service is from underground or overhead facilities; the magnitude or timing of requirements; physical location of the end-use activity; accounting methods; and quality or reliability of service provided [3, 4].

The primary purpose of providing different classifications of consumers is for planning (for example, load growth and peak demand) and the establishing rate classes [4]. For example, within the residential sector separate rate classes can be established for customers with electric space or water heating – or separate rate classes can be established for full-electric homes [3]. Electricity sales are defined as the number of kilowatt-hours (kWh) sold during a given period of time. Sales are normally classified according to the type of customer or service using the electricity [1].

The rates charged for electricity vary between countries, regions, and states. The reasons for variations in rates are due to many diverse factors such as: regulation; the method of electricity generation; the construction costs of the plants; the associated expense for operation and maintenance of the plant; global supply and demand for fuel; national demand for transmission; international events; and even changes in weather [5]. (See Residential Electricity Prices: A Consumer’s Guide for detailed information on residential electricity rates.)

Figure 1 provides a breakdown of the number of customers served by sector for 2000 through 2005 [2]. As seen in the data, the vast majority of consumers are located in the residential sector, with over 87% of the customer total for 2000 through 2005. Commercial consumers represent about 12%, industrial about 0.5%, and other about 0.8% of the total consumers.

Figure 1 : Number of Ultimate Customers Served by Sector (2000 through 2005)

Period	Residential		Commercial		Industrial		Other (Not Including Transportation)		All Sectors
Period	Customers	% of Total	Customers	% of Total	Customers	% of Total	Customers	% of Total	Customers
2000	111,717,711	87.6%	14,349,067	11.2%	526,554	0.4%	974,185	0.8%	127,567,517
2001	114,890,240	87.5%	14,867,490	11.3%	571,463	0.4%	1,030,046	0.8%	131,359,239
2002	116,622,037	87.3%	15,333,700	11.5%	601,744	0.5%	1,066,554	0.8%	133,624,035
2003	117,280,481	87.2%	16,549,519	12.3%	713,221	0.5%	n/a	n/a	134,544,348
2004	118,763,768	87.2%	16,606,783	12.2%	747,600	0.5%	n/a	n/a	136,119,176
2005	120,760,839	87.3%	16,871,940	12.2%	733,862	0.5%	n/a	n/a	138,367,159

Figure 2 provides a breakdown of retail sales of electricity to consumer sectors for 2000 through 2005 [2]. For 2005, the residential sector consumed about 35.6% of total electricity while the commercial sector consumed about 33.4%, the industrial sector about 26.7%, the transportation sector about 0.2%, other consumers about 3%, and about 4.1% of electricity produced was classified as “direct use.” Direct use represents commercial and industrial facility use of onsite net electricity generation, and electricity sales or transfers to adjacent or co-located facilities [2].

Also evident is the fact that the residential and commercial sectors represent an increasingly larger percentage while the industrial sector continues to represent a smaller percentage of total usage. Furthermore, a comparison of data in Figure 1 to data in Figure 2 shows that despite the fact that industrial consumers represent only a half of a percent of total customers, the sector consumes over one fourth total electricity in the US.

Figure 2 : Retail Sales and Direct Use of Electricity to Ultimate Customers by Sector (2000 through 2005)

Period	Residential		Commercial		Industrial		Direct Use		End-Use[a]
Period	Sales (MWh)	% of Total	Sales (MWh)	% of Total	Sales (MWh)	% of Total	Consump-tion (MWh)	% of Total	Total (MWh)
2000	1,192,446,491	33.2%	1,055,232,090	29.4%	1,064,239,393	29.6%	170,942,509	4.8%	3,592,356,775
2001	1,201,606,593	33.8%	1,083,068,516	30.4%	996,609,310	28.0%	162,648,615	4.6%	3,557,106,719
2002	1,265,179,869	34.8%	1,104,496,607	30.4%	990,237,631	27.3%	166,184,296	4.6%	3,631,650,307
2003	1,275,823,910	34.8%	1,198,727,601	32.7%	1,012,373,247	27.6%	168,294,526	4.6%	3,662,029,012
2004	1,291,981,578	34.8%	1,230,424,731	33.1%	1,017,849,532	27.4%	168,470,002	4.5%	3,715,949,485
2005	1,359,227,107	35.6%	1,275,079,020	33.4%	1,019,156,065	26.7%	154,700,367	4.1%	3,815,668,880

a. Also includes transportation and "other" consumption.

Details on Each Sector

Residential Sector

The residential sector includes private households and apartment buildings where energy is consumed primarily for space heating, water heating, air conditioning, lighting, refrigeration, cooking, and clothes drying [4]. Residential consumers comprise about 87% of total end-use consumers serviced by electric utilities and consume about 35.6% of total electricity produced in the US [2].

Commercial Sector

The commercial sector includes non-manufacturing business establishments such as hotels, motels, restaurants, wholesale businesses, retail stores, and health, social, and educational institutions. Sometimes the commercial sector includes small manufacturing facilities as well [4]. Commercial consumers comprise about 12% of total end-use consumers serviced by electric utilities and consume about 33.4% of total electricity produced in the US [2].

Industrial Sector

The industrial sector includes most manufacturing facilities, construction, mining, agriculture, fishing, and forestry establishments [4]. Industrial consumers comprise about 0.5% of total end-use consumers serviced by electric utilities and consume about 26.7% of total electricity produced in the US [2].

Other Consumers

Consumers falling outside of the residential, commercial, and industrial sectors include public street and highway lighting, railroads and railways, municipalities, and some divisions or agencies of State and Federal Governments [4]. These consumers comprise about 0.8% of total end-use consumers serviced by electric utilities and consume about 3% of total electricity produced in the US [2].