Electricity is the second most used power source in our homes after natural gas. Electricity powers our lighting, our appliances, our air conditioners and refrigerators. And in some cases electricity even powers our hot water heaters and space heaters or furnaces.

Electricity that powers our homes comes from a variety of sources. In most instances in the US those sources are fossil fuels, predominantly coal and natural gas. In many states and in some provinces Nuclear power and Renewable energy also contribute significantly to the overall electricity mix.

The picture is different in Canada where Hydro power produces the largest share at close to 60% of Canada’s electrical production, followed by fossil fuels (coal, natural gas and oil) at 28% and nuclear at 12% (a number that is increasing due to planned refurbishments). Wind, bioenergy and other sources are now being considered as contributors to the overall portfolio, although combined, they currently provide only about 2% of Canadian electricity production.

Total electricity consumption in the USA is projected to increase at average annual rate of 1.6% percent in the residential sector as shown in the chart. There are several reasons why home energy consumption is projected to grow. The average size of homes is projected to be larger in 2025 than in 2003 in terms of both square footage and ceiling height, with corresponding increases in electricity use for heating, cooling, and lighting. In addition, expected population shifts to warmer climates increase the amount of electricity used for air conditioning, although the projected increases are mitigated in part by the implementation of a more stringent efficiency standard for air conditioners and heat pumps in 2006.

Electricity is produced in many locations throughout North America and in most instances it must be delivered through transmission and distribution lines. The availability of these high voltage lines is one of the biggest costs associated with capturing solar or geothermal power in say, Nevada, and transporting that energy to markets in California or the east coast. In addition to the capital cost of building these transmission grids, there is also a loss of electricity along the way. The latest data we have is from 1998, which showed that approximately 7.2% of the electricity produced in the USA was lost in transmission and distribution.

Most of the electricity in the United States is produced in steam turbines. A turbine converts the kinetic energy of moving water or steam to mechanical energy. Steam turbines have a series of blades mounted on a shaft. The steam is forced against the shaft to rotate it, which then spins the shaft in the generator. In a fossil-fueled steam turbine, the fuel is burned in a furnace to heat water in a boiler to produce steam. Coal, petroleum (oil), and natural gas are burned in large furnaces to heat water to make steam that in turn pushes on the blades of a turbine.

Natural Gas in addition to being burned to heat water for steam, can also be burned to produce hot combustion gases that pass directly through a turbine, spinning the blades of the turbine to generate electricity. Gas turbines are commonly used when electricity utility usage is in high demand. In 2006, 20% of the nation's electricity was fueled by natural gas.

Petroleum can also be used to make steam to turn a turbine. Residual fuel oil, a product refined from crude oil, is often the petroleum product used in electric plants that use petroleum to make steam. Petroleum was used to generate about two percent (2%) of all electricity generated in U.S. electricity plants in 2006.

Nuclear power is a method in which steam is produced by heating water through a process called nuclear fission. In a nuclear power plant, a reactor contains a core of nuclear fuel, primarily enriched uranium. When atoms of uranium fuel are hit by neutrons they split, releasing heat and more neutrons. Under controlled conditions, these other neutrons can strike more uranium atoms, splitting more atoms, and so on. Thereby, continuous fission can take place, forming a chain reaction releasing heat. The heat is used to turn water into steam that, in turn, spins a turbine that generates electricity. Nuclear power was used to generate 19% of all the country's electricity in 2006.

Renewable Energy sources contributed 7% to the total USA energy consumption in 2007 and 26% to Canadian consumption in 2005.