I have worked on energy policy off and on for about twenty years now, but until about 2019 I had little experience with cooperative and public power. When I started working on a research project about the Tennessee Valley Authority, I realized that there’s a fascinating history — a subject that was once a source of public excitement and a cause for popular organizing.

This conflict has been present since the very inception of the electric grid. Starting on Pearl Street in New York City 1882, Thomas Edison built the first power station to cater to the wealthy. Private finance had little interest in ensuring mass electrification. Investors were looking for high returns on investment, and that meant prioritizing large cities, industrial customers, and wealthy households. And so, at the turn of the century, municipalities entered the power market to electrify communities that were being left out. For a period, there was a complementary relationship; private power would serve lucrative areas while public power served everyone else. But this was unsustainable.

Municipalities had multiple tools at their disposal. In many cases they issued private power companies term-limited franchises, allowing them to transfer to another company once the term ended. These franchises were essential for private power companies — they wouldn’t be able to operate without them. The franchise gives the utilities the ability to use roads and public space, and many municipalities realized that this gave them leverage over rates and quality of service. Additionally, municipalities had — and still have — eminent domain powers to acquire and operate private power companies as public agencies. Many cities exercised this option in the past. These are tools waiting to be picked up again.

At the grassroots level, there was a common view that private power companies had captured local institutions, so not only were customers getting expensive and unreliable power, but they were also making a mockery of electoral democracy. That is not so different from what we see now. At the time, there were candidates for office who were committed to the cause of public power and very skilled at translating these arcane issues into everyday language. Public power became a cause grounded in popular politics.

In addition to the municipalization threat, one issue private power faced early on was that some cities issued competing franchises. Often, power companies couldn’t service their debts because of destructive competition between private power companies. Initial investment in a grid is high, but once operational, the cost of generating an incremental unit of power is not actually that great. However, competition over price prevented companies from covering their debts to investors.

Realizing they were on a path to mutual destruction, companies sought a solution that could neutralize popular demands for public ownership and stabilize their industry. They came out in favor of local monopolies with a central regulator. Business magnate Samuel Insull was a key player in organizing the utilities around this model, with the understanding that it could eventually be captured to serve private interests.

Rates were still high, service wasn’t great, and utilities were still focused on industrial customers and wealthy households — ignoring the countryside entirely. The 1920 census was the first to report a majority of households living in cities, so the nation we are talking about was still a substantially rural one. And rural populations were left in the darkness by power companies under the compromise model.

One important feature of the compromise model: it took power away from local governments and vested it at the state level. Private finance and private power really wanted this. States were less democratically responsive. Utilities thought that it would be easier to capture state officials, once they shifted regulatory power away from the cities.

It’s worth noting that some progressive reformers were also in favor of Insull’s vision. They were distrustful of the working class and made common cause with private power. Research for this book really changed my view of twentieth-century progressives — I thought of them previously as generally concerned with democracy and popular representation. That isn’t how many of them saw themselves at all; they were extremely skeptical of popular democracy and in favor of elite rule. And the electric grid lends itself to this kind of elite consolidation of power because of its complexity. You have managers who are the only ones who understand the physical infrastructure of the grid, and then public utility regulation gets into arcane questions of cost accounting that few people understand.

The question of valuation is a fundamentally political question and was a major issue in the first half of the twentieth century. There were two basic schools of thought. The first argued that utilities should be able to recoup the original cost of construction, plus a reasonable rate of return. The second claimed that because money loses its value over time, utilities should be compensated for this loss by calculating the “reproduction cost” — essentially, what it would cost to build the system today.

This approach is ridiculous, and leads to chaos, which was precisely the point. It was a way of neutering regulation. Commissioners responded to the confusion by letting the utilities do what they want — at most, trying to extract some concessions here and there. This fight wasn’t really settled until the New Deal, when [Franklin D.] Roosevelt gave the famous “yardstick speech” in Portland, Oregon, and, among other things, endorsed original cost valuation.

Again, we can look to the conditions at the time. The great depression opened up political possibilities that seemed impossible just a decade earlier. In the ’20s, private power was hegemonic. Private utilities were in a position that seemed secure and durable, and they were also spending huge amounts of money on propaganda to control public opinion. Then the crash happens. Millions of people were out of work. At that time, people like Samuel Insull were the face of modern capitalism. They were like [Mark] Zuckerberg or [Elon] Musk today. But the crash laid them low.

Holding companies, which controlled utilities across the nation, were very highly leveraged. One corporation was stacked on top of another to create these entities that could circumvent local regulation. So, when the Depression hit, there was a small drop-off of power sales. At first it wasn’t a huge deal, but a 5 percent drop-off at the bottom had a cascading effect upward, and it ultimately destroyed many of these holding companies. Many millions of people owning holding company stock were left holding nothing.

Correct. Public power advocates took advantage of the crisis to move forward and took advantage of the overreach of their opponents. And all of the organizing that they had done during the previous decade — all of the local campaigns that they continued to organize — it all really paid off. They had a blueprint ready to go, and they had a coalition lined up.

Yes. Senator George Norris’s strategy to make sure the dam was not privatized during the [Warren G.] Harding, [Calvin] Coolidge, and [Herbert] Hoover administrations was to slow things down legislatively, and to lay the foundation for what you can do once you have power.

Fossil capital and its defenders are very fond of pitting affordability and reliability against climate. We need to fight back against that narrative. We can have more reliable service, climate justice and lower rates. The most promising way of reconciling these goals is public governance. If you look at affordability, public power tends to be cheaper than private power. The Pacific Northwest has some of the cheapest rates in the country, and they are public. We have to show that we have a proven model of advancing climate justice and affordability.

One theme in my book is that there is a problem when we just throw public subsidies at the private sector, hoping that maybe they will do the right thing. This is not sufficient at all. What we are doing right now isn’t working. If we are going to spend all this public money, we should be planning and deciding how it is used.

I’m really excited about New York’s Build Public Renewables Act [BPRA]. A lot will hinge on how it is implemented. If it is successful, we can point to it and say, New York has done this, we can do it in Nebraska and Illinois and elsewhere. If the BPRA goes well, it will make a powerful, pragmatic case for public power, and showcase the practical benefits that made public power so successful in the 1930s and ’40s. Back then, people could see, regardless of ideological orientation, that their lives had gotten better thanks to greater public participation in the generation and transmission of electricity.

Roosevelt’s vision was very much aligned with the “yardstick approach” — the notion that public-private competition can help us ensure access to basic goods, not just in electricity but in housing and other sectors. It wasn’t that public power politicians wanted to nationalize the power sector, although some did. George Norris wanted to have [Tennessee Valley Authorities] all over the country, establish fair rates, and make the private sector compete, and if they couldn’t compete, so be it. The BPRA can be a yardstick at a moment in history when we need it more than ever.

Right now, even after decades of neoliberal dominance, around one in four power customers are served by a publicly owned utility or rural electric cooperative. People can already see the benefits — they pay less for power, and in some places, they have real input on how the utility is run. Now we need to bring this vision to the whole country.