This post is part of a symposium on Sandeep Vaheesan’s Democracy in Power: A History of Electrification in the United States. Read the rest of the posts here.
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In the 1930s, President Franklin Delano Roosevelt and like-minded thinkers advanced the idea of publicly owned utilities as a “yardstick” against which private utilities’ performance could be measured. When private utilities fell short, the threat of public power would discipline these entities into better behavior, or would result in full-out replacement by utilities owned and controlled by municipalities, state entities, or the federal government. This theory animated an impressive array of New Deal efforts at rural electrification, in which the government directly built out large-scale public electricity generation and funded communities to create their own local power systems in areas of the country that private utilities refused to serve.
In Democracy in Power, Sandeep Vaheesan argues that these twentieth-century rural electrification efforts can serve as a model for public power in today’s energy system. He notes the key challenges facing the system today—the need to rapidly transition to clean energy while maintaining affordable rates—and proposes revitalizing public power as a solution to these dilemmas. To realize this vision, Vaheesan outlines a bold legislative agenda that would pave the way toward a clean electricity system through public ownership.
I am sympathetic to Vaheesan’s vision, having previously argued that the theory of public power has renewed potency in today’s energy system. But of course, theory and politics are different matters. As I explore in this post, there are important differences between the political economy of rural electrification and that of today’s crisis. Understanding these distinctions can help us be clear-eyed about the political hurdles facing modern public power movements, which in turn helps us strategize the most promising forms and functions of public power today.
Vaheesan readily acknowledges that his proposed public takeover effort is “utopian and unrealistic” (283). But, he explains, the same appeared true in the 1920s; it was only through a sustained political fight that the proponents of public power achieved a democratic mandate in the 1930s. Vaheesan sees the stirrings of a similar political coalition today, pointing to the 2022 Inflation Reduction Act (IRA), the United States’ largest ever climate legislation, “as a first step toward a broader and deeper transformation of the national power system” toward more public forms of power (286). In particular, he highlights some encouraging IRA provisions that, if they remain intact, will make it easier for publicly owned utilities to build and own renewable energy infrastructure.
Nevertheless, there are significant political differences between rural electrification and today’s push for 100% clean electricity. It is going to be much more difficult to yardstick it to the man today than it was in the 1930s, for at least three reasons. First, rural electrification addressed a gap in service for farms and rural communities. As Vaheesan compellingly describes, utilities saw no profit in running expensive, far-flung lines to these consumers who could afford little power, and so they declined to invest. As a result, when public and cooperative entities stepped in to build in rural areas, they were entering new service areas. Although private utilities still resisted—Vaheesan colorfully recounts their attempted erection of “spite lines” to siphon off the wealthiest potential customers (116)—their opposition remained limited since they had little to lose.
Today’s landscape presents a stark contrast. Although a few areas of the United States remain woefully under-electrified, most places are now fully served by a monopoly provider. That means efforts by public entities to take over any distribution system will face considerably greater opposition: A utility will be losing a profitable piece of its existing service territory, not just declining to expand into a new one. This fundamental difference helps explain why modern public takeover efforts—such as the ones in Boulder and Maine that Vaheesan describes in the book—have been so politically challenging, with utilities pouring funding into opposing each phase of these movements.
Second, the harsh politics of stranded assets intensifies these challenges. Unlike rural electrification, which expanded generation capacity, today’s clean energy transition requires replacing existing infrastructure (even as the total system must expand). We simply cannot make electricity from fossil fuels any longer while preserving a livable planet. Currently, though, the U.S. electricity system runs on nearly 60% fossil fuels, mostly natural gas, delivered through a vast array of drilling operations, pipelines, and gas-fired generators. Many of these capital-intensive investments are relatively new, as gas use has ballooned in the electricity system in the past few decades. Thus, to address climate change, many of these assets will have to be stranded—that is, abandoned before the end of their useful life for cleaner replacement technologies. The premature retirement of hundreds of billions of dollars in fossil-fueled infrastructure creates a powerful industry lobby opposing clean energy—one that is currently ascendant in federal energy policy. This lobbying force is joined by public and private power entities alike, with publicly owned utilities potentially facing even greater pressure to retain “useful” assets without shareholders to absorb stranded costs. While Vaheesan proposes conditioning federal funding for public takeovers on 100% clean energy commitments, this very same fossil lobby makes legislating such a commitment politically challenging.
Finally, the macroeconomic implications of moving to clean energy are quite different from those of rural electrification. Rural electrification succeeded in part because of strategic public-private alliances. For example, as David Neuse describes, the Tennessee Valley Authority launched a cooperative effort with “appliance manufacturers, retail stores, and participating private utilities” to boost rural demand, thereby aligning “TVA’s goals with those of business.” This approach deliberately promoted increased consumption, generating accompanying revenue growth for manufacturers of an array of new products.
This growth-focused project wasn’t the only possible path for electrification. Economist John Maynard Keynes famously envisioned an electrified society where people worked just fifteen hours a week, reserving most time for family and leisure. Tellingly, though, politicians rejected this leisure-centered future. Instead, they emphasized enhanced material prosperity, as when FDR campaigned for public power on the contention that “low prices to domestic consumers will result in their using far more electrical appliances than they do today.”
Although the clean energy transition analogously offers new profit opportunities for companies producing solar panels, battery storage, and electric vehicles, these technologies must replace—not merely supplement—existing infrastructure. Indeed, climate mitigation will fail if solar and electric vehicles only add to our grid and our transportation fleet rather than substituting for fossil-fueled electricity and gas-powered vehicles. Thus, although addressing climate change remains good macroeconomic policy in the sense that it will prevent massive economic suffering and damage, this transition lacks the growth-generating potential that drove rural electrification. Instead, it creates unavoidable battles for market share between incumbent firms and clean-energy-related entrants that infuses clean energy politics today. This dynamic is evident in the divergent responses among automakers to the rise of electric vehicles, with some firms that view themselves as likely winners championing the shift while others resist it. These competitive dynamics leave today’s climate-focused public power movement with fewer natural business allies than its economic expansionist predecessor.
To sum these differences up: Takeovers are harder than gap filling, stranding assets on the scale required for decarbonization is a new political challenge, and the clean energy transition does not have the same promise of supercharging economic growth that rural electrification did. All of these factors produce resistance from investor-owned utilities and incumbent firms that is far more entrenched than what public power advocates encountered during their earlier successes.
While these distinctions may induce some despair about the potential for public power today, a sharper understanding of the differences in political economy between these moments also points to some targeted pathways forward for research and action. First, we should explore potential “gap-filling” opportunities where public power might provoke less direct resistance from utilities. Could a public power entity, for instance, construct the elusive offshore wind transmission backbone along the U.S. east coast—a project that no private utility has seen fit to undertake? One recent political victory, New York’s legislation authorizing its public power entity to build and own renewables, exemplifies this additive approach rather than a replacement strategy.
We should also further explore how public power might address stranded fossil fuel assets. One way to tamp down fossil asset holders’ resistance to clean energy might be for the public to buy these assets and then retire them, perhaps through central banks. There are, however, risks to such proposals. As Andreas Malm and Wim Carton point out in their new book Overshoot, not only does this strategy feel morally abhorrent but it would also significantly raise the costs of the clean energy transition. Moreover, it would create problematic incentives, as private holders of many kinds of fossil-fuel-related infrastructure might demand similar treatment or rush to procure assets in advance of a buyout. Scholars of public power should also consider another problem related to stranded assets: what to do with the 55% of global oil and gas production that comes from state-owned enterprises. How might the public nature of most fossil fuels create distinct opportunities and hurdles for decarbonization? All to say, acknowledging the stranded asset dilemma embedded in the energy transition raises provocative and pressing questions about the role of public power today.
Finally, when it comes to the challenge of marketing clean energy’s economic potential as compared to selling rural electrification, I believe the IRA is instructive for additional reasons to the ones that Vaheesan suggests. The Biden administration touted the IRA and related legislation not only for its clean energy potential, but also for its role in bringing back good domestic manufacturing jobs and allowing the U.S. to compete with China in core clean energy growth industries. Although this spending did not translate into jobs on the ground in time for the 2024 election (and, as historian Brent Cebul compellingly argues, may have some deeper flaws), this approach does seem to hold political potential: As IRA money flows into Republican districts, many conservatives are now urging Congress to preserve the Act’s core policies. This suggests that creative policy frameworks connecting climate action with broad economic prosperity could make today’s public ownership initiatives politically viable in ways reminiscent of rural electrification’s success.
Ultimately, Vaheesan’s analogy between the project of rural electrification and public power in today’s clean energy transition is fruitful and generative. This parallel raises a host of compelling questions for scholars and advocates about the politics and potential of public power today. As climate progress inches ever-too-slowly forward, long live the yardstick.
