Marc J. Dunkelman

“Previously, during the Progressive Era, when electrical wires had first been strung across the country, municipalities had often taken the lead, establishing locally owned electrical systems under the direct control of City Hall. But if that appeared like progress to some, conservatives worried about the creeping tentacles of (often machine-controlled) local government. From that tension, a compromise was born. Rather than choosing between public and private ownership, government would charter “public utilities,” entities that would be run independently and for profit, but with the imprimatur of public oversight.6 In exchange for controlling the exclusive franchise to serve an area, a utility was contractually required to extend service to anyone who wanted a connection.7 In theory, the public would get the benefit of municipal ownership with the efficiency born of private industry. Or that was, at least, the hope. Already by the mid-1920s, however, many were questioning the wisdom of that arrangement. Legal agreements and secretive financial arrangements had opened the door for shadowy financial interests to claim effective control of the nation’s utilities. Local citizens might have maintained the impression that the small power plant serving their single neighborhood was owned locally—but in many cases it was actually controlled by a corporation headquartered thousands of miles away. That left many Americans—most of them dependent on their little, local electrical utility—powerless to lobby for lower rates, better service, or new connections. Perhaps worse, profit-oriented ventures, however they might be governed, had no real incentive to string wires to faraway places that were unlikely to draw much electricity. And that market-based reality had left the vast countryside in regions like the Tennessee Valley bereft of service.”
― Marc J. Dunkelman, Why Nothing Works: Who Killed Progress—and How to Bring It Back