Here’s How FDR Explained Making Electricity Public
“My friends, my policy is as radical as the Constitution of the United States,” he said
When electric power first started becoming available in the 1890s, people bought it from small private companies that sprang up around the country.
In the beginning, eager to get in on a good thing, writes the University of Oregon, many people started power companies. In the absence of regulation, things were chaotic: individual cities could have up to 30 power companies operating within that one city. “During this time,” writes the university, “some politicians called for a publicly run network in order to bring some order to the electric utility industry. But the business community successfully lobbied against government control.”
The initial chaos abated as larger companies bought up smaller power companies in the first decades of the twentieth century, the university writes. “By 1930, ten large holding companies, which were headed by multi-millionaires like John D. Rockefeller Jr., J.P. Morgan Jr. and Samuel Insull owned 75 per cent of the electric industry.”
The grid was so big and complicated, the university writes, that state regulation was impossible. But things were coming to a head: “Despite massive advertising campaigns by the private power industry condemning public ownership as ‘socialistic,’ public opinion had begun to shift toward a negative view of the big holding companies.”
A series of federal investigations revealed that the power companies were overcharging customers and paying little tax, while engaging in financial fraud. Franklin Delano Roosevelt, campaigning for president in 1932, said he had the solution to this growing problem:
To the people of the country I have but one answer on this subject. Judge me by the enemies I have made. Judge me by the selfish purposes of these utility leaders who have talked of radicalism while they were selling watered stock to the people and using our schools to deceive the coming generation. My friends, my policy is as radical as the Constitution of the United States. I promise you this: Never shall the Federal Government part with its sovereignty or with its control of its power resources while I'm President of the United States.
Roosevelt was envisoning another way, writes Andrew Glass for Politico. He asked Congress to create “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.” Congress responded with the Tennessee Valley Authority, the nation's first publicly owned power company. Roosevelt signed the bill creating the TVA on this day in 1933.
Of course, the TVA was more than a power company. It was created during the Depression, Glass writes, and the Tennessee Valley was in a bad way. The TVA would need to address more than electricity: it was created to provide flood control, assist with agricultural and economic development, maintain forested lands, and more.
When Roosevelt signed the act that created the TVA, “Malaria remained rampant in some 30 percent of the population,” Glass writes. “Household incomes averaged $640 a year. Much of the land had been farmed too hard for too long, which eroded and depleted the soil."
But the TVA brought new life to the region. “TVA-generated electricity attracted industries, which in turn created jobs,” he writes. “Light and modern appliances made life easier and farms more productive.” The TVA also worked with farmers to develop fertilizers and improve their land as well as the natural environment.
The TVA remains the largest national public power company, Glass writes, serving nearly 8.5 million customers.