When electric power began appearing in the late 1890s, many purchased it from private firms that started to pop up nationwide.
At first and eager to get their hands on a great thing, writes the University of Oregon, many individuals started power companies. Without regulation, things were a mess in that cities could have as many as 30 companies that operated in that one city. “During this time,” according to the university’s report, “some politicians called for an open-source network to control the electric utility sector. However, the business community campaigned against the government’s control.”
The initial chaos was quelled because larger companies purchased smaller power companies during the early years of the 20th century, according to the university. “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.”
Grids were so vast and complex, as the university explains that regulation by the state was inconceivable. However, things were about to come to a point of no return: “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.”
An array of investigations by the federal government showed that power companies were charging customers too much, paying a low tax, and engaging in fraud in the financial sector. Franklin Delano Roosevelt, campaigning for the presidency in 1932, claimed he had the answer to the growing issue:
To the citizens of this nation, I can offer only one option on the subject. You can judge me by the enemies I’ve created. Judge me according to the selfish motives of these power leaders who proclaimed radicalism when they were selling watered stocks to the public and using our schools to fool the next generation. My dear friends, my policy is just as radical as it is in the Constitution of the United States. I guarantee you I will never let the Federal Government part with its sovereignty or control over its power resources when I am the President of the United States.
Roosevelt was contemplating a different way, writes Andrew Glass for Politico. He urged Congress to establish “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.” Congress quickly responded by establishing The Tennessee Valley Authority, the first publically owned power company. Roosevelt signed the bill that established the TVA on the day of this date in 1933.
Of course, there was a reason that the TVA was much more than a power corporation. It was founded amid the Depression, Glass writes, and the Tennessee Valley was in a negative state. The TVA must address more than just electricity. It was created to offer flood control, support economic and agricultural development, protect forested areas, and much more.
In the year Roosevelt signed the bill, which established the TVA, “Malaria remained rampant in some 30 percent of the population,” Glass writes. “Household incomes were about $640 a year. The land has been used over a long period of time, and this eroded and diminished the soil.”
However, the TVA gave fresh life to the area. “TVA-generated electricity attracted industries, which in turn created jobs,” the author writes. “Light and modern appliances made life easier and farms more productive.” The TVA also collaborated with farmers in the development of fertilizers and to improve their farms and the natural environment.
GLASS WRITES THAT the TVA remains the most prominent national public power provider, serving almost 8.5 million clients.