Out of all 50 states, Nebraska is the only one that supplies cheap electricity to its residents through a completely socialized, public-owned, citizen-governed utility company. According to Truthout, all of Nebraska’s businesses, as well as each of the state’s 1.8 million citizens depend not on a private, for-profit utility corporation for its power, but 167 publicly-owned utilities. After reading the Nebraska Power Association’s website, the description of their business model sounds like something Karl Marx would’ve been proud of:
“Publicly owned utilities exist to serve customers. Period. There are no stockholders, and thus no profit motive. Our electric prices do not include a profit. That means Nebraska’s utilities can focus exclusively on keeping electric rates low and customer service high. Our customers, not big investors in New York and Chicago, own Nebraska’s utilities.”
Nebraska went to a complete publicly-owned model after the greed of Wall Street-backed private utility companies left a bad taste in the mouths of Nebraska’s residents. In the gilded age of the late 19th and early 20th centuries, these private utilities used their deep pockets and clout with local politicians to buy out their competition and stop new power cooperatives from forming. By 1930, the people of Nebraska got fed up with paying higher rates for poorer service and took their rage to the ballot box, voting in favor of a revenue bond finance proposal for a publicly-owned power system.
Senator George Norris of Nebraska, a champion of FDR’s New Deal and proponent of the Tennessee Valley Authority, was also a prominent cheerleader for local and national reforms that strengthened the position of public utilities in the electricity market. Nebraska passed the Enabling Act in 1933, which allowed voters to petition for a public utility through the democratic process. In 1935, Congress passed the Public Utility Holding Company (Wheeler-Rayburn) Act, breaking up the highly-concentrated, Wall Street-financed firms like the ones that had bought up one-third of Nebraska’s municipal utilities. The following year, Congress passed the Rural Electrification Act, which provided funding for publicly-owned power companies. Nebraska’s power companies were 100 percent public-owned by 1949.
Sounds great, right? It didn’t take long for the power companies to revolt and solidify their grip on Congress. Once Ronald Reagan was elected president, deregulation fever had swept the country. Reagan and his Congress, determined to enforce the narrative that government was the problem, uprooted government controls on price manipulation, believing that the market should be solely responsible for setting prices on everything from electricity, transportation, natural gas, and telecommunications. Jimmy Carter’s Public Utilities Regulatory Policies Act (PURPA), meant to allow equal competition between Qualifying Facilities (companies providing electricity from one source) and Independent Power Producers (companies providing electricity from multiple, renewable sources like wind and solar) was used as justification that the non-utility generators –QFs– were just as efficient at providing electricity as the regulated IPPs.
In October of 1992, Reagan’s former CIA director-turned-president signed the Energy Policy Act into law, which gutted the Wheeler-Rayburn act by allowing the non-regulated QFs access to the transmissions market. It also created an entirely new category of energy companies separate from QFs and IPPs, called Exempt Wholesale Generators (EWGs). These new EWGs were exempt from the rules governing QFs and IPPs, paving the way for higher concentration of the electric power market. According to PBS Frontline, the top 10 investor-owned utility companies controlled 40 percent of the entire electric power generation market by 1998. This essentially means more people across America who aren’t served by a publicly-owned utility company have ever-decreasing options when it comes to power companies.
Fast-forward to a recent horror story: for 2 to 3 days on Thanksgiving week of 2014, a snowstorm knocked out power for roughly 200,000 residents in over a dozen towns in central New Hampshire – the area’s fourth-biggest power outage in history. According to a friend who braved the storm (and wishes to remain anonymous for this story), untold amounts of staple Thanksgiving perishables like turkey, sweet potatoes, salad, and desserts that his family members had spent days and dollars preparing and perfecting were all ruined. The electric-powered heating system for his home was non-operational, requiring him find a ride to a hardware store to buy a propane heater, then finding a balance between having a room warm enough to sleep in and cracking the window just enough so the propane fumes wouldn’t kill him in his sleep.
Privately-owned Unitil, the only power company in the town my friend lives in, never gave an estimated time of restoration, and barely even managed to update their phone messages every 12 hours. In return for all of the lost food, lost money, and cold nights huddled under blankets, all my friend got in return from Unitil that month was an electric bill that was slightly higher than the previous month’s bill. My friend described sheer bewilderment and rage at the bill – bewilderment at the bill’s charges since he didn’t use electricity for 3 days, and rage at being offered no credit for the outage. Since there’s no publicly-owned utility company serving central New Hampshire, my friend remains entirely at the mercy of Unitil, with no recourse.
The concentration of private power companies will only continue as long as it goes unchallenged by local residents and customers. If the citizens of Nebraska were able to take to the polls and use their democratic process to gain a public utility option a century ago, then the rest of America should too.
This is part 3 of the 5-part series, “Austerity is Bunk,” on NationofChange, also hosted at Commonomicsusa.org.