Powering Strong Communities

Past is precedent

As of this writing, on March 31, 2020, we are in the throes of the COVID-19 response. At this moment, there is uncertainty about when we will be able to stem the tide of serious infection and death from the virus and return to normalcy. Public power utilities are implementing plans to ensure essential personnel can keep the power flowing. We are working with federal, state and local governments to ensure electric utility employees are considered essential. From where we sit now, it is more apparent than ever that electricity is fundamental to modern society no matter where we work and live.

While public power utilities have long planned for “high-impact, low-frequency” events such as pandemics, we have not experienced a pervasive health crisis like this since the early years of electric utilities. The Spanish flu killed an estimated 675,000 Americans from 1918 to 1919, at the tail end of World War I, which itself killed another 117,000. At that point, electricity was not as integral to society as it is now. In addition, interconnection between utilities was not established until a few years later, with the inception of the Connecticut Valley Power Exchange in 1922.

The 18 years between this seminal event and the establishment of the American Public Power Association in 1940 — 80 years ago as of Oct. 3, 2020 — saw interconnection and the economies of scale enabled by “power pools” become more prevalent. Industries harnessed electricity to provide things like affordable cars, while newly invented machines like air conditioners made life more comfortable. 

These years also saw a raging debate in the country about private power versus public power. In the 1920s, owners of private utilities, like the infamous Samuel Insull, had leveraged the monopoly power of state-regulated, vertically integrated utilities to create layers of unregulated holding companies that overcharged ratepayers and eventually collapsed under their Ponzi-scheme-like weight after the stock market crash of 1929. 

In the 1930s, passage of laws like the Public Utility Holding Company Act and the Federal Power Act pushed by President Franklin Delano Roosevelt reined in these baser instincts — just as 30 years before the trust-busting laws advocated by his cousin, President Teddy Roosevelt, had reined in the steel and oil barons.

This era also birthed the federal utility known as the Tennessee Valley Authority, nonprofit rural electric cooperatives to serve the “last mile” of electric service to farmers and ranchers, and massive hydropower projects such as the Hoover Dam that instilled the concept of “preference” power — designating not-for-profit public power and rural electric cooperatives as preferred customers to purchase this federally generated hydropower at cost. 

While many public power utilities had been created in the late 1800s to serve communities overlooked by private power, the 1930s were an inflexion point. They established themselves as uniquely suited to providing this now essential service — a “public enterprise” that married public works with excellence in engineering and performance.

This era also highlighted the need for a unified public power presence in Washington, D.C., as well as the need for a community of public power utilities that would support each other and, ultimately, the communities they each served. The groundwork was laid for the creation of an association of public power utilities to “promote cooperation among, and the betterment of municipal corporations, state agencies, and political subdivisions … and to educate and assist the public power sector of the electric utility industry with particular regard to management and operation; engineering, design, construction, operation and research; accounting and commercial practice; public policy; personnel training; and such other matters as may be common to … Public Power Systems.”

The realization of this plan occurred in October 1940, when the world was in turmoil as a result of the aggression of Nazi Germany and Imperial Japan. Such aggression had been displayed a few months earlier, when Paris fell to the Germans on June 14. On that day, Roosevelt signed into law the Naval Expansion Act, which authorized an increase of the U.S. Navy by 11%. In the few days before that action, he had approved the sale of surplus war material to Great Britain and condemned Italy’s declaration of war against France and Great Britain. 

The future was uncertain, and the U.S. was still rebuilding from the Great Depression. No one knew in 1940 if the Allies would win or, for the optimists, when they would win. Yet the need for public power utilities throughout the country to link arms and face events together was never more certain.

On Oct. 29, the three original staff members of the American Public Power Association, Boyd Fisher, Louis C. Stephens and Harold C. Ames Jr. — all residents of the greater Washington, D.C., area — signed the certificate of incorporation in Washington and listed the first 15 Board members who came from public power utilities across the country. Some of these men would serve in the war once the U.S. officially entered it on Dec. 7, 1941, but some would stay back to ensure that power flowed to the factories, aluminum smelters, mines, docks, and other infrastructure that enabled us to eventually win the war. It is no coincidence that public power utilities underpinned many crucial wartime industries and supply lines in places like Los Angeles, Washington state and the Tennessee Valley, among many others.

While the COVID-19 outbreak is not caused by malicious nation-states seeking world domination, nor is the death toll expected to approach even the tip of the iceberg of the 70 million to 85 million people killed from wartime actions and associated famine and disease during World War II, there is similarity in the uncertainty. When will we better understand the nature of COVID-19 and the best prevention and treatment while being able to keep our society and economy going? What are the implications for critical infrastructure providers such as public power utilities in both the long and short term as they balance health and safety with keeping the power flowing to their communities? What are the implications for our country and freedoms?

The outcome of World War II was not predetermined, but I have no doubt that the tenacity, innovation, and engineering brilliance of our society — fiercely underpinned by cost-based, reliable and abundant electricity — had a lot to do with tipping the scales. The connection established by the visionary founders of APPA in 1940 also undoubtedly helped the war effort as public power utility leaders and staff relied on each other via APPA to inform best practices and to aid in removing bureaucratic red tape in Washington. This is the very same thing that is happening now in response to COVID-19, and it will enable us to come through this uncertainty with greater strength and resilience. That is the power of public power, and I am so grateful to the dedicated professionals across the country who have made significant sacrifices to keep the lights on — both then and now.