As the industry resumes major capital-spending programs, utilities and their stakeholders are rightly concerned about the effects on prices. Traditional regulatory approaches expose utilities to...
Lighting Up the World
Why electricity is good—and more is better.
air conditioning—all hallmarks of industrialization and modernization made possible by electric power. Accordingly, Americans have experienced a dramatic increase in life expectancy (see Figure 2) .
One of the principal reasons that life expectancy soared over the last century was that people were much more likely to survive childhood. Survival during the first year of life was particularly important and remains a direct reflection of the technological level of a society (see Figure 3) . As Zakir and Wunnava (1999) note in Applied Economics Letters : “Infant mortality rates serve as excellent health status indicators across and within economies … and are associated with the well-being of a population.” 15 From 1900 to 1936, Cutler and Miller (2005) report in Demography that clean water was responsible for 74 percent of the reduction in infant mortality and 62 percent of the reduction in child mortality in a study of 13 U.S. cities. 16
The impact of electricity access on sanitation and cleaner water is noteworthy. In 1940, nearly one-half of U.S. homes lacked complete plumbing facilities and more than one-third had no flush toilet. 17 By 1960, electricity consumption had greatly increased, power was widely available, and 84 percent of the homes had complete plumbing facilities and 90 percent had a flush toilet (CDC, 2009). The better sanitation from electricity had a marked positive effect on waterborne diseases (see Figure 5) . From 1900 to 1936, Cutler and Miller (2005) report that clean water was responsible for about 43 percent of the total mortality decline in 13 U.S. cities. On average, water filtration reduced typhoid fever deaths by 46 percent—nearly eradicating the disease in the United States by 1936. Today, a lack of electricity devastates by creating a breakdown in the critical vaccine “cold chain.”
Additionally, electricity has improved quality of life. Kurt Yeager, former chief executive officer of EPRI, states in the Encyclopedia of Energy Engineering and Technology (2007) that “electricity is more than a form of commoditized energy; it is the underpinning of the modern quality of life, and the nation’s indispensable engine of prosperity and growth.” 18 The integration of accessible, reliable, and affordable electricity into the social structure had a significant positive impact. Americans truly do live better with more electricity—and they make more money. There has been a remarkably stable linear relationship between electricity consumption and GDP over the decades ( see Figure 4 ).19 In fact, Lacko (1999) observed a near one to one ratio in a number of different countries. 20
TVA: Transforming Rural America
The Tennessee Valley Authority provides a vivid example of how electrification has improved life in rural communities. “The general impression of the whole area affected by the TVA is that a transformation in rural life has been achieved,” wrote E. George Payne in the Journal of Educational Sociology (1946). 21
Although the majority of Americans living in large towns and cities had electricity by the early 1930s, less than 10 percent of those residing in small towns and farms had power. 22 President Franklin Roosevelt strongly believed that all citizens