Elections and Electrons

Deck: 

An Industry That's Often a Campaign Issue

Fortnightly Magazine - December 2019
Recharge the Economy with Renewable Energy Tax Credits

Each month, here, in this spot, the History Repeats column takes a look back on the large moments in the history of utility regulation and policy. And reflects on the lessons of history for us in the practice of pursuing the public interest in the present and years ahead.

Deals can be green these days, and green deals can be new or real. The monikers of the plans by politicians to combat climate change are variations of these words that harken back to Teddy Roosevelt's Square Deal and his cousin Franklin's New Deal.

We approach the 2020 elections that might endorse a deal of some sort to propel utility regulation and policy down a different path. It's instructive to look back at how our industry has responded to the political winds and gales.

Considerable political controversy dogged electric utilities from the start. Thomas Edison persuaded New York City officials, dispensing ample pocket money, to allow the installation of Pearl Street Station and its downtown distribution system. In the building craze that followed across the country, to electric lights and the first appliances, private companies and municipalities often clashed while carving out their territories.

Recharge the Economy with Renewable Energy Tax Credits

To electrify the nation, it was already recognized that a strange admixture of capitalism and socialism would be necessary, to bring capital to bear, to build and operate infrastructure efficiently, and to ensure the whole public benefits. The fruits of electricity were too important for households, farms and businesses, and its supply was too intrusive in public lands and spaces, to fully entrust the industry. That's why Samuel Insull, brought up in the more institutional society of Great Britain, leapt to a regulatory model.

When the Depression struck, the heretofore mentioned Franklin Roosevelt blamed Insull's empire of regulated utilities and was tempted to nationalize the industry. These were top themes in FDR's 1932 presidential campaign, just as combating climate change might be a constant in a 2020 presidential campaign.

Electric utilities have been at the forefront of national politics periodically since. In the fifties, Dwight Eisenhower drove the industry to nuclear, to keep up with demand and become less dependent on oil. In the seventies, Jimmy Carter drove the industry to get off oil and natural gas, in favor of nuclear - until the TMI incident - and notably, coal. A decade ago, Barack Obama drove the industry to get off coal, in favor of renewables and intentionally or not, natural gas. Feeling dizzy?

In 2020, oil has left the scene, natural gas is again in the spotlight or headlights, and nuclear is hanging on though unsteadily. There's talk of fifty, eighty, even a hundred percent dependence on renewables. As always, the industry will work to accommodate the path politicians have a passion for, even though that path can diverge from one election cycle to another.