It is not just deep state conspiracy theorists or the president’s henchmen who dislike government these days. Even on the left, there is mounting frustration with the ways in which bureaucracy proves an impediment to building things the country very much needs, like clean energy infrastructure and housing. Environmental review processes, administrative requirements for public participation, protracted and nitpicky judicial review, labor and domestic content requirements, and zoning and siting restrictions all slow down and sometimes outright destroy worthwhile projects. (See Alan Ehrenhalt’s review of Why Nothing Works, and Zephyr Teachout’s review of Abundance.)

The exigency of the climate crisis lends these complaints some force, at least when they align with empirics rather than serve as convenient scapegoats. Responding to climate change will require building a lot of things, quickly. We need massive quantities of wind and solar, long-distance transmission lines, battery storage facilities, and more. But what if we were to reconceptualize government not simply as an impediment to these ventures but as a potential powerhouse itself? (Pun intended.) 

Enter Sandeep Vaheesan’s lively new book, Democracy in Power, which paints a striking portrait of how federal, state, and local governments collaboratively built much of the U.S. electricity system over the first half of the twentieth century. Vaheesan then uses this history to spin off a future in which the government’s role in public power is revivified to construct a decarbonized and democratized energy system. 

The story begins in 1920s rural America—a cold, dark, and grueling place without the electricity by then common in urban areas. Vaheesan presents this rural darkness as “a puzzle,” given the state of the technology—although not so puzzling when reconceived through classic corporate logic. Rural customers were poor and far apart. Investor-owned utilities refused to build expensive systems to connect these households, who likely would consume too little electricity to make it worth the corporations’ while.

An alternative solution percolated its way into mainstream politics over the next decade: Perhaps government should build and own this system instead. Drawing on many successful examples of municipally owned utilities, public power champions like Senator George Norris of Nebraska pushed for Congress to adopt a broad agenda of giant publicly owned electricity systems throughout the country, which would serve the populations private utilities refused to connect.

Vaheesan recounts with vivid and amusing details the public-private battle that ensued. In short, private utilities dug their own graves. By the 1920s, most states had established public utilities commissions to regulate electric utilities’ rates and practices, in exchange for granting these companies monopoly service territories. But although utilities originally supported such regulation (in part to stave off bids for public takeovers), they quickly looked for ways to thwart it. 

Utilities’ central strategy in this regard was the holding company, an opaque device that Vaheesan manages to explain clearly and accessibly. Holding companies amalgamated smaller utilities into giant corporate structures that evaded state regulation, over-leveraged their assets, and obscured the financial fragility of the utility industry. When the industry wobbled, holding companies collapsed, taking with them the life savings of many Americans who had bet on utilities as a secure investment. One key New Deal response to this crisis was legislation that brought these companies under federal regulation and limited their scope and size. 

The holding company scandal had a collateral consequence: It increased politicians’ and the public’s appetite for publicly owned power as an antidote to private excesses. Although the utility industry was able to stave off public power in the 1920s through intensive lobbying and public relations efforts, by the early 1930s public power supporters were ascendant. Most notably, incoming President Franklin D. Roosevelt championed the ability of public power to discipline its private counterparts and pushed Congress to act. 

What resulted was a series of bills that finally brought power to rural America through government ownership. Vaheesan’s account of how this legislation and its programs unfolded is gripping and can scarcely be summarized in a paragraph. But to try: Congress authorized the federal government to construct and operate large hydropower operations across the country, and (in some cases, as with the Tennessee Valley Authority) to build the transmission lines to spread this power across rural regions. At the same time, it created the Rural Electrification Administration (REA) to aid rural communities in organizing themselves into rural electric cooperatives and municipal utilities. These locally or publicly owned systems received federal loans for construction and preference in the distribution of federally owned power, which helped make electricity affordable. Adjacent federal programs worked to grow rural electricity demand so systems would pay for themselves through rates. 

Together, these efforts formed a harmonic program of federal, regional, and local public initiatives that quickly electrified rural America—a program that corporate America had labeled impossible. Indeed, although private utilities had not wanted to serve these areas, they contested government efforts to electrify them every step of the way. In some places, they went so far as to build “spite lines,” which connected the wealthiest and most densely concentrated residents of potential cooperative territories but left all others in the dark, thereby rendering the economics of cooperative ownership ever more difficult. To no avail: The REA actively worked to counter these efforts through its loan authority, and it innovated to cut the cost of constructing distribution systems in half. Ultimately, after “the successes of the REA showed that rural electrification was feasible and even profitable,” Vaheesan writes, private utilities finally joined in these efforts that transformed life in rural America. 

The subtitle of Democracy in Power—A History of Electrification in the United States—promises too little: Although it is an excellent history, most of the book focuses on the present (Part II) and the potential future (Part III). 

Part II provides a snapshot of the electric industry today. As Vaheesan reports, some publicly owned utilities and cooperatives are flourishing, while others are floundering. The most democratic and innovative among them are working to increase engagement and turnout in board elections and to bring emerging clean energy offerings to their members. But others scarcely have any democratic impulses left—as with one cooperative that has failed to hold a board election for more than 60 years. Vaheesan explains this divergence in cooperative performance as partly due to failures of the REA to “codify democratic governance,” instead leaving cooperatives free to adopt divergent democratic practices and norms. 

Investor-owned utilities have a similarly mixed track record, much of which comes down to what their regulators demand of them. For example, Vaheesan observes that California utilities are leaders on renewable energy but—unfortunately and tragically—laggards on wildfire management. Why? Because regulators have put in place requirements for renewable energy purchases but have not carefully monitored utility practices with respect to wildfire prevention. Too often, Vaheesan suggests, regulation fails to live up to its potential to elevate the interests of the public over the interests of shareholders. The introduction of more competition into the sector has done little to ameliorate these dynamics, as electricity markets create new opportunities for market power and gaming that prove difficult to check. 

In sum, Part II offers a fair account of imperfect alternatives in modern power provisioning. No model of ownership clearly outperforms the others. Publicly owned utilities, regulated utilities, and deregulated utilities all have failed in transitioning to clean energy at the rate necessary to avert climate disaster and reduce attendant local air pollution. In fact, as Vaheesan astutely observes, carbon-intensive segments of the industry, which cut “across ownership types,” are actively working to resist the transition to clean energy. 

The question then is how to address this sclerosis—the pressing subject of Part III. Here Vaheesan’s tone pivots from that of historian-reporter to audacious policy advocate. To democratize the power sector, Vaheesan urges Congress to take two major steps. First, it should pass legislation to make it easier for localities to take over their power systems from private utilities. (Although this is presently legal in many places, it is politically and economically hard to achieve.) In essence, this step replicates the REA, although Vaheesan argues for one key difference. In place of loans, federal grants would cover the costs of these purchases, on two important conditions: a commitment to principles and practices of democratic governance; and adherence to a decarbonization mandate that accords with the imperatives of climate science. Second, Vaheesan calls for the establishment of “regional power authorities to generate and transmit low-cost, zero-carbon electricity”—21st-century equivalents of the Tennessee Valley Authority, updated for our times and needs. He also suggests that Congress should simultaneously pass a requirement on all investor-owned utilities to fully decarbonize, so this part of the sector does not fall behind. 

I am sympathetic to Vaheesan’s prescriptions, which is why I wish he had spent more time building his democratic case. If we’re inhabiting a policy world where Congress is ready to put in place a full decarbonization mandate on private utilities, what more do we need? Vaheesan insists that democracy in the power sector is “intrinsically valuable” and that a “democratic power system” should be the ultimate goal. But he doesn’t fully justify the widespread local takeovers he supports. Unlike Vaheesan, I am far from convinced that many cooperatives—even under more principled democratic governance—would yield ideal answers on questions such as infrastructure siting, given classic environmental justice concerns, well-known pathologies of local opposition to renewables, and enduring struggles in other areas of local decision-making such as zoning and affordable housing. Moreover, widely and deeply splintered ownership of the utility system has its own pitfalls under climate change, because more coordination across systems will be essential to a deeply decarbonized grid. How to balance the need for integrated systems, expertise, and collaboration with the allure of democratization is a difficult question that deserves confronting head-on. 

For similar reasons, what I find most attractive about Vaheesan’s proposal is the idea of new federal power authorities. As he notes, renewable energy has distinctly different economics than fossil fuels: Although it is capital intensive to construct, it has low operating and maintenance costs and zero fuel costs over time. As leading energy scholars have observed, that makes it a difficult fit with the current design of electricity markets, pegged as they are to the marginal costs of generation. Private developers who count on such markets as a core revenue stream to finance their projects struggle to build new renewable energy profitably, even as its costs have plummeted. At the same time, investor-owned utilities have an abysmal track record at planning and building the high-voltage transmission lines needed to affordably and reliably decarbonize the U.S. grid. Federal efforts in this space could optimize generation and transmission investments without the need for profits at levels that excite Wall Street investors, thus delivering the clean energy transition as affordably and quickly as possible and avoiding Vaheesan’s feared “zero-carbon oligarchy.” 

None of these proposals is remotely plausible at the moment, and Vaheesan is quick to acknowledge as much. But again he draws a historical analogy, noting that “public power wins that appeared impossible in the 1920s seemed to be inevitable in the mid-1930s.” Of course, the United States experienced the most severe economic shock in its history between those dates, a fate none would wish on us again. More bleakly, the more appropriate analogy for current U.S. politics might be Weimar Germany rather than our Roaring Twenties. 

Nevertheless, there is political resonance and relevance in Vaheesan’s case for public power that, if anything, he undersells. As he aptly notes, FDR celebrated public power as a “birch rod,” a disciplining force on private utilities. There need not be new federal legislation for them to play precisely this role now—and it may be more necessary than ever. Utilities across the country have a new strategy for delay: an insistence that we must not rush the energy transition, lest we compromise the reliability of our electricity system. One hundred percent carbon-free energy simply can’t be done, they say—at least not on the timescales demanded by science and morality—even as system modelers routinely show that it can be. 

That sounds an awful lot like what utilities said about rural electrification. As Vaheesan compellingly shows, it took new public entities and public programs to prove them wrong and force them to get on board. During this period when the energy transition is at risk of stalling, that is exactly what forward-looking states and localities should be doing: proving through public models that affordable, reliable, and clean energy is possible, and thus charting a course for system change that redounds to the benefit of all Americans while contributing to the ever-more-elusive goal of planetary stability.