NYBR - Building the Electrostate

Open Markets legal director Sandeep Vaheesan makes a case for expanding public ownership in the U.S. electric power sector, arguing it‘s the best way to secure affordable energy and decarbonization.

In the United States today, officials at all levels of government generally act as if private enterprise is the only way to provide goods and services. Yet a bastion of public ownership survives: more than a quarter of electricity customers—including the residents of Los Angeles, Omaha, San Antonio, Seattle, Jacksonville, and Tupelo, along with tens of millions of other people—get their power from one of the country’s more than 2,500 publicly owned utilities and rural electric cooperatives. Mostly established in the first half of the twentieth century, these institutions have a long record of offering reliable service at affordable rates; even today, publicly owned utilities charge less and resolve outages faster on average than their investor-owned counterparts.

Creating more like them, however, has been extraordinarily difficult. Since the 1940s, few communities have successfully taken control of their private utilities; one such example is the city of Massena, New York, which waged a seven-year political and legal fight before taking over its power grid from Niagara Mohawk in 1981. Residents immediately saw their bills go down substantially. Today, according to New York Focus, they enjoy “some of the cheapest, cleanest electricity in the state.”

The obstacles to expanding public power are not hard to divine. It is opposed by some of the most influential forces in the US—not just the utilities but allied corporate and financial interests, much of the political establishment, and often even unions of power sector workers. In Boulder, Colorado, a long and costly battle to take over the city’s private utility that began in 2010 was abandoned in 2020. (The effort did help the city secure an agreement that, among other things, requires the utility to make its services more reliable and to reduce greenhouse gas emissions more quickly.) In Maine, the state’s two private utilities together poured more than $40 million into fighting a November 2023 referendum that asked voters to authorize a consumer takeover, outspending supporters more than thirty to one. Though polls showed that voters, unhappy with the status quo, were open to the idea of public ownership, the utilities used anxiety about the cost of a debt-financed buyout and the specter of irresponsible “political” control to convince Mainers to stick with the devils they knew. The referendum lost by a margin of over 30 percent.

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