“That man may use it freely as the air he breathes, the waters of the rivers, the winds of heaven.”
Those words, embossed on a beautiful mosaic at the headquarters of Seattle City Light, reflect the founding principle of publicly run providers of electricity. At the turn of the century, investment companies, brokerage firms, and private utilities based largely on the East Coast tried to block the establishment of public power companies in the northwestern U.S. Today, they threaten the future of government-owned power once again. The issue remains the same. Who should control and benefit from the natural resources — workers or profiteers?
Private vs. public tug-of-war. Early power companies run for profit not only charged their customers exorbitant rates, but also refused to operate in rural communities because of the higher costs of setting up service.
In response to the unregulated monopolies, a grassroots movement sprang up to demand the establishment of public utilities. In the Northwest, it included workers, farmers, unions, and socialists.
Opposed at every step by the private power companies, the campaign eventually won the legislative victories that allowed for creation of large government-run utilities.
As more and more Public Utility Districts were organized, the power trust fought back, often through bought-and-paid-for politicians. In 1931, Seattle Mayor Frank Edwards fired J.D. Ross, the visionary head of Seattle City Light, because Ross was delivering power at half the cost of City Light’s private competitor.
But support for public ownership was so strong that in an election recall vote, the mayor was dumped by 90 percent!
Rule of the bottom line. The current craze for deregulation hit the power industry in 1992, with passage of the National Energy Policy Act.
Both public and private utilities operate as regional monopolies because of how electricity is transmitted. Until the act passed, most customers couldn’t choose their supplier. Prices were regulated heavily by government agencies.
The bill’s supposed intent was to nurture competition by de-monopolizing the industry and letting the market set prices. Backers claimed this would result in cheaper electricity and better service.
Hah! The only consumer groups this act benefits are the large industrial and commercial buyers, who are able to bargain for their power: they can threaten to take their substantial business elsewhere. But the rest of us have no chips to play with, and the littlest consumers end up subsidizing the savings of the biggest.
Dark days of market anarchy. The act also allows privatization to sneak in alongside deregulation.
Previously, only utilities who owned portions of the country’s power grid could transport bulk power from a generating source to a buyer. Now, owner utilities must grant non-owners access to any unused space on their system. This means that middlemen can make a quick buck off publicly built, owned, and maintained utilities by hitching a ride on their grid — purchasing electricity from one utility and selling it to another at a markup.
“Open access” poses the threat that greedy speculators will strain delivery systems past their capacities, making service disruptions common.
The good news is that utility worker unions in California and Wisconsin are battling layoffs induced by the “streamlining” that deregulation brings.
The current move toward wide-open markets could literally return us to the dark days at the beginning of the century. Only through nationalization, not privatization, will we the people have a chance to keep the lights on.
Heidi Durham is a pioneer woman in the electrical trades. A 21-year veteran of Seattle City Light, she is now a power dispatcher.