The Best Way to Fight Heat Waves and Outages Is to Green the Grid
Heat waves have killed thousands around the world in recent months. As periods of exceptionally high temperatures become increasingly frequent and intense due to climate change, drastic action is required to limit the damage. The electric power sector is both contributing to the problem as one of the principal sources of greenhouse gas emissions and being hurt by it, as seen by the early arrival of a powerful storm like Hurricane Beryl and lower water levels at Lake Mead threatening the Hoover Dam’s ability to produce energy. The United States, the largest historical emitter of greenhouse gases and the second largest polluter today, has begun cleaning up its power supply, thanks to the significant growth in solar and wind generation and the rapid decline in coal-fired power. But it’s not happening fast enough. Approximately sixty percent of electricity in 2023 was still produced by the combustion of fossil fuels, led by natural gas. The problem is structural. Profit-oriented corporations definitionally pursue profits. And that means they can neither be counted on to deliver reliable service, as millions in Houston served by CenterPoint Energy can attest, nor to develop enough zero-carbon power—as suggested by the ever-precarious state of offshore wind projects. Fortunately, we have an alternative, time-tested model—publicly built and owned clean energy.American culture frequently treats public ownership as a foreign experiment: feasible for Scandinavia, perhaps, but not here. Yet publicly owned utilities and rural electric cooperatives serve more than one-quarter of all power customers in the United States. The City of Los Angeles is served by the publicly owned Los Angeles Department of Water & Power, and the Tennessee Valley Authority (TVA) is one of the largest generators of electricity in the nation. In rural and suburban areas across the country, tens of millions of people are served by cooperatives.Many of these institutions were created as part of Franklin Delano Roosevelt’s New Deal. In 1933, Congress set up the TVA to build dams to control floods, promote navigation, and generate power in the Tennessee River basin, then one of the poorest regions in the country. Federal agencies also constructed large, multipurpose dams on the Colorado, Columbia, Sacramento, and Savannah Rivers (just to name a few) in the mid-twentieth century. There are several parallels between that period and the challenge of renewable energy now. National power policy in the 30s and 40s made electric service affordable and universal. In 1935, only about one in ten farmers had electricity. Private power companies had largely neglected rural America, dismissing these thinly populated areas as too costly to serve and unlikely to use enough power to make line extensions worthwhile. But by studying the rural market including through grassroots outreach, the Rural Electrification Administration determined there were many beneficial uses of electricity in farms and country homes and identified ways to reduce the costs of line construction. By the 1950s, thanks substantially to the federal government’s financial and technical assistance for rural electric cooperatives, 9 in 10 farmers had power. Cities also benefited from public investment in the power system. While most urban residents had electricity before FDR’s election in 1932, electrically modernized living—homes with a full suite of appliances such as refrigerators, vacuum cleaners, and washing machines—was the exception, not the rule, until the New Deal. Private utilities doubted the profits from residential customers and focused instead on selling electricity to the commercial and especially industrial sectors. Federal policymakers, however, saw a mostly untapped market and believed that the high rates private companies charged were impeding domestic use of electricity. They were correct: Lower rates from federal power projects stimulated greater household use of electricity and the purchase of modern appliances. The introduction of low-cost TVA power to Tupelo, Mississippi helped double power consumption between 1934 and 1935, raising living standards. FDR visited Tupelo in November 1934 and declared, “what you are doing here is going to be copied in every State of the Union before we get through.”Federal involvement also spurred the private sector to do better. With the Roosevelt administration showing the way, private utilities began to appreciate the economic promise of serving residential customers and rural areas. Critically, the very real threat of public takeover served as a strong stimulus for improvement. In the 1930s and 40s, Memphis, Omaha, San Antonio, and hundreds of other towns and cities, disenchanted with the rates and service of their private utilities, bought them out and operated them as public agencies.Nearly a century later, giving private power companies incentives to decarbonize has not created enough clean energy. The Inflation Reduction Act of 2022,
Heat waves have killed thousands around the world in recent months. As periods of exceptionally high temperatures become increasingly frequent and intense due to climate change, drastic action is required to limit the damage. The electric power sector is both contributing to the problem as one of the principal sources of greenhouse gas emissions and being hurt by it, as seen by the early arrival of a powerful storm like Hurricane Beryl and lower water levels at Lake Mead threatening the Hoover Dam’s ability to produce energy.
The United States, the largest historical emitter of greenhouse gases and the second largest polluter today, has begun cleaning up its power supply, thanks to the significant growth in solar and wind generation and the rapid decline in coal-fired power. But it’s not happening fast enough. Approximately sixty percent of electricity in 2023 was still produced by the combustion of fossil fuels, led by natural gas.
The problem is structural. Profit-oriented corporations definitionally pursue profits. And that means they can neither be counted on to deliver reliable service, as millions in Houston served by CenterPoint Energy can attest, nor to develop enough zero-carbon power—as suggested by the ever-precarious state of offshore wind projects. Fortunately, we have an alternative, time-tested model—publicly built and owned clean energy.
American culture frequently treats public ownership as a foreign experiment: feasible for Scandinavia, perhaps, but not here. Yet publicly owned utilities and rural electric cooperatives serve more than one-quarter of all power customers in the United States. The City of Los Angeles is served by the publicly owned Los Angeles Department of Water & Power, and the Tennessee Valley Authority (TVA) is one of the largest generators of electricity in the nation. In rural and suburban areas across the country, tens of millions of people are served by cooperatives.
Many of these institutions were created as part of Franklin Delano Roosevelt’s New Deal. In 1933, Congress set up the TVA to build dams to control floods, promote navigation, and generate power in the Tennessee River basin, then one of the poorest regions in the country. Federal agencies also constructed large, multipurpose dams on the Colorado, Columbia, Sacramento, and Savannah Rivers (just to name a few) in the mid-twentieth century.
There are several parallels between that period and the challenge of renewable energy now. National power policy in the 30s and 40s made electric service affordable and universal. In 1935, only about one in ten farmers had electricity. Private power companies had largely neglected rural America, dismissing these thinly populated areas as too costly to serve and unlikely to use enough power to make line extensions worthwhile. But by studying the rural market including through grassroots outreach, the Rural Electrification Administration determined there were many beneficial uses of electricity in farms and country homes and identified ways to reduce the costs of line construction. By the 1950s, thanks substantially to the federal government’s financial and technical assistance for rural electric cooperatives, 9 in 10 farmers had power.
Cities also benefited from public investment in the power system. While most urban residents had electricity before FDR’s election in 1932, electrically modernized living—homes with a full suite of appliances such as refrigerators, vacuum cleaners, and washing machines—was the exception, not the rule, until the New Deal. Private utilities doubted the profits from residential customers and focused instead on selling electricity to the commercial and especially industrial sectors. Federal policymakers, however, saw a mostly untapped market and believed that the high rates private companies charged were impeding domestic use of electricity. They were correct: Lower rates from federal power projects stimulated greater household use of electricity and the purchase of modern appliances.
The introduction of low-cost TVA power to Tupelo, Mississippi helped double power consumption between 1934 and 1935, raising living standards. FDR visited Tupelo in November 1934 and declared, “what you are doing here is going to be copied in every State of the Union before we get through.”
Federal involvement also spurred the private sector to do better. With the Roosevelt administration showing the way, private utilities began to appreciate the economic promise of serving residential customers and rural areas. Critically, the very real threat of public takeover served as a strong stimulus for improvement. In the 1930s and 40s, Memphis, Omaha, San Antonio, and hundreds of other towns and cities, disenchanted with the rates and service of their private utilities, bought them out and operated them as public agencies.
Nearly a century later, giving private power companies incentives to decarbonize has not created enough clean energy. The Inflation Reduction Act of 2022, potentially offering as much as $1 trillion over the next decade for investment in zero-carbon energy—and, encouragingly, offering funds even to tax-exempt institutions like municipally owned utilities—is certainly better than nothing, but it’s still just another way of trying to induce private actors to do the right thing. The Congressional Research Service’s modeling finds that the IRA will not get us to net zero. Congress needs to do more.
As geographer Brett Christophers explains in The Price Is Wrong: Why Capitalism Won’t Fix the Planet, renewable energy, under prevailing institutional arrangements, ordinarily does not yield sufficient profits in the absence of strong public support. Without substantial and stable expected profits, private capital will not come off the sidelines and build the clean energy humanity needs, similar to how it could not be counted on to electrify the American countryside on its own in the 1930s.
Under these circumstances, why not build clean energy projects through our elected government, instead of trying to entice private capital to decarbonize the power system? Public development has important advantages over the private-led approach. As history shows, the federal government is not constrained by profit considerations. Public institutions do not need to sacrifice maintenance projects to satiate the demands of shareholders for stock buybacks and dividends and to offer massive pay packages to their executives. Despite its poor reliability record in Texas, CenterPoint Energy disbursed nearly $500
million in dividends to shareholders and paid its CEO $16 million in 2023.
Further, the federal government, as the sovereign issuer of U.S. dollars that is not monetarily constrained the way households, businesses, and states are, can liberally invest to make clean energy abundant. Abundance is essential: Electrifying cars, heating, and manufacturing will do little to address the climate crisis unless the power grid is cleaned up. And public actors can engage in systems planning and optimally site a network of generation, energy storage, and transmission facilities, something that is difficult under the project-centric approach of private power developers.
In lieu of piecemeal, private-led development of zero-carbon energy, imagine well-paid workers constructing wind farms, solar arrays, geothermal stations, and storage projects across the country and connecting them together into a national grid that delivers zero-carbon energy to all points. Such federal investment could also demonstrate attractive opportunities that private companies presently do not see.
We already have a good model. One legacy of the New Deal is the federal Bonneville Power Administration (BPA). BPAsells power from a network of dams on the Columbia River and its tributaries, including the giant Grand Coulee Dam in eastern Washington State, and supplies almost 100 percent carbon-free electricity to the Pacific Northwest.
As BPA illustrates, publicly owned clean energy is not utopian but rather firmly rooted in the American experience. To paraphrase FDR, let’s copy this in every State of the Union.
