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Kasumi AlmeidaHIST 386: Technology in American HistoryProfessor Elizabeth PetrickResearch Paper

The History of Electrical power in the United States

Would it possible to imagine life without electric power? Wouldn’t our lives be simply

mundane and unproductive without it? How would Frankenstein be brought to life if there

wasn’t a notion nor clear understanding of the properties of electricity? For as far as we know,

electricity has taken part of every aspect of our lives. Accordingly, the idea of technological

modernization would have not been established if electric power was not readily available.The

goal of this paper is to analyze and understand the process of how generating electric power led

to the emergence of electrical utilities in America. Additionally, we’ll evaluate how generating

and expanding electric power has changed the American society, marking the beginning of

modernized technology such as electrical appliances through scientific discovery. On the same

hand, one may observe the importance of proper infrastructure and regulation in the process of

expansion of electric technology. Noticeably, the emergence of electrical utilities impacts the

everyday life of the American people in accordance to how people come to view technology in

general.

The notion in which electricity is classified as a form of “technology” would most likely

spark ambiguity since most of us would acknowledge that its existence is a natural phenomenon.

It is believed that the existence of such phenomenon dates back around 600 BCE, when the

“Greeks generated a spark by rubbing amber with fur and called it electricity (Greek word for

amber)”( Nersesian 22). For clarity purposes, the scientific definitions for electricity, electrical

energy, and electrical power are very different. Firstly, the unit that refers to the measurement of

electricity is coulombs.Meanwhile, the measuring unit for electrical energy is joules, and for

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electrical power, which is the flow of energy over time, is watts (one joule per second).

Certainly, it is important to know how to distinguish its difference to understand better the

process of generating electricity. Subsequently, electrical energy is defined as an electromagnetic

energy that consists of magnetic and electrostatic fields that move in the vicinity of wires near

the speed of light in response to the movement or vibration electrons 22.The simplified version of

the process of generating electricity consists of the following steps; first the generator works in

the formation of electrical charge. Consecutively, the electrical charge surrounds the wire and

creates a magnetic field which is the resulting electrical energy. The resulting electrical energy is

the energy used to power motors, heaters, etc 24. Soon, this method of generating electricity

becomes the very first means of advancements in electrical technology. We will come to observe

that the basic understanding regarding electricity is established in the beginning of the 13th

century. However, is later brought into many scientist's interest during the 18th century.

The process of development of electric power is entirely collective. Numerous scientists

around the globe played a significant role in demystifying the nature and properties of electricity.

For instance, Benjamin Franklin, one of the founding fathers of the United States, is marked as

one of the scientists during the 18th century whom had innate interest in understanding the

composition and existence of electricity. In means of clarity, he performed a dangerous

experiment with the purpose of demonstrating that lightning is a form of electricity. He used a

kite which would be connected to a key on the other end which would fly during a lightning

storm. When lightning hit the kite, a small current would travel through the string and once it

reached the key it would create a spark. After performing such a life-threatening experiment,

Franklin was able to ascertain that the “resulting spark resembled the spark that would result

from rubbing amber with fur” (Lynch 2). Soon, Franklin had been the first to understand the

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concept of positive and negative charge and its relation to the directional flow of electricity

23.Briefly, early records show that Franklin worked along with Jan Ingenhousz since they had

shown interest towards the studies of medical electricity, hoping that it would “aid in the cure of

certain paralytic disorders and depression” (Lynch 3).

The process of development in the field of electricity wouldn't have been possible to

achieve without the ongoing contribution of the most respected and ingenious inventors of all

times, also holding the title of “genius of electricity” in his own right, is Thomas Edison (1847-

1931). Edison is widely known for the invention of the electric light bulb, an electromagnetic

phenomenon,which is one of the inventions that had a strong impact in the american history and

the world. Moreover, Edison was not only an inventor but also an intelligent and sharp

businessman who successfully founded the first investor-owned utility in 1882 24. According to

the author of Edison’s bibliography, Keith Ellis, many of his accomplishments such as the

telegraph, phonograph, and electric light systems had gone through nearly 500 improvements in

order to be fully functional.Certainly, all of these inventions come to shape the american society

to what is today.Furthermore, we see how electricity plays an important role on Edison’s

inventions as he placed great efforts in ameliorating the first telegraph instrument by using

electric current to send messages through long distances to his experiments with electric light.

Clearly, his contributions had aided greatly in fields of communication. However, when he

initiated the idea of “subdividing power”, it was certainly one the most prominent to the time

since electric power was not readily available for the use in house and business lighting. Surely,

making the light bulb an invention that would be high in demand. Below is an image of a

Edison’s early incandescent electric lamp patent (“National Archives”).

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Edison’s light bulb has proven to be one of his well accomplished inventions that had a strong

impact in the early days of the american people and even today.The following passage by

Edison, “At the time, I was more or less at leisure, because I had just finished working on

the carbon button telephone, and this electric-light idea took possession of me. It was easy to

see what the thing needed: it wanted to be sub-divided. The light was too bright and too big.

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What we wished for was the little lights, and a distribution of them in people’s houses in a

manner similar to gas” 44, was a proposal that impacted the american people, especially those

located in larger cities, since it introduced a new way of living. Back then, Edison’s idea of

providing electric power to both residents and businesses in large cities “required a system of

electric lighting consisted of central power station, a generating plant, branch lines to distribute

electricity, safety fuses and electric bulbs and meters to measure the usage in terms of the

amount of current all” 42. In other words, the system required proper infrastructure in order to

function and since cities were highly densely and closely populated, it was easier to spread the

means of electric power. Edison’s idea was responsible for the construction of the first central

power plant in 1882, at Pearl Street, New York City. Consecutively, Edison was the first to take

part in the emergence of electrical utilities in the U.S. Soon, the electric power system starts

reaching the outskirts of larger cities, thus marking the beginning of the commercialization of

electric power production.

Despite the numerous endeavors to understanding the nature and properties of electricity,

it becomes crucial to understand that there is more to just generating electricity.Therefore, the

idea that it “takes energy to make energy” is strongly applied to the process of generating electric

power (Nersesian 16). Roy Nersesian’s Energy for the 21st Century states that the primary

source of energy in the beginning of the 19th century was through the use of biomass since

people were highly dependent on wood as natural resource for cooking and heating purposes.

Nersesian also emphasizes how back then, the population was smaller and the environment less

“modified” by civilization, so wood was an abundant fuel source. Moreover, the carbon dioxide

released by burning wood was absorbed by the plant growth therefore having very little impact

to the environment 47. However, medical science acknowledges the downside of burning wood.

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Clearly, the smoke produced by it was becoming a health hazard since it would affect one’s

respiratory system. Nersesian makes a thorough evaluation of the after effects of the constant

burning of biomass in addition to industrial pollutants being the cause of brown clouds especially

at southern asia and India47 . During the 20th century, there is a noticeable shift in resources

where biomass and fossil fuels becoming the principal resource for producing energy especially

in the beginning of industrialization.At some point, we see that coal ends up replacing other

sources of biomass. First, coal replaced charcoal in steel production and then wood for fueling

railroad locomotives and heating homes 48. As a matter of fact, most “natural” gas fed into

homes and businesses was actually a resulting product of coal 49. Seemingly, coal becomes the

main source of fuel especially during the Industrial Revolution since there was a demand for

greater production and efficiency. Soon, having a strong impact in the U.S. economy through

due to the fast development of manufacturing systems through the use of fossil fuels to power

machinery.

The development of electric utilities was of positive outcome to the american

society since it was an innovative technology. However, certain factors concerning regulation

and the need of recovering U.S.’s electricity markets have shown that there was a lot more to do

but generate electricity. Firstly, the lack of regulation have caused immense confusion amongst

many independent utility providers(“Electric Utilities: Deregulation and Restructuring of the

U.S. Electricity Markets”). One of the issues many of those utility providers faced involved in

the process of pinpointing their potential customers. The result of that was the ongoing

competition amongst utility providers. Providing utility services in suburbs proved to be easier

and cheaper due to being densely populated and most of the people who could afford utility

services were concentrated in those areas (“Electric Utilities: Deregulation and Restructuring of

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the U.S. Electricity Markets”). In addition, there were technological constraints in terms of

electrical distribution. In other words, electric power could only be delivered to those located in

within certain radius of a power plant. However, since there was a growing demand for electric

utilities, more power plants were being built and would generate power with greater efficiency.

Soon, there was a growing market for electric utilities which proved to be very lucrative

especially to the investment companies.Soon, electric utility ushered in an era of promising

technology that would be available to all. As result, we may see the enormous impact it has on

the american economy through the growing distribution of electric utilities as electric power was

being commercialized.

Since there was a growing market for electric utilities, investors such as Samuel Insull,

the president of Chicago Edison Company (1892),who initially worked under Thomas Edison’s

as his secretary,wanted to expand the utility system so that it would generate more profit. In

detail, initial powers plants were only producing energy at very low voltages (approximately 110

volts), which was sufficient for house and business lighting which was mostly used during the

evening for lighting. However, Insull wanted to take advantages of such technology to increase

profit by increasing the “load factor”. In detail, the load factor means “the ratio of average daily

or annual power use to the maximum load sustained during the same period”(“Emergence of

Electrical Utilities in America”). The stakes were high to have power generating machines

stopped for a certain amount of time during the day mostly because it would not generate

revenues. Basically, Insull’s “load factor” consisted of taking advantage of the off-peak hours of

power usages by selling electric utility services for a lower cost (“Emergence of Electrical

Utilities in America”). It was a win-win deal for both electric utility company and other

businesses such as railway companies since lower cost utilities increased profit due to its

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increasing demand.

Moreover, as electric utilities had proven to be extremely useful, Insull had

thought of other alternatives of taking advantage of such technology in order to increase its value

through massive production. He invested on a turbine generator, invented by Charles Parsons

(1884), hoping to produce power in a larger scale, soon he saw how the new turbines generated

up to 12 megawatts, which directly affected the costs of power due to its massive electric

production(“Emergence of Electrical Utilities in America”). The fast improvements in

technology introduced the creation of the alternating current transformers (AC transformers),

which changed the current systems because it could manage to transmit currents over long

distances (“Emergence of Electrical Utilities in America”). With increasing demand, there was

also increasing competition amongst electrical utility companies. One may observe that Insull’s

company starts monopolizing the utility market since it had been taking full lead due to its fast

progression on electric production. Clearly, after he proposed the idea of Consolidation (1920),

where he makes a pact with smaller companies to wane competition, we see that that his

company starts to reign as major electric utility distributor(“Emergence of Electrical Utilities in

America”). This gave rise to several local subdivisions which were bought by Investor owned

utility companies. The main utility provider would supply those substations, and set the prices

for its services.The positive side to such reign, was that Insull had taken initiative to expand

electric utility throughout the United States. In the meantime, Insull had given rise to investor

owned utilities (IOU) companies.Often we will see how the initial process of monopolization of

electrical utilities called for regulative control which remained intact as far as contemporary

times.

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Due to the lack of regulation, IOU companies would take control over its

substations, giving rise to a monopolized industry. It became a greater issue when utility

companies would overcharge their subsidiaries for the supplied equipment and service. This

issue called for municipal ownership and state regulation and finally federal intervention through

the Federal Power Act and the Public Utility Holding Company Act(1935), which imposed new

regulations on the investor-owned utility industry. This act would prohibit holding companies

from exploiting its subsidiaries. The purpose of municipal ownership over electrical utilities was

to “ensure that the cities were receiving the necessary services and commodities”. The idea of

applying municipal ownership over utilities was initially perceived with uneasiness by the people

due to the distrusted government. The concern lied mainly on the notion that if “utility costs

were lowered then there was no guarantee that there would be proper maintenance, or proper

equipment to maintain such commodity intact”(“Emergence of Electrical Utilities in America”).

However, state regulation seemed to be an appealing option due to active fiscalization on the

state electric company's balance sheet to establish proper rates in utilities. Wisconsin was the

first state to initiate such regulation which was then later adopted by New York’s governor,

Charles Evan Hughes. By 1914, forty three more states started to adopt such regulations over its

electric utilities (“Emergence of electrical utilities in America”). Henceforth, one may notice the

importance of active regulations since it stands as a politically necessary entity that “serves as a

body that would enforce the responsibilities and rights of electric power companies and their

customers”(“Roles of Regulation”). Hence, such regulative principle was seen as being

imperative since electricity was a necessary commodity to all. Moreover, the regulations played

an important role in driving utility company’s business. Furthermore, we come to observe the

ongoing efforts of “true regulation” through Roosevelt’s “Portland Speech” during his campaign

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in which he addresses on public utilities and hydroelectric power:

True regulation is for the equal benefit of the consumer and the investor. The only man who will

suffer from true regulation is the speculator, or the unscrupulous promoter who levies tribute

equally from the man who buys the service and from the man who invests his savings in this

great industry.I seek to protect both the consumer and the investor. To that end I now propose and

advocate, as I have proposed and advocated heretofore, the following remedies on the part of the

Government for the regulation and control of public utilities engaged in the power business, and

companies and corporations relating thereto:

First: Full publicity as to all capital issues of stocks, bonds and other securities; liabilities and

indebtedness; capital investment; and frequent information as to gross and net earnings. In other

words, let us "turn on the light!"(“The Portland Speech”,Portland Ore.September 21,1932).

The speech above worked as an incentive to expand and provide the public in rural settings with

federal utilities and ensuring that it would stay under federal regulations. Evidently, through the

establishment of the Tennessee Valley Authority and Bonneville Power Administration”(1933)

and Rural Electrification Administration (1935) , projects on hydroelectric power have been

created during Roosevelt’s presidency .The high peak in utility expansion is evident during

the 1910’s and 1920’s, where there is an increase in electric power users as well as electric

production at lower costs. We see the commencement of public distribution of electric utility in

rural areas which was greatly enforced by Franklin D. Roosevelt during his presidency. Once

electricity was distributed throughout rurals areas it had shown to ameliorate the standard of

living as well being of great business to electric utility providers although it had proven to be

quite of a difficult task.

For instance, it was crucial that the utility providers followed the usual protocols of

supply and demand, in addition to offering fair rate in utility costs. Such regulations seemed

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to be even-handed since it had not impaired utility companies from growing capital. In the

meantime, state regulations would acknowledge that utility companies would stand better as

“natural monopolies”. In detail, the notion behind “natural monopolies” stands for businesses

that carry higher advantages in leading commerce through massive investments in advanced

technology to provide services, hence, eliminating any kind of competition (“Emergence of

Electrical Utilities in America”). Therefore, state regulations thought that it would be fair to have

a particular area where a single utility company would be responsible for providing its services.

As result, other utility providers would not be allowed to provide its services if that particular

area is already “taken”.

Even though utilities had to work under certain regulations such as “obliging to

public priorities”, it still was of great advantage since they were given the “right of eminent

domain” (“History of Electric Utility Industry”). In other words, Investor Owned Utilities were

given the right to acquire necessary properties to construct power plants in means of increasing

utility supply. Therefore, regulations proved to be overly favorable and profitable to utility

companies. For this reason, many forms of business schemes were induced by pro-capitalist

views of holding companies and as result they controlled nearly “three-quarters of the IOU’s by

1932”(“Emergence of Electrical Utilities in America”).Again, even under regulation, IOU

companies were still able to take advantage of its subsidiaries through financial exploitation all

with the intent of building their own financial empires. Consequently, immediate federal

intervention took form as the “Public Utility Holding Company Act of 1935” was passed by

Congress which required severe fiscalization over major IOU companies financial reports and

required approval to issue stock and bond securities (“Public Utility Holding Company Act of

1935”). As we examine the process of expansion of electric utilities, it is apparent that there was

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a constant need of reform since its creation. First, it required proper infrastructure to build the

power plants, then finding methods of distributing power. Thereafter, regulations were applied to

electric utilities to remove bureaucratic domain of Investor Owned Utility companies which

proved to impair fair growth of other subsidiary utility businesses finally ensuring that

consumers received such utility services regardless of whether customers lived in metropolitan

or rural settings (“History of Electric Utility”). As of today, most of our electric utility providers

(about 61%) are publicly owned utilities as of 2012 (“U.S. Electric Utility Industry Statistics”).

In the meantime, electric power did not only bring light into the American houses but

also introduced society with numerous technologies derived from the expansion of electrical

utilities.An early example of such technology is seen through the growth in domestic appliances

then electronics as result to abundance in electrical utilities. By 1907, the first “practical

domestic vacuum cleaner” was introduced by James Spangler (“National Academy of

Engineering”). Spangler’s “electric suction sweeper” functions as suction apparatus through an

electric fan (“National Academy of Engineering”). Unfortunately, it proved to be inconvenient

due to its heavy weight then later its patent was passed down to William Hoover who was able to

redesign and make it useful for domestic cleaning uses (“National Academy of Engineering”).

Clearly, we may come to perceive that many technological instruments come to depend highly

on electricity, and that has influenced in the commercialization of prospective household goods

and electronics. Noticeably, it has also affected our way of living since technology had taken

part of every aspect of our lives. Soon, it became an active part of our culture and building

blocks of our society.

Without electricity, all means of transportation such as cars, planes, trains, etc, would not

function, perhaps it could have possibly not even existed in the first place.

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On top of that, electricity has maintained society out of the darkness ever since Edison had

introduced the “incandescent light bulb” and held a strong will in distributing electric lighting

throughout the United States. Moreover, Thomas Edison was certainly one of many genius

pioneers that had taken full lead on the practical uses of electricity especially in the fields of

electricity.Not to mention also the historical impact in the American economy since the use of

such utility technology aided numerous manufacturing industries in terms of production and

efficiency. Interestingly, historical records by Benjamin Franklin show that electricity has also

been used for medical treatment purposes. Showing that electricity is present also an anatomical

level.Therefore, we can strongly affirm that in contemporary times, electrical energy becomes

the primary means of sustaining our society so that is fully functional. In other words, one may

say that electrical power is the catalytic intermediate that allowed today’s society to flourish

since most of our technological devices comes to depend on it.

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