Whoa, something I can actually comment on. My knowledge here is limited to Washington State where I researched it heavily, specifically with public utilities. I've also seen how some of the legal battles over how utilities may behave has played out and can comment on that.

tl;dr: The fight was pretty severe, at least in Washington State. After being slowed down by the great depression and WWII, it took almost 18 years before even legally-authorized public utilities could take the actions the public voted for them to take.

In Washington State, the public put pressure on the legislators to enact a public utility law starting in 1929, and the law (Now RCW 54) took effect in 1931.

At that time, electric utilities were very powerful. They had monopolies over the production and distribution of electricity due to the massive infrastructure costs involved. The motivation for the law was that infrastructure progress had reached the point where cities and towns had reliable electricity, and rural people could visit and SEE the results of this progress, but they had no access to this itself. They wanted it, but the power companies weren't willing to bring it to them for a reasonable cost.

Taking a quick break here to give some background on utility infrastructure costs in general... Wiring up a community for power for the first time is an extremely expensive proposition, particularly if that area has a very low population density. For reference, using today's numbers, each power pole costs approximately $1,500 dollars, and can span about 300 feet; The power poles' costs must be amortized over about 30-50 years. Then there's the substation infrastructure - a 20-megawatt substation can serve about 20,000 homes, but costs between $10 and 30 million dollars to build, or $500 - $1,500 per home, with a 30-40 year lifespan. A residential transformer may cost about $5-10k and can serve ~3-5 homes, but only if those homes are close, with a 20-30 year lifespan. Then there's the costs of stringing all the wire (the wire itself is relatively negligible cost, thankfully) and the maintenance over the lifespan of the equipment.

So if a new neighborhood of 10 homes, 5 miles from a substation, wanted to have new electricity service(using today's dollars), it will take 88 power poles, ~3 transformers, and about $7,500 of substation capacity. Per home that cost works out to $15,450, and that amount must be recouped within the 30 year lifespan of the equipment to avoid the utility losing money. That's $43 dollars of raw costs per month before any electricity is delivered at all, with zero profit, and not counting the billing overhead of adding new customers or the regular maintenance overhead of those facilities over that 30 year period, and not counting the production infrastructure like dams or power plants. These costs would have been proportionately higher 90 years ago when the mass production and cost-effective designs were not known for the infrastructure.

I write all this to show one thing: It isn't very difficult to see WHY utilities weren't jumping at delivering power to rural areas. The investment risk/reward was pretty terrible. Now getting back to the history.

By 1930 when this bill passed, the utilities had already built a lot of electricity infrastructure. They had built several dams, which have a ~50-70-year return on investment horizon, and the combination of that and the other infrastructure was what gave them the monopoly. What the public utility bill did was it allowed counties to form public utilities on their own. And those public utilities had the power of eminent domain. They could literally condemn and seize the infrastructure the energy companies had been building since ~1905, much of which had come nowhere near reaching a return on investment. And in some cases, they might not even have to pay for it! You can imagine that the energy companies would fight hard against such a thing, and you would be correct. If some parts of this process sound like they were borderline unethical against the utilities, you would also accurately capture the mixed feelings that both the public as well as members of the public utilities' leadership had towards the process.

The fighting mostly played out in the courts. It took several years for the public utilities to form and get organized themselves. Most of them began to form in 1933-1938, but they did not own anything. They had to sue through the courts to get the infrastructure. In order to pay for the lawsuits and any purchases of infrastructure that the courts ordered they had to come up with the money up front themselves, or else take on bonds. Since public utilities were by no means guaranteed to be successful at this point, these bonds were hard to come by. The energy companies on the other hand were well funded, organized, and motivated. There were several attempts at passing changes to the laws that would either make the process easier for public utilities, or would provide more protection/defenses for energy companies; I believe all of these ultimately failed, but some of them just barely.

It took until the end of WWII until the dominoes began to fall against the energy companies. I'm going from memory here but I think the energy companies began to lose the first dams in about 1943 or 1944, and after 1946 they started to fall like dominoes. Most of the dams, naturally, were built in remote locations with a suitable landscape and river - exactly the type of rural area that was likely to form a PUD in order to get electricity to their farms. Each lawsuit referenced and built upon the previous ones, speeding up the process. By 1948-1952, the energy companies had basically given up and accepted that they were going to lose almost every single dam they had built, and they just did the best they could to convince the judge to give them a fair price through eminent domain; They lost a massive amount of money through it all. Soon after this came the aging electrical infrastructure through the same process, and finally public utilities could begin to serve their communities in the late 1940s and early 1950s, though they still had to build THAT infrastructure.

Other states went through a very different process to get their utilities into a regulated form; Washington was a young state at this point, as Olympia wasn't even formed until 1859, and other states had much more well developed regulations on utilities; Washington State didn't even HAVE railroads until 1883 to need to begin forming utility regulations for. In many cases the end result was not public utilities on county lines but rather the electric companies were bound by a state-run utility commission board, who had the final say on electricity rates & policies in their state.

Jumping from WA to NC, some large companies attempted to skirt these regulations and continue earning massive profits anyway. In the 1920's, Alcoa formed a public utility called Nantahala Power & Light Company as a subsidiary. Acting as a utility, which was regulated by the NC Utility Commission, they were authorized to actually build dams to produce huge amounts of power. They actually got federal funding to help with this as a utility.

But Alcoa is not an altruistic non-profit. Alcoa was/is a large aluminum smelting company. For those who don't know, Aluminum smelting is a complex process - First the mined raw input bauxite (Aluminum oxide) must be superheated to a few thousand degrees, and THEN the raw aluminum is retrieved by electrolysis - Passing monstrous amounts of electricity through the superheated liquid. So much power that aluminum plants make multi-decade contracts with dams and other major power plants before they decide to build their plant there. Or they just buy the public utility themselves, it seems.

As they owned the utility company, they could set their rates however they liked so long as the utility commission allowed it. And so they created distinctions only they could qualify for and sold themselves electricity at half the cost of other industrial customers. This resulted in a landmark lawsuit in 1952/53 between Mead Corporation, a paper mill, and Nantahala. The utility commission agreed with the way Alcoa had structured the rules, but to anyone else it was pretty clear what was going on.

The NC supreme court did something rarely done and overruled the utility commission - The rate was discriminatory and could not be allowed. Nantahala must treat Alcoa the same as any other large industrial customers. This wasn't even the last time they tried this - in 1984/5 they tried to use the source of the energy as a way to give themselves a preferential rate, and lost there too. 3 years after losing that one they finally sold Nantahala.

Summary: The fight was pretty severe and played out over decades. This was of course after the "utility regulation" fight over railroads and telegraph routes had played out; Electricity and water distribution piggy-backed onto those utility laws at first.

If anyone is interested, I could go into the specific example of Quebec during the Quiet Revolution in the 1960s', the nationalization of water and electricity being a major part of that change. Not sure if it is too niche or not for this question though, as it is tied up with the development of Quebec Nationalism and the modernization of Quebec.

Hi, friends,

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