Democracy Means Agreeing with Me: Electrification Past and Present

REVIEW ESSAY
Democracy in Power:
A History of Electrification in the United States
by Sandeep Vaheesan
University of Chicago Press, 2024, 400 pages

The American grid is in trouble. For years, our country has been retiring reliable power plants and building unreliable wind and solar resources. Moreover, most of the country’s power gets allocated in complex power markets where decisions are made beyond the public eye. And areas without markets still fall beneath the aegis of utilities, leviathans who toss their weight around in state politics and often get caught up in corruption schemes.

These were problems when America’s power demand stayed flat for decades. Even then, potential solutions felt more like a dizzying labyrinth of rules, regulations, interest groups, and technical minutiae replete with unobvious trade-offs and bizarre political deadlocks. And now that the AI revolution has dawned, America faces a surge in power demand that it is ill-prepared to meet. This new reality has only intensified both the need for grid reform and the difficulties of even understanding what needs reformation.

Some argue that the long queues to achieve interconnection in our power markets call for the legalization of microgrids that allow data centers and other private power consumers to pave their own way. Others who identify the same interconnection problem demand reform and streamlining within the markets. Another faction points to permit­ting as the lynchpin issue for all power projects—resolve that and most other problems dissolve. And then there are those who argue that federal subsidies have distorted our power markets, those who say the markets are fundamentally unworkable because market failures mean blackouts, those who decry the continued existence of monopoly utilities, those who see fossil fuels as the greatest problem attached to the power grid, and so on. Even in this incomplete list of perspectives there are shifting areas of overlap and mutual disagreement.

A recent book, Democracy in Power: A History of Electrification in the United States by Sandeep Vaheesan, takes square aim at the issue of grid governance, arguing that democratic public institutions should rule the power industry, not private entities. Unfortunately, Vaheesan reveals himself to be less than thoughtful about both the power industry and democracy. Instead, his book serves as a clarion call for people who like attending stakeholder meetings about a vital piece of infrastructure: these meetings, he hopes, would lead to a proliferation of further meetings so broad and democratic that their outcomes will, by nature, result in Vaheesan’s dream of a decarbonized power grid that runs (however unreliably) on sun, wind, and batteries. Reality, physical and political, takes on an incredible malleability throughout the book. On this point, Vaheesan’s introduction is quite straightforward:

History shows that the future of the power sector is in the hands of the public it serves. It is not preordained to be one way or another. . . . These things, which are often deemed private and naturalized, are institutions created by human beings and can be remade by us.

Who can deny such a claim? Often what is old turns out not to be what is true, though it has through age acquired truth’s reputation. And yet any serious student of history must admit that in the gyre of unfolding events the freedom to mold or re-mold institutions meets with fierce external pressures. But to concede fortune’s role in history’s welter would spoil one of Vaheesan’s guiding assumptions: that the world is simple and that the simple is just. Complications thus arise solely from the behavior of the greedy and the powerful (categories, for him, of complete and mutual inclusion). To correct this, we need only expand democracy, the font of simple, truthful action. Such a plain-hearted worldview warrants admiration for its moral sensitivity if not its intellectual rigor. As a result, the thinking that emerges from this worldview, while often well-told and even better researched, falls far short of the mark.

Powering Industrial America

Vaheesan starts at the near-beginning of the power industry, when America began to shift from an agrarian republic to an industrialized power. In the early twentieth century, electricity was still a relatively cutting-edge industry. Few people had power and the people who had it lived in cities, or ran factories in those cities. But as more and more Americans began to pack into urban centers, electricity started to become more common in households and apartments. And yet, the industry was still a chaos of competition. Often, utilities pitched into competitive rate slashing that bankrupted all parties. Setting appropriate rates, especially before the advent of meters to monitor consumption, sat at the nexus of black magic and sheer guesswork.

But out of this morass, certain dynamics became clear: competition proved unworkable because it led to dangerous and redundant infrastructure, the aforementioned price wars, and an investment environment so chaotic that financiers steered clear. How to solve this issue? One of Thomas Edison’s protégés, Samuel Insull, believed that the only way forward was to accept regulation. He reasoned that if utilities didn’t benefit from fierce competition, then they were natural monopolies, i.e. “the generation, transmission, and distribution of electricity was most efficiently performed bya single, vertically integrated company.”

Therefore, utilities should accept regulation at the state level in return for monopoly status. Public commissions would make sure they charged their customers fair rates while guaranteeing just and fair returns on capital invested. Insull hoped that regulated monopoly status would stabilize the investment environment, allowing utilities to secure the financing they needed to grow. Consumers simply had to sit back and watch their bills drop as the efficiencies took root. When Insull first pitched this idea to his industry peers they scoffed. But eventually, they came around. So did the Progressives, who saw in Insull’s vision a valuable proving ground for the belief in “scientific management” and “apolitical regulation.”

By 1907, states began granting monopoly franchises and establishing utility commissions. Insull was vindicated on all counts: bankers opened their wallets, customers saw low rates, and the industry rapidly consolidated.

Drawbacks abounded, however. As Vaheesan explains, the regulatory rationale essentially meant that the more money utilities spent, the more money they could make to recoup costs. Utility commissions often found themselves outgunned and outmaneuvered by utilities when it came to rate-making. Technically, a CEO could redecorate his office, write it off as an expense, and turn a profit. Worse has been done, which Vaheesan chronicles well. Insull and his pals turned their trade group, the National Electric Light Association (NELA), into a propaganda arm that ensnared media outlets, political bodies, and educational institutions. The scale and scope of this endeavor staggers the mind—and customers paid for much of it, as utilities folded these expenses into their arcane, self-serving rate-making calculus.

Monopoly status also laid the foundation for the financial house of cards that disgraced the utility industry when it fell in 1929. Public utility holding companies were formed to expand utilities, because they could “own the securities of other corporations instead of owning plants and facilities.” Over the course of the 1920s, competition for acquisitions and thus the growth of holding companies exploded. Holding companies solved an important financial difficulty.

This framework, however, was riven with problems, as Vaheesan explains:

Each company within a holding company was usually a separate corporation, which meant that its owner (including other corporations) had limited liability. In practical terms, the holding company was ordinarily not liable for the debts and other obligations of its operating companies and subholding companies.

Thus, a utility don could own and control a bunch of smaller companies with little capital invested. Even worse, he could headquarter the company in one state, allowing him to skirt the utility commission in the other states in which his subholding companies operated.

But holding companies also added “watered stock,” or non-voting shares to their list of financial benefits. Everyday people could “own” a part of these utilities by investing, but they could exert no control over how the company operated, nor could they glimpse its inner workings. Utilities who paid for NELA to advertise investing in nonvoting shares charged their customers for the privilege, thus double-dipping on people’s bank accounts. These byzantine firms were over-leveraged and top-heavy.

When the market crashed at the end of the 1920s, the utility industry crashed with it. Hundreds of thousands of common stock owners watched their investments plummet. Vaheesan doesn’t mention this, but even into the 1990s, it was common to hear old-timers in Chicago grumble that they’d lost a lot of money with Samuel Insull.

But for Vaheesan, those aren’t even the greatest crimes of the early monopoly framework for private utilities. His main criticisms of the monopoly utilities have to do with how they crushed municipal power and left rural Americans in the dark. Municipal power systems were the public alternative to monopoly utilities, though they were soon outcompeted by the private sector thanks to regulated monopoly status, which allowed private companies to scale-up faster, and thus crowd out opportunities for public power. Naturally, those in private industry tried to stamp out potential municipal power competitors and public takeovers when and wherever they could.

To the benefit of these tycoons, regulation ripped democratic control out of the peoples’ hands and placed authority in the palms of technocrats. Ostensibly, that outcome was regulation’s guiding rationale. “The aim was to replace local democratic control with technocratic management at the state level,” Vaheesan argues. This is a stretch. Municipal power always struggled for a whole host of reasons. Namely, for the financial reasons mentioned above, and the economies of scale.

What’s most puzzling about this section is that he omits one of the most important rationales for natural monopoly in the utility sector, at least for Samuel Insull, state regulation’s primary champion. True, Insull realized that monopoly reduced the dangers of redundant power line infrastructure and stabilized a hair-raising investment environment. Even more importantly, regulated monopoly status delivered greater economies of scale.

Insull’s drive for lower rates required larger power plants that could drop the unit cost of power, thus expanding the market for electricity. As that brought more customers in, even larger plants could be financed to begin the process over again. This approach required regulated monopoly status and became the industry’s standard playbook up until the 1970s. The entire premise was to make power more affordable to more people, because it was good for their business.

One could perhaps forgive Vaheesan for this oversight, since the scholarship on America’s power system, the largest machine in the world, is voluminous. However, he cites more than one work of scholarship that explains this dynamic in depth. A weak grasp of energy fundamentals like this hobbles Vaheesan’s ability to adequately think through the problems facing the grid throughout the book.

But for the sake of the argument, let’s say state regulation’s primary target was quashing municipal power. When Insull was expanding Commonwealth Edison around the turn of the century, Chicago’s notoriously crooked aldermen tried to use municipal franchises to extort him for their own financial benefit. These so-called Gray Wolves weren’t tribunes of public interest, but a different stripe of fat cat dining out on the little guy’s misfortune. Insull wanted to grow his business to make power more affordable—municipal power proved an obstacle to that end.

Moreover, municipal power, despite its boosters, proved technically and financially challenged at the time, as Vaheesan himself explains. The bigger generating units owned by the private sector eventually put out to pasture the smaller units of municipal systems. In addition, the Panic of 1907 all but cratered municipal power financing opportunities.

Where rural electrification is concerned, Vaheesan’s critique bites harder. He begins by presenting the reader with the horrors of rural life unrelieved by the miracles of electric power. About this he stands completely in the right. Rural America burdened its denizens with hookworm, bent spines, early deaths, hunger, and malnutrition. The advent of electricity would eventually rid farmers of most of these tragedies.

But the private sector at this time was reluctant to stretch their lines outward into the rural dark for several reasons. First, America was urbanizing, which meant farm country was depopulating. Second, urban areas provided more customers per power-line mile, which meant more secure returns on capital. Third, farmers, especially after the World War I–induced boom, fell on hard times and, utilities sensibly assumed, might not be able to pay for service, especially if they didn’t own the land they lived on. In the South, where tenant farming was more common, this proved a steep challenge.

Still, as Vaheesan catalogs, the utility industry did attempt to cross this moat through programs with land grant colleges to try rural electrification experiments and to educate farmers on what this new technology could do to improve their lives. Even Insull himself became a rural electrification advocate when he bought property in rural northern Illinois and linked the environs back to his urban empire. These programs were successful, but not at scale.

For Vaheesan, the private sector failure to illuminate rural America is damning. “International comparisons were not flattering for the United States. In Europe at the time, rural electrification was far more extensive: Czechoslovakia and France had rural electrification rates of 70 percent by 1930.” For scale, France is about 80 percent of the size of Texas.

Rhetorically, this whole section on the early days of the monopoly era sets up the Manichaean view that frames the rest of the book: the private sector and the American public have opposing interests. As a result, the answer to any downside or trade-off the private sector may bring about is always public control—naturally the more moral, more successful, and more democratic option, as Vaheesan sees it. This last, aside from decarbonization, becomes the vital core of Vaheesan’s argument. He puts it as plainly later on: “Investor-owned utilities serve two masters with conflicting interests: the public that wants affordable, reliable, safe, and clean service and shareholders, and their elected board and managers, who pursue higher returns on equity. This is the basic tension.”

But what he truly means by democracy we discover only by the end.

Getting the Switch Out of the Cupboard

One of Vaheesan’s strongest chapters details the New Deal’s public power policies. Here, he’s at his clearest, most accessible, and most precise. This is no mean feat. The New Deal political battles to establish public power entities and reign in private utilities amount to a complex, overlapping narrative, and the literature on it is so vast that it can easily overwhelm reader and researcher alike. Vaheesan helpfully splits the FDR administration’s efforts into three categories of action: establishing public power entities, creating rural electrification co-ops, and regulating private utilities.

The first part concerns the creation of enormous federal power entities like the Tennessee Valley Authority (TVA) and the Bonneville Power Administration (BPA). These projects were outgrowths of FDR’s notion that public power entities could keep private utilities honest by offering a “yardstick” by which to measure rates. But the BPA and TVA were also monopolies that engaged in the same ambiguous, dark art of rate-making.

Perhaps TVA and BPA’s attempts at rate-making were even murkier, especially the TVA’s since it had a triple mandate: power production, fertilizer production, and waterway management. What could its subsi­dized rates, which also encompassed unique activities no other utility engaged in, tell anyone about the honesty regarding the rates of its private neighbors? Vaheesan concedes as much. But, as he also demonstrates, it did achieve what private industry could not: bringing the lightbulb to previously benighted Americans in rural areas.

It was the Rural Electrification Administration (REA), however, that did the yeoman’s work there. The co-ops were a political masterstroke as they made sure that otherwise suspicious farmers understood that the power being generated was theirs to manage. The REA thus braided together enduring American values of self-governance, self-reliance, and Tocquevillian localism. It also triggered a private sector sprint to keep up with the government’s efforts. Suddenly aware that if the FDR administration ate the whole pie, there would be none left for them, private utilities leapt into action to extend their lines beyond the cities and suburbs. Without public rural electrification, we might not have seen private rural electrification until much later.

The third plank of the New Deal’s power policy involved the Public Utility Holding Company Act (puhca), which was brought to bear in 1935 by public power vanguards Senator Burton K. Wheeler (Democrat of Montana), Representative Sam Rayburn (Democrat of Texas), and George Norris (Republican of Nebraska). Title II of the act called for the establishment of the Federal Power Commission to regulated interstate commerce in the power sector, as Vaheesan explains:

In a 1927 decision, the Supreme Court ruled that states could not regulate wholesale power sold or transmitted in interstate commerce. Because Congress had not asserted jurisdiction over this portion of the industry, these transactions were exempt from both state and federal regulation. The Federal Power Act filled this gap.

The act vested the Federal Power Commission (now the Federal Energy Regulatory Commission) with the responsibility to “regulate interstate and wholesale transactions, such as sales of power from one utility with excess generation capacity to another utility in need of power,” along with the “authority to promote voluntary interconnection of power systems.” This status quo holds even today. “[T]he federal government has jurisdiction over interstate transmission and wholesale transactions; states are responsible for regulation of distribution, retail transactions, and generation,” Vaheesan explains. Title II proved far less controversial than Title I of puhca over which New Dealers and private industry fought red in tooth and claw.

On the whole, puhca was regulatory redress for the utility industry’s machinations in the holding company heyday. It forced holding companies to register with the Securities and Exchange Commission, and those that missed the deadline “were barred from activities such as using the mail to conduct interstate sale of electricity and gas and to operate utility subsidiaries or properties.” In addition, puhca put restrictions on a host of other holding company activities including acquisitions, loans, and relationships between holding companies and their subsidiaries. It also stripped holding companies down to a single layer, squashing the potential for massive, overleveraged financial structures.

Its most controversial aspect came from Section 11, which sought to “simplify the structure of holding companies to address their undue complexity and the inequitable allocation of voting power among different classes of securities holders.” It also sought to constrain holding companies by breaking up “holding companies with operating properties spread across the nation and limit holding companies to economically and geographically integrated systems.” Lastly, Section 11 granted the SEC the authority to force the reorganization of non-compliant holding companies.

Appropriately, opponents called Section 11 the “death sentence” provision because they correctly interpreted it as an existential threat. They argued that the death sentence was an assault on the free enterprise tradition in America and lacked discrimination between honestly run holding companies and their corrupt cousins. Some public power advocates, in the grand tradition of radicals incapable of taking “yes” for an answer, threw in with these opponents because these reforms didn’t go far enough. What ensued was one of the greatest legislative fights of the era.

Vaheesan does a superb job of narrating the politicking within the House and Senate, especially with regards to the utility industry’s astro-turfed support campaigns, which, once exposed, undermined their cause. He even covers the “aggressive, even arguably questionable, parliamentary methods” proponents employed to push puhca through Congress.

Ultimately, it was the stalwart Progressive jurist Felix Frankfurter who bent Roosevelt’s ear and persuaded him to ditch the death sentence, accepting a version whereby “a holding company could feature only one subholding company between itself and operating systems.” The watered down version of puhca passed, but still had a far-ranging impact on the industry.

“We Have to Face Some Hard Realities”

How are the legacy New Deal entities doing today? The investor-owned utilities? And what about these new power markets that blanket most of the country? Vaheesan presents a candid assessment of the New Deal’s legacy. The major public power entities—BPA and TVA, especially—have exhibited some of the antidemocratic behavior of private utilities. And both wear the black mark of trampling minority rights. Vaheesan cites the BPA’s cavalier damming projects and their negative impact on indigenous lands, the TVA’s neglect of black farmers in the South (back then, the Democratic heartland sat half in Dixie), and the various environmental crimes that both entities’ industrial development incurred. The solution here seems to be more meetings involving “stakeholders” and “climate advocates.”

Rural co-ops receive a similarly mixed evaluation but for different reasons. On the one hand, some co-ops are quite democratic, and they get extra brownie points if they incorporate the climate agenda into their operations (if they don’t, then they’re less democratic). On the other hand, some co-ops have become good old boys’ networks that govern their fief with an iron fist. About this Vaheesan is absolutely right. He brings ample evidence to bear as well, though his diagnosis of the root cause of these perversions of democratic governance harbors a certain irony.

Ultimately, Vaheesan argues, the variety of governance stems from REA decisions back in the 1930s. Its model law for rural cooperatives, in the agency’s haste to stoke the proliferation of co-ops, failed to provide enough guidance to secure better, more uniform results in the long term. Thus, the lack of guidance gave “individual co-op incorporators and boards autonomy to decide how democratic they would be in practice.” Another way to put it: the REA was too democratic in disseminating democracy. Less should have been left up to those at the grassroots. That aside, Vaheesan deserves points for honesty in laying out what ails his preferred institutions.

And what about the private, investor-owned utilities? There’s hardly any room for praise, given the industry’s track record. Three cases Vaheesan covers stand out: scandals (one in Ohio and another in Illinois), in which crooked politicians collaborated with utilities on bailing out nuclear plants, and the notorious, fatal wildfires that PG&E’s neglectful power line maintenance caused in 2017. These are far from the only examples available. A few years ago, John Oliver covered utilities on his HBO show Last Week Tonight. It is with great pain that I admit he was right about something when he quipped that if you google your utility and the word scandal you’re bound to see pages and pages of search results.

Such catastrophes and scandals do provoke serious reflection on the nature of utility governance. Especially coupled with the opaque and abstruse power markets that have taken root since the 1990s. In detailing how America moved toward wholesale power markets, Vaheesan exhibits a laudable scholarly acumen. His summation is capacious, brief, and legible, a rarity given how arcane these markets can be.

Vaheesan details how, in an attempt to expose utilities to the discipline of competition and strip waste out of the power sector, states and regions formed regional transmission organizations (RTOs, also called Independent System Operators or ISOs). The premise of the RTO is that in a wholesale market, the cheapest generators will set the clearing prices, delivering lower bills to consumers and simultaneously delivering price signals that incentivize resource allocation. In short, the market will deliver greater efficiencies that dispense with planning by encouraging proper investments in necessary power generation.

The results have largely fallen short of the aspiration. RTO governance is at least as challenging as traditional investor-owned utility governance. And it’s not clear these markets have delivered real savings to customers. In many cases, it appears that these markets have fragilized the power system. Vaheesan observes the imbalances of this system:

Wholesale power markets have seemingly swung between two poles. In several markets, generators at times possessed monopoly or oligopoly power in which they collected billions in unjustified profits from ratepayers. . . . On the other hand, in one market, generators faced conditions in which they could not recover their fixed costs. In attempting to strike an appropriate balance between the consumer interest and the investor interest, federal and state regulators have struggled to find a happy medium between the two extremes.

Thanks to this dynamic, rates are either too high or too low, Vaheesan explains. One strategy to find this happy medium has been the development of capacity markets, whereby RTOs hold seasonal auctions for power plants to be on-deck at anticipated times of peak demand. For Vaheesan, these strategies are inadequate. He describes PJM’s (the largest power market in America) capacity auction as little more than an upward wealth transfer to generators (usually fossil fuel plants).

He also castigates ISO–New England and PJM for “penalizing” renewables. Both RTOs “reasoned that renewable generation resources such as solar and wind received unfair subsidies from states in their region.” In response to their distorted price signals, PJM and ISO-NE “required them to offer capacity using prices not reflecting the state support they received.” And here we get to the crux of why this book never truly succeeds in its aims. Vaheesan’s defense of left-wing shibboleths—like the necessity for massive amounts of wind and solar—prevents him from seeing the technical and economic rationale behind PJM and ISO-NE’s decisions.

If, through subsidies, the federal government puts its thumb on the scale for wind and solar, then in order to maintain a stable supply of power, PJM and ISO-NE have to do something because wind and solar are neither dispatchable, nor reliable (something Vaheesan concedes later on). And there’s very little control RTOs can exert on their markets because they are policy takers, not policy makers. So, what should an entity tasked with keeping the lights on do to make sure there are adequate resources to fulfill this task given a limited suite of tools available?

Moreover, Vaheesan describes capacity markets as wealth transfers, but neglects California’s rooftop solar regime, which transfers billions of dollars from working-class Californians to homeowners every single year. Instead, he praises the “net metering” schemes that have allowed Californian rooftop solar to proliferate because they serve an important role in climate change mitigation.

A more robust analysis would reveal that RTOs are over-indexing on renewables, just-in-time natural gas, and imports from neighbors (what energy expert Meredith Angwin dubs “the fatal trifecta”). The CEO of the Midcontinent Independent System Operator said last year, “We have to face some hard realities . . . the transition that is underway to get to a decarbonized end state is posing material, adverse challenges to electric reliability.”¹ And, in 2023, the grid watchdog, the North American Electric Reliability Corporation (NERC) identified the transition to renewables as the number one threat to grid reliability, highlighting the tight coupling between wind, solar, and natural gas.² In reality, neither natural gas maximalists nor renewable energy ideologues have the right solution to this issue.

Instead of arriving at a more sensible conclusion, Vaheesan falls prey to a familiar pitfall on the climate-conscious energy policy spectrum: renewables and the schemes that support them can never fail–they can only be failed. This shortcoming also bars him from the uncomfortable truth that renewables have had greater success at deployment in power markets than anywhere else. Such a fact gets in the way of Vaheesan’s tidy framework, where fossil fuel companies are evil and antidemocratic and renewables plus climate advocates are forces for the democratic public good. After all, the major environmental organizations were big boosters of power markets. It’s as if he’s on the cusp of realizing what’s wrong but can’t bring himself to draw the final conclusion.

Whose Democracy Is It Anyway?

Before we can get to Vaheesan’s cure for what ails us, it is worth revisiting the chapter that deals with property law, money, and corpo­rate enfranchisement. Vaheesan here invokes the typical progressive bromide that because certain things have changed over the course of history, what stems from transcendental natural rights is little more than political convention. Therefore, this is “our economy” which can be “remade” in a way that “we” see fit. “As members of a formal and aspirational representative democracy, we have the power to reconstruct economic arrangements,” Vaheesan writes. Backgrounding this inherited wisdom about the social construction of all things is an immutable, transhistorical equation between democracy and the common good. Thus, all things except (a particular interpretation of) democracy amount to tears in the rain. This wish to have it both ways—everything is socially constructed except for the things I cherish, which are quietly beyond time—is sloppy thinking.

Admittedly, this book is not a work of philosophy. It does, however, anchor its core arguments in an unexamined political philosophical commitment to democracy so-called. From Vaheesan’s perspective, democracy is pitted against private control, opacity, fossil fuels, and monopoly. The latter represent enemies to the common good, an object that appears to the author as an uncontested truth. This opposition arises because when liberals wield political power to achieve desired economic outcomes, this is called democracy. When conservatives do so, it cannot be called democracy. It is authoritarian, reactionary, perhaps even fascistic. Only the Democratic Party, a reader must infer, has the mantle of truly representing the sovereign people of the United States. This book is an academic work published by a university press.

I’m not arguing that because different conceptions of the common good exist that the common good can be dispensed with. Rather, I hold with the tradition which recognizes both the necessity of the common good and its resultant controversial nature. It is around this controversy that political faction emerges. But Vaheesan’s approach makes reckoning with faction as a basic element of democracy impossible, because democracy means agreeing with Vaheesan. Consequently, one can’t in good faith debate the merits of integrating too many variable, non-dispatchable resources onto the grid while retiring firm baseload capacity. To fall on the wrong side of that debate means denying the climate crisis, which indicates supporting fossil fuel interests, and thus threatening democracy. Differences in opinion become, at the outset, differences in principle.

To the author’s credit, he’s no Pollyanna about public power as it actually exists. Vaheesan would be the first to point out that public power institutions make decisions that aren’t in the public interest, decisions that “arguably show the limits of a publicly elected, nonexpert board.” Such institutions, however, only serve as evidence that “effective public power is not utopian or unprecedented and already exists in the United States.” Moreover, Vaheesan argues, “Democracy in the power sector is intrinsically valuable.” If the power sector is managed in such a way that it widens a gap between the rich and the poor, then it is perpetuating undemocratic outcomes by deepening economic inequality. The remedy demands an expansion of democratic control over the power sector.

So, theory aside, what does democracy mean in practice when it comes to the power sector? Step one involves establishing locally controlled electric utility boards through an act of Congress. “Congress should,” Vaheesan writes, “authorize states, cities, towns, and counties, individually or collectively, to take over investor-owned utilities serving them and operate them as democratic enterprises committed to full decarbonization.” (Again, note Vaheesan’s insistence that democracy and decarbonization naturally go hand-in-hand.) Lest anyone think this congressional activity too strident, Vaheesan soothes the reader that citizens would have to opt into a public power board through democratic means—ballot initiatives, voting, etc.

Vaheesan then provides impressive detail about how these charters would work. These boards would be granted the same rights as corporations, maintain a full-time board, and perform three vital tasks: First, they should have the power to hire and fire the general manager of the utility, who would be responsible for its day-to-day management. Second, the board should have the authority to set retail electricity rates. Third, they should have the power to develop long-term strategy for the public utility, including determining the composition of the utility’s wholesale power supply and developing energy efficiency and conservation programs.

And they would be granted eminent domain. With this authority, these public utility boards “would be able to condemn and take over existing utilities and obtain rights-of-way and land for siting infrastructure.” This muscle is vital for effecting public takeover of private utilities.

Who would staff these boards? First and foremost, people from the utility’s footprint. Plus, some 30 to 40 percent of the board membership would come from a utility’s workers, an effort to make sure those directly responsible for keeping the lights on have a say in the decision-making about the system they oversee. Congress would combine these democratic governance elements with this mandate: “The charters should require full decarbonization by 2035 and an interim greenhouse gas reduction target of 2030.” The details are to be hashed out by the boards, of course, to keep Congress from overstepping and implementing a one-size-fits-all mandate. There’s more besides, and Vaheesan has the courage of his convictions to really try and spell this vision out.

For now, I’m going to be maximally generous and say, for the sake of argument, that all of this is a good idea. And why not? Like Vaheesan, I’m a non-rosey-eyed fan of the New Deal co-ops. So, let’s say we must revive this tradition and correct its mistakes in precisely the way Vaheesan desires. What happens then?

If you’re Vaheesan, incredible disappointment, I suspect. For a couple of reasons. First, there’s that pesky issue of decarbonization. Let’s leave aside, for now, that the Republican Party (or centrist Democrats, for that matter!) would have to be completely absent from the halls of power to enable this entire scheme, let alone mandating the cessation of fossil fuel use in the power sector within the next decade.

Most of America’s power comes from fossil fuels, so it stands to reason that many of the workers on these boards will work in that sector. Likely, they’d vote to maintain their jobs at coal or gas plants and to keep those plants running. Except that Congress, in Vahessan’s world, will have made this functionally illegal. Perhaps democracy in this case means you can vote for anything except keeping your job, especially if you turn a wrench for a living. So, then, isn’t it reasonable to expect utility staffing issues if you keep laying off workers, closing plants, and slashing power consumption?

I should add that in such a situation, it’s also reasonable to imagine that wealthier people will simply buy private power generation if they find their ability to source power from the public power board curtailed—a troubling dynamic already prevalent in California, Texas, and Puerto Rico.

Second, there’s the question of who ends up in full-time positions on these public utility decarbonization boards. I imagine that Vaheesan envisions a noble stream of lunch pail types from the citizenry rolling up their sleeves, pounding the pavement, knocking on doors, and winning enough votes to serve on their local power board—single moms in denim button-downs wearing down their Keds, young children on their hips—that kind of thing. And not without reason; this happens at many power co-ops that already exist. But I suspect this will happen less often than Vaheesan hopes, especially in the regions most likely to opt into his scheme. Mainly because anyone who has to deal with local or state-level political fights over energy has to contend with the subsidiaries of America’s major climate NGOs, themselves products of billionaire philanthropy and private interests.

Consider, for example, the Natural Resources Defense Council, which has the coffers to pay people a quarter of a million dollars a year to attend every single RTO meeting and shmooze. Or the pipeline from elite colleges and law school to climate NGOs and the policy sphere. These are the people who do things like shut down the Indian Point Power Plant in New York, which immediately raised emissions and starved New York City of much needed capacity. These are also the groups that defend rooftop solar net metering in California, an above mentioned multibillion dollar per year upward wealth transfer. Many of these larger groups also have offices in Beijing. In Vaheesan’s democratic Valhalla, these groups would enact elite capture of another kind, though given that Vaheesan sees climate advocates as natural tribunes of democracy, he never has to consider this.

What we have here is an uninterrogated contradiction at the heart of left-wing politics in America. See, it wasn’t just Barry Goldwater that killed the New Deal, it was also environmental law and the NGOs that ascended to power by vaulting over its corpse. You can’t promote developmentalist, democratic institutions with hidebound commitments to degrowth policies like slashing power consumption to spare the climate. Despite the voluminous output from Verso et al., these conceptions of the common good stand at cross purposes. Vaheesan’s inability to even broach these tensions within either his argumentation or the marshaling of evidence debases the entire enterprise. The bright spots in his book cast the dimmer portions in a deep black, a deflating chiaroscuro of uneven quality.

The annals of the power system’s evolution are rife with material for asking provocative questions about the role of science, technology, and expertise in a democratic society. Sadly, Vaheesan asks few such questions, opting instead for rigorous griping about the inherent unfairness of private enterprise. And it’s not that he or his assistants are bad researchers—the book’s citations deserve commendation. It’s that he doesn’t seem to be interested in what the research indicates: that governing the grid is an exceptionally demanding task in which many want the juice without being on the hook for the squeeze. Instead, we get pablum about “democracy,” an ambiguous cure-all that, in the final accounting, papers over the problems Vaheesan describes.

Of course, a layman coming to this book, one uninitiated in the historical literature or the basic mechanics and politics of the power sector, would likely struggle to discern these shortcomings about his book. An irony worth pondering.

This article originally appeared in American Affairs Volume IX, Number 2 (Summer 2025): 120–36.

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Notes