How Electric Utilities Have Changed
When most of our electric grid was built (1935-1960), it was owned by either municipalities or locally owned private companies. In both cases, executives and managers were trusted members of the local community. They were accountable. And they were seen as heroes for bringing electric power to the rest of us.

Corporate takeovers during the 1980s and 90s changed all that. The thinking was that if we allowed large, publicly held corporations to take over our electric utilities, it would bring more capital to invest in the grid.

While that may be true, the trade off is that distant executives have not been accessible or accountable to local communities. Instead, they are accountable only to their corporate shareholders. The priorities have changed from serving local communities to serving international investors.

As a result, we’ve seen continuous power outages and rate hikes. We’ve seen major investments in profitable transmission lines, but little investment in updating and strengthening the grid to accommodate renewable energy. We seen a decline in customer service. This is where we are today in a majority of US communities.

What is Energy Democracy?
Energy democracy—a new term emerging in the last several years—is a response to investor ownership of our electric grids. People now want more say in how our electric grids are managed, what investments are a priority, and how customers are treated. Several principles of democracy apply here:
• Public or collective ownership of energy infrastructure
• Decentralization and strengthening of the grid to accommodate renewable energy
• More public participation in policy and management decisions
• Equitable governance of energy systems (by race, geography and socioeconomic status)

Do Democratic Models Exist Now?
A number of electric grids across the country were never sold to corporate investors. Over 2000 US communities get their power from a locally owned and managed utility. These utilities serve large cities like Nashville, Sacramento, Austin and Seattle, the state of Nebraska, and many smaller towns and regions across the country. Massachusetts has 41 locally owned utilities, Maine has eight.

The track record of locally owned grids is positive. They have consistently lower rates than investor owned utilities. They are more reliable. And they have adopted renewable energy at a much faster rate than the investor owned utilities.

These locally owned utilities offer a model for turning our corporate owned grids back into municipal or consumer owned utilities. This is what Pine Tree Power is trying to do in Maine. In California and elsewhere bills have been introduced to do the same.

The Challenge of Change
Changing utility ownership is particularly challenging, however. This is because electric utilities are so profitable for investors. The federally set Return on Equity for electric utilities is 10-15%, based on what assets are being considered, and where the grid is located. This is a very healthy rate of return for an investment with no risk.

Consumers have no choice, so the investor return is predicable and guaranteed. In 2022, $187 million left Maine in electric utility profits. Because of the federal Return on Equity rates, investor owned utilities everywhere make a good profit. Imagine if this money could be used to lower rates or reinvest in the grid!

Should our electric utilities be owned by distant shareholders? As a believer in democracy, I would say no. It’s time to take back our electric grids, and own and manage them locally.

Sources: www. American Public Power Association: publicpower.org. Pinetreepower.org, etc.