Image: Blanco Vista neighborhood of San Marcos, Texas
Quote: "If you get there and the Waffle House is closed? That's really bad. That's where you go to work." - Former FEMA Administrator Craig Fugate (2011)
TIL: Waffle House Index
Soundtrack: Sand Whirling - Niklas Paschburg
Watch: Tank Girl (1995)
Starting on Monday, February 15th, the Electric Reliability Council of Texas (ERCOT) started to respond to a chain reaction of collapsing power supply triggered by cold weather that has seen millions without power and at least 50 people dead and counting.
As snow blanketed much of Texas on Sunday, an 11-year-old boy in the Houston area gleefully played outside. Seeing the snow was a first for the boy, who came to the U.S. from Honduras two years ago with his mother. [...] Less than 24 hours later, as temperatures plunged to near single digits and homes across the state lost power, the boy [froze to death]. - Texas Tribute
As power started to cycle back, customers on variable [market] rate plans saw their power bills surge by 18,000% as wholesale pricing shot from the seasonal average of $50 to $9,000 Mwh.
While it would be easy to call this an extreme weather event, something beyond our control, with an increasing rate of changing weather patterns, let’s put this in context to understand the national implications and real human costs of a failing system.
Public Utilities
When you think of electricity, assuming your education was anything like mine, I expect that Edison’s light bulb is quick to mind. Maybe even Franklin’s Battery. What if I told you that while these men contributed to scientific history, they were not the first investors of these items?
The use of electricity itself goes back about 2,000 years ago [9,950 - 10,650 HE | 150 BC - 650 AD], outside of Baghdad where a battery constructed of clay, asphalt, iron, and copper, filled with vinegar was used likely to electroplate items in gold, well before Benjamin Franklin constructed his battery in [1]1749. Edison’s innovation improved the filament on a patent he purchased from Henry Woodward and Matthew Evans in ‘1879; Whose work built upon Swan's work during the ‘1850s. Tesla, before the car company in his namesake, was comparatively a footnote in history.
"If Edison hadn’t invented those things, other people would have" Leonard DeGraaf, an archivist at Thomas Edison National Historical Park
If these men aren’t remarkable, why are they remembered as “great” American inventors and other Captains of industry? The story of electricity is perhaps one of the best-forgotten battles over America’s Correct Collective Memory.
Pearl Street Station, the first Power Station, was established by Edison in Manhattan during September of ‘1882. With limited range, he used his direct current (DC) design to sell lightbulbs to the wealthy elites of Manhatten.
In ‘1893, the International Niagara Falls Commission organized a contest to harness the fall’s power that would ultimately allow Tesla to prove himself. Completed in ‘1896, with 50,000 horsepower turbines, Telsa’s alternating current (AC) design, not limited by range, would see power flowing through Buffalo to New York City. The electrification of the cities streets and the public transportation services that followed would become the template for the modern city.
Under the WW1 industrialization efforts moving into the ‘1920s, hydroelectric damns accounted for roughly 25% of grid power, but demand grew exponentially. Navigable Streams, a major shipping source, fell under federal control and required congressional approval to be blocked. This was naturally restrictive and helped to see the rise of coal-steam, and later gas-turbine, power plants across the nation.
Congress established the Federal Water Power Act ‘1920 to delegate their power to oversee the construction and operation of these hydropower projects, creating the Federal Power Commission (FPC).
In the following years, many companies begin to enter the electric power industry in a literal land grab. Large companies formed, and power, both literally and figurative, begin to consolidate around these natural infrastructure monopolies.
Then as states tried to regulate them, they started to merge into larger interstate holding companies to avoid local public oversight. By the ‘1930s, the ten largest holding companies controlled about 75% of all electrical power sold by utilities.
Starting in March ‘1928, the FTC would be tasked with investigating the electrical industry, releasing monthly reports to the senate detailing their findings. This would continue into November of ‘1934 with the release of segment 71, of what would become 94 volumes, including a summarized list of decades worth of propaganda directed against the general public and supporters of municipal ownership of electric facilities.
One such document under discussion was the Serial Report of Rate Research Committee, ‘1927-28, published by the Rate Research Committee ahead of the National Electric Light Association’s ‘1928 convention. NELA was an industry group comprised of about 90% of the utility providers. This report set out to compare factual rates of net monthly bills between selected cities that had municipally run public plants and those that had their private facilities.
Based on cherry-picked data, NELA's report found that their larger private infrastructure furnished electricity for less than the smaller public municipalities.
Four of these cities, Los Angeles, Seattle, Cleveland, and Columbus, contained both Municipal and Private plants; Which naturally created public-private market competition. Weighed by population would help bring down any discrepancies between the two systems.
After removing those four cities, the FTC went again to the census and located cities having populations as close as possible to in population density to NELA’s selected municipalities [1,273,000 Public to 1,284,000 Private] then compared the domestic lighting rates with NELA's own ‘1928 rate book.
Additionally, to ensure that this could be considered a true comparison, taxes had to be included. While a study published in the American Economic Review found that this accounted for less than 7% of the cost of production, included in an already large 70% spread between New York and Ontario, FTC still included the NELA’s padding of 10% to ensure that the public could consider this beyond reproach.
The FTC’s commission found that private providers, at a comparable scale, were charging an average of 65% more than their publicly-run counterparts given the opportunity. While I can not account for how investors spent all of this extra earning, a fair amount was reinvested into universities and other educational documentation of varying legitimacy.
This “incomplete and indefinite” accounting lists Harvard University as one of the biggest receivers, which at the time had tuition of $300, was taking delivery of about [$121,000 (1920) | $1,582,571.10 (2021)] a year.
While I could not locate any copies of The Ohm Queen or The Romance of Power, I doubt these texts were grounded in advocacy for the commons with such aristocratical notions. Romanticism, in this economy?
The combined cost of payments made to educational institutions, fellowships, payments, and reimbursements to professors, complete with pamphlets, books, contests, and other miscellaneous expenditures, accounts for [ $1,312,264.77 (1920) | $17,163,242.15 (2021)] in spending. In summary, the report concluded:
The record in this investigation established conclusively that the electric and gas utilities, since about 1919, have carried on an aggressive country-wide propaganda campaign. In it they have mode use not only of their own agencies, but have enlisted outside organizations in active, and often secret, aid. In it they literally employed all forms of publicity except "sky writing", and frequently engaged in efforts to block the full expression of opposing view. The record shows that this propaganda had for its objective the disparagement of all forms of public ownership and operation of utilities and the preachment of the economy, sufficiency, and general excellence of privately owned utilities. The record establishes that, measured by quantity extent, and cost, this was probably the greatest peace-time propaganda campaign ever conducted by private interests this country - Volume 71, Page 607, FTC
In actuality, like J.P. Morgan, private interests sought control of this public infrastructure and natural monopolies since the advent; Who with Edison placed fearmongering stories about Tesla’s AC design in newspapers. Edison even invented the rather inhumane Electric chair to help illustrate this view.
While these reports continued for years, detailing testimony of how these corporations had manipulated a nation, almost non of it would make it into the public's consciousness. They worked hard to convince the American public that it was simply un-American to support the locally managed public facilities; And while the state certainly contains a multitude of flaws, it is also very literally America.
The influence of ad revenue was as prevalent it is today. Still, more directly, the newly formed NBC was created with General Electric purchase AT&T’s radio system, tapping the executive director of the NELA, M.H. Aylesworth, as the founding president; Thereby capturing a near-monopoly on public discourse during the Golden Age of Radio.
On the heels of volume 71A, in ‘1935 as part of the New Deal, Roosevelt would call out the "distribution of electricity" in his State of the Union before signing into law the Public Utility Holding Company Act (PUHCA), which evolved into one of the bitterest political battles of the New Deal era.
Part of this act worked to break apart the holding and “super-holding” pyramid companies that were often heavily leveraged and engaging in some of the securities fraud, as I mentioned in [[W: The Big Squeeze]].
Continuing in this tradition, a hundred years later, in examples from ‘1995 to ‘2015, Texas is still employing this soft power over the American school system. And the very education I received.
While many districts would select their textbooks individually, the Texas State Board of Education uses their position to buy as a single voting block.
“The bottom line is that Texas and California are the biggest buyers of textbooks in the country, and what we adopt in Texas is what the rest of the country gets,” said Carol Jones, the field director of the Texas chapter of Citizens for a Sound Economy, part of the coalition monitoring books
By purchasing about 10% of the nations books, the review board chaired by Ms. Shore, a co-owner of TEC Well Service Inc., an oil and gas provider, can effectively write the textbooks used for teaching about policy and environmental science by selecting books like “Global Science: Energy, Resources, Environment” which was partly financed by the Mineral Information Institute, a consortium of mining companies.
“It was a book burning,” he said. “It was 100 percent political.” At the suggestion of the foundation, the LeBel company rewrote the sentence “Destruction of the tropical rain forest could affect weather over the entire planet” so that it now reads, “Tropical rain forest ecosystems impact weather over the entire planet.”
It also added these sentences: “In the past, the earth has been much warmer than it is now, and fossils of sea creatures show us that the sea level was much higher than it is today. So does it really matter if the world gets warmer?”
The foundation also succeeded in having this sentence deleted: “Most experts on global warming feel that immediate action should be taken to curb global warming.”
“We are now telling them what to write and what not to write,” Mary Helen Berlanga [told the New York Times]
It’s just the planet that we all live on. What’s the worst thing that ecosystem collapse could do? Fossils show that mass extinction events happen all the time. So what does it matter?
Similarly, a McGraw-Hill ‘2015 history book also described the enslaved Africans used to build this country as workers.
All while the textbooks were debating whether we should use the term worker or slave, the real debate had shifted towards using enslaved persons because slave reduces a person to a status, marginalizing the active process of subjugation inflicted. The origin of slaves comes from the subjugation of the Slavic peoples.
A process that I discussed in [[W: Deconstruction]] that is still being used today; For example, the labor that California uses to fight wildfires brought about this climate change is extracting a reported $100m a year in unpaid wages.
To be continued... Next Week in Water & Power, The Battle Over Texas Regulation.