Government Owned Hydroelectric Power
Today there are over 600 Federal hydropower plants located mostly in the Northwest and the Southeast Unites States. Together, these plants produce approximately 3% of the nation’s electric supply. Most of the output from these plants goes to reduce the cost of electricity for publicly-owned municipal utilities and rural electric cooperatives.
But Federal hydropower and its support of publicly owned utility systems was not pre-ordained. It did not occur until after a brutal 1920s era battle between a Senator from Nebraska and one of the richest men in America.
History of the Mussel Shoals Generating Plant
The Federal Government got into the power generation business during World War I when it began construction of a hydroelectric generating facility on the Tennessee River, at Mussel Shoals, Alabama. The Government planned to use the Mussel Shoals electric production to power a nearby munitions facility. But the War ended before the munitions plant was completed and construction on the hydroelectric plant was cancelled.
Congress had to decide what to do with the partially completed generating plant. George Norris, Senator from Nebraska, knew that, in the 1920s, privately-owned electric utilities were not extending service to the very poor rural communities of the Tennessee River Valley. So residents of those communities were living without the benefits of electricity. Their day-to-day lives were much like the lives of their parents and grandparents in the 18th and 19th centuries. Norris proposed that the Federal government complete construction of the Mussel Shoals generating plant and deliver the low-cost electricity to the surrounding communities.
But Norris received little support from his fellow Senators. This was the era of the Bolshevik revolution in Russia. And there was fear that that revolution could come to the United States. The Senators were sympathetic to the argument of the utility industry that Government participation in the electric power industry would bring this country one step closer to Communism. Therefore, Congress solicited bids from private entities seeking to take over ownership of the Mussel Shoals generating plant.
Henry Ford Seeks Control of the Mussel Shoals Plant
The highest bidder was Henry Ford. He promised to use the production from the Mussel Shoals plant to industrialize the Tennessee River Valley. He suggested that the Tennessee River Valley would become a “Little Detroit”. Once Ford’s plans became public, land speculators bought up the land near Mussel Shoals and sold it in small lots to local residents. They thought Henry Ford was going to make them rich.
But George Norris was not ready to give up his fight. He did whatever he could to postpone Congress’ approval of Ford’s proposal. Even though he was fighting to bring a better life to the residents of the Tennessee River Valley those residents were more interested in Ford’s promises of economic development than in Norris’ promises of the availability of low cost electricity. During the years of his fight with Ford, Norris received death threats from residents of Mussel Shoals and, whenever he visited the area, he had to be accompanied by an armed bodyguard.
Eventually, Ford grew tired of the fight and withdrew his bid. Congress then sought to make the plant available to privately-owned utility companies. But those efforts never went anywhere because, throughout the 1920s, Norris continued to fight for Government ownership.
President Roosevelt Makes Federal Hydropower a Reality
Norris finally got his wish in 1932 when Franklin Roosevelt was elected President. One of the first actions of the Roosevelt administration was enactment of the Tennessee Valley Authority (TVA) Act which provided for the Government to construct a series of dams generating Federal hydropower up and down the Tennessee River Valley.
Those dams control flooding, improve navigation and produce low-cost electricity for the residents of the Tennessee River Valley. The TVA Act was so successful that it was followed by numerous other Federal laws that provided for the construction of all of the Federal hydropower projects that are currently in operation throughout the United States.
The following videos provide additional information regarding Henry Ford’s effort to develop the Mussel Shoals project:
I. David Rosenstein worked as a consulting engineer and attorney in the electric industry for 40 years. At various times during his career he worked for utility customers, Rural Electric Cooperatives, traditional investor owned regulated utilities and deregulated power generation companies. Each of his posts in this blog describes a different aspect of the past, present or future of the electric industry.