Powering the Dream_ The History and Promise of Green Technology - Alexis Madrigal [47]
The electric utilities and appliance manufacturers also actively courted their business, recognizing home builders as the key source of new business.17 Utilities had to get bigger to make more money—and they believed that their “grow and build” strategy, in which people were encouraged to use as much electricity as possible, would deliver lower prices and greater market share. In fact, for the first six decades of the twentieth century, they were right. The utility industry was the site of an astonishing burst of innovation. Three things were working in their favor.
First, the thermal efficiency of power plants was improving rapidly. Engineers found ways to use more of the heat generated by burning coal into electricity. Edison’s Chicago plant used nearly seven pounds of coal to produce a kilowatt-hour.18 By 1965, however, new plants could generate the same electricity with just a pound.19 There were no new technologies introduced during this period, only the kinds of metallurgical and process advances that allowed the utility operators to increase the pressure and temperature of their boilers, and new metals were developed that could contain the tremendous force used in the modern turbogenerator.
Second, for decades building bigger plants reduced the cost of each kilowatt-hour produced. In two big spurts in the 1920s and then after World War II, plants grew from just a megawatt or two into thousand-megawatt monsters. Millions of horsepower could be derived from a single power station. Although there was a technical reality underlying the love of gigantism, there was also engineering glory to be had by building the biggest.20
Third, the utilities pushed to have themselves declared natural monopolies in a geographic region so they could have ready access to money for building plants and fending off budding public power movements. The flipside of regulation was that utility profits were decided by utility boards that determined what their “fair rate of return” would be. Fairness, as you might expect, can be seen multiple ways, but in these golden days the slippery definition tended to aid the utilities because they had been able to make electrical power cheaper year after year.21 Between the years of 1902 and 1930, say, the consumer price index doubled, but a 1930 kilowatt-hour cost the consumer 40 percent of what that energy power would have run in 1902.22 The fall continued into the middle of the 1960s. The pursuit of size, efficiency, and a fair rate of return drove the industry.
Utility managers could do what they pleased professionally and aesthetically and still deliver higher profits and lower prices. What a deal! These men saw themselves as the spiritual descendants of Prometheus, the technical descendants of Edison, and the most benign kind of social reformers.23 At the turn of the century electricity had been a mark of distinction for the upper crust; forty years later, it was the common technological property of everyone. As the Tennessee Valley Authority’s David Lilienthal put it in 1944, electricity has “deep human importance, for this must be remembered: the quantity of electrical energy in the hands of people is a modern measure of the people’s command over their resources and the best single measure of their productiveness, their opportunities for industrialization, their potentialities for the future.” Lilienthal and others compared electricity to “a modern slave, working tirelessly for men.”24
The only problem, really, was that consumers had to hold up their end of the bargain. That is to say, they had to keep buying more and more electricity. It was equally important that they buy the right kinds of appliances to smooth out the load drawn out of the electric system.
Here’s why: Electric utilities have to build enough capacity to satisfy the largest possible load on the system, even if that’s far higher than the average