When more than a million metro-area Washingtonians lost their power in last Friday’s superheated near-hurricane, and hundreds of thousands of them went three, four, or five sweltering days before it came back on, was Pepco—the local power company—to blame? How about Dominion Virginia Power? Would a municipally owned company have done a better job?
I’m all for having publicly owned utilities, but in this case, I don’t think ownership mattered. When a storm like last Friday’s sweeps through, all that counts is whether the power lines are buried underground or strung from poles. Neighborhoods that had their power lines underground (like mine, in Dupont Circle) didn’t lose power. Neighborhoods that didn’t went dark—unless they were spared by a shift in the winds.
As climate change subjects more and more cities and regions to extreme weather, one obvious response is to bury the lines underground. This probably isn’t a good idea in earthquake belts, but there aren’t all that many such belts lurking below. For the rest of us, burying the lines seems the best solution.
But how to pay for all this? It’s become common practice in the region to require developers who are building new neighborhoods to bury the lines, and the economics of burying lines in densely populated urban areas are benign: There are so many consumers in an urban city block that the per capita costs of taking the lines underground aren’t all that high. The problem comes in suburban and rural areas, where millions live but not all that densely.
This is hardly the first time we’ve confronted this problem. In the 1930s, urban America was almost completely electrified, but rural America was almost completely not. In 1934, just 11 percent of American farms had electric power. Private power companies demanded that the farmers pay the full cost of building the system, which farmers plainly lacked the money to do. (In Germany and France, whose governments had built the power grids, 90 percent of farms were electrified.)
President Franklin Roosevelt asked Morris Cooke, a Pennsylvania utilities executive, to compute the cost of electrifying America’s farms (and in the '30s, the percentage of Americans who lived on farms was more than ten times what it is today). Cooke ran the numbers and presented them to FDR, who in 1935 created by executive order the Rural Electrification Administration (REA) and appointed Cooke to run it. The following year, Congress authorized and appropriated roughly $400 million for the new agency. The REA then made long-term, low-interest loans to states, localities, and rural power cooperatives that covered the construction and start-up costs of electric power systems. By 1942, half of America’s farms were electrified; by the early 1950s, virtually all of them were.
That suggests a possible solution for suburban Washington’s woes. As climate change manifests itself differently in different parts of the country, a federal appropriation such as that which funded the REA doesn’t make sense (nor would it make it through Congress, since nothing makes it through Congress). But there’s no reason why Maryland and Virginia, say, couldn’t issue bonds that would cover the costs of burying their power lines, the repayment of the bonds to be stretched out over several decades so that the area’s power consumers wouldn’t get socked by massive rate increases. (Indeed, since the bonds would in essence subsidize Pepco, Dominion, and their ilk, the states could dictate the rates the companies could charge.) In Maryland, it might even be politically possible to enact, say, a sales tax increase that could be used, rather than surcharges to electric bills, to repay the bonds. (In Virginia, there’s no way such a tax could be enacted.)
With the cost of borrowing at an all-time low, and with who knows what storms 'a-brewing, there’s no time like now to get started.
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