http://www.ppcpdx.org/in-ppHistory.html
http://www.nber.org/chapters/c9986.pdf
8.1 Introduction
The history of public utility regulation in the United States has an odd
circular quality. During the late nineteenth century, gas and electric companies
were subject to limited regulatory oversight; by the early twentieth
century, they were subject to burdensome municipal regulation; and by
1940, most gas and electric companies were subject to state and federal regulation
(Stigler and Friedland 1962; Troesken 1996). Yet during the 1980s
and 1990s, the regulatory bodies that had built up over the previous 100
years were abrogated, and gas and electric companies began operating in
regulatory environments akin to those that had existed in the 1880s and
1890s (Joskow 1989). Similarly, in the American water industry, the governance
regime progressed from private provision with limited municipal
oversight during the nineteenth century to widespread municipal ownership
by the mid-twentieth century (Baker 1897; Troesken 1999).
During the
1970s and 1980s, municipally owned water companies were privatized by
the score and returned to the governance regime that had prevailed during
the nineteenth century, with private provision and limited municipal oversight
http://americanhistory.si.edu/powering/past/h1main.htm
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Municipal Ownership
The big question for progressive reformers was how to gain for society the benefits of natural monopoly without suffering the abuses common among monopolist owners? The answer actually took two forms--municipal ownership and state regulation of companies. By purchasing firms providing essential services and commodities, cities could ensure that the benefits of natural monopoly would flow directly to the people (or so it was hoped). In the electricity supply business, customers would enjoy lower rates as the city-owned utility exploited economies of scale and increased sales to greater numbers of people and businesses. Since cities have no stockholders demanding dividend payments or returns on investment, they could pass on savings directly to their citizens.
<snip>
Public Power for Rural Customers
Keeping his word, Roosevelt created (with the consent of Congress) government agencies that generated and distributed electricity to segments of the American public neglected by investor-owned utilities (IOUs). IOU executives had previously argued that electrifying rural areas would be too expensive and would not provide adequate returns on investment, but the Tennessee Valley Authority (created in 1933) and the Rural Electrification Administration (1935) proved otherwise. These and other institutions demonstrated that electrification of even the poorest households could raise standards of living of the inhabitants and produce good income to electricity suppliers. (In 1930, only 10% of American farms had electrical service; by 1945, almost 45% of them were wired up.) As a result of these actions, investor-owned utilities have been deprived, to this day, of a significant portion of the country's customers--customers who are served by municipal utilities or rural cooperatives.
<snip>
Public Utility Holding Company Act of 1935
Beyond embarrassing utility executives with these initiatives, the federal government imposed new rules on the investor-owned utility industry. By passing the Public Utility Holding Company Act of 1935, Congress outlawed the pyramid structure that had been at the core of financial abuses.
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