The case against investor-owned utilities and the need for municipal power systems (California)

The problem addressed in this dissertation is whether private enterprise is more effective than government when it comes to the provision of public goods and services. Although contemporary free market ideologists claim that privately owned organizations are inherently more effective and efficient than government or public organizations, the research findings reported in this dissertation indicate that at least in the case of the provision of electric power, public power utilities provide greater benefits to the communities they serve than private, investor-owned utilities. As the recent power crisis in California has revealed, private power utilities seek to maximize profit for their shareholders often at the expense of the consumers and the communities they are supposed to serve; whereas public power utilities tend to provide electrical power at lower rates and with greater regard for the protection of the economic stability and environment of the communities they serve.; This study provides a historical case study of how a private power company, Pacific Gas and Electric, gained control over the electric power generated by the City and County of San Francisco's own hydroelectric facility in Hetch Hetchy Valley. The federal legislation that gave the city the land for this facility was supposed to provide cheap public power to the city. However, the case study reveals how this company has prevented the city from establishing its own municipal power distribution system, and how it has maintained a highly profitable monopoly over the distribution of electric power within the city for more than seventy-five years. This study also examines the history of private versus public power in the United States and analyzes the political as well as legal tactics that have been used by the private power industry to prevent competition from public power utilities. It also reveals that municipal power utilities, on the whole, have provided cheaper and cleaner power to the public than the private power industry.