Few innovations have been more transformative than the production and distribution of electricity in the latter years of the nineteenth century. Overnight, cities and towns in the United States and Canada were lifted out of the dirty and dark age of coal and kerosene and transported into the magical world of ‘the hydro’ and ‘the electric light’. In the early days of this electricity revolution, one newspaper in Canada caught the spirit of the age with a headline that proclaimed, “Niagara Falls, Berlin Rises”.¹

Much has been written about the development of the electricity business since the days of Thomas Edison, George Westinghouse, Nikola Tesla and, in Canada, the remarkable Adam Beck. Typically, the hydro story attracts scholars writing from the perspective of the historian, the economist, or the engineer; many of these people have produced very cogent analyses of the hydro story. Refreshing it is then to read a new book on this topic, The Grid, written by a cultural anthropologist Professor Gretchen Bakke of McGill University in Montreal.

Bakke has produced a timely, stimulating and provocative look at the world of electricity production from its complicated beginnings over a century ago to our own time, when change of all kinds is stressing the business as never before. Bakke argues in these pages that while our electricity infrastructure is absolutely critical to the way we live our modern lives, the average citizen of 21st-century America knows little and appears to care less about this vital resource. Moreover, she writes “there is intense seething change in the very structure of the power machine that keeps us warm, lit and relatively well off”. At the centre of this ‘seething change’ is a diverse group of change agents ranging from Silicon Valley smart guys to aging hippies to retired schoolteachers, all of whom seem determined to bring about a fundamental restructuring of the electricity business.

The Grid opens with a fascinating account on how we got ‘the central station’ model that has dominated the electricity sector for most of its existence in North America. Readers may be surprised to discover that, in the beginning, power plants were small, local, and usually intermittent in their operation. Edison developed a system built around the direct current (DC) which, in its early years, was quite limited in its range. Westinghouse and Tesla responded with their more versatile alternating current (AC) which had the great benefit that it could travel much longer distances than direct current at that time. In those early days, the producers of electricity sold and delivered their product directly to a variety of customers for such end uses as lighting, traction, and of course, the muscle to power a rapidly expanding industrial economy.

It was not long before the capital-intensive nature of the electricity business became clear. Large amounts of money would be required to build out the necessary infrastructure in sprawling and congested cities like New York and Chicago. More local power plants would be required to generate the electricity for an expanding market and a veritable jungle of wires would be required to get this power to market. And how would these dollars be recovered since most customers required only limited amounts of electricity for only part of the day? Well, as Bakke tells it, the genius who devised a solution for this challenge was an English-born assistant to Thomas Edison named Samuel Insull.

Insull began his life in America as Edison’s personal secretary but he soon mastered the financial details of the business and moved to the Midwest. There, he took charge of Chicago Edison and soon made it the dominant player in that market. Insull realized that his costs were largely fixed but his customer base was simply too small and unreliable to provide the necessary revenue stream to support his large capital outlays. He soon noticed that if he lowered the price of his product and varied his rates for different categories of customers, he was able to drive demand and thereby increase his revenue. Like Adam Beck in Ontario, Insull set out to aggressively market electricity to middle class homeowners, commercial establishments, and industrial operations. In 1894, Chicago Edison built the largest power plant in the world at Harrison Street and discovered that with bigger and bigger ‘central stations’, electricity could be produced ever more cheaply and efficiently. As the twentieth century dawned, Chicago Edison was doing a booming business in the great metropolis of the American Midwest.

According to this Bakke thesis, Insull also figured out that government regulation and localized monopoly were a great boon to investor-owned utilities. A utility consensus developed during the trust-busting Progressive era of pre-World War I America. This consensus provided that “if utilities accepted to be heavily regulated, the government at the state and federal levels agreed to grant them a guaranteed service area, within which no other electric utility would be issued a charter to function.” For Bakke, these Insull-led reforms established the parameters of our electricity system for much of the modern era. It was Insull who understood that electricity could be a product ‘for the masses not the few’, that electricity had such popular appeal it could move cautious politicians to support investments and financing they would not normally consider, and it was Samuel Insull who “made it seem natural that the electricity business could only work as a monopoly”.

Insull’s business model of large generating power plants and monopoly franchise service areas prospered for many years and not even the Great Depression changed the basic formula. Yes, writes Bakke, it is true that by the mid-1930s, Insull’s electric empire and many other investor-owned utility companies were collapsing under the weight of too much debt and questionable accounting practices, but the question of the late 30s was not whether there would be competing providers within a single locality but “which sort of monopoly an electricity customer might find themselves a part of: a non-profit municipal network or a for-profit investor-owned utility”. The post-World War II economic expansion in the United States represented a high-water mark for the electricity power brokers as prices remained low, revenues grew, and system expansion seemed to know no limits. Throughout it all, the customer remained quite passive, soothed by attractive pricing and the never-ending array of appliances and electrical applications.

The 1970s arrived with a disruptive jolt. Vietnam, OPEC, stagflation, Watergate, Three Mile Island, and an increasingly restless and skeptical consumer all converged to change the channel from complacency to concern and consternation. Jimmy Carter became President in January of 1977 and soon he was talking to Americans about a very different kind of energy future, what Bakke affectionately calls ‘The Cardigan Path’. Carter told Americans that concepts like energy conservation and energy efficiency must become part of everyday life and business. Rather than turn up the thermostat when it gets cold, Carter advised Americans to put on a sweater! Congress followed suit with the National Energy Act² and the Public Utilities Regulatory Policies Act (PURPA)³, “which effectively broke the utility’s total control of everything that entered, moved through, and exited their power system”.

Professor Bakke is not a neutral observer in these policy developments. Throughout this long and, at times, convoluted story, the reader is treated to some clear author preferences. For example, as we are led down the Cardigan Path, we are told at page 109 that “PURPA helped prove that bigger wasn’t better and that monopoly-governed, vertically-integrated, government-regulated megacompanies were far and away not the best way to make and manage American power. Small was not only beautiful but efficient, and as it has turned out, cost-effective.” While there is no question that there is abundant evidence to support the claim that bigger is not always better and that many of these energy megacompanies had serious faults and failures, I am not sure that in the intensifying urban world of 21st-century America, one can yet conclude that small is always better or more cost-effective. Nowhere in the Bakke account is there any good analysis of the resistance in non-urban communities to some of the new energy infrastructure like windmills beyond the axiomatic belief that wind energy is basically a good thing. Many who follow the energy debate have observed, for example, that there are many people who are very keen about windmills as long as they are nowhere to be seen in their neighbourhoods. In the current energy debate, windmills often find themselves ‘in the penalty box’ with hydro dams, oil pipelines and high-voltage transmission towers.

Bakke is on much stronger ground when dealing with the rising challenge of resilience to our existing electricity grid. Her analysis of the Great Blackout of August 2003 which left 50 million Americans and Canadians in the dark for days is truly a cautionary tale. She reminds the reader in vivid detail of the threats now posed to any version of a ‘central station model’, such threats as poorly managed foliage, of severe weather incidents, of the intersection and impact of sophisticated technology, and yes, the remarkably nasty effect on wires caused by overly aggressive squirrels. Add to this list of issues the fact that, because energy deregulation effectively reduced electricity to a commodity like many others, there are now many fewer players with an interest in strengthening the grid. Because public policy “has drastically changed the ways in which we now use the grid… the physics and the economics of the system today have no choice but to work at cross-purposes”. And Bakke notes importantly “that the grid, like any complex mechanical system, is not just a machine but also the regulatory, business, cultural and natural environments within which this machine functions”. Policy makers would do well to heed her advice when she stresses the point that the grid is not just governed by its engineering and its management but also by such factors as climate change, profit motives, and other socio-cultural factors that may change over time.

In the later chapters of this book, Bakke deals with one of these socio-cultural factors, the consumer of electricity and how the consumer has changed in recent years. Here again the perspective of the cultural anthropologist is both refreshing and helpful to the current energy debate. Bakke is at her best when describing “Mr. and Mrs. Front Porch” in communities like Houston, Texas, Bakersfield, California, Boulder, Colorado and rural Maine. Her description of encounters between these customers and ‘the smart utility guys’ out selling smart meters, for example, would be funny if not so startling and worrisome. The utility representatives are often out in their service areas trying to convince customers of the need to reduce consumption, of the benefit of time-of-use rates, and other generally recommended initiatives to lessen the stress on the system and to better manage both provider and consumer costs. But, in this telling, the utility people do not seem to appreciate or even understand that, for many of their customers, the real issue today is control. As Bakke describes the current situation, the modern customer wants more control in terms of how the electricity is generated, how and when it is delivered and, of course, how it is priced. She describes the American customer as someone who is inclined to believe that a smart meter is more likely ‘a surveillance device’ serving the interest of the utility rather than protecting the interest of the consumer. While Bakke glides over some very relevant issues like managing peak demand, she is very good on the credibility gap now facing many utilities. As one of her witnesses says rather colourfully, the sparks flew when the real utility policy seemed to be “Smart Meters/Stupid Customers”.

How does a modern society like Canada or the United States square this circle? In our digital and highly interconnected world today, we are even more dependent on reliable and quality electricity than we were a few short years ago when many fewer applications were dependent on very sensitive computing technology which shuts down even if the power supply is only slightly less than optimal. New threats like cyberterrorism pose significant challenges and costs to our grid. But as the daily news cycle makes plain, citizens everywhere are not only disconnected from a good understanding of some basic energy realities but these same citizens are not especially keen to support what needs to be done to reach what Bakke describes as ‘The Holy Grail’ of a better electricity/energy future. For her, there is no doubt that that future will be some version of the Amory Lovins ‘soft energy path’ because both Bakke and Lovins believe that ‘the traditional or hard path’ to solving these energy challenges places too much faith in technology. It is simply unreasonable they argue to expect that such a complex machine as our modern grid built on the central station model can survive what present and future threats hold for it. For Bakke, the soft energy path can succeed if ‘we the people’ – engineers, environmentalists, business leaders, engaged citizens – come together and develop a plan which incorporates many solutions. The US military, for example, has developed some very transferable models of effective microgrids, university communities in states like New York and California have done the same. Elon Musk and others seem to be revolutionizing energy storage. The electrification of transportation holds great promise, much of which has been demonstrated on continents other than North America. Building design is another area where Bakke believes enormous possibilities can be found that will both please and serve the consumer at an affordable cost. Is it not possible to imagine the wireless distribution of electricity she asks?

As another winter grips North America – from Halifax to Atlanta, from Chicago to Whitehorse – millions of us will settle in to home or workplace expecting that the lights and heat will stay on as the cold winds blow, the snow falls and the ice forms. This winter those of you interested in the energy/electricity policy debate might enjoy taking some time to read what a hungry squirrel, an unexpected storm or just plain bad luck could do our overstressed, under-resourced and sadly, under-appreciated electricity system. This book will please some more than others and I can hear many of my engineering and business colleagues complaining that critical technical and economic issues have been either ignored or treated rather lightly. Overall, Gretchen Bakke has done us a service by raising important questions that need to be understood and addressed; the fact that she has done so from the perspective of a cultural anthropologist is an added bonus.

* Sean Conway is a Public Policy Advisor at Gowling WLG and a Visiting Professor at Ryerson University.

1. Berlin Ontario changed its name to Kitchener in 1916.
2. National Energy Act of 1978 (NEA).
3. Public Utilities Regulatory Policies Act (PURPA), Pub L No 95–617, 92 Stat 3117 (enacted November 9, 1978).