It’s easy to take electricity for granted, but imagine your home without it. Instead of flipping on a switch, you’d rely on candles or gas lamps to light the way.
There’d be no air conditioner to provide relief on a hot summer day. Food would spoil quickly without a refrigerator, and we’d quite literally become disconnected without Wi-Fi.
“[We] just wouldn’t have the quality of life that we have today,” said William Rampe, a policy analyst at the Institute for Energy Research in D.C.
In 1880, Thomas Edison — one of the best-known American inventors — patented the incandescent light bulb. But at that time, homes were not wired for electricity. Two years later, the famous banker J.P. Morgan, who was one of Edison’s early financial backers, became one of the first people to have electric lighting installed in their house.
“[Electricity] really wasn’t something that was very common,” Rampe said, noting that it was only accessible to the wealthy. “At that time, it was just for lighting. We didn’t have all the appliances we have today.”
With funding from Morgan, Edison opened the Pearl Street Station in lower Manhattan in 1882. This was the country’s first central power plant and later became part of General Electric. It grew from 59 customers in the first year to 513 customers by 1883.
“[The station] distributed electricity from a centralized station to a lot of different people,” Rampe said.
But the person who brought reliable, affordable electricity to millions of Americans was actually Edison’s private secretary-turned-business manager Samuel Insull. He helped build the modern power grid and created an electricity empire.
“The Henry Ford of [the] modern electricity industry was Samuel Insull,” Rampe said. “And that’s because he was able to achieve economies of scale.”
Insull realized that by building large power plants and getting lots of people to use electricity, the cost would drop for everyone. He consolidated small mom-and-pop electric companies into one huge, organized system.
As a result, electricity became more reliable, reaching more homes and businesses, and families could finally afford it. Insull understood electricity “could be marketable, not just something that’s a toy for the wealthiest people in the country,” Rampe said.
Insull left General Electric to run the Chicago Edison Company and transformed Chicago into one of the most electrified cities in the world. He also pioneered the two-part pricing system for usage and demand that is still the foundation of how electricity is billed today.
By the 1920s, Insull controlled a massive network of utilities across many states. His electricity empire collapsed during the Great Depression and Insull lost his wealth, but the utility model he created continues shaping the industry today.
“He was really important for getting the industry off the ground,” Rampe said. “We have a system where we don’t really have outages, except for certain times and extreme weather.”
States regulated utilities until the Federal Power Act of 1935 gave the federal government authority over electricity that crosses state lines. The law also aimed to stabilize the electric industry, regulate utility companies, and protect consumers from abusive pricing.
But rural America had been left behind, as private utility companies focused more on cities and urban homes. The Rural Electrification Act of 1936 brought electricity to farms and transformed agriculture in the U.S.
“As we got into the 20th century, [electricity use] really skyrocketed,” Rampe said. Before 1910, under 10 percent of homes had electricity. By 1955, nearly 100% of homes did. “That leads to the state we are in now, especially [in the] United States, where nearly everyone has electricity.” The ways we use electricity at home continue to evolve with new technologies, from rooftop solar panels to electric cars to smart devices, reshaping daily life.
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