How The New Deal Changed American Power (w/ Sandeep Vaheesan)

Jan 20, 2025

Sandeep Vaheesan, legal director at the Open Markets Institute and author on electrification history. He walks through how New Deal public power programs remade rural life and spurred mass appliance adoption. He explains dam-building, TVA impacts, and how public and cooperative utilities shaped wartime mobilization. He also addresses the era’s racial injustices and why public leadership matters for decarbonization.

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INSIGHT

Public Power Unleashed Hidden Demand

Public projects lowered rates, spurred cheap appliance production, and builders upgraded housing wiring, which together unleashed massive new residential electricity demand.
The public yardstick view proved correct: lower prices and better housing infrastructure expanded consumption.

ANECDOTE

Public Power Fueled The War Effort

Federal hydropower became essential for wartime industries like aluminum and later the Manhattan Project sites at Hanford and Oak Ridge.
Public power initially seemed surplus, but WWII demand validated large federal capacity investments.

INSIGHT

New Deal Housing Produced Redlining

Federal housing finance created redlining: white neighborhoods got low-cost 30-year mortgages while Black neighborhoods were denied credit and racially restrictive covenants were encouraged.
This federal policy produced entrenched segregation that shaped unequal modernization access.

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Prior to the New Deal, millions of rural Americans were quite literally living in the dark. Though electricity had been available for decades, it was out of reach for most living in America's countryside post-World War I. That all changed within a decade. President Franklin D. Roosevelt's approach to the power sector during the Great Depression transformed electrification and public utilities on rural life and dramatically modernized the American home throught the nation. In his new book, Democracy In Power, A History of Electrification in the United States, Sandeep Vaheesan explores the rapid economic and social changes brought about by the New Deal through initiatives like the Tennessee Valley Authority (TVA) and Rural Electrification Act and argues that many lessons from the era are relevant today's push for climate action.

Sandeep joins the show this week to explain how public competition in the 20th century stimulated power consumption and improved living standards in America. He explains why Americans were ready for change during the New Deal era, how federal initiatives would later power wartime efforts, and how decisions during FDR's presidency still impact the current landscape of public and cooperative utilities. We also explore the racial and gender inequality of the era and how many New Deal programs exacerbated injustices. Finally, Sandeep argues for public leadership in achieving decarbonization targets while ensuring democratic principles in power management.

Sandeep Vaheesan is the legal director at the Open Markets Institute. He leads their legal research and advocacy, including the amicus program.

Read Democracy In Power, A History of Electrification in the United States.

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