Socialism for Red States in the Electric Utility Industry

20 Pages Posted: 15 Sep 2016

See all articles by Richard Schmalensee

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: September 1, 2016

Abstract

TVA and the other federal electric utilities were created under Democratic administrations, and their service territories were initially bluer than average. These subsidized enterprises sell cheap power preferentially to non-investor-owned distributors, so such distributors are more prominent where the federal utilities are important sellers. The political map of the U.S. had changed dramatically since the federal utilities were created. The federal utilities and non-investor-owned distributors are now more important on average in red states than in blue ones. Interest has trumped ideology: Republican policy-makers strongly opposed to socialism in principle seem happy with the important role of government enterprises in the U.S. electric utility industry.

Keywords: electricity, government enterprise, political economy, socialism

JEL Classification: L32, L94, N72, Q48, H42

Suggested Citation

Schmalensee, Richard, Socialism for Red States in the Electric Utility Industry (September 1, 2016). Available at SSRN: https://ssrn.com/abstract=2838336 or http://dx.doi.org/10.2139/ssrn.2838336

Richard Schmalensee (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)

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