Texas Burning

Last week, I wrote about Sam Insull’s innovation with time-of-use rates. His other big innovation was the monopoly business model for utilities, which he first proposed in 1898 and was ubiquitous in the U.S. just 15 years later.

Under that model, utilities earned guaranteed rates of return on every dollar. It was a good deal for the country because it attracted massive amounts of capital and helped rapidly electrify America’s cities (rural areas would come later in the New Deal with the advent of co-operatives).

But those guaranteed returns are becoming harder to come by. The wildfires now raging in the Texas Panhandle demonstrate that the monopoly utility model suddenly faces stiff headwinds — many driven by fossil-fueled climate change. 

A Texas homeowner has already sued Xcel Energy, accusing the mammoth utility of starting the Smokehouse Creek blaze, the biggest wildfire in Texas history. Xcel has monopoly utility status and territory in eight states, including in the Texas Panhandle…