There's only one state where every single home and business get its electricity from a consumer-owned not-for-profit utility.
Nebraska has 121 municipals, 30 public power districts, 10 electric cooperatives, and zero investor-owned utilities (IOUs). No one in the state has consumed a kilowatt-hour of IOU electricity since 1949.
The story of how and why this happened goes all the way back to Thomas Edison and intersects with the New Dealers who created the federal rural electrification program in the early 1930s.
Edison and other utility system pioneers began marketing their equipment in the early 1880s. In Nebraska, as in other states, local entrepreneurs formed companies to generate and distribute electricity in towns and cities. As more and more municipalities granted franchises to these companies, the Nebraska legislature passed a law in 1885 granting mayors and city councils the authority to act as regulators.
By 1902, 43 private power companies operated in the state. But municipal systems, set up mostly for street lighting and electric streetcars, were coming on strong. By 1910, there were 59 across the state. Small hydro and coal or diesel generators produced their power.
There were three reasons for the rapid growth of the municipal systems, according to an article on the Nebraska Energy Office's website: The early equipment was of a scale cities, towns, and even villages could manage; they could provide street lighting at half the cost of private companies; and there was popular support for local control of this new industry.
Left behind were rural areas, where a large proportion of Nebraskans lived. Less than 5 percent of farms had been electrified by 1920, and only about one-half percent of these were served with central station power.
Farmers who had been digging irrigation ditches and canals for decades desperately wanted electricity to power pumps for the times when great chunks of the state turned bone dry for months at a time.
By 1926, the Cornhusker State counted 282 municipal systems, more than any other state. Farmers who lived close to town hoped they would extend their lines. Competitive tensions were rising between the municipal utilities and the 56 private companies and between the companies and the groups of farmers who were trying to organize electric co-ops.
In addition, monopolistic utility holding companies were getting a solid foothold in the state, consolidating private utilities and buying out the weak municipals. They'd also begun a vicious public relations campaign against public power of any kind.
Meanwhile, the League of Nebraska Municipalities and its political allies were pushing for revenue bond financing for the municipals. The holding companies blocked them in two consecutive legislative sessions. But then, in a bold move, Initiative 324 was taken directly to the people, where it passed in December 1930 by 151,353 votes.
"Initiative 324 passed in every precinct, demonstrating the ongoing popular support for public power and making Nebraska a national leader in the area of revenue financing," the Nebraska Energy Office article states.
State Attorney General C.A. Sorenson, U.S. Sen. George W. Norris, and C.E. Beds, mayor of Crete, Nebraska, which formed the first municipal utility in the state in 1887, provided the political muscle behind the initiative. After the vote, they set their sights on rural electrification. (Norris would go on to sponsor the Tennessee Valley Authority Act of 1933 and the Rural Electrification Act of 1936.)
The first hurdle was federal enabling legislation for public power districts, electric co-ops, and irrigation districts, which passed in 1933. That was followed in 1935 by the passage of the Public Utilities Holding Company Act, which forced the breakup of many of these companies after a four-year investigation of abusive practices, and the passage, the next year, of the Rural Electrification Act.
These actions in Washington opened the public power floodgates in Nebraska. Between 1933 and 1943, 16 public power districts and 35 rural electrification districts were established.
While the Public Utility Holding Company Act was being challenged in the courts, investor-owned utilities still generated 85 percent of the state's power, but this proportion would eventually flip. Three new public power districts were poised to supply much of the state's needs at low rates with their hydro resources.
After the U.S. Supreme Court upheld the breakup of the holding companies, Consumer's Public Power District bought 14 IOUs for $42 million. By 1942, according to the government article, the IOUs had been run out of most of the state. The last sizeable IOU redoubt, Omaha, fell when Omaha Public Power District bought American Light & Power's subsidiary Nebraska Power Company in 1946.
One small area of private service remained in Knox County, near the South Dakota border, until Northwestern Public Service Company transferred its assets to North Central Public Power District in December 1949.