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1 Center for American Progress | Distributed Generation and Its Potential Impact on Universal Access to Electricity
In he Unied Saes we have universal access o elecriciy. I is no only available o  Americans who live in densely populaed areas, wealhy Americans, or Americans wih he echnical ingenuiy o generae elecriciy. I is available o 100 percen o Americans and accessible o any who wish o ap ino i.
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Tis universal access o elecriciy arose rom a very inenional se o policies pu in place hroughou he 20h cenury, mosly requiring uiliies o provide service o every-one in heir service erriory and hen using governmen suppor or he developmen o new elecriciy inrasrucure o ensure ha every home could be par o ha uiliy’s service erriory. Tis was a moral and legal conrac ha elecric companies enered ino  wih he American people, and i generaed a grea amoun o business or hem as i ueled he rapid growh o our naion’s middle class. Te same condiions exis in radiional elephones. Every American has access o a landline, wheher or no hey use i. Bu wih significan echnological changes in ele-phones and inormaion echnology󲀔such as he rapid growh o wireless and daa ser- vices󲀔our commimen o providing universal access o high-qualiy communicaions services such as broadband Inerne or cell-phone service o every American is running ino challenges, resuling in wha is known as he digial divide.” Te emergence o an inormaion economy and he rapid ransiion in boh physical inrasrucure and corpo-rae business models were powerul engines o growh and prosperiy or our naion, and hey were a welcome boos o he U.S. economy. Bu i was also disrupive, and  while he siuaion is improving, he polarizing divide has no been enirely avered. Te elecriciy indusry is now enering a similar period o rapid change as ha aced by he elecom indusry a decade ago. New echnologies rom smar grids and solar panels o superefficien homes and elecriciy sorage are all coming on-line rapidly a he same ime ha our legacy inrasrucure aces he unanswered challenges o an aging flee o power plans and ransmission lines. Tis is coupled wih desabilizing polluion hreas and he disrupive orce o rapidly changing uel coss due o he collapse o naural gas prices.
 The Electrical Divide: New Energy  Technologies and Avoiding an Electric Service Gap
By Richard W. Caperton and Mari Hernandez July 15, 2013
 
2 Center for American Progress | Distributed Generation and Its Potential Impact on Universal Access to Electricity
I hese deeply ransormaive changes in he U.S. power secor are no managed prop-erly, 21s cenury America could see an emerging elecrical divide no unlike he digial divide o he lae 20h cenury. Again, hese changes and innovaions are o be welcomed or wha hey can bring in erms o economic opporuniy, echnological leadership, and he sewardship o our environmenal resources. Bu hey mus be managed wih an eye oward inclusion and aim o bridge any poenial elecrical divide ha emerges.In his issue brie we explain how his elecrical divide could come o pass and how i can sill be avoided, drawing on lessons learned rom America’s earlies hisory wih elecrificaion, as well as rom he recen growh o he elecom indusry and he emer-gen challenges o he digial divide.
Electrification in the United States
 Electricity is no longer a luxury. It is a definite necessity. It lights our homes, our places o work and our streets. It turns the wheels o most o our transportation and our  actories. In our homes it serves not only or light, but it can become the willing servant o the amily in countless ways. It can relieve the drudgery o the housewie and lif the  great burden off the shoulders o the hardworking armer. 󲀔 President Franklin D. Roosevelt, September 21, 1932
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I is hard o imagine lie in he Unied Saes wihou elecriciy. I is so ingrained in our everyday lives ha i is easy o orge ha i was no always available o all Americans. Bu universal access o elecriciy acually ook hal a cenury o maerialize.In he 1880s many small-scale elecric companies began o emerge as hey saw an opporuniy o offer a saer alernaive o gas lighing.
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 Iniially ocused on providing sreelighs and commercial illuminaion, hese companies expanded heir service o include indusrial cusomers in he 1890s and evenually added residenial cusomers afer he urn o he cenury.
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 Bu he ransiion o residenial cusomers was slow and inequiable, especially or low-income and rural Americans.Residenial elecriciy service was limied o he wealhy a firs, as privaely owned uili-ies could make more o a profi off o cusomers who could afford o purchase elecric appliances ha boosed a household’s elecriciy use.
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 Uiliies evenually began o offer service o mos urban residens, no jus he wealhy. Bu rural households were lierally lef in he dark because uiliies were no economically moivaed o provide elecriciy service o houses ha were ar away rom heir cenral power saions.
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 Disribuion lines  were expensive and a paricularly unatracive invesmen since many uiliies hough armers would no be able o afford elecric service.
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3 Center for American Progress | Distributed Generation and Its Potential Impact on Universal Access to Electricity
By 1932 more han 80 percen o urban households had access o elecriciy, while jus 11 percen o arms were hooked up o he grid.
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 Recognizing he need o provide elec-riciy o rural areas o he counry, Presiden Franklin Roosevel issued Execuive Order 7037 on May 11, 1935, and hen signed he Rural Elecrificaion Ac ino law in 1936.
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 Tese acions esablished he Rural Elecrificaion Adminisraion, which provided low-ineres loans and assisance o rural elecriciy cooperaive uiliies o help finance he consrucion o disribuion aciliies󲀔and in laer years generaion aciliies󲀔ha  would provide elecriciy o arms. Te governmen also creaed he ennessee Valley  Auhoriy and oher elecric-power providers o generae elecriciy ha would serve rural America.
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 Te governmen also auhorized and provided unding or he con-srucion o he Hoover Dam o elecriy he Souhwes.
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 Tis combined effor was suc-cessul: Rural access o elecriciy wen rom 11.6 percen in 1935 o nearly 50 percen in 1945.
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 By 1953 more han 90 percen o arms had he abiliy o connec o he grid.
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Every American now has access o affordable, reliable, and sae elecriciy. Tis is an impressive accomplishmen ha required governmen acion o make i happen.
Universal electricity access
Universal access o elecriciy arose ou o a policy commimen, no rom ree-marke  business pracices. Te ac is ha a ree marke dominaed by raional profi-maximiz-ing businesses would resul in some people no being served. Absen a policy direcive o provide universal service, profi-maximizing uiliies would only provide service o cusomers in cases where he revenue rom ha cusomer was greaer han he addi-ional cos o serving ha cusomer. In economic erms, he uiliy would serve o a poin where marginal revenue equaled marginal cos.Te problem is ha some cusomers may no be profiable o serve, as was he case in he early days o American elecrificaion. Cusomers in remoe areas, who require long copper wires in order o be reached, or low-income cusomers, who use very litle elec-riciy󲀔no having air condiioning or a elevision can lead o very litle usage󲀔would  be paricularly suscepible o no geting high-qualiy, reliable, and affordable service.Te soluion is o have some amoun o cross-subsidizaion among cusomers; ha is, some cusomers may pay more or elecriciy han i coss o serve hem, while ohers may pay less. Tis is no necessarily economically efficien, bu he beneficial oucomes o universal access o elecriciy more han ouweigh he coss. Tis cross-subsidizaion is supplemened wih governmen spending hrough programs such as he Low-Income Home Energy Assisance Program, which helps vulnerable amilies pay heir energy bills.
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