Power Struggles

COMPETITION AND COMMON INTEREST

Following the establishment of REA in 1935, public utility companies began a long battle with their new competitors, the electrical cooperatives. These utility companies mounted an aggressive lobbying campaign in congress to strengthen support for their interests. They also competed directly with cooperatives for rural customers and charged them high rates for electricity.

Fortunately, Georgia Power and the state's electrical cooperatives forged a more productive relationship. Unlike many utility companies, Georgia Power sold electricity to cooperatives at wholesale prices. These low prices allowed EMCs to transmit affordable electricity to their customers. Despite this good working relationship, territory conflicts did arise. Early in 1936, REA director John Carmody accused Georgia Power of "skimming the cream" by building lines for wealthier rural customers and leaving the poorer, less profitable customers for Georgia cooperatives to serve. Disagreements such as these, often called "spite lines," were common between the two. Georgia Power and Tennessee Electric Power Company also made accusations against the Tennessee Valley Authority for building lines outside their established limits of service. Despite these skirmishes, Georgia Power vowed "where we ourselves can't build; we will help others to build." This promise expressed the company's acceptance that it did not have sufficient funds to meet the demand for electricity in rural areas by itself. It also reflected Georgia Power's realization that it could profit more from working with the cooperatives to provide electrical service to rural areas.