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A History and Future of Centralized Utilities in America

Updated: Apr 25

As homeowners, we often take for granted the modern conveniences of gas, water, sewage, and power at our fingertips. We don't really think about the utilities coming in and out of our house until something goes wrong. But when you think about the scale of planning and infrastructure needed to do something centrally like collect, treat, and distribute clean water to millions of homes across the country, it's a pretty incredible thing. There's a rich history of historic events, innovation, and policy that's led us to our current system of centralized utilities. It's one that has been incredibly beneficial to us, but is it the direction we will or should take in the future?

Pearl Street Station - the history of the US power grid

A Glimpse into the Past: The Era of Centralization


While the idea of plumbing actually dates back to around 2500BC in Ancient Egypt, we generally consider the age of modern plumbing to have started in 1829 when Boston's Tremont Hotel became the first of its kind to install 8 indoor water closets, followed 4 years later by the White House.

In the late 1800s, the development of municipal water systems revolutionized urban living. Major cities like Philadelphia and Boston pioneered the construction of water treatment plants and distribution networks, ensuring a steady supply of clean water to homes and businesses.

A population boom and cholera outbreak in 1849 resulting in the deaths of almost 3% of its citizens led to Chicago becoming the first major American city with a comprehensive sewer system. It wasn't until the mid 1930s that US lawmakers and medical professionals recognized the need for sanitary sewer systems and implemented guidelines and plumbing codes to create such systems (some of which are still enforced today, for better or worse).


Similar to plumbing, humans have known about electricity for millennia, but have only been able to harness it for the past 250 years. Benjamin Franklin's famous kite experiment in 1752 is generally considered the modern jumping off point, followed by British scientist Michael Faraday's 1831 discovery of the basic principles of electricity generation (the same basic principles we use today).

The power grid in America began with Thomas Edison founding what would become General Electric and installing the first central power plant in New York in 1882. Over the next half century, the industry grew to include many smaller power providers in a highly competitive market. When the Great Depression hit, most of those providers went out of business despite major growth in the power grid through FDR's New Deal. After the Depression, the remaining power companies were assigned specific zones, essentially creating legal monopolies monitored by the government.


Like the others, naturally occurring gas has been known about since ancient times, including the Chinese around 500 BC using crude bamboo pipelines to transport gas to boil sea water in order to create drinkable water. Around 1785, the British used natural gas to light its homes and streets and Baltimore became the first American city to do the same in 1816. It wasn't until Robert Bunsen's burner in 1885 that natural gas' use was expanded to heating and cooking. Today, the US has over 2 million miles of pipeline delivering gas to homes and businesses around the country.

Centralized Utilities: The Positives and Negatives

Power plant pollution

Centralization offered undeniable benefits. It promised reliability, efficiency, and affordability through economies of scale. By consolidating resources and infrastructure, cities could provide essential services to a growing population more cost-effectively. For the average homeowner, centralized utilities meant access to reliable services at affordable rates.

However, as communities grew increasingly dependent on centralized systems, cracks began to emerge. Aging infrastructure became a ticking time bomb, susceptible to breakdowns and outages. Natural disasters in history and even today expose the vulnerabilities of centralized utilities, leaving millions without power and clean water for days or weeks.

Centralized utilities often resulted in monopolistic control, with a handful of companies wielding disproportionate influence over pricing and policy. Consumers found themselves at the mercy of corporate interests, with little recourse for redress.

Legislation like The Public Utility Holding Company Act of 1935 aimed to curb the monopolistic practices of large utility conglomerates, promoting the creation of publicly regulated utility commissions to oversee pricing and service quality.

Embracing Change: The Shift Towards Decentralization

In recent years, technological advancements and changing attitudes have sparked a shift in home utilities. From rooftop solar panels to rainwater harvesting systems, homeowners are beginning to reclaim control over their energy and water sources.

A movement towards decentralization has started to occur and offers tangible benefits for the average homeowner. Reducing reliance on centralized grids is becoming a safeguard against outages and price hikes. It allows homeowners to embrace renewable energy and reduce their carbon footprint. Overall, it's an opportunity for homeowners to take back control of more of their home and the impact it has on our planet.

The Future of Solar Power

Navigating the Road Ahead: Opportunities and Challenges

The journey towards decentralization is obviously not without its obstacles. Major leaps in battery storage technology has helped decentralized power become a reality for many homeowners already, but not without significant upfront costs. Those costs, however, have come down in recent years. It now costs about the same to power your home via solar with battery backups as it does to install a whole home backup generator, which is standard practice in some areas.

Natural gas is becoming less and less common in new homes and major renovations as homeowners and builders are starting to recognize the significant negative impact it can have on the indoor air quality of a home.

Decentralized water and sewage is probably the most difficult challenge of the group . Rainwater collection is great for yard work or flushing toilets, but not for most other fresh water uses in our homes. A water well is not practical or possible for every home and a septic system can have its own challenges/costs, especially when compared with existing sewage systems.

These challenges may be opportunities for neighbors or small communities to solve together. One neighbor might have a great spot for solar panels while another has access to an underground well and sharing these resources solves problems for both homes. (I'll be honest, I've never built a well and have no idea how underground springs work, so this might be a terrible example, but you get the idea).


Overall, the idea behind decentralized utilities comes down to controlling your monthly bills, controlling the impact your home has on the environment, and becoming less reliant on others for your home to function properly. We've spent the past 150 years creating a centralized utility system that has benefited millions, but I'm excited to see the direction we go towards resource independence in the future.

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