BATTLING THE UTILITIES
Consumers rarely received much attention in Albany unless blatantly scandalous business practices forced government to act. Privately owned utilities had long invited close scrutiny because the powerful monopolies often took a public-be-damned attitude in spite of the fact that most citizens depended on them for vital services. In New York the battle for reasonable utility rates dated from the Progressive Era when Governor Charles Evans Hughes won passage of a law creating a Public Service Commission (PSC) to regulate all utilities. 1 Although considered a model in 1907, the PSC showed signs of weakness by the 1930s. Under the impact of the Depression, New York strengthened the agency in an attempt to reduce rates which did not decline with other prices. But the widely heralded legislative victory proved in many ways a hollow one. As in the case of housing, government regulation of utilities was a cumbersome and inefficient process. This increased the demand for electricity produced by the government, but opponents prevented state development of New York's water power resources during this period.
Government regulation of private business requires at least three essentials to have any hope of success. In addition to adequate power, a watchdog public commission needs an able and conscientious staff and sufficient funds to make enforcement possible. 2 By 1930, New York's Public Service Commission lacked all three preconditions for effective regulation.
Since its creation in 1907, the PSC had stood still while the utility industry underwent radical changes. Most important, control over electric and gas production had passed into the hands of a few men who headed giant holding companies that had bought up local power plants. Groups of holding companies had also merged into larger combinations. In New York this process of pyramiding resulted in creation of the Niagara-Hudson Power