Electricity: The Arbitrage of Reach

Electricity was the arbitrage of reach: the same energy, delivered instantly, to wherever it was needed. In three decades it went from a novelty in lower Manhattan to the default in most American homes.

Key Milestones

• Pearl Street Station, 1882, under Edison. The first commercial power plant in the United States, delivering direct current electricity to paying customers in lower Manhattan.
• The alternating current system, 1880s to 1890s, under Tesla and Westinghouse. AC power could travel far greater distances than DC, finally decoupling where energy was generated from where it was used.
• Household electrification, 1900s to 1930s. Electricity moved from factories and streetlights into the home, changing daily domestic life about as thoroughly as any invention before it.

The Energy, Social, and Economic Impact of Electricity

In 1910, only about 10% of American homes had electricity. By 1920, that number had climbed to roughly 35%. By 1930, it had reached about 67%. Generation itself grew even faster: total U.S. electricity output rose more than twentyfold between 1902 and 1930.

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Electricity's real arbitrage was reach. Steam and coal had already unlocked enormous energy density; electricity simply let that energy travel, silently and instantly, to wherever it was needed, with no train tracks required.