Charles Luce was used to sparring with politicians and negotiating with state regulators...
But nothing could prepare him for the wrath of his own shareholders.
Luce was the chairman of Consolidated Edison – one of the biggest energy utility companies in New York. In May 1974, he stood in front of a sea of investors at the Commodore Hotel in midtown Manhattan.
Many were retirees. Others were everyday New Yorkers who had come to rely on the blue-chip utility as a safe source of income.
And none of them were happy to hear what Luce had to say.
Luce told the packed room that Con Ed was cutting its dividend... something the company hadn't done since 1885. In the world of utilities, it was practically sacrilege.
The room erupted in jeers and cries of outrage. Investors called Luce and his lieutenants bad managers. They accused the team of letting Con Ed's financial foundation collapse under their watch.
But the truth was more complicated. Luce and Con Ed were struggling to survive a brand-new reality for energy.
The postwar years had been a golden age of electricity...
Con Ed and other utilities spent decades pushing the benefits of all-electric living. Folks were snapping up appliances like air conditioning, refrigerators, and microwaves for their homes.
By the early 1970s, U.S. households consumed nearly three times more electricity per capita than they had in 1950.
One in three homes had air conditioning... up from less than 1% just three decades earlier.
Con Ed's New York customer base exploded.
Its power supply did not.
Con Ed tried to build new capacity...
Its efforts included a massive pumped-hydro facility at Storm King Mountain. But it was thwarted by an emerging environmental movement that blocked the project in federal court.
At the same time, the 1973 oil embargo sent fuel prices surging. Inflation added pressure to labor and infrastructure budgets.
And customers, already angry about high rates, were behind on payments.
Con Ed was carrying hundreds of millions of dollars in unpaid bills by 1974. By the time that fateful investor meeting came around, it was forced to make a tough decision.
The truth is, that dividend cut was decades in the making. The U.S. was woefully unprepared for the surge in electricity demand that was coming. There was no fixing the problem overnight.
And that brings us to today...
The AI boom is putting immense strain on America's electrical grid once again. Utilities in major cities are rationing power. Some have stopped taking requests for additional data-center projects until 2030 and beyond.
Our energy supply – and, therefore, energy prices – have been fairly stable for decades. But that's changing fast.
We'll spend the next two days diving into just how dire America's energy shortage is. Be sure to check back.
For now, keep in mind – there's one key difference between the today's energy story and that of the 1970s...
These days, we know what comes next when demand surges and supply buckles.
We're building new capacity as fast as we can. And you can profit... if you know where to look.
Regards,
Joel Litman
March 23, 2026
