Soon the commercial companies started developing small hydroelectric power plants in the mountainous regions around metropolitan areas. It will be surprising to know that by the year 1920, around 40% of the U.S.’s electric power demands were met by hydroelectric power plants. The development of hydroelectric power plants was greatly enhanced and supported by creation of Federal Power Commission in the year 1920.
When larger hydroelectric power plants were developed, they were found to be more cost effective. The studies showed that hydroelectric power needed federal support to compete with the other types of power generating plants. By the year 1933 it was also realized that besides power generation, the hydroelectric power plants greatly help in controlling floods, navigating between cities, and irrigation.
With so many benefits of the hydroelectric power plants, the government created the Tennessee Valley Authority in the southeastern United States. The main aim of this agency was to develop large scale hydroelectric power plants. During the same period, in the year 1937, in the Pacific Northwest, the government created the Bonneville Power Administration, whose main focus was electrification of farms and small communities with public power.