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Twentieth-Century Business Archives

Puget Sound Power & Light Company - Lehman Brothers Collection

Puget Sound Power & Light Company

List of Deals

Puget Power's history began in 1885 when Sydney Z. Mitchell and F. H. Sparling opened an office in Seattle as northwest regional agents for the Edison Electric Light Company. The two launched a promotional campaign that would later become a model for developing electric services throughout the territory. The first step was to convince the city of Seattle of the advantages the new incandescent electric light bulb offered. By the end of October 1885, Mitchell and Sparling had organized the Seattle Electric Light Company. The following month, the Seattle City Council granted the company a twenty-five-year franchise. On March 22, 1886, Mitchell and Sparling gave a successful demonstration of electricity to Seattle citizens, and soon after Seattle Electric's initial system had grown to 250 lamps, the first central station system for incandescent electric lighting west of the Rocky Mountains. Over the next fifteen years, the company built steam-powered central station systems in Tacoma, Spokane, Portland, Bellingham, and many smaller towns in Washington, as well as Oregon, Idaho, and even British Columbia, Canada.

Meanwhile, other ambitious entrepreneurs founded other electric companies that would eventually become part of Puget Power. Charles H. Baker drew up plans to harness the power of the Snoqualmie River in the 1890s. Construction on the Snoqualmie Falls Plant, the first completely underground electric generating facility in the world, was begun and completed in 1898. Dr. E. C. Kilbourne also founded the Pacific Electric Light Company during the 1890s when he saw the advantages of serving lighting and streetcar power loads on combined systems. Many individual companies and systems, providing combinations of power, lighting, and streetcar loads, sprang up, including twelve in Seattle alone. Nearly all of them were wiped out in the financial panic of 1893.

Mitchell called upon Charles Augustus Stone and Edwin Sidney Webster, partners in a Boston-based operation that advised or operated troubled electric utilities or else financed, refinanced, and even acquired them. Stone and Webster realized that the utilities industry not only needed reorganization, but also strong local leadership. They approached Jacob Furth, who in 1900 became president of the newly formed Seattle Electric Company. The new enterprise not only consolidated all the surviving lighting, traction, and related subsidiary businesses in Seattle, but began to expand its interests throughout the Puget Sound region. In 1912 Seattle Electric incorporated as the Puget Sound Traction, Light & Power Company. The company would later drop the word "traction" from its name.

Eight more utility companies in the Puget Sound region were bought and integrated within the company between 1912 and 1920. The utility pursued an aggressive policy of acquiring utility companies in central and western Washington from 1920 to 1940, and ten more were added. During this formative period, Puget Power became a leader in the utilities industry. In 1913 near Lynden, for example, the company constructed what is believed to be the first power line in the United States built specifically to serve farm customers. In 1925 at Puyallup, it established the Farm Power Laboratory, a unique research center where labor-saving uses of electricity on the farm could be demonstrated and promoted. Another first for Puget Power came in 1926 when it installed a cross-Sound submarine cable from Richmond Beach, north of Seattle, to President's Point, south of Kingston on the Kitsap Peninsula. In 1928 the company began construction of the Rock Island Dam on the Columbia River.

Puget Power began to face a series of problems that challenged the very existence of the utility beginning in the 1930s. Company morale was low, due in part to salary cuts and layoffs. In 1930 state voters passed the District Power Bill, which allowed the formation of county Public Utility Districts (PUDs) to enter the electricity distribution business. Puget Power had fought hard against the bill, fearing that its passage would inhibit the company's financing of new construction projects. Other problems included the city of Seattle's default on payments of the streetcar revenue bonds it had issued to Puget Power to purchase the system and the Bremerton City Council's declaration of its intention to take over Puget Power's distribution system at the expiration of the current franchise in 1931. Puget Power's greatest challenge was disarming the growing public power movement, which sought to disenfranchise the utility. The utility countered in a public campaign that tried to show what it considered to be the unfairness of tax-subsidized government competition. Bremerton decided against a takeover of the Puget Power franchises in 1931. However, by 1936 thirteen counties had voted to form PUDs. With the company's service area and revenue base threatened, the utility found that financing new construction projects were extremely difficult. In November 1943 the Seattle City Council adopted a resolution to expand its power-generating capacity with the intention of taking over service to Puget Power's customers at the expiration of the company's fifty-year franchise in 1952.

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