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The Washington Water Power Company - Lehman Brothers Collection

The Washington Water Power Company

List of Deals

In 1885 George A. Fitch was the first person in Spokane Falls, Washington, to build an electric generator. A year later, Fitch was bought out by a group of local businessmen who, operating as the Spokane Falls Electric Light and Power Company, ordered a complete electrical lighting plant from Edison. To amass the capital necessary for the company's expansion plans, the owners began to seek out interested investors. The Edison Electric Light Company was willing to fund the plans in exchange for payment in both cash and stocks. Edison also received a 30 percent royalty from every company using his equipment. Thus, Spokane Falls Electric Light and Power Company was reorganized as Edison Electric Illuminating Company. The new plant was completed in 1888, but the need for electricity still far surpassed the capacity.

A group of local investors organized the Washington Water Power Company (WWP) in 1889 to develop the lower Spokane Falls. Within two years, WWP had built a dam and a power station at Monroe Street with more than twice the capacity being generated on the river at that time. In 1889 WWP had begun to purchase shares of the Edison Company, with which it operated closely, and by 1891 WWP had completely acquired its competitor.

WWP purchased shares in several streetcar companies through the 1890s in order to encourage residential expansion. The theory behind this strategy was that streetcars—themselves powered by electricity—would draw people into areas reached by the cars, thereby increasing demand. One of the companies in which WWP acquired a controlling interest was the Spokane Street Railway Company, which also owned Twickenham Park. To increase streetcar use, in 1895 Twickenham was incorporated as an amusement park that included a swimming pool, hence the name was changed to Natatorium Park. WWP owned and operated the park until 1929. The financial panic of 1893 stalled the company's growth and potential for profit, but it was rescued from bankruptcy by William A. White, a New York City financier. White was named to a committee that was charged with reorganizing the company's finances. Both the structural and financial reorganization proved to be successful.

By 1900 WWP was the premier owner and operator of streetcars in Spokane. In 1902, however, J. P. Graves formed the Spokane Traction Company and, although the electricity necessary to run the line would be purchased from WWP, he received permission from the city to develop a street railway to compete with the company. WWP's peak year for streetcar travel was 1910, with nearly twenty-five million passengers carried. Eventually the Spokane Traction Company was merged into WWP due to increasingly low passenger rates for both companies. In 1931 WWP began to successfully test buses run by electricity on city-maintained streets, as opposed to streetcars running on rails serviced by the company. The city's last streetcar ran in 1936, but WWP remained in the transportation business until 1945.

WWP expanded its electric service area outside of Spokane in 1901. That year, the company bought a tract of land in Post Falls, Idaho; WWP planned an ambitious 100-mile long, high-voltage transmission line to carry electric power to mines throughout northeastern Washington and northern Idaho. When it was completed in 1903, this power line was the longest high-voltage line in the world.

WWP completed a rapid expansion program during the next three decades. Added capacity enabled WWP to supply reliable and economical power to dozens of communities reached through transmission line extensions. It also spread the company's costs over a larger base, resulting in cost efficiencies and system diversity. In 1925 WWP acquired the Chelan Power Company from the Great Northern Railway Company. The following year, WWP began replacing its direct current (DC) in downtown Spokane with alternating current (AC)—although the company continued to use the DC system for its streetcar system. As the economical benefits of AC became apparent to customers, the demand for electricity grew, and the company began touting electrical appliances in addition to the stoves and water heaters already being sold. WWP's aggressive campaign allowed the company to set records in sales for some of these machines.

In 1928 WWP was acquired by American Power & Light Co. (AP&L), a utility holding subsidiary of Electric Bond and Share Company (EBASCO). With the passing of the Public Utility Holding Company Act in 1935, WWP was thrust into a period of legal battles for its control that lasted nearly two decades.

WWP received the first of its three Edison Awards in 1940. Other milestones around that time included recognition for having developed electric water heaters, increasing annual residential use of electricity to over twice the national average, and refinancing company debt. With the outbreak of World War II, WWP turned its attention from marketing to helping with war efforts. The company's sales force began to urge its customers to conserve energy and to repair, rather than replace, electrical appliances. WWP also aided the cause by selling war bonds, instituting scrap drives, and planning victory gardens, and it was a major supporter of the drive to build a bomber repair facility nearby. The end of World War II brought new surges in demand for electrical power, demand that WWP was not prepared to meet. WWP desperately needed to increase its level of generation. By the end of the 1940s, the company found itself engaged in not one, but two battles—the first to build new generating capacity, and the second to remain an investor-owned utility.

As the 1950s began, public utilities were gaining more ground, and WWP was beginning to suffer as a result. Therefore, AP&L decided that it wanted to cut its losses and divest itself of WWP, even if the company had to be sold to a public utility district (PUD). WWP's board disagreed with this decision, and even garnered the support of some Spokane businessmen who were then able to get a restraining order to temporarily prevent the sale. The case was tried in March 1951. The decision handed down made it clear that the sale of WWP could not be legal because the company had interests in several states, and PUDs were not able to own property in states other than the one in which they operated. In 1952 a new board of directors was formed consisting of members selected by both WWP and AP&L. Shares of WWP stock were distributed to AP&L stockholders, and for the first time since William A. White rescued the company from bankruptcy in 1895, WWP was on its own. During this time, the company was also aggressively moving to resolve the power supply problem. In November of 1950 the company filed with the FPC for a license to build the Cabinet Gorge Dam on the Clark Fork River in Idaho. When completed in 1953, the Cabinet Gorge Dam nearly doubled WWP's generating capacity.

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