Orange and Rockland Utilities, Inc.
List of Deals
In 1852 Orange and Rockland’s earliest predecessor company began providing gas to forty-one customers and three street lights in Nyack, New York. The company grew to include other subsidiary utility companies and to provide electrical power as well as gas. By 1974 Orange and Rockland had almost 184,000 electric customers and 80,000 gas customers. It serviced 1,350 square miles in Rockland, Orange, and Sullivan Counties in New York; Bergen, Passaic, and Sussex Counties in New Jersey; and Pike County, Pennsylvania.
The Nyack gasworks changed hands several times over the nineteenth century. The Hauptwait brothers—their full names are unknown—ran the company from its inception until a bankruptcy in 1872. A.M. Voorhis then bought and continued to operate the company. It was incorporated as Nyack Gas and Light Fuel Company in 1890. Rockland Light and Power, a rival gas company in the area, was founded in 1899; when S.R. Bradley purchased Nyack Gas in 1905, he merged it into Rockland Light and Power.
Roscoe W. Smith founded another nearby gas company in 1905, calling it the Orange Utilities Company. Orange Utilities was one of the longest-lived family-owned utilities in the Northeast. Smith remained a director of the company until 1950. Rockland Light and Power acquired Orange Utilities in 1924, creating the subsidiary Orange and Rockland Electric Company. Rockland Light and Power incorporated in 1926. The company pioneered delivery of natural gas in 1935.
In 1958 Rockland Light and Power received permission from the federal Public Service Commission to consolidate Orange and Rockland Electric Company. The fully merged company was dubbed Orange and Rockland Utilities, Inc. Its net income for 1958 was $2.37 million, up from $2.18 million in 1956. The company maintained an affiliation with the Rockland Electric Company and the Pike County Light and Power Company. By 1968 net income reached $7.7 million. Net income was $14.3 million in 1973.
The energy crisis in 1974 created shortages for Orange and Rockland. The Wall Street Journal described the company as “financially pinched” (Nov. 5, 1974, p. 6). Orange and Rockland needed financing for new projects, but faced a shortage of cash and a strike in the coal industry. As a result the company sold $30 million in thirty-year 9 1/8 percent bonds that year, taking a substantial interest risk to pay off short-term debts at worse rates. At the same time, Orange and Rockland sold nearly $3 million in transformers and coal reserves and cancelled orders for new equipment.
Orange and Rockland survived the pinch, though. The company was purchased by Consolidated Edison of New York City for $790 million in 1999. After the acquisition, analysts claimed this was a substantial (and possibly illegal) undervaluation of Orange and Rockland.
Note: The deal book contains maps of the area Orange and Rockland served. Several versions of the prospectus are included in the deal book, and they show an interesting evolution in the company’s response to the energy crisis and stagflation.