Ohio Edison Company
List of Deals
Ohio Edison Company was incorporated in 1930 by the Commonwealth and Southern Corporation to consolidate five Ohio public utility companies. Those companies were Northern Ohio Power & Light Company of Akron, the Pennsylvania-Ohio Power & Light Company of Youngstown, the Ohio Edison Company of Springfield, The London (Ohio) Light & Power Company, and the Akron Steam Heating Company. The new Ohio Edison Company was a subsidiary of the Commonwealth & Southern Corporation, a holding company based in New York that bought all 600,000 shares of Ohio Edison's stock for $15 million in cash. Through consolidation, the parent company planned to improve the financial picture of the five companies by pooling resources. Upon incorporation of Ohio Edison, transportation assets belonging to the five former companies were transferred to three transportation companies, which for the first few years were operated under Ohio Edison's control before being spun off as separate entities.
Despite the Depression, Ohio Edison grew during its first full year of operation. In 1931 the company began construction of an East Akron power transmission line, which replaced power purchased from a Cleveland utility company. As a means of boosting electric sales, from its outset Ohio Edison promoted and marketed electric appliances, an aspect of operations that endured for over four decades. During the early 1930s division offices established small-appliance service departments and sales departments, which expanded their inventory as new products entered the marketplace.
After the United States entered the war in 1941, Ohio Edison and other utilities were placed under supervision of the War Production Board and were temporarily restricted from selling appliances and constructing new power lines. Industrial electricity sales skyrocketed with wartime production. In response to increased need for power generation during the war, Ohio Edison constructed the new R.E. Burger plant in Belmont County, Ohio. In 1944 the company acquired Pennsylvania Power Company (Penn Power) from Commonwealth & Southern. This acquisition gave the Ohio Edison system over 1,500 square miles of service area in western Pennsylvania.
Restrictions on utilities were lifted following the war. Postwar prosperity made it easier to obtain credit, and sales of new Ohio Edison appliances boomed. At the same time, industrial expansion gave rise to increased residential and nonresidential electric sales and left the company in need of increased power generation. In its first postwar acquisition, Ohio Edison purchased an electric distribution system serving McDonald, Ohio, in 1946. Ohio Edison became an independent company in 1949 after the Securities and Exchange Commission (SEC) forced Commonwealth & Southern to divest its interests in Ohio Edison. At the same time, Ohio Edison's competitor, Ohio Public Service Company (OPS), also became an independent company. In 1950 Ohio Edison acquired OPS. The OPS merger added the Ohio communities of Sandusky, Marion, Mansfield, Massillon, Lorain, and Warren to the Ohio Edison system, pushing the company's customer base to more than 500,000 and making Ohio Edison the tenth-largest electric utility in the United States in terms of operating revenues. To offset rising operating costs, in 1950 Ohio Edison initiated its first rate increase, which added about $0.22 a month to the average residential bill.