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Louisville Gas & Electric Company - Lehman Brothers Collection

Louisville Gas & Electric Company

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Louisville Gas and Electric Company traces its roots to the formation of the Louisville Gas and Water Company in 1838. The city of Louisville was in need of a solution to its growing crime problem and reasoned that city lighting would have a deterring effect on crime. Louisville became the fifth city in the United States to have gaslights in streets and homes. The new company sold gas manufactured from coal. In 1842 the company's name was changed to the Louisville Gas Company, and it revised its charter to repeal a provision calling for the company to establish a city waterworks.

The company boasted thirty-five miles of gas mains and 925 street lamps by 1859. After a competitor, Citizens Gas Light Company, built a gas plant in the city in 1871, a swarm of other competitors rushed into the gas business in Louisville. In 1881 electric lights were introduced to the city. Louisville Gas amended its charter in 1890 to allow the company to manufacture, distribute, and sell electricity and to buy stock in electric companies. The company quickly acquired a controlling interest in the Louisville Electric Light Company and began replacing gas street lamps with electric arc lights.

The Louisville Lighting Company was formed in 1903. The city's utilities operations were streamlined into a single company in 1913. This was the birth of Louisville Gas and Electric (LG&E), which consolidated the old Louisville Gas Company, the Louisville Lighting Company, and the Kentucky Heating Company. Three other companies were later added, and the new giant was soon serving 37,000 gas customers and 19,000 electric customers. The city used its stock in the Louisville Gas Company as leverage to require the company to construct a gas pipeline from West Virginia that would shore up the city's dwindling gas supply. The line was completed in 1914 and remained in service until 1962. The low cost of gas in the growing city brought steady increases in demand from 1914 to 1924, and LG&E expanded to meet the growing demand.

In late 1920 the company bought 51 percent of the stock in the Ivyton Oil & Gas Company, which had eighteen gas wells in Magoffin County, Kentucky. Three years later, the company began work on a new manufactured-gas plant that would provide a long-term solution to the gas shortage. The company also turned to hydroelectric power during that decade and received permission from the Federal Power Commission to build a generating station on the Ohio River as part of a power and navigational dam project on the river.

Louisville's swelling demand for gas was reined in sharply by the Depression. LG&E survived these difficult times, but President Roosevelt's New Deal legislation brought a host of new regulations designed to affect the way public utility companies did business. In 1939 the company made a key decision that would influence Louisville's emergence as a post-World War II industrial center. The company ordered two 25,000-kilowatt, steam-powered electrical-generating units just a few months before the government's growing mobilization for war halted utility-expansion projects. The new electrical capacity enabled the company to be a supplier of energy for government and defense needs. That brought new industry to Louisville during the war and attracted peacetime industries to the city even into the 1960s, including LG&E's biggest customer, General Electric's Appliance Park. The company also developed new underground natural gas storage facilities to meet the postwar boom in gas heating and cooking appliances, and the construction of interstate gas pipelines brought in new supplies of gas to fill those storage facilities.

A challenge to the company's future came in 1944 and 1945, when the city sought to acquire all of LG&E's physical properties. The company's employees fought the takeover attempt and worked to turn public opinion against it. The 1950s and 1960s saw the company's diversification into new opportunities. In 1952 the company was one of fifteen investor-owned utilities that formed the Ohio Valley Electric Corporation to meet most of the power requirements of an Atomic Energy Commission plant in Ohio. In 1967 LG&E became a charter member of the East Central Area Reliability Coordination group, a network of utilities whose interconnections have been used to supplement local power output during emergencies and peak demand periods.

A different company milestone came in 1957: the first general increase in electric rates in the company's history. In 1972 the company applied to the Public Service Commission of Kentucky for a second general rate increase. This year marked the beginning of a tough decade for utilities and energy providers nationwide. LG&E was forced in 1973 to seek a moratorium on new and additional gas loads by its customers.

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