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Part IV: The Middle Years

In 1925, the backers of a major power plant expansion in Moorhead noted that the Minnesota city was "one of a comparatively few cities in the Northwest which owned and successfully operated its own water and electric light plant. We have watched town after town get into financial difficulties with its power plant and then connect up with a high line of one of the great power companies."

 

The 1920s were a bleak era for municipal electric power in the United States. In 1925, more than 560 utility companies in the United States were involved in consolidations. Most were small-town electric utilities absorbed by larger, city-based investor-owned utilities.
Old-fashioned phone

 

phoneThat did not mean that the citizens of Moorhead had to follow the trend. "The rise of these giant corporations is one of the outstanding features of the last 10 years," the backers of a power plant expansion admitted in 1925. But all of those towns tying into the high line were essentially giving up their independence, the water and light department backers pointed out. "When a city permits a public service corporation to monopolize the business of furnishing water, light, power and heat to its people," the backers noted, "it relieves itself from the responsibility of raising the money to provide these facilities for itself."

 

By 1925, Moorhead’s power plant was straining to keep up with the demand for electric power in Moorhead. Commissioners proposed adding a new 750-kilowatt turbine to replace equipment that had been installed before the turn of the century. The commissioners also urged the installation of two new 300-horsepower steam boilers.

 

City fathers placed a $135,000 bond issue on the ballot in May 1925 for the construction of the power plant expansion. Voters handily approved the proposal after backers pointed out that the municipal water and light department had accumulated a surplus of $290,000 during its 30 years of operation, most of which went right back into city budgets for construction of the city hall and the fire station.

 

Installation of new generating equipment in the power plant necessitated changes in the fuel mix for the boilers—from wood to coal.

 

Rex Lathrop, who started as a fireman in the power plant in 1941, recalled loading trucks with coal for the plant when he was still a boy. Frank Lathrop, his father, had won the contract to haul coal to the plant in 1928. Lathrop’s trucks transported coal from railroad yards in Fargo and Moorhead to the plant. Some of the coal was dumped into hoppers, and then Lathrop’s trucks backed underneath the hoppers to receive a load of coal.

 

Some of the coal had to be unloaded directly from boxcars. "We’d shovel that eastern coal right out of the boxcars into the trucks," Rex Lathrop said. "It was dirty and hard work. That’s where I got my round shoulders."

 

The city’s constantly growing need for electrical power accelerated even more in the late 1920s. In 1928, the city’s electric light plant generated 2,260,000 kilowatts, a nearly 13 percent increase over the previous year. With the installation of a 1,500-kilowatt steam turbine in 1929, generating  capacity allowed the electric light plant to produce just under 2.7 million kilowatts, an increase of about 18 percent from the year before.

 

waterbottleThe death of A.J. Warner in January 1929 meant that for the first time in 20 years, water and light commissioners were faced with the task of selecting a superintendent for the water and light department. In the spring of 1929, the commission announced its choice: Harold A. Warner, the son of Ambrose Warner. The younger Warner had begun working for his father when still a boy, and he was schooled in all facets of the utility’s operations; Harold’s brother, Herbert Warner, also worked for the water and light department.

 

The year 1929 was a seminal year for the electric utility industry in the United States. The collapse of Wall Street on October 29, 1929, signaled the beginning of the Great Depression.

 

The wisdom of expanding and upgrading the power plant back in 1925 was proved during the Great Depression when the water and light department was able to reduce its rates for customers hard hit by the unemployment and financial problems experienced by most privately-owned companies in the cities of Moorhead and Fargo.

 

In 1936, when the economy of the rest of the state was literally in shambles, the Moorhead Municipal Power plant earned nearly $50,000 in revenues over expenses; the city’s water department reported revenues of $15,834 before depreciation. As it had through the latter 1920s, electric power consumption continued to grow at a healthy rate during the Great Depression of the 1930s. Production of just under 4.6 million kilowatt-hours of electricity in 1936 was again up 18 percent over the previous year.

 

Business was so good, even in the depths of the Great Depression, that water and light commissioners passed on savings to Moorhead consumers. The commission had spent $150,000 during the year to install a new, 3,000-kilowatt steam turbine, but the production efficiencies realized allowed the department to institute an across-the-board rate cut.

 

fanOn January 1, 1937, residential rates dropped significantly. The old rates had been seven cents per kilowatt-hour for the first 35-kwh, five cents for the next 25-kwh and three cents for everything above 60-kwh. The new rates were 5.5 cents for the first 35-kwh, 4.5 cents for the next 25-kwh and two cents for anything in excess of the minimums.

 

The low rates encouraged customers to increase electric consumption. Harold Warner reported to the commission in the spring of 1937 that customers had added 53 new electric stoves to the system since the previous October.

 

The water and light department ended the difficult decade of the 1930s in fine shape. In 1940, the department reported that receipts had topped $400,000, and had generated 9.14 million kilowatt-hours, double the production of just four years before. Net revenue was just over $2,000, due in part to a $200,000 construction program during the year, which resulted in the addition of a 3,000-kilowatt steam turbine to the power plant and the erection of a one-million-gallon reserve water tank on the city’s east side.

 

In Europe and Asia, war clouds were already gathering in 1940. America’s involvement in World War II would bring immense new pressures to bear on the nation’s electric utility industry. For the Moorhead Water and Light Department, the war would reveal previously unsuspected problems of crisis proportions.

 

 

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