Black Hills Power and Light, Decade of the 40's
Formation of an agreement providing for the sale of additional Series B three percent bonds in the amount of $1.5 million to the Equitable Life Assurance Society was approved. Proceeds were placed in the hands of the Mortgage Trustee and withdrawn by certification of additions to property or various stages of completion of the construction program. The agreement provided for the sale and delivery of the bonds on July 15, 1947.
During the fiscal year ended October 31, 1947, the Company experienced unprecedented growth. Compared to 1946, electric revenues increased 25 percent and kWh sales increased 26 percent. The number of customers served increased by 13 percent during that year and the number of rural customers increased from 541 to 668, a gain of 23 percent. The Company also contracted to furnish 1500 kW to the Central Electric and Gas Company at Hot Springs, South Dakota.
When the decision was made to build the large steam generating plant at 0 sage, a transmission grid system from the plant into the Black Hills became necessary. The decision was made to construct a line from Osage to the steam plant at Pluma, South Dakota, a second line from Osage to Pactola, South Dakota, and continuing on to Rapid City, South Dakota, and a third line from Osage to Newcastle, Wyoming, continuing to Custer, South Dakota. Some of these lines were contract built by M.J.T. and owned by Vein Mills and Cable Jones of Newcastle.
A large central switching station at Pactola was established with remote control to the Rapid City plant. Pactola was chosen as a good spot for the station as lines from north and south and east and west converged there.
In 1947 the Company adopted a range/water heater installation policy because of the need for heavier wiring in many homes so customers could use more electrical appliances. The Company would pay the customer $20.00 for new residence or remodeled residence providing it followed certain conditions: (1) service entrance not smaller than 1" conduit; (2) range panel be 60 amp similar to Square D #33582; and (3) approved range cable from service entrance to range receptacle. For existing homes the Company paid $35.00 to the customer if the specifications were met. Five dollars was paid if the customers put in a 30 amp switch for an electric water heater.
This unique program was very successful with home builders and owners. It was updated through the years to accommodate new appliances and was dropped when the state passed legislation requiring city wiring codes and inspections that duplicated the intent of the program. The benefits from the program were realized for years because it eliminated a number of the meters from inside the house and allowed them to be located on the outside to comply with the program. It did upgrade the wiring in homes where wiring was inadequate and unsafe. Many other utility companies requested information about the program and it is believed that Black Hills Power and Light Company was the originator of the program.
In 1948 Directors George Philip of Rapid City died, and William G. Rice resigned. As a result, Neil G. Simpson and C. G. Skartvedt were elected to the Board of Directors. H. R. McIntosh became Assistant Secretary the same year.
In 1948 the Company experienced substantial growth, the kilowatt-hour sales increased 29.2 percent, about three times the national average. Total revenues increased 27.3 percent and the total number of customers served increased 8.4 percent. The growth was well balanced between all classes of service. For the first time electric revenues exceeded two million dollars.
In June 1948 Volume I, No. 1 of the Lamplighter was published. The monthly Company magazine was published for and by the employees with Allan "Birdie" Arnold as Editor. "Birdie" had proposed the Company house organ to better acquaint the employees with each other and report the progress of a fast growing Company. Through the years, Birdie made a tremendous contribution to the Company and its employees with his writing skills and his determination "to tell it like it is". The initiation of the publication was another indication of a strong desire by management to be concerned about management, employees, and customers. The philosophy of the Company at that time was expressed in an editorial from one of the first editions of the Lamplighter:
To Mr. French:
As one of the many veterans returning to the Company after a period of absence, I can truthfully say that we were very pleasantly amazed to see the marvelous changes in our system. Everything consolidated under one head, a program of transmission, distribution and plant construction that surpassed even our wildest dreams, the most modern electrical equipment available, blanket coverage of communications, plenty of transportation and the chance to advance in any department. To add a personal angle, the many benefits, entertainment, vacations, sick leaves, Employee Savings & Welfare Program, hospital and life insurances, annuities, gift of stock, Christmas gifts, surprise bonuses and many more benefits that we have received all add up to the realization that we are working for and with a mighty good outfit.
We are sincerely grateful for all these advantages that you have offered to us and, at this time, the entire company joins me to wish you and Mrs. French the best of everything for the New Year and many more to come.
"Birdie"
The first unit of the Osage plant went on-line as scheduled in late 1948. When this unit was purchased, expectations were to install the second unit in 1951 or 1952. As time passed, the load continued to grow and it became apparent that the need would come earlier.
Engineers advised that the second unit should be installed as soon as possible, so the Board of Directors authorized the purchase of another 10,000 kW unit. The project meant the sale of additional securities to provide the necessary cash that would be needed. Plans were made to have the second unit ready to go on-line in December of 1949. All three 69 kV lines from Osage into the Black Hills also needed to be completed by 1949, so a real job lay ahead.
There was a considerable amount of oil and gas activity in the Mush Creek field located about twelve miles west of Newcastle and approximately twelve miles south of Osage. The production of both gas and oil showed an increase, and there was still a considerable amount of drilling being done. With this in mind, the Company gave consideration to moving some of the present gas burning equipment from the Rapid City and Pluma plants to Osage. A study indicated that while there was enough gas available, the life of the field was not yet well enough established to justify building the necessary gathering and transmission pipelines.
Since the electric load was growing so rapidly, it was doubtful whether the units at Rapid City and Pluma could be spared during the period required for moving them to Osage.
With the far flung system of plants and conductors, the Company had vital need for communications. It had become important to have a communication network available because of emergencies, accidents, general construction, maintenance and overall operations. In addition to the regular telephone system, a carrier current system was used between plants and headquarters. Carrier systems use the wires on the high voltage transmission to carry the voice signal. A short-wave radio system was installed in 1948 to give a blanket communications coverage. Immediately the radio proved itself in many ways. It saved extra trips, helped coordinate work, and became a valuable tool during emergencies. How did the Company ever operate before the radios were installed?
In 1948 Mr. French proposed to the REA groups that they finance the installation of a third 10,000 kW generating unit at Osage. The unit would be leased to and operated by the Company just as if the Company owned it. Such an arrangement would provide power for the REA groups at lower costs and would provide the system with additional generating capacity because all of the capacity would not be needed by the REA groups. The local REA groups negotiated with the Company in 1945 to tap the transmission system and buy their electrical energy from the Company until Bureau of Reclamation Dams on the Missouri River were completed. Then they would wheel the Bureau power over the Company's lines rather than duplicate lines with their own system.
The new Company office at 621 Sixth Street, Rapid City, was built in 1948 with load building in mind. One of the features was the high lighting levels throughout the building with the best in accent lighting where it was needed. Another unique feature of the building was the heat pump in the air conditioning system. No combustible fuel was used in the building; electricity was used entirely for heating and cooling. The heat pump was installed in the building to provide information and data to determine its feasibility as a load building appliance. The complete air conditioning system was very satisfactory. Operating costs compared favorably with other types of fuel and the installation created interest in heat pumps for residential use. The Company pioneered the installation of heat pumps above the Mason-Dixon line by installing resistant heaters that would operate under temperatures too low for the air-to-air heat pump to operate satisfactorily. Over the years, a heat pump has proven to be a successful load building device with a very good load factor.
The Sales Department also included a "Power Use" division that expanded the sales efforts not only to residential but to commercial and industrial customers as well. Commercial cooking equipment and technical assistance to the industrial customer was also important. If the Company could show the customers how to save on electrical use and make them satisfied customers they would have a strong tendency to go electric when they needed additional equipment.