Decade of the 50's
In 1956 Kermit Fenner, Assistant Secretary-Treasurer, died. He was a very popular man and gave many years of dedicated service. L. Duane Walrafen was elected Secretary of the Company.
The 1956 execution of an option with Homestake Mining Company to acquire the coal mine which supplies fuel for the Company's generating plants was a historic event for the Company. Wyodak Resources Development Corp. was the beginning of a large and important diversification program within the company.
Wyodak was established as a wholly-owned subsidiary of the Company. It was incorporated under the laws of Delaware, and given authority to exercise the Company's option to purchase the mining equipment and lease the coal lands of Wyodak Coal Company. The Company purchased shares of the common stock of the subsidiary in the amount of $50,000 using stockholder dividend money, or retained earnings. It also loaned the subsidiary $208,000 and guaranteed the purchase money notes of the subsidiary in an amount not to exceed $380,700. Wyodak then began operation of the coal mine.
Wyodak Resources Development Corp. planned to experiment immediately with a drying process. If feasible, the quality of the coal would be improved and a considerable reduction in freight costs could be realized.
The coal mine was originally opened as a "wagon" mine in 1921. Located six miles east of Gillette, Wyoming, in Donkey Creek Valley, the property is adjacent to the main line of the CB&Q railroad and just a few hundred yards from U.S. Highway 14-16. Since 1925 the mine has furnished coal for the Kirk plant at Lead, and since 1948 the Company has been using Wyodak coal at its Osage plant.
Estimates by geologists indicate that there are approximately 21 million tons of coal on land under lease and another 50 million tons on adjacent land. The approximately 8,000 BTU per pound coal lies in a practically continuous vein averaging 70 feet in thickness. An overburden of loam, clay, and sand varying from 15 to 40 feet covers the coal.
The new 69 kV switching station was constructed in 1956 at Rapid City to serve as a transmission and distribution nucleus. A 69 kV loop around the city was constructed and three substations were added. Greater efficiency, better service, and increased capacity will result from the construction. The new 16,500 kW unit at Kirk also went into operation in 1956.
For the second time in two years, an election was held in 1956 to determine whether or not the International Brotherhood of Electrical Workers Union should act as bargaining agent for 179 employees. In this second election 62 percent of the employees voted against unionization as compared to 55 percent voting no the year before.
The Economic Scholarship Fund, Inc., was organized in December of 1956 at Rapid City High School for economics classes. The corporation was organized by instructor Lloyd Kaufman. It had two purposes, first to give students knowledge of the American business system by studying and actually purchasing shares of stock and second, to make money from the venture so economics classes could offer a scholarship to a Rapid City High School student. The four economics classes contributed $1 per student for a total of $82. After a thorough study they decided to buy four shares of Black Hills Power and Light Company stock with their money. Representatives of this group have attended many of the annual stockholders meetings of the Company through the years, and the value of their portfolio has shown tremendous gain.
Work began in early May of 1956 on construction of a 69 kV line from Hot Springs to Edgemont and from Kirk to Spearfish, then to Belle Fourche.
A new Company policy in regard to coffee breaks was established on October 26,1956. The policy was adopted to provide equal coffee privileges for employees in all offices, plants, and warehouses of the Company. Coffee and the facilities to make and dispense it will be provided in each location, a coffee break will be authorized in the morning and afternoon of each working day. Because of the large number of employees in Rapid City, a coffee room was maintained. Coffee and tea were available without charge. Other items available at a charge to cover the cost were milk, soft drinks, cookies, and rolls. Coffee for line crews was supplied on the job in thermos containers.
Harry Petersen was promoted to Director of Personnel and Public Relations on November 1, 1956. He started the development of a personnel section to administer personnel problems and keep personnel records. He continued to be in charge of the Company's public relations, advertising, and editing of the Lamplighter.
The importance of an active sales promotion program was felt to be essential to the continued success of the Company. The competent staff of home service counselors and engineers provided free advisory services to the customers on the use of appliances and equipment, adequate wiring, and proper lighting. The load building program was supported by dealer relations programs, and the Company's merchandise operation and public relations programs helped to strengthen the Company's position in the service area. The overall load building program was at least partly responsible for the 300 percent increase in kWh sales since 1947. Air conditioning which was responsible for much of the load growth in some areas of the country, was not widely used by the Company's customers because of the temperate summer climate in the area.
Effective November 1, 1956, all employees, with the exception of generating plant personnel, were reduced to a 40-hour work week while their take home pay remained approximately the same. Employees had worked five eight-hour days and four hours on Saturday mornings. Saturday work was eliminated. The estimated increase in payroll costs resulting from this change was five per cent. After a year of operation under the new policy it was determined that customer service was not impaired, the number of employees did not have to be increased, and payroll expenses remained constant. Employees were credited with an outstanding effort for their constant attempts to hold down expenses. The following year the work week for generating plant employees was reduced from 48 to 40 hours with no loss in take home pay.
Due to the 40-hour work week, a decision was made to install telephone answering equipment in all offices except at Rapid City. The equipment operated during the hours each office was closed. When the office telephone number was called, the call was answered by the unit which played back a recorded message. The message gave an emergency number to be called and explained that a brief message could be left so that the person calling could be contacted later. After-hour deposit boxes were installed at each of the offices to allow bill payment even when the offices were closed. The answering devices were later abandoned because some of the public began leaving inappropriate information and messages, all in the spirit of a joke.
The new generating unit at Kirk went into operation in late fall and the Company began supplying, on an exchange basis, approximately 23 million kWh per month to the Bureau of Reclamation. The power was returned during the next routine generating plant overhaul period.
A common stock offering of 11,700 shares was offered in 1956. A total of 10,293 shares (88 percent) were subscribed for under preemptive rights and 8,557 shares were subscribed for under additional rights, making a total subscription of 18,850 shares equal to 161 percent of offering. The employees of the Company subscribed for a substantial number of shares.
The wholly-owned subsidiary, Wyodak Resources Development Corp., completed its first full year of operation October 31, 1957. Net income for the year was $42,507. During the year, Wyodak mined 377,684 tons of coal. Company power plants used approximately 88 percent of the coal mined.
Effective November 1, 1957, Wyodak converted from a 48-hour to a 40-hour work week. Wage rates were adjusted upward to provide employees with approximately the same take-home pay.
The board of directors for Wyodak Resources Development Corp. included:
H. Z. Babbitt J. B. French
J. D. Davenport Paul R. Quamberg
Harry Edwards Neil G. Simpson
C. G. Skartvedt
Officers for Wyodak were:
J. B. French President
Neil G. Simpson Vice President
Harold E. Ross Vice Pres. or General Manager
H. R. McIntosh SecretaryTreasurer
L. Duane Walrafin Assistant Secretary
Harold E. Norman Assistant Treasurer
Black Hills Power and Light Company had grown substantially and had reached a point where it was too large to be a "little" company and too small to be a "big" one. This brought about a number of management problems, complicated by the loss of such stalwarts as B. B. Neel and Robert Protheroe. In 1957 the Board of Directors named J. B. French, Chairman of the Board for the Company; Neil G. Simpson, President and General Manager; Robert Asheim, Vice President-Operations; Harold Norman, Vice President and Treasurer; L. Duane Walrafin, Vice President and Secretary; and H. R. McIntosh, Assistant Secretary and Treasurer.
Neil Simpson, since the formation of Black Hills Power and Light Company, had been a vice president and was recognized as Mr. French's right hand man. Mr. Simpson was born and raised in Chadron, Nebraska. He received a General Engineering degree from South Dakota School of Mines and Technology in 1939. In college he was All-South Dakota Intercollegiate Conference in football and still managed to work for Dakota Power Company while going to school. He worked as store clerk, groundman on the line crew, serviceman, sales engineer, local manager, and office clerk. He was elected Vice President in 1941 and became General Manager for the Company in 1950. Because Mr. French had to spend a large portion of his time in Washington and New York on financing the tremendous growth and the contractual arrangements with the Bureau of Reclamation, Neil Simpson had the awesome task of managing the day-to-day activities of the Company.
Neil Simpson became President at age 45 and was already a 21 year veteran with the Company. His entire career was spent in Rapid City except from 1943 to 1946 when he moved to Deadwood as local manager for the Lead and Deadwood offices. Betty Lane, mother of Director Thomas Lane, was manager of the Sturgis office during the middle 1940's.
Through the 1950's the Company actively participated in research and development as an aid in strengthening the Company. Where fuel transportation costs are high it is advantageous to build generating plants at or near coal mines, called "mine mouth" plants. Power is then carried over transmission lines to load centers. Because of the limited water supply at Wyodak a special approach was necessary. Large generating plants could not be located there unless some new technology was developed. One possibility could be the installation of conventional steam turbines combined with air-cooled condensers. A second. method could be the installation of a so-called "coal burning gas turbine". General Electric Company and the Company initiated a research program using the coal burning gas turbine unit, but results did not prove very encouraging. A third method could be the installation of a plant to produce gas from coal, which in turn could be used in a gas-burning gas turbine. Samples of Wyodak coal were sent to Germany where projects of this nature were operating. Tests showed that the coal was suitable so study was continued. A sufficient quantity of water for cooling was available at the mine for operation of any of the three methods.
The electric industry at that time was giving a lot of attention to load building during "off peak" periods. One method was a "pump storage generating plant". During off peak periods water could be pumped to high elevations and then returned through water-wheel driven generators during peak periods. Several locations in the Company area seemed suitable for this type of installation so research continued.
Another successful industry program was the combining of facilities of several companies into one or more power pools. The advantage of a power pool was the reduction in investment and the lowering of production costs. The Company participated in efforts to establish two such pools.
Knowing that the goodwill of the customer and the public was necessary, the Company maintained a continuous program of public relations. It was designed to gain and hold the confidence and goodwill of those the Company served. An effort was made to keep the public fully informed regarding the operations, aims, and policies. Efforts were furthered through newspaper, radio and television advertising, and talks concerning the operations for various organizations. News stories and other printed materials were utilized, and plant tours were conducted for children and adults. The Company also sponsored summer youth programs.
The Home Service Department conducted cooking classes for more than 600 youngsters, including nearly 80 boys. With 289 classes spread over the summer months, each student received approximatelyeight hours of instruction and actual electric cooking experience.