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Southern California Edison – A Brief History
Southern California Edison – A Brief History
The origins of Southern California Edison (SCE) can be traced back to the earliest predecessor companies that provided the first electric service in Southern California. However, the earliest predecessor wasn’t a company at all at first – it was an event organized by Holt and Knupp in the town of Visalia in the San Joaquin valley. On July 4th, 1886, they erected an arc light downtown illuminated by a steam generator fueled by burning cordwood from the surrounding farmland. Two other direct ancestors began operations in 1886 as well – the Santa Barbara Electric Light Company and the Riverside Water Company. Soon thereafter, several other small companies began providing power from hydro power plants in the watersheds of the Sierras above Visalia, and the San Gabriel and San Bernardino Mountains East of Los Angeles in Azusa, San Antonio Canyon, and Mill Creek. After 1900, advances in generation and particularly in the transmission of electricity spurred mergers and acquisitions and the industry consolidated. In 1909, two of the largest companies, Westside Lighting and the Edison Company of Los Angeles, combined to create Southern California Edison. At the same time, a third large conglomerate - Henry Huntington’s Pacific Electric “Redcar” trolley system - was expanding and needed additional power sources. Because oil plants were expensive and local hydro resources were seasonal, the power would have to come from outside the Los Angeles basin.
Engineer John Eastwood had surveyed the San Joaquin River in the high Sierras and determined the feasibility of a system of dams and reservoirs to capture the enormous snow melt that could provide water year-round. Once stored, this water could be released at will to power turbines downstream. Pacific Electric accepted Eastwoods’ proposal and the “Big Creek” project was begun in 1910. The largest American hydroelectric plant ever created for public use entirely funded by private financing, the first power from Big Creek was delivered to Los Angeles in 1913. By 1917, the Big Creek system had been purchased by SCE and Huntington joined the company’s board of directors. Expansion of Big Creek continued until 1987, when the Eastwood Power Station began operating. The total output of Big Creek is approximately 1000 MW, earning the reputation of “The Hardest Working Water in the World.” By 1910, the City of Los Angeles was constructing an aqueduct to bring water from the Owens River on the Eastern side of the Sierras enabling the development of hydropower, and as a result in 1917 SCE sold the L.A. electrical distribution system to the City. Fortunately, significant growth was occurring across the entire region, enabling SCE to continue to prosper. During the Great Depression, SCE participated in the building of Hoover Dam in neighboring Nevada by building a 220-mile-long transmission line from Victorville to Boulder City. This line powered the construction and provided electricity to the town until the dam and powerhouse was up and running.
World War II
Electricity demand in Southern California increased 94% between 1939 and 1944, driven primarily by wartime industries. Douglas Aircraft, Northrup, Kaiser Steel, Alcoa, and Columbia Steel all sited plants in the area, as well as Firestone, Goodyear, and General Motors. The region also had military bases, ordnance works, and the huge Long Beach Naval Shipyards. SCE provided power for all of them. SCE cooperated with the government seizure of two of SCE’s Long Beach Steam Plant generators destined for use by the Soviet Union to power their war effort. In addition, five SCE engineers were assigned to help design electrical systems for the top-secret Manhattan Project. Nearly 900 SCE men and women served in the armed forces during the war years.
SCE gained more customers after the war than any other utility in the nation, as the state’s population grew by more than half between 1940 and 1950, from 6.9 million to 10.6 million, with most of the growth in the Southern California region.
The industrialization of the region had enormous financial benefits, but one down-side was that air quality suffered. Due to the unique geography and meteorology of the Los Angeles area, morning emissions from a variety of sources, including power plants, were trapped beneath warm air, creating ozone and other components of photochemical smog. SCE began research into smog abatement in the 1940’s, and the resulting pollution control program was the first in the nation by a utility. Led by California Institute of Technology researcher Aire Haagen-Smit, new power plant controls were developed and adopted throughout the industry.
On November 12, 1957, at 7:30 p.m., the lights in the town of Moorpark, California went out for twenty seconds, and when they came back on, SCE became the first utility in history to supply all the electrical needs of a town with nuclear power. The Santa Susanna Experimental Station was the first plant to produce commercial electricity from a civilian nuclear reactor. In 1960, SCE announced that it would develop a large commercial-scale nuclear plant: The San Onofre Nuclear Generating Station (SONGS). SCE broke ground on Unit 1 in 1963, and the plant went online in 1968. Eventually three units would be constructed which provided approximately a quarter of the power for the region. Unit 1 reached the end of its production run in 1994. In January, 2012, a radioactive steam leak in Unit 3 caused the shutdown of the entire plant, and after more than a year of analysis, the company decided to retire the entire facility.
In 1973, the energy crisis brought on by the quadrupling of oil prices overnight by the Organization of Arab Petroleum Exporting Countries (OPEC) shocked the nation into rethinking its energy use – and spurred the first load-management and conservation programs at SCE, such as solar-assisted water heaters and higher efficiency appliances. Energy conservation has continued to be a focus of the company.
By 1975, SCE had begun researching more environmentally-friendly ways of producing electricity. In 1976 the U.S. Energy Research and Development Administration selected SCE’s Coolwater plant in the Mojave Desert as the site for the nation’s first large-scale solar electric generation site. The plant created 10 MW of power by concentrating 1,800 computer-controlled mirrors that focused sunlight onto a massive 300-foot-tall “power tower” to heat fluids which drove a steam generator, and was the largest plant of its kind in the world.
SCE also took part in wind energy development. In 1978 SCE opened a wind energy research center near Palm Springs, California, and many manufacturers were invited to field-test early designs of wind-powered generators. Also in 1978, SCE partnered with Union Oil to build a 10 MW geothermal power plant near the Salton Sea, the first plant in the nation to produce electricity using the heat and steam from beneath the earth’s crust. In 1980 SCE announced it was making a commitment to satisfy one-third of its new generation requirements with alternative and renewable power – again the first major utility in the nation to do so. SCE has led the nation in the percentage of power it delivers to customers from renewable sources – currently over 20 percent.
In 1994 the California Public Utility Commission (CPUC) issued a report called the Blue Book, announcing its intention to investigate and potentially adopt full retail competition in California. The announcement sent a shock wave through the U.S. power industry as California would be the first state to attempt to dismantle major utility monopolies. Wall Street’s response was immediate and severe: the stock prices of California’s three investor-owned utilities plummeted overnight. Eventually an agreement was negotiated that highly incentivized SCE to sell off its gas-fired generating plants. Twelve were sold in 1998 totaling 8,062 MW.
California Energy Crisis
The generally-agreed-upon purpose of the restructuring of the electric industry in California was to lower prices for consumers. Unfortunately, the market designed by State regulators contained loop-holes for market manipulation by unregulated participants. This resulted in violent and frequent swings in the wholesale market during summer peak demand. Although SCE customers were largely insulated by a mandatory rate “freeze” during this period, the company was clearly exposed financially. In the summer of 2000, Governor Gray Davis called for a state investigation into “possible price manipulation in the wholesale electricity marketplace.” By September, the State’s report found that market manipulation had occurred, with hourly wholesale electricity prices up 37% in May and 182% in June. In effect, the company was forced to buy expensive power but then had to sell it cheaply. In a September news conference, Davis called the state’s electricity market “clearly broken.” That same month, the Wall Street Journal reported that rating agencies were concerned that SCE might become insolvent if quick action was not taken. By January, 2001, SCE was on the brink of bankruptcy, owing nearly $600 million to creditors it had borrowed to keep the lights on for customers. All three major rating agencies downgraded the company’s bond values to “junk” status. By April, PG&E in northern California had declared voluntary bankruptcy, but CEO and Chairman John Bryson held out persistently for a negotiated solution with the state. Bryson’s persistence paid off – a deal was struck in October enabling SCE to recover approximately $3.6 billion in uncollected wholesale power costs over time.
In 2004, two years after the California Legislature had passed a law requiring electricity retailers in the state to purchase at least 20 percent of their power from renewable sources by 2017, Governor Schwarzenegger announce the Million Solar Roofs Program, with a goal of installing 3,000 MW of rooftop solar photovoltaic panels statewide by 2016. SCE has consistently been one of the nation’s largest purchasers of solar power. In 2009, it procured more than 70 percent of the nation’s solar output.
Smart Grid Solutions
SCE’s Advanced Technology Labs test and develop crucial components of the next generation grid, including advanced battery systems. In September, 2014, the company turned on the largest lithium-ion battery storage system in the nation in Tehachapi, California. Batteries systems have the potential to store large amounts of energy from intermittent renewable sources like wind and solar, helping to maintain consistent voltage.