In 1896 — 14 years after Thomas Edison launched the first electrical power plant in the U.S., Santa Clara’s Board of Town Trustees made a historic decision: they invested $7,000 in an electric generator. That 1896 project laid the groundwork for all of the city’s electric power policy that followed.
While that policy put control of Santa Clara’s energy future squarely in the municipality’s hands, low rates for residential customers were a by-product, not a purpose, of establishing the city’s electric company.
This series takes a look at different eras of Silicon Valley Power, starting with its 19th Century beginnings, post-war expansion, investment in power generation and growth in the 21st Century.
The story begins with a budget surplus following a city waterworks construction project driven by municipal needs. The Board of Town Trustees decided to use it to generate electricity for the city’s street lights, freeing Santa Clara from the need to purchase privately owned power.
Then, as now, there were nay-sayers predicting bankruptcy from this municipal profligacy.
Samuel Morrison, who later constructed and managed the town’s gas works, and “Captain” James Sennett, a former stevedore and local fruit grower, brought a lawsuit charging that the proposed electrical plant would exhaust the town’s general fund and create a debt in excess of revenues.
In an August 1896 hearing, a court found that the town had sufficient resources — in addition to the surplus from the water project — to build that power plant. The contracts were awarded the same day, and by December 1896, the city’s Electric Light Committee reported to the town board that “lights [are] running and seem to give satisfaction.”
Several years later, the generator was such a success that the Santa Clara Commercial League (forerunner of the Chamber of Commerce) was extolling the virtues of the city’s publicly run utility:
“…the [street] lamps cost … $4.60 per month for each arc lamp. The town formerly paid a private corporation for each … $9.65 per month. The commercial lighting is also controlled by the town and is a source of revenue, although the price is as low as any place in the State — that is, 10 cents per kilowatt hour.”
In 1903, the city upgraded its electrical system from direct current to alternating current and began purchasing its power from the Electric Company of San Jose (which eventually became part of PG&E), whose economies of scale allowed it to halve Santa Clara’s already low power rate. It would be another 80 years before Santa Clara again became a power producer.
But even while the city was buying its electricity, it retained control over its distribution network and, more importantly, ensured a foundation to build on and ultimately paved the way toward energy independence.
Three people in particular – George Sullivan, Sherman Jackson, and Donald Von Raesfeld – played central roles in Santa Clara’s power story during the post-WWII boom years, benefiting us today.
Mary Hanel, local historian and retired Santa Clara City librarian Mary Hanel contributed to this story. More details can be found in “A Short History of the City of Santa Clara Electric Department,” published in 1996 by the City of Santa Clara Electric Utility.
Next: Post-War Expansion
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