“The only thing new in the world is the history you don't know.” -- Harry Truman

Wednesday, October 26, 2011

Burlington: The Public Power Story

James Burke, Burlington’s Democratic mayor for seven terms between 1903 and 1935, is commonly hailed as “father” of the Burlington Electric Department. Though his political rivals at the time often reminded the public that the idea hadn’t actually originated with him, Burke was indisputably the engine that pulled the new department along during its early years.

Municipal power had enormous appeal in the early 20th century. In Vermont, the legislature authorized Burlington to furnish electric power to local residents on December 9, 1902. This meant that the city could purchase needed land – by eminent domain when necessary – and issue bonds for the work.

Three weeks earlier, however, the lawmakers had also approved the incorporation of a privately-owned light and power company. Burlington Light and Power would subsequently compete with – and more than once sue – the city over the management of energy distribution.

The Moran Plant on Burlington's Waterfront once generated power,
but has been closed for the past 25 years. 

Public vs. Private Power

Burlington Light and Power was founded by men like B.B. Smalley and Urban Woodbury. Smalley was a wealthy Democrat who had run for governor in 1892. A corporation lawyer, banker and president of the Burlington Gas Light Company, he was also on the board of directors of the Consolidated Electric Company, which merged with his Gas Light Company in 1906.

Woodbury was one of Smalley’s closest business associates. President of Consolidated Electric and founding board member of the Gas Light Company, he was a war hero, a former mayor and lieutenant governor, and had diverse business interests. Two years after Smalley ran for governor as a Democrat and lost Woodbury ran as a Republican and, predictably, won.

In short, Mayor Burke had some powerful opponents.

Just a week after he was declared the legal mayor by the State Supreme Court in 1903, he went to the City Council to win backing for light plant bonds. Two days later, on June 11, he staged a special citywide meeting to vote on the proposed $150,000 investment.

Woodbury was there to speak against the plan, along with Elias Lyman, owner of the area’s big coal company and the local mass transit monopoly, Burlington Traction Company. Both were hissed by the crowd as they talked.

The voters said yes to Burke’s proposal. Less than two years later his daughter, Loretta, pressed a button at the bandstand in City Hall park, energizing two circuits of street lights with power from the just-completed plant. Within ten years Burlington was generating over one million kilowatt hours with a turbine generator.

Despite widespread local support for public power, owners of the competing power company didn’t cave in. In fact, when the city was on the verge of expanding the department in 1910, Burlington Light and Power made a competing bid to supply energy for street lights, public buildings and parks. After it was turned down, the utility company filed an injunction to prevent the city from issuing new bonds.

Mayor James Burke
The lawsuit was dropped after two years, since it wasn’t possible to prove that commercial lighting supplied by the city was increasing the public debt. The company’s hope of challenging the city’s legal right to compete had been dashed. But Light and Power did eventually take the city to court and win. The Supreme Court decision came in 1918, while Mayor Burke was temporarily retired. 

The basis of the case was an agreement forged by Burke between the city and the private utility back in 1904. To avoid duplication as demand for electricity increased, Burlington had agreed to share utility pole space with Light and Power. Since the city used more of its poles, the city department was supposed to pay a 20 cent per year fee for each wire attached.

In 1909, Burlington stopped paying. One claim was that its charter established a right to use the top of all poles without charge. Light and Power cried foul.  A contract was a contract, after all, and the city was its chief competitor. The court agreed. No matter what the City Charter said, the department had to pay up.

That small defeat didn’t change the direction in which the city was moving, however. When Green Mountain Power offered $1 million to lease the department for 20 years the city wisely declined. During those 20 years public power brought Burlington more than $2 million in profit. In 1953, the department officially became a city monopoly when it purchased GMP’s franchise.

Modern Times

The 30-megawatt coal-fired Moran Generating Station, named for Mayor J.E. Moran, was completed in 1954. Since its closing decades ago, the city has pursued various plans to convert it for recreation or other community use. Its future, and that of the department itself, briefly became issues in the 2012 mayoral race when, at the start of a tough mayoral campaign, Republican candidate Kurt Wright proposed the sale of BED to reduce the city debt.

In 2005, BED received a National Star of Energy Efficiency award from the Alliance to Save Energy. A House resolution congratulating BED on this achievement noted that “despite the city’s significant commercial expansion over the last 15 years, in 2004, Burlington used less electricity than in 1989, a feat that was made possible through BED’s innovative leadership as a promoter of energy efficiency.” It also assisted in avoiding the release of over 43,000 tons of carbon dioxide annually.  

Today BED is the largest municipally-owned electric utility in Vermont. With more than 19,000 residential and commercial customers, it generates around $50 million in annual revenues, and provides power for the city and Burlington International Airport. Although exempt from local property taxes, the department pays around $1.5 million annually in contributions to the city, plus “indirect costs” that can reach $500,000. Mayor Burke’s vision of municipal energy production has gone farther than he could have imagined.

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