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    Powering a City: How Energy and Big Dreams Transformed San Antonio
    Powering a City: How Energy and Big Dreams Transformed San Antonio
    Powering a City: How Energy and Big Dreams Transformed San Antonio
    Ebook374 pages5 hours

    Powering a City: How Energy and Big Dreams Transformed San Antonio

    By Catherine Nixon Cooke, Bill Greehey and Char Miller

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    About this ebook

    At the center of San Antonio’s growth from a small pioneering town to a major western metropolis sits CPS Energy, the largest municipally owned energy utility in the United States and an innovator in harnessing, conserving, and capitalizing on natural energy resources.

    The story of modern energy in San Antonio begins in 1860, when the San Antonio Gas Company started manufacturing gas for streetlights in a small plant on San Pedro Creek, using tree resin that arrived by oxcart. The company grew from a dark, dusty frontier town with more saloons than grocery stores to a bustling crossroads to the West and, ultimately, a twentieth-first-century American city. Innovative city leaders purchased the utility from a New York–based holding company in 1942, and CPS Energy as we know it today was born.

    In Powering the City, Catherine Nixon Cooke discusses the rise and fall of big holding companies, the impact of the Great Depression and World War II--when 25 percent of the company’s workforce enlisted in the armed forces--on the city’s energy supply, and the emergence of nuclear energy and a nationally acclaimed model for harnessing solar and wind energy.

    Known and relatively unknown events are recounted, including Samuel Insull’s move to Europe after his empire crashed in 1929; President Franklin Roosevelt’s Public Utility Holding Company Act of 1935, which made it possible for the city to purchase the San Antonio Public Service Company; the city's competition with the Guadalupe Blanco River Authority, whose champion was Congressman Lyndon Johnson, in which the city emerged victorious in a deal that today returns billions in financial benefit; legal wranglings such as one that led to the establishment of Valero Energy Corporation; and energy’s role in the Southwest Research Institute and the South Texas Medical Center, HemisFair 1968, Sea World, Fiesta Texas, and Morgan’s Wonderland.

    Images from CPS's archive of historic photographs, some dating as far back as the early 1900s; back issues of its in-house magazine; and the Institute of Texas Cultures provide rich material to illustrate the story.

    As CPS Energy celebrates seventy-five years of city ownership, the region's industrial, scientific, and technological innovation are due in part to the company’s extraordinary impact on San Antonio.
    LanguageEnglish
    PublisherMaverick Books
    Release dateNov 30, 2017
    ISBN9781595348449
    Powering a City: How Energy and Big Dreams Transformed San Antonio
    Author

    Catherine Nixon Cooke

    Catherine Nixon Cooke is the author of Tom Slick Mystery Hunter and a contributing author to They Lived to Tell the Tale: True Stories of Adventure from the Legendary Explorers Club. Cooke served as editor-in-chief of Coronet magazine for more than a decade. She lives with her husband in San Antonio, Texas, and on a farm in the nearby Hill Country.

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      Book preview

      Powering a City - Catherine Nixon Cooke

      PART 1

      The Deal of the Century

      San Antonio, 1942

      The front page of the October 24, 1942, edition of the San Antonio Light showed American marines wading to shore for an all-out battle for the Solomons, and two headlines were emblazoned across the top of the page. One announced that the United States and Britain had opened a battlefront in Egypt; the other reported that the San Antonio Public Service Company had been purchased by the City of San Antonio.

      Other news of World War II filled the page, describing two nights of bombing in Italy by Britain’s Royal Air Force and attacks on Nazi Germany’s field marshal Rommel By Sky, Sea, and Land. Not quite a year after the Japanese attack on Pearl Harbor, battles were raging in Europe, Africa, and the Pacific. The world watched with dread and wonder as planes and tanks and men went into combat, with newspapers and newsreels documenting the drama.

      Despite news of the war, other big news in San Antonio was the talk of the town that day. Mayor Charles Kennon Quin held a press conference on Saturday morning, in time to make the afternoon edition of the newspaper, announcing that the City had made a deal for providing power to San Antonio. Full details of the deal will be made public just as soon as we can possibly do so, the mayor said, indicating that it might result in some saving to San Antonio. This prediction would prove to be the understatement of the century.

      Mayor Charles Kennon Quin . . .

      Mayor Charles Kennon Quin worked with city leaders to purchase the San Antonio Public Service Company from American Light & Traction in 1942.

      Prior to the purchase, San Antonio received its gas, electric, and transportation service from San Antonio Public Service Company (SAPSCo), which also provided electric service to the rest of Bexar County and parts of nine neighboring counties, including the towns of Boerne, Hondo, and Floresville. There were three existing power plants: Station A, built in 1909 on Villita Street in downtown San Antonio; Station B, built in 1917 on Mission Road; and the Comal plant, built in 1926 just outside Landa Park in New Braunfels.

      For the past decade, construction in San Antonio had been booming. Military presence had increased at Fort Sam Houston Army Base, and Air Corps personnel training had intensified at Randolph and Kelly air fields in anticipation of World War II. San Antonio’s population had surpassed 250,000, and as the city grew SAPSCo began acquiring smaller electric generating companies, including the Travis plant, which served the St. Anthony Hotel, the world’s first hotel to have a central system for air-conditioning and heat.

      Three power plants provided . . .

      Three power plants provided energy to San Antonio in 1942. The newest was the Comal plant in New Braunfels, built in 1926.

      Not unexpectedly, with the growing demand for power, large national companies had acquired utility companies in many parts of the country. The United Light & Power Company had controlled SAPSCo since 1930, as well as companies operating in Michigan, Iowa, and several other states. This large holding company was owned by the New York–based American Light & Traction Company, part of the Wall Street banking house Emerson McMillin.

      In the late 1800s Emerson McMillin recognized that gas and electricity were the way of the future, and by 1900 he had focused the banking house that carried his name on mergers and acquisitions in that new realm of business, using a holding company he called American Light & Traction, where he served as chairman of the board. Within a year the company controlled over forty small local power suppliers that produced gas and electricity, along with streetcar properties, in various parts of the United States.

      McMillin’s rise to wealth and influence is one of the great American success stories. Born in 1844, he grew up in poverty in Ewington, Ohio, the youngest son of an iron furnace manager. At the age of twelve he became an apprentice in this rough and tumble industry alongside his father and five brothers. Strong and unafraid of hard physical work, he quickly mastered the mechanics of the blast furnace engines and the workings of a charcoal kiln. He did not go to school until he was fifteen, and two years later he joined his father and older brothers in the Union Army to fight in the Civil War. Known as the Fighting McMillins, two brothers were killed and the youngest McMillin was wounded five times. While his regiment was camped in the mountains of Virginia, McMillin became interested in geology and the natural sciences; his explorations and the knowledge he obtained there would eventually earn him recognition as one of the foremost authorities in the gas world and lead him to the highest financial circles on Wall Street.

      Banking house and holding . . .

      Banking house and holding company mogul Emerson McMillin got his start working in the Ohio iron foundries in the mid-1800s.

      After the war McMillin and a brother purchased and sold coal, comfortable back in the world of blast furnaces, saw mills, and similar industries. He drifted into the town of Ironton, Ohio, where a new gasworks was being built. Hired as a laborer by the superintendent, McMillin watched every phase of the construction and manufacturing process as he worked, and when the project was complete he was encouraged to stay. The superintendent told him that the gas industry was in an experimental stage, that it was a field filled with opportunities that might never come again, and McMillin heeded that prediction. By 1867 he was superintendent of the Ironton Gas Light Company, and he focused on learning everything about metallurgy and the generation of gas, installing a research lab at the plant.

      His in-depth knowledge catapulted him to the top of the new field, and in rapid succession over the next decade he became general manager of Lawrence Iron Works, vice president and general manager of the Crescent Iron Company, president of the Iron & Steel Company, and general manager of the New York & Ohio Steel Company, which operated rolling mills, blast furnaces, and coal and iron mines. By 1883 he had purchased several small coal gas plants in various locations and had completed a takeover of the Columbus Gas Works. In 1889 he combined four warring gas companies in St. Louis to form Laclede Gas Light Company, which eventually became the largest natural gas distribution utility in Missouri, operating today as Laclede Gas.

      McMillin’s offices . . .

      McMillin’s offices on Wall Street were described as the most luxuriant in the country in 1897.

      McMillin was also an agent for the London-based American Industrial Syndicate, Limited, along with New Yorker George Shepherd Page. Sir Julian Goldsmith, president of more than a hundred gas companies and one of the richest men in England, was a director of the organization, along with six other wealthy British capitalists. The syndicate was seeking investments in American gas properties; McMillin created a massive $13.5 million deal with the syndicate and Laclede Gas Light that earned him a doorplate on Wall Street bearing the name Emerson McMillin & Company, Bankers. The deals got even bigger and included the successful launch of the East River Gas Company of Long Island City, which supplied gas to New York City through a tunnel under the East River. An article written in 1897 by Lila Rose M’Cabe for the Ironton Register described the eleven-room banking house of Emerson McMillin as the most luxuriant in the country, with oak walls, polished wood floors, marble tile corridors, Turkish rugs—they replete the paraphernalia that goes to make up the business shrine of a modern millionaire. It was in these opulent offices that the City of San Antonio would negotiate, two decades after McMillin’s death, to create the best deal in its history.

      In 1935 Congress passed the Public Utility Holding Company Act to discourage control of the electric utility industry by a few large corporations. President Franklin Roosevelt pushed hard against public utilities following his election in 1932, and the legislation provided a way to take action against them. The law’s impact was not felt in San Antonio until 1941, when American Light & Traction was ordered to divest itself of SAPSCo and certain other South Texas holdings.

      Entrepreneurial business leaders in San Antonio saw an opportunity in the divesture and urged Mayor Quin and the city commissioners to negotiate the purchase of SAPSCo. Wilbur L. Matthews was the principal attorney for the utilities company and a senior partner at Brooks, Napier, Brown & Matthews, one of the city’s earliest law firms, first established as Ogden, Brooks & Napier in 1904. Matthews had begun representing SAPSCo in 1929 when senior partner Walter P. Napier became president of Alamo National Bank. In his 1983 book San Antonio Lawyer, Matthews recalls that many others recognized the divesture as a potential gold mine as well, including the Guadalupe-Blanco River Authority (GBRA), based in

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