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 History of AEP: A Century of Firsts
American Electric Power celebrated its 100th anniversary during 2006, highlighting AEP’s long tradition of leadership in the electric utility industry.
On Dec. 20, 1906, a certificate of incorporation was filed in Albany, N.Y. for the American Gas and Electric Company. The company was formed from a utility holding company, Electric Company of America, which was organized in 1899. The company acquired its first utility properties Jan. 2, 1907. These properties provided electric service, gas, water, steam, transit, or ice service in communities in New Jersey, New York, Pennsylvania, West Virginia, Ohio, Indiana, and Illinois. The company became American Electric Power in 1958, and merged with Central and Southwest Corporation in 2000.
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In its earliest years, AEP – then known as American Gas and Electric Company (AG&E) - was an assortment of small, struggling utilities scattered across a number of states, stretching from the Atlantic Ocean to Illinois.
American Gas and Electric was incorporated in the state of New York on December 20, 1906, and acquired its first utility properties on January 2, 1907. These original properties provided electric service, gas, water, steam, transit, or even ice service in communities in New Jersey, New York, Pennsylvania, West Virginia, Ohio, Indiana, and Illinois. Over the years, many of these properties were sold. In fact, only five of the communities originally served by AG&E in 1907 – Marion and Muncie, Indiana; Canton and Bridgeport, Ohio; and Wheeling, West Virginia – are still part of the AEP System.
AEP’s interconnected power system got its start in 1911, when power plants in Marion and Muncie were connected by a 33,000 volt line across some 30 miles of Indiana farmland so they could support each other and improve reliability.
In 1917, AEP’s first “super” power plant began operation on the Ohio River at Wheeling. Called the Windsor Plant, it was the first major steam plant built at a considerable distance from its principal load center – Canton, the largest city that AG&E served in Ohio at the time, which desperately needed to power its steel mills in support of World War I. Power was delivered to Canton customers over the nation’s first long-distance 138,000-volt transmission line. Windsor Plant was also the first major plant built at the mouth of a coal mine, eliminating the need to haul coal over long distances.
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During
the years 1922-26, AG&E made a number
of major property acquisitions, making
this five-year span one of the greatest
expansion periods in its history. It
pushed into Michigan in 1922 with the
acquisition of Indiana and Michigan
Electric. In 1924, AG&E purchased
control of American Electric Power Company
– no relation to the present –
a Philadelphia holding company. In 1925,
AG&E bought Appalachian Power Company,
and, in 1926, merged this unit with
other Virginia and southern West Virginia
holdings into a new company, which it
called Appalachian Electric Power Company.
America was on the move in the 1920s,
and electricity was quickly becoming
the engine that powered the journey.
In 1923, AG&E embarked on the
simultaneous construction of three
very large generating stations –
the Twin Branch plant in northern
Indiana, the Philo Plant in southeastern
Ohio, and the Stanton plant in northeastern
Pennsylvania. Each new plant represented
a major advance in the art of power
generation. Philo, for example, was
the first plant in the world to reheat
steam to do double duty in the process
of generating electricity.
In 1928, the Federal Trade Commission
launched a comprehensive inquiry
into
the entire electric power industry,
culminating with the passage of
the
Public Utility Holding Company Act
(PUHCA) in 1935. Although PUHCA
caused
the breakup of other holding companies
– and several of AG&E’s
holdings were also divested –
AG&E’s so-called Central
System, stretching from Virginia
to
Michigan, was left intact. Indeed,
it was cited as a model of what
an
integrated system should be.
AG&E entered the Great Depression
in relatively good financial health.
Two weeks following the stock market
crash in 1929, AG&E President
George Tidd sent a letter of reassurance
to shareholders. The company persevered
and maintained its financial integrity
through the period.
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During
the period from 1941-61, after a hiatus
during World War II, the AG&E System
kept ahead of the increasing demand
for electric energy by building new
power plants, ever bigger and at lower
cost, and the new power lines to link
them and deliver their product. During
the period, AG&E installed
36 new generating units at 14 locations
in five states – with a generating
capacity totaling 6 million kilowatts.
In one year, AG&E plants occupied
the top five spots on the list of
America’s
most efficient generating stations.
At the same time, AG&E managed
to plan, engineer, design, and install
11 new generating units totaling over
2 million kilowatts and a 390-mile,
345,000-volt transmission system for
the Ohio Valley Electric Cooperative
(OVEC), which had been formed to supply
power to the federal government’s
uranium enrichment plant at Piketon,
Ohio. The units came on line in 1955
and 1956.
Much of the work during this era
was led by Philip Sporn, who joined
AG&E in 1920 and served as its
President from 1947 until 1961. An
industry leader with an international
reputation, Sporn was, in a sense,
the company’s chief planner,
designer, engineer, architect, financial
officer, public relations man, and
sales manager.
The company continued to expand,
acquiring Indiana Service Corporation
of Fort Wayne in 1948.
Finally, in 1958, American Gas and
Electric changed its name, becoming
the American Electric Power that is
known today.
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From
1961 until 1975, AEP was led by Donald
C. Cook, a Michigan native who had previously
been the chairman of the federal Securities
and Exchange Commission. AEP continued
to grow during this period, adding 21
new generating units to bring total
system generating capacity to 17.6 million
kilowatts. By 1975, annual revenues
had climbed to $1.6 billion.
In 1967, AEP announced that it would
build a nuclear generating station
on the shores of Lake Michigan. The
1,020,000-kw Unit 1 of the Donald
C. Cook Nuclear Plant went into commercial
operation in 1975, while the 1,090,000-kw
Unit 2 was completed in 1978.
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W.S.
“Pete” White served as chairman
from 1976 until 1991, and he presided
over the acquisition of Columbus and
Southern Ohio Electric Company on May
9, 1980. That same year, after calling
New York City its headquarters for nearly
three-quarters of a century, AEP began
moving its corporate offices to Columbus,
Ohio, completing the move in 1983 with
the completion of a new 31-story office
facility at 1 Riverside Plaza.
On January 1, 1991, Richard Disbrow
succeeded White as chief executive
officer of the company, and inherited
the chairman’s role when White
retired at the end of 1991.
E. Linn Draper, Jr. became president
of AEP in March, 1992, following 13
years with Gulf States Utilities Company
in Beaumont, Texas, where he served
as chairman, president, and chief
executive officer. When Disbrow retired
in April 1993, Draper assumed the
same roles at AEP.
During 1996, AEP’s sales of
electricity to retail customers topped
100 billion kilowatt hours for the
first time in the company’s
history.
On December 22, 1997, AEP
announced
a definitive merger with Central
and South West Corp. of Dallas,
Texas. The merger was completed on
June
15,
2000 and created a company with
(at that time) combined revenues
of $12.5
billion, electricity sales of 200
million megawatts hours, $35 billion
in assets, and nearly 9 million
customers across the globe.
Michael G. Morris became president and chief executive officer of AEP on January 1, 2004. He was elected chairman on February 24, 2004.
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