CPP History

       “Chief among the questions of prime concern to Cleveland are those relating to common municipal services that are distinguished as public utilities’…let us begin with an electric lighting plant of the most modern type, by which we can produce electricity cheaply for street lighting, and in addition can give to the people in their homes and places of business  the benefit of electric power at the minimum of cost…the same system can be extended  over the entire city,. . . ”

              Reformist Cleveland mayor Tom L. Johnson in his May 4, 1903 address to City Council, providing Cleveland Public Power with its symbolic beginning.

The early 20th Century marked a time of low public confidence in both elected and corporate officials, noted for systemic patronage as scientific and professional methods were introduced for the first time to modernize and reform politics, government administration, and business practices.  This historical context provides the backdrop to Mayor Johnson’s vision for the City of Cleveland, emphasizing municipal ownership of waterworks, parks, schools, and other public monopolies.   Johnson’s platform -- to serve the people and not special interests was simply stated “if you do not own them, they will in time own you.”  Johnson made the establishment of a public electric utility a top priority in his administration. 

In 1903, Johnson launched initiatives to turn municipal power into a reality by incorporating its respective bond issue with his Ohio gubernatorial bid.  Ultimately defeated at the polls, the failed bid to acquire voter support for the bond initiative didn’t detour Mayor Johnson’s vision to provide electric service to Cleveland.  Cleveland acquired its first municipal light plant, the Old South Brooklyn Facility, in 1906 when the Village of South Brooklyn was annexed.  A second generating plant was acquired in 1910 when the Village of  Collinwood was annexed. The system was not initially interconnected but  service was soon extended throughout the City.

 Its' immediate economic benefits were realized with lower rates resulting  from market competition.  The lower prices produced an increased  demand for services, and system upgrades were soon required.  Two used 500 kW units installed at the Water Department, Division Pumping Station were purchased and a 300 kW turbine-generator was added to the Collinwood facility in 1912. Cleveland now had a total generation capacity of 3250 kW available at the three plants that served approximately 5,000 customers.

The acquisition of these two small light plants, along with the ability to successfully and profitably operate them over a number of years, provided public confidence in the former mayor's vision.
A new advocate for public power emerged as initial cost benefits were successfully demonstrated. Mayor Newton D. Baker was instrumental in Cleveland’s first bold move towards building an entire municipal electric system. The Baker administration introduced a 2 million dollar bond initiative to provide necessary funds to move forward on a Central Generating Station. This initiative was subsequently approved in 1911. Completed in 1914, the 15,000 kW, East 53rd St. Central Generating Station was the largest municipal power plant in the United States, comprised of three turbines of 7,500 kW each, and another rated at 1,500 kW, achieving a total system generation capacity of 24,000 kW. The municipal electric system was a quarter of the size of its private sector rival, but provided significant economic impact by reducing cost from 0.08, to 0.03 cents, per kWH.

Three methods are used to establish electric service requirements for consumers at reasonable rates.  The first is by either negotiating a contract, or granting a franchise to a private utility.  A second method relies on the public utility commission to fix rates and service conditions for the states’ consumers.  Service, either in whole or in part, by means of a publicly owned electrical system is the third method.  Unique among its larger American counterparts, Cleveland used all three methods to influence its electric service rate structure.  Decreasing generation costs affected the consumer’s monthly electric bill, attracting new consumers and significantly increasing the Division of Light and Power customer base.  Electric service customers rose from 5,300 in January 1914 to 14,500 by September of the same year.  Alternately, by June of 1920, average private sector supplied electric rates fell from .075 cents per kWH to .05 cents, providing an estimated annual savings of $513,500.

 Despite decreasing electrical rates, the customer base of the municipal  electrical system continued climbing, listing 35,394 customers by 1923.   Plant improvements also continued with incremental system upgrades as  additional generators were purchased.  Capacity was increased to 25,000  kW in 1919, with subsequent upgrades to 35,000 kW in 1921, and 50,000  kW in 1925.  The E. 53rd St. Central Generating Station was operating with three 5,000 kW, two 10,000 kW, and one 15,000 kW turbine-generator(s) by 1926.  This phenomenal growth cycle continued throughout the decade, serving over 42,000 customers by 1927.  Nationally, Cleveland was recognized as having the lowest domestic light rates of any major U.S. city.  This distinction recognized rates of both private and public electric suppliers to the City, attributed directly to economic competition between the two service providers.

Success sometimes creates problems, and that began to occur within the municipal light system.  Cleveland’s rapidly expanding economic and industrial base revealed a system with limited growth potential.  Despite the increases in generation capacity over the years, the E.53rd St. plant was, by contemporary standards, becoming a small generating facility.  Although rated at 50,000 kW, the system actually operated at 42,250 kW.  There was little room left to grow, but even less existed as a reserve margin, should a system malfunction occur.  The existing load demands required nearly continuous operation of plant equipment for extended periods of time. 

The system was limited in its ability to obtain new business because it could not assure prospective customers there was ample emergency facilities for use in the event that one or more generators should break down.  This question of how the system would provide for reliability in the present, while preparing to meet the demands of the future were actively being debated in 1929, when the Wall St. Crash occurred.  In 1931, the United States had joined the rest of the world in the Great Economic Depression.  Cleveland, like every other major city in the United States, was profoundly affected by the severe economic conditions.  Despite the economy, the system continued to expand with a customer base numbering nearly 45,000.  

The Federal Power Commission performed a survey of 191 cities in 1935 and determined the electric rates for Cleveland were the lowest in the Country.  Economic hardship and the lack of significant plant upgrade for nearly a decade had little impact on growth of the system as it served nearly 51,000 customers, and supplied 17,224 street lights by mid-decade.  The next two years bought slow, but steady interest in upgrading the present municipal electrical system to allow for expansion and greater generation capacity.  An organization (the Cleveland Municipal Light Plant Association), akin to a populist movement formed in 1937 advocating expansion of the plant.  The Association created a campaign that was instrumental in City Council’s presentation of the issue as an agenda item that year. Councilman William C. Reed, another champion of municipal power, initiated a three million dollar bond initiative to be put before the voters.  The “Mortgage Bond Ordinance” passed by a 2.5 to 1 margin in the December 1938 special election, clearing the way for groundbreaking ceremonies on August 28th, 1939.  Construction was completed in the fall of 1941, consisting of three - 300,000 lbs. steam generators, one - 25,000 kW, and one - 12,500 kW turbine-generator.  The new facility was designated as the Lake Road Generating Plant and its 37,500 kW addition provided a combined generating capacity of 87,500 kW to the system. 

Once again, history was about to impact the municipal plant.  The attack on Pearl Harbor drew the United States fully into the World War II.  The City of Cleveland played a significant role in America’s war effort.   She was recognized as one of the industrial giants that formed the backbone of the “arsenal of democracy” and the additional generating capacity of the Lake Road Station was critically important.  The demands placed on capacity to meet war production quotas deemed essential to the nation’s war effort, required continuous plant operations.  Plant personnel demonstrated their dedication and commitment throughout the war by spending countless hours maintaining the system.  Many times sleeping on cots located throughout the plant for a few hours, workers would then go right back to work.  By 1945, the last year of the war, the customer base grew to 55,350. As the economy shifted from war production to consumer goods, demands on the municipal generating capacity also grew, demonstrating that the wars' end would provide no relief.  A public, stifled by years of economic constraint during the depression and control of resources because of the war, could finally buy the products they wanted and needed.  The American economy exploded through pent up consumer demand, creating the greatest period of industrial growth ever experienced. 

 Cleveland, as a major manufacturing center saw even greater  demands placed on its industrial capacity causing the system to  again, reach dangerous levels.  Peak electrical loads exceeded the  firm generation capacity designed to provide a safe and reliable  reserve margin.  Another bond was issued in August of 1948 for  seven million dollars, allowing for two more 300,000 lbs  steam- generators and two 25,000 kW turbine-generators. When completed in November of 1953, the system increased to 137,500 kW, providing a 57% improvement to generation capacity.  The Lake Road Plant once again became one of the largest municipal facilities in the United States.  By the mid 1950’s, the Division of Light and Power’s electrical system also included a line department, storeroom, transformer shop, and a pole yard located at the W.41st St. Service Center.  The meter department, responsible for the maintenance and installation of electric meters was located at St. Clair, and E.18th St.  The Line Department was recognized for its pioneering efforts in establishing a central dispatch in continuous radio contact with trouble crews.  This practice was noted for improving the quality of service to its customers and was soon emulated by other utilities.  Significantly, the system served 57,000 customers, as well as all the municipal divisions and street lighting.  As the system grew, Cleveland was still recognized for having some of the lowest electrical rates in the nation, especially as it pertained to residential customers. 

The decade drew to a close, and a new bond initiative for a million dollars was authorized in 1958, to install a new transformer at the Collinwood Substation, lighting for the Lakeland and Inner Belt Freeways, and to build a new substation on the west side.  The installation included four underground, 69 kV oil filled transmission cables.  Exiting from the plant, two ran to the W.41st St. Facility, while two similar cables ran to the Collinwood Substation.  The system expanded significantly in size over the years, achieving an invested value of fifty million dollars, accomplished without cost to the taxpayers.  In fact, it was sited for having saved Cleveland’s citizens millions of dollars, through lower electric rates achieved through competition.  The City was estimated to have saved $500,000 a year in street lighting alone.  By 1963, the Division of Light and Power recorded 59,664 customers and posted a net income of $1.4 million, achieving an organizational zenith.  

Dark clouds were gathering on the horizon again as the cost of generating electricity was increasing because of aging equipment.  In 1966, a study was commissioned to analyze options available to the city regarding the state of the municipal electric system.  A series of recommendations were evaluated ranging from an analysis of the retention or sale of the system, impacts of a rate increase, whether or not to expand facilities and finally, feasibility of an interconnection with its rival.  As a result, system upgrades were initiated to improve the Lake Road Plant generation capacity, by installing a massive boiler.  The 110 feet high boiler was housed in a five-story building when completed in 1967.  From the beginning, it proved to be a significant maintenance issue.  The boiler completely failed in 1969, becoming one of several incidents that created a cascading effect of financial troubles.  It marked the first time in the Division’s nearly seventy year history it posted a loss in revenues, but not the last.

Municipal electric systems' fortunes continued to decline over the next several years severely affecting the condition and reliability of equipment and material. Simultaneously, a period of fiscal crisis almost as significant as that experienced during the Great Depression was affecting every aspect of the nation’s economy. The situation was much different this time, because the municipal electric system was regarded by many as a fiscal drain on City resources.  Compounding these circumstances was a growing reputation for unreliability and prolonged outages, a catalyst for steady decline in the customer base.   Losses were recorded every year, decreasing from its peak of 59,000 in 1963, to 47,616 by 1974.   The addition of a 138 kV interconnection to its rival’s electrical system combined with mechanical issues led to the Lake Road Generating Plant retirement in 1977.  The combination of all these issues created a complex process of political and legal posturing that ensued from 1971 through 1979 relevant to the disposition of the City’s electrical system. A proposal to sell the municipal electric system to its long-time private sector rival had been all but decided when a new champion for the cause of municipal power emerged, Dennis J. Kucinich.  As the Municipal Court Clerk, Kucinich so passionately supported the issue that he built a mayoral campaign around the issue during his 1977 election bid.
  
Dennis Kucinich became Mayor of Cleveland; however the election didn’t end the issue of municipal ownership of the electric system.  The topic of what to do with the Muny Light was an emotionally charged issue.  Either end of the political spectrum defined “Muny Light” as either an enduring, or disparaging reference to the Division of Light and Power.  A referendum held in February of 1979, allowed Clevelanders to decide its fate.  Another populist effort was organized to save the system called the “Cleveland Can Win” campaign.   Logos appeared around the City bearing the caption “Power to the People,” symbolic of the desire to maintain “Muny Light” within the public domain.   National attention was drawn to the process when consumer advocate Ralph Nader joined this citizen’s campaign, providing a David and Goliath aspect to the fight.  The referendum resulted in a win for municipal public power by a 2-to-1 margin.

The political enthusiasm began to diminish while subsequent court rulings opened access to less expensive power available on the open market, improving the  financial picture for the municipal light system. In fact, numerous studies found that  despite the past decade of political and economic turmoil, the Divisions rates were  still lower than its competitor.  Within a year of the referendum, over a 1,000 new  customers were added back to its roll.  Voters wanted to retain “Muny Light” as  a viable enterprise, but the realities of its physical limitations still needed to be addressed.   A new administration once again brought about a degree of uncertainty to the future of “Muny Light". Much to the surprise of many, Mayor George Voinovich started investing in the system to upgrade reliability and performance. 

The rebuilding process was accomplished in a series of steps. A second 138 kV interconnection was installed in 1982, greatly improving system reliability.  New vehicles were added, employees were given pay increases to make their wage scale competitive to industry standards, and employee morale greatly improved.  By 1983, millions had been pumped back into the system.With this improved outlook, it seemed that the name “Muny Light” didn’t reflect its new image.  The name was officially changed to Cleveland Public Power (CPP) in 1983 to reflect its rebirth, once again making money and able to invest in itself.  In 1984, CPP received the Scattergood Award from the American Municipal Power Association for outstanding system operation and achievement.  System improvements in all categories ultimately resulted in a system efficiency rating of 99.952 by 1989.   In fact, this system was rated among the top five percent of municipal power systems throughout the United States in size, listing 51,895 customers by the end of the year.  The system had expanded by over twelve percent between 1982 and 1989.

 The call to grow even larger was being sounded again with a third 138 kV interconnection being installed in 1990 as a part of  a ninety million dollar expansion program targeting growth to the City’s  East Side.  Another significant improvement was the installation of a  System Control and Data Acquisition System (SCADA) to provide  telemetry and automation to the system, from the interconnections to  the substations.  All of the system improvements and upgrades provided Cleveland Public Power with state of the art technology.  When the  expansion of the City’s eastside neighborhoods was completed in 1995, the customer base had grown again to nearly 80,000.  New substations were added and most of the existing ones significantly upgraded. 

The beginning of this new millennium reflected significant forces of change swirling about, affecting not only Cleveland Public Power, but the electric utility industry as a whole.  Its old regional rival has been swallowed by a huge conglomerate and de-regulation may provide direction for the future.  As we draw to a close, this first decade of the 21st Century, finds the spirit behind the birth of this institution alive and well.  The municipal electric system still serves primarily residential and commercial customers, various city divisions, and street lighting.  Initiatives are underway designed to improve and grow the system through “Green Power” as well as other eco-friendly methods.  The goal is not only to provide service to our customers but to all residents of the City through competitive pricing and to serve as a “yardstick” by which local electric rates are measured.

 


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