Public Service Company of New Hampshire
Waterwheels at numerous falls powering grist, lumber, and textile mills gave birth to New Hampshire industry. To serve the people of the larger towns which grew up around those mills, as well as the shipping center of Portsmouth, came gas lights and horse-drawn streetcars. Later, more efficient electric arc lights and trolley cars replaced them. To meet the growing power needs of the state more effectively, the Public Service Company of New Hampshire was formed in 1926 by the consolidation of five utilities: Keene Gas and Electric Company, Laconia Gas and Electric Company, Ashuelot Gas and Electric Company, Souhegan Valley Electric Company, and Manchester Traction, Light and Power Company.

The five companies were themselves combinations of 19 predecessor companies, not counting three street railway companies which, although owned by the Manchester company, continued to be operated as separate corporations. Thus, like the other operating companies of NU, PSNH had many ancestors.

Perhaps the earliest predecessor was the Nashua Gas Light Company, incorporated in 1850, which first delivered gas to its customers in 1853. It paid its men $1 for a 12-hour shift.

Nashua first underwent electrification - for streetlighting - in 1886. The established Nashua Gas Light Company was challenged by the new Nashua Electric Light Company, so much so that the gas company entered the market for electricity and in 1887 changed its name to Nashua Light, Heat, and Power Company. In 1889, it bought "all property, rights, and franchises" of its competitor for $100,000.

Horse car of a predecessor of PSNH

The Manchester Horse Railroad was chartered by the state Legislature in 1864, but was not formally organized until 1871. The first passengers were carried in 1877 in ten-foot-long cars seating 16. Lighting was by kerosene lamps; straw was spread on the floor in winter to keep passengers' feet from freezing. In 1895, the company replaced horses with electric cars. Prior to that, however, the Dover Horse Railway, which had started in 1882, converted to electric power in 1892, when it was acquired by the Dover Electric Company.
 

Manchester Electric Light Company
New Hampshire's first electric company was the Manchester Electric Light Company, incorporated in August 1881. In January of the following year, the company organized itself and arranged for a generating station on the property of Amoskeag Manufacturing Company, but efforts to sell stock to raise the $25,000 of needed capital were unsuccessful.

Meanwhile, the New England Weston Electric Light Company of Boston had made arrangements to build a generating station on the Amoskeag property. It completed installation of its own steam engine in February 1883. Prior to that, however, it used power from Amoskeag to turn its generator. Thus, on the evening of April 23, 1882, the first electric arc streetlights in Manchester were turned on - two weeks before the startup of Edison's Pearl Street Station in lower Manhattan. The generating equipment of the first Manchester station consisted of six ten-light Weston dynamos, with two more standing by for emergencies.

In 1885, the directors of the Manchester Electric Light Company purchased all the property of the New England Weston Electric Light Company in the city, and appointed a committee to look for a site for a new and larger generating station. The Brook Street Station resulted. In 1890, the company put into operation its first alternating-current generator, with a capacity of 600 sixteen-candlepower incandescent lamps. A year later, another machine was added which had a capacity of 2,000 lights.

Another innovation occurred in 1891 when the first electric motor for power purposes was installed to run the press of the SATURDAY TELEGRAM newspaper in Manchester. This industrial use of power was to expand greatly and by the beginning of World War II, half of PSNH's electric sales were to industrial customers. Even at the time of consolidation in 1926, the Manchester company was by far the largest of those joined in PSNH.

J. Brodie Smith

The pioneer Manchester Electric Light Company did not go long without competition in that city. In 1886, the Ben Franklin Electric Company was organized, launching the career of J. Brodie Smith, its manager, who was to be a dominant figure in the New Hampshire electrical industry until his death in 1947, 61 years later.

Smith was inventive and interested in electricity from his early years. He took out a number of patents on electrical devices. His home was rich in gadgets which he created in his elaborate home workshop.

The Franklin Company operated its plant, consisting of two 30-light Thompson-Houston 2,000-candlepower dynamos, at the works of the Manchester Gas Light Company. In 1892, Manchester Electric Light agreed to consolidate operations with Franklin, and Smith was appointed superintendent of the Brook Street Station, where the Franklin Company's dynamos were moved. When PSNH was organized, Smith became vice president and general manager. He held the position until 1940 and thereafter served as vice president until his retirement in 1946.

The Formation of PSNH
By the end of the nineteenth century, competing electric companies had been built up in many localities throughout New Hampshire - in Dover, Peterborough, and Durham, for example. Bits and pieces of an electric power industry were spread across the state. Some minor consolidations had taken place, but meaningful integration remained for the future.

Manchester Traction Light and Power Company car barn

In 1901, Manchester Electric Light merged into a new concern, the Manchester Traction, Light and Power Company. Manchester Traction was a consolidation of several small electric companies in the city and on the nearby Merrimack River. Its capitalization was $1,750,000 outstanding in bonds and $2,300,000 in par value $100 stock. "Traction" preceded "Light and Power" in the title because at the time - and for about the first quarter of this century - trolleys and interurban railways were the largest users of electric power. For Manchester Traction, the period was also marked by construction of transmission lines as the company reached outward from its urban hub into the countryside.

PSNH Office, Conway, New Hampshire, 1928

In 1925, Samuel Insull's Middle West Utilities, a Chicago holding company which also was an operating company, acquired Manchester Traction. The book value of the company was by then up to $18,841,734. The Insull interests, with extensive holdings in New England, organized them into the New England Public Service Company. NEPSCO's subsidiaries served 286 communities and wholesaled power for 80 others. It had 47 hydro and 9 steam stations.

PSNH was organized on August 16, 1926, to combine in one company the Insull holdings in New Hampshire, except for some bordering on neighboring states. The chairman of the Board of Directors was Martin J. Insull, brother of Samuel, representing Middle West Utilities. Walter S. Wyman was president. The organization laid the foundation for the present electrical industry of New Hampshire. The new company had sufficient properties in the southern and western parts of the state to form a framework for efficient service to the area. Through NEPSCO, it had contacts to the east and north which would lead to bringing those regions into a statewide system.

Keene to Dover transmission line, 1926

During its first full year of operation, PSNH acquired five electric utilities and continued to expand in the following years. It pushed the construction of transmission lines to tie its various parts together, sending, for example, a high-voltage line across the southern part of the state from Keene to Dover in 1926.

Vice president for Operations was Avery R. Schiller, a dominant figure in the company's management for decades. He became president in 1942 and served for 23 years until 1965, when he became chairman of the board. He held that post until his retirement in 1970.

Upon Schiller's elevation to chairman, the presidency was filled by William C. Tallman, who later succeeded Schiller in the chairman's position in 1980. The post of chairman was vacant through the decade of the 1970s.

Focus on Electricity and Expansion
In its early years, PSNH's business was not limited to electricity. It was also in the gas, electric railway, and steam businesses. At the end of 1926, there were almost one-third as many gas as electric meters - 11,008 compared with 36,831. The use of gas for house heating had been steadily increasing and was expected to add considerably to the net earnings of the gas department. But the use of electricity gained rapidly on gas, so that in December 1931 the number of gas meters had fallen to 10,960 while electric meters had increased to 51,270. The gas business revenues fell, and in 1945 the company's gas properties were sold.

PSNH's steam sales business, which had always been small, was divested in 1949. As for the railway (and, later, bus) businesses, increasing use of automobiles forced their eventual abandonment in 1954. Like any vigorous business, PSNH promoted the sale of its products. In 1929, a Home Service Department was established to help customers select and use gas and electric appliances.

Labor saving electricity brought the automated milking parlor to rural New England

These efforts proved effetive. In 1928, the average residential customer used 296 kWh annually; by 1931, this had gone up 45 percent to 429 kWh.

PSNH also emphasized rural electrification. Construction of rural lines increased steadily, from 23.3 miles in 1927 to 99.5 miles in 1931. That continued through the Great Depression and World War II. The quality of home comfort and efficiency on farms improved dramatically as labor-saving electricity came to the countryside. The milk pail and stool were replaced by machinery, removing the one-cow-at-a-time limit of hand milking. In 1934, Samuel Insull was tried on various charges and lost control of his $3 billion empire, Middle West Utilities. In the aftermath of the breakup, NEPSCO was severed from Middle West Utilities and Chairman Martin Insull was dropped from the board. Wyman continued as president, and in spite of the troubled times - it was the midst of the Depression - PSNH advanced for more than a decade with only minor setbacks.

The Great Hurricane of 1938 struck on September 21, causing universal outage for the company. Much service was restored within a day or two, but by October 1, service was still out to 10 percent of the customers. Even by October 9, a few scattered communities still did not have service restored. By 1945, the average residential usage was 1,012 kWh and annual total sales was 477,828,000 kWh - more than two and a half times of that of 1932. People were buying electric stoves, refrigerators, irons, water heaters, and other appliances. Most farms - about 83 percent - were electrified. The average kWh cost moved steadily downward between 1932 and 1945, from 7.48 cents to 4.45 cents.

Keene street scene after 1938 hurricane

Storms, depression, and war did not stop PSNH from acquiring other companies. The post-war period of economic growth was one in which PSNH played a role by attracting new industry to the state. Sale of industrial power in 1966 was three and one-third times what it had been in 1948. But domestic use of electricity surpassed even that, rising from 100,900,000 kWh to 676,100,000 kWh.

Merrimack Station

Such growth called for more generating capacity, so, in 1948, the company built the Schiller Plant, a 40,000-kW mercury binary cycle facility, in Portsmouth. Construction of the 15,000-kW J. Brodie Smith hydroelectric plant on the Androscoggin River at Berlin was begun. In 1948, the company's 32 hydro plants, with a combined rated capacity of 77,500 kW, were matched by six fuel-burning plants with a capacity of 76,250 kW. New England was running out of undeveloped water, and the unreliability of riverflow made operation of hydro plants uneconomical.

By 1973, 41 hydro plants which at one time or another had been on the PSNH lines had been retired. In their stead came the large and efficient steam plants, such as the Merrimack Station's units at Bow.

Seabrook Station
In 1972, plans were announced for a two-unit 2,300-MW nuclear plant at Seabrook, New Hampshire, to be jointly owned by nine New England utilities, including CL&P, with the lead owner, PSNH, acting as managing agent. PSNH applied for a construction license from the Atomic Energy Commission in March 1973 and the license was granted by the reorganized Nuclear Regulatory Commission in July 1976.

However, a variety of factors converged to create financial difficulty for PSNH. The oil embargoes of the 1970s and the subsequent emphasis on energy conservation temporarily reduced electricity sales. In addition, regulatory design changes, several labor strikes, opposition, and litigation combined to lengthen Seabrook Station's construction schedule, adding to the plant's cost. And in 1979, the New Hampshire Legislature passed a law (the anti-Construction Work in Progress law, or anti-CWIP) which prohibited PSNH from charging its customers for the interest on the money the company was borrowing to finance its share of Seabrook Station's construction costs.

In April 1984, PSNH temporarily could not meet its monthly financial obligations to the Seabrook project, forcing a halt to construction for several months. As the fiscal impact deepened, PSNH and other of the joint owners formed an autonomous division within PSNH (New Hampshire Yankee or NHY) to manage the completion of construction and to operate the plant. NHY reported directly to an executive committee of the joint owners. In late 1984, the joint owners decided to concentrate their resources on the completion of the 1,150-MW Unit 1; Unit 2 was cancelled. PSNH sold some of its Seabrook shares, reducing its ownership to about 36 percent. When Seabrook 1 was finally completed in 1986, it cost $5.2 billion, far more than its original estimated price.

Although construction was done, receipt of an operating license from the NRC to permit the plant's operation was delayed primarily because of lack of cooperation from local and state government officials in the neighboring state of Massachusetts in developing federally required emergency response plans for Seabrook Station. Licensing, safety demonstrations, and startup operations would take another three years to complete. Fuel loading and testing for the plant were started in 1989 and, after extensive NRC hearings and a federally graded drill of Seabrook's emergency response plan, the NRC issued an operating license in March 1990. After several months of startup testing, Seabrook completed its testing programs and began regular full-power operation in August 1990.

However, the financial and political difficulties encountered along the way led PSNH to a liquidity crisis in 1984. Various restructuring remedies were tried, but they were insufficient to stop the negative cash flow. On January 28, 1988, PSNH filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. The United States Bankruptcy Court for the District of New Hampshire began exercising supervisory powers over the operations of PSNH. Nevertheless, the company's employees continued to serve its customers with electric power while investors, other creditors, regulators and governmental agencies debated various plans for reorganizing the corporation.

The NU-PSNH Connection
In March 1988, NU announced its interest in acquiring PSNH, as did three other New England utilities. After extensive negotiations, NU reached agreement near the end of 1989 with the representatives of the state of New Hampshire, the official committees representing PSNH's unsecured creditors and equity security holders, bondholders and PSNH. The cornerstone of the plan was a comprehensive rate program for PSNH based on seven annual 5.5 percent rate increases. After favorable votes by PSNH creditors and investors, the Bankruptcy Court confirmed the NU-sponsored plan of reorganization in April, 1990.

The plan had two steps. Step 1 would permit PSNH to end its bankruptcy while awaiting the approvals for NU to acquire the company. At Step 2, NU's acquisition of PSNH would be accomplished.

PSNH's Chairman John C. Duffett and other senior officers left PSNH in April 1990 as a result of NU's realignment of the company. While regulatory approvals for the acquisition were pursued, the company was managed by NU under a management contract, and Frank R. Locke, a senior vice president for NU, functioned as the chief administrative officer of PSNH.

After months of hearings, the New Hampshire Public Utilities Commission (NHPUC) in June 1990 approved the rate agreement on which the plan of reorganization was based. The Connecticut Department of Public Utility Control and the Securities and Exchange Commission also gave preliminary approvals. Following the New Hampshire Supreme Court decision in April 1991 upholding the NHPUC's approval of the rate agreement, the financing Step 1 was completed on May 16, 1991. On that date, PSNH emerged from bankruptcy.

On June 5, 1992 the affiliation was completed and PSNH became a wholly owned operating subsidiary of NU. Its share of Seabrook Station was transferred to North Atlantic Energy Corporation, a new NU subsidiary.

Seabrook Station under construction, 1981

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