Chicago Edison Company

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Chicago Edison Company Soundex Code C220

The earliest predecessor of Chicago Edison Company was the Isolated Lighting Company, established in early 1881 by George H. Bliss as a subsidiary of Edison General Electric Thomas Edison's company.

In 1882, this company was taken over by the Western Edison Light Company, which was chartered by several prominent Chicagoans to not only take over Isolated Lighting's role as Edison's agent in Chicago, but also to develop a central station electric system. Western Edison installed the first incandescent lighting in a Chicago home, that of stockholder John W. Doane, in 1882, and it was first lit on November 10 of that year.

In March, 1887, president of Western Edison, John M. Clark; Robert Todd Lincoln, and John B. Drake obtained a franchise from Chicago to distribute electricity in the downtown area, bounded by North Avenue, 39th Street, and Ashland Avenue. They then formed the Chicago Edison Company, which took over all of Western Edison's business on Saturday, July 2, 1887. Chicago Edison's first central generating station, designed by chief engineer Frederick Sargent, opened at 139 (later 120) West Adams Street in August, 1888. This first station was intended to serve an area bounded by Harrison Street, Market Street, and Water Street (both now Wacker Drive), and Michigan Avenue, and served this area with an Edison-patented direct current system until it closed in 1914 or 1915.

The Samuel Insull Era

By 1892, Chicago Edison's load had grown to 3,200 kilowatts, the full capacity of its generating station. Its growth showed no sign of slowing, especially with plans in the works to host the 1893 Columbian Exposition. Its president, E.T. Watkins, had resigned the year before, and it was clear that new leadership was needed. In New York, meanwhile, Thomas Edison had been bought out of his company as it was being consolidated into the General Electric Company. One of Edison's associates, Samuel Insull, had however been retained as the second vice-president of General Electric, and was subsequently offered the presidency of the company. Instead, Insull agreed to stay on only long enough to oversee the consolidation of Edison's companies.

The board of Chicago Edison wrote to Insull, asking for a recommendation for their president. In reply, Insull applied for the job, saying, "It is the best opportunity that I know of in the United States to develop the business of the production and distribution of electrical energy." The board accepted his application, and on May 26, 1892, Insull was elected president of Chicago Edison.

Upon his arrival, Insull found that Chicago Edison was one of nearly 30 electric companies operating in Chicago, all competing for business. While prevailing opinion at the time held that competition between the many companies was the best way to improve service and keep prices low, Insull believed that a regulated monopoly, giving exclusive operating rights in a specific territory to one company in exchange for state control over service terms and prices, would be most beneficial for both utilities and customers. While state regulation did not begin until 1914, Insull began forming a monopoly on electric service by acquiring many of his competitors. By 1895, he had acquired enough of them, and their rights to use the different manufacturers' equipment, that he had obtained a complete monopoly on electric service in Chicago Edison's territory.

Insull also initiated construction of a much larger power plant on Harrison Street, west of the Chicago River. While its original capacity of 6,400 kilowatts, twice that of the Adams Street Station and the largest in the United States, seemed wildly optimistic when it opened in August, 1894, Insull believed that the economy of scale provided by such a large station would offset the initial cost. Aside from this point, the size of the station allowed it to replace the Adams Street Station, which had become both overloaded and obsolescent. Insull's optimism was rapidly justified: the Harrison Street Station reached its original capacity within the first several years, and was expanded to 16,200 kilowatts by 1903.

In 1907, Chicago Edison Company combined with Commonwealth Electric Company to form Commonwealth Edison (ComEd). Six years later, it absorbed the independent Cosmopolitan Electric Company, and with that purchase effectively obtained a monopoly on electric service in Chicago.

Insull also founded Public Service Company of Northern Illinois, which developed rural electrification in northern Illinois outside Chicago. Public Service and ComEd, along with many other companies, were subsidiaries of Insull's Middle West Utilities Company until Middle West's collapse during the Great Depression.

According to at least one source Insull was also the earliest to develop transmission companies, in the 1920s, a concept that was undermined by the development of Public Utility Commissions, in general, and the Public Utility Holding Company Act of 1935, in particular. Necessary regulation in that form has been overcome by recent deregulatory measures.

In 2000, then-ComEd parent Unicom Corporation merged with PECO Energy to form Exelon, which now owns both Commonwealth Edison and Philadelphia-area utility PECO (formerly Philadelphia Electric Company).