The public distribution of power commenced in Winnipeg in 1883 with the sale of gas processed out of coal. The Manitoba Electric and Gas Company, incorporated in 1880, pumped the gas through street mains, selling to individuals for domestic lighting and to the City for street lighting purposes. In 1889 the North West Electric Company commenced to supply electricity for street lighting purposes, at the rate of 30 cents per k.w.h., the power being generated n a steam plant.
The Winnipeg Electric Street Railway Company entered the local scene in 1892, having secured a franchise to operate a public transit system in the City. A horsedrawn street railway already existed, having been established in 1882. After two years of competition, characterized by two sets of trolley lines on Main Street, the new firm bought out its pioneer rival. Power for the new electric street railway was at first generated in a local steam plant, but in 1906 the Company built a 37,800 h.p. hydro-electric plant at Pinewa, on the Winnipeg River, some 80 miles from the City. High voltage transmission lines brought the energy into Winnipeg for use by the street railway, for sale to the general public and to the City authorities for lighting purposes. In the meantime, the Winnipeg Electric Street Railway Company had acquired the local gas firm, together with competing firms supplying electricity generated in steam plants. By 1905 the Company consequently held the charters of six different concerns which had been organized to supply gas, electricity and public transit within the City, and held in effect a local power as well as transit monopoly. The firm was controlled by William McKenzie and Donald Mann, builders and owners of the Canadian Northern Railway, and of street railway systems in other Canadian cities.
The City Council had, as early as the 1880's, contemplated a municipal power scheme, the City Engineer favouring the construction of a 10,000 h.p. plant on the Assiniboine River. Since the Assiniboine was a navigable river and the power development would cause an impassable obstruction, it would be necessary to cut a navigation channel in conjunction with the power plant, in order to maintain the navigability of the River. After being intermittently considered for about 15 years, the scheme was given up as being too costly in relation to its promised benefits.
The monopoly position of the Winnipeg Electric Railway Company (1) in the distribution of power roused serious concern and gave rise to widespread demand for a municipality owned power utility. Mr. Thomas Sharpe, who led the forces demanding municipally provided power, was elected Mayor in 1904 and returned by acclamation in 1905. In June, 1906, Winnipeg voters overwhelmingly approved a by-law authorizing Council to undertake the construction of a hydro-electric power plant. Plans were immediately initiated to build a plant at Pointe du Bois on the Winnipeg River, about 100 miles from the City. Unfortunately, a world-wide financial crises, which developed in 1907, and lasted into 1908, rendered it difficult to float the necessary debentures. Inability to obtain money except on very unfavourable terms obliged the City to postpone the project (though there were strong advocates of immediate construction despite the unfavourable terms on which money would have to be borrowed). With the ending of the financial crises in 1908, debentures could again be sold readily and the project went forward, being completed in 1911.
With the completion of the City Hydro Plant at Pointe du Bois, the cost of electricity in Winnipeg dropped sharply. The advocates of the municipal scheme had promised that a public power plant could supply power at 3 cents per K.W.H. and this was in fact the rate set. (Actually 3 1/3 cents with a 10% discount allowed for prompt payment). The Winnipeg Electric Railway Company, which had been charging 9 cents per K.W.H. in 1910, immediately lowered its rate to the level fixed by City Hydro.
The City authorities, it might be noted, persevered with the Pointe du Bois project, despite offers from private groups which would have have rendered its construction unnecessary. The Winnipeg Electric Railway Company offered to sell power at a favourable rate to the City from its Pinewa plant. Other private groups offered to build hydro-electric plants, from which they would supply power to the City. In 1908 the owners of the Winnipeg Electric Railway Company offered to sell out to the City, if adequate price were paid. Negotiations were begun but fell through. With the City determined to establish its own electric utility and unwilling to buy out a privately owned system, Winnipeg came to have two rival utilities, one privately owned and the other publicly owned, each generating and distributing its own power.
The City Hydro actively competed against its rival, even outside the limits of the City of Winnipeg, selling power in a number of adjoining suburban municipalities. City Hydro also sold small amounts of power in the vicinity of its generating plant and along the route of the transmission line to Winnipeg. To reduce wasteful duplication and to prevent a regular forest of poles from being erected in the City streets, an arrangement was made whereby the two rival utilities used the same poles for distribution within the urban area. Each system however installed its own cross arms, transformers, and distribution wires. Further duplication existed in that each system maintained its own sub-stations, repair crews, shops, stores, spares, etc.
The requirements of Winnipeg supported the construction of the first power plants in Manitoba. In 1919, however, the Provincial Government, determined to make electrical power available to rural residents of the Province, established the Manitoba Power Commission with authority to purchase blocks of power from existing generating plants, for retail distribution in rural Manitoba. Population growth and economic expansion brought further increase in the local demand for power, and in 1923 the Winnipeg Electric Company constructed an additional plant at Great Falls on the Winnipeg River. Shortly afterward the Manitoba Paper Company built its mill at Pine Falls, providing a market for a very large portion of the new power plant's output. City Hydro also extended its generating capacity with the construction of a steam turbine plant within the City itself. A downtown Central Heating service was introduced in conjunction with the standby plant, off peak hydro-electric energy being used insofar as possible to generate the required steam.
In 1924, the Winnipeg Electric Railway Company, significantly, changed its name to the Winnipeg Electric Company. Although it continued to operate the street railway system and the gas utility, the generation and sale of electric power had become overwhelmingly the largest and most profitable element in its total business.
With the demand for electrical power steadily rising, both City Hydro and the Winnipeg Electric Company undertook major expansion programmes in 1928. In that year Hydro commenced the construction of a new power plant at Slave Falls, 100 miles from the City, and the Winnipeg Electric Company of a plant at Seven Sisters, 60 miles from the City, both on the Winnipeg River. Completed in 1931 soon after the Great Depression of the 1930's had begun, the supply of power from these two plants proved to be more than was required for a number of years, until improving conditions enabled their output to be sold profitably.
Following the end of World War II the demand for power rose sharply. Population growth, industrial expansion and increased per capita consumption brought sharp increases in the demand for power in Metropolitan Winnipeg, while the Manitoba Power Commission accelerated its programme of bringing electricity to the residents of rural Manitoba. By 1946 existing generating plants were approaching their capacity, and a provincial power shortage loomed. Additional plants could of course provide the additional power which would soon be required, but very great obstacles and difficulties stood in the way of their construction.
To understand the nature of these difficulties and the reasons for their existence requires some explanation. On the Winnipeg River, within less than 100 miles of the City of Winnipeg, there are six sites suitable for hydro-electric development. (1) The four largest and best were already and best were already developed by the Pointe du Bois and Slave Falls plants of City Hydro, and the Great Falls and Seven Sisters plants of the Winnipeg Electric Company. The two remaining sites on the Winnipeg River, at Pine Falls and McArthur Falls, could be developed to produce only 112,000 h.p. and 54,000 h.p. respectively, whereas the four plants already operating had a total capacity of 594,000 h.p., or an average of 148,000 h.p. per plant. Furthermore the two remaining sites, besides being smaller, could only be developed at a far higher cost per h.p. than had been incurred in the case of the other four — partly because of the great increase which had occurred in construction costs, and partly because the sites were much less favourable.
The capacity of existing plants on the Winnipeg River was in 1946 not yet fully utilized, but if demand continued to increase at the wartime rate, that capacity would be fully employed within four or five years. With electrical appliances and equipment becoming increasingly available after the war, there was every indication that the demand for electrical energy would continue to grow in peacetime as rapidly as it had grown during the war years. Once the rate of consumption equalled the generating capacity of existing plants, continued increase in demand could be met only if additional generating plants were built. Since the construction of a hydro-electric generating plant requires four to five years, an immediate start was required if, as soon as the existing plant became fully utilized, a new plant was to be ready to meet further increase in demand.
Neither City Hydro nor the Winnipeg Electric Company showed signs, however, of readiness to undertake the heavy investment in new generating plants, whch had to be initiated almost at once if a power shortage in four to five years time was to be averted. Concerned by the prospect of a power shortage within the near future, the Provincial Government appointed Mr. T. H. Hogg to investigate the prospective need for power in Manitoba, and to recommend how these needs might best be satisfied. In his report presented in 1948, Mr. Hogg suggested for alternatve courses of action, of which one, Plan C, was strongly favoured.
It was evident that with both City Hydro and the Winnipeg Electric Company reluctant to undertake the construction of additional generating capacity, the Province's increasing poser requirements. But it woulld be manifestly unfair to have the Provicial Government build all new plants, while the City Hydro and Winnipeg Electric Company retained and operated their existing plants; for the new plants built by the Province would all inevitably be high cost plants, owing to the fact that the most favourable sites for hydro-electric power generation in the Province were already used, and all addtional power would have to come from sources much less favourable. Power generated in the future was bound to be much more costly, whether generated on the two remaining sites on the Winnipeg River, in steam plants, atomic plants, or on sites on Manitoba's northern rivers, from where it would be transmitted to Metropolitan Winnipeg over long distance transmission lines.
Furthermore, because they served large and well developed markets, the plants of City Hydro and Winnipeg Electric Company were operating, and would continue to operate, at or near capacity. The plants built by the Province would operate for a considerable time at a good deal less than capacity, being called upon only to supply the extra power required over and above that supplied by existing plants. Full utilization of the Province's plants would be achieved only after a period of years, when demand had risen sufficiently to absorb their full output. Because they would operate for a long time at a lower proportion of their capacity, the per unit costs of newly built power plants would be very much higher than the per unit costs of the four existing plants.
Plan C accordingly called for the acquisition by the Provincial government of the entire properties of the Winnipeg Electric Company, and of the generating plants of City Hydro. A provicial authority would be established to operate all generating plnts within the Province and to assume responsibility for the construction and peration of all additional generating plants which would be required in the future. It was anticipated that integration of the operations of the generating plants on the Winnipeg River under a single authority would itself bring important benefits; considerably more power could be developed even on the basis of the existing plnts if their operations were properly co-ordinated. City Hydro would continue as a distribution agency for the Metropolitan area, purchasing its power requirements from the Provincial authority. It would, however, become the sole distributor within the Metropolitan area, the Province turning over to it the distributing facilities of the Winnipeg Electric Company within the Greater Winnipeg Area. The Manitoba Power Commission would contiue to distribute power in rural Manitoba, purchasing its requirements from the Provincial generating authority at the same price as was paid by City Hydro.
The Provincial Government accepted Plan C and entered into talks with representatives of the City of Winnipeg in regard to implementation of the plan by the necessary joint action. A modification of Plan C was devised under which the City Hydro would retain ownership of its generating plants. When, however, in April, 1952, City Council submitted the plan for voter approval in a referendum, it was decisively rejected. In October, 1952 the Provincial Government accordingly announced a "go it alone" policy. An offer was made for the purchase of the 564,989 common shares of the Winnipeg Electric Company and a deal was promptly closed, subject only to the approval of the Legislature; this was granted at the next Session. Under the purchase agreement, the Winnipeg Electric Company was in effect divided up into three distinct components, one owning the power generation, transmission, and distribution facilities, another owning the transit system, and the third the gas manufacture and distribution system. The Provincial Government purchased only the power generation, transmission and distribution facilities, while the transit utility and the gas utility, each of which became incorporated as a separate company, continued to be owned by the shareholders of the former Winnipeg Electric Company.
The purcahase agreement provided, however, that if the City of Winnipeg or some inter-municipal organization expressed the desire within six months to acquire the transit utility, the shareholders would be obliged to sell at a fixed price per share. This in fact came to pass. The Greater Winnipeg Transit Commision which came into being in April, 1953, representing the City of Winnipeg and the eleven other municipalities in the Metropolitan area, acquired the properties of the transit utility, and has operated the system ever since. The five man commission is composed of three members nominated by the Winnipeg City Council and two suburban representatives chosen by the Provincial Government from a roster submitted by the suburban municipalities.
The Winnipeg and Central Gas Company was incorporated in 1953 as owner and operator of the gas utility which had been formerly part of the Winnipeg Electric Company. The utility's operations had been unprofitable in recent years, but it was hoped that once natural gas became available operatios mght be greatly expanded and profits once more earned. Accordingly the Company negociated agreements with 10 suburban municipalities whereby it was accorded the right to install gas distribution mains in their streets and lanes. Distribution of natura gas was considerably delayed, however by delays in the construction of the Trans Canada Pipe Line, which was to carry gas from the Alberta fields across Canada.