SEVENTY YEARS OF POWER TO THE PEOPLE

by George Sibley

Updated from article  published in the Gunnison Country Times, Thursday, June 3, 1999

At that time, Gun­nison and Crested Butte were generat­ing electricity for their residents, but the rest of the valley was dark, except for kerosene lamps. Today, the GCEA has almost 7,000 members in three counties (Gun­nison and parts of Saguache and Hins­dale), along more than 750 miles of power lines, and the lines reach all but the most remote resi­dents.

In the mid-1930s, in the depths of the Great Depression, only 11 percent of the rural people of the United States had electricity. Almost all of them lived in the cities and larger towns. Most of the providers of electricity were in the private sector, and there was no way for private electricity providers to profitably extend their lines into the countryside where consumer densities were often lower than two per mile.

        This growing inequity between town and country was acknowledged by the govern­ment in 1935, when it included rural electrification in a general program of unemployment relief. It quickly became clear that rural electrification required a lot more than employing peo­ple to string lines. In May 1936, the Rural Electrification Admin­istration (REA) was given its own statutory authorization, and one of America's greatest collaborations between local cooperative ventures and the national society began.

The REA made low-interest loans to local cooperatives, and also loaned them the expertise needed to design and construct electric systems.

People in the Upper Gunni­son Valley got interested in the REA early in 1937, less than a year after the creation of the agency. In February, local engi­neer Jerome Johnson contacted the Washington office on behalf of a group of Ohio Creek ranch­ers who wanted to extend the city of Gunnison's lines 11 miles up their valley to serve 22 cus­tomers. A general meeting was called in April, at which 50 peo­ple showed up, mostly ranchers and a few summer resort own­ers.

On Sept. 22, 1938, an incor­poration meeting for the Gunni­son County Rural Electric Asso­ciation was held. W. Richard Walker was elected chairman and Janet Allen secretary. The other original directors elected were Har­vey Lobdell, Tony Danni, Han­nah Shackleford, Ruth Dicker­son and J.H. Sanders. Robert G. Porter was retained as "project attorney" at $100 a year. By the time the organization held its first annual meeting on Jan. 9, 1939, 116 people had kicked in their $5 membership fees. After disbursements of around $300, the association had $275 in the bank.

The dispersion from around the valley just of the original board members indicates the magnitude of the electrification challenge: Allen was a ranchwife from Ohio Creek; Shackleford was a ranchwife from up the East River; Lobdell ranched east of Gunnison in the Tomichi Creek valley; Dickerson ran a river resort west of Gunnison; and Walker had a dairy on the river a few miles north of Gunni­son.

The REA in Washington said that to break even on construct­ing and operating a rural power system, the average density of customers should be more than three per mile of line. Most of the rural parts of Upper Gunnison could hardly muster two per mile in 1939, spread out over more than 3,500 square miles.

The only hope for getting enough customers to break even was to get one or more of the valley's population concentra­tions to buy in. The city of Gun­nison was too big for REA population standards (towns less than 2,500), and it also had a good municipal plant for generating its power with enough capacity to carry the city well into the (then) projectable future. But there was also an underlying tension between Gunnison people and the country people. According to GCEA attorney Robert Porter, "the administration of the city of Gunnison was quite hostile to our plans" for reasons no longer explicit, although it probably related to a common conservative belief that the REA was a “communist” (or at least socialist) program.

Crested Butte also had a small steam plant, in the downtown powerhouse beside the “Old City Hall,” - now a restaurant. But Crested Butte's plant was old and subject to breakdowns, so many people in that town were interested in teaming up with the feds to improve their system. When the GCEA decided to try to recruit Crested Butte to get average density up, four board members from that town were added: Mayor Joe Pasic, businessmen Tim Morgan and George Spehar Jr., and County Commissioner Bill Whalen. V. A. Morgan was hired as the first GCEA manager. By late that year, the membership passed 500.

In October 1940, with 200 Crested Buttians present, that town's board approved a resolution permitting the GCEA to solicit memberships in town, and giving rights-of-way and ease­ments on streets and alleys for distribution lines. The resolu­tion was presented to the Town Board by GCEA attorney Porter, but also speaking on behalf of it were the managers of CF&I's Big Mine and the Crested Butte Coal Company, George Spehar on behalf of the Crested Butte Lions Club, and County Commissioner Bill Whalen (who was also vice president of the GCEA).

Arthur Gerth from the REA in Washington unveiled plans for three 100-kilowatt diesel genera­tors to be located in a building to be built in Crested Butte that would also house the GCEA offices. Gerth promised more than $150,000 in REA financing for the project - $40,000 for the plant and $110,000 for 1OO miles of power lines. The money was to be appropriated the following spring.

Bids for the power plant and for line construction were let that winter, and early in April, with the appropriation supposedly making its way on sched­ule, the town of Crested Butte granted the GCEA a 25-year franchise to provide its electrical energy. GCEA manager Morgan announced that the staking of lines would begin within days, weather permitting.

Then politics struck. Porter received a telegram in mid-April announcing that the $155,000 allocation had been approved – ­but he didn't even have time to get the good news around before receiving a phone call telling him to ignore the telegram; the appropriation had been can­celed. The reason for the cancel­lation was not specified.

Whatever the cause, it was a bad moment in rural Gunnison County - with train-cars of power poles already arriving in the valley. At his retirement ban­quet from the association in 1969, Porter said, "I called direc­tors for a meeting that night and I can assure it was a gloomy meeting .... I must confess that I was ready to give up the ghost and quit the fight. But I will never forget the reaction of Mrs. Shackleford. She suddenly pounded the table with her fist and with flashing eyes she said, 'We will not stand for it! We will fight it through!' The upshot was that we decided to send to Washington Mr. Bill Whalen, our vice president, Mr. VA. Morgan, our manager, and myself, and we left the next day" – driving all the way, in Porter’s car, undoubtedly an interesting trip in 1941.    .

"Up to this time we had not attempted any political involve­ments," Porter said, "but this time we were desperate and when we arrived in Washington we went to Mr. Ed T. Taylor, our representative in Washington. He was at that time chairman of the House Ways and Means Committee and was very powerful politically.

“Mr. Taylor, after hearing our story, went with us to the office of the (REA) admin­istrator and that very afternoon the allocation was reinstated."

Morgan and the staff went to work. Crews worked through the summer and fall, running lines down the East River valley, and up both Ohio Creek and the Tomichi­ Quartz drainage.

The plant to power all of those lines was not quite so easy. For rea­sons unspeci­fied - but prob­ably relat­ed to the Lend-Lease Act for the war in Europe - the original plan for three diesel genera­tors was dropped. But in early June, Morgan announced that Washington had approved plans for a "state-of-the­-art hydroelectric power plant," with three 335-horsepower turbines.

The price of this hydro plant drove the total cost to more than a quarter-million dollars.

Bids were let for the plant in June 1941, and construc­tion began that summer. Late in the summer Morgan seemed to still be hopeful that the plant would be ready by winter, although the dams and the pipes and flumes to the reservoir had not been begun. By mid-fall, the date for energizing the system had been pushed back to late November, and Morgan and the GCEA directors decided to approach the town of Crested Butte about taking over and fix­ing up the old Crested Butte steam plant until the new hydro plant could be completed the following year. The town approved and lines were run to it from the new site.

So on Saturday, Dec. 6, with much ceremony, speechifying and music from the Crested Butte High School Band, the lit­tle steam plant began pushing electricity into the rural reaches of the county. By Christmas, according to the News-Champi­on, 80 rural residents were enjoying a steady flow of 117 volts along 112 miles of new lines.

But that was Dec. 6, 1941. Pearl Harbor was attacked the next morning. Materials that had been difficult to get became impossible to get. Late in May 1942, Morgan went to an REA conference in St. Louis, where the rural associations were "urged to intensify efforts to put kilowatts to work for victory."

From there he went on to Washington, intensifying his own efforts to break loose the pipe, penstocks, turbines and generators needed to complete the GCEA plant. But he found that to be impossible under the standing order of the War Production Board: "When material is needed for the civilian popula­tion in quantities such as the hydro plant at Crested Butte calls for," he reported on his return to the valley, "they must refuse on the basis that it is a question now of 'winning the war first.' "

The walls for the powerplant were erected on the foundation, but that was as far as the project ever went as a power plant. In the early 1960s, after the ski area began, Oklahoma restaurateur Eula Erickson bought the structure and converted it into a restaurant known, under several owners and man­agers, as The Steakhouse. The building came to a terrible end in the early 1970s in a propane explo­sion.

In addition to no materials for the power plant, there were no materials for extending the lines, so what might have been a showcase rural electrification pro­ject powered by a state-of-the-art hydroelectric plant, was instead a limited system struggling to get by with a small antiquated steam plant. Frequent outages, "unavoidable because of the condition of the old steam engine and boiler," plagued the valley, and, Morgan noted, "having only one unit means an outage every time repairs have to be made."

Morgan drew a kind of a Model A analogy: An automo­bile that has been run from 10 to 30 miles per hour for 30 years will click along and give that rate of service for a long time. But when you speed it up to 60 miles per-hour to meet your additional demand, your auto­mobile will naturally have to be in the shop for repairs frequent­ly. And if you don't have a spare automobile, you have to walk."

In 1942, after a long year of farm-type make-do repairs, Porter said that "an inspector closed down [the Crested Butte plant with an admonition that this old plant was likely to blow up at any time, and probably when it did blow up it would damage most of the town of Crested Butte."

The Roosevelt Gold Mines Company above Pitkin had a small hydro plant which Mor­gan arranged to adapt to fit the GCEA system. The GCEA got a special dispensation from the War Production Board for the seven miles of wire necessary to connect the system to that plant. But that was not a very good solution since Quartz Creek froze down to a trickle in the winter, rendering the plant use­less for a good part of the year.

The temporary solution for the duration of the war and some years thereafter was to connect to the Gunnison system, which still had enough capacity to run the rural system as well as the city. A connection between the two systems was made in 1944 at the Zugelder Ranch in lower Ohio Creek.

That got the lights back on, but it was not ideal. It put a sig­nificant burden on the Gunnison system, and Gunnison in turn put a pretty fair burden on the REA users at bill time - the rev­enues from which created a big surplus for the city. There had been little love lost between the city utility and the GCEA. The ranchers and townspeople from Crested Butte and Quartz Creek were well aware that they were financing a big piece of the city's budget. The GCEA continued to explore every option imaginable for an alternate power supply.

Again according to Porter, "We tried to get an agreement with the Public Service Company to bring us power over the existing line from Poncha Junction to White Pine. That failing, we then discussed and planned for bringing in a diesel plant on a flat car to furnish power. That fell through. We actually surveyed two routes for a line from Aspen, one over (East) Maroon Pass and other through Taylor Park and over Taylor Pass.... In the meantime we also negotiated with the Western Colorado Power Company at Montrose but, of course, we got nowhere."

In 1943, frustrated at the inability to get anything con­structive done, Morgan request­ed a leave of absence, which became permanent. Homer Duke, the GCEA book­keeper, was appointed superin­tendent, a position he held for 21 years.

In 1948, the GCEA began negotiations with the Bureau of Reclamation, which was looking for customers for power from its Green Mountain Reservoir near Dillon. The bureau was recep­tive, but there was a catch; since such an arrangement would involve the construction of an expensive transmission line over Monarch Pass from near Salida, the bureau was only willing to build the line if the city of Gunnison would also contract to buy power.

City leaders were not entirely opposed to the idea because their steam plant was aging. They were going to have to make a significant investment in new equipment or begin importing power – and the Bureau’s power was attractively cheap. The bureau's line would cost the valley nothing directly - the bureau had taken care of that by declaring the city's equipment sufficiently outmoded to constitute an "emergency situation" for the valley, which enabled the bureau to go to Congress for a $200,000 emergency appropriation for the transmission line.

But the city had grown accustomed to the revenues from the sale of power to the GCEA users; without that revenue, they faced a local tax increase. So they negotiated for a complicated deal whereby, in return for keeping their equipment maintained as "standby" for both systems in case of a line break or other outage, they would get to add several mills onto the bureau's price for power.                      

Negotiations went on through 1950. Finally, in early December 1950, the city signed a satisfactory contract with the bureau, and the bureau's transmission line came over the pass in 1951.

That was the end of home-grown power generation in the Gunnison Valley. After experiences like the GCEA's (not all that uncommon), the local co-ops were increasingly content to be "distribution co-ops," building and maintaining the local lines to deliver power purchased from generators elsewhere. 

With the power supply problem solved by the bureau line, the GCEA was able to expand its service area. In 1953 lines went into the Powderhorn Valley, and by 1957 the GCEA had gone all  the way into Lake City, purchasing the privately-owned Lake City Power Company.

The association also finished hooking up people in its original service areas, extending lines to Gothic above Crested Butte and into the uppermost reaches of the Quartz-Cochetopa-Tomichi valleys. All of these extensions were financed through the REA.

The last major area of the Upper Gunnison Basin to get electricity was Taylor Park. Not until 1971 did the REA approve a loan to the GCEA for service to Taylor Park and Tincup, and electricity was finally available there in 1974.

The Crested Butte Ski Area became a big new customer in 1960-61; that, plus the general increase in domestic electric usage, began to burden the bureau line, and in 1962, the GCEA joined the Colorado-Ute Generation & Transmission Association, a “co-op organized by co-ops” headquartered in Montrose, and purchased power from that organization until Colorado-Ute's demise in the early 1990s - a consequence of over-building its generation capacity in the late 1970s and 1980s, anticipating an energy boom that didn’t happen. Since 1992 the valley's G&T is the huge Tri-State Generation and Transmission Association (also a co-op of co-ops with 44 members), which added Colorado-Ute's customers to the co-ops it serves throughout Colorado, central and southeastern Wyoming, and western Nebraska.

In 1975, the GCEA moved its main offices from Crested Butte to its more central location west of Gunnison. And in 1981, the GCEA became the third co-op in the nation (and the first in Colorado) to institute an Energy Conservation Loan Program, making money available for local efforts to save electricity rather than to use more of it.

In 1996, the GCEA refinanced all of its debt with private finance companies, and no longer receives any financial assistance from the REA (recently renamed the Rural Utilities Service). This saves the local co-op money in the short term, and enables a greater flexibility in the future. Enough co-ops across the country are doing this so there is discussion about decom­missioning the REA/RUS entire­ly. It may well be a program that can be closed because it has done its job so well. When the REA was created, only 11 per­cent of rural America had access to electricity; now the access is nearly 100 percent. In 1949, the REA's mission was extended to the task of bringing phone ser­vice to rural areas (although that was not a task the GCEA had to take on), and now telephones reach more than 96 percent of rural places. The local organiza­tions like the GCEA that the REA "incubated" are now strong and stable enough for the most part to finance their own development.

But the impor­tance of the federal assistance notwithstanding, the most impor­tant action hap­pened at the local level, where some people per­formed heroic and often unpaid service. Janet Allen was on the GCEA's original board of direc­tors, and served as the organiza­tion's secretary for its first 36 years. Robert Porter, who eventually became district judge, served as the GCEA attorney from its start until 1969. The first manager, V. A. Morgan, struggled against overwhelming wartime odds to get the system up and keep it running. Homer Duke stepped in when Morgan left and man­aged the utility for the next two decades.

Today, the organization has two 25-year employees who have helped guide the organiza­tion into its maturity. Mike Wells started as a lineman in Crested Butte and is now the general manager. Gunni­son native Dan McDonough started as a meter reader and is now member services represen­tative.

Despite having a modem and reliable electric system in place for all of the Upper Gunnison River valley except for the City of Gunnison, however, the world continues to change and the GCEA continues to have to rise to the challenges of the future. They are currently caught between Tri-State’s need to plan new capacity to meet future projections for all 44 of its co-ops, and a growing awareness in their own service area of a need for “demand-side management” to institute serious conservation and efficiency practices that might reduce the need for new capacity.

But in moving into its eighth decade now, with 10,000 meters active, the GCEA is a long way beyond starting from scratch to address these challenges.