HISTORY OF MISSOULA ELECTRIC COOPERATIVE, INC.
In 1882 Thomas Edison completed the Pearl Street Electric Station which began providing electric power to New York's lower Manhattan district. From that first day at the Pearl Street station, city dwellers had electric power but it wasn't until FDR took office and passed the Rural Electrification bills that the rural farmers and ranchers of this country were able to receive electric power like their city cousins.
In the 1930's the electric utilities considered it too expensive and unprofitable to run power lines to the farmers. It was the Dust Bowl era and many farmers were struggling to survive; very few could come up with the money required by the investor-owned utilities to run lines out to the farms. In the early 30's, Holmes Maclay, a rancher in the Lolo-Florence area, approached the Montana Power Company about obtaining power from the bitterroot line. He was told even though his place was only 1,000 feet from the line, it would cost $10,000 to get hooked up. That kind of money was impossible for him to raise; in fact, that amount would have bought his ranch. In those times it would have been foolish to mortgage your place just to get electric power.
How much electricity could the farmers use to pay for the cost of running lines to them? In the early 30's the Federal Emergency Relief Agency began a survey of the farmers and ranchers in the Missoula area to answer that question. This was an electrification survey which assessed each farm's possible electric load. It also provided information on buildings, number of tenants, whether they had a small electric generating plant and what appliances they might have and buy if they had electric power. This early survey provided valuable background information for later proposals to the REA for loans.
The State of Montana was looking into rural electrification at the same time as the Federal government. The State Water Conservation Board, while planning for dam sites and irrigation projects initiated by the Federal government, realized they would need electric power. In 1935 Montana passed the State Electric Authority Act creating an electrification division within the State Water Conservation Board. The division became invaluable to the small co-ops and associations that were forming throughout the state because of their engineering services and help in filing loan applications with the National REA.
Early in 1936 a group of Missoula area farmers and ranchers began organizing to bring electricity into their homes. With the help of the Missoula County Farm Bureau and the County Extension Agent, M.M. Oliphant, the Missoula County Electrification Association was formed. The Association in those early days depended heavily upon Oliphant and the State Water Conservation Board engineer, J.M. Garrison, for help in setting up the electrification project and filing the loan application with the REA.
In September 1936, J.M. Garrison filed a revised application with the REA. This revised application for the Missoula County electrification Association proposed to serve 326 customers in the three units of the project - Lolo, Clinton and Frenchtown. It would involve 72 miles of line at an estimated cost of $1,115 per mile of line. The project's overall cost was projected to be $80,960.15.
On October 30, 1936 the Montana 12-Missoula line was approved by the REA in Washington. The allotment approval for construction was $77,000. Once loan approval was arranged, the most difficult tasks lay ahead - set up the organization formally, build the line and prepare the company to manage the daily affairs of the Association.
The Association met in November of 1936 to begin filing the incorporation papers with the State of Montana. The Association asked Mr. Edwin Booth, chief counsel for the Water Conservation board, to be their temporary attorney and J.M. Garrison to be the engineer for the project. The County Farm Bureau put up the $5.00 filing fee for the Association.
On December 9, 1936 the Missoula County Electrification Association filed the papers with the State of Montana to become incorporated as a cooperative association under the laws of Montana, Chapter 25, Part III of the Civil Code of 1921. The capital amount was set at $10,000 with the duration of the incorporation to be 40 years. The signers of the incorporation papers included Harry Stieger, Lee Elliot, Ira F. Holling, Holmes Maclay and Victor Loiselle.
A special meeting was held December 22, 1936 to consider the next step now that the State of Montana had approved incorporation and granted a license to sell stock. The county attorney of Missoula advised the Association that after at least 10 shares of stock were sold a stockholder meeting could be held to elect a board of directors and draw up Bylaws to run the organization. Committees were set up to sell stock for each area of the Association --J.H. Ray in the DeSmet community, Art Donlan and Victor Loiselle in Frenchtown, Lee Elliot in Bonita, Charles Stahl in Hellgate, Holmes Maclay in Lolo, R.M. Boatman and Peter Willey in Clinton, Harry Stiegler and Arthur Deschamps in Grass Valley and A.T. Hoblitt in Florence. Ten dollars was the price set for each share of stock. The committee were reminded that the Association is to be as a non-profit association owned by its members as stated in the application to the state for incorporation.
It was important to sign up the potential users so the engineer could begin the specifications for building the line to each member of the Association.
In January, Holmes Maclay and a group of Directors and Members set out for Helena to attend a statewide meeting with other rural cooperatives and associations in the state. Along the way they ran into a blizzard near Garrison Junction. The storm was making the road so treacherous that the Montana Highway Patrol closed the highway at Garrison. Leaving their cars at Garrison, the group rode the Northern Pacific train back to Missoula. A week later they went back to get their cars at Garrison only to run into another blizzard on the way back to Missoula.
On January 5, 1937 the Association held its first annual meeting at the Missoula County courthouse. Ninety-five (95) people signed up for at least one share of stock. The Chairman, Mr. Stiegler, gave a brief synopsis on the Association's progress to that point. The discussion at this early meeting revolved around rates, cost of construction of the main line to each farm and the election of a board of directors. Taking Mr. Oliphant's suggestion, seven directors were elected that day. Peter Willey and Lee Elliot were elected to represent the Bitterroot District, Harry Stiegler and Charles Stahl represented the Frenchtown area and Victor Loiselle was director at large.
On the 27th day of February 1937, the Association held another Stockholders meeting to adopt By-laws of the corporation. This meeting was the continuation of the January 15th meeting. Upon adoption of the new By-laws it was determined they needed another meeting to elect a new board of directors according to the procedures of the new By-laws.
Another meeting to elect a board of directors was held March 20, 1937. Ten people were nominated and included the seven directors elected at the January 15th meeting. After the balloting was completed two new faces were added to the board - Ed Hamel and A.R. Deschamps. The Board elected Holmes Maclay as President, Lee Elliot as Vice President and E.N. Hamel as Secretary-Treasurer.
Five days after the March 20th meeting, the Board met to approve J.M. Garrison as the engineer in charge of the project. Edward T. Dussault was also approved as counsel for the Association.
Meetings of the Board of Directors and Stockholders continued throughout 1937 as construction of the lines progressed. During these early days everyone involved with the Association contributed a great deal of time to the meetings.
In June the Board traveled to Helena to open bids submitted for construction of the new line. Of the seven companies bidding, Charles F. Shannon of Butte won the project with the lowest bid. R.H. Rawson of Portland, Oregon was awarded the contract for the Pole Inspection Service.
It was becoming increasingly difficult for the Board to deal with the pressing needs of the business and still perform work on their own farms and ranches. They decided to hire someone to manage the business of the Corporation during the construction phase of the project. In August 1937, L.L. Howland from Florence was hired to be the Project Superintendent at a salary of $125.00 per month. Mr. Howland was also responsible for obtaining easements.
By this time it seemed many of the major problems facing the Association were behind them. However, the major problem still faced them; it actually wasn't one major problem but hundreds of small ones all tied up under one heading -- easements. First the people were asked to join the Association by buying a share of stock, then they attended numerous meetings and signed an agreement with the Association to purchase power from the Association and install wiring according to the National Electric Code, but now the Association wanted an easement across their land to run the power lines. This was before they received one kilowatt hour from the Association. Easements were a major problem in that the Association was unable to pay for these easements like the investor-owned utilities because the REA loan stipulated that the co-ops could not use loan money to pay for easements.
In October of 1937, Mr. Howland was having difficulty obtaining an easement from a party in Frenchtown. The Board adjourned their meeting and proceeded as a group to meet with the individual. In another situation, the Board held a Stockholders meeting in Clinton and explained that the line would be held up unless they could obtain an easement from a particular individual. The problem was therefore, left to the people in that area to find a solution. If the co-op had the money to pay for easements, the line would have been completed on time. Lack of easements slowed construction and in some cases caused the lines to be relocated.
In the spring of 1938 the first lines were energized. This first 75 miles of line served people from Hellgate to Six Mile, Milltown to 2 miles east of Clinton and from Lolo south to Bass Creek. At this time there were 125 members of the Missoula County Electrification Association.
During the first year of operation, the Association earned $5,588 in revenue but had $5,757 in expenses. The average bill amounted to $4.22 per month.
In March 1938 the annual meeting was held at the Missoula Chamber of Commerce
Building. Fifty four Members elected Directors for the coming year; they were Holmes Maclay, Ed Hamel, Leo Elliot, A.T. Hoblitt, Peter Willey, A.R. Deschamps and Charles Stahl. The Members were informed that Gordon Trenary was hired as the first Manager of the Association at a salary of $100 per month. Miss Martha Vickers was hired as the bookkeeper-stenographer at a salary of $50 per month.
In July 1939 the Association held a special meeting to consider the proposition of
converting the Association to a cooperative, non-profit membership corporation pursuant to Section 16 of the new Rural Electrification Cooperative Act, Chapter 172, Montana Session Laws of 1939. The eighty-eight (88) Members attending voted in favor of the measure. Thus, capital stock shares were converted to individual or joint memberships. The Board was to remain the same, however, a new set of By-laws was adopted. There was also a new name for the Association -- the Missoula Electric Cooperative, Inc.
As a cooperative, the Board did everything it could to help Members. In September 1939 the Board made a motion to ask the REA for funds to be used in assisting Members with wiring their homes and acquiring and installing electrical and plumbing appliances and equipment. This fund was to be managed by a committee of the Board and Manager. Loans were made so that as soon as the lines were energized, the Members could begin using power right away. By 1941, the Co-op had loaned out $3,664.48 in installment loans.
Up until this time the office of the Cooperative was located in No. 25 Higgins Building. This office was quickly outgrown and new space was needed. Negotiations with Howard N. Edwards were underway for a location on 402 Woody Street. On November 1, 1939 the Cooperative moved into its new offices. It cost $425.00 to fix up the inside; rent was $30.00 a month with a five year lease but now the Cooperative had its first real offices.
In February 1940 Gordon Trenary tendered his resignation as Manager of the Cooperative. Elmer Thompson was named as the Acting Manager until the REA later approved the appointment.
After the main line was built, line extensions were added as money was allotted to the Cooperative. With no cash reserves, each extension required approval by the REA since money would have to be borrowed to build the extensions. Usually neighbors in an area would request the extension together. For the Cooperative to borrow money to build an extension, they would have to prove that it was cost effective.
At the annual meeting in 1941 the Board Treasurer reported to the Membership that the Cooperative had borrowed $247,000 from the REA. Loan repayments to the REA were made and have been each year through revenue generated from the sale of electricity.
Besides their financial report at each annual meeting, a special feature usually included a cooking demonstration. It was a transition period for many farm wives. Until this time, the cooking all had to be done on wood stoves. The new task was to learn to cook with electricity. No longer did they have to endure the hot cookstove in the middle of summer. The electric stove also made canning easier and faster for now the temperature could be controlled and there was no fire box to empty three or four times a day. Local merchants also set up displays of other electrical appliances like the washing machine, the electric water pump, the iron and the radio. There was equipment for the men too but it was the women who benefited first from the coming of electricity. The drudgery and isolation of the farmers and ranchers was finally being broken.
In 1946 E.F. Pike replaced Elmer Thompson as Manager of the Cooperative. Mr. Pike worked with J.M. Garrison at the State Water Conservation Board on the engineering of the lines for the Cooperative. His knowledge of the system was invaluable in solving the problems facing the Cooperative in those early days.
When the Cooperative first started, power was purchased from the Montana Power Company, but on April 8, 1950 at midnight, the Bonneville Power Administration began serving the Cooperative. By using BPA, the Cooperative saved $1,000 their first month in wholesale power costs.