Scarborough Public Utilities Commission History

Company History:

The Scarborough Public Utilities Commission provides electricity and water to Scarborough, Ontario, a borough of Toronto. Electricity first came to Scarborough in 1892 via the Toronto and Scarborough Electric Railway tracks that ran through the township. In 1906 the Hydro-Electric Power Commission of Ontario was created to supply energy to greater Toronto. Scarborough, with a mostly rural population of 3,426 in 1910, had a lower demand for electricity than the urban Toronto area, so it was not until the Toronto Electric Light Company extended its electric cables to Scarborough that electricity for seven street lights was available in 1908.

Demand grew with time, and in 1912 the Toronto Electric Light Company further extended its wires, but their placement created a problem for nearby residents because they were placed on the same power poles that held lines supplying energy to the electric railway. When a street car passed a home lighted with these wires, the light dimmed measurably, and returned to normal only when the street car had passed well into the distance.

In January 1913, the Scarborough Town Council approved a plan to supply "a municipally owned railway and electric power at a moderate price." In May 1913, the Ontario provincial government gave its approval for the municipal railway proposal. In the summer of 1914, the public first learned the details of the proposed Toronto Northeastern hydro-electric railway. Two years later, construction on the railway began, and concurrently the population of Scarborough grew. This increase led to the construction of new electric power lines, and 74 residential customers received power in their homes for the first time in 1917.

In 1920 administration of the Scarborough hydro-electric system and the water works was handed over to the newly established Scarborough Public Utilities Commission. In 1921 the Commission purchased the distribution rights for all electric energy in Scarborough from the Toronto Electric Light Company, increasing the number of its consumers from 1,433 in 1922 to 2,749 in 1923.

Demand for electricity, known as "load" or "power requirement," is the rate at which electric energy is delivered to customers at any given time. Scarborough's demand remained strong into the 1930s. By 1931 the Commission was serving 4,580 customers through 72 lineal miles of power lines. It bought more than 3,000 horsepower of electricity daily from the Ontario Hydro-Electric Power Commission, which generated energy from hydro-electric plants in northern Ontario. Capital investment for the company in 1931 was $424,691. To secure those funds, the Commission issued debentures to investors, and reinvested operational surpluses.

The depression of the 1930s slowed the Commission's growth. Of the 21,448 people in Scarborough in 1935, approximately one quarter were unemployed or on welfare. Economic strain also stunted the borough's population growth. Ten years later in 1945, 25,482 people lived in Scarborough, up only slightly from a decade earlier.

During World War II, electric power supplied the regional war effort. This boosted the Utility's production and after 1945, veterans who moved to Scarborough created new demand for water and electricity. More than 250,000 people moved to Scarborough in the decade preceding 1955, creating a significant industrial and commercial center north of Toronto. Residential demand for electricity in this decade grew 15-fold. Commercial and industrial demand doubled. In 1955 the Commission's water revenue was $4.04 million, of which $1.4 million came from industrial and commercial customers.

This growth had led to expansion. The store front office the utility had occupied was replaced by a new three-story, 25,000 square-foot office building which opened in 1953. The new headquarters served 28,000 electric and 18,000 water customers, and housed the utility's almost 300 employees. In 1958 the company bought nine acres of land and an office building to house its hydro and water construction and stores department. The population of Scarborough continued to grow rapidly and capital expenditure for the Commission grew to $17.64 million in 1960.

In 1960 the Commission first installed underground power lines in residential subdivisions. Previously, overhead power poles and wires served as carriers of power. By 1965, the new practice became mandatory in Scarborough.

During this period of impressive growth, customers paid less for service despite the fact that the use of electricity and electrical appliances grew with the population. Greater population allowed the Commission to reduce the average charge per household from 4.6 cents per kilowatt hour in 1921 to 1.25 cents in 1966.

This situation changed in the early 1970s, however, because the escalating price of oil on the world market made electricity a more appealing source of energy. For the Commission, demand increased, but national inflation caused production costs to rise, forcing the Commission to raise consumer rates.

In 1973 the company used computerized billing for industrial and commercial customers for the first time. Its goal was to reduce operating costs, thereby forestalling consumer rate increases. Savings aside, in 1974, the Commission reported an 11.5 percent increase in wholesale power costs. This was passed on to consumers in the form of an 11.2 percent rate increase. Still, the company warned of future increases of even greater magnitude due to the stagnant Ontario economy and its growing inflation.

During the same year, the company moved its waterworks meter testing facility. In addition, a new, more powerful computer was installed at the company's headquarters to aid in customer accounting and general business operations. Again, automation aimed at greater cost savings. Despite these efforts, rates increased in 1976. That year, a rise in operating costs of 22 percent led to a 19.6 percent general rate rise. Higher overheads were due in part to an aging waterworks system which suffered growing numbers of main breaks. In addition, the summer in 1976 was wet and cool, yielding decreased water use. During this period, greater energy conservation further bit into projected annual energy use. Electricity consumption in 1977 rose 3.4 percent, much less than the 6 percent projected by the Commission.

To speed up the bill payment system for customers, in 1977 the Commission introduced an automated telephone answering service to record meter readings submitted by residential and commercial users. Total revenue for the Commission in 1977 was $67.7 million, up from $52.6 million recorded a year earlier.

Successive rate increases had led to an increasing number of complaints. In 1978, the company introduced a new computer system to better monitor customer service. The Supervisory Control and Data Acquisition System (SCADA) featured a central location by which engineers could operate the entire electricity and water networks, ensuring maximum reliability at the lowest operating cost.

The Commission also had a public relations challenge in convincing customers to practice conservation, but only when usage fell faster than rates rose would lower monthly utility bills be possible. Initiatives included computerized microfilm work order forms, cash receipts, and customer inquiries. But the company's cost-cutting efforts were met with rising costs and a poor economic outlook. General manager James Curtis said of the utility's situation in 1981: "We continue to produce the lower growth levels being experienced as a result of inflation and the down turn in the economy. With the continued increases in bulk power costs, this lower growth rate puts added pressure on the efforts to hold down rate increases at the retail level."

To encourage greater conservation, in 1981 the Ontario government introduced a program which provided homeowners with low-interest loans and energy audits to encourage lower energy use. The Commission trained employees to visit homes and advise on window and door sealing, insulation, and energy-conscious habits.

In 1983 the Commission leased a new headquarters to ease congestion at existing facilities. Also in 1984, the SCADA computer monitoring system finally came into operation. It comprised 19 individual control cabinets for use by company engineers. They were to check relay settings, analyze equipment breakdowns, and prevent system shut-downs, especially during poor weather.

During 1985, peak power usage by the Commission's customers surpassed 700 megawatts for the first time. This represented a 10 percent increase compared to a year earlier. In 1986 the company provided electricity to 119,442 customers, up two percent, and it had 100,702 water customers, up from 96,754 customers in 1985.

James Curtis retired as general manager of the Commission in 1987. He was replaced by Gordon Murless, who had been assistant general manager and treasurer. Murless retained his treasurer position on the Commission board.

The recovering Ontario economy in 1989 helped the Commission set records in several areas: the number of customers served, electricity kilowatt hour sales and demand, sales of cubic meters of water, and requests for service by commercial and industrial customers. Indeed, the growing use of air conditioners meant the peak demand for electricity in July, traditionally the hottest month of the year, reached record levels. But 1989 was also marked by labor troubles. Employees belonging to the Utility Workers of Canada Union struck in July, and did not return to work until a new collective agreement was signed in October.

A year later, the company introduced computerized meter reading using the Itron Meter Reading System. This eliminated the use of reading sheets. Employees could now quickly read meters, and gather data that went straight into the company's computer bank.

Revenue for the company in 1991 hit $292.9 million, compared with $267.9 million a year earlier. In 1992 Kim Allen replaced Gordon Murless as general manager and treasurer of the Commission. The company was subsequently reorganized into four divisions: Customer Services, Electric, Water, and Corporate Support.

In 1992 revenue for the Commission was $316.7 million, up from $293.9 million a year earlier. Importantly, the 127,387 customers the Commission served that year was down slightly from 128,140 served in 1991, so existing customers were consuming more energy.

Looking to the future, the Commission began a 25 year program to convert its entire 4.16 kV electrical system to a new and more efficient 27.6 kV system. This was intended to replace old, deteriorated cables and meet anticipated customer demand into the next century.

Further Reading:

Bonis, Robert, Hydro-Electric Power in Scarborough, Scarborough Public Utilities Commission, Toronto, 1966.

Source: International Directory of Company Histories, Vol. 9. St. James Press, 1994.

Directory of Sample Business Plans Directory of Company Histories Contact Us Advertise