October 24, 2021

How Groton and Marathon prosper from their own electric companies

Municipal power

Travis Dunn/staff reporter

This substation transmits electricity to the customers of the Village of Groton’s electric department, one of 47 municipally-owned electric utility companies in New York.

There are two kinds of people in the world — those who get their electricity from municipal power companies, and those who don’t.

Most people in the greater Cortland area don’t; instead, they buy their electricity from National Grid or New York State Electric & Gas.

Then there are those who do — the residents of the villages of Marathon and Groton. Customers of these companies may take them for granted, and people outside those municipalities might not even know about them.

But how did these two villages come to own their own electric companies?

———
Water and light
For Marathon, it started in 1895 with a sawmill, owned by Burgess & Brinks, or James S. Burgess and Walter A. Brink, that used its waterwheels to generate power for electric lights, according to Bruce L. Melvin’s “The Sociology of a Village and the Surrounding Territory,” published in 1931.

“The mill has an excellent water power which never fails, but runs the machinery throughout the entire year. It also runs the plant for the electric light company that is doing business in Marathon,” according to “Grip’s Historical Souvenir of Marathon,” published in 1901.

Electric power remained a service offered by Burgess & Brink, until the village had a special election in October 1900, and residents voted to buy the electric company for $8,500, according to Grip’s. An electric plant was “put in” that year — or 1901 — which suggests the village expanded the generation capacity beyond the hydroelectric power Burgess & Brinks provided.

As of 1901, the new municipal power company had “1,200 lights including 35 arc lights of the latest pattern, alternating current.”

Grip’s credited three men — C. Eugene Boyden, president of the village board, first elected in 1896, as well as Burgess and Brink — with getting the project off the ground.

In Groton, municipal power began with a town meeting Feb. 11, 1896, in the Nye opera house. Between that meeting and March 17, the village had a referendum in which residents voted to build a municipal power plant and to establish a street lighting system, to be built “at a cost not to exceed $10,000,” according to a “History of the Municipal Electric Utility,” an official village history of the electric company published in October 2001.

The power plant, built on Cayuga Street near the Owasco Inlet, consisted of two 125-horsepower tubular boilers, two reciprocating engines and four DC generators. Total generation capacity: 121 kilowatts. The boilers were powered by steam turbines red by burning soft coal, which came by train and was “dumped into a large bin built under the trestle” and “taken by wheelbarrow to the boilers and stoked by hand,” according to the official village history.

———
Selling Out
But the survival of both of these municipal power companies — among the 47 operating today in New York — was not always a sure thing.

Groton’s electrical department, as the power company is now called, had problems because it charged customers by the electric outlet, rather than by usage, according to a Dec. 22, 1981, Cortland Standard article. This cost the company money, and prompted a switch to the installation of electric meters and rates based on usage.

But the town still continued to lose money, and in 1917, the village leased its power stations and electrical infrastructure to Groton Electric and Gas Corp. — a precursor to what is today New York State Electric & Gas — which operated the village’s electrical department for the next 15 years.

The village, however, decided not to renew the 15-year-lease when it came to an end in 1933. The village instead voted in a referendum to buy the company back, said Chuck Rankin, Groton’s village administrator.

Yet the village only bought part of the company back — the portion that covered homes and businesses in the village — with a $45,000 bond, according to the official village history.

But while Groton took back its electric department, it continued to buy its electricity from NYSEG, a practice that would continue to 1962.

Marathon, too, changed how its municipal power company operated early, but instead of leasing out the utility, Marathon started buying power from Binghamton Light, Heat and Power Co. in 1924. That company would later became Associated Gas and Electric, and, later still, New York State Electric & Gas.

———
The Big Switch
The next best change for both villages came in the 1962, after the New York Power Authority began offering low-cost electricity generated by a massive hydroelectric dam in Lewiston near Niagara Falls.

The dam was the brainchild of Robert Moses, then-chairman of the power authority and long-time chairman of the New York State Council of Parks, whose fingerprints can be found today on the infrastructure of New York from the Northern State Parkway in Long Island to the giant Niagara Power Project, now known as Robert Moses Niagara Hydroelectric Power Station, the largest hydroelectric dam in the world when it was completed in 1961.

When that dam began sending cheap electricity across upstate New York, most of the state’s municipal power companies became eager customers.

Marathon was one, starting in May 1962, a practice it continues today.

The reason was simple. For Marathon, electricity from the power authority was 42% cheaper than what NYSEG was charging, according to Robert Braman Sr., then-superintendent of the Marathon electric company, quoted in a Feb. 16, 1976, article in the Marathon Independent-Villager. Braman said that savings translated into 28% rate reduction for customers, while the other 14% was reinvested in the utility.

At a time when investor-owned electric companies were constantly rationalizing continual rate increases, Braman said Marathon, in 1976, was charging rates 37% lower than it was in 1930s when he first started working for the utility.

The reason was low overhead, he said. The municipally owned utility made no profit, and reinvested in the utility and the electrical infrastructure. The utility also had only three employees — all Bramans — who were not unionized and did whatever jobs needed doing.

The village bought electricity in bulk from the power authority and paid a transmission or “wheeling” charge to NYSEG.

Before all this happened, the village came close to selling out to NYSEG. But then-mayor William Appleby fought this, and persuaded the town board to side with him.

“We felt that if NYSEG wanted it so badly, it must have been worth something,” Appleby told the Independent-Villager. “The village was better off holding on to the plant.”

Groton, too, could have sold its utility, but, like Marathon, it chose not to.

In 1962, it also switched to NYPA power coming from the Niagara Power Project.

One of the reasons the village likely held onto its electric department was Smith-Corona, according to T. Edward Walpole, former chairman of the board of light commissioners, quoted in the Dec. 22, 1981, Cortland Standard article.

In the same article, Frank McLear, a former superintendent of the power company, estimated that Smith-Corona, which had a manufacturing plant in Groton, bought about a quarter of the system’s output.

Rankin agreed that cheaper power was likely why Smith-Corona kept its plant in Groton, and why Groton held onto its public utility.

“I think that was a contributing factor,” Rankin said. “I think that was one reason they (Smith-Corona) stayed here as long as they did.”

———
Municipal power
Today, these two municipally owned utilities — like other public electric companies in upstate New York, such as those in Endicott, Greene, Skaneateles, Penn Yan and Solvay — continue to offer cheaper rates than investor-owned companies such as NYSEG and National Grid.

According to the American Public Power Association, public power companies provide electricity to one in seven Americans, who pay 13% less than customers of privately owned power companies, saving on average $176.79 annually, or about $15 per month. About 10% of electricity generated in the U.S. comes from public power companies.

According to the APPA, repair to electrical infrastructure damage is also faster with municipal power companies than with private companies. In the event of “major adverse event,” such as a storm, “customers of a public power utility are likely to be without power for less time — 74 minutes a year, compared to 136 minutes a year for customers of private utilities,” according to the APPA.

For businesses, especially energy-intensive ones, cheaper electricity is nothing to sneeze at.

“We look at that as a clear advantage,” said Kevin Thompson, chief financial officer of Marathon Boat Group Inc., who said that Marathon’s cheaper power is one of the reasons to keep his company stationed in the village.

Same goes for Groton. Jeff Cronk, co-owner of C&D Assembly, Inc., an electronics manufacturer, said his business pays a lot less for electricity than it would if it were located outside the village and buying power from NYSEG.

Cronk said he also sees the difference at home. He lives in the town of Groton, where NYSEG provides his home electricity, and his residential rate is substantially more than what his mother, who lives in the village, is charged by the village’s electrical department.

“It’s pretty significant,” he said. “My mother pays like 30 bucks, and I pay like 300.”