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Home , Black Hills, Frank Farrar, Nils Boe, Peter Norbeck, Ralph Herseth, Reptile Gardens

“It’s unfair to the people of this area for us to collect taxes from our customers to help TVA [Tennessee Valley Authority] sell power at a lower price to their customers.” NEIL SIMPSON, President, Power and Light Company

60 Expanding Futures on the 4 EXPANDING FUTURES ON THE GREAT PLAINS Black Hills Power and Light continued to expand. The company absorbed smaller utilities. It offered power and transmission services to other areas in collaboration with public power agencies and rural electric cooperatives. But tensions with the rural cooperatives were building over territories and customers. As the federal government began to construct dams and hydroelectric facilities on the , company officials scrambled to hold onto Black Hills Power and Light’s market and customers.

61 Expanding Futures on the Great Plains Govenor ’s plan to build a dam dams on the river would revive the state’s proponents of the public power district bill were and hydroelectric facilities on the Missouri River economy. Their efforts to encourage the federal able to convince legislators that new districts after World War I died for lack of sufficient government to build a series of dams gained were needed to secure the power to be generated demand, but the idea lingered in the minds of momentum in 1943 after spring floods caused by Missouri River hydroelectric plants. The public many policymakers in Pierre and Washington, major damage to downstream communities, power district bill passed in 1950. D.C. After drought, depression and war, South especially Omaha, . Dakota’s congressional delegation hoped that While Black Hills Power and Light officials Under public pressure, the Army Corps of quietly worried about the competition from public Engineers and the Bureau of Reclamation power, executives publicly reassured stockholders developed and submitted plans to Congress. that municipalities had had the right to create The delegation voted with others public power companies for years, but none had to pass the Flood Control Act of 1944 based on done so in the company’s territory. Since it would a compromise proposal known as the Pick-Sloan take a vote of the people, the company said it was Plan. Two years later, South Dakota’s Governor confident that there would be no competitive M. Q. Sharpe presided at the ground-breaking of threat. But the issue did not go away. the first dam on the river near Kansas City. As it became clear that a dam would be As construction began, South Dakota worried constructed on the river in South Dakota and that it would not get its “fair share” of Missouri that public power would be made available River power. To position the state on the issue, to public institutions and rural cooperatives, the governor appointed a study committee Black Hills Power and Light sought to turn a with representatives from the cooperatives, competitive threat into an opportunity. If the the municipal-owned, and the investor-owned company was not going to sell power it had The Flood Control Act of 1944 provided for the electric companies. The committee offered two generated, it could at least provide or share construction of four major dams on the Missouri River different bills to the Legislature – one proposing transmission facilities and hope to avoid making in South Dakota. The last of these projects, the Big the creation of a state authority; the other future capital expenditures by purchasing low Bend Dam, was dedicated in 1966. enabling the creation of public power districts. cost hydroelectric power. In the spring of 1950, The state authority bill went nowhere, but Ben French went to Washington with REA

62 Expanding Futures on the Great Plains at the Alex Johnson Hotel in Rapid City on wheel Missouri River power to the Rushmore November 3, 1953, he reiterated the company’s G. & T. Cooperative, and exchange economy support for the transmission line and argued that and emergency power over its lines. That it was necessary to maintain high standards of agreement was signed on June 11, 1955, with the service to institutional customers including the expectation that Missouri River power would Rapid City Air Force base, other military projects, become available after the first of the year. public institutions and hospitals.

Officials from the Bureau of Reclamation and the rural electrics were hesitant about French’s plan. In exchange for constructing the line, Black Hills Power and Light wanted enough power from the Missouri River facilities to justify construction of the line. The Bureau pointed out that it served many areas on a single line and that approval of a second line might prompt “a flood of requests.” South Dakota Senator Karl E. Mundt pushed for the George Crouch, president of West River Electric development of the Missouri River dams to provide Association, told the that his flood control, water and public power. association had “pretty well made up its mind” about one transmission line. officials to testify before Congress in support of Despite resistance from the REAs, Black Hills efforts by the Bureau of Reclamation to begin Power and Light continued to negotiate with The state-owned plant in Rapid City became building a transmission line from Rapid City to the Bureau of Reclamation. In the spring of 1955 the focal point for a debate over public versus private the east toward the river. French told shareholders that the company was power in 1959. Gov. recommended that on the verge of an agreement with the Bureau the plant use Bureau of Reclamation power from the French continued to push for a shared transmission that would allow Black Hills Power and Light Missouri River. line for the next several years. At a meeting held to purchase “secondary and dump” energy,

63 Expanding Futures on the Great Plains A NEW GENERATION IN AN ELECTRIC KITCHEN As planning for the Missouri River facilities moved forward in 1954, South Dakota Sen. Karl using electric ranges and ovens. Participants Mundt also floated the idea that a nuclear power took home Reddy Kilowatt recipe cards for plant might be built on the river to firm up the muffins, donuts, spaghetti, no-bake brownies hydroelectric power to be produced by the dams. and other delicacies. Mundt pushed for a joint study by the REA and the Atomic Energy Commission.

In the television era of Leave it to Beaver As plans were developed for allocating power from and Donna Reed, when cooking was seen the Missouri River facilities, some people in South as primarily a woman’s role, girls filled most Dakota believed their fears were being confirmed. of the classes. But there were also boys who Governor told the press that “Unless we move fast, power from Oahe also may slip away learned to cook for themselves. in greater quantities than we feel desirable.” Foss named a state power coordinating committee “to In the 1950s, Harriet Christie directed the assure South Dakota a fair share of Missouri River Cooking classes helped boys and girls learn Home Service Department in Rapid City power.” The governor appointed Neil Simpson to how to fend for themselves in the kitchen. and Mae Bledsoe ran the program in the the committee, along with various officials from public power and rural cooperatives. They also supported the company’s overall Northern Hills. Both women had been with public relations program and introduced a the company for a number of years. They With the completion of the Missouri River new generation to electric appliances. traveled throughout the company’s service dams and hydroelectric facilities, public officials area demonstrating cooking techniques to continued to talk of replacing private power Summer classes were offered by the school classes and groups of homemakers. supplies with public. In 1959, Governor Ralph Herseth suggested that the state could save employees of the Home Service Department. Working closely with the retail sales $150,000 a year at the state-owned cement plant In 1957, more than 600 youth participated. department they helped promote the use of in Rapid City by using Bureau of Reclamation They received eight hours of instruction electric appliances. power rather than Black Hills Power and Light

64 Expanding Futures on the Great Plains electricity. With the cement plant’s contract ELECTRIC METER Black Hills Power and Light’s close association with Black Hills Power and Light set to expire with the SDSM&T led to a number of in January 1961, company officials scrambled to address Herseth’s proposal. SCHOOL 1957 collaborations, including the electric meter school for employees. To Black Hills Power and Light officials, the situation with the Cement Plant was complicated by the already low rates the company provided to the plant. According to a Public Service Commission report, the rates were so low that they could be characterized as being within “the realm of discrimination.” Caught between Wyoming regulators on the one hand and the on the other, Black Hills Power and Light decided to take advantage of a two-year cancellation clause in the contract. On January 24, 1959, the company cancelled the contract, forcing the State of South Dakota and the Bureau of Reclamation to bargain in earnest.

Adding a layer of complexity to these negotiations, Jarvis Davenport of Sturgis, a long-time member of Black Hills Power and Light’s board of directors and chairman of the executive committee, was also the chairman of the State Cement Plant board. A prominent Republican and member of the board of the U.S. Chamber of Commerce, Davenport had served on the cement plant board for 17 years.

65 Expanding Futures on the Great Plains keep politics out of the operations of the plant. He went on to say that it was “unfair to the He also favored private enterprise to provide the people of this area for us to collect taxes from plant with power. our customers to help TVA sell power at a lower price to their customers.” As the controversy over the cement plant and the issue of public power continued, Simpson Simpson’s frequent criticisms of government- and French worried about losing the business funded power generation and cooperatives of the company’s second largest customer. They sparked a reaction from local cooperative leaders. frequently reminded audiences that investor- Speaking to the Lion’s Club in January 1960, the owned companies contributed substantially to head of the West River Electric Association the local tax base and that federal taxes paid by rejected Simpson’s characterization of the co-ops the company had helped to build the Missouri as “socialistic and communistic.” He pointed out River dams. Cooperatives and municipal power companies paid far less in taxes. Simpson compared Black Hills Power and Light to a Nebraska consumer public power district. The Nebraska district had a net plant valuation of $46 million and total revenue of $15 million Jarvis Davenport, a Sturgis businessman, served on in 1959, and paid only $225,000 in taxes. In the board of directors of Black Hills Power and Light contrast, Black Hills Power and Light had a net from 1942 to 1974. property value of $20 million, revenues of $6 million, but paid nearly $1.2 million in taxes. The original Belle Fourche Light, Heat and Power Despite his service on the cement plant board On other occasions, Simpson sharply criticized Company began its operations in 1906. As a division and his acknowledgement that the plant was a public power. At a luncheon in 1959 he blasted of Black Hills Power and Light, it bordered a number “socialistic” venture, he believed the operation the government’s support of the Tennessee of rural electric cooperatives prompting occasional ran well and served the people and industries of Valley Authority (TVA), calling it “one of the conflicts over new customers. the state. He urged the governor and others to most glaring examples of encroaching socialism.”

66 Expanding Futures on the Great Plains that Black Hills Power and Light depended on a flat rate per kilowatt hour. The agreement with cooperative-owned power plants for “two-fifths the cement plant provided the framework for a of the power available to Black Hills Power and new rate structure that Black Hills Power and Light,” suggesting that the company was “biting Light offered to all of its industrial customers. the hand that feeds it.” Simpson countered in a chamber of commerce address that he had no quarrel with cooperatives or the REA “so long WORKING WITH COOPERATIVES as they remain within areas they were originally AND PUBLIC POWER intended to serve.” Despite the sometimes fiery rhetoric that divided Black Hills Power and Light from the rural Against the backdrop of this debate, the cement electric cooperatives, the company continued plant issue moved toward resolution when the to negotiate the murky boundaries between the state hired a consultant to analyze the plant’s role of the marketplace and the role of public electric needs and the facilities of the available or government-sponsored organizations in the TELEVISION CHANGES POLITICS suppliers. The consultant concluded that the provision of electric power. In the semi-urban Television’s growing influence led to the savings that would result from converting to areas surrounding cities in the Black Hills, the first televised presidential debates in 1960. Bureau of Reclamation power were “negligible” company looked for ways to work with the rural Although radio audiences judged Richard and that transmission over 170 miles on a single electric cooperatives, leveraging their access to Nixon the winner, his better-looking opponent, line “was not dependable enough for cement inexpensive government financing, but bringing plant operations.” With this report in hand, the the company’s superior management and John Kennedy won over television viewers. state and Black Hills Power and Light signed technological skills to bear on joint projects. Television’s popularity had grown rapidly a new contract in October 1960. Under the throughout the 1950s. At the beginning of the terms of the deal, Black Hills would continue to In the 1950s, Black Hills Power and Light had decade, only 9 percent of American households supply one-third of the plant’s electric power at entered into multiple agreements with Rushmore had a TV, compared to 87 percent in 1960. an increased rate. The Bureau of Reclamation G. & T. Electric Cooperative to install and operate would supply the remaining two-thirds of the power plants at Osage and at the Kirk Plant in Along with other new appliances, television plant’s requirements. Black Hills agreed to wheel Lead. In 1961, Black Hills Power and Light struck contributed to the ever-growing demand for the Bureau’s power over its transmission lines for a deal with Consumers Public Power District electric power. of Nebraska to develop a high-voltage inter-tie CONTINUING CONSOLIDATION Even these acquisitions were colored by the between systems of the two organizations. The tie IN THE BLACK HILLS tensions over public versus private power. In allowed Black Hills Power and Light to purchase Cooperation between the rural electrics Hot Springs, for example, prior to the Black additional capacity and to join in pool operations and Black Hills Power and Light reflected Hills Power and Light Company acquisition, in the Rocky Mountain area. Despite these efforts the increasingly integrated character of the a group of citizens had been lobbying the city to cooperate, however, tensions with the rural electric grid in western South Dakota and to purchase Central’s facilities and create a electrics would only increase in the 1960s. Wyoming. This integration was also visible municipal electric company. After Black Hills in the company’s continuing acquisition of Power and Light bought the local company, small, independent or municipal companies. these citizens took out a large advertisement During WWII, Black Hills Power and in the Hot Springs Star protesting the fact that Light had purchased the electric utility in Central Gas and Electric had been unwilling to Edgemont, South Dakota from the Mountain negotiate a purchase price with the city. Despite States Power Company. After the war, the these concerns, the deal went through and with company acquired the electric property in this acquisition Black Hills Power and Light Newcastle, Wyoming from Mountain States. became the only remaining investor-owned At the end of 1952, Black Hills Power and provider of electric service in the Black Hills. Light bought the electric distribution system in Keystone near Mt. Rushmore from Battle Creek Power Company. The next year, the COLLECTIVE BARGAINING SPARKS DEBATE company opened a branch office in Hill City Across the U.S., the post-war era saw a resurgence to serve customers in this area. In July 1960, of the union movement that even touched the company announced plans to purchase the long-time “right-to-work” state of South the electric properties of Central Gas and Dakota. Black Hills Power and Light executives As the number of customers grew, office clerks kept Electric Company in Hot Springs, Buffalo repeatedly expressed pride in the company’s track of each account on file cards. For years, many Gap, and Oral, South Dakota, an acquisition employee relations. Nevertheless, management customers came to the office to pay their bill and save that would help increase Black Hills Power clearly associated worker organizations with the the cost of a stamp. and Light’s customer base by nearly 10 spread of communism. The 1949 annual report percent in 1960. to shareholders, for example, included a full-page

68 Expanding Futures on the Great Plains cartoon depicting “The Story of Ten Little Free Workers,” including “Reddy Kilowatt,” who lost their freedom to collectivization and socialized government programs.

The International Brotherhood of Electrical Workers (IBEW) made several efforts in the mid-1950s to organize line employees of Black Hills Power and Light. In 1955, Rapid City Local 1250 filed a petition for a hearing and election to be supervised by the National Labor Relations Board (NLRB). Simpson made it clear that the company would “keep a hands- off policy and let employees make up their own minds.” He did point out to reporters, however, that the company had a generous compensation These images appeared as part of a cartoon in the Black Hills Power and Light Company 1949 Annual Report. policy. Since 1941, he said, salaries of many field workers had increased 300 percent while the cost of living had only risen 98 percent. rejected the union by a 55-45 percent margin. union would not be beneficial to either the Moreover, the company paid for generous A year later, the IBEW tried again. This time company or our employees.” He suggested that fringe benefits including sick leave, insurance, the petition was filed by the office the union would contribute nothing “except vacation time, recreation and other programs. of the IBEW, which had become part of the difficulty in the administration of future Altogether, these benefits increased the value newly formed AFL-CIO, the nation’s largest policies” but he encouraged all employees of the employee’s compensation by 31 percent federation of labor organizations. to get out and vote. Voting supervised by over take-home pay, Simpson said. the NLRB took place over two days in 18 Simpson once again expressed confidence different locations. When the votes were When it came time to vote, 99 percent of the that employees would reject the union. “It tallied, 106 eligible employees had voted company’s eligible employees cast a ballot and is my firm belief,” he told reporters, “that a against the union; 65 for.

69 Expanding Futures on the Great Plains As Black Hills Power and Light became the shorter work week, however, they would still Consumer demand was also heightened by the increasingly prosperous in the late 1950s, receive the same take-home pay. The next year, proliferation of other new devices. In 1950, one work life for employees continued to improve. the work week for generating plant employees in five American families owned a television. Ten Following a nationwide trend, the company was also reduced from 48 to 40 hours a week years later, 46 million families, or seven out of announced in October 1956 that all employees, without a loss in take-home pay. The remarkable eight households, were able to watch the debut except those working in power plants, would have stability of the workforce provided evidence of of shows like Andy Griffith or My Three Sons a 40-hour, instead of a 48-hour, work week. With employee loyalty. By 1959, two-thirds of the or view the famous presidential debates between company’s full-time employees had been with the John F. Kennedy and Richard M. Nixon. In the company for five years or longer. Even with the average American household, the television stability of the company’s workforce, efforts to was on for five hours a day, contributing to the introduce collective bargaining would continue growing demand for electric power. in the 1960s. Black Hills Power and Light also marketed to a new generation of consumers in the early MORE APPLIANCES MEANS MORE DEMAND 1960s by offering summer cooking classes for In the 1950s and 1960s, Black Hills Power pre-teen children. and Light continued to sell and service electric appliances. The growing popularity of air While growing consumer demand increased conditioning also played a key role in the increase the need for electric power, an expanding in demand for electrical power. As businesses industrial base in the Black Hills also and consumers switched on these units, power contributed to the need for generation. In demand in what had been the traditionally low 1960, for example, the Homestake consumption summer months rose. Writing in the Company, Black Hills Power and Light summer of 1959, Simpson told shareholders that Company’s largest customer, announced that in the last two years the annual load pattern had it would invest $1.5 million to expand its Mae Bledsoe was the Home Service Counselor in the changed “substantially” and created an improved operations in Lead. The expansion increased Northern Black Hills. load factor resulting in “more efficient use of our Homestake’s electric energy requirements by generation and transmission investment.” nine million kW hours per year.

70 Expanding Futures on the Great Plains plant to be built in Rapid City, adjacent to the had risen from 6,256 to 314,649. Meanwhile, State Cement Plant. The plant, with an initial customers had benefitted from steadily falling 22,000 kW capacity, would be named for the prices. The average revenue per kilowatt hour company’s chairman – Ben French. It would be in 1928 was $7.21. By 1958, it was only $1.90. equipped with a mechanical dust collector to The contribution to the common good had also help reduce air pollution. In an editorial, the risen dramatically: taxes paid had increased from Rapid City Daily Journal noted that the plant $31,600 in 1928 to $1,259,000 in 1958. Less than represented “the largest single enterprise of a two years after the groundbreaking, the new Ben private business in this area since the railroads French station began commercial operations. came in.” The newspaper underscored the “firm” power supply that the plant would produce as opposed to the water dependent power produced by the Missouri River hydroelectric plants. The newspaper also said it was appropriate that the plant be named for French who had “anticipated the future for this area and contributed to a Ben French turned the first shovel full of dirt to start far-seeing development expansion plan for the construction of the company’s new 22 MW power power company.” plant in Rapid City in 1959. That year he recorded his 30th anniversary with the company. Using a -plated shovel provided for the occasion, French broke ground for the new plant on April 29, 1959, 30 years after his arrival in BUILDING THE BEN FRENCH STATION Rapid City. The company used the occasion to Growing demand and the threat of competition review the growth that had taken place since from Missouri River power led Black Hills 1929. The population in the company’s service Power and Light to make a bold move. At the area had grown from 23,000 to 95,000 in 30 years. 1959 annual shareholders meeting, Simpson The company’s system peak load had increased unveiled a model for a new $5 million power from 2,200 to 68,295 kW. Kilowatt hour sales

71 Expanding Futures on the Great Plains BEN FRENCH POWER PLANT Ben French Power Plant began commercial operations in January 1961. It provided system 1961 72 stabilization rather than base load power. Expanding Futures on the Great Plains RETURNS FOR SHAREHOLDERS DEADWOOD SURROUNDED BY FIRE Through the 1950s, inflation driven by the Korean War affected industries and consumers Fire roared up the steep hillsides and along across the country. Black Hills Power and Light the near Deadwood on the afternoon held rates steady from 1947 until 1958. That of September 8, 1959. Ignited by sparks year the company announced that it would seek from a trash burner between Central City a 5 percent increase from the Wyoming Public and Deadwood, the fierce blaze was fueled Service Commission and various cities that regulated service in South Dakota. In announcing by a dry wind and temperatures in the high the application, Simpson told reporters that nineties. As residents evacuated, 3,500 despite inflation, the average price per kilowatt- people from around the Black Hills came to hour of electricity had declined by 24.5 percent fight the fire. but increases in operating costs were beginning to eat into earnings. Without sufficient earnings the company would not be able to continue to Throughout the afternoon, Black Hills Crews install power lines in the burned out area. attract capital to develop power plants and other Power and Light line crews labored to help facilities. “To assure continuing and adequate firefighters and keep power flowing to on three sides, firefighters were able to keep service, and to preserve the financial integrity communities in the area. In the early evening the blaze from consuming most of the homes of the business, it is essential that we obtain rate the fire destroyed the 69 kV lines from the relief at this time,” he said. Effective in April 1958 and businesses in town. Damage to Black in South Dakota, the rates were not approved by Pluma Plant. Power was down for nine Hills Power and Light’s facilities totaled less Wyoming regulators until February 1959. minutes, and water pumps stopped working. than $25,000. Using an older line, the company was able to As the rate increase flowed to the bottom line restore power to aid the firefighters. Once the ashes had cooled, Black Hills Power and the new Ben French power station became operational which lowered the company’s cost and Light crews worked to set new poles and of generating power, earnings improved. By the The fire was not completely subdued for seven string power lines. Within weeks they had middle of 1962, Black Hills Power and Light days. Although it surrounded the community restored power to the community. By 1962, Wyodak coal produced operating still on, he joined the Navy. He returned to revenues of $618,000, 85 percent of which came Black Hills Power and Light as a distribution $3.00 from Black Hills Power and Light. Overall, the engineer in November 1945. Over the years, he company had come a long way in 20 years under had risen up the corporate ladder. He served as the leadership of French and Simpson. a local manager in Rapid City starting in 1950. $2.50 He then became manager of the Distribution department for the entire company in 1953. LEADERSHIP CHANGES In January 1954, he was promoted again. He $2.00 Simpson ran the company with a strong hand, was appointed system manager of engineering but by the early 1960s, Robert Asheim also and operations. Like many Black Hills Power emerged as a major figure in the organization. and Light employees and leaders, Asheim was $1.50 He was effectively Simpson’s chief operating active in the community and local politics. He officer in the days before such a position had was elected to the City Council of Rapid City

been created. “He was in charge of everything in 1962. On the council he worked to bring

1948 1951 1954 1957 1960 1963 that Neil wanted him to do,” remembers one more efficiency to city government. He also long-time employee. developed a deeper knowledge of local politics. Earnings per share fluctuated in the mid-1950s, but rose after the 1958 rate increase. With his intense blue eyes and thick crew cut hair, Asheim had the movie star looks of CAMPAIGNS TO WIN ELECTIONS Chuck Connor, the star of The Rifleman, a As local utilities, electric companies like Black had grown its annual revenues to $8.38 million. popular television western of the era. He had Hills Power and Light continued to operate It served 18 incorporated communities in and grown up in Elm Springs, South Dakota and with the approval of local governments – even around the Black Hills, as well as many rural areas graduated from New Underwood High School. though South Dakota law prohibited cities from with a total population base of about 120,000 He worked briefly for Black Hills Power and offering exclusive franchises. As a result, Black in South Dakota and Wyoming. About half of Light while he was a student at the newly Hills Power and Light had to periodically turn these people lived or did business in Rapid City. renamed South Dakota School of Mines and to voters in local communities to renew the Approximately 13 percent lived in Wyoming. Technology. He graduated in 1944 with a company’s franchise. Sometimes these elections The investment in Wyodak was paying off. degree in electrical engineering. With the war went smoothly and sometimes they didn’t.

74 Expanding Futures on the Great Plains As these elections became more important, talk to one of the agents, a young man named the company’s executives looked for someone Joe Rovere. Rovere was born in Lusk, Wyoming to coordinate the company’s outreach to on the same day a cyclone tore through the local communities and maintain good public country and wrecked his parents’ homestead. relations. One day in 1962, Asheim stopped With the baby Joe in arms, his parents moved into the county extension office in Sturgis to to Lead. Rovere grew up on a small farm in Boulder Canyon and graduated from Sturgis Brown High School in 1947. After health problems forced him to quit South Dakota State University, he returned to Sturgis and took a job with the extension service. Over the next 12 years-plus he became a familiar figure in and around the communities of the northern Black Hills. Asheim and Simpson figured Rovere would be the perfect individual to help carry the company’s message to the people and hired him.

Rovere spent much of his time speaking to service groups about the differences between the investor-owned utilities and the rural electric associations. There were also franchise elections Joe Rovere became the public face of Black Hills to be handled. In 1964, voters in Hot Springs Power and Light for many people in the 1960s. went to the polls to decide whether to give Black The retail price of electricity fell steadily Traveling throughout the company’s territory, he Hills Power and Light a franchise. Opponents helped educate customers about the issues related ran newspaper advertisements suggesting that a throughout the 1950s. Campaigning to win to electric power. franchise would diminish the city’s bargaining franchise renewals, the company touted the power with the company over rates and service. efficiency of its operations. Black Hills Power and Light sought to renew provide electric service to the Minuteman missile its franchise in Newell and Sturgis a year later. sites in the state in 1961. Simpson reacted to In making the case to these voters, the company the announcement with frustration: “I cannot stressed continuity and reliability and the trust see any justification for this line. Our company that had been created over the years. In brochures already has transmission facilities from Rapid for local residents the company highlighted the City to Newell to carry power loads of the missile fact that charges per kilowatt hour had declined sites.” Black Hills Power and Light complained almost 30 percent, from 3.92 cents in 1941 to that these contracts would cost taxpayers $10 2.79 cents in 1965. The company also pointed million over and above what it would have cost out that taxes paid by the company supported if the company provided this service. Simpson schools and local government. In Newell, the franchise was renewed easily with only one person out of 183 voters who cast ballots, voting against the company. In Sturgis, voters cast 96.3 percent of the ballots in favor of renewing the company’s franchise. In Hill City, the vote was 85 for, three Public communications helped customers understand against. Generally, the company’s emphasis on the process of generating electricity from coal in the service, its support for local government, and mine to power in the home. its commitment to the community earned high marks from local residents.

Voters rejected the franchise proposal by a 610 to 513 margin. Despite the vote, the company NEW CONTROVERSIES, OLD THEMES thanked those who had voted yes in newspaper The development of public power on the Airmen and their families shopped the commissary at ads and promised that “Black Hills Power and Missouri River continued to put pressure on in 1958. With the Cold War, Light Company will work tirelessly to give the Black Hills Power and Light in the 1960s. REA- the base’s mission expanded with the construction of people of Hot Springs the best possible service at financed cooperatives in western South Dakota a Titan Missile Base nearby. the lowest possible cost.” negotiated a federal government contract to

76 Expanding Futures on the Great Plains asserted that officials in the REA and the Bureau FATHER AND SON AT WYODAK of Reclamation had put pressure on the Air Force to make a deal with the cooperatives. “Those For many years, the Wyodak mine was Though legally blind, he followed in his planners are the leftist-types who believe that a managed by father and son – Edward G. father’s footsteps. In 1949 he became big brother centralized government knows what Ross and Harold Edward “Ed” Ross. A Scottish manager of the Wyodak power plant and is best for the individual, and, to them, cost is no immigrant, Edward came to America with his coal mine. He continued in this position after object,” he said. brother. They both became miners in Lead and Black Hills Power and Light bought the plant That same year, Ellsworth Air Force Base rose from laborers to senior management. and the mine in the 1950s, retiring in 1973. allowed its 10-year contract with the company to expire, choosing instead to contract with the In 1922, Homestake asked Edward to move to Bureau of Reclamation. The loss of the air base Gillette to run the company’s newly acquired as a customer was compounded several years later when Secretary of Defense Robert McNamara Wyodak coal mine. Edward moved his family, announced that the government would close the including his 14-year old son, Ed. The father army depot outside of Edgemont. Since World ran the Wyodak operations until 1932. When War II, activity and employment at this base had Homestake expanded during the Depression, fluctuated. During the Korean conflict, nearly he returned to Lead and became assistant 1,300 people had been employed at the depot. mine superintendent. Despite competitive tensions with public power providers and cooperatives, Black Hills Power The son, Ed Ross, graduated from the and Light was also increasingly involved in University of Wyoming in 1932 with a degree regional efforts to integrate transmission systems in electrical engineering. He studied at so that companies and cooperatives could turn to one another when power plants went down Harvard for a year and then went to work or when demand spiked to purchase auxiliary for Homestake. Injured in a work-related power. In 1963, Black Hills Power and Light explosion in 1946, he lost most of his vision. Harold “Ed” Ross lead Wyodak from 1949 to 1973.

77 Expanding Futures on the Great Plains helped launch the Mid-Continent Area Power a 161 kV transmission line to Consumers Public Planners (MAPP) organization. MAPP included Power District at Chadron. In the early 1960s, 39 power suppliers from ten Midwestern states Black Hills Power and Light regularly purchased and Manitoba. Black Hills Power and Light power from Consumers Public Power District. connected to this network via a transmission line running from Rapid City to the Oahe Dam. The company was also active in the Rocky Mountain REGULATORS DENY COMPENSATION PLAN Power Pool and interconnected to this system via Tensions over differing views of the role of public and private capital in the development of electric service in the 1960s were also reflected in questions of executive compensation. In 1964, the board of Black Hills Power and Light decided to sell up to 10,000 shares of common stock at 95 percent or more of the market value to key employees. But the board As CEO Neil Simpson was a strong and personable couldn’t make this decision on its own. This leader. He resisted a number of efforts to expand compensation strategy, designed to align the government’s role in the power industry. management’s interests with shareholders, had to be approved by regulators at the Federal Power Commission (FPC). to push stock quotations ever higher.” The commission also argued that stock incentives The FPC rejected Black Hills Power and could overcompensate executives compared Light’s proposal in June 1964. In a divided 3-2 with lower and middle management, leading to Window-mounted air conditioners became wildly decision, a majority on the commission asserted possible morale problems. popular in the late 1950s. Customers were that stock-option plans “tend naturally to invited to “take the simmer out of summer” with divert management from their responsibilities The FPC decision reflected the increasingly this 1964 billboard. to the public and to focus their attention prevalent view among some regulators that their on maximizing prices and earnings in order duty to watch out for the public interest could

78 Expanding Futures on the Great Plains and should allow them to overrule the business increasingly engaged in a bitter dispute over a 2 percent tax on the gross revenue of the decisions of managers and boards of directors. territory. The federal government had created cooperatives. Compared with the 8 percent This attitude frustrated executives and directors the REA to serve rural communities. Under charged to investor-owned utilities, this was alike who believed that while regulators were South Dakota law, rural communities were hardly persuasive. After a two and a half hour entitled to set rates and monitor the cost and defined as areas and towns with fewer than debate on the floor of the State Senate, the bills quality of service, the distribution of profits to 1,500 people. As towns served by rural electric were defeated. shareholders and employees (through incentive cooperatives surpassed the 1,500 population programs) was up to the companies’ boards of mark or were engulfed by growing nearby cities, directors. Looked at another way, managers the electric cooperatives and investor-owned and directors of investor-owned utilities argued companies argued over who had a legitimate that the regulators would eventually discourage right to serve these customers. investors from contributing new capital to the utilities if the rights of shareholders weren’t The cooperatives sought to protect their markets balanced with the rights of consumers and in the . In 1959 their the public interest. This tension between the “fair play” bill was passed by the Senate, but public interest in electric service and the role the House recommended it for study by the of private capital grew increasingly heated in Legislative Research Council. In 1961, the South Dakota in the 1960s as rural cooperatives cooperatives lobbied for a new law to permit and investor-owned utilities competed to serve them to remain in urbanizing communities. growing communities. The cooperatives wanted to continue to provide service even after a town’s population exceeded 1,500. They also wanted permission to continue TERRITORIAL DISPUTE HEATS UP serving areas that had been annexed by larger Rural electric cooperatives were thriving by the mid- Through the 1950s and 1960s, South Dakota cities. Officials in a number of cities resisted the 1960s. Their national association fact book noted farms and ranches continued to grow in bill because cooperatives paid far less in taxes in 1965 that 5.2 million Americans living in rural size and decrease in number. As many rural than investor-owned utilities. The REA tried communities were receiving electric service from residents relocated to nearby towns and cities, to check this opposition with a companion local and regional cooperatives. investor-owned utilities and cooperatives were bill that would allow annexing cities to charge

79 Expanding Futures on the Great Plains The tension between the investor-owned the investor-owned utilities. The controversy utilities and the cooperatives did not go away. became an issue in the gubernatorial election In 1963, new legislation was introduced but the that year. Republican candidate tried investor-owned companies were able to turn to broker a compromise saying that “the state the bill their way. Under the new law, when was becoming divided and that the people were a town annexed an adjacent community, the ‘climbing the walls’ during legislative fights over electric service provider serving the majority of the power struggle.” But the battle continued. customers would have the right to purchase the facilities of the other provider. NUCLEAR POWER IN SOUTH DAKOTA PUBLIC POWER LEADS TO NEW THREATS Science fiction writers and cartoonists in the Cooperatives were outraged by the legislation, As the hydroelectric turbines on the Missouri 1950s imagined that the world would soon terming it “foul play.” They vowed to overturn River at the Big Bend power plant began to the legislation. Countering the cooperatives turn in 1966 the controversy over public versus be powered by atomic energy. South Dakota rhetoric, Black Hills Power and Light ran private power increased. By 1968, the major Senator Karl Mundt promoted the idea of a advertisements in newspapers throughout the dams on the river that had been incorporated nuclear power plant along the Missouri River region in October 1963 describing the situation into the Pick-Sloan project were complete in 1954, but his plant was never built. as “A Race That Nobody Wins.” High taxes on and generating 10.2 billion kilowatt hours of utility company profits invested in cooperatives power. With this new supply of public power that wanted to compete with the investor-owned policymakers sought to supply many major The world’s first all-nuclear power plant was utilities created a situation where “everyone’s public institutions. In 1968, Black Hills Power developed on the Big River near Sioux energy in running [the race] is wasted, when and Light went to court to block the state of Falls by Northern States Power (NSP) and that effort could be used in profitable activity South Dakota from entering into an agreement began operating in 1964. NSP soon discovered where everybody benefits.” with Rushmore Electric Power Cooperative to that operating costs for its experimental provide sub-stations and transmission lines to The cooperatives tried to amend the law in carry Bureau of Reclamation power from the 66 MW Pathfinder plant were high. They 1964 but failed. As the issue became more Missouri River to four state institutions in the converted the plant to a conventional, gas- partisan, Democrats generally lined up with Black Hills: the South Dakota School of Mines fired steam boiler in 1967. the cooperatives and Republicans sided with and Technology, Black Hills State College, the State Veteran’s Home at Hot Springs, and Custer But while the courts held for Black Hills Power State Hospital. The company argued that the and Light under the 1965 law, the law itself was 1965 law prevented this kind of competitive being challenged in court. In December, the invasion by the cooperative. The courts agreed. South Dakota Supreme Court ruled that the law was unconstitutional because it gave non- judicial duties to a judge in violation of the state’s constitution. With the court’s decision, the law reverted to the 1963 legislation. The cooperatives vowed that they would come back to the Legislature with a new bill. Meanwhile, others looked for another solution.

Newly elected Governor began his administration in 1969 by proposing the creation of a Gas and Electric Consumers Council. “We have given electric and gas utilities a quasi-monopoly,” Farrar said, “and no protection for the public.” The lack of As governor, Republican Frank Farrar sought to regulation, he believed, had led to high rates increase state regulation of public utilities. His and constrained industrial development. bill was passed and signed in 1969. After citizens Under his proposal, the council would have submitted more than 50,000 signatures in protest, the power to resolve territorial disputes and the Legislature repealed the law in 1970. set rates. Meanwhile, State Senator Frank The company asserted that using tax dollars to Henderson of Pennington County offered a subsidize rural electric cooperatives to compete different solution. He proposed a bill giving out that South Dakota was one of only three against investor-owned utilities created “a race the South Dakota Public Utilities Commission states (Minnesota and Texas were the other) that nobody wins.” the authority to regulate electric utilities. that did not regulate gas and electric service at Advocates for statewide regulation pointed the state level.

81 Expanding Futures on the Great Plains Farrar’s proposal was attacked by the the bill and jammed his office with visitors regulating 79 utilities in the state including the cooperatives. They accused the governor of in opposition to the proposal.” According to seven investor-owned, 34 cooperative, and 32 “selling out” to the private power companies. the Rapid City Daily Journal, the bill was the municipal electric service companies. The pressure from the cooperatives was intense “pivotal” measure of the 1969 Legislative session as members “badgered him in hearings on and could “make or break” the new governor. Black Hills Power and Light supported the governor’s proposal to resolve the tensions To the general public, the issue was often between the cooperatives and the investor- confusing. It was also complicated by the owned companies. Opponents promised to fact that the investor-owned companies and put the law before the voters. The governor’s the cooperatives continued to work together popularity went into a “drastic skid.” In early to meet the need for power. Some opponents June, opponents submitted more than 50,000 of the bill, for example, sought to discredit signatures on a petition to refer the measure to the investor-owned utilities by accusing the voters. Before voters had an opportunity Black Hills Power and Light and Rushmore to pass judgment on the bill, however, the Electric of “colluding” because the two legislature repealed the law in early 1970, companies had cooperated to finance, build sending all parties back to the drawing board. and operate power plants at Osage and Kirk. For company executives, the situation While Black Hills Power and Light struggled became increasingly frustrating. with regulatory issues, the economic legacy of the 1960s also presented challenges. The On the first roll call in the State Senate, Farrar’s closing of the munitions depot in Provo had plan failed by one vote. Proponents amended contributed to a substantial loss of population the bill. The next week the bill passed by the in the southern Black Hills. Despite continuing narrowest of margins. Known as the Consumer’s migration from the countryside into the urban Protection Bill, the measure cleared the House area around Rapid City, the city’s population and was signed by the governor, creating the had increased by less than 5 percent in a South Dakota Gas and Electric Consumer decade. Although the company’s annual reports Council. The new council was charged with highlighted good news, residential energy sales

82 Expanding Futures on the Great Plains grew very slowly between 1964 and 1967 and The Westinghouse D4S meter, introduced in total energy sales actually declined. WESTINGHOUSE D4S 1968, had a lower profile and weighed less In the summer of 1969, a series of corporate 1968-1983 than previous models. announcements seemed to promise a brighter future in the decade ahead. Control Data Corp., a booming electronics firm, said it would build a major manufacturing facility in Rapid City. Homestake Mining Company announced it would begin a five-year, $8 million expansion. In August, construction began on an $8.5 million pilot plant to convert lignite, a low- grade form of coal, to high quality pipeline gas. These new investments held out hope for substantial growth and well-paying jobs.

Economic growth also foreshadowed additional demand for power. To meet that demand, Black Hills Power and Light would need new facilities. But with the engaged in a growing conflict in Vietnam and increasing social upheaval at home, the economic climate for business was changing. In the 1970s the company would face the hardest years in its history. For employees and residents of the Black Hills, one night especially would bring overwhelming disaster.

83 Expanding Futures on the Great Plains RAPID CITY FLOOD Torrential rains broke Canyon Lake Dam and sent a wall of water through Rapid City. The flood took 1972 84 238 lives and destroyed hundreds of homes.

JUNE 9, 1972 THE RAPID CITY FLOOD

On the night of June 9, 1972 it began to rain. A structure. City employees and volunteers working car. The water swirled around the vehicle. When storm cell hovered over the northern Black Hills, in the downpour struggled to pull debris from the Landguth saw a house on high ground with its intensified, and did not move. Within a matter of spillway to alleviate the pressure on the dam, but lights on, he pulled up the driveway and into hours, depending on the location, seven to fifteen they could not keep up. Meanwhile, along the the open garage. A huge cottonwood tree had inches fell. The weather service issued a flood alert path of the creek below the dam, the waters rose, fallen in front of the house and was diverting the at 7:15 p.m. as water rushing down hillsides flowed filling backyards and flooding streets. onrushing waters. That tree protected the house into Rapid Creek, swelling the stream beyond its through the night. boundaries. As the muddy flow came through In the Riverdell neighborhood below the dam Dark Canyon on the outskirts of Rapid City and some people were at home in bed. Others had In another area, as one woman and her husband then poured into Canyon Lake it strained the dam heard the flood warning and realized that the loaded their four children into the family car in to its breaking point. creek had burst its banks. They stuffed blankets and rugs under the doors to keep the water from Elaine F. Smolnikar, who worked for Bob Asheim, coming in. Others gathered children and loaded lived in a house in Dark Canyon. She and her them into their cars. husband had no other family in the community. A week earlier she had bought a new Black Hills At home in another part of town when he heard Gold ring and showed it off to everyone in the the warnings, Joe Rovere got in his car and drove executive offices. She was wearing it that night as to his mother-in-law’s small house near Rapid the rain beat down. Creek. She was already in bed and insisted she wasn’t leaving the house. Rovere persisted, got her Around 9:00 p.m. a torrent of water came in the car and brought her to his home. through the canyon, raising water levels four feet in a minute and ripping homes from their The rain kept coming. foundations. Elaine and her husband were carried A damaged billboard advertising Rapid City’s into the flood. When of water reached People abandoned their homes. Black Hills Power famous attraction offered images Canyon Lake, it cascaded over the top of the and Light engineer Dan Landguth and his family, of a happier time. dam, eroding and weakening the base of the who lived below Canyon Lake dam, piled into the

85 1972 Rapid City Flood the middle of the pounding rain she noticed that sweeping away houses, bridges and trees. As the Pretty Pines restaurant on the West Side to grab “there were no lights except for the lightning.” water raced through town, it left Rapid City and food. Landguth remembers Neil Simpson coming Before they had traveled a block, the car started flowed eastward to the River, carrying through the restaurant. He listened to their stories, to fill with water. Abandoning the car, they made away houses and buildings and taking 238 lives. and soon after, he told those who had lost their it to the roof of a nearby house, and huddled with homes to go back to their families. “I learned a life ten other people through the night. Throughout the Black Hills the flood took the lesson from that,” remembered Landguth. “Always lives of young and old, rich and poor, Indian put the priority of your people first.” At about 10:45 p.m., the dam gave way. A wall and white. Many would-be rescuers, including of water swept through the Canyon Lake area, firefighters, a police officer, and members of the While other Black Hills Power and Light National Guard died. Henry Hausmann, a 75-year Company employees worked to restore power, old former Black Hills Power and Light employee, Larry Owen had a somber task. When word came perished along with his daughter and son. that Elaine Smolnikar was among the missing, he began visiting the makeshift morgues around Rescued early the next morning, Landguth could town. Identifying the bodies was often extremely not believe the devastation. He and his family difficult. But when he saw the hand of one woman were taken to West Middle School. When he was and recognized the ring she had proudly displayed finally able to check on his house, he found it still a week earlier, he knew he had found Elaine. standing, but soaked through with mud and water. Fish from the ruined fish hatchery flopped about Although the storm and the flood took out in the rooms and even in the family’s cars. power in many parts of Rapid City and in other communities in the Black Hills, the company’s With telephone and electrical systems ruined transmission network did not suffer major in many parts of town, Black Hills Power and damage. Employees and the community pulled Light employees mobilized at the company’s together to restore power and rebuild Rapid headquarters on Sixth Street. “We had to make an City. The Red Cross set up service centers for At the rescue shelters, victims of the flood rested from inventory,” remembers Landguth, to see what lines homeless survivors. Drinking water had to be their ordeal with the comfort of their pets. and substations had been destroyed. As employees made available. Everywhere people dealt with the worked round the clock, they checked in at the shock and grief over the loss of life and more than

86 1972 Rapid City Flood advised not to hook a drop cord to their neighbor’s wrote, “Many have asked, ‘How might we help?’ house to get service unless the electrical meter had One important way in which you can help is to let been removed; otherwise they might endanger the your friends and associates know that the …tourist lives of repair crews in the area. Customers were accommodations and tourist attractions in the also cautioned against reconnecting appliances Black Hills are available for those who are planning that may have been saturated with flood waters. a trip to this region.” Despite the devastation, the residents of the Black Hills were putting their lives Ads for new appliances and sales of flood-damaged and communities back together. goods filled the newspapers. Black Hills Power and Light teamed up with Hotpoint to offer victims low-cost opportunities to buy new appliances. Businessman Lou Haggerty had a sense of humor. His billboard advertised “Salvage Sale! Featuring Earth Tones and Pre-Shrunk Goods.” In the middle of a presidential campaign, Senator George McGovern and his wife Eleanor rushed Within days of the flood, experts from the South back to South Dakota to survey the damage. Dakota School of Mines and Technology advised the city to ban reconstruction in the flood plain. After much debate, the floodway was designated $100 million in property damage in Rapid City as a permanent greenway and memorial park. and other communities. Slowly, the community began to recover.

As merchants worked to re-open their businesses, In the aftermath of the flood Black Hills Power they cleaned the mud and debris from their stores. and Light sought to reassure stockholders Black Hills Power and Light published notices in and spread the word that the devastation had The Rapid City Journal said this pile up of cars the paper advising customers to be cautious before affected only concentrated areas in the Hills. at the corner of East Boulevard North and Omaha re-establishing electrical service. Wires, fuses and Many communities and recreation facilities were looked like an “elephant walk” at the circus. breakers needed to be checked. Customers were untouched and open to tourists. As Neil Simpson

87 1972 Rapid City Flood