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HISTORY FOCUS: •PACIFIC GAS AND ELECTRIC •SACRAMENTO MUNICIPAL UTILITY DISTRICT •SIERRA PACIFIC POWER
3: LOSING ITS GRIP

If the system was in bad shape, it was because PG&E had had little incentive to maintain it.

PG&E first began to lose its grip on the Sacramento electric franchise on July 2, 1923, when Sacramento citizens voted 6,378 to 978 to create the Sacramento Municipal Utility District.

Public ownership of utilities was not a new issue, of course. In the 1890s, the People’s Party, a national political uprising of farmers and workers, called for public ownership of America’s utilities, railroads and banks. Commonly known as Populists, the People’s Party peaked in 1894 when it captured several governorships and many seats in Congress. The Populists fell into decline in 1896, after the defeat of People’s Party presidential candidate William Jennings Bryan.

But the dream of public ownership of utilities persisted into the new century, spurred by dissatisfaction with high rates, poor service, and a general distrust of giant corporate monopolies, which some private utilities were in the process of becoming.

The creation of SMUD in 1923 was a local expression of that Populist tradition: SMUD’s founders sought to put the area’s water and power resources under the control of the people. To do so, they knew they had to acquire the electric distribution systems of PG&E and Great Western Power Co.—the existing suppliers of light and power in the District.


Great Western Power linemen working in the early 20th century.


SMUD crew frames a KPF switch on the ground in 1956.

4: TOOTH & NAIL

PG&E fought the takeover tooth and nail.

Before SMUD could acquire PG&E’s property through the process of eminent domain, the state Railroad Commission had to determine the compensation to which PG&E would be entitled. In 1934, and again in 1938, SMUD directors pressed their case with petitions to the state Railroad Commission.

Acting on the 1938 petition, the Railroad Commission in 1942 finally set a monetary award for PG&E’s properties. PG&E rejected it.

SMUD followed with a condemnation suit in 1943, which SMUD won in Superior Court in 1945. PG&E appealed.

A year later, the judgment was affirmed in the Third District Court of Appeals. Finally, on March 21, 1946, the California Supreme Court put the matter to rest by denying PG&E’s petition for further review.

Through all the years of litigation, PG&E had let its Sacramento system fall into a state of disrepair. When SMUD took over in 1947, it was up to men like Leonard Williams to begin putting the system back together again.