User:PParmley/PG&E History part 1. draft

San Francisco Gas
In the 1850s, manufactured gas was introduced in the United States as a means of lighting and gasworks were built in the larger eastern American cities. The gas industry was still unknown in the West, however, and in San Francisco, street lighting was only available on Merchant Street in the form of oil lamps.

Brothers Peter, James and Michael Donahue took an interest in gas manufacturing while running the foundry that later became Union Iron Works, the largest shipbuilding operation on the West Coast. Joseph G. Eastland, an engineer and clerk at the foundry, joined them in gathering as much information on gas making as they could find. In July 1852, James applied for and received from the Common Council of the City of San Francisco a franchise to erect a gasworks, lay pipes in the streets and install street lamps to light the city with "brilliant gas." The council specified that gas should be supplied to households "at such rates as will make it to their interest to use it in preference to any other material". The Donahue brothers and Eastland incorporated the San Francisco Gas Company on August 31, 1852, with $150,000 of authorized capital. The company became the first gas utility in the West. Its official seal bore the inscription "Fiat Lux"—let there be light—the same slogan later adopted by the University of California. There were 11 original stockholders, and the three Donahue brothers subscribed for 610 of the 1,500 shares.

The original location for the gas works was bounded by First, Fremont, Howard and Natoma streets south of Market, on the then shore of the San Francisco Bay. Work on the plant started in November, 1852, and it was ready for operation only a few months later. On the night of February 11, 1854, the streets of San Francisco were for the first time lighted by gas. To celebrate the event, the company held a gala banquet at the Oriental Hotel. Gas lighting quickly gained public favor. In the first year of operation, there were 237 customers. That number more than doubled the next year to 563. By the end of 1855, the company had laid more than 6 ½ miles of pipe and 154 street lamps were in operation.

The growing popularity of gas light led to the establishment of competing gas companies, including Aubin Patent Gas Company and Citizens Gas Company. These smaller companies were quickly acquired by the San Francisco Gas Company. However, one rival provided serious competition. The City Gas Company was founded in April 1870 by the Bank of California to compete with the gas monopoly held by the Donahue brothers' operation. City Gas began operation in 1872 and initiated a price war with the San Francisco Gas Company. In 1873, the companies negotiated their consolidation as a compromise and the Bank of California gained part ownership of "the most lucrative gas monopoly in the West." On April 1, 1873, the San Francisco Gas Light Company was formed, representing a merger of the San Francisco Gas Company, the City Gas Company, and the Metropolitan Gas Company.

San Francisco Gas and Electric
Gas utilities, including San Francisco Gas Light, faced new competition with the introduction of electric lighting to California. In 1879, San Francisco was the first city in the U.S. to have a central generating station for electric customers. To stay competitive, the San Francisco Gas Light Company introduced the Argand lamp that same year. The lamp increased the light capacity of gas street lamps, but proved to be an expensive improvement and was not generally adopted. Meanwhile, the demand for electric light in the stores and factories of downtown San Francisco continued to grow. The first electric street light was erected in 1888 in front of City Hall, and the electrical grid supporting it was gradually extended. A second generating station was constructed in 1888 by the California Electric Light Company to increase production capacity.

New competition also emerged in the 1880s in the form of water gas, an improved illuminant patented by Thaddeus Lowe. The United Gas Improvement Company, a water gas manufacturer organized after purchasing the Lowe gas patents, acquired a lease and then an interest in San Francisco's Central Gas Light Company on November 1, 1883. United was acquired by the Pacific Gas Improvement Company in 1884. Under the management of president Albert Miller, Pacific Gas Improvement developed into a formidable competitor to San Francisco Gas Light.

In 1888, San Francisco Gas Light built its own water gas plant at the Potrero gas works. The manufacturing of water gas proved successful due to the increased availability of inexpensive petroleum. The company decided to construct a modern gas works with both updated water gas manufacturing technology and a modern coal-gas plant as a hedge against shortages in the supply of oil. In 1891, the North Beach Gas Works was completed under the direction of San Francisco Gas Light president and engineer Joseph B. Crockett. The facility was the largest gas holder in the U.S. west of Chicago.

In 1896, the Edison Light and Power Company merged with the San Francisco Gas Light Company to form the new San Francisco Gas and Electric Company. Consolidation of gas and electric companies solved problems for both utilities by eliminating competition and producing economic savings through joint operation. Other companies that began operation as active competitors but eventually merged into the San Francisco Gas and Electric Company included the Equitable Gas Light Company, the Independent Electric Light and Power Company, and the Independent Gas and Power Company. In 1903, the company purchased its main competitor for gas lighting, the Pacific Gas Improvement Company.