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Electric Bond and Share Company

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Electric Bond and Share Company
Company typeHolding company affiliated with General Electric
IndustryEnergy
Founded1905; 121 years ago (1905)
Defunct1935 (1935)
Fatedissolved due to the Public Utility Holding Company Act of 1935
Headquarters
New York City
,
United States

The Electric Bond and Share Company (Ebasco) was a U.S.-based electric utility holding company initially established by General Electric. Following the enactment of the Public Utility Holding Company Act of 1935, it was compelled to divest its assets and undergo restructuring. The U.S. Securities and Exchange Commission (SEC) selected Ebasco as the principal subject in the legal case Securities and Exchange Commission v. Electric Bond and Share company, which culminated in a 1938 Supreme Court decision favoring the SEC. Over a span exceeding two decades, the SEC systematically dismantled Ebasco alongside other dominant holding firms to ensure compliance with the legislation. Despite this, Ebasco maintained ownership of its international electric power subsidiary, American & Foreign Power Company (A&FP). After reorganization, the company transitioned from investment activities to engineering major fossil fuel and nuclear power plants. Its association with the 1983 financial collapse of the Washington Public Power Supply System's nuclear projects, coupled with litigation and asbestos-related claims, contributed to its decline amid a wider industry downturn following the 1979 Three Mile Island incident.


History

Formed in 1905 as a holding entity for electric utility securities by General Electric, utilizing employee pension funds, Ebasco was part of J.P. Morgan’s broader plan to consolidate control over the U.S. electric sector. Morgan resisted regulatory measures until his death in 1913. After dismissing Samuel Insull, Morgan inadvertently prompted Insull to create Middle West Utilities Company (later known as Exelon), which advocated for regulated monopolies due to substantial infrastructure investments. During Theodore Roosevelt’s trust-busting period, the National Civic Federation (NCF) examined the merits of public versus private power ownership; Insull championed regulation that shaped legislation nationwide.

By 1925, Ebasco held sway over more than 10% of U.S. electric utilities through five principal holding companies. Although General Electric formally reduced its control, Morgan retained financial dominance.[1] The Commonwealth & Southern Corporation, another component of Morgan’s syndicate alongside Ebasco, owned utilities across the Midwest and Southern states, some eventually becoming part of the Southern Company. By 1926, Ebasco employed over 1,000 staff in New York City and managed companies operating in 33 states with an estimated value of $1.25 billion.[2]

Growing public scrutiny prompted an investigation by the Federal Trade Commission from 1928 until 1935, culminating in a detailed report that appraised Ebasco and its affiliates at $3.5 billion. This encompassed extensive domestic holdings as well as a foreign firm conducting business in 16 countries through 70 subsidiaries.

President Franklin D. Roosevelt, a proponent of public power initiatives, highlighted the collapse of Insull’s Middle West Utilities during his 1932 campaign.[3] After taking office, Roosevelt implemented banking reforms and appointed Ferdinand Pecora to probe financial institutions connected to Morgan and Ebasco.[4] These inquiries revealed that electric utilities ranked among the most capital-intensive sectors and underscored Morgan’s significant financial influence.[5]

The Pecora Commission identified National City Company (now Citibank) as a pivotal entity in Ebasco’s investment dealings, influencing enactment of the Glass–Steagall Act. Alongside FTC findings, this paved the way for the landmark Public Utility Holding Company Act of 1935—recognized as one of Congress’s most intense legislative battles.[6] Ebasco contested this law but was defeated by the Supreme Court in 1938.[7] Wendell Willkie, who led one of Morgan’s key investments—the Southern Company—ran unsuccessfully against Roosevelt in 1940.

Ebasco (stock symbol EBS) was listed on the Dow Jones Utility Average between 1938 and 1947.Cite error: The opening <ref> tag is malformed or has a bad name

SEC-led dissolution of EBASCo

In accordance with the Public Utility Holding Company Act of 1935, the U.S. Securities and Exchange Commission (SEC) oversaw the dismantling, restructuring, or divestiture of EBASCo’s holding entities, excluding American & Foreign Power Co., providing annual reports on this significant legal disassembly from 1936 through 1961. The legislation sought to confine the electric utility sector within state lines to enhance regulatory oversight. By 1949, the SEC had authority over 210 holding companies encompassing 918 electric utilities, with 46 entities still operational. The SEC chronicled EBASCo’s segmentation of five principal holding companies whose assets totaled $3.5 billion.

Investigations conducted in 1940 revealed that Middle South Utilities, the Southern Group, and EBASCo were financed by Morgan Stanley, effectively placing Wall Street in control of nearly 80% of the nation's electric power industry.

After unsuccessful attempts to nullify the 1935 Act through litigation, EBASCo complied with directives issued by the SEC. On August 23, 1941, its National Power & Light Co. received orders to dissolve 27 subsidiary companies; by March 22, 1949, this included significant holdings such as Pennsylvania's PPL Corporation and operations spanning the Carolinas and Alabama.

On August 22, 1942, the SEC mandated the breakup of American Power & Light Corp., which controlled 35 subsidiaries, along with Electric Power & Light Corporation, which had 24 subsidiaries. American Power & Light lost its appeal before the U.S. Supreme Court in 1946; by 1949, almost all subsidiaries had complied with the breakup orders. Electric Power & Light reorganized under the name Middle South Utilities Inc., which later became Entergy.

SEC actions also targeted American Gas & Electric Company beginning in 1939. In 1945, it was permitted to maintain control over subsidiaries located in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia, and West Virginia provided it divested its holdings in Pennsylvania and New Jersey. A proposed acquisition of Continental Gas & Electric Corp. was rejected in 1946. American Gas & Electric was separated in 1958 to form American Electric Power (AEP).

The repeal of the 1935 Act was enacted during the Bush administration through the Energy Policy Act of 2005, promoting deregulation within the electric utility sector.

EBASCo holding entities before 1935

The following lists EBASCo-controlled holding companies and their subsidiaries that fell under regulation by the Public Utilities Holding Company Act of 1935.

American Gas & Electric Company

Founded in 1906 and controlled by EBASCo, American Gas & Electric was spun off in 1958 as American Electric Power (AEP). AEP currently serves more than five million electricity customers across eleven states and ranks as the sixth-largest gas and electric utility company nationwide. Key subsidiaries include:

  • Appalachian Electric Power Co. (currently Appalachian Power)
  • Ohio Power Co. (operating as AEP Ohio)
  • Indiana & Michigan Electric Co. (known as Indiana Michigan Power)
  • Scranton Electric Co., sold to PPL Corporation in 1956
  • Atlantic City Elec. Co., now part of Exelon
  • Ky. & W. Va. Power Co. (Kentucky Power)
  • Wheeling Electric Co., presently an AEP subsidiary
  • Indiana General Service Co.
  • Kingsport Utilities, Inc. (Kingsport Power Company)

American Power & Light Company

Prior to 1935, American Power & Light controlled more than 35 subsidiaries. Under directives from the SEC, the company was dismantled by 1951, although numerous affiliated companies remain active today:

  • Citizens Power & Light Co., Council Bluffs, Iowa – integrated into Nebraska Power in 1937
  • Central Arizona Light & Power Co., Phoenix – combined with Arizona Edison in 1952 to create Arizona Public Service
  • Florida Power & Light Co., Miami – currently a division of NextEra Energy Resources
  • Fort Worth Power & Light Co., Texas – absorbed into TU Electric in 1984
  • Helena Gas & Electric Co., Montana
  • Kansas Gas & Electric Co., Wichita – merged with Kansas Power and Light in 1992, forming Westar Energy
  • Minnesota Power & Light Co., Duluth – presently operating as Minnesota Power under Allete
  • Missoula Public Service Co., Montana – purchased by Montana Power Company in 1929
  • Montana Power Company, Butte – continues operations today
  • Nebraska Power Co., Omaha – taken over by Omaha Public Power District
  • Northern Power Co., Superior, Wisconsin
  • Northwestern Electric Co., Portland – merged into Pacific Power & Light in 1947
  • Pacific Power & Light Co., Portland – now known as PacifiCorp, owned by Berkshire Hathaway Energy
  • Portland Gas & Coke Co., Oregon – currently operates as NW Natural
  • St. Augustine Co., Florida
  • Superior Water, Light & Power Co., Wisconsin – an Allete subsidiary
  • Texas Electric Service Co., Dallas – part of TU Electric since 1984
  • Texas Power & Light Co., Dallas – incorporated into TU Electric in 1984
  • Texas Public Utilities Corp., Dallas – also part of TU Electric
  • Washington Water Power Co., Spokane – presently operating as Avista

Electric Power & Light Corporation

Established in 1925 to serve as a holding company for subsidiaries of Electric Bond & Shares Co., it was divested following SEC intervention by 1949 and renamed Mid South Utilities, Inc., which is now recognized as Entergy. Its affiliated companies included:

  • Arkansas Power & Light Co., Little Rock, Arkansas
  • Dallas Power & Light Co., Dallas, Texas
  • Idaho Power Co., Boise, Idaho
  • Louisiana Gas & Fuel Co., Shreveport, Louisiana
  • Louisiana Power & Light Co., New Orleans, Louisiana
  • Mississippi Central Power Co., Jackson, Mississippi
  • Mississippi Power & Light Co., Jackson, Mississippi
  • Nevada Power Co., Boise, Idaho
  • New Orleans Public Service Inc., New Orleans, Louisiana
  • Salmon River Power & Light Co., Boise, Idaho
  • Utah Light & Traction Co., Salt Lake City, Utah
  • Utah Power & Light Co., Salt Lake City, Utah
  • Western Colorado Power Co., Durango, Colorado

National Power & Light Company

Formed in 1925 to consolidate subsidiaries of Electric Bond & Shares Co., National Power merged with Lehigh Power Securities under SEC directives. This entity ultimately transformed into the modern-day PPL Corporation. Its principal subsidiaries were:

  • Birmingham Electric Co., Birmingham, Alabama
  • Carolina Power & Light Co., Raleigh, North Carolina
  • Holston River Electric Corp., Rogersville, Tennessee
  • Houston Lighting & Power Co., Houston, Texas
  • Knoxville Power & Light Co., Knoxville, Tennessee
  • Memphis Power & Light Co., Memphis, Tennessee
  • South Texas Utilities Co., Houston, Texas
  • Tennessee Public Service Co., Newport, Tennessee
  • West Tennessee Power & Light Co., Jackson, Tennessee

Lehigh Power Securities Corporation

Lehigh Power Securities Corporation, which was integrated into National Power & Light Company, held controlling interests in the following entities:

  • Pennsylvania Power & Light Co., based in Allentown, Pennsylvania (currently known as PPL Corporation)
  • Lancaster Group, Edison Electric Co., located in Lancaster, Pennsylvania
  • Transit Group, Lehigh Valley Transit Co., situated in Allentown, Pennsylvania

American & Foreign Power Company

Formed in 1923 as a fully owned subsidiary of EBASCo to oversee its international electric utility holdings, American & Foreign Power Company operated globally. Although General Electric divested its shares in EBASCo in 1925 amid public scrutiny, the GE chairman remained on EBASCo’s board alongside founding president Sydney Z. Mitchell. By 1929, the company reported assets totaling $750 million and provided electricity to nearly a thousand communities worldwide. Due to its emphasis on foreign operations, it maintained U.S. ownership after the enactment of the 1935 Public Utility Holding Company Act.

The company’s global expansion was strategically aligned with U.S. government interests during and after World War I, including acquiring utilities near the Panama Canal and in Guatemala. By 1922, it had significantly extended its reach across Central and South America.

In Cuba, American & Foreign Power held a dominant position in the electric industry from the 1920s until the nationalization of utilities during the Cuban Revolution in 1960. General Electric invested more than $100 million to control Cuba’s electrical infrastructure amid complex political dynamics influenced by U.S. involvement and governance under General Gerardo Machado.

Additional key markets included:

  • Argentina – ownership of over 100 electric companies
  • Brazil
  • Canada – British Columbia Power Corporation
  • Chile – major utility providers
  • China – Shanghai Power Company (purchased in 1929 for $32 million)
  • Colombia
  • Costa Rica
  • Ecuador
  • Guatemala
  • India
  • Italy – Italian Superpower Corporation
  • Japan – two utility companies
  • Mexico
  • Panama – utilities near the Panama Canal acquired in 1917 at U.S. government request
  • Venezuela

American & Foreign Power’s broad portfolio illustrated EBASCo’s international business approach and its leadership role in electrification efforts worldwide during the early twentieth century.

Dixon-Yates Affair

Following President Eisenhower’s election in 1952, a significant policy change known as "no new starts" halted federally funded water and power projects associated with public ownership. This policy shift was epitomized by the Dixon-Yates affair, which exposed Pacific Gas & Electric Company (PG&E) as the architect behind efforts to cut funding for the Central Valley Project’s electrical grid. PG&E leveraged influence with conservative lawmakers to eliminate support for public power development, resulting in dependence on PG&E for electricity and leading to the collapse of cooperatives throughout northern California.

In 1954, Eisenhower instructed the Atomic Energy Commission to procure 600,000 kilowatts for Oak Ridge National Laboratory from private firms rather than from the Tennessee Valley Authority (TVA). The Dixon-Yates contract sought to circumvent TVA's public power system but became a national controversy when testimonies revealed that Middle South Utilities was controlled by Ebasco Services. Following a confidential industry report, the contract was terminated in July 1955.

By 1961, after prolonged legal proceedings, Electric Bond and Share complied with Securities and Exchange Commission mandates and ceased functioning as an electric power holding company. In 1967, it merged with American & Foreign Power Co., forming Ebasco Industries in 1968 while maintaining Ebasco Services Inc. as a subsidiary entity.

Ebasco Services

On November 27, 1935, the Electric Bond & Share Company founded Ebasco Services to oversee its holding company functions, following an SEC lawsuit mandating registration under the Public Utility Company Holding Company Act. In 1969, Boise Cascade gained control over Ebasco Industries along with its subsidiary, Ebasco Services. Halliburton's 1973 attempt to acquire Ebasco Services was blocked by the Justice Department due to antitrust concerns within the industry.

By the mid-1970s, Ebasco had diversified from purely investment roles into constructing nuclear and fossil fuel power plants. In 1976, Ensearch, a Texas oil firm formerly known as Texas Power & Light Co.—one of Ebasco’s initial subsidiaries—purchased Ebasco. By 1980, Ebasco operated through three main divisions: Architectural/Engineering (A/E) Ebasco Services, Ebasco Environmental (which was later divested to Foster Wheeler), and Ebasco Engineering and Construction.

Ebasco emerged as a leading US architect-engineer firm, managing numerous nuclear power projects both domestically and abroad, including Fukushima Daiichi units 1, 2, and 6. Although originally contracted for the Bataan Nuclear Station in the Philippines, it was eventually replaced by Westinghouse. The company's role in the financial failure of Washington Public Power Supply System’s five nuclear reactors resulted in a 1992 lawsuit related to asbestos exposure.

In 1994, Raytheon purchased Ebasco for $210 million and renamed it Raytheon Ebasco Overseas Ltd., with subsidiaries spanning 11 countries. Subsequently, Raytheon Engineers & Constructors—the parent of Ebasco Services—was sold to Morrison Knudsen Corporation and rebranded as Washington Group International, Inc., a global engineering and construction enterprise generating over $5 billion annually and operating in more than 40 nations. Washington Group filed for Chapter 11 bankruptcy in 2001, involving several Ebasco-related entities. In 2007, URS Corporation acquired Washington Group; URS itself was acquired by AECOM in 2014, forming one of the largest engineering firms worldwide.

After TXU Corp.’s acquisition in 2007—which included plans for new nuclear facilities at Comanche Peak—the company encountered financial troubles leading to bankruptcy in 2014. Emerging from bankruptcy as TXU Energy in 2018, Energy Futures Holdings (EFH), formerly TXU Corp., owned EEC Holdings, which controlled Ebasco Canada Ltd.; this subsidiary was closed during the bankruptcy proceedings.

A 2015 Sun Sentinel report noted that American & Foreign Power Company—once part of Ebasco with foreign investments including Cuban holdings—became owned by Office Depot following a series of mergers involving Boise Cascade and OfficeMax. The proposed merger between Office Depot and Staples in 2015—which might have transferred these assets—was blocked by a court ruling in 2016.

In 2016, Raytheon Ebasco Overseas Ltd.’s Indian subsidiary encountered tax disputes within Indian judicial systems. Meanwhile, CT Corporation continues to act as agent for Ebasco across various US states.

The law firm Reid and Priest formerly represented Ebasco during its legal disputes before merging into Thelen LLP.

Presently, a business named Ebasco Trading Co. operates out of Dubai; any affiliation with the original corporation remains uncertain.

For further insight into legal controversies and whistleblower cases involving Ebasco Services, consult related articles. Note that the Public Utilities Holding Company Act of 1935 was repealed by the Energy Policy Act of 2005.

External links

  1. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ebasco history
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named NY Evening Post
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Insull empire
  4. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Pecora
  5. ↑ Ferdinand Pecora noted that this group "holds more real power than any similar group in the United States."
  6. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named PUCHA
  7. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named court
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