Duke Power Company

Written By Jonathan Murray

In addition to producing electricity that spurred industrial development in North Carolina, the Duke Power Company, now called the Duke Energy Corporation, has played important roles in several chapters of the state’s history. 

The company’s origins lay in the construction of a hydroelectric dam on the Catawba River.  This had been an idea from Dr. W. Gill Wylie, a gynecologist by profession who foresaw the possibilities of electric power. After the completion of the dam in 1904, James Buchanan "Buck" Duke, who had amassed a fortune manufacturing machine-rolled cigarettes, offered to invest in Wylie’s electricity generation venture.  The Southern Power Company was incorporated in 1905.

The new company constructed a precisely coordinated system of dams on the Catawba River in South Carolina. The system was designed by Southern Power’s chief engineer, W. S. Lee, and though it was located in South Carolina, much of its power flowed through new transmission lines into North Carolina. In its early years, Southern Power had numerous advantages over competitors, including efficient operations and a massive source of capital in Buck Duke’s tobacco fortune. Buck Duke favored industrial uses of electrical power: during the early years of the Southern Power Company, its principal customers were textile manufacturers, which expanded rapidly as a result of their new source of energy.

In North and South Carolina, residential electricity consumption was minimal until around 1920. When Buck Duke founded Southern Power, he did not intend to supply electricity to residential customers. Southern Power began accepting residential customers only when textile manufacturers insisted that the company sell electricity to the workers who lived near textile mills. Southern Power soon began selling electricity to any individual customer who lived near power lines, and its customer base expanded rapidly. In the midst of this expansion, Buck Duke in 1913 created a new division of Southern Power devoted to residential sales. Called the Southern Public Utilities Company, this division of Southern Power revolutionized domestic life in the Carolinas, and by the 1920s, electrical appliances had become ubiquitous in the two states. 

Renamed Duke Power in 1924, the electricity giant became unpopular in the early years of the Great Depression, having drawn the attention of anti-business politicians. Any politicians who supported Duke Power were ridiculed, and many of them, such as U.S. Senator Cameron Morrison, were voted out of office after doing so. Moreover, in the mid-1930s, the Federal government’s Tennessee Valley Authority and Public Works Administration began constructing power plants that competed with Duke Power’s plants. Duke Power opposed these government projects. Its executives offered clumsy public explanations for Duke Power’s opposition to these Federal plants. They asserted, for instance, that the Federal plants would severely constrain Duke Power’s philanthropic activities. Nevertheless, the company had some success in blocking these Federal projects, in one case suing successfully to keep a Federally funded plant out of High Point. The Depression was in any event a low point for Duke Power, and its expansion had ground to a halt by the late 1930s. 

Along with many other businesses, Duke Power recovered and resumed expansion after World War II. During the 1950s and 1960s, Duke Power became one of the earliest adopters of nuclear power technology in the United States, and continues to operate nuclear power plants in the Carolinas.

In 1971, the company achieved notoriety as the defendant in Griggs v. Duke Power, a landmark court decision on racial discrimination. Thirteen African-American employees of Duke Power sued the company for requiring minimum scores on intelligence tests for advancement. Though Duke Power had by then ceased its policies of overt discrimination, its intelligence test requirement effectively excluded African-Americans from many parts of the company. The case reached the U.S. Supreme Court.  Chief Justice Warren Burger delivered the court’s opinion, ruling that the intelligence tests administered by Duke Power were irrelevant to the skills required of the company’s employees. Further, he held that these policies had the effect of discriminating against African-Americans and thus violated Title VII of the 1964 Civil Rights Act. Burger wrote that while Duke Power likely did not have discriminatory intent in requiring minimum intelligence test scores, the discriminatory effect of the company’s intelligence testing policy rendered it illegal. 

In recent years, Duke Power has continued its expansion, moving into the Midwest, and it has branched into other businesses, such as natural gas.  It has been called the Duke Energy Corporation since it merged in 2006 with the Cinergy Coporation, a Cincinnati-based electricity company.  After the merger, Duke Power announced plans to expand its nuclear power operations, placing it at the forefront of that technology’s revival.