Each combined alternator/turbine system weighed seventy-six tons, so the operational stresses would be extreme, requiring all system elements, like shafting and gearing, to be balanced with great accuracy. By itself, the complex turbine shape was a world-class machining challenge. After the first two alternator/turbine systems were constructed, there was a nine-month testing and adjustment process. The first power was delivered to customers in August, 1895, about a year later than originally projected. Successfully completing the project would have been a splendid accomplishment by any measure; given the lack of technical consensus at the outset, it bordered on the miraculous.

The first customers were heavy manufacturers close to the power plant. The acid test, however, was transmitting power to Buffalo, some twenty-six miles away. Excruciating street-franchise details first had to be worked through with the city fathers, but finally, at 12:01 on a Monday morning, on November 16, 1896, a switch was pulled in the powerhouse of the Buffalo street railway company, the lights came on, the dynamos hummed, and the nearly unlimited power of the Niagara River had been placed at the disposal of the citizens of Buffalo.

Over the next twenty years or so, AC became the utility power standard. The economics of large generating complexes serving extensive geographic regions were too compelling. That meant tricky conversions of existing power stations, and the gradual replacement of DC equipment by AC. The construction of ever-larger generating complexes and the retooling of industry away from steam and water power to electricity were major boosts to the engineering disciplines. Electricity may also have been the first American industry to be dominated by qualified engineers and scientists, rather than by ingenious tinkerers, like Edison. Tesla, who did calculus in his head, always maintained that “a little theory and calculation would have saved [Edison] 90 percent of his labor.”⁷

The stunning growth of electrical utility companies, at the outset of the Progressive Era, naturally created an anti-monopoly backlash. Samuel Insull, a native Briton who emigrated to the United States to take a job as Edison’s secretary and rose to become one of the greatest of utility moguls, took the issue head on, lecturing around the country. Using his flagship company in Chicago as his example—it had the country’s highest customer penetration—he showed how the economics naturally drove to local monopolies: utilities had to build to meet peak demand, which varied greatly within a day. The greater the customer base, the greater variety of demand profiles, and the greater the opportunity to balance loads throughout the day, thus lowering costs and driving down rates. Insull’s charts showed that as per capita revenue in the Chicago region had increased, prices to customers had fallen sharply. He argued forthrightly that electrical utilities should be exempted from the anti-monopoly laws, but in return they should accept state regulation of their rates and service standards. That message was skeptically received by many of his fellow power executives, but by getting out in front of the issue, he helped assure that regulatory schemes would be more to the industry’s liking. We will come back to Insull, for he was a major figure in accelerating the growth of America’s unique consumer-oriented economy before he became the poster boy for the consequences of excess leverage in an economic crash.

When all ten of the Niagara alternators were in service in 1900, they produced about a fifth of all electrical energy in the United States. By 1920, American electric power consumption had increased tenfold, and it more than doubled during the twenties. By then it was an independent force in driving social and economic changes throughout the country.