Public Service Corporation

The Public Service Corporation (PSC) was an energy and transportation company in New Jersey. It was formed to shore up financing and development of New Jersey's streetcar and power companies at a time when they were growing but exhausting capital. It did this by leasing their operations or buying them outright, and using the size and integration of the systems to get favorable financing for improvements.

Its energy utility became the Public Service Electric and Gas Company. Its transportation business became the nucleus of New Jersey Transit's bus network, along with the Newark subway system.

In the 1890s, gas lighting was a mature business with small technological advancing growth, but new competition from electricity. Streetcar companies were also well established, but the disjointed network limited the operators, reduced profits, and made it difficult to finance improvements. Some were losing money. Similarly, the electrification of the state had proceeded rapidly, but in a disjointed, local fashion, that sometimes caused financing difficulties for the operators. especially as technological improvements required constant capital.

In the 1880s and 1890s, United Gas Improvement of Pennsylvania had developed a model of operating or owning local gas providers. It decided to expand the model to New Jersey, and made a deal in 1899 with several power utilities there to merge into a holding company it formed, United Electric Company of New Jersey. UGI's consolidation strategy served as prototype for large consolidation efforts, which would cover broad portions of New Jersey utility operations, as well as streetcar operation (whose own power generation needs or operations were a natural fit for the electric company consolidation, aside from the pressing need to improve the financial stability of streetcar companies).

PSC was formed May 6, 1903. It was initially a merger of four trolley companies and a power company serving Passaic, Hudson, Bergen and Essex counties. It quickly continued consolidating gas, electric and trolley companies throughout much of New Jersey, eventually over 400 being combined.

Initially, PSC did not necessarily buy its consolidation target companies (whether transportation or power) outright. Instead, it often obtained very long term lease agreements (typically 900 years) with them for their plants, and often bought large stakes in the companies and took over their boards of directors. By 1928, this arrangement was deemed to be cumbersome and complicated for financing efforts. PSC would use its influence via shared boards of directors to merge the other utilities outrigh into one of its holding companies, exchanging third parties' shares for PSC preferred stock.

In its early years, the company had five primary operating subsidiaries:

All of these were holding companies, except for the bus company. United Electric was a special case. As mentioned above, it had predated Public Service, having been formed in 1899 to consolidate local electric companies in Essex, Hudson, Passaic, Bergen, Morris, Union, and Middlesex counties (some accounts leave out some of the counties). PSC leased United's operations in 1907, but did not consolidate it into Public Service Electric Company, keeping it as a direct subsidiary of Public Service

...
Wikipedia