The Town of Salem along with other towns across America pioneered public power. In March 1891, Salem Town Council granted a franchise to a company known as The Salem Electric Company to operate an electric system in the Salem. In September 1891, electricity, on a limited basis, was furnished to the Town of Salem.
The Town of Salem purchased the electric system from the Salem Electric Company September 19, 1892, for the sum of $19,000.
In 1907, Salem entered into a power purchase contract with Roanoke Water Power Company, predecessor of American Electric Power (AEP), and gradually the Town/City began providing electric service to consumers. Salem now supplies electric power to all but three properties in the city. The City signed a 20 year Power Supply Agreement with AEP beginning on July 1, 2006. The City continues to grow resulting in increased demand. The peak demand for electric power during August 2007 was 92 MW. As a result of the increasing demand, in 2005 the City undertook a project to add four substations. Two of these were added to existing sites and two were put on new sites.
Approximately 12,500 electric customers are served by the City. These customers are served by nine (9) substations rated 20,000 kVA each and two substations rated 25,000 kVA each. The City purchases power wholesale at 69,000 volts (69 kV), at four different locations. These lines are all tied to one central switching station located on Wortham Street. The eleven substations are fed from the 69 KV lines and transform the voltage down to the level needed to supply power to the City's customers. The Electric Department operates a Supervisory Control and Data Acquisition System (SCADA) which allows for control and monitoring of voltage level, current in each feeder, number of operations of the circuit breakers, the time the breaker operated, the status of protective relaying and many other features that help provide reliable electric service.
The department also furnishes streetlights and dusk-to-dawn lights and maintains traffic signals at 37 intersections in the City.
The Electric Department is an active member of the Municipal Electric Power Association of Virginia, Blue Ridge Power Agency, and the American Public Power Association. Through these agencies the Electric Department has been actively participating in both Federal and State deregulation efforts