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An economic downturn affected the streetcar company in [[1897]]. It was reorganized again as the [[Pensacola Electric Terminal Railway Company]], with Captain [[William H. Northrup]] as president. [[William A. Blount]]'s law firm assisted in the transition and introduced northern firm Stone & Webster to help develop the utility. The [[Pensacola Electric Light & Power Company]] was also incorporated in [[1897]], building a coal-powered generator at [[Baylen Street|Baylen]] and [[Cedar Street]]s that provided power to much of the area. Elevated wires were placed over the streets to provide electricity to the trolleys; a double set of tracks were placed in the broad [[Palafox Street]]; and a streetcar barn and mechanical shop was built at [[Gadsden Street|Gadsden]] and [[DeVillier Street]]s.
In June [[1906]], Boston conglomerate [[Wikipedia:Stone & Webster|Stone & Webster]] took over the city's streetcar and electric systems. A 1908 issue of the ''Stone & Webster Public Service Journal'' describes the improvements Stone & Webster made to the system, as well as its operations in 1908:
<blockquote>It was in 1906 that the Stone & Webster organization took charge of the traction and electric lighting systems of Pensacola, both of which it has improved. At that time there was a line seven and one-half miles along the shore to Fort Barancas (sic) — is, to the government reservation, where the navy yard is located, and where a good-sized colony exists. This line was electrified for only about a third of the distance, steam being employed over the balance. Today, electricity is the sole power. The city lines of the old company were in inadequate condition, but the situation in this respect has since been much improved. All told, the street railway company now operates 20.39 miles of track. Its equipment consists of 26 passenger cars, with 9 trailers, together with one express car and 11 miscellaneous cars. Power for both the street railway and lighting is supplied from a brick power station, with a capacity for 700 Kw. for lighting and 800 Kw. for traction purposes. The equipment includes a new 300 Kw. Parson's steam turbine, and a new direct connected 500 Kw. railway generator. A brick repair shop, a car barn and several parcels of land in the city are owned by the company. The distributing system of the lighting plant is in excellent condition, having recently been overhauled and thoroughly rebuilt. The electric light franchise is perpetual, having been granted by special act of the legislature. The railway franchise expires in 1933. That part of the line running to the government military reservation is operated under authority granted by the Secretary of War, the grant on the naval reservation being by special act of Congress.</blockquote>