The Electric Cooperative Story
As late as the mid-1930s, nine out of 10 rural homes were without electric service. Farmers milked cows by hand in the dim light of a kerosene lantern, and families relied on the wood range and washboard for cooking and cleaning.
The unavailability of electricity in rural areas kept their economies entirely and exclusively dependent on agriculture. Factories and businesses, of course, preferred to locate in cities where electric power was easily acquired. For many years, power companies ignored the rural areas of the nation.
The first official action of the federal government pointing the way to the present rural electrification program came with the passage of the Tennessee Valley Authority (TVA) Act in May 1933. This act authorized the TVA Board to construct transmission lines to serve “farms and small villages that are not otherwise supplied with electricity at reasonable rates.”
Rural Electrification Administration
The idea of providing federal assistance to accomplish rural electrification gained ground rapidly when President Roosevelt took office in 1933. On May 11, 1935, Roosevelt signed Executive Order No. 7037 establishing the Rural Electrification Administration (REA). It was not until a year later that the Rural Electrification Act was passed and the lending program that became the REA got underway.
Within months, it became evident to REA officials that established investor-owned utilities were not interested in using federal loan funds to serve sparely populated rural areas. But loan applications from farmer-based cooperatives poured in, and REA soon realized electric cooperatives would be the entities to make rural electrification a reality.
In 1937, the REA drafted the Electric Cooperative Corporation Act, a model law that states could adopt to enable the formation and operation of not-for-profit, consumer-owned electric cooperatives.
Within four years following the close of the World War II, the number of rural electric systems in operation doubled, the number of consumers connected more than tripled and the miles of energized line grew more than five-fold. By 1953, more than 90 percent of U.S. farms had electricity.
Today, about 99 percent of the nation’s farms have electric service. Most rural electrification is the product of locally owned rural electric cooperatives that got their start by borrowing funds from REA to build lines and provide service on a not-for-profit basis. REA is now the Rural Utilities Service, or RUS, and is part of the U.S. Department of Agriculture.
Co-op Growth Over Time
The Birth of NRECA
False claims that electric cooperatives were hoarding copper wire during World War II brought cooperative leaders from different states together to defend themselves. As a result, in 1942, America’s electric cooperatives formed the National Rural Electric Cooperative Association (NRECA) to provide a unified voice for cooperatives and to represent their interests in Washington, DC.
Today, NRECA represents more than 900 consumer-owned, not-for-profit electric cooperatives, public power districts, and public utility districts in the United States. The Arlington, Va.-based national service organization oversees cooperative employee benefits plans; carries out federal government relations activities like lobbying; conducts management and director training; and spearheads communications, advocacy, and public relations initiatives. In addition, it coordinates national and regional conferences and seminars; offers member cooperatives advice on tax, legal, environmental, and engineering matters; and performs economic and technical research.