Rural Electrification

As the lights began coming on all over rural America, the first magic glow of the naked bulb in the farm home was witnessed with a sense of wonder and awe. A Kentucky farmer, remembering his boyhood, recalled: "I'll never forget that day - it was late on a November afternoon, just before dark. All we had were wires hanging down from the ceiling in every room, with bare bulbs on the end. Dad turned on the one in the kitchen first, and he just stood there, holding on to the pull chain. He said to me, 'Carl, come here and hang on to this so I can turn on the light in the sitting room.' I knew he didn't have to do that and I told him to stop holding it, that it would stay on. He finally let go, and then looked kind of foolish."

America's Rural Electric Story

Today, rural America is a land made bright and thriving by an industrious, imaginative people, a people who have created cooperative institutions to improve their lives and to enrich and increase the productivity of a nation.

The glimmering tapestries of light that set the nights aglow throughout all of rural America are testament to perhaps the most singular and stunning of these cooperative achievements - the bringing of light and power to the land.

The story of rural electrification begins in darkness and then comes alive in the radiant light of hope and promise which lives within the human spirit. It is a story of how hopes and excitement were translated into vital and imaginative action, into a unique partnership struck by the federal government and rural people in their determined effort to electrify the land and "get lights." The people of rural America realized their dreams through hard work and loans and technical assistance from a little agency they called "the REA". How they successfully built their cooperative institutions to achieve the light and power and how each generation of rural Americans have nurtured and carried forward the early work is a magnificent and intensely human story of struggle, trial and triumph.

Today, as those early struggles stand many decades distant, the early organizing experiences and triumphs of rural electrification's pioneers are told and celebrated against a backdrop of folk legend and lore. But the old power and magic persists in present-day rural electrification. Those early, moving experiences are beacons and guideposts to the present, enlivening, enriching and inspiring legacy which rural electric people continue today. The rural electric experience is never-ending. Here is that story, America's rural electric story.

The Dawn of Hope

Because there was no electricity, life and work for most rural Americans in the 1930s was fixed in a cycle of hardship and drudgery, little had changed from decades before. Only the most affluent farmers and ranchers or those near towns could get "the electric." The majority of rural people, nearly 90 percent, lived and labored in a dark and powerless land.

But, beginning in 1935, the hope for electricity in rural America became a reality. The federal government had a plan to provide assistance to the people of rural America and help them bring the power into their lives. They could organize cooperatively and secure loans to electrify the rural areas. This message swept the land. It was the beginning of the full-scale electrification of America, a partnership of the people with their government. People called it "the REA".

President Franklin D. Roosevelt created the Rural Electrification Administration (REA) with an executive order signed in May 1935. With this action was the recognition that if rural America was ever to become electrified, there was need for government involvement. But it was the involvement of the rural people themselves that became the true catalyst. After it became apparent that private utilities were not going to construct electric lines with REA loan funds under the agency's plan for area-wide rural electrification, it was the farmer-owned cooperatives, many newly-organized for the REA loans, that came to the forefront. Their applications flooded the REA offices in Washington, D.C. By 1936, the movement for cooperative rural electrification became a ground-swell of popular support that swept the land. Congress passed legislation making REA permanent with provisions for cooperatives.

Meanwhile, rural electric organizing meetings increased and intensified. REA field men, meeting day and night, outlined procedures and principles to the rural leaders. It took a tremendous effort, a wagon-load of patience and hard work, as these committed men and women went up and down the country roads, working from farm to farm, to get the needed signatures of new members, obtaining the hard-to-come-by $5 "sign-up" fees. Then began the long hours of mapping in electric lines with the engineers, acquiring land easements for the lines from their neighbors, and finally, preparing the loan application to REA. At the same time, REA engineers and specialists in Washington worked at a frenzied pace to keep up with the demand. Yes, the REA was really coming. Electricity for rural America!

How the people in partnership with their government electrified the rural areas is one of the greatest achievements of cooperative and economic democracy this nation has ever known. In hundreds and hundreds of regions there were the first hopes and excitement, then the cooperative commitment to bring light and power into their lives, to "get the REA".

The stories of the early days of rural electrification are all unique but similar - rural men and women educating and organizing - for power. They met, they planned and they created their own cooperative institutions. All over the country, the poles began to dot the landscape and, overhead, new lines of power were coming into the lives of rural Americans. Line crews, often aided by eager members themselves, cleared rights of way and dug holes, while others came behind with the poles and hardware. Last, the crews came to string the wire.

In the earliest days raising the lines was sometimes a primitive affair, but by 1936, REA developed assembly line methods for line construction with uniform procedures and standardized types of electrical hardware. The results were lowered costs, which made electricity feasible for more and more rural people. The number and rate of REA projects accelerated. Rural electrification was on the move.

The New "Hired Hand"

Soon after light and power came into the home, farmers and ranchers began to realize the potential for electricity in their daily work. Electricity could grind feed, shell corn, pump water and saw wood. It powered milking machines and lifted hay into the barn. Electricity furnished the bright lights in the barnyard, giving precious extra hours to bring in the harvest. At the heart of all these lightened labors and the increased productivity was the electric motor - the new "hired hand".
A new cooperative enterprise soon appeared on Main Street. The first offices of rural electric systems were most often humble, storefront affairs, but they were welcome additions to rural communities determined to pull themselves out of the throes of a Depression-ridden rural America. The cooperative, a unique new enterprise, soon found itself in the forefront of community affairs. The directors that the cooperative members had elected were their neighbors and friends, farmers and ranchers like themselves. These directors met monthly to set policy and give guidance to the cooperative manager.

The entire co-op form of running the system was given full and democratic expression once a year at the annual membership meeting. Under one-member/one-vote bylaws, member control was assured. It was and continues to be economic democracy at work.

A Boon to the Economy

There was a quickening of life in the community. Schools, churches and meeting places now had lights and other electric conveniences for the first time. All of the electric improvements created new economic activity along Main Street. New business and new kinds of businesses began to appear - electric wiring, plumbing and new electric appliances could be found in the stores. In addition, electricity brought new industry. With electric power available from the co-op, factories could locate in rural areas consequently generating more jobs. These new employment opportunities gave hope, promise and a future to the younger generation in rural America - rural opportunities.
The rural electric co-op had become a vital economic foundation with its board of directors providing a rich store of new community leadership. Rural electrification and the respect, responsibility and revitalization that it accomplished, was not so wild a dream after all.

The people of rural America built a remarkably unified and enduring movement, determined to succeed. Much of their solidarity came from the tenacious cooperative spirit so deep-rooted in the governing of their electric systems. From the grassroots power of the people out on the lines through the strong and active "statewide" organizations to Washington, D.C. and the National Rural Electric Cooperative Association (NRECA), this bulwark of unity and a sense of community has ensured survival, growth and maturity for cooperative rural electrification. This unity continues as cooperatives' greatest source of strength - especially today as cooperatives face restructuring in the industry and competition in the marketplace.

Electric Use Soars

When rural electric cooperatives were first organized, their directors and managers wondered how they and their neighbors were going to use all the electricity the lines were built to carry. Forty kilowatt hours (kwh) a month seemed impossible.
Their apprehensions were short-lived, as indicated by a review of national rural electric growth rates. In 1948, ten years after the program started, the astronomical figure of 40 kwh thought to be wildly optimistic earlier, had tripled to more than 120 kwh as a national average of on-farm consumption. And electric consumption in rural areas continued to rise at phenomenal rates for several decades. The accelerating consumption, combined with the millions of farms that were being electrified for the first time, made rural electrification the growth industry in agricultural areas for many years - much to the delight of appliance and equipment manufacturers and dealers.

In 1938, when 40 kwh seemed like a pipe dream, the typical rural electric system had built and was operating 250 miles of line with $230,000 the co-op had borrowed from the Rural Electrification Administration. The fledgling electric utility had about 800 consumer-members who had elected directors to govern the affairs of the organization. The co-op staff consisted of a manager, a bookkeeper, a line foreman and a crew.

By the time of the bombing of Pearl Harbor in December 1941 and the outbreak of World War II, there were nearly 775 rural electric systems operating or under development across rural America. The war effort slowed the advance of rural electrification, but at the war's close, new legislation was enacted by Congress to complete the job. This legislation liberalized interest rates and payback periods for REA loans, making rural electrification possible for even the most remote regions.

In 1947, there were still 2.5 million farm families without light and power, but the period of rural electrification's greatest growth was about to begin. Exceptional growth followed for electric co-ops all across the nation. By 1948, more than 40,000 consumers a month were being connected to co-op lines. In 1949 alone, 184,000 miles of electric line, more than 700 miles a working day, were energized. By 1953, close to five million farms or 88 percent, had been electrified and there were 1.2 million miles of electric lines singing along America's rural roads and highways.

On the 25th anniversary of REA in May 1960, the big push for the construction and development of the local co-op systems had resulted in 97 percent of all U.S. farms being electrified. But the delivery of light and power over the rural lines to farm families for the first time did not complete the rural electrification program or REA's and the electric co-ops' missions. The growth of electric consumption was increasing to an average of 20 kwh a year and there was no decrease in sight. That meant new and heavier high-voltage lines had to replace the original system and additional, more powerful substations had to be built, all requiring big capital investments.

Another new challenge confronted rural electrics on the 25th anniversary of REA - the securing of an adequate supply of wholesale power to meet the mounting demands of the distributor system and its members. In the first 25 years of rural electrification, electric cooperatives had built a few small generating plants and lines of their own with REA financing. The majority of their power came from two outside sources - purchases from private power companies and from the federal government's power system of hydroelectric dams. Progressive federal policies aiding rural electrification, particularly in the critical arena of generation and transmission of wholesale power, predate the rural electric program by several decades. Principal among these was the 1906 anti-monopoly provision of "preference," which gives first rights of purchase of hydroelectricity from dams of the nation's federal power system to public bodies and nonprofit entities.

Power supply and the pressing need to achieve the security of reliable generation and transmission resources was rural electrification's greatest and most overriding concern for many years following World War II, a period of extended "boom" growth for rural electric systems. Federal power and preference, essential elements of rural electric power supply still today, were the helping hands that met many of the critical shortages.

However, by 1960, rural electric consumption was outstripping the capacity of these sources to provide further wholesale power for the co-ops. One solution was to create new groups and federations of co-ops to generate and transmit power in several or many local distribution systems. Rural electric communities extended their vision and raised their level of organizing skills to a new and wider challenge: the search to create and maintain a lifeline of wholesale power. They turned the old vision and skills, so successful in forming their first organizations, to create new groups and federations. They developed generation and transmission cooperatives, power supply networks which today reach over vast regions to supply an increasing portion of the power needed by cooperative members. These cooperatively-owned and operated plants and lines form an essential resource of wholesale power assuring continued growth and vitality for rural America's farms, ranches, businesses and industries far into the future.

The True Impact of Electricity

Rural electrification has had a profound impact on the way Americans live and work today. It has provided high-quality food and fiber for the nation and the world. It has created room for commercial and industrial growth. And it has made a newfound home for crowd-weary people.

The electricity provided by almost 1,000 rural electric systems has allowed the American farmer and rancher to increase productivity to easily feed our nation and help feed a hungry world - at a cost that allows Americans to spend less of their income on food than people of any other nation.

Electricity from cooperatives has allowed small and large industries to locate in rural areas. Thousands of companies have been aided by economic development initiatives of rural electric leaders, providing hundreds of thousands of new jobs and relieving population pressures on America's cities.

Because there are electric cooperatives, today's rural America enjoys greatly diversified economic activity with greater stability and security for millions of its residents - a diversity that has reached into social and cultural life, enriching the community. And because there is electricity in rural America, there are choices in people's lives about where and how they live, many finding rural America an attractive and desirable place to work and to raise families - still a land of opportunity.

In the beginning, the organizers of the rural electric system knew they were taking on a big commitment to the future. In partnership with their federal government, the REA, they turned a dream into reality and set in motion one of the most amazing success stories of cooperative and economic democracy this nation has ever known. They leave a powerful and impressive legacy of success: 30 million consumers on the lines of rural electric systems reaching out to the most remote regions of the nation.

It is a challenging job. The nation's rural electric systems operate and maintain nearly half this country's power lines, which reach approximately five consumers per mile of line. These are difficult economics to overcome, the vast distances and slim revenues still requiring the powerful twin legacies of cooperation and a responsive federal government. Rural electric systems remain vital economic and social institutions because of a powerful faith and commitment to these legacies, because their strength continues to arise out of an imaginative and dynamic people determined to continue them.

Celebrating and Giving Thanks

Grateful farm and ranch families wrote letters of thanks to REA, to President and Mrs. Roosevelt, and later to President Truman, telling them how electricity had improved their lives and their work. Letters to REA told of the night that the lights came on and how both children and parents ran through their homes, turning lights on and off. Some even told of hurling their hated kerosene lamps, sooty glass chimneys and all, out of the window.
In Tennessee, a farmer who got his lights in the early 1940s, rose the next Sunday at church to bear witness:

"Brothers and sisters, I want to tell you this. The greatest thing on earth is to have the love of God in your heart, and the next greatest thing is to have electricity in your house."

The Future of Electric Cooperatives - Restructuring and Competition

In April 1996, the Federal Energy Regulatory Commission (FERC) issued orders implementing wholesale competition in the electric power industry as provided for in the Energy Policy Act signed into law in 1992. However, the retail end of the electric industry remains the largest regulated industry in the United States. The States have the primary role in regulating electric utilities. However, U.S. tax policy and environmental policy, as well as interstate commerce issues, and the Rural Utilities Service (formerly the Rural Electrification Administration) are under the control of the federal government. Both the States and Federal government are debating the regulatory structure of the retail electric utility industry to decide if it should be changed. The key issue is: Can competition provide adequate discipline in the marketplace to assure every American a satisfactory, reliable and affordable electric power supply, or does that require some government involvement?