It’s hard to imagine what our daily lives would be like without electricity. Our dependence on electricity grows every year. We act as though it has always been there, often taking it for granted, but even the shortest power outage is an inconvenience.
But 90 years ago, when President Franklin Roosevelt signed the executive order that created the Rural Electrification Administration (REA), nobody in America’s small towns and wide-open spaces took electricity for granted. That’s because most of them didn’t have access to it.
As the 19th century ended, wealthy investors were starting electricity utility companies in cities from coast to coast. Building power plants and installing power lines were costly, so investors focused their efforts on places with the highest population density. Few gave any thought to rural America.
Built-up areas offered more customers in smaller spaces, which helped those utilities become profitable. Running power lines to serve a handful of consumers spread across so many acres didn’t make economic sense, so most utilities ignored them. After all, they couldn’t make as much money serving those places.
Long after their city family and friends became accustomed to enjoying the wonders of electric lighting and the earliest home appliances, folks in remote areas could only dream of those conveniences. The REA was created to change that, providing a source of expertise and financing for a new concept in energy — the rural electric cooperative.
Electric cooperatives are built and owned by the very people they serve. They’re led by boards of local residents who are elected by their neighbors to represent them and are responsible for acting in fellow members’ best interests.
The primary goal of a co-op isn’t to make money, but to provide a safe and reliable source of electricity at a cost the local community can afford. As not-for-profit organizations, they receive their money from members when they pay electric bills, and use most of that money to purchase and deliver electricity.
When co-ops earn more than they pay out in wholesale energy and other costs, they keep some of the extra money in reserves or return it to their members through what are known as capital credits.
Because co-ops exist to serve their members, they have an obligation to keep the price of electricity as low as possible. When members spend less for their electricity, they have more money to use on what’s important to them.
Co-ops also work to support the area’s economic health through activities designed to bring new employers to the community and help existing businesses expand. That’s particularly important, because many of the areas served by co-ops face economic challenges. One in four households on co-op lines nationally has an annual income of below $35,000, making affordable rates a key priority.
When co-op leaders make decisions, they’re focused on doing the best thing for their members. Co-ops want to make sure they provide power at the best price possible. That’s because they are truly not-for-profit, but all for you.
