The National Rural Electric Cooperative Association (NRECA) and electric co-op leaders joined officials from the U.S. Department of Agriculture (USDA) at the end of May to celebrate the 90th anniversary of the Rural Electrification Act (REA), the law that helped deliver power across rural America.
The REA was a New Deal Era effort to provide low-cost federal loans for building electric distribution systems in rural areas to revive America’s economy in the wake of the Great Depression.
The law drove the creation of electric cooperatives throughout the U.S. and laid the foundation for the USDA’s Rural Utilities Service (RUS), which provides financing for co-op infrastructure to this day. That support is crucial as co-ops gear up to meet growing demand while maintaining reliable, affordable service.
That partnership “is more important today than it’s ever been. These investments in rural America still matter greatly,” NRECA CEO Jim Matheson said. “They’re critical to promoting reliability, affordability, economic opportunity and quality of life in rural America.”
The REA, signed into law on May 20, 1936, was one of the most impactful pieces of President Franklin D. Roosevelt’s New Deal reforms. When the REA was enacted, only 10% of U.S. farms and rural homes had electricity. Today, that has risen to about 99%.
The law also helped transform the Rural Electrification Administration — the forerunner to the modern-day RUS — from a relief agency to a lasting program to provide loans for rural electrification, supporting the creation and growth of co-ops.
The REA “allowed us to truly stitch our country together,” Agriculture Deputy Secretary Stephen Vaden said. “It was our quick adoption of electric power throughout rural America that helped to create the innovation and the great economic growth that our country experienced throughout the 20th century.”
Today, more than 900 electric co-ops are operating across the country and modernizing their systems to improve cost and reliability for the 42 million Americans they serve. About 200 electric co-ops are also building or operating broadband networks to deliver high-speed internet access to rural America.
In 1994, Congress reorganized the Rural Electrification Administration into RUS, which delivers on the REA’s original mission through three core programs to support electric, telecommunications and water infrastructure.
“Investment in rural utility infrastructure … is as important to rural life and the national economy today as it ever was,” said Chris McLean, assistant administrator for the RUS Electric Loan Program. “Few federal programs have been as successful as the Rural Electrification Act.”
Even with the strides co-ops have made to power rural America, the partnership between RUS and co-ops remains essential. The RUS electric loan program ensures co-ops can build and upgrade the infrastructure needed to power a changing rural America while keeping rates affordable.
Photo courtesy of NRECA
