In May, the National Rural Electric Cooperative Association (NRECA) and other electric cooperative leaders joined officials from the U.S. Department of Agriculture (USDA) to celebrate the 90th anniversary of the Rural Electrification Act (REA), the law that helped bring power to rural America.
The REA was a New Deal-era effort that provided low-cost federal loans to build electric distribution systems in rural areas as part of the nation’s recovery from the Great Depression.
The law spurred the creation of electric cooperatives across the country and laid the foundation for the USDA’s Rural Utilities Service (RUS), which continues financing co-op infrastructure today. That support remains crucial as co-ops meet growing demand while maintaining reliable, affordable service.
“I’m thankful every day for the work that you all do,” Agriculture Secretary Brooke Rollins said during the event at USDA headquarters. “The work of co-ops together with RUS is the best of us, and that is what will keep America strong and the American dream available for all moving forward.”
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.”
History of the REA
Signed into law on May 20, 1936, the REA was one of the most significant pieces of President Franklin D. Roosevelt’s New Deal.
When the REA was enacted, only 10% of U.S. farms and rural homes had electricity. Today, about 99% of the nation’s farms have electric service.
The law transformed the Rural Electrification Administration, the predecessor to today’s RUS, from a relief agency into a long-term loan program that supported the creation and growth of electric cooperatives.
“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 create the innovation and economic growth our country experienced throughout the 20th century.”
Today, more than 900 electric co-ops serve 42 million Americans and continue modernizing their systems to improve reliability and control costs.
In 1994, Congress reorganized the Rural Electrification Administration into RUS, which carries out the REA’s mission through programs supporting 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. “I dare say that few federal programs have been as successful as the Rural Electrification Act.”
Some co-ops have been RUS borrowers since the 1930s, while others are among the newest borrowers in the country, McLean said.
The partnership continues
Even after decades of progress, the partnership between RUS and electric cooperatives remains essential, speakers said at the USDA event.
“Having the USDA support rural America through utility programs for electric, broadband, water and telephone service is very important because it allows us to borrow money at a cheaper rate to keep America rolling,” said Troy Amoss, CEO and general manager of Chariton Valley Electric Cooperative in Albia.
The RUS electric loan program helps co-ops build and upgrade the infrastructure needed to power a changing rural America while keeping rates affordable. The program also benefits taxpayers because co-ops repay the loans with interest.
Source: NRECA
