What Are Electric Cooperatives?
The excuses for this disparity ranged from claims that it was not profitable to run electricity outside cities due to the lower population densities, to the slur that rural residents wouldn't know what to do with it. In truth, the problem was that it took a longer period for rural electric service to turn a profit than in the cities, and the existing utilities were looking for a short-term return on their investment. Although there were several attempts in congress to set up a national agency to oversee rural electrification, these efforts were stymied by the existing power companies.
The turning point came in the 1930s when Franklin D. Roosevelt became an ally of rural electrification. A victim of polio, Roosevelt had founded a rehabilitation institute in Warm Springs, Georgia in 1927, and purchased what later became known as the Little White House as a vacation retreat. Warm Springs was one of the few communities in Georgia that had electric power. Even so, according to Roosevelt, he was stunned when his first power bill for his cottage was greater than his entire estate in New York. When he complained, he was told that the higher rates were required due to the community's low population density. Realizing that his goal of modernization and economic recovery of the U.S. could not happen while such disparities remained, Roosevelt became a supporter of a national rural electrification program to provide loans to run electricity to the remaining 90% of the nation. Congress passed a bill authorizing the creation of the Rural Electrification Administration in 1935, and Roosevelt signed it in a ceremony at in Warm Springs.
Still, utilities were reluctant to use these loans to provide electricity to rural America. Tired of waiting on the existing power companies, rural people formed their own utilities. Known as electric cooperatives, each company was set up to be owned by every person receiving electric power. Since each customer was to be an owner of the company, electric cooperatives were designed to be non-profit, with any funds left over after costs redistributed to the members. Utilizing standards provided by the REA, the cooperatives began building their own power lines.
In this manner the electric cooperatives were born. By our very nature we are customer oriented, our primary concern not with pleasing distant shareholders, but in providing our customers with the best and most cost effective electrical service possible. Owned by those we serve, electric cooperatives are not faceless utilities, but companies made up of friends, neighbors, and relatives. And it is this sense of ownership and personal responsibility that makes the satisfaction of our members our highest goal.