Umair Gaines
The first electric cooperative was established in response to the lack of electricity in rural areas. As late as the mid-1930s, nine out of ten rural homes in the US had no electric service. This was due to power companies' lack of interest in serving these areas, as it was not profitable. The first official action by the federal government to address this issue was the passage of the Tennessee Valley Authority (TVA) Act in May 1933, which authorized the construction of transmission lines to serve underserved areas. The first electric cooperative was then formed in Alabama in March 1936, and the Rural Electrification Administration (REA) was established in 1935 to provide federal loans for local, consumer-owned electric cooperatives. Most of the nation's 900-plus electric cooperatives were formed in the late 1930s and early 1940s, and they continue to play a vital role in providing electricity to rural communities today.
| Characteristics | Values |
|---|---|
| Date of establishment | 26 April 1937 |
| First electric cooperative in | Arkansas |
| Number of members | 150 |
| Number of employees | 3 |
| Date of first power lines | 15 April 1938 |
| Number of distribution lines | 10,373 miles |
| Number of substations | 50 |
| Number of member accounts | 103,440+ |
| Type of cooperative | Non-profit |
| Area served | 18 counties in Arkansas |
| Headquarters | Jacksonville, Arkansas |
| District offices | Bryant, Heber Springs, Perryville, Stuttgart |
| Parent organization | Arkansas Electric Cooperative Corporation |
| Fuel sources | Renewable energy, nuclear power, natural gas, clean coal |
| Community projects | Operation Round-Up, Guatemala mission, college scholarships, annual youth tour |
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What You'll Learn
- The Rural Electrification Administration was established in 1935
- The first electric cooperative in Arkansas was formed in 1937
- The Tennessee Valley Authority Act was passed in 1933
- Electric cooperatives were formed by farmers and rural community leaders
- By 1940, 567 cooperatives provided electricity to 1.5 million consumers
The Rural Electrification Administration was established in 1935
In the early 1930s, nine out of ten rural homes in the United States lacked access to electric service. This unavailability of electricity kept rural economies dependent on agriculture, while businesses and factories preferred to locate in cities where electricity was easily accessible.
The Rural Electrification Administration (REA) was established on May 11, 1935, through President Franklin D. Roosevelt's Executive Order 7037. The REA was created to supervise the distribution of electric energy to remote regions of the United States. Roosevelt understood the benefits that electrification would bring to the rural American economy. The idea of providing federal assistance to accomplish rural electrification gained momentum when Roosevelt took office in 1933.
The following year, on May 20, 1936, Roosevelt signed the Rural Electrification Act into law. This act provided federal loans to finance the construction of equipment and electrical distribution systems to serve isolated rural areas. The funding was channelled through cooperative electric power companies, which purchased power wholesale and distributed it through their transmission and distribution lines.
The REA soon realised that electric cooperatives would be the entities to make rural electrification a reality. In 1937, the REA drafted the Electric Cooperative Corporation Act, enabling the formation and operation of not-for-profit, consumer-owned electric cooperatives. These cooperatives borrowed funds from the REA to build lines and provide service, and they continue to play a crucial role in rural electrification today.
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The first electric cooperative in Arkansas was formed in 1937
In the mid-1930s, nine out of ten rural homes in the United States were without electric service. This unavailability of electricity in rural areas kept their economies dependent on agriculture. In 1932, President Franklin Roosevelt created the New Deal program, which included funding for rural electrification. This paved the way for Arkansas Governor Carl E. Bailey to sign legislation allowing the incorporation of electric cooperatives in the state.
On April 26, 1937, the First Electric Cooperative was formed as the first electric cooperative in Arkansas. It was established under the federal Rural Electrification Act of 1935, which enabled the formation and operation of not-for-profit, consumer-owned electric cooperatives. The First Electric Cooperative energized its first lines on April 15, 1938, near Jacksonville, Arkansas, with three employees and 150 members.
The cooperative is headquartered in Jacksonville, Arkansas, with district offices in Bryant, Heber Springs, Perryville, and Stuttgart. It serves portions of 18 counties in central and southeast Arkansas, providing electricity to more than 103,440 member accounts as of July 2023. First Electric is a member of the Arkansas Electric Cooperative Corporation (AECC), which sells wholesale energy to First Electric and 16 other member cooperatives in Arkansas.
In addition to its core business of providing electricity, First Electric also engages in community projects such as Operation Round-Up, the Guatemala mission, college scholarships, and an annual youth tour to Washington, D.C. The cooperative participates in the Guatemala mission by donating materials, labor, and funds to help provide electric service to rural Guatemala residents. First Electric also supports fuel diversity, including power generation through a mix of energy resources such as renewable energy, nuclear power, natural gas, and clean coal.
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The Tennessee Valley Authority Act was passed in 1933
In 1933, the Tennessee Valley was in dire economic straits. Thirty percent of the population was affected by malaria, and the average income in rural areas was $639 per year, with some families surviving on as little as $100 per year. The land had been exhausted by poor farming practices, and the soil was eroded and depleted, leading to reduced crop yields and farm incomes. The region had also lost 10% of its forests to fires each year.
The Tennessee Valley Authority Act, passed on May 18, 1933, aimed to address these issues by creating the Tennessee Valley Authority (TVA). This federal corporation was tasked with improving navigability, flood control, and reforestation in the Tennessee Valley. It was also responsible for providing electricity to the region, which had previously lacked access to electric service, hindering economic development.
The TVA was the first agency directed to address the total resource development needs of a major region. It embarked on the construction of several hydroelectric dams, with the first, Norris Dam, breaking ground on October 1, 1933. These dams improved flood control and provided much-needed electricity to the area, attracting new industries and employment opportunities.
The Act also authorized the TVA Board to construct transmission lines to serve "farms and small villages that are not otherwise supplied with electricity at reasonable rates." This marked the beginning of rural electrification efforts, which would later be formalized with the creation of the Rural Electrification Administration (REA) in 1935.
The Tennessee Valley Authority Act played a crucial role in modernizing the Tennessee Valley, improving the lives of its residents, and laying the foundation for the electrification of rural areas across the nation.
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Electric cooperatives were formed by farmers and rural community leaders
In the 1930s, nine out of ten rural homes in the United States were without electric service. Families relied on wood stoves and washboards for cooking and cleaning, and children did their homework by the dim light of coal-oil lamps. The unavailability of electricity in rural areas kept their economies dependent on agriculture, and factories and businesses chose to locate in cities where electricity was easily accessible.
Power companies were not interested in serving sparsely populated rural areas as it was not profitable for them. As a result, farmers and other rural community leaders joined forces to form electric cooperatives. Each member paid a fee of $5, making them owners of the co-op, and generating the capital needed to qualify for a loan.
The idea of providing federal assistance to accomplish rural electrification gained ground when President Roosevelt took office in 1933. On May 11, 1935, Roosevelt signed Executive Order No. 7037, establishing the Rural Electrification Administration (REA). The REA soon realized that electric cooperatives would be the entities to make rural electrification a reality. In 1937, the REA drafted the Electric Cooperative Corporation Act, a model law that states could adopt to enable the formation and operation of not-for-profit, consumer-owned electric cooperatives.
By 1940, 567 cooperatives across the nation were providing electricity to 1.5 million consumers in 46 states. Today, electric cooperatives are democratic, tax-paying, not-for-profit businesses governed by member-elected boards of directors. They adhere to a tradition of community service, with members and employees participating in economic development efforts and charitable undertakings.
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By 1940, 567 cooperatives provided electricity to 1.5 million consumers
The first electric cooperative in the United States was established in 1935, following the creation of the Rural Electrification Administration (REA) by President Roosevelt. This enabled farmers and ranchers to borrow federal money to form local, consumer-owned electric cooperatives, bringing electricity to rural areas for the first time.
The REA's lending program, established by the Rural Electrification Act, soon became a reality. The Act was passed in 1936, a year after Roosevelt signed Executive Order No. 7037, which established the REA. The REA's initial focus was on providing loans to established investor-owned utilities to serve rural areas. However, it quickly became apparent that these companies were not interested in using federal loan funds for this purpose. Instead, loan applications from farmer-based cooperatives poured in, and the REA recognised that electric cooperatives would be the key to rural electrification.
The REA drafted the Electric Cooperative Corporation Act in 1937, providing a framework for states to establish and operate not-for-profit, consumer-owned electric cooperatives. This marked the beginning of a rapid expansion of electric cooperatives across the nation. By 1940, just five years after the establishment of the REA, there were 567 cooperatives providing electricity to 1.5 million consumers in 46 states. This growth continued, and by 1953, more than 90% of US farms had electricity, a remarkable achievement considering that in the mid-1930s, nine out of ten rural homes were without electric service.
Today, electric cooperatives continue to play a vital role in rural electrification. Nearly 900 electric cooperatives serve approximately 40 million people in 47 states, and most rural electrification is achieved through locally owned cooperatives. These cooperatives have brought significant benefits to rural communities, providing affordable and reliable sources of power and contributing to economic diversification.
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Frequently asked questions
The first electric cooperative was started in 1935 in Central Texas, called the Bartlett Electric Cooperative.
The electric cooperative program was officially born in Alabama on March 2, 1936, when Clarke-Washington Electric Membership Corp. became the first cooperative to incorporate.
The First Electric Cooperative was the first in Arkansas and was incorporated on April 26, 1937, under the Rural Electrification Act.
