Beatrice Lang
In the early 20th century, many people in rural America lacked access to electricity. While electricity was commonplace in cities, it was largely unavailable in farms and other rural areas. This was due to the high costs of connecting remote areas to the grid, as well as the low population density in these regions, making it uneconomical for investors and taxpayers. In 1935, President Franklin D. Roosevelt established the Rural Electrification Administration (REA) to address this issue and bring electricity to rural communities. The REA provided loans to electric cooperatives, which were then repaid over 30 years. This initiative, along with the formation of electric cooperatives and advocacy from organizations like the National Rural Electric Cooperative Association (NRECA), played a significant role in electrifying rural America and improving the lives and productivity of its residents.
| Characteristics | Values |
|---|---|
| Name of the organization | Rural Electrification Administration (REA) |
| Year of establishment | 1935 |
| Founder | Franklin D. Roosevelt |
| Aim | To bring electricity to rural areas |
| Mode of operation | Provided federal loans to electric cooperatives for the installation of electrical distribution systems |
| Impact | Improved efficiency of work and comforts of home life in rural areas, decentralized industrialization, improved productivity, standards of living, education, communication, and economic diversification in rural areas |
| Current status | Renamed as the Rural Utilities Service |
| Current initiatives | Investing in smart grid and broadband technologies for rural communities |
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What You'll Learn
The Rural Electrification Administration (REA)
The establishment of the REA was part of Roosevelt's 1932 presidential campaign promises, and it was included in the suite of public works projects under the New Deal, aimed at tackling the Great Depression. The REA's primary function was not to construct power systems but rather to provide loans to electric cooperatives, which were repaid over 30 years. These cooperatives were generally owned and operated by farmers, and they purchased power wholesale to distribute using their transmission and distribution lines.
The initial progress of the REA was slow, but by the end of the 1930s, many cooperatives had formed to take advantage of the agency's loans. The REA also provided technical assistance, hiring engineers to design more cost-effective ways to build transmission lines. The agency's efforts were instrumental in achieving the widespread electrification of rural areas by the late 1950s.
The REA's impact extended beyond providing electricity to farms and rural communities. It facilitated the decentralisation of industry, allowing mills and factories to be established in the countryside. This, in turn, improved productivity, standards of living, education, communication, and economic diversification in these regions, reducing the disparities between urban and rural populations.
The legacy of the REA continues today, with hundreds of rural electric cooperatives still operating and providing essential services to their members. The success of the cooperative model has led to its consideration for other rural infrastructure projects, such as the extension of rural broadband.
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Electric cooperatives
The high cost of connecting rural areas to the electrical grid was a significant barrier. Power companies often deemed it uneconomical to run wires into the countryside, where there were fewer potential customers per square mile. This left rural communities with limited options for accessing electricity.
The formation of electric cooperatives transformed agriculture and improved the quality of life in rural America. Electrification brought increased productivity and efficiency to farms and rural industries. It also improved standards of living, communication, and economic diversification, reducing the gap between city and country dwellers.
Today, hundreds of electric cooperatives continue to provide power and other services to their members across the United States. The success of electric cooperatives in rural electrification has led to similar initiatives in other areas, such as the expansion of rural broadband access. The legacy of electric cooperatives demonstrates the power of community collaboration and innovative financing in addressing infrastructure gaps and improving the lives of people in underserved areas.
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The Rural Electrification Act of 1936
In the early 20th century, many people in rural America lived without electricity. By the 1920s, most cities and towns in America had electricity, but only about 10% of rural areas were electrified. Running wires into the countryside was considered uneconomical, given the sparse population.
During the Great Depression, communities banded together to bring electricity to America's farmland. In 1932, Franklin D. Roosevelt made rural electrification part of his presidential campaign. On May 11, 1935, Roosevelt issued Executive Order 7037, creating the Rural Electrification Administration (REA). The REA was established to initiate, formulate, administer, and supervise projects related to the generation, transmission, and distribution of electric energy in rural areas.
The REA made loans to electric cooperatives, which were repaid over 30 years. Rural communities established cooperatives, provided labour, and ultimately owned the systems they built. The REA also hired advisors to teach people how to use electricity and operate equipment. The cooperatives formed under the Act continue to provide power and other services to their members.
Amendments to the Act over the years have included extending loan terms, allowing loans to telephone companies, and providing access to rural broadband telecommunications networks.
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The Tennessee Valley Authority (TVA) Act
In the late 19th century, the Army Corps of Engineers first recognized several potential dam sites along the Tennessee River for electricity generation and navigation improvements. The National Defense Act of 1916, signed by President Woodrow Wilson, authorized the construction of a dam on the Tennessee River in Muscle Shoals, Alabama, for the production of nitrates for ammunition. The dam was completed in 1924.
In 1933, President Franklin D. Roosevelt signed the Tennessee Valley Authority (TVA) Act, creating the TVA as a federal corporation. The agency was tasked with addressing the pressing issues facing the Tennessee Valley, such as flooding, providing electricity to homes and businesses, and reforestation. The TVA was also responsible for improving navigation on the Tennessee River and fostering the region's business and agricultural development.
The establishment of the TVA marked a significant step in the unified development of the Tennessee Valley. It aimed to tackle the challenges of devastating floods, land erosion, economic decline, and population out-migration. The electricity generated by TVA dams brought about a transformative change in the region, making life easier for residents and increasing farm productivity.
The TVA's service area covers all of Tennessee and portions of Alabama, Mississippi, Kentucky, and small areas of Georgia, North Carolina, and Virginia. It operates as a federally owned electric utility corporation, similar to a private for-profit company, without receiving taxpayer funding. The TVA has played a crucial role in improving the quality of life in the region, providing electricity, flood control, and contributing to economic development.
The TVA has faced some controversies, including the displacement of families and power struggles between its board members. Additionally, the environmental impact of dam construction has been a subject of legal disputes. Despite these challenges, the TVA has grown to become the nation's largest public power company, serving about 80,000 square miles in the southeastern United States.
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The New Deal
In the early 20th century, many people in rural America lived without electricity. By the 1920s, most cities and towns in America had electricity, but only about 10% of rural areas were electrified by 1932. The high costs of connecting remote farms to the electrical grid meant that utility companies were reluctant to invest in rural electrification.
In 1932, Franklin D. Roosevelt made rural electrification part of his presidential campaign. On May 11, 1935, he issued Executive Order 7037, creating the Rural Electrification Administration (REA). The REA was part of the suite of public works projects under Roosevelt's New Deal, designed to remedy high unemployment during the Great Depression.
The REA provided federal loans to cooperative electric power companies to finance the construction of electricity generation and transmission infrastructure in rural areas. Rather than simply building power systems, the REA made loans to electric cooperatives that were repaid over 30 years. These cooperatives were generally made up of farmers who owned and operated them. The cooperatives provided labour to build the systems that they ultimately came to own. The REA also hired advisors to teach people how to use electricity and operate and maintain equipment.
The Rural Electrification Act was passed by Congress and signed into law by Roosevelt on May 20, 1936. The Act provided for federal loans for the installation of electrical distribution systems to serve isolated rural areas. By the late 1950s, there was essentially complete electrification of rural areas, with 90% of U.S. farms having electricity by 1953.
The Rural Electrification Administration and the Rural Electrification Act were thus instrumental in bringing electricity to rural areas in the United States, transforming agriculture and improving the lives of people in these areas.
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Frequently asked questions
The Rural Electrification Administration (REA) was established in 1935 by President Franklin Roosevelt to bring electricity to rural areas in the United States.
The REA provided federal loans to electric cooperatives that were repaid over 30 years. These cooperatives were generally made up of farmers who owned and operated them.
The REA transformed agriculture and life in rural America, improving productivity, standards of living, education, communication, and economic diversification. By the late 1950s, there was essentially complete electrification of rural areas.
Today, about 99% of the nation's farms have electric service. The USDA continues to invest in rural electric projects to deliver affordable and reliable electricity, as well as smart grid and broadband technologies.
