Cooperative Services Branch

Rural Electric Co-ops do more than keep the lights on.

May 20, 2022

Source: John Bayler Photography

May 20th celebrates 86 years since the passage of the Rural Electrification Act of 

1936. This legislation provided funding for electric distribution that many rural 

residents now take for granted. When the Act passed only 11percent of farms had 

electric power, leaving many to milk by hand, use spring houses or purchase ice for 

refrigeration, use kerosene to heat poultry brooders and light lamps in the house, 

and use wood stoves for cooking and heating water for washing. 

Initially it was thought that the investor-owned electric providers would use low 

interest government loans to extend electricity into rural areas. However, this did 

not materialize. The following year the Electric Cooperative Corporation Act 

passed. This provided a model cooperative law states could use to create 

cooperatives to develop and operate non-profit consumer owned electric 

distribution. Resulting in todays’ Rural Electric Cooperatives. This was a huge 

success, in just over 15 years, 90 percent of farms had electric service. Today that 

number has increased to 99 percent.
Rural electric cooperatives have not stopped there. They 

strive to keep rural communities connected to the world, by 

providing broadband services and community development 

opportunities in the communities they serve. 

“We were happy to assist Wabash in the construction of 

their new headquarters and be a part of bringing better, 

more efficient service to their members” 

Matt Conklin, CEO Clay Electric Cooperative

One such example is Clay Electric 

Cooperative, Inc. of Flora Illinois. The 

non-profit’s operations began in 1944 

with 39 miles of line serving 49 member 

owners. Today they serve members in a 

7-county area with 862 miles of line and 

just over 3,200 member 

owners. Keeping with the 

sixth principles of cooperation (see 

cooperative principles in sidebar) Clay 

Electric used USDA Rural Development’s 

Rural Economic Development Loan 

(REDL) program to provide a passthrough loan to Wabash Co-op, 

preserving 127 jobs in the 

communications co-op. The funds will 

allow Wabash Communications Co-op to 

modernize bringing broadband and fiber 

optics to rural businesses, schools, and 

homes.

The Rural Electrification Act was the start of providing equitable services to rural 

communities. And while REA has undergone many changes since 1936, the 

mission to provide services to their rural members remains. Rural Electric 

cooperatives have embraced cooperative principles, and are working with other 

cooperatives and businesses in their communities to enhance access to services 

that promote business development, job creation and retention which support a 

bright future for the communities they serve. 

For further information about cooperatives and services see these resources:

Co-ops 101 (Español)

Co-op Essentials
“The New Deal Co-ops, Depression-fighting strategies involved co-ops in ag. 

Utilities and health-cares sectors” Rural Cooperatives Magazine; Vol. 81, No.2, Pg. 

22.

National Rural Electric Cooperative Association

Rural Economic Development Loan

Rural Utility Service (RUS)

This Bulletin was produced by Debbie Rausch, USDA Rural Development, 

with assistance from Mary Warren, USDA Rural Development-Illinois. To contact 

the author: Deborah.Rausch@usda.gov

Please note: the focus on the cooperatives in this bulletin is for example and 

informational purposes and does not signify endorsement over other companies' 

products and services. If you would like to reach out with your own cooperative 

story, we would love to hear it, simply contact us. coopinfo@usda.gov

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