Celebrating the greatest
public-private
partnership in
American history

“President Kennedy,
like Roosevelt,
understood cooperatives
and the
cooperative model as
a tool for building
infrastructure and,
just as important,
for promoting
democracy.”


By Glenn English, CEO
National Rural Electric Cooperative
Association (NRECA)

Editor’s note: This guest commentary is
provided courtesy NRECA, which
represents 865 electric co-ops that serve 37
million consumer-members. The views
expressed are the author’s, and do not
necessarily reflect those of USDA or its
employees.



n May 11, 1935, President Franklin Roosevelt signed an Executive Order creating the Rural Electrification Administration, now the Rural Utilities Service (RUS). That was 75 years ago, when 90 percent of farms and rural communities had no electricity.

We should be celebrating. The phenomenal success of this partnership is self-evident in the poles and wires spanning the continent.

I believe cooperatives and RUS can best honor the legacy of this program by reminding the American public of what government and citizens accomplished together in the early part of the last century.

Many engineers point to rural electrification — the task of creating the electrical grid that now spans the continent — as the greatest engineering feat of the 20th century. This feat would not have been possible without the Rural Electrification Administration: one of the most successful public-private partnerships in the history of this country.

The government supplied loans and administrative support; private citizens banding together to form cooperatives made it happen. The not-for-profit, consumer-owned cooperative business model lies at the heart of this achievement.

President Roosevelt acknowledged as much in a Jan. 19, 1943, wartime letter celebrating the first annual meeting of the co-op’s nationwide service arm, the National Rural Electric Cooperative Association: “I think that the forward march of the electric cooperatives has an even more profound significance in terms of our fight to preserve democracy. For it represents what is perhaps the most democratic form of business enterprise, one in which the individual finds his greatest gain through cooperation with his neighbor.”

The fruit of this partnership was not simply electrification, but a profound social transformation. Quite simply: the availability of affordable electric power changed every aspect of life in rural America.

President John F. Kennedy, like Roosevelt, understood cooperatives and the cooperative model as a tool for building infrastructure and, just as important, for promoting democracy.

In 1962, Kennedy signed an agreement stipulating that NRECA, at the request of the Agency for International Development, would provide managers, engineers and other specialists needed to start cooperatives in other countries. Kennedy believed that the United States could fight communism abroad by exporting the rural electric cooperative model and access to affordable electric power.

Fostering cooperatives abroad accomplished two goals: building an understanding of democratic governance and raising the standard of living, making these populations less open to communism.

Under the RUS model, government provides a hand up — not a hand-out.

The RUS loan program provides financing necessary to sustain and build needed infrastructure to meet the rural America’s growing energy demands. The principal along with the interest payments go back into federal coffers.

After 75 years, the RUS mission to provide affordable electric power has not changed and the need for this program has not abated.

As the nation moves to repair its aging infrastructure, build a smarter grid and reduce carbon emissions from electricity generation, these loans are still vital to protecting affordable power for rural America. Co-ops use these funds to build and maintain distribution lines, make upgrades to substations and transformers, improve environmental performance at generation plants, install natural gas-fired and renewable generation and foster energy-efficiency efforts.

One cooperative in Colorado, for example, is using funds to finance the underground loops for residential geothermal heat pumps. A cooperative in South Dakota is lending RUS funds to consumer members to pay for energy audits and efficiency improvements. The 5-percent interest loans are paid back to the cooperative within five years.

The recession has hit rural America hard. Cooperatives will continue to work hard to keep rural communities viable. The Rural Economic Development Loan and Grant Program (REDLG) can assist co-ops in this goal.

Too often, critics have made attacks on these programs that are not based on facts. We have, perhaps, made their job easier by neglecting to tell this story as it should be told. As our leaders struggle for answers in an uncertain economic environment, perhaps they should take a second look at the partnership between people and the government.




May/June Table of Contents