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.
