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Electricity Goes to the Country

Morris Llewellyn Cooke

Administrator, Rural Electrification Authority

September 1936


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A typical cooperative project grew out of a letter from a county agent in Henderson County, Kentucky, who wrote that a few local farmers were interested in securing electricity, and asked information and advice about a construction loan.

A field man sent by the REA development section made a rapid survey of Henderson County conditions. To a meeting which followed there came, not the few farmers expected, but nearly a hundred, with their leaders, and the presiclent of the State Farm Bureau Federation.

The group's desire for electricity, and the prohibitive cost of obtaining service from the local power company, were set forth by the county agent.

When the REA plan was outlined, the farmers learned that tenants as well as landlords could secure electric power and that, as security for the government loan, a lien is placed on the government-financed power line and its revenues, not on the farmer's property. They learned that money allocated for building a line covers its entire cost, including a service line to each farmhouse served; that a cooperative group must be incorporated, and that a project must he deemed self-liquidating by REA to secure a loan.

Local interest grew rapidly. Prospective customers signed for service. A marked map of the territory was submitted to the REA engineers. After much correspondence between the Henderson County Rural Electrification Association and REA to clarify all details of the scheme, an allocation of $190,000 was made. The amount covers the building of 153 miles of highline (at a cost of $1150 a mile) and three small sub-stations. This line cost, decidedly higher than the REA average, is accounted for by the large number of customers to the mile—7.8—requiring separate transfomers and motors, and by difficult physical conditions. The Henderson Municipal Plant is to supply electricity for these rural lines. The retail cost to each customer probably will be approximately $4.25 for the first 100 kwh. Additional power consumed will be cheaper.

The experience of the first year of REA has been especially valuable in demonstrating the desirability of a long term, carefully planned program. Under the line extension policies generally in practice until recently, the more prosperous farms in a given area ultimately received electric service, while the less prosperous farms by that very fact became more isolated, less able to bear the expense of the extension. The result was a haphazard rural system of finger-like lines, with great pockets of unserved areas between and beyond them. Obviously a system planned in advance to cover a given area thoroughly would have been far more satisfactory to the consumers and in the long run to the companies.

The gratifying results of such planned electrification in many European countries are common knowledge. Less familiar, perhaps, is the story of electrification in New Zealand. With a large number of dairy and stock farms, and an average population density of fifteen people to the square mile—three less than the state of Nebraska—New Zealand offers a good basis for comparison with rural America. The government there instituted a widespread electrification plan in 1918, dividing the entire country into fifty-five electric power districts. Forty such districts have already begun operation, thirty-nine of them in predominantly rural areas, supplying cheap and abundant electricity to farms. Steady expansion built on sound beginnings has already brought electric service to two thirds of New Zealand's rural population, and the operations as a whole show a good reserve margin.

Electric Power on the Farm
Electric power on the farm

Under its ten-year program, REA hopes to bring electricity to another million American farms. Its emphasis will be on loans for distribution lines, in order to continue cooperating as far as possible with existing producers of electric energy.

Each of the REA activities has widespread implications. Insistence on progressive construction standards, coincident with efforts of some utilities, has led the industry to admit that sturdy and efficient rural lines can be built under widely varying conditions for approximately $950 a mile. The accepted figure until recently ranged from $1600 to $2400 and upward. Electrifying an entire area and the application of competitive bidding and large scale buying methods to REA projects have furthered construction economy.

But the rural line, once built, cannot vitally affect farm life unless the farmer is able to make use of the energy it brings. In the past many farmers who felt that they might scratch together enough cash for an extension hesitated to do so because they could not also meet outright the expenses of wiring their homes and barns and purchasing equipment. The Tennessee Valley Authority and some of the private companies of the Southeast have shown that the way to successful operation is through low rates inducing high consumption. But high consumption demands appliances„appliances whose cost is not a drain on but a supplement to farm income and farm comfort. A new feature of the REA plan is provision for financing house wiring and the purchase and installation of electrical appliances, and modern plumbing equipment. Loans so used will be limited to a period not exceeding two thirds of the assured life of the equipment, with interest at approximately the prevailing rate for government obligations.

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