News & Resources: History

RURAL ELECTRIFICATION IN MISSISSIPPI
In 1935, less than one percent of Mississippi’s farms and rural residents had electric power. Today, the situation is reversed. Virtually all rural homes and farms have electric service due to the creation of Mississippi’s 25 electric power associations (rural electric cooperatives) which distributes electric service and one generation and transmission cooperative which distributes wholesale power to 11 electric power associations. How this came about is a fascinating story of cooperation among neighbors.

Urban areas were beginning to recover from the Great Depression, thanks in large part to the availability of electricity. In the sparsely populated countryside, people were enjoying life but not the amenities that only electricity could provide. Private investors weren’t interested in financing electrical delivery systems where profit could not be realized. Rural people of the 30s who wanted to "tie on" to the electric service provided in the towns found that paying the cost of providing service was far too high. At that time, it cost almost $2,000 to build a mile of line, and the average annual income of the farm family was much less than that amount.

Even by joining together, rural people could not afford to provide themselves with electric power. And even if they could, there were many who didn’t think farm families could afford electric rates, or that electricity would be very useful to the farmer.

Fortunately for the rural people of Mississippi, and the history of our economic progress, those who could not see the advantages of rural electrification were to be proved very, very wrong. Putting their faith in a long tradition of independent self-reliance, the people of rural Mississippi decided to do the job themselves. It was a true grassroots movement.

Since the first colonists came to this country, rural people have had a strong belief in cooperation. In the early years of this century, cooperatives were formed --- organizations through which cooperative members would collectively buy a box car of fertilizer, for example. In this way, each member of the co-op could save money on the amount of fertilizer he needed, since it was (and still is) more economical to buy large quantities of a material than to place many individual small orders. All co-op members enjoyed the savings made possible by joint purchasing, and co-ops of several types are still a prominent feature of Mississippi’s economy.

It was only natural that the co-op idea be considered for providing electric service. But the huge investment required to build an electrical system was beyond the reach of almost every rural person as cash was hard to come by. But it was also a time of many new programs on the part of the government, programs designed to help people get back to work and recover from the great economic hardships that spread across our land. These programs, largely developed under President Franklin D. Roosevelt, were designed to "prime the pump" of our economy and get more money into the hands of the people, in the country and city. President Roosevelt saw the advantages of electrifying rural areas, and he realized the need for some form of governmental action to reach this goal.

President Roosevelt created the Rural Electrification Administration (now called Rural Utilities Services) by executive order on May 11, 1935. Later, he made the REA a lending agency to help provide electric service to rural areas. This meant that rural people could unite to borrow money to build electric systems for themselves and pay the government loan back, with interest, as their systems generated income.

In September 1935, Monroe County Electric Power Association of Amory became the first electric power association in Mississippi to secure an REA loan and begin operations. Previously, in 1934, Alcorn County Electric Power Association had been organized to distribute electricity purchased from the Tennessee Valley Authority.

The Rural Electrification Administration was established strictly as a lending agency to make loans to existing electric utilities, electric power associations, or other qualified organizations to build facilities for furnishing electric power to rural areas, just as a bank is a lending agency in financing the building of homes through loans guaranteed by the Federal Housing Administration. Since funds borrowed through REA would be paid back, the government could achieve a great deal of progress at little expense to the taxpayer. Over the years, 25 electric power associations would be formed in Mississippi, a state that has a large rural population. These organizations are incorporated, chartered, and conduct business under authority of laws passed by the Mississippi Legislature.

WHAT IS AN ELECTRIC POWER ASSOCIATION?
What is an electric power association, who owns it, and how does it work?

Very simply, an electric power association or cooperative is a private, not-for-profit organization, locally owned and managed and incorporated under state law, providing electricity to its member/owners at the least possible cost. There are two important things to remember about an electric power association:

It is actually owned by the members it serves, and each member has one vote in the affairs of the association, regardless of the amount of electricity he or she uses.

This is the difference between an electric power association and an investor-owned utility, which is organized for profit, and owned and controlled by its stockholders.

An electric power association is a democratic organization. It conducts annual membership meetings, at which the member/owners --- the consumers it serves --- elect a board of directors from among their membership. The directors elect their own officers and employ a manager to run the daily operations of the association. Thus, employees are responsible to the manager, the manager is responsible to the board, and the board is responsible to the membership at large. As you can see, the customers of an electric power association --- the member/owners --- have the final say in the operation of the association.

A SUCCESS STORY
Almost 50 years ago, many people predicted that electric power associations had no future at all....those who said that rural people could not afford electricity, and could not find it very useful even if they had it. Obviously, the rural electric cooperative concept was much stronger than these gloomy voices of despair.

Much of the progress, economic and social, that has come about in rural Mississippi can be traced almost directly to the creation of electric power associations. And that progress continues. Each electric power association is an inspiring example of neighbors working with neighbors to make the quality of life better for the entire community. And for us, improving community life means going beyond our primary responsibility to provide dependable electric services at competitive prices.

For more than 60 years, Mississippi’s electric power associations have played a vital role in the growth and development of our great state. But our work is not done. We are making plans for tomorrow’s electricity demand today, in order to ensure a dependable supply for the future.

We welcome challenges. Through good times and bad.

We welcome opportunities. From the struggles of the past to the unlimited potential of the future. It’s a public responsibility we take seriously, but it’s also a personal commitment we take to heart.

Because we are the heart of Mississippi.

The Electric Power Associations of Mississippi
We Belong to You!
For more information contact Ron Stewart at 1-601-605-8600.