Rural Electrification in Mississippi
In 1935, less than 1% 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).
There are 26 electric cooperatives in the state:
- 25 distribute electric energy to members
- 1 generation and transmission cooperative provides wholesale power to 11 electric distribution cooperatives
- The remaining 14 receive wholesale power from the Tennessee Valley Authority
Cooperation Among Neighbors
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 rural areas because of the inability to make a profit
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
- Almost $2,000 to build a mile of line
- Much higher than the average annual income of a farm family
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 wrong. Putting their faith in a long tradition of independent self-reliance, the people of rural Mississippi decided to do the job themselves.
Grassroots Movement
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.
- For example, these were organizations through which cooperative members would collectively buy a box car of fertilizer. 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.
Investments Were Needed
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.
These programs were
- Designed to help people get back to work and recover from the great economic hardships that spread across our land
- Largely developed under President Franklin D. Roosevelt
- Designed to “prime the pump” of our economy and get more money into the hands of the people
President Roosevelt saw the advantages of electrifying rural areas, and he realized the need for some form of governmental action to reach this goal.
Rural Utilities Services
President Roosevelt created the Rural Electrification Administration (REA) (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
First REA Loan
- In September 1935, Monroe County Electric Power Association of Amory became the first electric power association in Mississippi to secure a 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 (TVA)
Mississippi Electric Power Associations
The Rural Electrification Administration was established strictly as a lending agency to make loans to:
- Existing electric utilities
- Electric power associations/cooperatives
- Other qualified organizations
These loans would help 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 were 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.
Cooperative Energy
As time evolved, electric cooperatives in the southern part of the state worked together to create Cooperative Energy, formerly South Mississippi Electric Power Association:
- Cooperative Energy serves 11 distribution cooperatives in the state with wholesale electric energy
- TVA provides electric energy to 14 distribution cooperatives.
Cooperatives Moving Forward
In 2016, the Electric Power Association Act was updated to reflect modern electric cooperatives that served Mississippians with reliable and affordable electric power.
Nearly a century later, electric cooperatives are continuing their mission of providing electric power to rural Mississippians and improving the quality of life.