It’s hard to imagine what our daily lives would be like without electricity. Every year, our dependence on what travels across poles and wires to our homes and businesses grows. We take its presence for granted, and can’t imagine life without it. Even the shortest power outage manages to turn our world upside-down.

But 90 years ago, when President Franklin Roosevelt signed the executive order that created the Rural Electrification Administration, nobody in America’s small towns and wide-open spaces took electricity for granted. That’s because most of them didn’t have access to it.

As the 19th century drew to a close, wealthy investors were starting electric utility companies in cities. Building power plants and installing power lines was costly, so investors focused their effort in places with the highest population density. Few gave any thought to rural America. Running power lines to serve a handful of consumers spread across so many thousands of acres just wasn’t as profitable, so most utilities ignored them. 

Long after their city cousins became accustomed to enjoying the wonders of electric lighting and the earliest home appliances, folks in more remote areas could only dream about the convenience. The REA was created to change that, providing a source of expertise and financing for a new concept in energy: the rural electric power cooperative.

Besides the areas each served, the most important distinctions between those big utilities and the new co-ops were who owned them and their purpose. As the name implies, investor-owned utilities are owned by people who buy stock in the utilities. The primary goal of those utilities is to make money to distribute to their investors.

Electric cooperatives are built and owned not by investors, but by the very people they serve. They’re led by boards of local residents who are elected by their neighbors to represent them and are responsible for acting in the members’ best interests. 

The primary goal of a co-op isn’t to make money, but to provide a safe and reliable source of electricity at a cost the local community can afford. As not-for-profit organizations, they receive their money from members when they pay electric bills, then use most of that money to purchase and deliver electricity. They typically set aside some money for the future and emergency needs. And, because they employ local people who patronize local businesses, much of the money they earn stays in the communities they serve, boosting the local economy.

Co-ops’ rates are designed to cover the costs associated with operating the co-op, maintaining the infrastructure for delivering power, and the generation and transmission of energy. Because they’re not designed to make a profit, co-ops don’t make more money when you use more power, or when wholesale prices increase. It’s also why they are dedicated to helping their members reduce energy consumption and lower their power bills. Because co-ops exist to serve their members and not profit-hungry investors, they have an obligation to keep the price of electricity as low as possible. 

When co-ops earn more than they pay out in wholesale energy and other costs, they keep some of the extra money in reserves or return it to their members through what are known as capital credits. 

When co-op leaders make decisions, they’re focused on doing the best thing for their members, to make sure they’re meeting your needs for power at the best price possible. That’s because they’re truly not for profit — instead, they’re for you and your neighbors.