Old Windmill

Power for the people: 1930-1957

It is impossible to tell the story of Basin Electric without mentioning the time and circumstance of America before rural electrification and the origins of distribution cooperatives and generation and transmission (G&T) cooperatives.

It was President Theodore Roosevelt who originally researched federal dams for flood control, conservation, irrigation, navigation, recreation, and hydro power was an afterthought. Since land was taken from the people to build the dams, the thought was that the power should be given back to the people at cost, not to a private power company that could earn money for stockholders.

During the Great Depression, President Franklin D. Roosevelt pledged a New Deal for the American people. At that time, countries around the world had various levels of rural electric development. France and Germany were highly developed, rural New Zealand was 60 percent electrified, but the U.S. – which had miles upon miles of rural land – was only 10 percent developed. The rural Great Plains was only 3.5 percent electrified. A major obstacle to electrifying rural America was the lack of corporate profit for developing this area; specifically, the cost of building transmission lines for sparsely populated areas.

The time period from 1879–1929, the Age of Invention, saw new technologies (powered by electricity) advancing the country at a rapid pace. There was a great divide between rural and urban life. If you lived in the city you had electric lights, water pumps, washing machines, electric ovens and ranges, refrigeration, electric motors, radios, and all the modern technologies made life easier. But if you lived in the country, everything was harder, took more time, and was less efficient without electricity.

The case for rural electrification

Morris Cooke, an electrical engineer and advisor to the Power Authority of New York, pointed out this notable difference between rural and urban life to Congress. In his now famous “12-Minute Memo,” he made the case for the federal government to get involved in rural electrification: how it would increase farm production (irrigation/milk refrigeration), improve the standard of living, and how it could be accomplished at a reasonable cost.

Cooke gained national attention in Pennsylvania when the Governor commissioned him to conduct a feasibility study for electrifying rural areas of the state. The state legislature voted against Cooke’s proposal, but when FDR was elected governor of New York, he hired Cooke to study the St. Lawrence River’s hydro power potential for providing electricity for businesses, residential areas, and farms in the future.

Cooke’s paper convinced President Franklin D. Roosevelt (FDR) that the federal government should promote rural electrification. In response to the memo, FDR’s first act was to establish the Rural Electrification Administration (REA) in 1935, appointing Morris Cooke the head of the REA and providing $100 million for rural electrification. In today's dollars including inflation, that would equal approximately $1.3 billion – SOURCE: Consumer Price Index.

Cooke first worked with a committee of private utility companies in a joint effort to accomplish the goal of rural electrification. Despite the $100 million available, during 1936 the investor-owned utilities (IOUs) questioned the need for rural electrification. Ultimately, the REA Act was passed in 1936 and preference loans were made available to public entities: public power districts (PPDs), public utility districts (PUDs), municipals and electric cooperatives.

There may never have been many cooperatives if private power companies would have worked with the REA, but an overwhelming majority of IOUs snubbed their noses at the idea because they couldn’t make enough money for their stockholders. Since the IOUs rejected this opportunity, rural people got together, formed electric cooperatives and worked directly with the REA to bring electricity to rural America.