Rural Electrification Administration   

1935 - Present


In the spring of 1935, Delco-Light production surpassed 375,000 units and the number of homes with a farm or wind electric plant exceeded 800,000. The most popular Delco-Light model, the 8C3 combination automatic and battery charging plant, with the large capacity 160 amp-hour Exide Ironclad battery sold for $495. A gallon of kerosene at the time cost 6 cents.

In Minneapolis, the top of the line Jacobs Wind Electric Model 60 sold for $490. A 50 foot tower and large 660 amp-hour battery added $175 and $365, respectively, for a total price of $1,030. The equally impressive Model 45 with a 440 amp-hour capacity brought this price down to $830. The rest of the wind chargers were available for about the same, or less, depending on their power rating. Business grew for both farm and wind electric plant manufacturers and about 15 percent of rural homes were served by the mid-1930s.

The electric utilities at the time predominantly served the large and medium size cities and thought serving rural customers was financially impractical. Farms close to the cities or near the transmission lines were offered electric service with unfavorable terms. Farmers had to pay the utility for any and all construction costs to install the power lines, and then give them back to the utilities with easements and pay a premium price per unit of energy. Not many people were standing in line, but about 10 percent of “rural” homes were served by central station electric utilities.

In 1935, President Franklin Roosevelt established the Rural Electrification Administration (REA) by executive order as an “emergency agency to carry electricity to as many farms as possible in the shortest possible time and have it used in quantities sufficient to affect rural life.” The 1936 Rural Electrification Act transformed the REA to a permanent agency. In the next two years, $210 million was spent on 100,000 miles of power lines to provide electricity to 220,000 farms at a cost of $950 per home. Each home was typically supplied with a 60 amp service that included a range circuit, two light circuits, and one appliance circuit. In connecting to the rural grid, each customer paid a monthly service fee, plus a per-unit cost of electricity.

At the time, the average annual wage was $1,713 and the average cost of a new home was $3,925. For reference, in 2006 the average annual wage was $44,334 and the average cost of a new home was above $261,100. In 1935, the U.S. population was 128 million with 43 percent, or about 55.5 million, living in rural areas and 54 percent of the rural population actually engaged in farming. There were 6.2 million farms with an average size of 155 acres and the typical farmer grew 4.5 different crops. In 2000, the U.S. population was 282 million with less than 21 percent, or 59 million, living in rural areas and only 10 percent of the rural population actually engaged in farming - leaving 90 percent as paycheck wage earners. Between 1935 and 2000, the number of farms fell from 6.2 million to 2 million, average farm size has grew from 155 to 440 acres, and the number of crops fell from 4.5 to 1.2. There is no doubt REA “was sufficient to affect rural life.”  Whether the effect was positive or not is subject to debate.

At the time of REA’s implementation, the number of farms that owned a farm or wind electric plant was never considered in the federal government’s deliberations, although the number was 50 percent greater than rural homes close to cities and transmission lines that were served by the electric utilities which were considered. In providing electric power to homes that already had it, the REA solved a problem that didn’t exist. The aggressive REA program pitted neighbor against neighbor and insisted that any farm or wind electric plant equipment was removed or made inoperative for bogus “safety” reasons. In the process, REA destroyed an entire industry of more than 170 primary manufacturers and several hundred secondary manufacturers, plus sales and service organizations, which operated successfully and even grow in a vibrant free market during the Great Depression. Along with the losses of tens of thousands of jobs, the small town manufacturers and retailers disappeared and energy dollars flowed out of these towns to the electric power monopolies in the urban centers.

The rural grid has been praised as a great accomplishment and no doubt it changed the lives of those new recipients in good ways. On the other hand, it can be argued that it was (a.) a colossal mistake, fiscally foolish, and technically ill advised and (b.) that the problem of rural electrification was already being solved in a classic free-market environment, especially in the most remote places. Consider the following:

  1. BulletThe rural distribution grid operates at a higher voltage and is significantly more expensive to install than an urban grid.

  2. BulletA significant amount of overhead power lines serve a minority of the electric customers, or about 90 percent of the lines cover 10 percent of the country’s population including many seasonal and vacation homes.

  3. BulletPower losses in rural distribution are far greater than the urban grid and represent a major percentage of the total line losses nationally, with a negative impact on the country’s overall electric system efficiency.

  4. BulletThe rural grid is more susceptible to severe weather and storm damage and outages, and is thus less reliable, more difficult to maintain, and time consuming to repair.

  5. BulletThe rural grid’s easement and vegetation removal requirements are disproportionately expensive to maintain.

  6. Bullet The rural grid is a major eyesore on the landscape and far uglier than a country home with a small wind charger and/or a few solar panels.

  7. BulletIn some cases, the seasonal and vacation homes and businesses served by the rural grid could easily be served by a small farm or wind electric plant.

  8. BulletMillions of private acres have been seized by eminent domain for privately-owned electric transmission and distribution corridors.

  9. BulletMillions of acres are subject to electric utility easements and control on a percentage of everyone’s property, including citizens like the Amish who do not even use electricity

As noted, when REA was passed, nearly 800,000, or 15 percent, of rural homes were powered by a farm and/or wind electric plant. These electric plants fit into farming life well. Wind electric plants provided standalone power or when combined with a farm electric plant reduced fuel consumption significantly and extended the engine life to several decades. On the horizon was the discovery of the photovoltaic or solar cell, which – if developed early on – would have integrated perfectly into the farm and wind electric plants to improve overall operation and allow them to serve areas with abundant sunshine and low wind energy potential. Given the state of engineering science today, with the advancements in engine technology, materials, manufacturing, and electronics, it would be easy to manufacture a combination wind/solar/farm electric plant capable of reliably delivering electricity to millions of individual rural and remote homes, businesses, and communities. Doing so could begin the transition to a clean energy economy by:

  1. BulletCreating hundreds of thousands of jobs in manufacturing, sales, installation work, and servicing of solar, wind, and biofuel farm electric plants and equipment.

  2. BulletEliminating the disproportionate rural power losses and associated waste heat, while improving overall grid reliability and reducing maintenance cost

  3. BulletEliminating the unsightly rural grid (imagine this) and the wholesale destruction of trees along the nation’s roadsides, saving even more costs. There are 160 million power line poles along the roads in the United States.

  4. BulletFreeing resources to allow improvements in the urban electric system - like burying power lines in the cities.

  5. BulletIntroducing a return to the true free-market system of manufacturing and selling wind, solar, and biofuel electric plants and equipment to rural and remote individuals, businesses, communities, and organizations.



A kilowatt in every pot