Testing For Rural Electric Cooperatives

The Rural Electrification Act of 1936 provided federal loans for installation of electrical distribution systems to serve rural areas of the United States. The funding was channeled through cooperative electric power companies, most of which still exist today. These memberowned cooperatives purchased power on a wholesale basis and distributed it using their own network of transmission and distribution lines. These rural electric cooperatives (RECs) still rely heavily on the federal government for funding through an electric program administered through the United States Department of Agriculture (USDA). Loans are made to corporations, states, territories and subdivisionsand agencies such as municipalities, people’s utility districts, and cooperative, nonprofit, limited-dividend, or mutual associations that provide retail electric service needs to rural areas. Through the Electric Programs of USDA, the federal government is the majority note holder for approximately 700 electric system borrowers in 46 states.