Rural Electrification Before the REA—A Case Study

Despite the assumption that rural electrification began with formation of the Rural Electrification Authority (REA) in 1936,

While there are differences between urban and rural lifestyles that can’t be accounted for in a numerical representation, and there is a four-year gap between the censuses of the two areas, it is evident that Berwick customers were being supplied, even in 1925, with modern electrical connections. The original intention of the Berwick company was to supply lighting to residences and farm facilities, but electrical appliances made their debut quickly after electrical service was established. Despite encouraging statistics and the Kansas State Agriculture and Engineering College campaign for immersion in an electrical lifestyle for rural areas, total electrification was slow in coming. By 1945 many farms being served by the Berwick Company had added more services, but the only electrical product that all farms had in common was house lights.

Almost immediately after line construction was complete the price of power for members of the Berwick Company started falling. By contrast, the Cooperative Corporations formed under the REA maintained their prices at the same rate for as many as thirty years after completion of construction. The Berwick Company relied on internal assets and small loans from the local bank to pay for costs of construction and expansion, so the corporation didn’t have extended loan payment obligations. The lack of loan obligation was a major contrast to the REA cooperatives, which relied almost entirely on Federal loan money for construction and initial operation. REA Cooperatives were responsible for the initial easement acquisition and surveying required to complete a loan application. As more consumers were added to Berwick transmission lines the cost of power purchased from the Sabetha municipal company fell from 4.5 cents per kwh in 1924 to 2 cents per kwh in 1945. Also, upgrades in transmission line technology allowed for more efficient distribution of electricity from Sabetha. Initially more than 50% of the power purchased from the Sabetha plant was lost in transmission, and that number steadily fell to around 30% in 1945. There was also a constant increase in the amount of electricity consumed per farm, which allowed the Berwick Company to get better volume discounts from Sabetha’s municipal power company. The result of these price reductions is that by 1945 the cost to a customer per kwh was about 5 cents, 35% of the original 14.4 cents.

Some topics in this essay:
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