How did the Rural Electrification Act impact America?

The 1936 Act very much sped up the provision of grid electrical power to rural and frontier regions, including AmerInd reservations, across the United States, by providing power where commercial (investor-owned) power providers could not economically provide service, and municipally-owned (government-owned) utilities WOULD not provide service, back in the 1930s. This was done through subsidized, low-interest federal government loans to grassroots organizations organized as cooperatives (and a few public power districts as you find in Nebraska today). It slowed down the massive accumulation of power by local governments – counties and smaller towns – in contrast to many larger cities and towns where providing electrical power joined providing water, sewage, and even trash collection services as yet another political football for corruption, patronage, and control (micro-management control at that). It also provided a limited amount of more competition at least along the fringes of urban/suburban areas.

Not that local rural electric cooperatives (RECs) don’t have politics: they DO. But it is limited by their charters: not as much potential for horse-trading, bribery, nepotism, and all the other diseases endemic to local and state governments (and a federal pandemic, IMHO).

Unfortunately, like many of the FDR-era alphabet agencies, and longer than many, it created a seemingly perpetual federal bureaucratic agency and yet another way for Congressmen to “benefit” their districts and states with all the federal money – and with more and more strings attached. It set a precedent for government largess to buy off the voters, skew development, and many other negative impacts. This idea was used (for both good and bad) in rural telecommunications, and especially in recent decades, the proliferation of rural water systems. These all created security concerns, vastly increased costs, and actually increases negative environmental impacts. It also accelerated the merger and centralization of investor-owned utilities to compete with government-funded and often government-owned utilities, and led to the current continentally-integrated electrical grid which is so incredibly fragile and at risk.

It also definitely stunted technological advances and deployment of those advances by making a centralized, generally-monopolistic utility system the standard. So alternatives (decentralized and even on-site power supplies: solar, wind, micro-hydro, geothermal, and even nuclear) have been unable to compete. Subsidizing construction of distribution lines and providing government-owned and -operated power stations (providing the electricity) skewed the market. Things like TVA and WAPA (Western Area Power Administration) together with USACE and BuRec hydro (dams), artificially-low interest rates and outright grants, all have created a far more inefficient system than a true free market would have.

Even in my own lifetime I have seen good engineering and brilliant and imaginative inventions to provide power (good, steady, dependable, and cheap) even to rural and frontier homes, businesses, and communities unable to survive for economic reasons because of government subsidies of vast and interlocking grid “solutions” which are only sustainable because of regulatory pressures, free money, and political decisions overriding sound engineering and financial reasoning. A system designed to ensure and expand government control.

And a system which today is increasingly fragile: it is SO dependent on government and so skewed by politics (especially nonsense about “green power” and “renewable power”) that the collapse of even PART of the grid for a short time leads to near-catastrophic results. (An example is the Texan debacle in the winter of 2020.) Adding to this is the massive but micro-management (mismanagement) by federal and State and even local agencies: the various State Public Utilities Commissions, for example. And the threat of electromagnetic pulses completely frying the system.

In and of themselves, rural electric cooperatives are not socialist in nature, especially as more and more alternatives to grid and monopoly electrical power are available in frontier, rural, and small-town regions of the States. (One CAN argue that they are socialist because providing electricity is a monopoly virtually everywhere – but there ARE alternatives to grid power.) But what makes RECs socialist is that government subsidizes them in numerous ways, particularly in the form of subsidized low-interest rates and generous grant programs. As with ANY industry, such government assistance (and the always-present strings: control) is corrosive and grows more damaging with each passing year.

What this means is that the benefits to the Forty-eight States and territories (especially rural and frontier areas) back in the 1930s, almost ninety years later, have been far outweighed by the detrimental effects, multiplied by years of spending and skewing both the market and technological advances.