Rural Utilities Service

Rural Utilities Service

The Rural Electrification Administration (REA) was an agency of the United States federal government created on May 11, 1935 through efforts of the administration of President Franklin D. Roosevelt. The REA's task was to promote electrification in rural areas, which in the 1930s rarely were provided with electricity due to the unwillingness of power companies to serve farmsteads. America lagged significantly behind European countries in rural electrification. Private electric utilities argued that the government had no right to compete with or regulate private enterprise, despite many of these utilities having refused to extend their lines to rural areas, claiming lack of profitability. Since private power companies set rural rates four times as high as city rates, this was a self-fulfilling prophecy. [Robert McChesney and John Podesta. [ "Let There Be Wi-Fi"] . "The Washington Monthly", January/February 2006. Accessed 30 July 2008.] Under the REA program there was no direct government competition to private enterprise. Instead, REA made loans available to local electrification cooperatives, which operated lines and distributed electricity. By 1939 the REA served 288,000 households, prompting private business to extend service into the countryside and to lower rates. By the end of the decade, forty percent of rural homes had power, up from around 10% in 1930. From 1949, the REA could also provide assistance to co-operative telephone companies.

As the Rural Utilities Service (RUS) it is still a federal government agency of the U.S. government, charged with providing public utilities (electricity, telephone, water, sewer) to rural areas through public-private partnerships. It is part of the U.S. Department of Agriculture. Coincidentally, "rus" is Latin for "countryside".


[ The Rural Utilities Service] (RUS) of the U.S. Department of Agriculture plays a key role in improving the quality of life in rural America. It does this by administering electrification, telecommunications, and water and waste programs in a manner that is forward looking, financially responsible, and oriented toward customer needs.


The RUS is one of three agencies (the other two are Rural Business-Cooperative Service and the Rural Housing Service) within the Rural Development Bureau of the U.S. Department of Agriculture (USDA). The administrators of these three agencies report to the undersecretary for rural development. The RUS administrator, who makes the primary policy and program decisions for the agency, is assisted by a borrower and program support staff that includes a financial services staff, an administrative liaison staff, and a program accounting services division. Because of the financial nature of the agency's work, the administrator and associated staff work closely with two other agencies that are not part of the USDA, the Federal Financing Bank (FFB) and the Rural Telephone Bank (RTB). These banks provide the funds for many of the loan programs administered by the RUS.

The program functions of the RUS are divided among three operating units: water and waste, electric, and telecommunications, each led by an assistant administrator. The administrator and staff concentrate on the financial details of individual RUS projects, and these three operating units provide the engineering and technical personnel to plan and execute projects.

Related federal legislation

*1944: Rural Electrification Act Amendments PL 78-425, 78-563
*1949: Rural Electrification Act Amendments PL 81-423
*1961: Area Redevelopment Act PL 87-27
*1961: Housing Act PL 87-90
*1962: Rural Electrification Act Amendments PL 87-862
*1965: Appalachian Regional Development Act PL 89-4
*1965: Department of Housing and Urban Development PL 89-174
*1966: Demonstration Cities and Metropolitan Development Act PL 89-754
*1972: Rural Development Act PL 92-419


External links

* [ Article on the REA from EH.NET's Encyclopedia]

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