It was the year 1935 when President Franklin D. Roosevelt signed an executive order creating the Rural Electrification Administration (REA). A new way of life was made possible for millions of farm families all over the United States. With much determination, communication, cooperation, and organization, rural electric systems began to form. Among the nearly one thousand RECs that came into existence were Sioux Electric Cooperative Association, O'Brien County Rural Electric Cooperative, Plymouth Electric Cooperative Association, and Ida County Rural Electric Cooperative.
The efforts of the original incorporators of those cooperatives literally lit up the countryside. Many folks celebrated by burying their kerosene lanterns as they saw emancipation from a life of near-drudgery, marching up the road in the form of utility poles.
Today, most rural families enjoy the benefits of electricity, which has helped to make American agriculture the most productive in the world. To prepare for the ongoing changes in the electric utility industry, many RECs have merged or consolidated operations. In 1993, O'Brien County Rural Electric Cooperative and Sioux Electric Cooperative Association became North West Rural Electric Cooperative. Then, in January 1998, Ida County Rural Electric Cooperative and Plymouth Electric Cooperative Association joined North West Rural Electric Cooperative, forming the Cooperative as we know it today.
Our organization is larger, our operations have diversified, yet our task of providing reliable electric service for our member-owners remains. The job of rural electrification is never finished -- to keep the lights on!
Four original cooperatives incorporated
Year of last consolidation into one organization.
What is an REC?
RECs are owned by their consumer/members and operate on a nonprofit basis. The primary purpose of an REC is to make electric energy available to its members at the lowest cost. RECs may be exempt from income taxation if they meet IRS requirements. Rural Electric Cooperatives generally serve areas that the investor-owned utilities declined to serve because they could not do so profitably.
Under the electric cooperative form of business, the customers who pay the monthly electric bills own the company. Since the cooperative is not motivated by profit, there is no need for state rate review. Rates are set by democratically elected boards of directors who represent the interests of the cooperative's consumer/members.
Municipal utilities are publicly owned for the purpose of providing a dependable, economical power supply to a city's residents. Like the Rural Electric Cooperatives, municipal utilities are not subject to state rate regulation because additional public oversight is unnecessary.
Investor-owned utilities (IOUs) are shareholder-owned, for-profit business corporations. IOUs pay federal and state income taxes on their profits after taking all available tax credits and deductions. An Investor Owned Utility's rates must meet the approval of state regulations due to the monopoly control of electric service in its franchised territories. Shareholders are assured of a fair return on their investment and customers receive reliable, reasonably priced electricity.