Rural Utilities Service

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An REA lineman at work in Hayti, Missouri in 1942.

The Rural Utilities Service (RUS) is an agency of the United States Department of Agriculture (USDA), one of the four federal executive departments of the United States government charged with providing public utilities (electricity, telephone, water, sewer) to rural areas in the United States via public-private partnerships.

History, structure, and programs[edit]

The RUS is one of three agencies (the other two are Rural Business-Cooperative Service and the Rural Housing Service) that are part of the USDA's Rural Development Bureau. The three agencies are headed by administrators, who each report to the Under Secretary of Agriculture for Rural Development (the RUS administrator is the only one of the three who is Senate-confirmed).

The RUS administrator makes the primary policy and program decisions for the agency and 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 former Rural Telephone Bank (RTB), which was dissolved in 2006. These banks provide the funds for many of the loan programs administered by the RUS.

The program functions of the RUS are divided into 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.


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RUS traces its roots to the Rural Electrification Administration (REA), one of the New Deal agencies created under President Franklin Delano Roosevelt. The REA was created on May 11, 1935, with the primary goal of promoting rural electrification.[1] In the 1930s, the U.S. lagged significantly behind Europe in providing electricity to rural areas due to the unwillingness of power companies to serve farmsteads.

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. Private power companies set rural rates four times as high as city rates.[2] Under the REA there was no direct government competition to private enterprise. Instead, REA made loans available to local electrification cooperatives, which operated lines and distributed electricity.

In 1939, 288,000 households had their electricity provided by rural electric cooperatives; most of these electric coops had applied for and received loans from REA. Harry A. Slattery was the administrator of REA from 1939–1944. In 1944, he resigned after a conflict with the Secretary of Agriculture.

In 1934, less than 11% of US farms had electricity. (In Germany and France that same year, nearly 90% of farms had electricity.) By 1942, nearly 50% of US farms had electricity, and by 1952 almost all US farms had electricity.[3]

In 1949, the REA became authorized to provide loans to rural telephone cooperatives.[4]

The reorganization of REA into RUS was authorized by the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 (P.L.103-354).

Related federal legislation[edit]


  1. ^ History of Coops
  2. ^ McChesney, Robert and John Podesta. "Let There Be Wi-Fi". Washington Monthly, January/February 2006. Accessed 30 July 2008.
  3. ^ FDR: The New Deal Years, 1933–1937, pages 491–92, by Kenneth S. Davis. Published by Random House, 1986
  4. ^ History of Rural Telecommunications, National Telecommunications Cooperative Association

Further reading[edit]

External links[edit]