Visionary Locals Transform Lives With the Power of Cooperation
By Andrew Cutler
In the early 1930s, as electricity became a vital resource for modern living, rural communities across the United States found themselves left in the dark, both literally and figuratively. Farmers and ranchers in Umatilla County were no exception. October celebrated as National Cooperative Month, is a reminder of how these communities took matters into their own hands.
Determined to bring light and power to their homes and businesses, a group of visionary locals banded together, forming the Umatilla Electric Cooperative in 1937. This cooperative spirit not only electrified the region but also transformed the lives of countless families, paving the way for progress and prosperity in rural Oregon.
“For decades, the idea of public power — citizens owning electric utilities rather than private corporations — was out there,” Steve Meyers, a former member services administrator for UEC, said. “Teddy Roosevelt was a big champion of it, but it never got off the ground until the 1930s when President Franklin Roosevelt came to power.”
Power was widely available in the urban areas, including Pendleton and Hermiston, but the rural areas and farms of Umatilla and Morrow counties remained without it.
History of Electric Cooperatives
According to the National Rural Electric Cooperative Association, as late as the mid-1930s, 9 out of 10 rural homes were without electric service. Farmers milked cows by hand in the dim light of a kerosene lantern and families relied on the wood range and washboard for cooking and cleaning.
The lack of electricity kept rural economies dependent entirely on agriculture, as factories and businesses preferred to locate in cities where power was easily accessible. Power companies ignored rural areas for years because “it wasn't profitable for them to run lines and poles out where there weren't a whole lot of people,” Meyers explained.
The first significant federal effort toward rural electrification came with the passage of the Tennessee Valley Authority Act in May 1933. This act authorized the TVA Board to construct transmission lines to serve “farms and small villages that are not otherwise supplied with electricity at reasonable rates.” The idea of providing federal assistance for rural electrification gained momentum when Roosevelt took office in 1933. On May 11, 1935, Roosevelt signed Executive Order No. 7037, establishing the Rural Electrification Administration. A year later, the Rural Electrification Act was passed, launching the lending program that became the REA.
It quickly became evident to REA officials that established investor-owned utilities were not interested in using federal loan funds to serve sparsely populated rural areas. However, loan applications from farmer-based cooperatives poured in, and the REA soon recognized that electric cooperatives would be the key to making rural electrification a reality.
In 1937, the REA drafted the Electric Cooperative Corporation Act, a model law that states could adopt to enable the formation and operation of not-for-profit, consumer-owned electric cooperatives.
Organizing an Idea
As established investor-owned utilities showed little interest in using federal loans to bring electricity to rural areas, it was farmer-based cooperatives that seized the opportunity.
Once word reached the Hermiston area about the REA and its available loans, residents sprang into action.
“The first I heard about rural electrification, REA, was along in the spring of 1935,” Roy Penney recounted to Ruralite magazine in 1985 and Meyers shared in his book, “When the High Line Comes.”
Penney went on to say that at a Grange meeting in Echo, the assistant county agent, W.A. Sawyer, stood up and shared what he knew about REA and how we could get electricity on the farms.
“Everyone was for it,” Penney recounted. “They appointed me chairman and I was to form a committee and try to get something started.”
Meyers said Penney was the right guy for the job. Penney, the principal of Stanfield Grade School since 1921 and a farmer since 1926, had given plenty of thought about organizing a rural electric cooperative.
“(Penney) was a principal at Stanfield, and he had a little farm outside of Hermiston that he inherited. At the same time in 1937 he was getting people in the community interested in forming a co-op under REA, he was organizing a 4th of July celebration in Stanfield,” Meyers said. “He was going to have motorcycles crash into a flaming wall and pass through a burning canvas tunnel. This guy was a ball of energy. He wasn't even going to be the beneficiary of an electric co-op. He lived in territory that was not going to be Umatilla Electric. He did it out of the goodness of helping the community.”
Penney recruited Enos Martin, a manager at the Hermiston Irrigation District, J.H. Reid, a banker and farmer in the area, and Hawley Bean, a farmer in the Echo area, to his committee.
“There are a lot of characters from the very early days, and they all have interesting stories,” Meyers said. “It was a community initiative to start UEC. It wasn't easy to start because this was the absolute bottom of the Depression.”
In his book, Meyers noted that in January 1937, the county agent submitted a final report and survey forms for a loan application to REA headquarters. The survey revealed that 492 farmers required electricity, and to serve these farms, 120.5 miles of power lines would be needed, averaging about 4 customers per mile. On April 30, 1937, the committee held a meeting in the Sawyer's office, where they elected their board of directors, with Penney chosen as chairman.
UEC Comes Online
After the election of the board of directors, there was still plenty of work to do before power could finally reach the farms, businesses, and homes of Umatilla and Morrow counties. Meyers recounted in his book that the board signed the “Articles of Association” on June 16, 1937, and they were filed 2 days later.
The following day, June 19, the Umatilla Electric Cooperative Association held its first meeting as 1 of FDR’s rural electric cooperatives. On June 26, the board hired J. Edgar Saylor of Echo as project superintendent for $100 a month, and a few days later, on July 8, the cooperative leased office space on the second floor of the Hermiston Irrigation District building, which is still standing on Hurlburt Avenue.
“They rented the second floor for $10 a month,” Meyers said. “That was the start of Umatilla Electric. You have companies that started in a garage that became very successful. Umatilla Electric is the equivalent of having started in a garage.”
As UEC approached the minimum number of members needed to satisfy the REA, the cooperative secured a $129,000 loan from the federal government at a 2% interest rate, according to Meyers. “They threw them a bone. Umatilla Electric had to pay every penny back with interest,” he said. With the organization of UEC complete and funds now in hand from REA came the chore of building 120 miles of power lines to reach farms and rural areas in Umatilla and Morrow counties.
Meyers wrote that the board approved a $5 fee to join the cooperative. The board compiled a list of the cooperative's first 28 members. The board then hired Elmer Perry Dodd, a former publisher of the Pendleton Tribune and a founding father of Hermiston, to sign up new members and to secure rights-of-way for power lines for free with the promise that all would benefit from the lower costs.
Meyers wrote in his book that on Oct. 27, 1937, with 252 paid members, the UEC board directed Saylor to spend most of his time seeking new members and collecting the $5 fee from those who already signed. On November 4, 8 sealed bids for construction of the power lines were opened. A bid from a Portland engineering firm, Newport, Kern & Kibbie, to use Cooper wire was selected by the board. The bid was for $107,625.48. Over the next several months, power lines were built, and homes and businesses were wired for electricity by dedicated crews working tirelessly to bring the much-needed service to the rural areas of Umatilla and Morrow counties.
Finally, on July 15, 1938, a ceremony was held to electrify Umatilla Electric Cooperative’s power system. The ceremony took place at the cooperative’s first substation north of Hermiston near the intersection of what is now Punkin Center and Sagebrush roads. Because they can focus on their members rather than making a profit for faraway shareholders, electric cooperatives have unlimited potential, Meyers said.
“You can see the results of that today,” he said. “From humble beginnings, UEC and the communities it serves have grown into 1 of the country’s rural success stories.”
October Honors Cooperatives in US
Every October, cooperatives nationwide celebrate National Cooperative Month, an annual event that serves as an opportunity to highlight the cooperative difference and remind member-owners of Umatilla Electric Cooperative, of the cooperative’s commitment and purpose.
During National Cooperative Month, attention is drawn to the cooperative’s unique approach, which is anchored in the 7 Cooperative Principles. These principles not only guide the cooperative’s operations but also reinforce its role in fostering community engagement and mutual support. By embracing these principles, Umatilla Electric Cooperative continues to focus on delivering essential services and supporting local initiatives that enhance the well-being of its members and the broader community.
For co-op employees and member-owners who are familiar with these principles, October is an excellent time to renew our connection to each other and the mission of Umatilla Electric Cooperative. The cooperative is committed to providing safe and reliable electricity to its member-owners, while also offering a variety of programs and services designed to benefit the community it serves.
According to the National Rural Electric Cooperative Association (NRECA), cooperatives serve 42 million people, including 92% of counties experiencing persistent poverty. Across 48 states, co-ops power more than 22 million businesses, homes, schools, and farms.
As not-for-profit organizations, cooperatives return more than $1 billion annually to their member-owners. The foundation of the electric cooperative network is comprised of 832 distribution cooperatives, which were built by and serve cooperative member-owners in their communities by delivering electricity and other essential services.
Additionally, 64 generation and transmission cooperatives provide wholesale power to these distribution co-ops, either through their electric generation facilities or by purchasing power on behalf of their distribution members.
7 Cooperative Principles
According to the National Rural Electric Cooperative Association, cooperatives around the world adhere to core principles and values established by the International Cooperative Alliance.
These principles, originating from the first modern cooperative founded in Rochdale, England, in 1844, are integral to the operation of America’s electric cooperatives, setting them apart from other electric utilities by emphasizing member needs.
The cooperative model is based on several key principles.
- Open and Voluntary Membership ensures that cooperatives are accessible to all individuals who can use their services and are willing to take on membership responsibilities, regardless of race, religion, gender, or economic status.
- Democratic Member Control means that cooperatives are governed by their members, who actively participate in policy-setting and decision-making, with representatives elected from among the membership.
- Members’ Economic Participation involves members contributing equitably to the cooperative’s capital, with surpluses used to develop the cooperative, build reserves, benefit members, and support approved activities.
- Autonomy and Independence highlight that cooperatives operate as self-help organizations controlled by their members, maintaining democratic control even when entering external agreements or raising capital.
- Education, Training, and Information focus on providing members, elected representatives, CEOs, and employees with the necessary skills and knowledge to contribute effectively, while also communicating the benefits of cooperatives to the public.
- Cooperation Among Cooperatives involves working together across various levels to enhance services, support local economies, and address community needs.
- Finally, Concern for the Community underscores cooperatives' commitment to the sustainable development of their communities through member-supported policies.
The Cooperative Difference
Unlike investor-owned utilities, electric cooperatives are owned by the people they serve. As nonprofit entities, any profits generated by electric cooperatives are allocated back to the members as capital credits, based on patronage, and returned over time. Being locally owned, electric cooperatives are community-focused organizations dedicated to delivering safe, reliable, and affordable energy to their member-owners.
Although cooperatives serve fewer people compared to other utility types, their electric lines cover more than 75% of the U.S. landmass. This is because cooperatives provide power where others once refused to go, often due to low population density.
According to the National Rural Electric Cooperative Association, electric co-ops consistently rank highest in member satisfaction among the 3 types of utilities: cooperatives, investor-owned utilities, and municipal/publicly-owned utilities. This high level of satisfaction is often attributed to the fact that co-ops serve consumer members rather than customers, fostering a sense of community where neighbors are serving neighbors.