How LBJ Wired The Texas Hill Country

This excerpt from my book, A Question of Power, recounts Lyndon Johnson’s pivotal role in the creation of what is now the world’s largest electric co-op.

It wasn’t the damming of the stream or the harnessing of the floods in which I take pride, but rather in the ending of the waste of the region…new horizons have been opened to young minds, if by nothing more than the advent of electricity into rural homes. Men and women have been released from the waste of drudgery and toil against the unyielding rock of the Texas hills. This is the true fulfillment of the true responsibility of government.

— Lyndon Johnson, 1958

I love electric co-ops. Over the past decade or so, I’ve spoken at electric co-op events all across the country, and each time, I’m heartened by the people I get to meet at those events. They are ranchers, farmers, and businesspeople who live in rural communities and plan to stay there. The people who operate the co-ops and sit on their boards, are the people who fix things, grow things, and build things. Co-ops are living remnants of the New Deal, vestiges of another era. They allow average Americans to own stakes in critical energy infrastructure. They represent an ethos of public ownership, accountability, and civic pride.

We live in an age of gigantism and globalism. Big Tech, zillionaire oligarchs, and info-oligopolies dominate our politics and our digital lives.

Co-ops are the antithesis of Big Tech, Bezos, and Zuck. They are the quintessence of localism and small-town America. Given that reality, they may seem like an anachronism. But they are foundational to the prosperity of rural communities across the US. Today, nearly 900 electric co-ops are operating in the US, and their service territories cover more than half of the country’s landmass. They provide electricity to 42 million people, and about 25% of the households they serve have annual incomes of less than $35,000. Put simply, co-ops are an integral part of the American economy and an often-overlooked part of the American success story.

On Saturday night, after visiting Enchanted Rock, we drove back to Austin through Johnson City, home of the Pedernales Electric Cooperative, which now serves a vast swath of Central Texas. I stopped to take a photo of the PEC sign shown above.

Here’s an excerpt from my sixth book, A Question of Power: Electricity and the Wealth of Nations, that tells the story of how, in 1938, a freshman Congressman from Texas, Lyndon Johnson — a man born in a farmhouse without electricity or running water, and who would go on to be one of the greatest presidents of the 20^th century — brought electricity to the Texas Hill Country.

This excerpt is from Chapter 5, “Wiring The Superpower,” from my 2020 book, A Question of Power.

Lyndon Johnson’s first meeting as a US Congressman with President Franklin Roosevelt, didn’t go well. It was June 1938. Johnson had joined the House of Representatives 14 months earlier and he had a laser-like focus on one task: He needed the Rural Electrification Administration to extend a loan to the Pedernales Electric Cooperative. He needed Roosevelt’s help to get that loan.

Johnson had met Roosevelt for the first time about a year earlier when the two had shared a train ride from Galveston. Roosevelt took a liking to the lanky politician, who at the time wasn’t even 30 years old. But when Johnson met Roosevelt in Washington to talk business, the president was distracted. Rather than discuss Texas hydropower projects and electrification, the president was reportedly more interested in knowing whether Johnson had ever seen a Russian woman naked. Probably nervous, and no doubt flummoxed by the question, Johnson didn’t even get to ask Roosevelt about the loan before the president’s aides ushered him out of the president’s office.

Though he failed at his initial meeting with Roosevelt, Johnson didn’t give up. He couldn’t. Johnson had campaigned on a pledge to bring electricity to the Texas Hill Country and he was going to make good on that promise. For Johnson, the grinding poverty of farm living without electricity wasn’t an abstract notion. He was “raised by the light of lanterns and cooked for on a wood-burning stove. He had seen his mother scrubbing clothes in a washtub,” explains Ronnie Dugger in his 1982 biography of Johnson, The Politician. By the time of his meeting with Roosevelt, the Rural Electrification Act had been in effect for two years, but the hard-luck farmers and rural landowners in the Texas Hill Country where he had grown up were still stuck in the dark and it looked like that was where they were going to stay.

The problem was too few people. Under the rules set by the REA, rural electric cooperatives had to be able to show that they could connect at least three customers for every mile of new distribution wire. That was a problem. The population density of the rocky, ashe-juniper infested hills of the Edwards Plateau west of Austin was simply too low.

Speaker of the US House of Representatives Sam Rayburn gets a kiss from Senator Lyndon Johnson on Rayburn’s 74^th birthday, January 8, 1956. Rayburn was the longest-serving Speaker of the House in US history. Credit: The Dolph Briscoe Center for American History, The University of Texas at Austin.

Even if the area around Johnson City had had more people, there wasn’t enough money to make rural electrification happen. The farmers and ranchers who worked the region’s thin, rocky soils were barely eking out a living as it was. Nevertheless, Johnson – who was born in 1908 near the tiny town of Stonewall – knew that if he was going to make his mark in Washington, he had to bring water and electricity to the Texas Hill Country. When he arrived in Washington in 1937 after winning a special election to represent the 10^th Congressional district, two major hydro projects were being built on the Colorado River in central Texas: The Buchanan Dam, located about 70 miles northwest of Austin; and the Mansfield Dam (then known as the Marshall Ford Dam) which was located about 20 miles northwest of the Texas Capitol building. The dams were enormously expensive — and enormously valuable assets — that would finally provide flood control, recreational opportunities, and of course, water for irrigation and municipal use. But little had been resolved about the electricity that was going to be produced by the dams’ powerhouses. Together, the two dams were to have more than 100 megawatts of electric-generation capacity. But the construction budgets didn’t include any cash for poles and wires to carry that hydropower to local residents living in tiny places like Dripping Springs, Oatmeal, and Blanco.

Johnson knew that if the federal government didn’t step in, the electricity from the dams would likely be controlled by the big utilities. Like the man who would become his mentor, Sam Rayburn, Johnson well understood that by the mid-1930s, the Texas economy was largely controlled by Eastern financial interests. The public utility holding companies had a stranglehold on the state’s electricity production. Out-of-state companies owned 83 percent of the oil refineries and 99 percent of the railroads. Correcting that imbalance, and giving local interests more say — or rather, an ownership stake — in the production of electricity was critical if Texas was to thrive. As Dugger explains, “The case for limited socialism called ‘public power’ was plain, and Johnson knew and felt the sting of his position.” Dugger then quoted Johnson, who told him: “They hated me for these dams…The power companies gave me hell. They called me a Communist.”

Johnson didn’t care. In a speech on the subject, he told his constituents, “we should use that power. I believe that river is yours, and the power it can generate belongs to you.” In other words, if having electricity in the Hill Country required socializing the cost of electrification, or being called a Communist, Johnson was just fine with that.

In 1938, a group of ranchers and farmers formed the Pedernales Electric Cooperative with the hope that they could qualify for a loan from the REA. But the early efforts didn’t yield much success. The population-density problem seemed insurmountable. As another Johnson biographer, Robert Caro, recounted in his 1983 book, The Path to Power, despite months of effort to sign up local residents for the co-op, “the county agents had collected nowhere near the number required — not three per mile, but fewer than two. The Pedernales Electric Coop appeared stillborn.”

Lester Beall’s illusrations for the Rural Electification Administration were part of a broad effort to encourage women to use more electricity. Credit: Wikipedia.

Johnson implored his constituents to sign up for the co-op. According to E. Babe Smith, one of the founders of the Pedernales co-op, as Johnson traveled from town to town, promoting electrification, he “played on the emotions of the women.” Johnson told them about his mother, how she had hauled water in buckets from the river and scraped her knuckles on the washboard. Electricity would mean water pumps and washing machines. With refrigerators, he told them, they wouldn’t have to “start fresh every morning” at the cookstove. Relieved of that drudgery, he told the women, “You’ll look younger at 40 than your mother.”

In his pursuit of federal money for the new co-op, Johnson made a direct appeal to John Carmody, the head of the REA, asking for an exemption to the three-customers-per mile rule. Carmody refused. With few other options, Johnson turned to a friend, Tommy Corcoran, who was one of Roosevelt’s top advisers, and asked him to arrange another meeting with the president. Corcoran agreed to do so and offered some advice: “show him what Austin will look like…Don’t argue with him, Lyndon, show him.”

At his next meeting with Roosevelt, Johnson strode in with poster-size photos that showed the progress being made on the Buchanan Dam, as well as images of long-distance transmission lines and an electrified rural home at night. Roosevelt agreed on the spot. According to Johnson, the president immediately called Carmody at the REA. Roosevelt instructed Carmody to make the loan to the Pedernales Electric Cooperative and to “charge it to my account.” Yes, Roosevelt understood the REA’s three-customers-per-mile rule for new loans, but he assured Carmody that the people in the region would “catch up to that density problem because they breed pretty fast.”

On September 27, 1938, Pedernales Electric Cooperative got a telegram saying that it had been granted a federal loan for $1.3 million. (About $23 million in 2017 dollars). That was enough to build about 1,800 miles of distribution lines which provided electricity to about 2,900 families in the rocky scrub land around Johnson City. The co-op’s first customers were required to put down a $5 deposit and pay the minimum charge for electric service: $2.45 per month, which is about $40 in 2016 dollars. Looking back, it’s hard to imagine that Central Texas was once so sparsely populated that the Pedernales Electric Cooperative couldn’t qualify for a loan. But as it turns out Franklin Roosevelt was right: they do breed pretty fast in Texas. Today, the little co-op that couldn’t get a federal loan is the largest electric cooperative in America, and therefore, the largest electric cooperative in the world.

Note: Today, PEC has about 420,000 member/owners and has a service territory that covers 8,100 square miles, a territory that’s larger than the land area of New Jersey.

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