Abstract: AS A BUSINESS ENTERPRISE whose function is the sale of electricity at retail the rural electric distribution cooperatives are more concerned with the wholesale cost of energy than are industrial enterprises. Cost of energy has always been the largest single component in the operating costs of the cooperative. The cost of wholesale energy to the cooperatives has declined steadily since the inception of Rural Electrification Administration (hereinafter referred to as REA) in 1935. This decline can be attributed not only to the general trend in the electric industry, where efficiency rose higher than in any other industry, but also to the federal government's preference clause allowing the cooperatives to buy energy from federal projects.

　　Subjects: CONSUMER cooperatives; ELECTRIC industries; ELECTRIC utilities; ELECTRIC power distribution; PRICES; COOPERATIVE societies; FEDERAL government; All Other Miscellaneous Electrical Equipment and Component Manufacturing; Electric Power Distribution; ELECTRICITY