In 1940, Appalachian Electric Cooperative borrowed money from the U.S. Department of Agriculture through the Rural Electrification Administration (REA). These funds were used to buy the existing electric facilities in the area. Today, the Cooperative continues to borrow the necessary money for needed expansions through this source. The original loans were paid back to the REA over a 35 year period, at low interest rates.
The Tennessee Valley Authority furnishes electric energy to the Cooperative at wholesale rates. Approximately .80 cents of every dollar that the Cooperative takes in goes to the TVA for power. The Cooperative has a wholesale power contract with TVA which stipulates the rates that the power will be sold to its members and the contract also provides that a rate reduction will be required if excessive profits are made by the Cooperative.