With a population of just under 2,500, Mountain City is really just a town, and a pretty one at that. Situated in the forested northeast corner of Tennessee, it’s right on scenic State Highway 67 and right off the storied Appalachian Trail. Beautiful Watauga Lake is just down the road, and some of the highest peaks in the eastern United States are within a short drive.

Mountain City is proud of its small-town charm and grateful for the amenities made possible by its local utility, Mountain Electric Cooperative, which has served the town and surrounding rural areas since 1941.

Modern electric service first came to the area in 1912, when a group of Johnson County (Mountain City is its seat) citizens formed Roan Creek Electric Light and Power Co. to distribute power from a small hydroelectric plant. Other plants were soon built in four nearby towns just across the North Carolina border: Banner Elk, Linville, Crossnore and Elk Park. But service was limited to a few hours of operation each day.

In 1927, East Tennessee Light & Power Co. bought the Roan Creek plant.  ETL&P had a franchise to serve Johnson and Carter counties and part of Avery County, N.C., including Newland, a little mountain that is the county seat. But ETL&P, an investor-owned utility, did not build lines out into the rural areas, leaving many people without electricity.

Then, on April 1, 1941, a group of farmers and other rural residents banded together to form a legally incorporated cooperative, Mountain Electric Cooperative.

Four years later, the co-op bought ETL&P. That was the year, (1945) Germany surrendered to the Allies, ending World War II in Europe. Expecting peacetime load growth, Mountain Electric entered into an agreement with the Tennessee Valley Authority (TVA) for the purchase and delivery of wholesale power to a substation in the co-op’s service area.

Next, Mountain Electric purchased two small utilities: the Banner Elk system, which served a hospital, a small college and an orphanage; and the Crossnore system. Both towns are near Boone, N.C., the biggest population center in this region where Tennessee and North Carolina come together in the Appalachian Mountains.

By the end of 1949, Mountain Electric served 4,182 member-consumers primarily in Johnson and Carter counties in Tennessee and Avery County, according to the co-op’s official history. It served much smaller numbers in four other counties.: Watauga (N.C.), Burke (N.C.), Mitchell (N.C.) and Unicoi (Tenn.) Today, the total membership is about 36,500.

Mountain Electric is great example of a co-op that started small and kept looking for opportunities to purchase generation, wholesale power, substations and lines so it could fill the holes in its service area.

The history emphasizes this outlook: “At that time, the cooperative implemented the area coverage program that made electric service available to any cooperative member at no extra cost. Under this program, members in remote rural areas would receive electric service at the same cost as members who lived next to an existing line. This opened the door to electric service for everybody in the area.”