The Pedernales Electric Cooperative, headquartered in Johnson City, provides electricity to 77,824 members in twelve Hill Country counties. Its purpose is to supply electric energy to its members at the lowest possible cost consistent with sound economy and good management. Any person, firm, or corporation may become a member by paying the membership fee. Rising economic expectations and the unwillingness of privately owned electric companies to provide service to rural America prompted the federal government, in the mid-1930s, to establish the Rural Electrification Administration. As a result, ranchers and farmers banded together into nonprofit electric cooperatives, borrowed money from the REA, built their own power lines, and repaid their loans from sales of electricity. In May 1938 representatives from Blanco, Burnet, Gillespie, Hays, and Llano counties met in Johnson City to form the Pedernales Electric Cooperative. Eleven directors were elected, three from Gillespie County and two each from the other counties. Johnson City was selected as the headquarters because it was close to the homes of the newly elected president, Hugo Weinheimer of Stonewall, and the secretary-treasurer, Richard Klappenbach, a native of Johnson City. At this meeting the board prepared and mailed the loan application to Washington.
Many residents and potential subscribers still had reservations and misconceptions, however. Some believed that the five-dollar initiation fee went to the government and not the co-op. Others did not understand that the member received no return on the capital he contributed other than lower electric rates. A few feared that membership involved personal liability, while others could not comprehend that the entire system would belong to them after the loan was repaid in twenty years. Consequently, the board and co-op members, through newspaper articles and word of mouth, were constantly trying to educate potential subscribers and eradicate misconceptions.
In June, Mason and Kendall counties asked to become members. The REA granted a franchise, and in September 1938 permission was given for 1,718 miles of rural electric lines and $1,332,000 was lent to pay for them. This was the longest mileage and the most money ever granted in a single approval. The initial five-county area expanded to cover parts of ten Central Texas counties. Power-line construction began in December 1938, and the co-op eventually served 4,000 families. The PEC had become the largest electric co-op within the REA system within six months and remained so through the 1980s. During these early days of rural electrification the PEC sponsored local fairs that gave potential consumers an opportunity to see the home appliances that would soon become commonplace in rural Texas. The PEC also assisted its members in obtaining REA financing to wire their homes and to purchase electrical appliances.
On November 1, 1939, the first section of PEC's 1,800 miles of transmission lines was energized through a substation at Bertram, and 422 members in Burnet County joined E. "Babe" Smith, who had PEC meter number one, in receiving electricity. Running water, refrigeration, radio, electric stoves, washing machines, and irons brought rural families into the modern world. Electricity was the most important factor in ending much of the drudgery of farm life and improving the physical well-being of Hill Country residents. In the early 1990s the PEC provided service to Bell, Blanco, Burnet, Caldwell, Comal, Gillespie, Guadalupe, Hays, Kendall, Lampasas, Llano, Travis, and Williamson counties. It owned and maintained 11,525 miles of power lines, serviced 94,277 electric meters, and employed about 390 people.