Prior to 1940, only a few areas in Jackson and Marshall Counties – mostly in cities and towns – had electricity. Rural customers were still cooking on wood stoves, heating with fireplaces and reading with coal-oil lamps. When President Roosevelt signed the Rural Electrification Act, creating REA, on May 11, 1935, doors began to creep open to a brighter world. Large power companies said providing power to rural areas was too costly and too dangerous, that the farmers would not be able to pay their electric bills and the cost of extending electrical lines into rural areas would be prohibitive. Because no one else was willing to serve the rural areas, leaders from across Jackson and Marshall Counties organized a member owned cooperative and thus North Alabama Electric Cooperative was born.

On March 11, 1940, the first office of NAEC was opened. Located on Main Street in Stevenson, it was upstairs over the fire department, next to what today is the Ideal Beauty Shop. The office moved once more before locating to its present site at 41103 US Highway 72 in Stevenson in 1942.

The first Manager was Jack Lillard. Among the first employees were: Georgia Cox, Francis Carroll, Kyle and Leo Smith, Aaron Colquitt, E.P. Bevels and John Helton. In the Late 1940’s as the post war boom found its way to the Tennessee Valley, it became necessary to hire additional linemen for constructing lines across the NAEC service area. Among the extra crews were: Joe Hill, Carmen McCrary and Ferrell Colquitt.

During the first year of service the Cooperative grew to 1,026 members and 126 miles of line. The next 10 years saw the largest percentage of growth to date – 5,229 customers and 802 miles of line. Today there are more than 17,700 members and 2,000 miles of line.