In 1935, the Rural Electrification Administration (REA) was established by Franklin D. Roosevelt’s Executive Order No. 7037 for the purpose of promoting rural electrification. At that time, only a small percentage of American farms had electricity because power companies located in the city found the cost too high to construct lines to sparsely populated areas. The REA was established to provide low-interest loans and technical assistance to cooperatives. Because of the REA program, DMEA was incorporated in August 1938 and originally named Delta-Montrose Rural Power Lines Association.
Electricity first flowed through Delta-Montrose Rural Power Lines Association's distribution system in May 1939, serving 250 members in the Pea Green area near Delta. Members in the Delta, Hotchkiss, and Paonia areas were added in the following years.
Western Colorado Power Company (WCPC), an investor-owned utility, also provided electricity to the same territory as Delta-Montrose Rural Power Lines Association. Frequently, the Delta-Montrose Rural Power Lines Association and WCPC power lines ran parallel to one another.
In 1971, the Public Utilities Commission of Colorado ordered an exchange of customers to correct this situation and consolidated certain areas. Two thousand customers were affected in this consolidation.
In May 1975, Delta-Montrose Rural Power Lines Association purchased a portion of the territory being served by WCPC, adding approximately 10,000 members and 730 miles of line to their system. Because Delta-Montrose Rural Power Lines Association no longer served just rural areas, the "Rural Power Lines" changed, and the cooperative became Delta-Montrose Electric Association.