Abstract Distribution systems such as the Rural Electric Cooperatives (RECs) in the U.S. obtain power largely through purchases. Supply is often guaranteed through long-term contracts, and prices may be less sensitive in the short run to increases in fuel costs. The development of a model to capture some of the unique features of the RECs cost structures is discussed. The use of such a model in forecasting the growth of the cooperatives is presented; three scenarios of alternative assumptions regarding the growth of fuel prices are analyzed. Based on these scenarios, it is concluded that the annual load growths of RECs will range between 3.6 and 5.9% to the year 2000.