Sequachee Valley Electric Cooperative was incorporated on July 31, 1939, by a group of community leaders who could foresee the benefits of an electric utility owned by and responsive to the people who were to receive electricity from it. The incorporators took the Cherokee Indian name  "Sequachee" (pronounced Se-kwah-chee), for the river running through the area as the unique identification of their new utility, and for over 80 years the Cooperative has been the only business in the area to use the original spelling, rather than "Sequatchie."

The primary purpose for founding the Cooperative was to enable the rural people in the Valley to secure electricity to improve their way of life and standard of living. Local townspeople who already enjoyed the benefits of electricity knew that the economic future for everyone would be improved with electricity available to all.

The cooperative organization enabled the new business to borrow money from the Rural Electrification Administration; one of the special federal agencies created during the 1930’s to improve the national economy and particularly the rural economy.

With the SVEC charter approved and board of trustees in place in August 1939, the new cooperative set in motion the purchase of the lines that had been owned by the Tennessee Valley Electric Power Company located primarily in the larger towns of Marion, Grundy, Sequatchie and Bledsoe counties and began expanding out into the smaller towns and the rural areas of these four counties.

On September 1, 1939, Sequachee Valley Electric Cooperative began its existence, taking over properties in its areas purchased by the Tennessee Valley Authority on August 16 of that year from the Tennessee Electric Power Company.

SVEC immediately began rehabilitation of the power system. At that time, it started an aggressive program to build lines to serve new customers, primarily rural, and to promote the use of electricity under its lower rates.