Oregon gained a distinction in 1912 when the Southern Pacific Railroad became one of the few railroads in the nation to convert branch steam railroad lines into an electric interurban network. Growing competition from the Oregon Electric Railway provided motivation, as did successful experience with electric railroad operation in California. At the time, the Southern Pacific, one of the largest railroads in the West, owned most of the railroads in Oregon. 

Initial efforts were undertaken by the newly acquired Portland, Eugene and Eastern Railway (PE&E), which owned city streetcar systems in Salem, Albany, and Eugene and had been arranging franchises for a planned electric line between those cities and Portland. The Southern Pacific added its Westside and Yamhill branches to the PE&E and began construction of an electric railway. 

The PE&E began electric interurban service on January 17, 1914, using two routes: the Westside line, parts of which dated to 1871, went by way of Beaverton, Hillsboro, and Forest Grove; and the Eastside line, which ran through Oswego, Tualatin, and Newberg. These lines joined north of McMinnville at St. Joseph, creating a 109-mile circle known as the Yamhill Loop. During the first year, the PE&E mainline was extended south of McMinnville to Whiteson. 

In 1915, the Southern Pacific dropped the PE&E name and replaced it with Southern Pacific Lines. The Oregon interurban railway was also known as the Red Electric Lines because of the color of its cars. Their bright red livery was similar to that used by the railroad’s Pacific Electric streetcars in Los Angeles. 

On June 17, 1917, electric rail service was completed through the Willamette Valley to Corvallis, eighty-eight miles south of Portland. A planned extension to Eugene was not built, and Corvallis became the southern terminus for the Red Electrics. The Southern Pacific was running sixty-four Red Electric trains a day by the 1920s. Four trains went to Corvallis and two to Whiteson. One- or two-car commuter trains offered frequent service closer to Portland. 

The new all-steel Pullman-built Red Electric interurbans ran on 1,500 volts DC and used pantographs instead of trolley poles, like their Sacramento Northern Railway cousins in Northern California, but the large porthole-like windows at each end were a distinctive Oregon feature. Although the Southern Pacific’s red cars were not as elegantly appointed as the Oregon Electric Railway’s classic parlor cars, they were modern looking and fast.

Expenses increased throughout the 1920s, as better roads and affordable automobiles reduced ridership, and as population growth in the rural Willamette Valley lagged behind expectations. Labor and franchise difficulties also plagued the Southern Pacific. Union crew requirements remained inflexible, and the City of Portland was constantly pressuring the railroad to remove its tracks from Southwest Fourth Street.

The Red Electric system was one of the last interurban railways built and one of the first to be abandoned. When passenger train service was discontinued on October 5, 1929, the Southern Pacific's Oregon interurban railway was only fifteen years old.