San Miguel Electric Cooperative Revenue and Competitors

San Miguel Electric Cooperative, Inc. (San Miguel) was created on February 17, 1977, under the Rural Electric Cooperative Act of the State of Texas, for the purpose of owning and operating a 400-MW mine-mouth, lignite-fired generating plant and associated mining facilities that furnish power and energy to Brazos Electric Power Cooperative, Inc. (BEPC) and South Texas Electric Cooperative, Inc. (STEC). Construction of the plant was initiated as a joint venture by BEPC and STEC in 1974. San Miguel purchased the plant and related mining facilities upon receiving long-term financing in 1978. Commercial operation of the plant began on January 7, 1982. BEPC and STEC, which are generation and transmission cooperatives (G&T's), have entered into wholesale power contracts with San Miguel that cannot be terminated before the year 2037, under which they have purchased and agreed to purchase, and San Miguel has sold and agreed to sell, the entire output of the plant. The contracts provide that BEPC and STEC are collectively responsible for San Miguel's total cost of owning and operating the plant, including San Miguel's debt service obligations, and such responsibility is allocated between BEPC and STEC by reference to their respective power purchase obligations for any given year.