San Miguel Electric Cooperative Inc. (SMECI), a not-for-profit generation and transmission rural electric cooperative located in Atascosa County, Texas, was awarded more than $1.4 billion through the U.S. Department of Agriculture’s (USDA’s) Empowering Rural America (New ERA) program. With the money, SMECI, which operates a mine-mouth lignite-fired power plant, said it will convert its lignite operations to a 400-MW solar and 200-MW battery storage facility “to provide clean, reliable, and affordable renewable energy to 47 rural South Texas counties.”
“The USDA funding represents a new era for the San Miguel Electric Cooperative, which has long been the backbone of electric generation for generations of South Texans,” Craig Courter, general manager/CEO of the cooperative, said in a statement. “New ERA program funding will allow us to virtually eliminate our greenhouse gas emissions, while continuing to provide affordable and reliable power to rural South Texans.”
SMECI, which began commercial operation in 1982, currently produces 391 MW of electricity through a wholesale power contract with South Texas Electric Cooperative (STEC), which, in turn, supplies power to its distribution cooperative members, who provide retail service to more than 340,000 rural Texas customers. As SMECI converts from lignite to solar, it will enter into a new wholesale power contract with STEC to supply the output of the proposed solar and battery storage facility, which is expected to be operational by 2027.
The USDA said the New ERA program was made possible by President Biden’s Inflation Reduction Act, the largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936. New ERA program funding is available to member-owned rural electric cooperatives, which have been the backbone of America’s rural power delivery for nearly a century, it said.
“USDA is committed to enhancing the quality of life and improving air and water in our rural communities,” Agriculture Secretary Tom Vilsack said in a statement on Dec. 19, announcing awards for more than $4.37 billion in clean energy investments. “The Inflation Reduction Act’s historic investments enable USDA to partner with rural electric cooperatives to strengthen America’s energy security and lower electricity bills for hardworking families, farmers, and small business owners.”
SMECI announced in early September that it had been named a finalist for New ERA funding. At the time, it noted the wholesale power contract with STEC ran through 2037 and could be continued further, depending on lignite coal availability. However, it said the supply of lignite-fired electricity would be discontinued earlier if San Miguel was awarded the New ERA funding.
In a statement issued on Dec. 23, SMECI said it will use part of the New ERA funding to refinance debt from its stranded lignite infrastructure. It said the conversion will not affect SMECI’s ongoing mine reclamation program, which is secured by bonds that will not be released until regulators have determined that the mine reclamation is complete.
“Reclamation is a vital part of a mining operation’s culture and—for SMECI—a passion. The cooperative works closely with its landowners to restore mined land to their preferred specifications. This can include pastureland, which uses vegetation, such as grasses, to provide feed benefits to ranch animals and build soil stability,” SMECI said.
“San Miguel will continue to be an integral part of the energy needs of the South Texas communities we have served since 1982,” said Courter. “With this conversion, we look forward to many more years of providing energy at an affordable rate in a state that continues to grow at an unprecedented pace.”
Beyond solar power, SMECI has taken steps to tap into another form of renewable energy as well. In August, the cooperative entered into a first-of-its-kind geothermal energy partnership with Sage Geosystems Inc., which will launch its EarthStore facility at San Miguel. “This will be the first project in Texas to utilize the earth’s natural capacity for energy storage to produce clean, sustainable, and dispatchable electricity on demand. Sage’s technology offers a reliable and resilient power source—independent of weather conditions and not reliant on wind or sunshine,” SMECI said.
The USDA said it expects to make additional New ERA award announcements in the coming weeks. Including the December investments, the USDA has awarded funding to 15 cooperatives as part of the New ERA program, totaling almost $9 billion in New ERA-financed grants and loans.
—Aaron Larson is POWER’s executive editor ().
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