San Miguel Electric Cooperative, Inc. (SMECI) has been awarded over $1.4 billion by the United States Department of Agriculture (USDA) Rural Utilities Service (RUS) through the Empowering Rural America (New ERA) program. This initiative, funded by the Inflation Reduction Act, aims to support energy projects prioritizing greenhouse gas reductions.
The investment will enable SMECI, a not-for-profit electric cooperative based in Atascosa County, Texas, to transition from lignite-fired power generation to renewable energy. The cooperative plans to replace its lignite operations with a 400-megawatt (MW) solar generation facility with 200 MW of battery storage. This transformation will provide clean, reliable, and affordable power 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,” said Craig Courter, General Manager and CEO of SMECI. “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 has been a critical energy provider since its commercial operations began in 1982. Currently, the cooperative produces 391 MW of electricity, distributed through a Wholesale Power Contract with South Texas Electric Cooperative (STEC). STEC supplies power to its member cooperatives, serving over 340,000 rural Texans. The new solar and battery storage facility, expected to be operational by 2027, will replace the existing lignite-powered plant. SMECI will enter into a new Wholesale Power Contract with STEC to supply the output from the renewable energy facility.
Part of the USDA funding will refinance the debt associated with SMECI’s lignite infrastructure. This conversion will not impact the cooperative’s ongoing mine reclamation efforts. SMECI’s reclamation program, secured by regulatory bonds, will continue until all requirements are fulfilled and regulators approve the land’s restoration.
Land reclamation has been a cornerstone of SMECI’s operations since its inception. Working closely with landowners, the cooperative restores mined lands to preferred conditions, such as pastureland with vegetation that supports ranching and enhances soil stability.
“San Miguel will continue to be an integral part of the energy needs of the South Texas communities we have served since 1982,” added 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.”
