2018-08-27T11:59:04-07:00 2017-12-31 990 2017-01-01 741937134 SAN MIGUEL ELECTRIC COOPERATIVE INC SANM 8307843411 PO Box 280 Jourdanton TX 78026 Michael Kezar General Manager 8307843411 2018-08-27 2017 2022-09-23 18:48:47Z Michael Kezar P O Box 280 Jourdanton TX 78026 150983044 0 X www.smeci.net X 1977 TX San Miguel was created for the sole purpose of owning and operating a 400 MW mine-mouth lignite-fired generating plant and associated mining facilities to furnish power and energy to its member cooperatives. 16 16 192 0 0 0 0 0 131504440 137010320 6911121 7338014 10399126 6634710 148814687 150983044 0 0 1275066 272380 17862081 17963482 0 0 0 129677540 132747182 148814687 150983044 0 0 346711564 379687395 228667949 264109121 118043615 115578274 Maintain a dependable power supply at the lowest possible and competitive cost to our customers through integrity, hard work, and safety. 0 0 0 San Miguel was created for the sole purpose of owning and operating a 400 MW mine-mouth lignite-fired generating plant and associated mining facility to furnish power and energy to its members on a cooperative basis. 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 117 0 1 192 1 0 0 0 0 0 136408223 14574821 0 X 16 16 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X X Derrick Brummett 8307843411 PO Box 280 Jourdanton TX 78026 X Don Wehmeyer Vice President Jan-April President May-December 10 X 14400 0 0 Kenneth White Assistant Sectretary / Treasurer Jan-April Vice President May-December 6 X 13020 0 0 Mark Rollans Secretary/Treasurer 4 X 12528 0 0 John Herrera Director Jan - April Assistant Secretary / Treasurer May-December 5 X 15012 0 0 Jack Rolando Alaniz Director May-December 5 X 9412 0 0 Brad Bierstedt Director 2 X 13086 0 0 Jim Coleman Director 2 X 13812 0 0 Ron Hughes Director 2 X 1093 0 0 Leroy Kaspar Director 4 X 13896 0 0 Dick Koop Director 3.7 X 11480 0 0 Reynaldo Lopez President Jan-April 6.5 X 5120 0 0 Trace McCuan Director 4 X 0 0 0 Gary Raybon Director 6 X 13956 0 0 David Rosse Director 5 X 13896 0 0 Larry Schendel Director 2.3 X 12816 0 0 Clyde Stewart Director 6 X 13380 0 0 Blaine Warzecha Director 2 X 11342 0 0 Michael Kezar General Manager 35 X 0 0 0 Derrick Brummett Admin Services Mgr 50 X 176559 0 53253 Mark Shilling Engineering Manager 55 X 162557 0 64942 Joe Badillo Operations Manager 40 X 116734 0 66030 Richard Dan Cates Plant Manager 55 X 169958 0 42859 John Neal Mechanic "A" 45 X 120389 0 13268 Kevin Patton Maintenance Manager 50 X 160987 0 43818 1095433 0 284170 35 0 1 0 Kiewit Mining Group PO Box 250 Jourdanton TX 78026 Mining contractor 65139364 Holt Cat P O Box 650345 Dallas TX 75265 Mine equipment 5110438 Terlingua Operating LLC 2401 Dominian Hill Austin TX 78733 Mine development 3400299 Atlantic Group P O Box 654068 Dallas TX 75265 Labor Support 2968814 Siemens Energy Inc Dept CH 10169 Palatine IL 60055 Capital Upgrade to Plant 2145758 53 X 0 Generation of Electricity 221000 137010320 137010320 0 0 0 0 0 0 137010320 7338014 0 0 7338014 0 0 0 0 -806 0 0 -806 0 0 0 0 Sales of SO2 Emission Allowances 221000 19 19 0 0 Transmission 221000 2654133 2654133 0 0 Deferred Revenues 221000 -602096 -602096 0 0 4583460 4583460 0 0 6635516 150983044 143645836 0 7337208 X 272380 364808 14236301 2302381 1059992 1054278 4825904 15968368 Fuel Expense 68219828 Administration Expense 2158360 Operations/Trans Expense 16180143 Maintenance Expense 20438728 3901573 150983044 0 0 0 1018781 965454 10020818 1020875 14412564 13176079 36135757 37404041 2184950 9650554 684558881 472305311 181493598 212253570 76415858 80162293 25029238 25054529 346711564 379687395 11612108 12279360 3672987 4275085 77200000 77200000 19581517 15916873 54031880 93531880 62569457 60905923 228667949 264109121 X 0 0 0 0 118043615 115578274 118043615 115578274 346711564 379687395 X 0 0 0 0 0 -2465341 X 0 1 X 1 0 4470257 0 4470257 458092477 0 359897962 98194515 0 0 0 0 130066865 0 100425069 29641796 91929282 0 11982280 79947002 212253570 Mine closure and Plant decommissioning 77664000 F Ash Pond Cleanout funds 2498293 F 80162293 Patronage Capital from Associated Cooperatives 1584807 Restricted Investements in Associated Organizations 21158923 Special Funds - Homestead Funds/Deferred Compensation-457 (b) 623164 Interest Receivable 1687635 25054529 Accumulated provisions for FAS 106 795800 Accumulated provision for Homestead Funds 623164 Accumulated provision for Mine Closure 46421886 Asset Retirement Obligation - CCR Impacted items 4043214 Decommissioning Liability 9021859 60905923 X 143645836 0 0 0 0 0 143645836 0 7337208 7337208 150983044 150710664 0 0 0 0 0 150710664 0 272380 272380 150983044 Schedule D, Part X, Line 2 ASC Topic #740, "Income Taxes", requires that an enterprise cannot recognize a tax benefit in its financial statements unless it concludes that it is "more likely than not" that the benefit will be sustained on audit by the taxing authority. Tax-exempt and not-for-profit enterprises are also within the scope of the ASC, since the decision that some or all of an enterprise's activities are not subject to income taxes is itself a tax position for which the interpretation requires evaluation. At adoption, and annually thereafter, San Miguel applies the requirements to all tax positions for which the statute of limitations remained open. San Miguel recognizes the financial benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. San Miguel was determined by the Internal Revenue Service to be an exempt cooperative for purposes of federal income taxes, under Section 501(c)(12) of the Internal Revenue Code, in years when receipts from members, for the purpose of meeting losses and expenses, are at least 85 percent of the total income. The amount of unrecognized tax benefits as of December 31, 2017 was zero. Schedule D, Part XI, Line 4b Investment income on restricted investments. Schedule D, Part XII, Line 4b See general explanations on Schedule O for Form 990 Part 1 line 19. X X X X 0 0 0 Derrick Brummett Admin Services Mgr 156924 0 11555 0 8080 0 19109 0 34143 0 229811 0 0 0 Mark Shilling Engineering Manager 149332 0 12584 0 642 0 36418 0 28557 0 227533 0 0 0 Joe Badillo Operations Manager 110228 0 1329 0 5176 0 35132 0 30155 0 182020 0 0 0 Richard Dan Cates Plant Manager 159866 0 9450 0 642 0 11369 0 31490 0 212817 0 0 0 John Neal Mechanic "A" 94233 0 1092 0 25064 0 0 0 13268 0 133657 0 0 0 Kevin Patton Maintenance Manager 142969 0 10526 0 7491 0 14614 0 29344 0 204944 0 0 A Atascosa County Industrial Dev 870810599 046578AA8 2008-07-10 77200000 To redeem 1984 series Pollution Control Bonds 0 0 0 A 0 0 0 0 0 0 0 0 0 0 0 0 1 0 1 1 A 0 0 0 0 0 0 0 0 0 1 A 0 0 0 1 1 0 0 0 1 A 1 Schedule K, Part II, Line 1-07/10/2008 77,200,000 Atascosa County Industrial Dev 07/10/2008 77,200,000 Atascosa County Industrial Dev - San Miguel Electric Cooperative, Inc. reported proceeds amounts based on activity during the 12-month period Schedule K, Part IV, Line 2c-07/10/2008 77,200,000 Atascosa County Industrial Dev 07/10/2008 77,200,000 Atascosa County Industrial Dev - Rebate Calculation date was August 9, 2013. Form 990, Part I, Line 19 For the 2011 tax reporting year, the IRS made a significant change to the 990 instructions, whereby entities exempt under 501(c)(12) of the Internal Revenue Code are to report patronage dividends paid to their members on Part IX, Line 4. San Miguel being duly organized in the State of Texas, and exempt under 501(c)(12) of the Internal Revenue Code operates on a cooperative, non-profit basis for the mutual benefit of its patrons. As such, all revenues or margins received in excess of operating costs are retained as equity and allocated as a credit to each patron's capital account. Should the Board of Directors determine that the financial condition of the Cooperative will not be impaired, and there are no requirements which restrict such distribution, the Board of Directors may choose to retire credits reflected in member accounts in part or in full. Retirements of capital credits are restricted under San Miguel's current mortgage indenture until certain thresholds are met. San Miguel interprets the definition of "paid" to mean paid in money, property or qualified written allocation; therefore, San Miguel is reporting as allocated, for the 2011 and all subsequent tax reporting years, all excess margins as paid to its patrons on an annual basis in accordance with the above referenced interpretation of the IRS instructions. Form 990, Part VI, Section A, Line 1b The decisions of the San Miguel Board of Directors are reported directly to the governing boards of the 9 member cooperatives. Certain contracts, i.e. wholesale power contracts are subject to the approval by the members of the 9 cooperatives. Form 990, Part VI, Section A, Line 6 San Miguel Electric Cooperative, Inc. (San Miguel) is a not-for-profit cooperative corporation organized for the purpose of generating electric power. San Miguel sells power pursuant to a wholesale power contract with South Texas Electric Cooperative, Inc. (South Texas), which is a generation and transmission cooperative. South Texas in turn, sells power at wholesale to their 8 member cooperative, all of which are distribution cooperatives providing retail service to their member-customers. Form 990, Part VI, Section A, Line 7a San Miguel is governed by a board of 16 directors, each of whom is selected by and represents one of the 9 member cooperatives. The directors are elected annually at the San Miguel Annual Meeting. Form 990, Part VI, Section A, Line 7b The decisions of the San Miguel Board of Directors are reported directly to the governing boards for the member cooperatives. Certain contracts, i.e. wholesale power contracts are subject to the approval by the members of the cooperatives. Form 990, Part VI, Section B, Line 11b A copy of the draft IRS Form 990 was provided to each of the current board members for the July 2018 meeting. Company personnel reviewed the IRS form 990 at the Finance and Audit Committee meeting on July 19, 2018 with the full board present. Board members were given an opportunity to ask any questions prior to the filing of the return. Form 990, Part VI, Section B, Line 12c The San Miguel Board of Directors approved a conflict of Interest Policy on December 10, 2008. The policy requires each "member of the Board of Directors, the General Manager, General Counsel and all Department Managers to file with the President of the Board of Directors, a Disclosure Report within thirty (30) days after attaining such position or status and then annually thereafter". The policy further specifies that "The president of the Board of Directors shall report no later than the regular March monthly Board meeting each year that he or she has received disclosure reports from all reporting persons signed and dated by February 15th of the current year". The disclosure report includes questions regarding a reporting person's personal and business relationships and any potential claims against San Miguel. In accordance with policy requirements, the above-mentioned parties are asked to complete and sign both the disclosure report and/or the conflict of interest report on an annual basis. Form 990, Part VI, Section B, Line 15 On April 22, 2016, San Miguel entered into a Management Service Agreement with South Texas Electric Cooperative (STEC). This agreement provides, for a fee of $17,500 per month paid to STEC, for Michael Kezar (a STEC Employee) to serve as General Manager for San Miguel. This agreement, which became effective June 1, 2016, was in effect throughout 2017. The salaries of all officers are based on a national survey for similar positions in the utility industry and recommended by an independent management consulting agency. Form 990, Part VI, Section C, Line 19 As San Miguel has outstanding loan funds guaranteed by the Rural Utilities Service, the financial statements are a matter of public record, and are provided to individuals upon request. We do not typically make San Miguel's governing documents or conflict of interest policy available to the public. Form 990, Part VII, Section A, Line 1a On April 22, 2016, San Miguel entered into a Management Service Agreement with South Texas Electric Cooperative (STEC). This agreement provides, for a fee of $17,500 per month paid to STEC, for Michael Kezar (a STEC Employee) to serve as General Manager for San Miguel. This agreement, which became effective June 1, 2016, was in effect throughout 2017. The salaries of all officers are based on a national survey for similar positions in the utility industry and recommended by an independent management consulting agency. Form 990, Part VIII, Line 5 In 2016 agreed to easement payment of $644,941.00 for gas pipeline. Balance was accrued into the books. When payment was received in 2017 for $641,135.00, amount was$806.00 less than accrued in 2016. Form 990, Part VIII, Line 11a 11b 11c The San Miguel Board of Directors approved deferred revenue plans in accordance with GAAP for Ash Pond Cleanout and Plant Decommissioning obligations. The total amount deferred and set aside for future Ash Pond Cleanout in 2017 was $310,240. The amount deferred for Plant Decommissioning in 2017 was 904,472. Amounts recognized into revenue for 2017 were $612,616. Total amount of Deferred Revenue under the plan for Ash Pond Cleanout is $2,463,663 Total amount under the plan for Plant Decommissioning is $1,811,422. Overall the total amount of Deferred Revenue is $4,275,085. Form 990, Part IX, Line 4 See general explanation on Schedule O for core Form 990, Part I, line 19. Form 990, Part XI, Line 9 As part of the 2015 Brazos transaction, funds were received in advance for Brazos' portion of debt obligations. During 2017, $2,737,721 of the debt obligations were amortized. As referenced on Schedule O, Part 1, Line 19, San Miguel's margins received in excess of operating costs are retained as equity and allocated as a credit to each patron's capital account. The amount of margins retained for 2017 was $272,380. The net margins and prepaid debt netted to ($2,465,341).