Brazos President & General Manager Message

For 67 years Brazos Electric has followed a simple and focused mission of generating, procuring and transmitting low cost, reliable power for the benefit of its members and customers. In 2008, Brazos Electric completed another successful year while remaining committed to its 67 year-old mission.

2008 was a year of many significant events, including:

Continued successful operation of the 600 megawatt gas-fired generation facility in Jack County that began commercial operation in 2006. The Jack County Generation Facility had an annual availability of 90.1% and only 7 hours of forced outage.

An excellent operational year for the 258 megawatt gas-fired Johnson County Generation Facility. This was the first full year of operation after massive damage to the Heat Recovery Steam Generator (HRSG) occurred under previous ownership in 2005. Brazos Electric performed major repairs to the HRSG and balance of plant equipment and resumed commercial operation of the facility in 2006. The plant's 2008 annual availability of 91.7% was the second highest availability in the history of the plant.

RUS approval of a $695,692,000 loan for Jack County 2 Generation Facility. This loan will provide long-term, low-cost financing for the Jack County 2 Generation Facility.

Significant reduction in our transmission and distribution system outage statistics due to the impact of Hurricane Ike and resulting in damage to the Entergy Texas transmission system. Despite the joint efforts of Brazos Electric and Entergy Texas personnel, we experienced 873.5 hours of combined outage time at our transmission and distribution facilities located in the south-eastern portion of our members' service area.

Completing $109,464,000 of capital upgrades to Brazos Electric's transmission and distribution system. These upgrades will provide continued reliable service to Brazos Electric's members.

Excellent financial performance with (i) 2008 net margins of $19,092,000, (ii) a 2008 Times Interest Earned Ratio of 1.36 and (iii) a 2008 Debt Service Coverage ratio of 1.38. Brazos Electric's 2008 financial performance assisted in the continuation of Brazos Electric's two investment grade credit ratings.

All of these accomplishments were made possible by the dedicated, experienced and knowledgeable employees of Brazos Electric. We thank all Brazos Electric employees for their efforts that made 2008 a successful year.

2009 will bring additional challenges. We look forward to responding to these challenges with the same focus on our core electric business and to our mission of providing valued service to our member-owners and other customers.

Ronnie Robinson , President

Clifton Karnei, Executive Vice President & General Manager