The opinion of the court was delivered by: Stiehl, District Judge:
Before the Court is Southwestern Electric Cooperative, Inc.'s
(Southwestern) Motion to Dismiss pursuant to Fed.R.Civ.P.
This cause was filed by the United States of America on behalf
of the Rural Electrification Administration (REA), the National
Rural Utilities Cooperative Finance Corporation (CFC), and
Soyland Power Cooperative, Inc. (Soyland), as a declaratory
judgment action seeking to have the Wholesale Power Contract
between Soyland and Southwestern declared binding. This Court has
subject matter jurisdiction pursuant to 28 U.S.C. § 1337 and
To sustain dismissal of a complaint under Fed.R.Civ.P.
12(b)(6), the Court must take all well-pleaded allegations as
true and construe the complaint in the light most favorable to
the plaintiffs to determine whether they are entitled to relief.
Conley v. Gibson, 355 U.S. 41, 45-56, 78 S.Ct. 99, 101-02, 2
L.Ed.2d 80 (1975). "The issue is not whether plaintiff will
ultimately prevail but whether the claimant is entitled to offer
evidence to support his claims." Scheuer v. Rhodes, 416 U.S. 232,
236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).
Southwestern is an Illinois not-for-profit corporation formed
in 1939 to distribute electrical power to its members in the
rural service area. Soyland is an Illinois not-for-profit
corporation which serves as a regional generation and
transmission cooperative (G & T) engaged in the wholesale
production and supply of electricity to its members. Soyland's
members consist of fifteen (15) rural Illinois power
cooperatives. The REA is a United States Government lending
agency which, pursuant to the Rural Electrification Act of 1936
(Act), 7 U.S.C. § 901 et seq., makes or guarantees loans to rural
electrical facilities. CFC is a private, not-for-profit
cooperative association which serves as a source of financing for
its members to supplement REA loans. CFC's membership consists
primarily of rural electrification cooperatives. Southwestern is
a member of both Soyland and CFC.
Due to the nature of the rural electrification system, numerous
contracts and loan agreements have been entered into among the
four parties. REA and Southwestern, pursuant to the Act, entered
into a loan agreement for the financing of the rural
electrification distribution system. The original loan has been
amended numerous times. As of March, 1986, REA had loaned
$23,815,000 to Southwestern for the construction of its
electrical distribution system. Of that amount, $17,024,097 is
outstanding. CFC is also a substantial creditor of Southwestern.
As of March, 1986, CFC had loaned $5,838,000 to Southwestern for
construction of its electrical distribution system, of which
$5,694,959 remains outstanding. To secure these loans, REA and
CFC entered into a Supplemental Mortgage and Security Agreement
with Southwestern, dated September 13, 1972.
REA and CFC are also substantial creditors of Soyland, of which
Southwestern is a member. REA has guaranteed the repayment of
loans to Soyland for construction of an electrical generation and
transmission system in the amount of $425,580,000 and an
additional, unadvanced, amount of $56,802,000 as of March 1986.
As of the same date, $425,497,423 remains outstanding. CFC has
advanced $63,000,000 to Soyland, of which $58,707,606 was
outstanding as of March, 1987. REA and CFC both have mortgages
with Soyland to secure the guaranteed loans.
In the mid-1970's, Soyland engaged in a series of negotiations
to purchase an ownership interest in the Clinton, Dewitt County,
Illinois nuclear power facility which the Illinois Power Company
proposed to build.
Southwestern entered into a contract with Soyland on May 26,
1976. This contract is the heart of the litigation before this
Court. Pursuant to the contract, Southwestern agreed to purchase
all of its electricity requirements from Soyland for a term
extending at least until the year 2015 (all-requirements
As stated above, it is this contract which is the subject of
the dispute. The plaintiffs have filed for declaratory judgment
that the contract is valid and enforceable. The defendant has
moved for dismissal and filed a counterclaim against Soyland.