2023-11-15T23:49:37-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 743023938 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC GUAD 8308571200 PO BOX 118 GONZALES TX 78629 DARREN SCHAUER CEO 8308571200 2023-11-15 1 DARREN SCHAUER 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-11-15 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z DARREN SCHAUER PO BOX 118 GONZALES TX 78629 333516518 0 X WWW.GVEC.ORG X 1938 TX TO PROVIDE RELIABLE ELECTRIC & INTERNET SERVICE ON A COOPERATIVE BASIS. 11 10 432 0 10330169 1197119 0 0 297387081 327990887 508644 676318 7277371 4849313 305173096 333516518 13827 121214 23810501 23699117 26676927 29226238 0 0 0 253810121 276650437 304311376 329697006 861720 3819512 883605194 960046886 518115876 565035727 365489318 395011159 BUILDING ON OUR HERITAGE & HAVING CONFIDENCE IN THE FUTURE, GUADALUPE VALLEY ELECTRIC COOPERATIVE IS A TEAM OF PROFESSIONALS COMMITTED TO EXCEEDING EXPECTATIONS BY IDENTIFYING & INVESTING IN PRODUCTS & SERVICES THAT EMPOWER THE PEOPLE AND COMMUNITIES WE SERVE. 0 0 ELECTRIC DIVISION:SALE OF ELECTRIC POWER TO MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 95,782 ACTIVE SERVICES AT YEAR END. INTERNET/BROADBAND SERVICE DIVISION:PROVIDING FIBER INTERNET SERVICES TO ITS MEMBERS THROUGH A COMBINATION OF WIRELESS AND FIBER-TO-THE-HOME TECHNOLOGIES. SERVICES OF THIS DIVISION WILL BE PROVIDED TO MEMBERS ON A PATRONAGE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL TO THE EXTENT OF MARGINS FOR SUCH DIVISION. FIBER AND WIRELESS INTERNET IS ALSO PROVIDED TO NON-MEMBERS ON A NON-PATRONAGE BASIS. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 1 0 0 0 0 0 0 1 1 1 0 1 206 0 432 1 1 1 0 0 0 0 321697960 16659891 0 0 0 X 11 10 1 0 1 0 1 1 1 1 0 0 0 0 1 1 1 1 0 1 1 0 X GARY KORN CFO 8308571200 825 E SARAH DEWITT DR GONZALES TX 78629 X GARY BIRDWELL CHAIRMAN 20.00 2.00 X X 51542 0 0 LEO YORK DIRECTOR 8.21 2.00 X 49292 0 0 HENRY SCHMIDT VICE PRESIDENT 10.00 3.00 X X 41192 0 0 LEWIS BORGFELD DIRECTOR 10.00 3.00 X 38483 0 0 MORRIS HARVEY SECRETARY/TREASURER 6.80 2.00 X X 35792 0 0 MARK ROBERTS DIRECTOR 5.20 2.00 X 30486 0 0 ROBERT WERNER DIRECTOR 5.40 2.00 X 29942 0 0 MELVIN STREY DIRECTOR 10.00 3.00 X 29483 0 0 DON WILLIAMS DIRECTOR 5.00 3.00 X 28587 0 0 DAVID WARZECHA DIRECTOR 5.00 2.00 X 26783 0 0 SHAWN MARTINEZ DIRECTOR 3.00 2.00 X 25748 0 0 DARREN SCHAUER GM/CEO 60.00 1.00 X 733479 0 60942 SEAN ALVAREZ COO 50.00 1.00 X 469105 0 59001 GARY KORN CFO 48.00 1.00 X 319404 0 52516 ASHLEY COBURN CPO 45.00 X 244519 0 51886 CEASON BARNICK SR EXEC MGR - CUSTOMER REL 45.00 X 241288 0 48715 GRAHAM HAUPTMAN SR EXEC MGR - MARKETING/PR 50.00 X 255729 0 27156 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 55.00 X 233115 0 46283 KRISTA DAVIS SR EXEC MGR - CORP SRVC/BUS PLAN 50.00 X 187638 0 48166 TAMMY THOMPSON SR MKTING/COMM MGR 60.00 X 164776 0 44379 ROBERT RUSSELL EXEC ENGINEER - COMMUNICATIONS 50.00 X 243430 0 35095 JEFFREY STRAHL EXEC MGR - INFORMATION TEC 55.00 X 226678 0 51116 WILLIAM NICHOLS EXEC MGR - POWER SUPPLY 50.00 X 209643 0 43841 ZACHARY TAYLOR EXEC MGR - ENGINEERING 50.00 X 200013 0 44608 RICHARD MCKINNEY EXEC MGR - OPERATIONS 48.00 X 187197 0 40865 4303344 0 654569 101 0 1 0 TLT CONSTRUCTION CO INC PO BOX 1086 SHERMAN TX 75091 LINE CONSTRUCTION 8114013 LAMBDA CONSTRUCTION LTD 211 JESSES CIRCLE NEW BRAUNFELS TX 78132 LINE CONSTRUCTION 6620950 SOURCE POWER LLC PO BOX 691348 SAN ANTONIO TX 78269 OH CONSTRUCTION 5207681 NORTHSTAR ENERGY SOLUTIONS 33402 ROY ORR BLVD GRAND PRAIRIE TX 75050 ELECTRIC CONSTRUCTION 3533768 AMP UTILITY COMPANY LLC 518 S ENTERPRIZE PKWY CORPUS CHRISTI TX 78405 LINE CONSTRUCTION 3305824 43 X SALES OF ELECTRICITY 221000 283703312 283703312 SALES FROM INTERNET OPERATIONS 517000 20918622 14551675 6366947 TRANSMISSION ACCESS 221000 15560899 15560899 SERVICE FEES & OTHER CHARGES 221000 2671477 2671477 TRANSMISSION LEASE 221000 2650377 2650377 2486200 2486200 327990887 654716 654716 21602 0 21602 21602 21602 INTERCOMPANY MANAGEMENT INCOME 561000 3496253 3496253 POLE ATTACHMENT INCOME 221000 626000 626000 MAINTENANCE REVENUE 561000 466969 466969 260091 260091 4849313 333516518 321905633 10330169 1280716 X 121214 23699117 3675427 19101958 1874883 2990021 1583949 10747706 36208317 PURCHASED POWER 205599243 ADMIN & GENERAL EXPENSE 9935273 DISTRIBUTION EXPENSE 5813019 UNRELATED BUSINESS INCO 383019 7963860 329697006 21257449 20129184 271560 271799 15522060 21767319 4621252 4485698 127058 103499 186139832 184802461 1024478139 327038512 627548771 697439627 15163505 16326230 3219789 3198584 9733918 11522485 883605194 960046886 31736695 37610053 220865 51456 90362 462597681 506207770 23509179 21127542 518115876 565035727 X 3870816 6010181 0 0 361618502 389000978 365489318 395011159 883605194 960046886 X 3819512 25702329 X X 0 1 X 0 0 0 1 X 20597597 20597597 79664788 45991356 33673432 798755724 281047156 517708568 125460030 125460030 697439627 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 4460487 CONSUMER DEPOSITS 3264712 ACCRUED OPERATING TAXES 3154634 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 8656390 ACCUMULATED DEFERRED FIT/UBIT 1022833 OTHER DEFERRED CREDITS AND LIABILITIES 568486 21127542 X PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS FROM RURAL AREAS TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE AND ITS AFFILIATES FOLLOW THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE AND AFFILIATES DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT THEIR TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART VIII HAS BEEN LEFT BLANK. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. 0 TSTC FOUNDATION 3801 CAMPUS DRIVE WACO TX 76705 752892470 501(C)(3) 100000 0 CONTRIBUTION FOR DEVELOPMENT OF TRADE SKILLS GONZALES HEALTHCARE SYSTEMS FOUNDATION PO BOX 2283 AUSTIN TX 78768 263339619 501(C)(3) 6000 0 2022 CONTRIBUTION 2 PART II: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X X X X 0 1 0 DARREN SCHAUER GM/CEO 515323 0 152412 0 65744 0 30500 0 30442 0 794421 0 0 0 SEAN ALVAREZ COO 361428 0 78392 0 29285 0 30500 0 28501 0 528106 0 0 0 GARY KORN CFO 271217 0 29475 0 18712 0 30500 0 22016 0 371920 0 0 0 ASHLEY COBURN CPO 210200 0 21700 0 12619 0 24155 0 27731 0 296405 0 0 0 CEASON BARNICK SR EXEC MGR - CUSTOMER REL 208627 0 16228 0 16433 0 23566 0 25149 0 290003 0 0 0 GRAHAM HAUPTMAN SR EXEC MGR - MARKETING/PR 156288 0 20000 0 79441 0 24706 0 2450 0 282885 0 0 0 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 193976 0 15543 0 23596 0 22715 0 23568 0 279398 0 0 0 ROBERT RUSSELL EXEC ENGINEER - COMMUNICATIONS 212169 0 16186 0 15075 0 23458 0 11637 0 278525 0 0 0 JEFFREY STRAHL EXEC MGR - INFORMATION TEC 197917 0 15728 0 13033 0 22464 0 28652 0 277794 0 0 0 WILLIAM NICHOLS EXEC MGR - POWER SUPPLY 186463 0 20096 0 3084 0 21368 0 22473 0 253484 0 0 0 ZACHARY TAYLOR EXEC MGR - ENGINEERING 173483 0 13941 0 12589 0 19472 0 25136 0 244621 0 0 0 KRISTA DAVIS SR EXEC MGR - CORP SRVC/BUS PLAN 169124 0 5925 0 12589 0 18671 0 29495 0 235804 0 0 0 RICHARD MCKINNEY EXEC MGR - OPERATIONS 157639 0 12829 0 16729 0 18290 0 22575 0 228062 0 0 0 TAMMY THOMPSON SR MKTING/COMM MGR 151242 0 12760 0 774 0 17353 0 27026 0 209155 0 0 0 PART I, LINE 4B DARREN SCHAUER - $20,500 457(B) PLAN SEAN ALVAREZ - $20,500 457(B) PLAN GARY KORN - $ 6,733 457(B) PLAN LEWIS BORGFELD FAMILY RELATIONSHIP - EMPLOYEE OFFICER (S. ALVAREZ) 38483 DIRECTOR 0 SEAN ALVEREZ FAMILY RELATIONSHIP - DIRECTOR (L. BORGFELD) 469105 EMPLOYMENT 0 FORM 990, PART I, LINE 19: REVENUE LESS EXPENSES AS REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S AUDITED FINANCIAL STATEMENTS DUE TO BOOK TO TAX ADJUSTMENTS REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE EQUITY METHOD INCOME IS RECORDED ON THE COOPERATIVE'S BOOKS AND INCLUDED IN TOTAL NET MARGINS. U.S. GAAP REQUIRES THE COOPERATIVE TO RECORD ON ITS BOOKS THE EQUITY METHOD INCOME FROM ITS WHOLLY OWNED SUBSIDIARY. EQUITY METHOD INCOME IS NOT INCOME FOR IRS FORM 990 PURPOSES AND AS SUCH HAS BEEN REPORTED AS AN OTHER CHANGE IN NET ASSETS. FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAS 11 BOARD MEMBERS; ALL 11 ARE ALLOWED TO VOTE; HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. PER IRS FORM 990 INSTRUCTIONS, DIRECTOR BORGFELD IS NOT AN INDEPENDENT DIRECTOR DUE TO A FAMILY RELATIONSHIP WITH AN EMPLOYEE OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 2 A FAMILY RELATIONSHIP EXISTS BETWEEN DIRECTOR LEWIS BORGFELD AND OFFICER SEAN ALVAREZ. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE COOPERATIVE'S BYLAWS WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES: ARTICLE I (MEMBERS) SECTION 1, CHANGED TITLE OF SECTION TO "REQUIREMENTS FOR MEMBERSHIP". DEFINED WHAT PERSONS, OR ENTITIES ARE ALLOWED TO BECOME MEMBERS. SUBSECTION (C) CHANGED TERM "ARTICLES" TO CERTIFICATE FOR CERTIFICATE OF FORMATION. DEFINED MARRIAGE AS NATURAL PERSONS THAT ARE LEGALLY MARRIED OR OTHERWISE JOINED IN A LEGALLY RECOGNIZED MARRIAGE RELATIONSHIP. SECTION 2. MEMBERSHIP FEE, SUBSECTION (B) ADDED THAT THE COOPERATIVE HAS THE RIGHT TO APPLY MEMBERSHIP FEES AND ANY ADDITIONAL FEES REQUIRED BY THE COOPERATIVE TO ANY OF A MEMBER'S ACCOUNTS. SECTION 3. PURCHASE OF ELECTRIC ENERGY AND/OR SERVICES, REVISED TO STATE THAT IT IS UNDERSTOOD THAT AMOUNTS IN EXCESS OF COST OF SERVICE WILL BE CREDITED TO THE CAPITAL ACCOUNT OF MEMBER. SECTION 4. NON-LIABILITY FOR DEBTS--MINIMUM LANGUAGE CHANGE THAT MEMBERS WILL NOT BE INDIVIDUALLY HELD LIABLE FOR DEBTS OF COOPERATIVE. SECTION 5. INDEMNIFICATION, SUBSECTION (A)DEFINED LAWS AS ALL APPLICABLE LOCAL, STATE, AND FEDERAL LAWS WHETHER LEGISLATIVE, EXECUTIVE OR JUDICIAL. SUBSECTION (B)DELETED "EMPLOYEE OR AGENTS AND ADDED "INCLUDING THE GENERAL MANAGER". SECTION 6. JOINT MEMBERSHIP, SUBSECTION (A) CHANGED DEFINITION OF MARRIAGE AS DESCRIBED IN SECTION 1. SECTION 7. CHANGED "EXPULSION OF MEMBERSHIP" TO "CONVERSION OF MEMBERSHIP". SUBSECTION (A), (B), AND (C) DEFINED PROCEDURE FOR CONVERTING A MEMBERSHIP TO JOINT MEMBERSHIP AFTER MARRIAGE, CHANGES AFTER DEATH OR DIVORCE. SECTION 8. WITHDRAWAL AND TERMINATION OF MEMBERSHIP, SUBSECTION (A) ADDED TERMS AND PROCEDURES FOR EXPULSION OF MEMBER TO BE A VOTE OF AT LEAST 2/3 OF DIRECTORS AFTER VIOLATION OR REFUSAL TO COMPLY BY MEMBER OF GOVERNING DOCUMENTS. CAN ONLY BE EXPELLED AFTER WRITTEN NOTICE TO MEMBER AND AFTER REFUSAL TO CURE VIOLATIONS WITHIN 10 DAYS OF NOTICE. EXPELLED MEMBER MAY BE REINSTATED BY VOTE OF THE BOARD OR BY VOTE OF THE MEMBERS AT ANY ANNUAL OR SPECIAL MEETING. SUBSECTION (B) MEMBER MAY BE EXPELLED AFTER A PERIOD OF TWELVE CONSECUTIVE MONTHS OF NOT PURCHASING POWER FROM COOPERATIVE. SUBSECTION (C) REVISED TO ADDRESS STATUS CHANGES FOR JOINT MEMBERSHIPS. ARTICLE II (MEETINGS OF MEMBERS) SECTION 1. ANNUAL MEETING, REVISED TO GIVE BOARD OF DIRECTORS AUTHORITY TO CHANGE THE ANNUAL MEETING DATE IF NECESSARY AND DELETED THE REQUIREMENT THAT THE BOARD OF DIRECTORS ADOPT A RESOLUTION WITHIN 45 DAYS AFTER AN ANNUAL MEETING HAS BEEN POSTPONED TO FIX THE DATE SUCH MEETING WILL BE HELD. SECTION "4" TO "4A" QUORUM. SECTION 4B. QUORUM DURING CERTAIN FORCE MAJEURE EVENTS, STATED THAT THE BELOW METHODS OF ATTAINING A QUORUM DURING FORCE MAJEURE EVENTS SHALL INCLUDE SUBSECTION (I) VOTING BY MAIL IN BALLOT IN A MANNER DETERMINED BY THE BOARD. SUBSECTION (II) ELECTRONICALLY VIA THE COOPERATIVE'S WEBSITE. SUBSECTION (III)ANY OTHER REASONABLE MEANS AS DEEMED NECESSARY BY THE COOPERATIVE. SECTION 5A. VOTING, ADDED SUBSECTIONS (A), (B), (C), AND (D) TO STATE EACH MEMBER SHALL BE ENTITLED TO ONE VOTE AND NO MORE, REGARDLESS OF THE NUMBER OF METERS HELD, THE PROCEDURES THAT ORGANIZATIONS AND ESTATES MAY APPOINT REPRESENTATIVES TO VOTE ON THEIR BEHALF, AND NO MEMBERS SHALL BE REGISTERED TO VOTE AFTER THE POINT IN THE ANNUAL MEETING, OR SPECIAL MEETING, AT WHICH TIME THE PERSON CONDUCTING SUCH MEETING RECEIVES A MOTION AND SECOND. SECTION 5B. VOTING DURING CERTAIN FORCE MAJEURE EVENTS, STATES THAT VOTING MAY BE POSTPONED UNTIL END OF FORCE MAJEURE EVENT, OR BE HELD AS DESCRIBED IN SECTION 4B. SECTION 6A. PROXIES, REVISED TO ALLOW WRITTEN CONFIRMATION OF PROXY AUTHORIZATION TO BE PROVIDED AT THE MEMBER MEETING. SECTION 6C WAS RENAMED "PROXY RECOMMENDATIONS FOR OTHER AGENDA ITEMS." SECTION 9. MEMBER MEETING AGENDA, WAS CHANGED TO STATE THAT THE BOARD OF DIRECTORS SHALL PREPARE THE AGENDA NOT FEWER THAN 60 DAYS PRIOR TO THE ANNUAL MEETING. ANY PERSON DESIRING TO PRESENT NEW BUSINESS FOR SUCH ANNUAL MEETING SHALL SUBMIT A REQUEST, IN WRITING, THAT THE BOARD OF DIRECTORS PLACE SUCH MATTER ON THE AGENDA. THE REQUEST SHALL BE IN WRITING AND DELIVERED BY HAND DELIVERY OR CERTIFIED MAIL TO THE BOARD OF DIRECTORS NO LATER THAN THE MONDAY PRECEDING THE DATE OF THE BOARD OF DIRECTORS MEETING AT WHICH THE AGENDA SHALL BE PREPARED. THE BOARD OF DIRECTORS SHALL DETERMINE WHETHER TO PLACE A PROPERLY REQUESTED MATTER ON THE AGENDA. ONLY THOSE MATTERS PLACED ON THE AGENDA FOR AN ANNUAL MEETING MAY BE SUBMITTED TO A VOTE OF THE MEMBERS AT SUCH ANNUAL MEETING. ARTICLE III (DIRECTORS) SECTION 3. QUALIFICATION AND TENURE, SUBSECTION (A) REVISED TO CHANGE THE INITIAL DATES FOR DIRECTOR CLASSES. SUBSECTION (C) ADDED DEFINITION OF REASONABLE AMOUNT OF TIME FOR POSTPONEMENT OF ELECTION TO BE UNTIL AFTER FORCE MAJEURE EVENT IS OVER OR UNTIL NEXT ANNUAL MEETING TO BE DECIDED BY BOARD OF DIRECTORS. SUBSECTION (D) DEFINED GOOD STANDING TO BE ELIGIBLE FOR DIRECTOR ELECTION. THESE INCLUDED: MEMBER WHO HAS NOT BEEN DISCONNECTED DUE TO NONPAYMENT WITHIN 12 MONTHS, FIVE YEARS PRECEDING CANIDACY A CONVICTION OR PLEA OF GUILT TO FELONY CRIME INVOLVING MORAL TURPITUDE, DISQUALIFIED PRIOR AS A DIRECTOR, HIGH SCHOOL DIPLOMA OR EQUIVALENT, FAILED TO ATTEND 3/4 OF BOARD MEETINGS OR CONTINUING EDUCATION IN PRIOR 12 MONTHS, 5 YEARS PRECEDING CANDIDACY WAS AN EMPLOYEE OF COOPERATIVE, BE A COMPETITOR OF COOPERATIVE, IS A CLOSE RELATIVE OF AN INCUMBENT DIRECTOR OR COOPERATIVE EMPLOYEE. SUBSECTION (E) DEFINES CLOSE RELATIVE AS SOMEONE WHO IS RELATED WITHIN THE FIRST DEGREE OR SECOND DEGREE. SUBSECTION (F) DISCUSSION OF DISQUALIFIED DIRECTOR DURING TENURE. MAJORITY OF DIRECTORS WITH EXCEPTION OF DISQUALIFIED DIRECTOR MUST VOTE FOR CONTINUED SERVICE OF SAID DIRECTOR. SUBSECTION (G) A DIRECTOR WHO BECOMES DISQUALIFIED DOES NOT DISQUALIFY ACTIONS OF BOARD DURING TIME PERIOD THAT DIRECTOR WAS DISQUALIFIED. SECTION 4. DIRECTOR DISQUALIFICATION, STATES THAT THE BOARD OF DIRECTORS SHALL DISQUALIFY THE DIRECTOR AND THE INDIVIDUAL IS NO LONGER A DIRECTOR, PROVIDED THAT: (A)THE BOARD OF DIRECTORS NOTIFIES THE DIRECTOR IN WRITING OF THE BASIS FOR, AND PROVIDES THE DIRECTOR AN OPPORTUNITY TO COMMENT; AND (B)WITHIN THIRTY (30) DAYS AFTER BOARD OF DIRECTORS NOTIFIES DIRECTOR OF THE PROPOSED DISQUALIFICATION, THE DIRECTOR NEITHER COMPLIES WITH NOR MEETS THE DIRECTOR QUALIFICATIONS. SECTION 6. ELECTION OF DIRECTORS, SUBSECTION (B) REMOVED PROVISIONS FOR TIE DURING ELECTION OF DIRECTORS. SECTION 7. REMOVAL OF DIRECTORS, SUBSECTION (A) ADDED PROCEDURES FOR REMOVAL OF DIRECTOR BY MEMBERS. PETITION HAD TO BE SIGNED BY AT LEAST 10% OF MEMBERS WITHIN 60 DAYS PRIOR TO TURNING IN PETITION TO SECRETARY. ONLY ONE REMOVAL IS ALLOWED PER 12 MONTH PERIOD. VOTE WILL BE HELD WITHIN 60 DAYS OF SECRETARY CERTIFYING AUTHENTENCITY. 2/3 MEMBER MAJORITY MUST VOTE FOR REMOVAL. SUBSECTION (B) STATED MEANS BY WHICH BOARD OF DIRECTORS MAY REMOVE A DIRECTOR. NEED A 2/3 MAJORITY VOTE FOR REMOVAL. SECTION 9. COMPENSATION, CHANGED "PER DIEM" TO "FOR EACH DAY OR A PORTION THEREOF SPENT ON COOPERATIVE BUSINESS". SECTION 12. EXECUTIVE COMMITTEE, DISCUSSED VACANCIES AND APPOINTMENT OF EXECUTIVE COMMITTEE. SECTION 13. DIRECTOR RESIGNATION, NOTED DIRECTOR CAN RESIGN AT ANY TIME, MUST GIVE WRITTEN NOTICE TO EXECUTIVE COMMITTEE. SECTION 14. RESTRICTION ON EMPLOYMENT OF DIRECTORS, DIRECTORS CAN NOT BE EMPLOYED BY COOPERATIVE OR AFFILIATES DURING PERIOD OF SERVICE OR 3 YEARS PRECEDING. SECTION 15. LIMITING LIABILITY OF DIRECTORS, TO THE FULLEST EXTENT PERMITTED BY LAW, A DIRECTOR SHALL NOT BE LIABLE TO THE COOPERATIVE OR TO ITS MEMBERS, FOR MONETARY DAMAGES FOR AN ACT OR OMISSION IN THE DIRECTOR'S CAPACITY AS A DIRECTOR, EXCEPT THAT THIS PROVISION DOES NOT ELIMINATE OR LIMIT THE LIABILITY OF A DIRECTOR FOR: (1) A BREACH OF THE DIRECTOR'S DUTY OF LOYALTY TO THE COOPERATIVE OF ITS MEMBERS; (2) AN ACT OR OMISSION NOT IN GOOD FAITH OR THAT INVOLVES INTENTIONAL MISCONDUCT OR A KNOWING VIOLATION OF THE LAW; (3) A TRANSACTION FROM WHICH A DIRECTOR RECEIVED AN IMPROPER BENEFIT, WHETHER OR NOT THE BENEFIT RESULTED FROM AN ACTION TAKEN WITHIN THE SCOPE OF THE DIRECTOR'S OFFICE; OR (4) AN ACT OR OMISSION FOR WHICH THE LIABILITY OF THE DIRECTOR IS EXPRESSLY PROVIDED FOR BY STATUTE. FORM 990, PART VI, SECTION A, LINE 4 THE FOLLOWING IS A CONTINUATION OF THE BYLAW CHANGES: ARTICLE IV (MEETINGS OF DIRECTORS) SECTION 4. QUORUM, ADDED PROVISIONS FOR NOTICE OF ADJOURNMENT TO ABSENT DIRECTORS FOR MEETINGS AND THAT THEY MAY BE COUNTED FOR QUORUM IF THEY AGREE TO SUCH PROCEDURES. SECTION 6. BOARD ACTION BY WRITTEN CONSENT, ADDED PROVISION FOR WRITTEN CONSENT TO BE COUNTED AS A VOTE FOR ABSENT DIRECTORS. SECTION 7. MEMBERS' ATTENDANCE AT BOARD MEETINGS, BOARD CAN APPROVE MEMBER ATTENDANCE ACCORDING TO THEIR DISCRETION. ARTICLE V (OFFICERS) SECTION 3. RENAMED THIS SECTION TO REMOVAL OR RESIGNATION OF OFFICER AND AGENTS, GAVE PROCEDURE BY WHICH BOARD OF DIRECTORS OFFICERS MAY RESIGN EITHER FROM EXECUTIVE OFFICER OR AS A DIRECTOR. SECTION 5.PRESIDENT, ADDED "UNLESS OTHERWISE DETERMINED BY THE DIRECTORS" REGARDING THE PRESIDENT PRESIDING OVER ALL MEETINGS OF THE BOARD. SECTION 7. SECRETARY, DUTIES OF THE SECRETARY WERE REVISED TO: (A)SEE THAT THE MINUTES OF MEETINGS OF THE MEMBERS AND OF THE BOARD ARE PROPERLY MAINTAINED, AND ADDED (D)KEEP A REGISTER OF THE NAMES AND MAILING ADDRESSES OF ALL MEMBERS; (E)KEEP ON FILE AT ALL TIMES A COMPLETE COPY OF THE ARTICLES AND THE BYLAWS OF THE COOPERATIVE CONTAINING ALL AMENDMENTS THERETO (WHICH COPY SHALL ALWAYS BE OPEN TO THE INSPECTION OF ANY MEMBER) AND AT THE EXPENSE OF THE COOPERATIVE, FURNISH A COPY OF THE BYLAWS AND OF ALL AMENDMENTS THERETO TO ANY MEMBER UPON REQUEST. SECTION 9. ADDED OTHER COOPERATIVE REPRESENTATIVES, THE BOARD MAY APPOINT OTHER OFFICERS, AGENTS AND EMPLOYEES OF THE COOPERATIVE, AND AUTHORIZED DESIGNEES OF THE BOARD MAY APPOINT SUCH OTHER AGENTS AND EMPLOYEES OF THE COOPERATIVE, AS THE BOARD OR ITS DESIGNEES (AS THE CASE MAY BE) CONSIDER NECESSARY. SUCH OTHER OFFICERS, AGENTS AND EMPLOYEES MAY BE GIVEN SUCH TITLES AS DETERMINED BY THE BOARD OR ITS DESIGNEES. SECTION 10. ADDED BONDS OF OFFICERS. THE TREASURER AND ANY OTHER OFFICER OR AGENT OF THE COOPERATIVE CHARGED WITH RESPONSIBILITY FOR THE CUSTODY OF ANY OF ITS FUNDS OR PROPERTY MAY BE BONDED IN SUCH SUM AND WITH SUCH SURETY AS THE BOARD SHALL DETERMINE. THE BOARD IN ITS DISCRETION MAY ALSO REQUIRE ANY OTHER OFFICER, AGENT OR EMPLOYEE OF THE COOPERATIVE TO BE BONDED IN SUCH AMOUNT AND WITH SUCH SURETY AS IT SHALL DETERMINE. ARTICLE VI (CONTRACTS, CHECKS AND DEPOSITS) WAS AMENDED TO (FINANCIAL TRANSACTIONS) ARTICLE VII (MEMBERSHIP CERTIFICATES) STATES "MEMBERSHIP IN THE COOPERATIVE MAY BE EVIDENCED BY A CERTIFICATE OF MEMBERSHIP WHICH SHALL BE IN SUCH FORM AND SHALL CONTAIN SUCH PROVISIONS AS SHALL BE DETERMINED BY THE BOARD NOT CONTRARY TO OR INCONSISTENT WITH THE CERTIFICATE OF FORMATION OR THESE BYLAWS. THE MEMBERSHIP AGREEMENT OR APPLICABLE ELECTRIC SERVICE AGREEMENT, ALONG WITH THE MEMBERSHIP NUMBER ASSIGNED BY THE COOPERATIVE TO SUCH MEMBER, SHALL CONSTITUTE THE MEMBERSHIP CERTIFICATE FOR PURPOSES OF THESE BYLAWS." ARTICLE VIII (NON-PROFIT OPERATION) SECTION 2. ALLOCATING CAPITAL CREDITS, UNDER SUBSECTION (C) COOPERATIVE SERVICE DELETED "THAT SUCH PRE-EXISTING LEGAL OBLIGATION MAY BE LIMITED TO MEMBERS ONLY. SUCH PRE-EXISTING LEGAL OBLIGATION SHALL BE PROVIDED FOR BY BOARD POLICIES, BOARD RESOLUTIONS, AN AFFIRMATIVE VOTE OF THE MEMBERS, OR OTHER CONTRACTUAL AUTHORITY (COLLECTIVELY, "AUTHORITY"). UNDER (E) DELETED "CONSISTENT WITH THIS BYLAW, THE ALLOCATION OF CAPITAL CREDITS IS IN THE DISCRETION OF THE BOARD AND THE BOARD MUST DETERMINE THE MANNER, METHOD, AND TIMING OF ALLOCATING CAPITAL CREDITS. THE COOPERATIVE MAY USE OR INVEST UNRETIRED CAPITAL CREDITS AS DETERMINED BY THE BOARD." SUBSECTION (F) "DIFFERENT AND SEPARATE ALLOCATIONS WAS RENAMED "METHOD OF ALLOCATION." ADDED NOTWITHSTANDING OTHER PROVISIONS OF THIS BYLAW, THE BOARD, ACTING THROUGH POLICY, HAS THE AUTHORITY TO (1) DETERMINE THE PROCESS FOR ANNUALLY CALCULATING THE AMOUNT OF PATRONAGE EARNINGS AND PATRONAGE LOSSES, AND (2) DETERMINE THE KIND, TIMING, METHOD AND TYPE OF ALLOCATION; PROVIDED HOWEVER, THAT SUCH METHODS ARE FAIR AND EQUITABLE ON THE BASIS OF PATRONAGE. SUCH POLICIES APPLY SEPARATELY TO EACH COOPERATIVE SERVICE AND INCLUDES, BUT IS NOT LIMITED TO, THE AUTHORITY TO DETERMINE THE ITEMS OF REVENUE INCLUDED IN THE DEFINITION OF PATRONAGE." ADDED (G) NOTIFICATION OF ALLOCATION. WITHIN A REASONABLE TIME AFTER THE END OF EACH FISCAL YEAR, THE COOPERATIVE SHALL NOTIFY ALL PATRONS, THROUGH GENERAL PUBLICATION OR SIMILAR METHOD OF COMMUNICATION, OF THE AGGREGATE AMOUNT OF CAPITAL CREDITS ALLOCATED TO THE CAPITAL ACCOUNTS OF ALL PATRONS, AND UPON REQUEST, THE COOPERATIVE SHALL INFORM AN INDIVIDUAL PATRON OF THE SPECIFIC AMOUNT OF CAPITAL CREDITED TO THE PATRON'S CAPITAL ACCOUNT." SECTION 3. NOTIFICATION AND ASSIGMENT OF CAPITAL CREDITS, WAS AMENDED TO "ASSIGNMENT OF CAPITAL CREDITS". STATES "EXCEPT AS OTHERWISE PROVIDED BY THE BOARD OR THESE BYLAWS, IN ORDER FOR A PATRON TO ASSIGN OR TRANSFER A PATRON'S CAPITAL CREDITS: (1) THE COOPERATIVE MUST RECEIVE A WRITTEN OR ELECTRONIC REQUEST SIGNED BY THE PATRON TO ASSIGN OR TRANSFER THE CAPITAL CREDITS; (2) THE PATRON AND THE ASSIGNEE OR TRANSFEREE MUST COMPLY WITH ALL REASONABLE REQUIREMENTS SPECIFIED BY THE COOPERATIVE; AND (3) THE BOARD SHALL HAVE THE RIGHT TO APPROVE OR DENY THE ASSIGNMENT OR TRANSFER IN ITS SOLE DISCRETION" SECTION 4. RETIRING CAPITAL CREDITS, SUBSECTION (C) CAPITAL CREDIT RECOUPMENT AND OFFSET. DELETED "REGARDLESS OF A STATUTE OF LIMITATION OR OTHER TIME LIMITATION, AFTER RETIRING CAPITAL CREDITS ALLOCATED TO A PATRON OR FORMER PATRON".(D) CAPITAL CREDIT RETIREMENT DISCRETION. ADDED "PURSUANT TO SUCH DISCRETION, THE BOARD SHALL ALSO HAVE THE POWER, EXERCISABLE IN ITS SOLE DISCRETION TO RETIRE ALL OR A PORTION OF CAPITAL CREDITS OF PATRONS PRIOR TO THE TIME SUCH CAPITAL WOULD OTHERWISE BE RETIRED UNDER THE PROVISIONS OF THESE BYLAWS OR THE POLICIES OF THE BOARD, BUT ONLY IF THE FINANCIAL CONDITION OF THE COOPERATIVE WILL NOT BE IMPAIRED. THE PAYMENT PORTION OF SUCH EARLY RETIREMENT MAY BE ON A DISCOUNTED AND NET PRESENT VALUE BASIS IN ORDER TO REFLECT THE TIME VALUE OF MONEY. SUCH POLICIES SHALL ESTABLISH THE CRITERIA USED IN DETERMINING THE DISCOUNTED AND NET PRESENT VALUE OF EARLY RETIREMENTS. THE DISCOUNT, WHICH IS THE DIFFERENCE BETWEEN THE TOTAL OF CAPITAL CREDITS RETIRED AND THE CASH PAYMENT OF SUCH EARLY RETIREMENT, SHALL BE DEEMED A CONTRIBUTION OF CAPITAL TO AND PART OF THE NET SAVINGS OF THE COOPERATIVE. SUBJECT TO BOARD ACTION THAT LEGALLY BINDS THE COOPERATIVE TO MAINTAIN RECORDS OF THE DISCOUNT BY PATRON OR FORMER PATRON, THE DISCOUNT SHALL BE A FORM OF RETAINED BUT ALLOCATED CAPITAL FOR PURPOSES OF DISTRIBUTING THE CUMULATIVE AMOUNT OF ALL SUCH DISCOUNTS TO THE RESPECTIVE PATRON OR FORMER PATRON UPON DISSOLUTION AND LIQUIDATION OF THE COOPERATIVE." SECTION 5. PATRON AGREEEMENT, AS REQUIRED BY LAW, EACH PATRON WILL: (A) REPORT TO THE APPROPRIATE ENTITY ALL ALLOCATED OR RETIRED CAPITAL CREDITS; AND (B) PAY THE APPROPRIATE ENTITY ANY TAX OR SIMILAR AMOUNT ON ALLOCATED OR RETIRED CAPITAL CREDITS. TO THE EXTENT THAT THE COOPERATIVE IS REQUIRED TO MAKE ANY TAX WITHHOLDING AMOUNTS FROM THE RETIREMENT OR PAYMENT OF SUCH CAPITAL CREDITS, THE PATRON ACKNOWLEDGES AND AGREES TO SUCH WITHHOLDING." ARTICLE X (WAIVER OF NOTICE). ANY MEMBER OR DIRECTOR MAY WAIVE, IN WRITING, ANY NOTICE OF MEETINGS REQUIRED TO BE GIVEN BY THESE BYLAWS, AND SUCH WAIVER MAY BE BEFORE OR AFTER THE MEETING. THE ATTENDANCE OF A MEMBER OR DIRECTOR AT ANY MEETING SHALL CONSTITUTE A WAIVER OF NOTICE OF SUCH MEETING BY SUCH MEMBER OR DIRECTOR, EXCEPT IN CASE A MEMBER OR DIRECTOR SHALL ATTEND A MEETING FOR THE EXPRESS PURPOSE OF OBJECTING TO THE TRANSACTION OF ANY BUSINESS ON THE GROUND THAT THE MEETING HAS NOT BEEN LAWFULLY CALLED OR CONVENED. ARTICLE XII (FISCAL YEAR). THE BOARD MAY DETERMINE AND MODIFY THE COOPERATIVE'S FISCAL YEAR. THE FISCAL YEAR OF THE COOPERATIVE SHALL BEGIN ON THE FIRST OF JANUARY OF EACH YEAR AND END ON THE THIRTY-FIRST DAY OF DECEMBER OF THE SAME YEAR. ARTICLE XIII (MEMBERSHIP IN OTHER ORGANIZATIONS) THE COOPERATIVE MAY BECOME A MEMBER OF, OR PURCHASE STOCK IN ANY OTHER ORGANIZATION UPON THE AUTHORIZATION OF A MAJORITY OF THE BOARD PRESENT AT A MEETING AT WHICH A QUORUM IS PRESENT. ARTICLE XV (AMENDMENTS) THE BYLAWS OF THE COOPERATIVE MAY BE ALTERED, AMENDED OR REPEALED BY THE AFFIRMATIVE VOTE OF NOT LESS THAN TWO-THIRDS (2/3) OF THE DIRECTORS AT ANY REGULAR OR SPECIAL MEETING. ARTICLE XV (STATEMENT OF NON DISCRIMINATION) WAS REMOVED. A COMPLETE COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE: HTTPS://WWW.GVEC.ORG, IN THE ABOUT US, MEMBERSHIP BENEFITS SECTION. FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS BY DISTRICT. FORM 990, PART VI, SECTION A, LINE 7B THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE: 1. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 3. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION FORM 990, PART VI, SECTION A, LINE 8B THE COOPERATIVE HAS NO COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE GOVERNING BODY. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, THE QUESTION HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION B, LINE 11B MANAGEMENT REVIEWED THE FORM 990 PRIOR TO FILING AND PRESENTED A COPY OF THE RETURN TO THE BOARD SUBSEQUENT TO FILING. FORM 990, PART VI, SECTION B, LINE 12C THE COOPERATIVE DOES NOT HAVE A FORMAL CONFLICT OF INTEREST POLICY, HOWEVER, LIMITATIONS ON THE BOARD OF DIRECTORS ARE DEFINED IN THE COOPERATIVE'S BYLAWS. THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH SUCH POLICIES. A QUESTIONNAIRE WAS ANSWERED BY ALL BOARD MEMBERS. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVES' IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS/CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE CEO USE THE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVES' OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE'S BYLAWS, ANNUAL REPORT AND FINANCIAL STATEMENTS ARE AVAILABLE ON ITS WEBSITE AT WWW.GVEC.ORG. FORM 990, PARTS VI & VII: THE COOPERATIVE ANNUALLY PROVIDES EACH DIRECTOR WHO SERVED ON THE BOARD DURING THE YEAR A QUESTIONNAIRE. THE COMPLETED QUESTIONNAIRES ARE USED TO COMPLETE THE APPLICABLE QUESTIONS ON THE FORM 990 PERTAINING TO BUSINESS RELATIONSHIPS AMONG DIRECTORS, OFFICERS, AND KEY EMPLOYEES, AS WELL AS TO DETERMINE IF THERE ARE ANY TRANSACTIONS WHICH MUST BE REPORTED IN DETAIL ON SCHEDULE L - "TRANSACTIONS WITH INTERESTED PERSONS". IF THE COOPERATIVE WAS UNABLE TO OBTAIN A COMPLETED QUESTIONNAIRE, THE COOPERATIVE RELIED UPON THE COMPLETED INFORMATION FOR THE PRIOR YEAR. THE COOPERATIVE DID NOT RECEIEVE A QUESTIONNAIRE FROM KEY EMPLOYEE GRAHAM HAUPTMAN; THEREFORE, THE PRIOR YEAR QUESTIONNAIRE WAS RELIED UPON WHILE PREPARING THE RETURN. THERE WERE NO KNOWN CHANGES FROM 2021 TO 2022. FORM 990, PART VII, COLUMN F: IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, THE COOPERATIVE HAS ESTABLISHED A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE MADE PURSUANT TO THE PLAN DOCUMENT. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS, KEY AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. FORM 990, PART VIII, LINE 2: PATRONAGE DIVIDENDS RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND THE PURCHASE OF SUPPLIES AND SERVICES FROM OTHER COOPERATIVE ORGANIZATIONS. THE EXPENSES ASSOCIATED WITH PURCHASES FROM AND PAYMENTS TO SUCH COOPERATIVE ORGANIZATIONS ARE A DIRECT COMPONENT OF COST OF THE ELECTRIC SERVICE PROVIDED BY THE COOPERATIVE TO ITS MEMBERS. FORM 990, PART IX: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE SEPARATELY REPORTS SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1-23 ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE USOA. FORM 990, PART IX, LINES 5-7: SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY, AND EXPENSE ACCOUNTS BASED ON THE ACCOUNTING SYSTEM DESCRIBED ABOVE. THE FOLLOWING SCHEDULE RECONCILES AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $22,777,385 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (387,330) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (224,345) LESS: KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (214,699) PLUS: SALARIES & BENEFITS ALLOCATED TO PURCHASED POWER 798,672 PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 8,279,625 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,962,585 TOTAL WAGES ACCRUED AND/OR PAID $32,991,893 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS & OTHER $ 4,282,298 OFFICE SUPPLIES 1,486,931 OUTSIDE SERVICES EMPLOYED 899,635 INJURIES & DAMAGES 1,762,599 PENSIONS & BENEFITS 3,004,287 REGULATORY COMMISSION 973,691 ADVERTISING 1,171,621 MISCELLANEOUS GENERAL 569,965 DISTRICT & ANNUAL MEETINGS 298,714 DUES TO ASSOCIATED ORGANIZATIONS 211,696 DIRECTORS 396,482 UTILITIES 965,236 MAINTENANCE OF GENERAL PLANT 2,213,447 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $18,236,602 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (387,330) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (6,023,817) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,890,182) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 9,935,273 FORM 990, PART IX, LINE 4: PURSUANT TO THE FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS "PATRONS") SHOULD BE REPORTED ON PART IX, LINE 4. THE PHRASE "PATRONAGE DIVIDENDS PAID" REFERS TO THE PROCESS, SUBSEQUENT TO YEAR-END, BY WHICH THE COOPERATIVE ALLOCATES PATRONAGE CAPITAL TO AND, THEREFORE, OPERATES AT COST WITH ITS PATRONS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS PATRONS AND TO DO SO ON A COOPERATIVE BASIS. TAX LAW DEFINES "OPERATING ON A COOPERATIVE BASIS" AS SUBORDINATION OF CAPITAL, DEMOCRATIC CONTROL, AND OPERATION AT COST. THE COOPERATIVE OPERATES AT COST THROUGH THE ALLOCATION OF TRUE PATRONAGE DIVIDENDS (ALSO REFERRED TO AS ALLOCATIONS OF PATRONAGE CAPITAL) TO ITS PATRONS. PATRONAGE DIVIDENDS ARE CONSIDERED PAID IF THE ALLOCATION IS MADE (1) PURSUANT TO A PRE-EXISTING OBLIGATION, (2) FROM THE MARGINS PRODUCED FROM THE TRANSACTIONS DONE WITH OR FOR PATRONS, AND (3) IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). ADDITIONALLY, THE ALLOCATION OF PATRONAGE DIVIDENDS SHOULD BE MADE WITHIN A REASONABLE TIME PERIOD AFTER THE CLOSE OF THE COOPERATIVE'S YEAR-END OF DECEMBER 31. EACH ONE OF THESE REQUIREMENTS FOR A TRUE PATRONAGE DIVIDEND IS PROVIDED FOR IN THE NON-PROFIT OPERATION ARTICLE OF THE COOPERATIVE'S BYLAWS. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2022 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS ARE THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS PATRONS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED SUCH AMOUNTS AS AN EXPENSE FOR FORM 990 REPORTING. PATRONAGE DIVIDENDS ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CONSUMER EXPENSE $ 2,221,328 INTERNET EXPENSE 4,675,711 INTERCOMPANY MANAGEMENT SERVICES EXPENSE 327,540 OTHER DEDUCTIONS 137,223 TRANSMISSION EXPENSE 602,058 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 7,963,860 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 23,699,117. PATRONAGE CAPITAL RETIRED - TOTAL -309,401. PATRONAGE CAPITAL RETIRED - DISCOUNT 174,539. OCI - PENSION & BENEFITS 3,057,208. EQUITY METHOD INCOME FROM SUBSIDIARIES -26,180. NET CHANGE IN MEMBERSHIPS 44,414. PATRONAGE CAPITAL ESCHEATED -937,368. 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