2024-10-30T09:59:44-05:00 2023-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2023-01-01 750208872 COOKE COUNTY ELECTRIC COOPERATIVE ASSOCIATION COOK 9407592211 PO DRAWER 530 MUENSTER TX 76252 NEIL HESSE GENERAL MANAGER 9407592211 2024-09-26 1 0 WILLIAM M MILLER P00439459 8067473806 2024-09-26 X 2023 2024-10-15 13:58:12Z PENTEX ENERGY NEIL HESSE PO DRAWER 530 MUENSTER TX 76252 53653624 0 X WWW.PENTEX.COM X 1938 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 5 5 76 0 0 0 0 0 60437225 53037167 106918 200770 57418 398426 60601561 53636363 46885 57592 3134314 3042837 5260672 5641304 0 0 0 51558929 44004881 60000800 52746614 600761 889749 97556614 99045089 13399037 12433716 84157577 86611373 PROVIDING RELIABLE ENERGY AND PROVEN SERVICE. 0 0 SALE OF ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 17,936 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 61 0 76 1 0 0 0 0 0 55771778 971092 0 0 0 X 5 5 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X RYAN FUHRMANN DIRECTOR OF FINANCEOFFICE OPS 9407592211 11799 WEST US HIGHWAY 82 MUENSTER TX 76252 X KENNETH ALEXANDER PRESIDENT 2.00 X X 28061 0 0 WAYNE KYLE VICE PRESIDENT 1.90 X X 29082 0 0 GARY DALE LEWIS JR SECRETARY/TREASURER 2.50 X X 27368 0 0 DON MILLER DIRECTOR 2.10 X 26276 0 0 RONNIE FELDERHOFF DIRECTOR 2.90 X 35583 0 0 NEIL HESSE GENERAL MANAGER 55.00 X 210314 0 110782 JANET VOTH SR. DIRECTOR OF FINANCE/OFFICE OPS 43.00 X 132106 0 64813 LARRY STEWART DIRECTOR OF SYSTEM OPS (JAN-JUNE) 47.50 X 85053 0 5028 DANIEL BLACK DIRECTOR OF IT 40.00 X 128836 0 34706 RYAN FUHRMANN DIRECTOR OF FINANCE/OFFICE OPS 45.00 X 132862 0 17215 CHRIS KUBIS DIRECTOR OF SYSTEM OPERATIONS 48.00 X 129368 0 43810 MALONY BARTUSH DIRECTOR OF HR/COMMUNICATIONS 42.00 X 114750 0 35878 GARY GREWING CREW FOREMAN 49.70 X 118163 0 42694 RONNIE BAYER LINE SUPERINTENDENT 48.00 X 111601 0 61066 CHARLES SCHILLING CREW FOREMAN 45.70 X 104100 0 30200 RUSSELL MCCASLAND SAFETY COORDINATOR 43.00 X 102252 0 45503 1515775 0 491695 11 0 1 0 HARDIN TREE INC PO BOX 310 OOLOGAH OK 74053 R-O-W TREE TRIMMING 965161 MERIDIAN COOPERATIVE INC 100 ASHFORD CENTER N SUITE 500 ATLANTA GA 30338 CYBERSECURITY & PAYMENT PROCESSING 401530 SCARBOROUGH ENGINEERING INC 2400 SCOTT AVENUE FORT WORTH TX 76103 ENGINEERING SERVICES 304607 OSMOSE UTILITIES SERVICES PO BOX 736729 DALLAS TX 75373 POLE INSPECTION & TREATMENT 261249 FORCE ELECTRICAL SERVICE LLC PO BOX 1288 WOODWARD OK 73802 ELECTRIC UTILITY CONSTRUCTION 156735 6 X SALES OF ELECTRICITY 221000 52379980 52379980 PATRONAGE DIVIDENDS 221000 613497 613497 SERVICE FEES 221000 43690 43690 53037167 150195 150195 67836 17261 50575 50575 50575 BOND SECURITIZATION P'SHIP INCOME 221000 345526 345526 POLE ATTACHMENT INCOME 221000 52867 52867 WATER WELL SALES 221000 33 33 398426 53636363 53433268 0 203095 X 57592 3042837 1241263 2940557 563014 618848 277622 59397 3465270 PURCHASED POWER 35417544 DISTRIBUTION EXPENSE 3228203 ADMIN & GENERAL EXPENSE 1364661 CONSUMER EXPENSE 418015 51791 52746614 8590896 4294708 257887 1033505 2888841 2396186 1438770 2003008 136809 2529492 96861308 42480559 51877250 54380749 28947076 29753303 3419085 2654138 97556614 99045089 5141578 3455380 483371 210280 865826 7774088 7902230 13399037 12433716 X 0 0 0 0 84157577 86611373 84157577 86611373 97556614 99045089 X 889749 1564047 X X 0 1 X 0 0 0 1 X 253194 253194 6086078 2161676 3924402 89376338 40318883 49057455 1145698 1145698 54380749 CAPITAL TERM CERTIFICATES - CFC 607534 C MEMBERSHIPS 2165 C PATRONAGE CAPITAL - BEPCI 27151999 C PATRONAGE CAPITAL - TEC 743047 C PATRONAGE CAPITAL - CFC 5318 C PATRONAGE CAPITAL - SEDC 155520 C PATRONAGE CAPITAL - NRTC 355467 C PATRONAGE CAPITAL - COBANK 66975 C PATRONAGE CAPITAL - CRC 9259 C INVESTMENT IN BOND SECURITIZATION PARTNERSHIP 656019 C 29753303 CONSUMER DEPOSITS 1185170 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS OTHER THAN PENSIONS 2273137 ACCRUED POWER COST - OVER COLLECTED 2839112 DEFERRED CREDITS - AID TO CONSTRUCTION 1097807 ACCRUED OPERATING TAXES 507004 7902230 X 53636363 0 53636363 0 53636363 49703777 0 49703777 3042837 3042837 52746614 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 AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. 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 UTILIZES 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 DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS), OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 3,042,837. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, AND IN ACCORDANCE WITH IRS INSTRUCTIONS SCHEDULE D, PART IX HAS BEEN LEFT BLANK. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY AND NOT AS AN EXPENSE. THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, HOWEVER, THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS EXPENSED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". 0 TEXAS ELECTRIC COOPERATIVE INC 1122 COLORADO STREET 24TH FLOOR AUSTIN TX 78701 741007829 7153 0 DONATIONS 1 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 1 1 X X X X 1 0 0 NEIL HESSE GENERAL MANAGER 202914 0 731 0 6669 0 91808 0 18974 0 321096 0 0 0 JANET VOTH SR. DIRECTOR OF FINANCE/OFFICE OPS 127476 0 780 0 3850 0 48678 0 16135 0 196919 0 0 0 CHRIS KUBIS DIRECTOR OF SYSTEM OPERATIONS 127477 0 780 0 1111 0 26026 0 17784 0 173178 0 0 0 RONNIE BAYER LINE SUPERINTENDENT 109483 0 780 0 1338 0 43522 0 17544 0 172667 0 0 0 DANIEL BLACK DIRECTOR OF IT 127476 0 780 0 580 0 16925 0 17781 0 163542 0 0 0 GARY GREWING CREW FOREMAN 116418 0 780 0 965 0 24550 0 18144 0 160857 0 0 0 MALONY BARTUSH DIRECTOR OF HR/COMMUNICATIONS 113686 0 780 0 284 0 16983 0 18895 0 150628 0 0 0 RYAN FUHRMANN DIRECTOR OF FINANCE/OFFICE OPS 131921 0 780 0 161 0 8297 0 8918 0 150077 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL REIMBURSE DIRECTORS AND EMPLOYEES FOR THE COST OF HIS/HER SPOUSE TO ACCOMPANY HIM/HER ON OFFICIAL BUSINESS OF THE COOPERATIVE. DURING THE YEAR, TWO INDIVIDUALS (HESSE AND STEWART) REPORTED ON FORM 990, PART VII RECEIVED THIS BEENEFIT. ADDITIONALLY, THE VALUE OF THE BENEFIT WAS INCLUDED IN THEIR RESPECTIVE REPORTABLE COMPENSATION. PART I, LINE 4A LARRY STEWART RECEIVED A SEVERANCE PAYMENT IN THE AMOUNT OF $15,394 DURING THE YEAR 2023. SCHEDULE J, PART II, COLUMN C: INCLUDED IN THIS AMOUNT IS THE INCREASE IN ACTUARIAL VALUE OF BENEFITS PAYABLE UNDER A DEFINED BENEFIT RETIREMENT PLAN. THE CONTRIBUTION RATE FOR PARTICIPANTS IN THE NRECA R&S DEFINED BENEFIT PENSION PLAN ARE THE SAME FOR ALL INDIVIDUALS IN THIS MULTI-EMPLOYER PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIRONMENT. IN OTHER WORDS, THE OLDER A PLAN PARTICIPANT IS, THE GREATER THE INCREASE IN THAT INDIVIDUAL'S CHANGE IN ACTUARIAL VALUE, ALL OTHER THINGS BEING EQUAL. BECAUSE THIS RELATES TO A MULTI-EMPLOYER PLAN, CASH CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. NEIL HESSE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 87,646 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,162 TOTAL REPORTED IN COLUMN C $ 91,808 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (87,646) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 45,879 EXPENSE TO THE COOPERATIVE $ 50,041 JANET VOTH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 46,036 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,642 TOTAL REPORTED IN COLUMN C $ 48,678 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (46,036) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,974 EXPENSE TO THE COOPERATIVE $ 31,616 CHRIS KUBIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 23,384 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,642 TOTAL REPORTED IN COLUMN C $ 26,026 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (23,384) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,693 EXPENSE TO THE COOPERATIVE $ 28,335 RONNIE BAYER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 41,250 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,272 TOTAL REPORTED IN COLUMN C $ 43,522 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (41,250) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 24,946 EXPENSE TO THE COOPERATIVE $ 27,218 DANIEL BLACK: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 14,283 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,642 TOTAL REPORTED IN COLUMN C $ 16,925 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (14,283) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,974 EXPENSE TO THE COOPERATIVE $ 31,616 GARY GREWING: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 22,772 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,778 TOTAL REPORTED IN COLUMN C $ 24,550 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (22,772) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 19,574 EXPENSE TO THE COOPERATIVE $ 21,352 MALONY BARTUSH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 14,617 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,366 TOTAL REPORTED IN COLUMN C $ 16,983 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (14,617) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 24,946 EXPENSE TO THE COOPERATIVE $ 27,312 FORM 990, PART I: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET INCOME OF $889,749, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE, ACCRUED UNBILLED POWER COST, AND THE PORTION OF NON-OPERATING MARGINS RETAINED. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE AND POWER COST BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THE COOPERATIVE ESTIMATES THIS ADDITIONAL REVENUE AND POWER COST WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES PATRONAGE CAPITAL TO MEMBERS IN THE YEAR THESE TWO ITEMS ARE ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE AND POWER COST, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE & UNBILLED POWER COST OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE AND POWER COST. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/23 $ 2,646,867 LESS: UNBILLED REVENUE 12/31/22 (3,411,815) LESS: UNBILLED POWER COST 12/31/23 (0) ADD: UNBILLED POWER COST 12/31/22 1,309,171 ADD: NON-OPERATING MARGINS RETAINED 345,526 (A) - NET INCOME ON PAGE 1, PART I, LINE 19 $ 889,749 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 3,042,837 TOTAL 2023 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $ 3,932,586 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 VII - NON-PROFIT OPERATION SECTION 2. PATRONAGE CAPITAL IN CONNECTION WITH FURNISHING ELECTRIC ENERGY, AMENDED PART (D) TO STATE "ALL OTHER AMOUNTS RECEIVED BY THE COOPERATIVE FROM ITS OPERATIONS IN EXCESS OF COSTS AND EXPENSES, OTHER THAN FROM THE FURNISHING OF ELECTRIC ENERGY, SHALL, INSOFAR AS PERMITTED BY LAW, BE (A) USED TO OFFSET ANY LOSSES INCURRED DURING THE CURRENT OR ANY PRIOR FISCAL YEAR, AS DETERMINED BY THE BOARD OF DIRECTORS AND (B) USED BY THE COOPERATIVE TO ESTABLISH UNALLOCATED RESERVES AND RETAINED CAPITAL NOT CURRENTLY DISTRIBUTABLE TO THE PATRONS, EXCEPT UPON DISSOLUTION OF THE COOPERATIVE; AND (C) TO THE EXTENT NOT NEEDED FOR THAT PURPOSE, ALLOCATED TO ITS PATRONS ON A PATRONAGE BASIS AND ANY AMOUNT SO ALLOCATED SHALL BE INCLUDED AS PART OF THE CAPITAL CREDITED TO ACCOUNTS OF PATRONS, AS HEREIN PROVIDED." A COMPLETE COPY OF THE COOPERATIVE'S BYLAWS CAN BE FOUND ON THEIR WEBSITE: HTTPS://PENTEX.COM. 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. 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 PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C ALL OFFICERS, DIRECTORS, AND EMPLOYEES ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S EMPLOYEE-ETHICS POLICY AND ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE GENERAL MANAGER AS SOON AS POSSIBLE. THE GENERAL MANAGER REGULARLY MONITORS AND ENFORCES THIS POLICY. FORM 990, PART VI, SECTION B, LINE 15 ANNUALLY, THE BOARD OF DIRECTORS EVALUATE AND SET THE COMPENSATION OF THE GENERAL MANAGER. THE BOARD USES RESULTS OF A COMPENSATION STUDY AND THE FORM 990 OF SIMILARLY SITUATED ELECTRIC COOPERATIVES AS A GUIDE IN THE DECISION MAKING PROCESS. THE GENERAL MANAGER USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEE, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES EACH NEW MEMBER WITH A COPY OF ITS BYLAWS, WHICH ARE ALSO LOCATED ON ITS WEBSITE AT WWW.PENTEX.COM. UPON REVISION, BYLAWS ARE MAILED TO ALL MEMBERS. THE COOPERATIVE WILL ALSO PROVIDE A COMPLETE COPY OF ITS CONFLICT OF INTEREST POLICY AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ADDITIONALLY, THE COOPERATIVE ANNUALLY PUBLISHES ITS AUDITED BALANCE SHEET AND INCOME STATEMENT IN THE CO-OP POWER MAGAZINE PRIOR TO EACH ANNUAL MEETING. 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. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, LONG TERM DISABILITY AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND THE HIGHLY COMPENSATED EMPLOYEE IS COMPRISED OF ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN, AND THE INSURANCE PAID ON BEHALF OF AND 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 2B: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO 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: ALTHOUGH THE COOPERATIVE IS NOT A RURAL UTILITIES SERVICE (RUS) BORROWER, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) PRESCRIBED FOR RUS ELECTRIC BORROWERS. 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 THEIR 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, 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 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 FOR THE 2023 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS IS 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, 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 $ 4,181,820 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (146,370) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (276,354) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,666,101 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 261,404 TOTAL WAGES ACCRUED AND/OR PAID $ 5,686,601 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS & OTHER $ 2,104,563 OFFICE SUPPLIES 475,222 OUTSIDE SERVICES 201,316 REGULATORY COMMISSION 78,613 DIRECTORS 162,912 PUBLIC RELATIONS 248,164 DUES 16,638 ANNUAL MEETING 47,882 MISCELLANEOUS GENERAL 72,229 DONATIONS 57,592 MAINTENANCE OF GENERAL PLANT 302,610 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,767,741 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (57,592) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,504,421) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (694,697) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (146,370) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,364,661 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 3,042,837. PATRONAGE CAPITAL RETIRED - TOTAL -1,835,269. PATRONAGE CAPITAL RETIRED - RECLAIMED (PAID) 1,509. PATRONAGE CAPITAL RETIRED - DISCOUNT 2,234. OCI - PROVISION FOR PENSIONS AND BENEFITS 352,736. FORM 990, PART XII, LINE 2C: THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. PENTEX ENERGY SOLUTIONS LLC PO BOX 530 MUENSTER TX 76252 934651188 SOLAR SALES & INSTALLATIONS TX 0 0 COOKE COUNTY ELECTRIC COOPERATIVE ASSOC COOKE COUNTY ELECTRIC CHARITABLE FOUNDATION PO BOX 530 MUENSTER TX 762520530 352477483 DISBURSEMENT OF FUNDS FOR CHARITABLE PURPOSES IN THE COOP'S SERVICE AREA TX 501(C)(3) LINE 7 COOKE COUNTY ELECTRIC COOPERATIVE ASSOCIATION 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 COOKE COUNTY ELECTRIC CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 COOKE COUNTY ELECTRIC CHARITABLE FOUNDATION O N/A - LESS THAN $50,000