2024-11-08T08:17:57-06:00 2023-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2023-01-01 740828412 PEDERNALES ELECTRIC COOPERATIVE INC PEDE 8008684732 PO BOX 1 JOHNSON CITY TX 78636 RANDY KRUGER CFO 8308684984 2024-11-05 1 0 WILLIAM M MILLER P00439459 8067473806 2024-11-05 X 2023 2024-10-15 13:58:12Z JULIE PARSLEY CEO PO BOX 1 JOHNSON CITY TX 78636 883001027 0 X WWW.PEC.COOP X 1938 TX TO DELIVER LOW-COST, RELIABLE AND SAFE ELECTRIC ENERGY TO THE MEMBERS OF THE COOPERATIVE. 7 7 1015 0 0 0 0 0 831272055 877807193 2830475 587003 4315301 4359185 838417831 882753381 0 0 38148351 52777517 61995130 74773862 0 0 0 725825092 751878060 825968573 879429439 12449258 3323942 2075295828 2211992643 1239020437 1330888679 836275391 881103964 WE ARE COMMITTED TO DELIVERING LOW-COST, RELIABLE, AND SAFE ENERGY FOR OUR MEMBERS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 403,712 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 229 0 1015 1 0 0 0 0 0 914543793 91052110 0 0 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X RANDY KRUGER CFO 8308684984 201 SOUTH AVENUE F JOHNSON CITY TX 78636 X AMY LEA SJ AKERS DIRECTOR 10.00 X 36100 0 0 TRAVIS COX SECRETARY/TREASURER 13.00 X X 36600 0 0 MARK EKRUT PRESIDENT 18.00 X X 37200 0 0 PAUL GRAF VICE PRESIDENT 14.30 X X 37200 0 0 JAMES OAKLEY DIRECTOR 8.00 X 36100 0 0 EMILY PATAKI DIRECTOR 14.00 X 36100 0 0 MILTON RISTER DIRECTOR 10.00 X 36600 0 0 JULIE PARSLEY CHIEF EXECUTIVE OFFICER 53.00 X 833543 0 47234 EDWARD A DAUTERIVE CHIEF OPERATIONS OFFICER 65.00 X 507557 0 97670 RANDY KRUGER CHIEF FINANCIAL OFFICER 50.00 X 545188 0 65400 DON BALLARD GENERAL COUNSEL 58.00 X 551531 0 47141 JOHN URBAN EVP - EXTERNAL RELATIONS 50.00 X 412492 0 70371 DAVID THOMPSON VP - MARKETS 50.00 X 361222 0 66140 TIMOTHY NANCE VP - MEMBER RELATIONS 40.00 X 314272 0 68941 STEPHEN MALDONADO VP - OPERATIONS 65.00 X 362971 0 161517 JOSE TREVINO VP - ENGINEERING 48.00 X 397040 0 58868 NATHANIEL FULMER VP - WORKFORCE & SAFETY OP 50.00 X 351937 0 51377 AISHA HAGEN ASSOCIATE GENERAL COUNSEL 40.00 X 364466 0 50117 CHRISTIAN POWELL VP - COMPLIANCE & REGULATORY 55.00 X 360439 0 62788 KATHERINE JONES CONTROLLER 45.00 X 355950 0 65193 JOHN WARREN DIR OF TRANSMISSION CONTROL CENTER 47.00 X 258688 0 54392 PAUL LOCHTE DIR OF ENGINEERING AND PLANNING 48.00 X 253014 0 101614 6486210 0 1068763 395 0 1 0 JAMES POWER LINE CONSTRUCTION 43 SHOOTING CLUB ROAD BOERNE TX 78006 ELECTRIC DIST LINE CONSTRUCTION 15294295 LAMBDA CONSTRUCTION LTD 211 JESSES CR NEW BRAUNFELS TX 78132 CONSTRUCTION 11101911 PANNELL CONTRACTING LLC 206 PARK LN BLANCO TX 78606 CONSTRUCTION 8628439 JRD LLC 10103 N DIVISION ST SUITE 106 SPOKANE WA 99218 CONSTRUCTION 6716101 HOLDER CONSTRUCTION GROUP LLC 15455 DALLAS PKWY SUITE 350 ADDISON TX 75001 CONSTRUCTION 6664402 88 X SALES OF ELECTRICITY 221000 829599651 829599651 TRANSMISSION ACCESS 221000 26729117 26729117 CUSTOMER SERVICE FEES 221000 9811639 9811639 TRANSMISSION LEASE 221000 4783618 4783618 PATRONAGE DIVIDENDS 221000 3874885 3874885 3008283 3008283 877807193 662407 7095 655312 172242 247646 -75404 -75404 -75404 POLE ATTACHMENT INCOME 221000 4359185 4359185 4359185 882753381 877738884 0 5014497 X 52777517 5628312 53456105 5787883 5804864 4096698 44587166 91399068 PURCHASED POWER 510060390 DISTRIBUTION EXPENSE 58960423 ADMIN & GENERAL EXPENSE 20802889 CONSUMER EXPENSE 19198791 6869333 879429439 4091355 9387692 5000000 32031672 33246836 36753718 52380454 2025596 3630644 2406557332 398235071 1880474992 2008322261 17880318 20291386 97038177 84733370 2075295828 2211992643 92671979 113421533 101037 96425 1035154995 1125382139 111092426 91988582 1239020437 1330888679 X 15988077 16764167 0 0 820287314 864339797 836275391 881103964 2075295828 2211992643 X 3323942 41504631 X X 0 1 X 1 0 0 1 X 40659795 40659795 103109244 27699031 75410213 2107363037 370527187 1736835850 155425256 8853 155416403 2008322261 ACCRUED OPERATING TAXES & FEES 13652968 ACCUMULATED PROVISION FOR PENSION AND BENEFITS 30580818 CONSUMER DEPOSITS 8165427 POST RETIREMENT MEDICAL BENEFITS DEFERRED CREDIT 38086750 DEFERRED CREDIT - REGULATORY LIABILITY 1373751 PEC POWER OF CHANGE & COMMUNITY GRANTS LIABILITY 128868 91988582 X 882753381 0 882753381 0 882753381 826651922 0 826651922 52777517 52777517 879429439 PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE ESTABLISHED AN ENERGY EFFICIENCY ASSISTANCE FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. AMOUNTS DELIVERED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE REPORTED TO THE STATE OF TEXAS AND CAN ONLY BE USED TO ASSIST MEMBERS OF AN ELECTRIC COOPERATIVE IN REDUCING THEIR ENERGY CONSUMPTION AND ELECTRICITY BILLS. ANY AMOUNTS SO DELIVERED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE FOLLOWS 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) AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED 52,777,517. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS FOR SCHEDULE D, PART VIII HAS BEEN LEFT BLANK. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID (I.E. 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 CAPITAL. BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, THE AMOUNT OF PATRONAGE DIVIDENDS ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". X X X 0 0 0 JULIE PARSLEY CHIEF EXECUTIVE OFFICER 651017 0 160962 0 21564 0 33000 0 14234 0 880777 0 0 0 RANDY KRUGER CHIEF FINANCIAL OFFICER 392919 0 131515 0 20754 0 33000 0 32400 0 610588 0 0 0 EDWARD A DAUTERIVE CHIEF OPERATIONS OFFICER 389057 0 97671 0 20829 0 56893 0 40777 0 605227 0 0 0 DON BALLARD GENERAL COUNSEL 398073 0 131510 0 21948 0 33000 0 14141 0 598672 0 0 0 STEPHEN MALDONADO VP - OPERATIONS 273768 0 80280 0 8923 0 125428 0 36089 0 524488 0 0 0 JOHN URBAN EVP - EXTERNAL RELATIONS 306160 0 87482 0 18850 0 31865 0 38506 0 482863 0 0 0 JOSE TREVINO VP - ENGINEERING 274764 0 103298 0 18978 0 28269 0 30599 0 455908 0 0 0 DAVID THOMPSON VP - MARKETS 271991 0 69748 0 19483 0 28269 0 37871 0 427362 0 0 0 CHRISTIAN POWELL VP - COMPLIANCE & REGULATORY 266748 0 74729 0 18962 0 22442 0 40346 0 423227 0 0 0 KATHERINE JONES CONTROLLER 269629 0 67336 0 18985 0 28269 0 36924 0 421143 0 0 0 AISHA HAGEN ASSOCIATE GENERAL COUNSEL 276860 0 67336 0 20270 0 26077 0 24040 0 414583 0 0 0 NATHANIEL FULMER VP - WORKFORCE & SAFETY OP 275888 0 57154 0 18895 0 28504 0 22873 0 403314 0 0 0 TIMOTHY NANCE VP - MEMBER RELATIONS 159757 0 141195 0 13320 0 44642 0 24299 0 383213 0 0 0 PAUL LOCHTE DIR OF ENGINEERING AND PLANNING 219045 0 30520 0 3449 0 61794 0 39820 0 354628 0 0 0 JOHN WARREN DIR OF TRANSMISSION CONTROL CENTER 220708 0 20995 0 16985 0 22852 0 31540 0 313080 0 0 0 FORM 990, PART I, LINE 19: THE NET INCOME REPORTED ON PART I, LINE 19 INCLUDES AN EXPENSE FOR PATRONAGE DIVIDENDS ALLOCATED TO THE PATRONS BASED ON NET OPERATING INCOME(LOSS). IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET OPERATING INCOME(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL REFLECT THE AMOUNT OF NON-OPERATING INCOME(LOSS) NOT ALLOCATED. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19, HOWEVER, REPORTS NET INCOME OF $3,323,942, WHICH INCLUDES THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE AND THE RETAINAGE OF NON-OPERATING MARGINS. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS JUST AND REASONABLE 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, PAGE 1 , PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE PLUS NON-OPERATING MARGINS RETAINED. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: ACCRUED UNBILLED REVENUE 12/31/23 $31,311,163 LESS: ACCRUED UNBILLED REVENUE 12/31/22 (28,862,646) ADD: NON-OPERATING MARGINS 875,425 (A) - NET INCOME ON PAGE 1,PART I, LINE 19 $ 3,323,942 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $52,777,517 TOTAL 2023 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $56,101,459 FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE OR ENERGY 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 THROUGH USE OF SINGLE MEMBER VOTING DISTRICTS VOTING METHODOLOGY. 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. AMENDMENTS TO ARTICLES OF INCORPORATION ADDITIONALLY, PEC BYLAWS PROVIDED TO THE MEMBERSHIP THE POWER TO REMOVE DIRECTORS FROM THE BOARD BY MAJORITY VOTE EITHER BY FULL MEMBERSHIP OR BY DISTRICT. IF THE VOTE IS FOR THE FULL MEMBERSHIP, THE PETITION MUST BE SIGNED BY 5% OF THE MEMBERSHIP. IF THE VOTE IS LIMITED TO THE DIRECTOR'S DISTRICT, THEN THE PETITION MUST BE SIGNED BY 15% OF THE MEMBERS OF THE RESPECTIVE DISTRICT. 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 AUDIT COMMITTEE FOR AN INITIAL REVIEW. SUBSEQUENT TO AUDIT COMMITTEE PRESENTATION, A COPY IS PROVIDED TO THE BOARD FOR FINAL REVIEW AND APPROVAL. THIS ACTION WAS TAKEN AT THE BOARD MEETING BEFORE FILING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C THE CONFLICT OF INTEREST POLICY REQUIRES ANNUAL AND ONGOING COMPLETION OF A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM BY ALL DIRECTORS, OFFICIALS OR DISCLOSING EMPLOYEES OF THE COOPERATIVE, INCLUDING OFFICERS AND EXECUTIVES. THE FORM, WHICH IS PART OF THE POLICY, INCLUDES AN AFFIRMATION THAT THE INDIVIDUAL WILL INFORM THE BOARD OF ANY NEW CONFLICT AFFECTING THEMSELVES OR ANY OTHER PERSON. EACH YEAR, THESE DOCUMENTS ARE SOLICITED AND GATHERED BY THE CUSTODIAN OF THESE RECORDS, WHICH INCLUDES THE BOARD'S SECRETARY FOR BOARD MEMBERS AND THE COOPERATIVE'S ETHICS AND COMPLIANCE OFFICER AND HUMAN RESOURCES DEPARTMENT FOR APPLICABLE EMPLOYEES. APPLICABLE PERSONS WHO JOIN THE COOPERATIVE ARE SUBJECT TO ADHERE TO THE POLICY AND ARE REQUIRED TO FILE THE FORM AT THE OUTSET OF THEIR EMPLOYMENT OR DIRECTORSHIP. THE COMPLETED BOARD OF DIRECTORS DISCLOSURE AFFIRMATIONS ARE FORMALLY ACCEPTED BY THE BOARD PRESIDENT IN A MEETING OPEN TO THE PUBLIC AND ARE PART OF THE PUBLIC MINUTES OF THE COOPERATIVE. THE POLICY ALSO REQUIRES ANNUAL TRAINING REGARDING CONFLICTS OF INTERESTS FOR THE ENTIRE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 15 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER IS ANNUALLY REVIEWED AND ADJUSTED BASED ON THE CEO PERFORMANCE EVALUATION POLICY. PURSUANT TO THE POLICY, THE VICE PRESIDENT OF THE BOARD IS DELEGATED THE RESPONSIBILITY FOR FACILITATING THE ANNUAL PERFORMANCE EVALUATION PROCESS. SUCH ANNUAL PROCESS INCLUDES AN EVALUATION BY EACH DIRECTOR OF THE CEO'S ACHIEVEMENT OF CORPORATE METRICS AS DEFINED IN THE COOPERATIVE'S CURRENT STRATEGIC PLAN, THE ACHIEVEMENT OF CURRENT YEAR STRATEGIC INITIATIVES AND THE FULFILLMENT OF HIS/HER PRIMARY MANAGEMENT RESPONSIBILITIES. THE CEO ALSO PERFORMS A SELF-ASSESSMENT WITH RESPECT TO THE SAME CRITERIA. THE VICE PRESIDENT COMPILES AND DISCUSSES THE RESULTS WITH THE BOARD IN EXECUTIVE SESSION. THE CONSENSUS ARRIVED AT FOLLOWING THESE DISCUSSIONS AND THE SETTING OF GOALS FOR THE CEO FOR THE UPCOMING YEAR ARE USED FOR ADJUSTING COMPENSATION. COMPENSATION FOR THE EXECUTIVES AND SENIOR LEADERSHIP IS ESTABLISHED BY WRITTEN GUIDELINES FOR EXECUTIVES AND SENIOR LEADERSHIP ESTABLISHED BY THE CEO OR AS CONSISTENT WITH OBJECTIVE THIRD PARTY ASSESSMENTS AND BENCHMARKING. THE COMPENSATION FOR ALL OTHER EMPLOYEES OF THE COOPERATIVE, INCLUDING THOSE MEETING THE DEFINITION OF EMPLOYEE OFFICER AND KEY EMPLOYEE, IS GOVERNED BY THE EMPLOYEE COMPENSATION POLICY AND IS SET BASED ON A COMPREHENSIVE COMPENSATION ASSESSMENT THAT IS RUN ANNUALLY TO DETERMINE MARKET VALUE FOR THE RESPECTIVE POSITIONS. THE CEO IS RESPONSIBLE FOR IMPLEMENTING THE POLICY AND MAY USE OUTSIDE CONSULTANTS AND EXPERTS TO PROVIDE OBJECTIVE ASSESSMENTS AND BENCHMARKING COMPARISONS TO INDUSTRY-WIDE COMPENSATION TRENDS AND SURVEYS IN ORDER TO SET THE MARKET VALUE OF EACH RESPECTIVE POSITION. SUCH BENCHMARKING COMPARISONS INCLUDE OTHER COOPERATIVES, PUBLIC UTILITIES AND PRIVATELY-OWNED OR INVESTOR-OWNED UTILITIES AS COMPARED TO THE SIZE AND COMPLEXIBILITY OF THE COOPERATIVE. COMPENSATION IS THEN TARGETED FOR 75% OF A POSITION'S MARKET VALUE. OTHER FACTORS FOR SETTING COMPENSATION INCLUDE THE NATURE AND QUALIFICATIONS FOR THE JOB, TRAINING, EXPERIENCE, INDIVIDUAL PERFORMANCE WITH RESPECT TO PERFORMANCE METRICS, FINANCIAL RESOURCES OF THE COOPERATIVE AND OTHER RELEVANT FACTORS. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE'S GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, ALL OTHER BOARD OPERATING POLICIES AND FINANCIAL STATEMENTS FOR THE MOST RECENTLY COMPLETED CALENDAR YEAR ARE AVAILABLE TO THE PUBLIC ON THE COOPERATIVE'S WEBSITE AT HTTPS://WWW.PEC.COOP/ABOUT-US/YOUR-COOPERATIVE/DOCUMENT-CENTER/. MEMBERS OF THE COOPERATIVE MAY BE ABLE TO REQUEST EXISTING RECORDS NOT POSTED ON THE WEBSITE THROUGH THE OPEN RECORDS REQUEST PROCESS OUTLINED ON THE COOPERATIVE'S WEBSITE. FORM 990, PART VII, COLUMN F: IN ORDER TO PROVIDE RETIREMENT BENEFITS, THE COOPERATIVE PROVIDES A DEFINED BENEFIT PLAN TO EMPLOYEES MEETING THE ELIGIBILITY REQUIREMENTS. HOWEVER, THE PLAN WAS CLOSED TO NEW PARTICIPANTS AFTER JANUARY 1, 2006. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF THE PLAN. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION, AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNT REPORTED ON PART VII COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE ASSOCIATED WITH PARTICIPATION IN THE DEFINED BENEFIT PLAN, IF APPLICABLE,THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE 401(K) PLAN AND INSURANCE PAID ON BEHALF OF AND FOR BENEFIT OF THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES. IN ADDITION TO THE ABOVE PLANS, THE COOPERATIVE ALSO PROVIDES ELIGIBLE PARTICIPANTS POST- RETIREMENT MEDICAL 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 COOPERATIVE UTILIZES THE UNIFORM SYSTEM OF ACCOUNTS (USOA) ESTABLISHED BY THE RURAL UTILITIES SERVICE (RUS). IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) ACCOUNTING STANDARDS CODIFICATION (ASC) 980, REGULATED OPERATIONS, THE COOPERATIVE RECORDS CERTAIN ASSETS AND LIABILITIES IN ACCORDANCE WITH THE ECONOMIC EFFECTS OF THE RATE MAKING PROCESS. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. FOR FORM 990 REPORTING PURPOSES, THE COOPERATIVE SEPARATELY REPORTS DONATIONS, SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS ACCOUNTING SYSTEM. OTHER EXPENSES DESCRIBED IN LINES 1-23, HOWEVER, ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE USOA. FORM 990, PART IX, LINE 24D: ADMINISTRATIVE AND GENERAL EXPENSES ARE COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS & OTHER $16,366,551 OFFICE SUPPLIES 10,122,994 PROFESSIONAL SERVICES 3,223,656 INJURIES & DAMAGES 767,739 PENSION & BENEFITS 96,071 MISCELLANEOUS GENERAL 4,889,735 RENTS 380,153 SALES 1,734,608 MAINTENANCE OF GENERAL PLANT 4,900 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $37,586,407 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (255,900) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (12,884,854) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (3,642,764) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $20,802,889 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 SCHDULE RECONCILES AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 59,084,417 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (255,900) LESS: EMPLOYEE OFFICER AND KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (734,659) PLUS: SALARIES & WAGES ALLOCATED TO PURCHASED POWER EXPENSE 705,589 PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 36,298,945 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 20,189,778 TOTAL WAGES ACCRUED AND/OR PAID $115,288,170 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 JUST AND REASONABLE 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 NONPROFIT OPERATION ARTICLE OF THE COOPERATIVE'S BYLAWS. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2023 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 24A: THE COOPERATIVE'S WHOLESALE POWER SUPPLIERS ARE THE LOWER COLORADO RIVER AUTHORITY, AEP ENERGY PARTNERS INC., KING CREEK WIND FARM 1 LLC, LUMINANT ENERGY COMPANY LLC, SHELL ENERGY NORTH AMERICA (US) L.P., MORGAN STANLEY CAPITAL GROUP, WSC ENERGY, SUNBEAM SOLAR OPERATIONS LLC (LUMINANCE), AND GREENSTREET ENERGY PARTNERS THROUGH ITS SUBSIDIARIES PEDERNALES SOLAR ENERGY IV LLC, PEDERNALES SOLAR ENERGY V LLC, PEDERNALES SOLAR ENERGY XIII LLC, AND PEDERNALES SOLAR ENERGY XIV LLC. THE $510,060,390 OF PURCHASED POWER EXPENSE, REPORTED ON LINE 24A, IS COMPRISED OF PAYMENTS MADE TO WHOLESALE POWER SUPPLIERS AND AN ALLOCATION OF POWER SUPPLY EXPENSES. FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TRANSMISSION $ 5,463,260 TAXES 1,406,073 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 6,869,333 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED 52,777,517. PATRONAGE CAPITAL RETIRED - TOTAL -45,074,689. PATRONAGE CAPITAL RETIRED - DISCOUNT 32,150,288. NET CHANGE IN MEMBERSHIPS 776,090. TRANSFERS TO OTHER EQUITIES 875,425. FORM 990, PART XII, LINE 2C: THE BOARD OF DIRECTORS ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE AND RECOMMEND THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. THE PEDERNALES ELECTRIC COOPERATIVE SCHOLARSHIP FUND 201 S AVENUE F JOHNSON CITY TX 78636 742897600 TO PROVIDE SCHOLARSHIPS FOR POST-SECONDARY AND TECHNICAL EDUCATION TX 501(C)(3) PF PEDERNALES ELECTRIC COOPERATIVE INC 1 PEC UNITED CHARITIES INC PO BOX 1 JOHNSON CITY TX 78636 742491188 TO SUPPORT CHARITABLE CAUSES OF OTHER 501(C)(3) ORGANIZATONS TX 501(C)(3) LINE 10 PEDERNALES ELECTRIC COOPERATIVE INC 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 1 1 0 THE PEDERNALES ELECTRIC COOPERATIVE SCHOLARSHIP FUND O N/A LESS THAN $50,000 THE PEDERNALES ELECTRIC COOPERATIVE SCHOLARSHIP FUND N N/A LESS THAN $50,000 THE PEDERNALES ELECTRIC COOPERATIVE SCHOLARSHIP FUND Q N/A LESS THAN $50,000 PEC UNITED CHARITIES O N/A LESS THAN $50,000 PEC UNITED CHARITIES R 195841 EMPLOYEE PAYROLL DEFERRALS PEC UNITED CHARITIES B 100000 POWER OF CHANGE MEMBER PROGRAM PEC UNITED CHARITIES N N/A LESS THAN $50,000