2022-10-07T10:24:05-05:00 2021-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2021-01-01 740811772 NUECES ELECTRIC COOPERATIVE INC NUEC 3613872581 14353 COOPERATIVE AVE ROBSTOWN TX 78380 VARZAVAND IRANI CEO 3613872581 2022-10-04 1 VARZAVAND IRANI 999009999 WILLIAM M MILLER P00439459 8067473806 2022-10-04 X 3 AAL1 IAL1 2021 2022-09-23 18:48:47Z VARZAVAND IRANI 14353 COOPERATIVE AVE ROBSTOWN TX 78380 88851506 0 X WWW.NUECESELECTRIC.ORG X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 8 8 103 0 0 0 0 0 94721012 87521103 1114452 1132855 1536731 53807 97372195 88707765 48387 74584 11268620 6438361 6325401 6625432 0 0 0 81995133 75446437 99637541 88584814 -2265346 122951 210472027 212095793 95536004 94907125 114936023 117188668 THE MISSION OF NUECES ELECTRIC COOPERATIVE, INC, A MEMBER-OWNED COOPERATIVE, IS TO HELP OUR MEMBERS CONTINUALLY IMPROVE THEIR QUALITY OF LIFE BY PROVIDING RELIABLE AND COST EFFECTIVE ELECTRIC SERVICE IN A CULTURE WHERE SAFETY IS A PRIORITY. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 49,036 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 1 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 0 1 1 0 0 1 84 0 103 1 0 0 0 0 0 86807261 2625195 0 0 0 X 8 8 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X ADRIANA PENA CFO 3613872581 14353 COOPERATIVE AVE ROBSTOWN TX 78380 X BRIAN MENKING PRESIDENT 2.20 X X 19800 0 0 DAVID ROSSE SECRETARY/TREASURER 4.90 X X 19800 0 0 GLADYS LIPPINCOTT DIRECTOR 2.00 1.00 X 17400 0 0 LOUIS W HARTMAN VICE PRESIDENT 5.90 X X 17100 0 0 GREGG TRUESDALE DIRECTOR 3.10 1.00 X 17100 0 0 RUMALDO JUAREZ DIRECTOR 3.30 1.00 X 17100 0 0 DONALD WAYNE HERRMANN DIRECTOR 4.30 1.00 X 16800 0 0 JUAN ALVARADO DIRECTOR 4.20 X 16800 0 0 VARZAVAND IRANI CEO 50.00 X 264125 0 88369 SARAH FISHER COO/ASSISTANT GENERAL MANAGER 50.00 X 181718 0 125937 ADRIANA PENA CFO 46.00 X 150585 0 115603 FRANK WILSON CRO 48.00 X 141640 0 87108 CHRISTOPHER TINER JOURNEY LINE WORKER 55.00 X 142818 0 66048 ALBERT PENA JOURNEY LINE WORKER 50.00 X 125644 0 64480 JUAN RIVERA JOURNEY LINE WORKER 63.00 X 177340 0 54583 RAYMUNDO PINA JOURNEY LINE WORKER 54.00 X 137712 0 53005 ROBERT HOLLOWAY JOURNEY LINE WORKER 58.00 X 156395 0 56204 1619877 0 711337 13 0 1 0 SOUTH TEXAS ELECTRIC CO-OP INC PO BOX 119 NURSERY TX 77976 RETAIL BILLING 1646011 URBAN ELECTRICAL SERVICES INC PO BOX 219 CARRIZO SPRINGS TX 78834 LINE CONSTRUCTION 1237273 MOREHEAD DOTTS & ASSOCIATES 545 N UPPER BROADWAY CORPUS CHRISTI TX 78401 ADVERTISING 1119690 ENERGY SERVICES GROUP LLC 141 LONGWATER DR SUITE 113 NORWELL MA 02061 RETAIL BILLING SYSTEM 557426 ASPLUNDH TREE EXPERT CO 1700 SOLUTION CENTER CHICAGO IL 60677 TREE TRIMMING 544424 15 X SALES OF ELECTRICITY 221000 83341669 83341669 PATRONAGE DIVIDENDS 221000 2713295 2713295 DISTRIBUTION SERVICES 221000 768300 768300 SERVICE FEES 221000 652714 652714 OTHER PROGRAM REVENUE 221000 45125 45125 87521103 1128983 1128983 1725 0 1725 1725 1725 26403 22531 3872 3872 3872 125572 121210 4362 4362 POLE ATTACHMENT INCOME 221000 47720 47720 47720 88707765 87529337 0 1178428 X 74584 6438361 1296985 3737556 428636 832010 330245 3280309 4383335 PURCHASED POWER 55665628 ADMIN & GENERAL EXPENSE 4001362 CONSUMER EXPENSE 3526775 DISTRIBUTION EXPENSE 2226684 2362344 88584814 8091592 6300946 500000 3145402 2836669 1915598 1888101 1016543 997180 151329073 32419883 118167137 118909190 29572058 30064010 46049826 47962137 2513871 2637560 210472027 212095793 7611052 6837504 6678837 8239627 300990 263749 75091646 73618435 5853479 5947810 95536004 94907125 X 492770 514135 0 0 114443253 116674533 114936023 117188668 210472027 212095793 X 122951 2129694 X X 0 1 X 1 0 0 1 X 1234601 1234601 26888672 5596227 21292445 121974167 26823656 95150511 1231633 1231633 118909190 TREASURY STRIPS 30064010 C 30064010 CAPITAL TERM CERTIFICATES 738569 C PATRONAGE CAPITAL - STEC 42032365 C PATRONAGE CAPITAL - CFC 269299 C PATRONAGE CAPITAL - TEC 1039359 C PATRONAGE CAPITAL - NISC 181192 C PATRONAGE CAPITAL - COBANK 2313974 C PATRONAGE CAPITAL - FEDERATED 531282 C PATRONAGE CAPITAL - CRC 23921 C PATRONAGE CAPITAL - NRTC 108540 C PATRONAGE CAPITAL - VALLEY TELEPHONE 1570 C OTHER INVESTMENTS - RESTRICTED ENERGY DEPOSIT & SCHOLARSHIP FUND 719931 C MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 2135 C 47962137 CONSUMER DEPOSITS 1990077 ADVANCES FOR CONSTRUCTION 2784739 UNCLAIMED PATRONAGE CAPITAL PAYABLE 763551 ACCRUED OPERATING TAXES 409443 5947810 X 87930614 0 87930614 777151 777151 88707765 81369302 0 81369302 7215512 7215512 88584814 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. PART X, LINE 2: THE COOPERATIVE ADOPTED 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 POSITION 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 XI, LINE 4B - OTHER ADJUSTMENTS: NON-OPERATING EXPENSE RECLASSIFIED AS FORM 990 EXPENSE 777,151. PART XII, LINE 4B - OTHER ADJUSTMENTS: NON-OPERATING EXPENSE RECLASSIFIED AS FORM 990 EXPENSE 777,151. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,438,361. 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. THEREFORE, 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 CAPITAL THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. HOWEVER, 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 EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". 0 NUECES CHARITIES INC 14353 COOPERATIVE AVE CORPUS CHRISTI TX 78380 742756238 501(C)(3) 10000 0 CHARITIES DONATIONS 2021 BUCCANEER COMMISSION INC PO BOX 30404 CORPUS CHRISTI TX 78463 741144093 501(C)(3) 20500 0 2021 BUC DAY MILITARY APPRECIATION AND 2021 BUD DAY SPONSORSHIP. 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 0 0 0 VARZAVAND IRANI CEO 243854 0 19285 0 986 0 59627 0 28742 0 352494 0 0 0 SARAH FISHER COO/ASSISTANT GENERAL MANAGER 167773 0 11365 0 2580 0 96689 0 29248 0 307655 0 0 0 ADRIANA PENA CFO 139377 0 10456 0 752 0 85274 0 30329 0 266188 0 0 0 JUAN RIVERA JOURNEY LINE WORKER 176305 0 314 0 721 0 40850 0 13733 0 231923 0 0 0 FRANK WILSON CRO 131054 0 9404 0 1182 0 58224 0 28884 0 228748 0 0 0 ROBERT HOLLOWAY JOURNEY LINE WORKER 155737 0 216 0 442 0 29357 0 26847 0 212599 0 0 0 CHRISTOPHER TINER JOURNEY LINE WORKER 142371 0 178 0 269 0 39223 0 26825 0 208866 0 0 0 RAYMUNDO PINA JOURNEY LINE WORKER 137226 0 301 0 185 0 24705 0 28300 0 190717 0 0 0 ALBERT PENA JOURNEY LINE WORKER 124495 0 377 0 772 0 37608 0 26872 0 190124 0 0 0 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 ENVIORNMENT. 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. VARZAVAND IRANI: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 51,076 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,551 TOTAL REPORTED IN COLUMN C $ 59,627 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (51,076) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 36,594 EXPENSE TO THE COOPERATIVE $ 45,145 SARAH FISHER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 90,755 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,934 TOTAL REPORTED IN COLUMN C $ 96,689 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (90,755) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,835 EXPENSE TO THE COOPERATIVE $ 38,769 ADRIANA PENA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 80,281 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,993 TOTAL REPORTED IN COLUMN C $ 85,274 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (80,281) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 27,460 EXPENSE TO THE COOPERATIVE $ 32,453 JUAN RIVERA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 35,157 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,693 TOTAL REPORTED IN COLUMN C $ 40,850 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (35,157) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,798 EXPENSE TO THE COOPERATIVE $ 23,491 FRANK WILSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 53,576 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,648 TOTAL REPORTED IN COLUMN C $ 58,224 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (53,576) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,388 EXPENSE TO THE COOPERATIVE $ 30,036 ROBERT HOLLOWAY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 24,263 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,094 TOTAL REPORTED IN COLUMN C $ 29,357 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (24,263) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,798 EXPENSE TO THE COOPERATIVE $ 22,892 CHRISTOPHER TINER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 34,550 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,673 TOTAL REPORTED IN COLUMN C $ 39,223 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (34,550) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,798 EXPENSE TO THE COOPERATIVE $ 22,471 RAYMUNDO PINA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,155 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,550 TOTAL REPORTED IN COLUMN C $ 24,705 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,155) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,798 EXPENSE TO THE COOPERATIVE $ 22,348 ALBERT PENA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 33,508 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,100 TOTAL REPORTED IN COLUMN C $ 37,608 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (33,508) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,798 EXPENSE TO THE COOPERATIVE $ 21,898 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 A NET INCOME OF $122,951, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. 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 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, 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. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/21 $ 2,628,557 LESS: UNBILLED REVENUE 12/31/20 (2,505,606) (A) - INCREASE EQUALS NET INCOME ON PAGE 1 $ 122,951 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 6,438,361 TOTAL 2021 NET MARGIN (A + B) $ 6,561,312 FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR, THE COOPERATIVE'S BYLAW WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES MADE: ARTICLE VIII: NON-PROFIT OPERATION, SECTION 2. MEMBER CAPITAL IN CONNECTION WITH THE USE OF COOPERATIVE SERVICES WAS AMENDED TO CLARIFY: (1) SERVICES TO WHICH THE COOPERATIVE IS OBLIGATED TO PROVIDE ON A PATRONAGE BASIS (I.E. THE TERM "COOPERATIVE SERVICES REPLACED THE TERM "ELECTRIC ENERGY"); (2)AUTHORITY OF THE BOARD TO DETERMINE THE METHOD(S) FOR HANDLING HOW AN OPERATIN LOSS IS HANDLED PROVIDED THAT SUCH METHOD IS CONSISTENT WITH ACCEPTED ACCOUNTING PRACTICES, LOAN COVENANTS AND FEDERAL COOPERATIVE TAX LAW; (3) AUTHORITY OF THE BOARD TO ADOPT POLICIES FOR DETERMINING THE KIND, TIMING, METHOD AND TYPE OF CAPITAL CREDIT ALLOCATION; (4) AUTHORITY TO USE INCOME NOT DERIVED FROM THE PROVISION OF A COOPERATIVE SERVICE FOR NETTING AGAINST OPERATING LOSSES AND FOR ESTABLISHING UNALLOCATED RESERVES AND RETAINED CAPITAL NOT CURRENTLY DISTRIBUTABLE EXCEPT UPON DISSOLUTION; (5) THAT THE RIGHT OF OFFSET BY THE COOPERATIVE (I.E. THE PROCESS BY WHICH THE AMOUNT OF CAPITAL CREDITS APPROVED FOR RETIREMENT ARE REDUCED BY THE AMOUNTS OWED BY THE MEMBER TO THE COOPERATIVE) APPLIES TO THE PAYMENT AMOUNT; AND (6) THE PROCESS, INCLUDING RIGHT OF OFFSET, BY WHICH CAPTIAL CREDITS OF A MEMBER MAY BE ASSIGNED TO THE COOPERATIVE OR TO A SUCCESSOR IN INTEREST OR TO A SUCCESSOR IN OCCUPANCY. A COMPLETE COPY OF THE BYLAWS ARE LOCATED ON THE COOPERATIVE'S WEBSITE AT HTTPS://NUECESELECTRIC.ORG/TRANSPARENCY-AND-YOUR-COOPERATIVE. 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. AMENDMENT TO THE ARTICLES OF INCORPORATION 2. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 3. DISSOLUTION AND LIQUIDATION OF THE COOPERATIVE 4. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 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 PROVIDED A DRAFT COPY OF THE FORM 990 TO THE FULL BOARD VIA CALL TO ORDER PRIOR TO THE AUGUST MEETINGS OF BOTH THE FINANCE AUDIT COMMITTEE AND BOARD OF DIRECTORS (BOARD). MANAGEMENT THEN PRESENTED A COPY OF THE FORM 990 TO THE FINANCE AUDIT COMMITTEE FOR DISCUSSION AND REVIEW. FOLLOWING THIS DISCUSSION, THE CHAIR OF THE FINANCE AUDIT COMMITTEE PRESENTED A SUMMARY COMMITTEE REPORT TO THE BOARD AT ITS AUGUST MEETING. EACH MEMBER OF THE BOARD IS THEN GIVEN THE OPPORTUNITY REVIEW. TO THE EXTENT RECEIVED, ALL QUESTIONS WERE ADDRESSED DURING THE SEPTEMBER BOARD MEETING. AFTER WHICH, THE FORM 990 WAS FINALIZED AND FILED. FORM 990, PART VI, SECTION B, LINE 12C DIRECTORS, OFFICERS AND KEY EMPLOYEES ARE REQUIRED TO DISCLOSE IMMEDIATELY ANY RELATIONSHIPS CONSIDERED TO BE A POSSIBLE CONFLICT OF INTEREST. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS/GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE CEO USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S 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 WILL PROVIDE A COPY OF ITS CONFLICT OF INTEREST POLICY TO ANY MEMBER REQUESTING A COPY. THE COOPERATIVE ALSO PROVIDES A COPY OF THE SUMMARIZED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE IN THE ANNUAL REPORT. ADDITIONALLY, THE BYLAWS, ARTICLES OF INCORPORATION, AND FULL COPY OF AUDITED FINANCIAL STATEMENTS ARE ALSO POSTED TO THE COOPERATIVE'S WEBSITE FOR THE MOST RECENTLY COMPLETED CALENDAR YEARS. 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, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. 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 NO LONGER AN 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, 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 5,034,541 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (141,900) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (417,017) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 3,007 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,628,957 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 382,753 TOTAL WAGES ACCRUED AND/OR PAID $ 6,490,341 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,619,954 OFFICE SUPPLIES 662,835 OUTSIDE SERVICES 219,395 INSURANCES 354,229 REGULATORY COMMISSION 338,205 DIRECTORS 156,360 DUES AND SUBSCRIPTIONS 63,630 ANNUAL MEETING 161,385 ADVERTISING 1,556,441 MISCELLANEOUS GENERAL 598,879 MAINTENANCE OF GENERAL PLANT 441,982 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 6,173,295 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (141,900) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,401,345) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (628,688) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 4,001,362 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 2021 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 ARE COMPRISED OF THE FOLLOWING: OTHER DEDUCTIONS $ 254,700 MILITARY PRIVATIZATION EXPENSES 777,151 PROPERTY AND GROSS RECEIPTS TAXES 1,330,493 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 2,362,344 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,438,361. PATRONAGE CAPITAL RETIRED - TOTAL -4,730,573. PATRONAGE CAPITAL RETIRED - DISCOUNT 402,181. NET CHANGE IN MEMBERSHIPS 21,365. UNBILLED REVENUE -1,640. FORM 990, PART XII, LINE 2C: THE BOARD OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. NUECES ELECTRIC CHARITIES INC 14353 COOPERATIVE AVE ROBSTOWN TX 78380 742756238 BETTERING THE QUALITY OF LIFE OF CITIZENS WITHIN THE SERVICE AREA. TX 501(C)(3) LINE 7 NUECES ELECTRIC COOPERATIVE INC 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 NUECES ELECTRIC CHARITIES INC N N/A - UNDER $50,000 NUECES ELECTRIC CHARITIES INC B N/A - UNDER $50,000 NUECES ELECTRIC CHARITIES INC O N/A - UNDER $50,000