2021-11-15T11:39:27-06:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 740811772 NUECES ELECTRIC COOPERATIVE INC NUEC 3613872581 14353 COOPERATIVE AVE ROBSTOWN TX 78380 VARZAVAND IRANI CEO 3613872581 2021-10-27 1 VARZAVAND IRANI 999009999 WILLIAM M MILLER P00439459 8067473806 2021-10-27 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z VARZAVAND IRANI 14353 COOPERATIVE AVE ROBSTOWN TX 78380 97463364 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 93 0 0 0 0 0 114022319 94721012 1091930 1114452 67548 1536731 115181797 97372195 49367 48387 12223678 11268620 6260420 6325401 0 0 0 97091655 81995133 115625120 99637541 -443323 -2265346 206673260 210472027 95214307 95536004 111458953 114936023 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 46,464 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 76 0 93 1 0 0 0 0 0 92643192 4233291 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 3.60 X X 20400 0 0 DAVID ROSSE SECRETARY/TREASURER 6.10 X X 19500 0 0 LOUIS W HARTMAN VICE PRESIDENT 5.90 X X 18600 0 0 GLADYS LIPPINCOTT DIRECTOR 2.70 1.00 X 18300 0 0 DONALD WAYNE HERRMANN DIRECTOR 4.80 1.00 X 18300 0 0 GREGG TRUESDALE DIRECTOR 3.80 1.00 X 18300 0 0 RUMALDO JUAREZ DIRECTOR 3.90 1.00 X 18000 0 0 JUAN ALVARADO DIRECTOR 4.00 X 17400 0 0 SARAH FISHER ASSISTANT GENERAL MANAGER & CCO 50.00 X 175917 0 105048 VARZAVAND IRANI CEO 50.00 X 201261 0 73203 ADRIANA PENA CFO 45.00 X 142163 0 92101 FRANK WILSON CRO 44.00 X 130966 0 73624 ROBERT HOLLOWAY LINEMAN 50.00 X 141667 0 49102 JUAN RIVERA LINEMAN 49.00 X 137648 0 46042 CHRISTOPHER TINER LINEMAN 43.00 X 126661 0 56598 MANUEL MAYORGA LINE SUPERINTENDENT 55.00 X 117783 0 60503 RAYMUNDO PINA LINEMAN 42.00 X 116832 0 45825 1439698 0 602046 18 0 1 0 URBAN ELECTRICAL SERVICES INC PO BOX 219 CARRIZO SPRINGS TX 78834 LINE CONSTRUCTION 1272959 SOUTH TEXAS ELECTRIC CO-OP INC PO BOX 119 NURSERY TX 77976 RETAIL BILLING 1188134 MOREHEAD DOTTS & ASSOCIATES 545 N UPPER BROADWAY CORPUS CHRISTI TX 78401 ADVERTISING 1124700 ASPLUNDH TREE EXPERT CO 1700 SOLUTION CENTER CHICAGO IL 60677 TREE TRIMMING 735176 ENERGY SERVICES GROUP LLC 141 LONGWATER DR SUITE 113 NORWELL MA 02061 RETAIL BILLING SYSTEM 447148 14 X SALES OF ELECTRICITY 221000 89679208 89679208 PATRONAGE DIVIDENDS 221000 3611131 3611131 DISTRIBUTION SERVICES 221000 755220 755220 SERVICE FEES 221000 665999 665999 OTHER PROGRAM REVENUE 221000 9454 9454 94721012 1069906 1069906 1725 0 1725 1725 1725 45550 1004 44546 44546 44546 113118 90165 22953 22953 PPP LOAN FORGIVENESS 221000 1464800 1464800 POLE ATTACHMENT INCOME 221000 47253 47253 1512053 97372195 94743965 0 2628230 X 45887 2500 11268620 1143083 3533050 489720 846689 312859 3401367 4279441 PURCHASED POWER 62618932 ADMIN & GENERAL EXPENSE 4046266 CONSUMER EXPENSE 3128431 DISTRIBUTION EXPENSE 2433011 2087685 99637541 5750877 8091592 3098274 3145402 1932816 1915598 1218009 1016543 148047161 29880024 117261609 118167137 28810289 29572058 43819884 46049826 4781502 2513871 206673260 210472027 7831903 7611052 6306774 6678837 344234 300990 75377438 75091646 5353958 5853479 95214307 95536004 X 449800 492770 0 0 111009153 114443253 111458953 114936023 206673260 210472027 X -2265346 5742416 X X 0 1 X 1 0 0 1 X 1234601 1234601 26839874 4922892 21916982 119314875 24957132 94357743 657811 657811 118167137 TREASURY STRIPS 29572058 C 29572058 CAPITAL TERM CERTIFICATES 738569 C PATRONAGE CAPITAL - STEC 40372535 C PATRONAGE CAPITAL - CFC 259230 C PATRONAGE CAPITAL - TEC 991821 C PATRONAGE CAPITAL - NISC 169840 C PATRONAGE CAPITAL - COBANK 2110842 C PATRONAGE CAPITAL - FEDERATED 494029 C PATRONAGE CAPITAL - CRC 29323 C PATRONAGE CAPITAL - NRTC 108541 C PATRONAGE CAPITAL - VALLEY TELEPHONE 1483 C OTHER INVESTMENTS - RESTRICTED ENERGY DEPOSIT & SCHOLARSHIP FUND 771478 C MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 2135 C 46049826 CONSUMER DEPOSITS 2148710 ADVANCES FOR CONSTRUCTION 2601222 UNCLAIMED PATRONAGE CAPITAL PAYABLE 715299 ACCRUED OPERATING TAXES 388248 5853479 X 96586750 0 96586750 785445 785445 97372195 87583476 0 87583476 12054065 12054065 99637541 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 785,445. PART XII, LINE 4B - OTHER ADJUSTMENTS: NON-OPERATING EXPENSE RECLASSIFIED AS FORM 990 EXPENSE 785,445. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 11,268,620. 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". PATRONAGE DIVIDENDS ARE ALLOCATED ON A PATRONAGE BASIS AND DONE SO PURSUANT TO A PRE-EXISTING OBLIGATION AS PROVIDED FOR IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. 0 MORALE WELFARE & RECREATION 9201 GATEWAY BLVD S EL PASO TX 79924 263384153 501(C)(3) 15000 WINGS OVER SOUTH TEXAS 2020 NUECES CHARITIES INC 14353 COOPERATIVE AVE CORPUS CHRISTI TX 78380 742756238 501(C)(3) 10000 CHARITIES DONATIONS 2020 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 SARAH FISHER ASSISTANT GENERAL MANAGER & CCO 135500 0 12728 0 27689 0 75765 0 29283 0 280965 0 0 0 VARZAVAND IRANI CEO 168178 0 14283 0 18800 0 46503 0 26700 0 274464 0 0 0 ADRIANA PENA CFO 115622 0 10441 0 16100 0 63328 0 28773 0 234264 0 0 0 FRANK WILSON CRO 105432 0 8914 0 16620 0 45104 0 28520 0 204590 0 0 0 ROBERT HOLLOWAY LINEMAN 135820 0 219 0 5628 0 23279 0 25823 0 190769 0 0 0 JUAN RIVERA LINEMAN 132805 0 290 0 4553 0 30669 0 15373 0 183690 0 0 0 CHRISTOPHER TINER LINEMAN 117177 0 160 0 9324 0 30788 0 25810 0 183259 0 0 0 MANUEL MAYORGA LINE SUPERINTENDENT 109669 0 5398 0 2716 0 34484 0 26019 0 178286 0 0 0 RAYMUNDO PINA LINEMAN 109870 0 289 0 6673 0 18533 0 27292 0 162657 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. SARAH FISHER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,975 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,790 TOTAL REPORTED IN COLUMN C $ 75,765 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (69,975) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,752 EXPENSE TO THE COOPERATIVE $ 34,542 VARZAVAND IRANI: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 39,966 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,537 TOTAL REPORTED IN COLUMN C $ 46,503 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (39,966) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,860 EXPENSE TO THE COOPERATIVE $ 40,397 ADRIANA PENA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,603 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,725 TOTAL REPORTED IN COLUMN C $ 63,328 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,603) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,753 EXPENSE TO THE COOPERATIVE $ 28,478 FRANK WILSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 40,759 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,345 TOTAL REPORTED IN COLUMN C $ 45,104 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (40,759) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,961 EXPENSE TO THE COOPERATIVE $ 26,306 ROBERT HOLLOWAY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 18,655 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,624 TOTAL REPORTED IN COLUMN C $ 23,279 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (18,655) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 15,684 EXPENSE TO THE COOPERATIVE $ 20,308 JUAN RIVERA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 26,234 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,435 TOTAL REPORTED IN COLUMN C $ 30,669 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (26,234) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 15,684 EXPENSE TO THE COOPERATIVE $ 20,119 CHRISTOPHER TINER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 26,631 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,157 TOTAL REPORTED IN COLUMN C $ 30,788 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (26,631) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 15,684 EXPENSE TO THE COOPERATIVE $ 19,841 MANUEL MAYORGA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 30,715 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,769 TOTAL REPORTED IN COLUMN C $ 34,484 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (30,715) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 19,435 EXPENSE TO THE COOPERATIVE $ 23,204 RAYMUNDO PINA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 14,651 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,882 TOTAL REPORTED IN COLUMN C $ 18,533 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (14,651) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 15,684 EXPENSE TO THE COOPERATIVE $ 19,566 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 LOSS OF $2,265,346, 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 12/31/20 $ 2,505,606 LESS: UNBILLED REVENUE 12/31/19 (4,770,952) (A) - DECREASE EQUALS NET LOSS ON PAGE 1 $(2,265,346) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $11,268,620 TOTAL 2020 NET MARGIN (A + B) $ 9,003,274 FORM 990, PART VI, SECTION A, LINE 4 BYLAW CHANGES: ON JANUARY 2, 2020 ARTICLE IV, SECTION 1, 3, AND 4 WERE AMENDED TO ADJUST THE NUMBER OF DIRECTORS FROM TEN TO EIGHT. ARTICLE VI, SECTION 1 AND 8 WERE ALSO AMENDED TO ELIMINATE THE POSITION OF ASSISTANT SECRETARY/TREASURER. 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 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 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 $ 4,676,133 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (148,800) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (343,976) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,603,733 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 486,785 TOTAL WAGES ACCRUED AND/OR PAID $ 6,273,848 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,427,808 OFFICE SUPPLIES 721,669 OUTSIDE SERVICES 333,641 INSURANCES 348,886 REGULATORY COMMISSION 309,588 DIRECTORS 180,049 DUES AND SUBSCRIPTIONS 97,203 ANNUAL MEETING 112,504 ADVERTISING 1,537,910 MISCELLANEOUS GENERAL 523,074 MAINTENANCE OF GENERAL PLANT 408,578 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 6,000,910 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (148,800) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,223,083) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (582,761) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 4,046,266 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 2020 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 $ 40,865 MILITARY PRIVATIZATION EXPENSES 785,445 PROPERTY AND GROSS RECEIPTS TAXES 1,261,375 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 2,087,685 FORM 990, PART IX, LINE 3: THE COOPERATIVE MADE A $2,500 CONTRIBUTION TO NRECA INTERNATIONAL TO ASSIST WITH BRINGING RURAL ELECTRIFICATION TO RURAL AREAS IN FOREIGN COUNTRIES. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 11,268,620. PATRONAGE CAPITAL RETIRED - TOTAL -5,725,788. PATRONAGE CAPITAL RETIRED - DISCOUNT 156,614. NET CHANGE IN MEMBERSHIPS 42,970. 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 O N/A - UNDER $50,000