Heart of Texas Electric Cooperative Inc. was incorporated in 1937 to provide electricity to rural areas of Central Texas. The co-op has over 17,000 members and over 23,000 meters served by over 3,800 miles of line.
The co-op's service area includes parts of Bell, Bosque, Coryell, Falls, Hamilton, McLennan and Milam counties.
In order to receive electricity, a person must join the cooperative, which makes the person a member/owner. The member/owners elect a board from the general membership which sets policy and hires a General
Manager to operate the business. Three directors are elected each year on a rotating basis.
The co-op employs over 50 people in three departments - Operations, Administrative Services, and Member Services.
On July 1, 2007, members of McLennan County Electric Cooperative and Belfalls Electric Cooperative voted to consolidate operations, resulting in a new cooperative called Heart of Texas Electric Cooperative Inc.
Heart of Texas Electric Cooperative Resources
Contents
Section 2.4 – Member Classes. Based upon the Cooperative Service Used or to be Used by a Member, the Cooperative may group Members into classes (“Member Classes”) by amendment to these Bylaws as provided herein.................................................................................................................................... 9
Heart of Texas Electric Cooperative, Inc.
Bylaws
Article 1 – General
Section 1.1 – Usage. Within these Bylaws of Heart of Texas Electric Cooperative (“Cooperative”) as currently existing or as later amended (“Bylaws”), except as otherwise provided and subject to the context requiring otherwise:
- words and phrases have their customary and ordinary meaning;
- the singular use of a word includes the plural use and the plural use of a word includes the singular use;.
- the masculine use of a word includes the feminine and neutral uses, the feminine use of a word includes the masculine and neutral uses, and the neutral use of a word includes the masculine and feminine uses;
- the present tense of a word includes the past and future tenses, and the future tense of a word includes the present tense;
- the words “shall” and “must” are words of obligation, with “shall” meaning “has a duty to” and “must” meaning “is required to;”
- the word “may” is a word of discretion meaning “has discretion to,” “is permitted to,” “is authorized to,” or “is entitled to;”
- the words “may … only” are words of limited discretion and prohibition;
- the words “shall not,” “must not,” and “may not” are words of prohibition, with “shall not” meaning “has a duty not to,” “must not” meaning “is required not to,” and “may not” meaning “has no discretion to,” “is not permitted to,” “is not authorized to,” and “is not entitled to;”
- an exception to a word of obligation is a word of discretion and an exception to a word of discretion is a word of prohibition;
- the words “except as otherwise provided” and “subject to” are words of limitation and exception; and
- the words “include,” “includes,” and “including” mean “include without
limitation,” “includes without limitation,” and “including without limitation.”
Section 1.2 – Defined Terms. These Bylaws define certain words, phrases, and terms (“Defined Terms”). In general, Defined Terms are: (1) defined in a full sentence or part of a sentence; (2) capitalized, underlined, and enclosed within quotation marks when defined; (3) enclosed within parenthesis when defined in part of a sentence; and (4) capitalized when otherwise used in these Bylaws. Except as otherwise provided in these Bylaws and subject to the context requiring otherwise, Defined Terms have the meaning specified in the appropriate Bylaw.
The following Defined Terms are defined in the Bylaw noted in parenthesis:
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- Amended (9.2); Annual Member Meeting (3.1); Applicant (2.2); Appraisal (8.1);
Articles (1.3); Assets (2.2);
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- Board (2.1); Board Committee (5.7); Board Executive Committee (5.8); Board Meeting (5.3); Bylaws (1.1); Bylaw Provision (9.8);
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- C&E Committee (3.12); Capital Credits (7.2); Close Relative (4.12); Conflict of Interest Director Qualifications (4.3); Conflict of Interest Transaction (5.9); Consolidate (8.2); Consolidation Agreement (8.2); Cooperative (1.1); Cooperative
Equipment (2.2); Cooperative Officer (6.8); Cooperative Official (2.5); Cooperative Purpose (2.9); Cooperative Service (2.1); Cooperative Service Area (4.1); Cooperative Subsidiary (4.3);
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- Defined Terms (1.2); Director (2.6); Director Districts (4.1); Director Qualifications (4.3); Director Quorum (5.6); Director Removal Petition (4.8); Director Term (4.6); Director Written Consent (5.5);
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- Electing Members (4.5); Electronic Document (9.1); Entity (2.1);
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- General Director Qualifications (4.3); Governing Documents (2.2);
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- Indemnification Advance (6.13); Indemnification Director or Officer (6.13); Indemnification Director Quorum (6.13); Indemnification Expenses (6.13); Indemnification Individual (6.13); Indemnification Party (6.13); Indemnification Proceeding (6.13); Indemnification Standard of Conduct (6.13);
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- Joint Members (2.6); Joint Membership (2.6);
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- Law (1.3); Location (2.1);
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- Mail Ballot (3.8); Mail Ballot With Member Meeting (3.8); Member (2.3); Member Challenge (3.12); Member Classes (2.4); Member Committee (5.7);
Member Demand (3.2); Member Equipment (2.2); Member Meeting (3.3); Member Meeting Issues (3.12); Member Meeting List (3.7); Member Meeting Waiver of Notice (3.8); Member Petition (4.4); Member Petition Nominations (4.4); Member Property (2.7); Member Quorum (3.9); Member Voting Document
(3.11); Membership Director Qualifications (4.3); Membership List (2.12);
Membership Procedures (2.2); Merge (8.2); Merger Agreement (8.2);
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- New Entity (8.2); Nominating Committee (4.4); Nominating Committee Nominations (4.4); Nominating Members (4.4); Non-Member Non-Patron (7.6);
Non-Member Patron (7.6);
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- Occupies (2.1); Officer (6.8); Other Officers (6.6);
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- Patron (7.2); Person (2.1); Provided (2.1);
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- Reasonable Reserves (7.7); Record Date (3.5); Regular Board Meeting (5.1); Regular Member Meetings (3.1); Removing Members (4.8); Required Officers (6.1);
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- Special Board Meeting (5.2); Special Member Meeting (3.2); Suspension Reasons (2.10);
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- Total Membership (3.2); Transfer (8.1);
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- Uses (2.1); and
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- Written Ballot (3.10).
Section 1.3 – Law and Articles. These Bylaws are subject to Law and the Articles of Incorporation of Heart of Texas Electric Cooperative (“Articles”). If, and to the extent
that, a Bylaw conflicts with Law or the Articles, then the Law or Articles control. “Law” includes applicable:
- local, state, and federal constitutions, statutes, ordinances, regulations, holdings, rulings, orders, and similar documents or actions, whether legislative, executive, or judicial; and
- legally binding contracts enforceable by or against Cooperative, including legally binding contracts between Cooperative and an Applicant or Member.
Article 2 – Cooperative Membership
Section 2.1 – Member Qualifications. Except as otherwise provided in these Bylaws, an individual or Entity may become and remain a member of the Cooperative only if: (1) the individual or Entity is a person with the capacity to enter legally binding contracts (“Person”); and (2) the Person consumes, receives,
purchases, or otherwise uses (“Uses”), or requests or agrees to Use when available, a Cooperative Service generated, transmitted, distributed, sold, supplied, furnished,
or otherwise provided (“Provided”) by the Cooperative.
An “Entity” includes a domestic or foreign: cooperative; business or nonprofit corporation; sole proprietorship; limited liability company; partnership; trust; estate; and local, regional, state, federal, or national government, including an agency or division a government.
Except as otherwise provided in these Bylaws, a Person may not become or remain a member of the Cooperative if the Person resides at, engages in a business at, owns, controls, or otherwise occupies (“Occupies”) a residence, office, building, premise, structure, facility, or other location (“Location”):
- Occupied by a second Person, other than a landlord, tenant, or similarly related Person, who: (A) is a Member, other than a Joint Member; or (B) owes the Cooperative for a Cooperative Service provided to or for the Location, if the first Person Occupied the Location when the Cooperative Provided the Cooperative Service; or
- previously Occupied by an Entity owned or controlled by the Person, which Entity owes the Cooperative for a Cooperative Service Provided to or for the Location.
A Person, either individually or through an Entity not considered legally separate from the Person, may not hold more than one membership in the Cooperative. Persons Occupying a Location to or for which the Cooperative provides a Cooperative Service may not hold more than one membership in the Cooperative.
Section 2.2 – Membership Procedure. Except as otherwise provided in these Bylaws or by the Board, a qualified Person seeking to become or remain a Member (“Applicant”) must complete the procedures stated in this Bylaw to the Cooperative’s satisfaction (“Membership Procedures”) within ten (10) days of initially Using, or requesting or agreeing to Use, the first Cooperative Service Used or to be Used by the Applicant.
To become or remain a Member, an Applicant must complete and sign a written membership application provided by the Cooperative in which the Applicant agrees to:
- comply with the Governing Documents;
- ensure that Member Equipment connected to Cooperative Equipment, and any act or omission involving Member Equipment connected to Cooperative Equipment, comply with the Governing Documents;
- be a Member;
- at prices, rates, or amounts determined by the Board, and pursuant to the terms, conditions, time, and manner specified by the Cooperative, pay the Cooperative for Cooperative Services Provided to the Applicant or Provided to or for a Location Occupied by the Applicant, and for dues, assessments, fees, deposits, contributions, and other amounts required by the Governing Documents; and
- the use of dues, assessments, contributions, or other amounts paid by the Applicant or Member to the Cooperative to pay for periodical subscriptions received by the Applicant or Member from the Cooperative or from an Entity in which the Cooperative is a member or owner.
The “Governing Documents” are the written membership application signed by an Applicant or Member and the following documents and actions, all as currently existing or as later adopted or amended: (1) all Law regarding or affecting the Cooperative’s property, property rights, and assets (“Assets”), the Cooperative’s operation, the
Cooperative’s Members and Patrons, the Provision and Use of Cooperative Services, Cooperative Equipment, and Member Equipment connected to Cooperative Equipment;
(2) the Articles; (3) these Bylaws; (4) the Cooperative’s service rules and regulations; (5) the Cooperative’s rate or price schedules; and (6) all rules, regulations, requirements, guidelines, procedures, policies, programs, determinations, resolutions, or actions taken, adopted, promulgated, or approved by the Board. A copy of these Bylaws must be
available at the Cooperative’s office.
“Cooperative Equipment” is a product, equipment, structure, facility, or other good owned, controlled, operated, or furnished by the Cooperative. “Member Equipment” is a product, equipment, structure, facility, or other good: (1) owned, controlled, operated, or furnished by an Applicant or Member; and (2) located on property owned, controlled, operated, or furnished by an Applicant or Member.
To become or remain a Member, an Applicant must: (1) give the Cooperative all information requested by the Cooperative, including the Applicant’s photographic
identification satisfactory to the Cooperative including the Applicant’s federal tax identification number; and (2) complete any additional or supplemental document, contract, or action required by the Board for the Cooperative Service which the Applicant is Using or requesting or agreeing to Use. Except as otherwise provided in these Bylaws, the Cooperative will not release, disclose, or disseminate personally identifiable, proprietary, or confidential information regarding a Member.
Except as otherwise provided in these Bylaws or by the Board, an Applicant shall pay the Cooperative: (1) dues, assessments, fees, deposits, contributions, and other amounts required by the Governing Documents; and (2) outstanding amounts owed to the Cooperative by the Applicant.
Section 2.3 – Membership. Except as otherwise provided in these Bylaws or by the Board, a qualified Person becomes a member of the Cooperative (“Member”) and consents to being a Member upon using, or requesting or agreeing to use, a Cooperative Service and completing the Membership Procedure. The Cooperative shall issue membership certificates to Members in a manner, method, and form determined by the Board. The Cooperative must provide each new Member a copy of these Bylaws.
If the Board determines that a qualified Person is unable to complete the
Membership Procedure, then the Board may refuse, suspend, or terminate the Person’s membership in the Cooperative. For other good cause determined by the Board, the Board may refuse a qualified Person membership in the Cooperative.
Except as otherwise provided in these Bylaws or by the Board in advance and in writing, a Cooperative membership, and a right or privilege associated with the Cooperative membership, may not be sold, purchased, assigned, disposed of, acquired, or otherwise transferred.
Section 2.4 – Member Classes. Based upon the Cooperative Service Used or to be Used by a Member, the Cooperative may group Members into classes
(“Member Classes”) by amendment to these Bylaws as provided herein.
In classifying or reclassifying Members: (1) A Member may not be a member of more than one Member Class; and (2) Upon the Cooperative learning that a Member is no longer qualified to be a member of a Member Class, the Cooperative may reclassify the Member and the Cooperative may not again reclassify the Member for at least thirty (30) days.
Except as otherwise provided in these Bylaws, a Member includes all Member Classes and all Members have the same rights and obligations.
Section 2.5 – Membership Agreement. A Member shall: (1) comply with the Governing Documents; and (2) pay the Cooperative for the Cooperative’s damages, costs, or expenses, including attorney fees and legal expenses, caused by or associated
with the Member’s failure to comply with the Governing Documents. If a Member fails to comply with the Governing Documents, then, as provided in these Bylaws, the Cooperative may suspend or terminate the Member or a Cooperative Service Provided to the Member. Regardless of whether money damages are available or adequate, the Cooperative may: (1) bring and maintain a legal action to enjoin the Member from violating the Governing Documents; and (2) bring and maintain a legal action to order the Member to comply with the Governing Documents.
The Articles and these Bylaws are contracts between the Cooperative and a Member. By becoming a Member, the Member acknowledges that: (1) Every Member is a vital and integral part of the Cooperative; (2) the Cooperative’s successful operation depends upon each Member complying with the Governing Documents; and (3) Members are united in an interdependent relationship.
As requested by the Cooperative, a Member shall: (1) submit a claim or dispute between the Member and the Cooperative to the Dispute Resolution Committee and shall comply with according to the rules and procedures prescribed by the Board of Directors; and (2) indemnify the Cooperative for, and hold the Cooperative harmless from, liabilities, damages, costs, or expenses, including reasonable attorney fees and legal expenses, incurred by the Cooperative, or by a Cooperative Director, Officer, employee, agent, or representative (“Cooperative Official”), and caused by the Member’s negligence, gross negligence, or willful misconduct, or by the unsafe or defective condition of a Location Occupied by the Member.
In general, a Member is not liable to third parties for the Cooperative’s acts, debts, liabilities, or obligations solely because of membership in the Cooperative. A Member may become liable to the Cooperative as provided in the Governing Documents or as otherwise agreed to by the Cooperative and the Member.
Section 2.6 – Joint Membership. Persons who qualify to be Members may hold a joint membership in the Cooperative (“Joint Membership”). A Joint Membership may consist only of individuals joined in a legally recognized relationship and occupying the same Location, each of whom qualifies to be a Member.
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- Creating a Joint Membership. To become or remain joint members of the Cooperative, qualified Persons must jointly complete the Membership Procedures before initially Using, or requesting or agreeing to Use, the first Cooperative Service Used or to be Used by the Persons. Qualified Persons become joint members of the Cooperative (“Joint Members”) and consent to being Joint Members in the same manner as Members become Members and consent to being Members. As provided by the Board, a Member may convert the Member’s individual membership to a Joint Membership with a qualified Person by written application to the Cooperative, signed by all of the proposed Joint Members.
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- Rights and Obligations of Joint Members. Except as otherwise provided in these Bylaws, a Joint Member has and enjoys the rights, benefits, and privileges, and is subject to the obligations, requirements, and liabilities, of being a Member. Joint Members are jointly and severally liable for complying with the Governing Documents. As used in these Bylaws, and except as otherwise provided in these Bylaws, a membership includes a Joint Membership and a Member includes a Joint Member. For a Joint Membership:
- notice of a meeting provided to a Joint Member constitutes notice to all Joint Members;
- waiver of notice of a meeting signed by a Joint Member constitutes waiver of notice for all Joint Members;
- the presence of a Joint Member or all Joint Members at a meeting constitutes the presence of one Member at the meeting;
- the presence of a Joint Member at a meeting waives notice of the meeting for all Joint Members;
- the presence of a Joint Member at a meeting may invalidate a Mail Ballot previously mailed by the Joint Member;
- if only one Joint Member votes on a matter, signs a document, or otherwise acts, then the vote, signature, or action binds the Joint Membership and constitutes one vote, signature, or action;
- if more than one Joint Member votes on a matter, signs a document, or otherwise acts, then each vote, signature, or action constitutes a vote, signature, or action divided pro-rata based upon the number of voting Joint Members;
- except upon the cessation of the legally recognized relationship, the suspension or termination of a Joint Member constitutes the suspension or termination of all Joint Members; and
- a Joint Member qualified to be a member of the Board (“Director”) may be a Director, regardless of whether another Joint Member is qualified to be a Director, but if more than one Joint Member is qualified to be a Director, then only one (1) Joint Member may be a Director.
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- Terminating a Joint Membership. Joint Members shall notify the Cooperative in writing of a cessation of the legally recognized relationship. Upon determining or discovering the cessation of the legally recognized relationship :
- if one Joint Member remains qualified to be a Member and continues to use a Cooperative Service at the same location, then the Joint Membership converts to a membership comprised of this person;
- if more than one (1) Joint Member remains qualified to be a Joint Member and continues to use a Cooperative Service at the same location, then the Joint Membership converts to a membership comprised of these persons;
- if all Joint Members remain qualified to be Joint Members and continue to use a Cooperative Service at the same location, then the Joint Membership converts to a membership of persons determined by Cooperative; and
- if no Joint Member remains qualified to be a Member and continues to use a Cooperative Service at the same location, then the Joint Membership terminates.
Section 2.7 – Provision of Cooperative Service. A Member shall comply with a reasonable procedure required by the Cooperative regarding the Provision of a Cooperative Service. Based upon different costs of providing a Cooperative Service to different groups of Members, the Cooperative may charge each group a different rate or price for providing the Cooperative Service.
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- Interruption of Cooperative Service. The Cooperative shall provide Cooperative Services to Members in a reasonable manner. THE COOPERATIVE, HOWEVER, DOES NOT INSURE, GUARANTEE, OR WARRANT THAT IT WILL PROVIDE ADEQUATE, CONTINUOUS, OR NON-FLUCTUATING ELECTRIC ENERGY OR OTHER COOPERATIVE SERVICE. THE COOPERATIVE IS NOT LIABLE FOR DAMAGES, COSTS, OR EXPENSES, INCLUDING ATTORNEY FEES OR LEGAL EXPENSES, CAUSED BY THE COOPERATIVE PROVIDING INADEQUATE, NON-CONTINUOUS, OR FLUCTUATING ELECTRIC ENERGY OR OTHER COOPERATIVESERVICE, UNLESS THE DAMAGES, COSTS, OR EXPENSES ARE CAUSED BY THE COOPERATIVE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. The
Cooperative’s responsibility and liability for providing a Cooperative Service terminate upon delivery of the Cooperative Service to a Member.
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- Safe and Protected Operation of Cooperative. A Member shall take or omit an act required by the Cooperative to safely, reliably, and efficiently operate the Cooperative and provide a Cooperative Service, which act involves: (1) a location occupied by the Member and to or for which the Cooperative provides a Cooperative Service; (2) real or personal property in which the Member possesses a legal or equitable right or interest (“Member Property”); (3) Cooperative Equipment; or (4) Member Equipment connected to Cooperative Equipment. A Member shall: (1) protect Cooperative Equipment and Member Equipment connected to Cooperative Equipment; and (2) install and maintain a protective device, and implement and follow a protective procedure, required by the Cooperative. As necessary to safely, reliably, and efficiently operate the Cooperative and provide a Cooperative Service, the Cooperative may temporarily suspend or terminate Provision of a Cooperative Service. A Member shall not tamper with, alter, interfere with, damage, or impair Cooperative Equipment. Except as otherwise provided by the Board, the Cooperative owns all Cooperative Equipment.
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- Member Equipment Connected to Cooperative Equipment. Except as otherwise provided by the Board, before Member Equipment is connected to Cooperative
Equipment, the Cooperative must approve the connection in writing. Before and while Member Equipment is connected to Cooperative Equipment, the Member:
- shall comply with, and shall ensure that the Member Equipment, the connection, and any act or omission regarding the Member Equipment and the connection comply with, the Governing Documents, including terms, conditions, requirements, and procedures required by the Cooperative regarding the Member Equipment and the connection;
- shall ensure that the Member Equipment and the connection do not adversely impact the Cooperative’s ability to safely, reliably, and efficiently operate the Cooperative or provide a Cooperative Service;
- grants the Cooperative the right to inspect the Member Equipment and the connection to determine whether they comply with the Governing Documents;
- grants the Cooperative the right to disconnect or temporarily operate Member Equipment that does not comply with the Governing Documents or that adversely impacts the Cooperative’s ability to safely, reliably, and efficiently operate the Cooperative or provide a Cooperative Service; and
- shall pay the Cooperative for income not received or accrued because of the connection.
If Member Equipment is connected to Cooperative Equipment, then: (1) the Member is, but the Cooperative is not, responsible for designing, installing, operating, maintaining, inspecting, repairing, replacing, and removing the Member Equipment; (2) the Cooperative is not liable for damage to, or for the performance of, the Member Equipment; (3) the Cooperative is not liable for damage to Member Property; (4) the Member is responsible for knowing the concerns, risks, and issues associated with operating the Member Equipment and connecting the Member Equipment to Cooperative Equipment; (5) the Member is liable for damage to, and for the nonperformance of, the Cooperative Equipment caused by the Member Equipment or the connection; and (6) the Member is liable for, and must indemnify the Cooperative against, injury or death to any Person and damage to any property caused by, or resulting from, the Member Equipment or the connection.
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- Suspension or Termination of Cooperative Service. After providing a Member reasonable notice and an opportunity to comment orally or in writing, the Cooperative may suspend or terminate the Provision of a Cooperative Service to the
Member for a Suspension Reason. Without providing a Member notice or an opportunity to comment, the Cooperative may suspend or terminate the Provision of a Cooperative Service to the Member upon determining or discovering:
- that Cooperative Equipment used to Provide the Cooperative Service has been tampered with, altered, interfered with, damaged, or impaired;
- that Member Equipment connected to Cooperative Equipment adversely impacts the Cooperative’s ability to safely, reliably, and efficiently operate the Cooperative or Provide a Cooperative Service;
- the unsafe condition of Cooperative Equipment or Member Equipment connected to Cooperative Equipment; or
- an imminent hazard or danger posed by Cooperative Equipment or Member Equipment connected to Cooperative Equipment.
Section 2.8 – Use of Cooperative Service. Except as otherwise provided in these Bylaws or by the Board: (1) a Member shall Use a Cooperative Service Provided by the Cooperative; and (2) a Member shall not participate in a program, activity, or event regarding the Member’s Use of a Cooperative Service or the value or quantity of a Cooperative Service Used by the Member. In Using a Cooperative Service, a Member shall comply with the Governing Documents.
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- Payment for Cooperative Service. At prices, rates, or amounts determined by the Board, and pursuant to terms, conditions, time, and manner specified by the Cooperative, a Member shall pay the Cooperative for: (1) Cooperative Services Provided to the Member or Provided to or for a Location Occupied by the Member; and
(2) dues, assessments, fees, deposits, contributions, or other amounts required by the Governing Documents. Dues, assessments, contributions, or other amounts paid by a Member to the Cooperative may pay for periodical subscriptions received by the Member from the Cooperative or from an Entity in which the Cooperative is a member or owner. When determining the value or quantity of a Cooperative Service Provided to a Member or Provided to or for a Location Occupied by the Member, the Cooperative may offset a Cooperative Service Provided by the Member against the Cooperative Service Provided to the Member or Provided to or for a Location Occupied by the Member.
If another Person Provides a Member a good or service related to a Cooperative Service Provided to the Member, then, before paying the other Person: (1) the Member shall pay the Cooperative; and (2) the Cooperative shall apply amounts received from or on behalf of the Member for or toward Cooperative Services Provided to the Member or Provided to or for a Location Occupied by the Member.
As provided by the Board: (1) a Member shall pay interest, compounded periodically, and late payment fees for amounts owed, but not timely paid, to the Cooperative; and (2) regardless of the Cooperative’s accounting procedures, the Cooperative may apply amounts paid by a Member to all of the Member’s accounts on a pro rata basis.
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- Reduction of Cooperative Service. Except as otherwise provided in these Bylaws, unless the Cooperative receives one hundred eighty (180) days prior written notice from a Member that the Member intends to substantially reduce or cease the
Member’s Use of a Cooperative Service, and as provided by the Board, if a Member substantially reduces or ceases the Member’s Use of a Cooperative Service, either singly or in combination, then the Cooperative may charge the Member, and the Member shall pay the Cooperative, the costs and expenses incurred by the Cooperative in relying upon the Member’s pre-reduction or pre-ceasing Use of the Cooperative Service.
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- Sale of Cooperative Service. Except as otherwise provided by the Board, a Member may not sell, lease, or otherwise transfer a Cooperative Service provided by the Cooperative or a right to a Cooperative Service provided by Cooperative.
Section 2.9 – Grant of Property Rights. As required by the Cooperative for a Cooperative Purpose, a Member shall: (1) provide the Cooperative safe and reliable access to or use of Member Property; and (2) pursuant to terms and condition specified by the Cooperative, and without compensation from the Cooperative, grant or convey to the Cooperative a written or oral easement, right-of-way, license, or other right or interest in Member Property, and execute a document regarding this grant or conveyance.
A “Cooperative Purpose” is, at any time: (1) purchasing, installing, constructing, inspecting, monitoring, operating, repairing, maintaining, removing, relocating, upgrading, or replacing Cooperative Equipment or Member Equipment connected to Cooperative Equipment; (2) Providing a Cooperative Service to a Member or one (1) or
more other Members; (3) monitoring, measuring, or maintaining a Cooperative Service Provided to a Member or one (1) or more other Members; (4) Providing electric energy to a Person or one (1) or more other Persons; (5) monitoring, measuring, or maintaining electric energy Provided to a Person or one (1) or more other Persons; (6) authorizing, permitting, satisfying, or facilitating an obligation incurred, or right granted, by the Cooperative regarding use of Cooperative Equipment; or (7) safely, reliably, and efficiently operating the Cooperative or Providing a Cooperative Service.
Section 2.10 – Member Suspension. The Cooperative may suspend a Member for the following reasons (“Suspension Reasons”):
- as provided in the Governing Documents;
- as determined by the Board for good cause;
- the Member is no longer qualified to be a Member;
- the Member does not timely pay an undisputed amount due the Cooperative;
- the Member violates or does not timely comply with the Governing Documents;
- the Member ceases Using a Cooperative Service for three (3) consecutive months; or
- the Member requests suspension.
Except as otherwise provided in these Bylaws or by the Board, a Member is suspended upon:
- the Member’s request for suspension; or
- the Cooperative: (A) providing the Member written notice of the Member’s possible suspension and the underlying Suspension Reason at least ten (10) days before the possible suspension; (B) notifying the Member that the Member has a right to, and allowing the Member an opportunity to, comment upon the Suspension Reason orally or in writing at least five (5) days after the Cooperative provides the notice; and (C) determining to suspend the Member.
The Cooperative must provide any written suspension notice to the Member’s most current address shown on the Membership List.
Upon a Member’s suspension:
- other than the Cooperative’s obligation to retire and pay Capital Credits, and other than the Cooperative’s obligations regarding dissolution, the Cooperative’s duties, obligations, and liabilities imposed by the Governing Documents for the Member cease and the Cooperative may cease Providing a Cooperative Service to the Member; and
- other than the Member’s right to receive retired and paid Capital Credits, and other than the Member’s rights upon the Cooperative’s dissolution, the Member forfeits and relinquishes rights provided in the Governing Documents, but remains subject to obligations imposed by the Governing Documents. In particular, a suspended Member may not receive notice, nominate, vote, remove, demand, request, petition, consent, or otherwise act as provided in the Governing Documents.
Unless the Cooperative determines otherwise, a Member’s suspension is lifted upon the Member rectifying the underlying Suspension Reason within thirty (30) days of the suspension. The Cooperative may lift a Member suspension for good cause determined by the Board.
Section 2.11 – Member Termination. Except as otherwise provided by the Board, after 90 days, a suspended Member is terminated. Except as otherwise provided in these Bylaws, a Member is terminated upon: (1) the Cooperative learning of the
Member’s death, legal dissolution, or legal cessation of existence; (2) the Member requesting termination; or (3) the Cooperative learning that the Member has permanently ceased Using a Cooperative Service. Except as otherwise provided by the Board, a partnership Member continuing to Use a Cooperative Service is not suspended upon the death of a partner or following any other alteration in the partnership. A partner leaving a partnership Member remains liable to the Cooperative for amounts owed to the
Cooperative by the Member at the time of the partner’s departure.
Termination of a Member does not: (1) release the Member from debts, liabilities, or obligations owed to the Cooperative; or (2) release the Cooperative from the obligation to retire and pay Capital Credits to the former Member or obligations to the former Member regarding the Cooperative’s dissolution. Upon a Member’s termination from the Cooperative, and after deducting amounts owed to the Cooperative, the Cooperative must return to the Member any amount provided in the Governing Documents.
Section 2.12 – Membership List. The Cooperative shall maintain a record of current Members in a form permitting the Cooperative to: (1) alphabetically list the names and addresses of all Members; and (2) indicate the number of votes each Member is entitled to cast (“Membership List”). Except as otherwise provided by these Bylaws or the Board, a Person may not inspect, copy, or receive a copy of the Membership List or a similar list of Members.
Upon thirty (30) days prior written notice or request to the Cooperative, a Member who has been an unsuspended Member during the immediately preceding twelve
(12) months may: (1) inspect and copy the Membership List at a reasonable time and location determined by the Cooperative; or (2) pay the Cooperative a reasonable charge determined by the Cooperative covering the labor and material cost of preparing and copying the Membership List, and the Cooperative must provide the Member a copy of the Membership List. A Member may inspect, copy, or receive a copy of the Membership List only if, as determined by the Cooperative: (1) the Member’s notice or request is made in good faith and for a proper purpose; (2) the Member describes with reasonable particularity the purpose for which the Member will use the Membership List; and (3) the Membership List is directly connected with the Member’s purpose. Except as otherwise provided by the Board, a Member may not: (1) use the Membership List for a purpose unrelated to the Member’s interest as a Member; (2) use the Membership List to solicit money or property unless the money or property is used solely to solicit Member votes;
(3) use the Membership List for a commercial purpose; or (4) sell the Membership List.
Article 3 – Member Meetings and Member Voting
Section 3.1 – Annual and Regular Member Meetings. Within a county in which the Cooperative Provides a Cooperative Service, the Cooperative: (1) shall annually hold a meeting of Members (“Annual Member Meeting”); and (2) may regularly hold meetings of Members (“Regular Member Meetings”). The date, time, and location of an Annual Meeting of the Members shall be on the third Tuesday in October of each year, at 7:30 P.M. at the Cooperative principal office, or in the event the Annual Meeting cannot be held on the date, at the time, or at the place set forth herein, at a date, time and place determined by the Directors and properly noticed as set forth below. The Directors shall determine the date, time and location of Regular Member Meetings. In the event storm, fire, flood, epidemic, abnormal weather conditions, other acts of God, or governmental regulation or prohibition on meeting, the Directors shall determine, in good faith, a substitute date, time and location of an Annual or Regular Member Meeting not later than one (1) year from the date stated above for such Annual or Regular Member Meeting. The Cooperative’s failure to hold an Annual or Regular Member Meeting does not affect an action taken by the Cooperative.
At the Annual Member Meeting: (1) the President shall provide a written or oral report regarding the activities of the Cooperative; and (2) the Treasurer or Manager shall provide a written or oral report regarding the financial condition of the Cooperative .
Section 3.2 – Special Member Meetings. Within a county in which the Cooperative Provides a Cooperative Service, the Cooperative shall hold a special meeting of Members (“Special Member Meeting”) upon receiving: (1) a written or oral request from the Board or President; (2) a written request signed by at least two thirds (2/3) of the Board; or (3) one (1) or more written demands signed and dated within ninety (90) days after the first signature by at least ten (10) percent of the total number of unsuspended Members (“Total Membership”), with each page of each written demand requesting and describing the purpose of the meeting (“Member Demand”). The Board shall determine the date, time, and location of a Special Member Meeting.
If the Cooperative does not notify Members of a Special Member Meeting within ninety (90) days of receiving a Member Demand, then a Member signing the Member Demand may: (1) set a reasonable time, place, and location for the Special Member Meeting; and (2) notify Members of the Special Member Meeting.
Section 3.3 – Agenda, Attendance, and Action at Member Meetings.
Except as otherwise provided in these Bylaws, before or at an Annual, Regular, or Special Member Meeting (“Member Meeting”), the Board: (1) shall determine the
agenda, program, or order of business for the Member Meeting; and (2) may limit attendance at the Member Meeting to Members.
Except as otherwise provided by the Board before or at a Member Meeting, the President: (1) shall preside at the Member Meeting; (2) may remove a Person from the Member Meeting for unruly, disruptive, or similar behavior; and (3) may exercise power reasonably necessary for efficiently and effectively conducting the Member Meeting.
Except as otherwise provided by the Board before or at a Member Meeting, Members attending the Member Meeting may consider, vote, or act only upon a matter described in the notice of the Member Meeting Members may raise or discuss a matter at a Member Meeting if: (1) at least ten percent (10%) of the Members sign one or more written requests to raise or discuss the matter; and (2) the Cooperative receives all written requests at least thirty (30) days before the Member Meeting.
Section 3.4 – Notice of Member Meetings. As directed by the President, Secretary, or any other Officer or Member properly calling the Member Meeting, the Cooperative shall deliver written notice of a Member Meeting personally or by mail to all Members entitled to attend the meeting. This notice must indicate the date, time, and location of the meeting and must be delivered at least ten (10) days, but no more than thirty (30) days, before the meeting. For a Special Member Meeting, this notice must state the purpose of the meeting and describe any matter to be considered or voted or acted upon at the meeting.
Except as otherwise provided in these Bylaws, a mailed notice of a Member Meeting is delivered when deposited in the United States mail with prepaid postage affixed and addressed to a Member at the Member’s address shown on the Membership List. The good faith, inadvertent, and unintended failure of a Member to receive notice of a Member Meeting does not affect an action taken at the Member Meeting.
Except as otherwise provided in these Bylaws, the Cooperative shall notify Members of a Member Meeting adjourned to another date, time, or location unless: (1) the meeting is adjourned to another date occurring within sixty (60) days following the Record Date for the original Member Meeting; and (2) the new date, time, or location is announced at the Member Meeting prior to adjournment.
Section 3.5 – Record Date. A “Record Date” is the date for determining the Total Membership and the Members entitled to: (1) sign a Member petition, request, demand, consent, appointment, or similar document; (2) receive a ballot, notice of a Member
Meeting, or similar document; or (3) vote. If a Member is suspended after the Record Date, then the Member may not sign a document, receive a document, or vote.
The Board may fix the Record Date, but the Record Date must not be more than thirty (30) days before the: (1) date the first Member signs a Member petition, request, demand, consent, appointment, or similar document; the Record Date may be more than 30 days before the (1) date a ballot, notice, or similar document is due or required; or (2) date of a Member Meeting. Except as otherwise provide by the Board, the Record Date:
(1) for signing a Member petition, request, demand, consent, appointment, or similar document is the date Cooperative receives the signed document; (1) for receiving a ballot, notice, or similar document is the date ninety (90) days before the document is due or required; and (2) voting at a Member Meeting is the date of the Member Meeting.
The Record Date for determining the Total Membership and the Members entitled to notice of, or to vote at, a Member Meeting is effective for a Member Meeting adjourned to a date not less than thirty (30) days after the Record Date for determining the Members entitled to notice of the original Member Meeting.
Section 3.6 – Member Meeting List. For a Member Meeting, the Cooperative shall prepare and maintain an alphabetical list stating the name and address of each Member entitled to receive notice of and to vote at the Member Meeting and the number of votes each Member is entitled to cast (“Member Meeting List”). The Cooperative shall make the Member Meeting List available at the Member Meeting and a Member entitled to vote at the meeting may inspect the Member Meeting List at any time during the meeting. Except as otherwise provided in these Bylaws or by the Board, a Person may not inspect the Member Meeting List.
Except as otherwise provided by the Board, a Member may not copy or receive a copy of the Member Meeting List.
A Member may inspect the Member Meeting List only if, as determined by the Cooperative: (1) the Member acts in good faith and for a proper purpose related to the Member Meeting; and (2) the Member Meeting List is directly connected with the Member’s purpose.
Except as otherwise provided by the Board, a Member may not: (1) use the Member Meeting List for a purpose unrelated to the Member Meeting; (2) use the Member Meeting List to solicit money or property unless the money or property is used solely to solicit Member votes at the Member Meeting; (3) use the Member Meeting List for a commercial purpose; or (4) sell the Member Meeting List. Upon providing the Cooperative satisfactory evidence that a Person is a properly authorized agent of a Member, the Person may act on the Member’s behalf.
Section 3.7 – Member Waiver of Notice. A Member may waive notice of a Member Meeting, or of a matter to be considered, or voted or acted upon, at a Member Meeting, by signing and delivering to the Cooperative a written waiver of notice (“Member Meeting Waiver of Notice”) either before the Member Meeting or within three
(3) days after the Member Meeting.
Unless a Member objects to holding a Member Meeting, or to transacting business at the Member Meeting, the Member’s attendance in person or voting by Mail Ballot on a matter considered at the Member Meeting waives the Member’s objection to lack of notice, or to defective notice, of the Member Meeting. Unless a Member objects to considering, or voting or acting upon, a matter at a Member Meeting, the Member’s attendance in person or voting by Mail Ballot on the matter considered at the Member Meeting waives the Member’s objection to considering, or voting or acting upon, the matter at the Member Meeting.
Section 3.8 – Member Voting by Mail Ballot. Except as otherwise provided in these Bylaws, a Member may vote or act by mail only as provided in this Bylaw and in a manner determined by the Board.
- Mail Ballot With Member Meeting. A Member may vote or act by mail only on an action that may be taken at the Member Meeting only as provided in these Bylaws in conjunction with a Member Meeting by the Cooperative delivering a mail ballot (“Mail Ballot With Member Meeting”) to each Member entitled to vote on the matter. A Member submitting a completed Mail Ballot With Member Meeting may not vote at the Member Meeting regarding a matter described in the Mail Ballot With Member Meeting. The Cooperative may count completed Mail Ballots With Member
Meeting received before the Member Meeting in determining whether a Member Quorum exists at the Member Meeting. The Cooperative must count as a Member’s vote a properly completed Mail Ballot With Member Meeting received on, or before, the time and date stated in the Mail Ballot With Member Meeting.]
- Mail Ballot. A Mail Ballot With Member Meeting (“Mail Ballot”) must:
- set forth and describe a proposed action, identify a candidate, and include the language of a motion, resolution, Bylaw Amendment, or other written statement, upon which a Member is asked to vote or act;
- state the date of a Member Meeting at which Members are scheduled to vote or act on the matter;
- provide an opportunity to vote for or against, or to abstain from voting on, the matter;
- instruct the Member how to complete and return the Mail Ballot; and
- state the time and date by which the Cooperative must receive the completed Mail Ballot.
Except as otherwise provided by the Board, a Member may not revoke a completed Mail Ballot received by the Cooperative. A Member’s failure to receive a Mail Ballot does not affect a vote or action taken by Mail Ballot.
Material soliciting approval of a matter by Mail Ballot must: (1) contain, or be accompanied by, a copy or summary of the matter; (2) state the Member Quorum required to vote on the matter; (3) for all matters other than the election of Directors, state the percentage of approvals necessary to approve the matter; and (4) state the time and date by which the Cooperative must receive a completed Mail Ballot.
If there are no contested positions the Cooperative will not be obligated to provide members a mail ballot and the election process will take place at the Annual Meeting.
Section 3.9 – Member Quorum. A quorum of Members is one hundred fifty
(150) of the Members entitled to vote on a matter (“Member Quorum”).
If there is less than a Member Quorum at a Member Meeting, then a majority of Members attending the Member Meeting in person may adjourn the Member Meeting to a date no more than ninety days following the original Member Meeting.
Section 3.10—Member Voting. If a Member presents identification or proof of Cooperative membership as reasonably required by the Cooperative, and if the Member is not suspended on the Record Date and remains unsuspended after the Record Date, then, regardless of the value or quantity of Cooperative Services Used, the Member may cast one (1) vote on a matter for which the Member is entitled to vote. To vote for an Entity Member, an individual must present evidence requested by and satisfactory to the Cooperative that the individual is authorized to vote for the Entity Member. If an individual Member, other than a Joint Member, dies without the Cooperative’s knowledge, then, until the Cooperative learns of the Member’s death or
terminates the Member’s membership, a Close Relative of the Member Using a Cooperative Service at the Location previously Occupied by the Member may cast the Member’s vote.
Except as otherwise provided in these Bylaws, Members approve a matter if: (1) a Member Quorum is present in person or voting by Mail Ballot; and (2) a majority of Members present in person or voting by Mail Ballot, who are entitled to vote on the matter, vote in favor of the matter. To approve a matter, the votes cast for the matter must equal or exceed a majority of the Member Quorum. To increase or decrease the vote required to approve a matter, the Members must approve an amendment to this Bylaw.
At a Member Meeting, the individual presiding over the Member vote may require the Members to vote by voice. If the individual presiding over the Member vote determines, in good faith, that a voice vote is not sufficient to accurately determine the vote results, then the Members shall vote by written ballot (“Written Ballot”), or by any other reasonable manner determined by the individual presiding over the Member vote. Members may not cumulate votes. Agreements signed by Members providing the manner in which a Member will vote are not valid.
Section 3.11– Accepting and Rejecting Member Voting Documents. For a Mail Ballot Member Meeting Waiver of Notice, or other document allegedly executed by, or on behalf of, a Member (collectively, “Member Voting Document”):
- the Cooperative may accept, and give effect to, the Member Voting Document if: (A) the name signed on the Member Voting Document corresponds to a
Member’s name, and the Cooperative acts in good faith; or (B) the Cooperative reasonably believes the Member Voting Document is valid and authorized;
- the Cooperative may reject, and not give effect to, the Member Voting Document if the Cooperative: (A) acts in good faith; and (B) has a reasonable basis for doubting the validity of the signature on the Member Voting Document or the validity of the signatory’s authority to sign on behalf of the Member; and
- the Cooperative, and a Cooperative Member or Official, are not liable to a Member for accepting or rejecting a Member Voting Document as provided in this Bylaw.
Section 3.12– Credentials and Election Committee. Before a Member Meeting, the Board shall appoint a Credentials and Election Member Committee (“C&E Committee”) for the Member Meeting consisting of an uneven number of Members between three and nine.
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- C&E Committee Members. A C&E Committee member must not be: (1) a member of the Nominating Committee; or (2) an existing, or a Close Relative of an existing, Cooperative Official or known Director candidate. As determined by the Board, the Cooperative may reasonably compensate or reimburse C&E Committee members.
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- C&E Committee Duties. During, or within a reasonable time before or after, the Member Meeting for which the C&E Committee was appointed, the C&E Committee shall:
- elect a chairperson and secretary;
- establish, or approve, the manner or method of Member registration and voting;
- oversee or supervise Member registration and voting, and the tabulation of Member votes; and
- consider and decide all questions, issues, or disputes regarding: (A) Member registration and voting; (B) the tabulation of Member votes; (C) Director nominations; and (D) whether a Director nominee or newly elected Director satisfies the Director Qualifications (collectively, “Member Meeting Issues”).
The C&E Committee may meet, consider, or decide Member Meeting Issues, or otherwise act, only if a majority of the C&E Committee members are present. A C&E Committee decision or action requires a vote of at least a majority of the C&E Committee members voting. Except as otherwise provided in this Bylaw, C&E Committee decisions or actions during, or within a reasonable time before or after, a Member Meeting are final. At the Cooperative’s expense, the Cooperative shall make available legal counsel to the C&E Committee. As used in this Bylaw, Member voting includes voting by Mail Ballot, Written Ballot or voice.
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- Member Challenge. A Member entitled to vote at a Member Meeting may comment upon a Member Meeting Issue, or challenge the C&E Committee’s decision or action regarding a Member Meeting Issue, by filing a written description of the Member’s comment or challenge (“Member Challenge”) with the Cooperative within three business days following the Member Meeting addressed by the Member Challenge.
Within thirty days of receiving a Member Challenge, the C&E Committee shall:
- as determined by the C&E Committee, meet and receive oral or written evidence from a Member, or legal counsel representing a Member, directly and substantially implicated in, or affected by, the Member Challenge; and
- consider, decide, and rule on the Member Challenge.
The C&E Committee’s decision regarding a Member Challenge is final. Upon written request by a Member received by the C&E Committee within thirty (30) days of a C&E Committee decision or action, the C&E Committee shall prepare a written report summarizing and explaining the C&E Committee’s decision or action. The failure of the Cooperative or the C&E Committee to act as required by this Bylaw shall not, by itself, affect a vote, Director election, or other action taken at a Member Meeting.
Article 4 – Board of Directors
Section 4.1 – Director Districts. Based upon geographic, population, membership, or other equitable consideration determined by the Board, the Board may divide the general area in which Members Occupy a Location at or for which Members Use a Cooperative Service (“Cooperative Service Area”) into a reasonable number of districts that equitably represent the Members (“Director Districts”).
If a Member Uses a Cooperative Service at Locations in more than one (1) Director District, then (1) if the Member is an individual and resides within the Cooperative Service Area, the Member Uses a Cooperative Service at a Location in the Director District in which the Member resides; and (2) if the Member is an individual and does not reside within the Cooperative Service Area, or if the Member is an Entity, the Member Uses a Cooperative Service at a Location in the Director District in which the Member first Used, and continues to Use, a Cooperative Service.
Periodically, based upon geographic, population, membership, or other equitable consideration determined by the Board, the Board may revise the Director Districts to ensure that the Director Districts equitably represent the Members. Within sixty (60) days following a Director District revision, and at least thirty (30) days before the next Annual Member Meeting, the Cooperative must notify, in writing, Members affected by the Director District revision. Director District revisions are effective on the date the Cooperative releases written notice of the Director District revision. A Director District revision may not: (1) increase an existing Director’s Director Term; or (2) unless the affected Director consents in writing, shorten an existing Director’s Director Term.
Section 4.2 – Board. The Cooperative shall have a Board that equitably represents the Members and is composed of no fewer than seven (7) Members or individuals authorized by Entity Members: (A) Using a Cooperative Service at a Location within each Director District; (B) nominated by the Members Using a Cooperative Service at a Location within the Cooperative Service Area; and (C) elected by the Members Using a Cooperative Service at a Location within the Cooperative Service Area;
The Board may not be composed of more than one (1) individual authorized by Entity Members. An Entity Member may not authorize more than one (1) Director. A Director authorized by an Entity Member must reside in the Cooperative Service Area.
Except as otherwise provided in these Bylaws:
- Cooperative powers must be exercised by the Board, or under the Board’s authority;
- Cooperative affairs must be managed under the Board’s direction; and
- the Board shall reasonably administer and enforce these Bylaws, or shall ensure that these Bylaws are reasonably administered and enforced.
To the extent the Governing Documents authorize a Person to exercise a power that the Board would otherwise exercise, the Person exercising the power has, and is subject to, the same duties, responsibilities, and standards of care of the Board.
Section 4.3 – Director Qualifications. A Director or Director candidate must comply with this Bylaw, except for the initial Directors set forth in the Articles of Consolidation.
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- General Director Qualifications. To become or remain a Director, a Person must comply with the following general qualifications (“General Director Qualifications”):
- be an individual;
- have the capacity to enter legally binding contracts;
- while a Director, and during the five (5) years immediately before becoming a Director, not: (A) be convicted of a felony or (B) plead guilty to a felony; and
- Comply with any other reasonable qualifications determined by the Board .
- Except as otherwise provided by the Board for good cause, receive a Credential Cooperative Director (“CCD”) certification from the National Rural Electric Cooperative Association (“NRECA”) within three (3) years of becoming a director.
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- Membership Director Qualifications. To become or remain a Director, an individual must comply with the following membership qualifications (“Membership Director Qualifications”):
- while a Director and during the five (5) years immediately before becoming a Director: (A) be an unsuspended Member; (B) permanently Occupy, and Use a Cooperative Service at, a Location within the Director District from which the Director is nominated or elected;
- while a Director: (A) be a Member; and (B) be authorized by an Entity Member that, while a Director and during the five years immediately before becoming a Director, is unsuspended, permanently Occupies and Uses a Cooperative Service at a Location within the Director District from which the Director is nominated or elected; or
- be designated or appointed by the Board.
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- Conflict of Interest Director Qualifications. To become or remain a Director, an individual must comply with the following conflict of interest qualifications (“Conflict of Interest Director Qualifications”):
- while a Director and during the fifteen (15) years immediately before becoming a Director, not be an employee of the Cooperative or its predecessor or successor cooperatives or an employee of an entity controlled by the Cooperative or in which the Cooperative owns a majority interest (“Cooperative Subsidiary”);
- while a Director and during the one (1) year immediately before becoming a Director, not receive or have a Close Relative that receives more than ten percent (10%) of annual gross income, other than insurance or Director compensation income, directly or indirectly from the Cooperative or a Cooperative Subsidiary;
- while a Director and during the one (1) year immediately before becoming a Director, not advance or have a Close Relative that advances the individual’s pecuniary interest by providing a good or service similar to a good or service provided by the Cooperative or a Cooperative Subsidiary; or be in a business
engaged in selling electrical or plumbing appliances, fixtures or supplies to among others the members of the cooperative.
- while a Director, or for one (1) year prior to becoming a Director, not be a Close Relative of a Director or Cooperative employee; or an employee of an entity controlled by the Cooperative or in which the Cooperative owns a majority
interest (“Cooperative Subsidiary”);
- while a Director, not be employed by another Director or be employed by, or receive more than ten percent (10%) of annual gross income from, an entity for which another Director controls, owns more than ten percent, or is a director or officer; and
- while a Director and during the one (1) year immediately before becoming a Director, not be employed by, control, own more than ten percent (10%) of, serve as a director or officer of, or receive more than ten percent (10%) of annual gross income from an entity that: (A) advances the entity’s pecuniary interest by providing a good or service similar to a good or service provided by the Cooperative or a Cooperative Subsidiary; or (B) receives more than ten percent (10%) of its annual gross income directly or indirectly from the Cooperative or a Cooperative Subsidiary or Members.
- While a Director holds an elective public office for which a salary is paid.
(d). Director Disqualification. After being elected, designated, or appointed, if a Director does not comply with all General Director Qualifications, Membership Director Qualifications, and Conflict of Interest Director Qualifications (collectively, “Director Qualifications”), then, except as otherwise provided by the Board for good cause, the Board may disqualify the Director and the individual is no longer a Director if:
- the Board notifies the Director in writing of the basis for, and provides the Director an opportunity to comment regarding, the Board’s proposed disqualification; and
- within thirty (30) days after the Board notifies the Director of the proposed disqualification, the Director neither complies with nor meets the Director Qualification.
If a majority of Directors authorized by these Bylaws complies with the Director Qualifications and approves a Board action, then the failure of a Director to comply with the Director Qualifications does not affect the Board action.
Section 4.4 – Director Nominations. For each Director position nominated by Members Using a Cooperative Service at a Location within the Cooperative Service Area (“Nominating Members”) and scheduled for election by Members at a Member Meeting, the Nominating Members shall nominate individuals as provided in this Bylaw. At least thirty (30) days before the nomination of individuals for Director positions, the Cooperative must provide Members with this Bylaw section.
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- Nominating Committee Nominations. At least sixty (60) days before the Member Meeting, the Board shall appoint a Member Committee consisting of at least one
- Member from each Director District (“Nominating Committee”). Nominating Committee members may not be an existing, or a Close Relative of an existing, Cooperative Official or known Director candidate.
At least thirty (30) days before the Member Meeting at which Members are scheduled to elect Directors, and on behalf of the Nominating Members, the Nominating Committee shall:
- nominate at least one (1) individual to run for election for each Director position nominated by the Nominating Members and scheduled for election by Members at the Member Meeting (“Nominating Committee Nominations”); and
- display the Nominating Committee Nominations at the Cooperative’s principal office.
If, before the scheduled election, a Nominating Committee Nominee dies, becomes incapacitated, or ceases to be qualified to be a Director, then the Nominating Committee may nominate another individual. As determined by the Board, the Cooperative may reasonably compensate or reimburse Nominating Committee members.
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- Member Petition Nominations. In addition to Nominating Committee Nominations, Nominating Members may nominate, through petition, individuals to run for election for a Director position nominated by Nominating Members and scheduled for election by Members at the Member Meeting (“Member Petition Nominations”). Nominating Members make Member Petition Nominations by delivering to the Cooperative at least eighty (80) business days before the Member Meeting in writing for each Member Petition Nomination (“Member Petition”):
- listing, on each page of the Member Petition, the name of the Member Petition Nominee;
- indicating, on each page of the Member Petition, the Director position for which the Member Petition Nominee will run; and
- containing the printed names, addresses, and telephone numbers, and original dated signatures signed within sixty days of the first signature, of at least fifty
(50) Nominating Members from the District being petitioned for.
After verifying that a Member Petition complies with this Bylaw, the Cooperative shall display the Member Petition Nomination in approximately the same location as the Nominating Committee Nominations.
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- Nominations from the Floor. Nominating Members may not nominate from the floor of a Member Meeting an individual to run for election to a Director position scheduled for election at the Member Meeting.
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- Notice of Director Nominations. At least ten (10) days before a Member Meeting at which Members are scheduled to elect Directors, the Cooperative shall notify Members of the:
- director positions scheduled for election by Members;
- names and corresponding Director positions of all Nominating Committee Nominations; and
- names and corresponding Director positions of all Member Petition Nominations.
Section 4.5 – Director Elections. At each Member Meeting at which a Director position is scheduled for election by Members Using a Cooperative Service at a Location within the Cooperative Service Area (“Electing Members”), the Electing Members shall elect the Director from the Nominating Committee Nominations or Member Petition Nominations by a plurality of votes cast by Electing Members with a Member Quorum present in person or voting by Mail Ballot or by Email Ballot. Electing Members may not vote for write-in candidates. If a Director position is unfilled after the first round of voting, then voting must be repeated until the Director position is filled, with the nominee receiving the lowest number of votes removed from the next round of voting. In the event of a tie vote the election will be determined by a coin flip. It is the Board’s discretion to determine if an election will be by vote of the members at a meeting or by mail and/or email ballot. At least thirty (30) days before the nomination of individuals for Director positions, the Cooperative must provide Members with this Bylaw section.
In addition to other information required by these Bylaws, a Mail Ballot or Email for electing Directors must:
- list the names, corresponding Director positions, and manner of nomination for Nominating Committee Nominations and Member Petition Nominations; and
- identify a Director whose Director Term is expiring.
A drawing by lot must determine the order, listing, and placement of names on a Mail Ballot, Written Ballot, or similar ballot.
Section 4.6 – Director Terms. Except as otherwise provided in these Bylaws or in the Articles of Consolidation, a Director’s term is three years or until a successor Director is elected, designated, or appointed (“Director Term”). A Director’s term begins:
(1) after the individual consents to being elected, designated, or appointed as a Director; and (2) at the beginning of the first Board Meeting held after a successor Director is elected. A Director’s term ends after: (1) a successor Director consents to being elected, designated, or appointed as a Director; and (2) immediately after a successor Director’s election, designation, or appointment.
The Cooperative must stagger Director Terms by dividing the total number of authorized Directors into groups of approximately equal number. Members must annually elect an approximately equal number of Directors.
Section 4.7 – Director Resignation. A Director may resign at any time. To resign, a Director must sign and deliver a written notice of resignation to the Board, President, or Secretary. Except as a later date is otherwise provided in a written notice of resignation, a Director’s resignation is effective when the Board, President, or Secretary receives the written notice of resignation. If a Director’s resignation is effective at a later date, and if the successor Director does not take office until the effective date of the Director’s resignation, then the pending Director vacancy may be filled before the
effective date of the Director’s resignation.
Section 4.8 – Director Removal. Except as otherwise provided in these Bylaws, the Board may remove a Director designated or appointed by the Board for any reason. As provided in this Bylaw, and for cause, the Members Using a Cooperative Service at a Location within the Cooperative Service Area (“Removing Members”) may remove a Director for whom the Removing Members may have voted.
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- Director Removal Petition. For a Director for whom removal is requested, the Removing Members must deliver to the President or Secretary a dated written petition (“Director Removal Petition”):
- identifying the Director on each page;
- explaining, on each page, the basis for the Director’s removal; and
- as Removing Members existed on the Director Removal Petition date, containing the printed names, printed addresses, and original and dated signatures obtained within sixty (60) days following the Director Removal Petition date, of at least ten percent (10%) of the Removing Members.
Within thirty (30) days after the President or Secretary receives a Director Removal Petition: (1) the Cooperative shall forward a copy of the Director Removal
Petition to the implicated Director; and (2) the Board shall meet to review the Director Removal Petition.
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- Member Meeting. If the Board determines that the Director Removal Petition complies with this Bylaw, then the Cooperative shall notice and hold a Member Meeting within sixty (60) days following the Board’s determination. Notice of the Member Meeting must state that: (1) a purpose of the Member Meeting is to consider removing a Director; (2) evidence may be presented, and a Member vote taken, regarding removing the Director; and (3) Members may elect a successor Director.
If a Member Quorum is present in person at the Member Meeting, then for the Director named in a Director Removal Petition:
- before a Member vote, evidence must be presented supporting the basis for removing the Director;
- the Director may be represented by legal counsel, and must have the opportunity to refute, and present evidence opposing, the basis for removing the Director; and
- after the Director’s presentation and Member discussion, the Removing Members must vote whether to remove the Director.
If a majority of Removing Members voting vote to remove the Director, then the Director is removed effective the time and date of the Member vote. At the Member Meeting, the Removing Members may elect a new Director to succeed the removed Director without complying with the Director Nomination or notice provisions of these Bylaws. A successor Director elected by the Removing Members must comply with the Director Qualifications and serves the unexpired Director Term of the removed Director. A Director Removal Petition or Director removal does not affect a Board action.
Members may not vote to remove a Director by Mail Ballot.
The Board may not remove a Director for lawfully opposing a Transfer of Cooperative Assets or a Cooperative dissolution. Removing Members may not remove a Director for lawfully opposing a Transfer of Cooperative Assets or a Cooperative dissolution.
Section 4.9 – Director Vacancy. Except as otherwise provided in these Bylaws:
- by an affirmative vote of the majority of remaining Directors, the Board may fill a vacant Director position, including a vacant Director position resulting from increasing the number of Directors; and
- a Director elected, designated, or appointed by the Board to fill a vacant Director position serves the unexpired Director Term of the vacant Director position.
If a Director vacancy will occur at a later specified date, then the Board may fill the vacancy before the vacancy occurs and the new Director takes office when the vacancy occurs. An individual elected, designated, or appointed to fill a vacant Director position must comply with the Director Qualifications. Except as otherwise provided in these Bylaws, and as used in this Bylaw, “vacant Director position” and “Directory vacancy” do not include Director positions vacated due to an expired Director Term.
Section 4.10 – Director Compensation. As determined or approved by the Board, the Cooperative may reasonably pay or reimburse Directors a fixed fee and for expenses actually and necessarily incurred attending a: (1) Board Meeting; (2) function, meeting, or event involving or relating to the Cooperative; or (3) function, meeting, or event involving, relating to, or reasonably enhancing the Director’s ability to serve in, the role of Director. The Board must determine or approve the manner, method, and amount of any Director fee or expense.
Section 4.11 – Director Conduct. In general:
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- Director Standard of Conduct. A Director is not deemed a trustee regarding the Cooperative or property held or administered by the Cooperative, including property potentially subject to restrictions imposed by the property’s donor or transferor. A Director shall discharge the Director’s duties, including duties as a Board Committee member:
- in good faith;
- in a manner the Director reasonably believes to be in the Cooperative’s best interests;
- when becoming informed in connection with the Director’s decision-making function or devoting attention to the Director’s oversight function, with the care that an individual in a like position would reasonably believe appropriate under similar circumstances; and
- in a manner in which the Director discloses or causes to be disclosed to other Directors or Board Committee members information not known by them, but known by the Director to be material to discharging their decision-making or oversight functions, except that disclosure is not required to the extent that the Director reasonably believes that disclosure would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.
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- Director Reliance on Others. Unless a Director has knowledge making reliance unwarranted, then in discharging the Director’s duties, including duties as a Board Committee member, the Director may rely: (1) on the performance by any of the following individuals listed in (A) or (C) to whom the Board has formally or informally delegated the authority or duty to perform one or more of the Board’s delegable functions; and (2) upon information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the following individuals:
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- one or more Cooperative Officers or employees whom the Director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided;
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- legal counsel, public accountants, or other individuals retained by the Cooperative regarding matters involving skills or expertise the Director reasonably believes are matters within the individual’s professional or expert competence and as to which the individual merits confidence; and
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- a Board Committee of which the Director is not a member if the Director reasonably believes the Board Committee merits confidence.
Section 4.12 – Close Relative. The term “Close Relative” means an individual
who:
- through blood, law, or marriage, is a spouse, child, stepchild, father, stepfather, mother, stepmother, brother, stepbrother, half-brother, sister, stepsister, half- sister, grandparent, grandchild, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law; or
- resides in the same residence (collectively, “Close Relative”).
An individual qualified and elected, designated, or appointed to a position does not become a Close Relative while serving in the position because of a marriage or legal action to which the individual was not a party.
Article 5 – Board Meetings and Director Voting
Section 5.1 – Regular Board Meetings. The Board shall regularly meet at
the date, time, and location determined by the Board (“Regular Board Meeting”). Except as otherwise provided in these Bylaws, the Board may hold Regular Board Meetings without notice. For good cause, the President may change the date, time, or location of a Regular Board Meeting. A Director not attending a Board Meeting at which the Regular Board Meeting date, time, or location is changed is entitled to receive notice of the Regular Board Meeting change at least two (2) days before the next Regular Board
Meeting. All Directors are entitled to receive notice of a President’s change in a Regular Board Meeting date, time, or location at least one day before the changed Regular Board Meeting.
Section 5.2 – Special Board Meetings. The Board, the President, or at least three
- Directors may call a special meeting of the Board (“Special Board Meeting”) by providing each Director at least one (1) day prior written or oral notice indicating the date, time, and location of the Special Board Meeting.
SECTION 5.3 – Conduct of Board Meetings. Except as otherwise provided in these Bylaws, a Regular Board Meeting or Special Board Meeting (“Board Meeting”) may be:
- held in, or out of, a state in which the Cooperative Provides a Cooperative Service; and
If a Director Quorum is present at a Board Meeting, then:
- in descending priority, the following Officers may preside at the Board Meeting:
President, Vice-President, Secretary, and Treasurer; and
- if no Officer is present or desires to preside at a Board Meeting, then the Directors attending the Board Meeting must elect a Director to preside over the Board Meeting.
The Board may promulgate or approve rules, policies, and procedures regarding:
- attendance at, participation in, or presentation during Board Meetings by Persons other than Directors;
- the right to access, inspect, or copy minutes, records, or other documents relating to a Board Meeting by Persons other than Directors; or
- the conduct of Board Meetings.
Section 5.4 – Waiver of Board Meeting Notice. At any time, a Director may waive notice of a Board Meeting by delivering to the Cooperative a written waiver of notice signed by the Director and later filed with the Board Meeting minutes or the Cooperative’s records. A Director’s attendance at, or participation in, a Board Meeting waives notice of the Board Meeting and any matter considered at the Board Meeting, unless the Director:
- upon arriving at the Board Meeting or before the vote on a particular matter, objects to lack of, or defective, notice of the Board Meeting or a matter being considered at the Board Meeting; and
- does not vote for, or assent to, an objected matter.
Section 5.5 – Board Action by Written Consent. Without a Board Meeting, the Board may take an action required or permitted to be taken at a Board Meeting if the action is: (1) taken by all Directors; and (2) evidenced by one or more written consents (“Director Written Consent”): (A) describing the action taken; (B) signed by each Director; and (C) included with the Cooperative’s Board Meeting minutes. Except as a different effective date is provided in the Director Written Consent, action taken by Director Written Consent is effective when the last Director signs the Director Written Consent. A Director Written Consent has the effect of, and may be described as, a Board Meeting vote.
Section 5.6 – Director Quorum and Voting. A quorum of Directors is a
majority of the Directors in office immediately before a Board Meeting begins (“Director Quorum”). If a Director Quorum is present when a matter is voted or acted upon, and unless the vote of a greater number of Directors is required, then the affirmative vote of a majority of Directors present is the act of the Board. A Director may not vote by proxy.
Section 5.7 – Committees. The Board may create a committee of the Board (“Board Committee”) and appoint Directors to serve on the Board Committee. A Board Committee must consist of two (2) or more Directors and serves at the Board’s
discretion. The Board may create a committee of the Members (“Member Committee”) and appoint Members, including Directors, to serve on the Member Committee.
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- Creation and Appointment of Committees. Except as otherwise provided in these Bylaws, at least a majority of Directors currently in office must approve the: (1) creation of a Board Committee or Member Committee; (2) appointment of Directors to a Board Committee; and (3) appointment of Members to a Member Committee.
- Conduct of Committee Meetings. To the same extent as the Board and Directors, the Bylaws addressing Regular Board Meetings, Special Board Meetings, Conduct of Board Meetings, Waiver of Board Meeting Notice, Board Action by Written Consent, and Director Quorum and Voting apply to Board Committees and Directors serving on Board Committees, and to Member Committees and Members serving on Member Committees.
- Committee Authority. A Member Committee may act as specified by the Board, but may not exercise Board authority. Except as otherwise provided in this Bylaw, the Board may authorize a Board Committee to exercise Board authority. Although a Board Committee may recommend, a Board Committee may not act, to: (1) retire and pay Capital Credits; (2) approve the Cooperative’s dissolution or merger, or the sale, pledge, or Transfer of all, or substantially all, Cooperative Assets; (3) elect, appoint, disqualify, or remove a Director, or fill a Board or Board Committee vacancy; or (4) adopt, amend, or repeal Bylaws.
- a Board executive committee is comprised of the President, Vice-President, Secretary, and Treasurer (“Board Executive Committee”); and
The Board Executive Committee: (1) is a Board Committee; (2) may exercise management of the current and ordinary business of the Cooperative, and other duties as authorized by the Board and permitted under these Bylaws; and (3) at the next Board Meeting following an exercise of Board authority, must report to the Board regarding the Board Executive Committee’s exercise of Board authority.
Section 5.9 – Conflict of Interest Transaction. A conflict of interest transaction is a transaction with the Cooperative in which a Director has a direct or indirect interest (“Conflict of Interest Transaction”).
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- Indirect Interest. A Director has an indirect interest in a transaction with the Cooperative if at least one party to the transaction is another Entity: (1) in which the
Director has a material interest or is a general partner; or (2) of which the Director is a director, officer, or trustee.
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- Approval of Conflict of Interest Transaction. Regardless of the presence or vote of a Director interested in a Conflict of Interest Transaction, a Conflict of Interest Transaction may be approved, and a Board Quorum or Member Quorum satisfied, if the Conflict of Interest Transaction’s material facts, and the Director’s interest, are:
- disclosed or known to the Board or Board Committee, and a majority of more than one (1) Director or Board Committee member with no interest in the Conflict of Interest Transaction votes to approve the Conflict of Interest Transaction; or
- disclosed or known to the Members, and a majority of Members not voting under the control of a Director or Entity interested in the Conflict of Interest Transaction votes to approve the Conflict of Interest Transaction.
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- Fair Conflict of Interest Transaction. A Conflict of Interest Transaction that is fair when entered is not: (1) voidable; or (2) the basis for imposing liability on a Director interested in the Conflict of Interest Transaction.
Article 6 – Officers, Indemnification, and Insurance
Section 6.1 – Required Officers. The Cooperative must have the following officers: President, Vice-President, Secretary, and Treasurer (“Required Officers”). The Board shall elect Required Officers: (1) at the first Regular Board Meeting following each Annual Member Meeting, or as soon after each Annual Member Meeting as reasonably possible and convenient; (2) by affirmative vote of a majority of Directors in office; and (3) by secret written ballot without prior nomination.
A Required Officer must be a Director. One (1) Director may simultaneously be Secretary and Treasurer. Except as otherwise provided by Law, this Director may not execute, acknowledge, or verify a document in more than one capacity. Subject to
removal by the Board, a Required Officer holds office until the Required Officer’s successor is elected. The Board shall fill a vacant Required Officer’s position for the unexpired portion of the Required Officer’s term. A Required Officer may delegate duties and responsibilities to a non-Director Cooperative Official.
Section 6.2 – President. Except as otherwise provided by the Board or these Bylaws, the President:
- shall preside, or designate another individual to preside, at all Board and Member Meetings;
- on the Cooperative’s behalf, may sign a document properly authorized or approved by the Board or Members; and
- shall perform all other duties, shall have all other responsibilities, and may exercise all other authority, prescribed by the Board.
Section 6.3 – Vice-President. Except as otherwise provided by the Board or these Bylaws, the Vice-President: (1) upon the President’s death, absence, disability, improper refusal, or inability to act, shall perform the duties, and have the powers, of the President; and (2) shall perform all other duties, shall have all other responsibilities, and may exercise all other authority, prescribed by the Board .
Section 6.4 – Secretary. Except as otherwise provided by the Board or these Bylaws, the Secretary:
- shall be responsible for preparing minutes of Board and Member Meetings;
- shall be responsible for authenticating the Cooperative’s records;
- may affix the Cooperative’s seal to a document authorized or approved by the Board or Members; and
- shall perform all other duties, shall have all other responsibilities, and may exercise all other authority, prescribed by the Board.
Section 6.5 – Treasurer. Except as otherwise provided by the Board or these Bylaws, the Treasurer shall perform all duties, shall have all responsibility, and may exercise all authority, prescribed by the Board.
Section 6.6 – Other Officers. The Board may elect or appoint other officers (“Other Officers”). The same individual may simultaneously hold more than one (1) office. Except as otherwise provided by Law, this individual may not execute, acknowledge, or verify a document in more than one (1) capacity. Other Officers:
- may be Directors, Cooperative employees, or other individuals;
- must be elected or appointed by the affirmative vote of a majority of current Directors;
- may be elected by secret written ballot and without prior nomination;
- may assist Required Officers; and
- shall perform all duties, shall have all responsibilities, and may exercise all authority, prescribed by the Board.
Section 6.7 – Responsibility for Corporate Reports. The Cooperative’s principal executive officer or officers and the principal financial officer or officers, or persons performing similar functions, must certify in each annual or quarterly report filed or submitted to the Members or a lender or government agency:
- the signing officer has reviewed the report;
- based on the officer’s knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading;
- based on the officer’s knowledge, the financial statements, and other financial information included in the report, fairly present in all material respects the
financial condition and results of operations of the Cooperative as of, and for, the periods presented in the report;
- the signing officers: (A) are responsible for establishing and maintaining internal controls;(B) have designed the internal controls to ensure that material information relating to the Cooperative and its consolidated subsidiaries is made known to the officers by others within those entities, particularly during the period in which the periodic reports are being prepared; (C) have evaluated the
effectiveness of the Cooperative’s internal controls as of a date within 90 (90) days prior to the report; and (D) have presented in the report their conclusions about the effectiveness of their internal controls based on their evaluation as of that date;
- the signing officers have disclosed to the Cooperative’s auditors and the Board Audit Committee (or persons fulfilling the equivalent function): (A) all significant deficiencies in the design or operation of internal controls which could adversely affect the Cooperative’s ability to record, process, summarize, and report financial data and have identified for the Cooperative’s auditors any material weaknesses in internal controls; and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal controls; and
- the signing officers have indicated in the report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Section 6.09– Officer Contract Rights. The election or appointment of an Officer, by itself, does not create a contract between the Cooperative and the Officer. An Officer’s resignation or removal does not affect the Cooperative’s contract rights, if any, with the Officer.
Section 6.10– Authority to Execute Documents. On the Cooperative’s behalf, two
(2) Required Officers may sign, execute, and acknowledge a document properly authorized or approved by the Board or Members. The Board may authorize additional Cooperative Officials to sign, execute, and acknowledge a document on the
Cooperative’s behalf.
Section 6.11– Officer Compensation. Except as otherwise provided by the Board or in a Bylaw addressing Director compensation, reimbursement, salaries, or benefits, the Cooperative may reasonably compensate, reimburse, pay a salary to, or provide insurance or other benefits to, an Officer.
Section 6.12– Bonds. At the Cooperative’s expense, the Cooperative may purchase a bond covering a Cooperative Official.
Section 6.13– Indemnification. As determined by the Board:
- Indemnification Director or Officer. The Cooperative shall indemnify:
(1) an individual who is or was a Director or Officer; (2) an individual who, while a Director or Officer, is or was serving at the Cooperative’s request as a director, officer, partner, trustee, employee, or agent of another Entity; or (3) the estate or personal representative of such an individual (collectively, “Indemnification Director or Officer”) who was wholly successful, on the merits or otherwise, in defending a threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, or investigative, and whether formal or informal (“Indemnification Proceeding”) to which the Indemnification Director or Officer was, is, or is threatened to be made a named defendant or respondent (“Indemnification Party”) because the Indemnification Director or Officer is or was a Director or Officer.
This indemnification is against reasonable expenses, including counsel fees (“Indemnification Expenses”) actually incurred by the Indemnification Director or Officer in connection with the Indemnification Proceeding.
- Indemnification Individual. The Cooperative may indemnify an
individual who is or was a Cooperative Official (“Indemnification Individual”) and was made, because the Indemnification Individual is or was a Cooperative Official, an Indemnification Party to an Indemnification Proceeding other than an Indemnification Proceeding: (1) by or in the right of the Cooperative in which the Indemnification Individual was adjudged liable to the Cooperative; or (2) charging, and in which the Indemnification Individual was adjudged liable for receiving, improper personal benefit to the Indemnification Individual, whether or not involving action in the Indemnification Individual’s official capacity.
This indemnification is against reasonable Indemnification Expenses incurred in connection with an Indemnification Proceeding by or in the right of the Cooperative; or against the obligation to pay a judgment, settlement, penalty, fine, or reasonable expense, including counsel fees, actually incurred in connection with any other Indemnification Proceeding incurred in the Indemnification Proceeding, if the Indemnification Individual:
- acted in good faith;
- reasonably believed: (A) for conduct as a Cooperative Official, that the
Indemnification Individual’s conduct was in the Cooperative’s best interest; and
(B) for all other conduct, that the Indemnification Individual’s conduct was not opposed to the Cooperative’s best interests; and
- in the case of any criminal Indemnification Proceeding, had no reasonable cause to believe the Indemnification Individual’s conduct was unlawful (collectively, “Indemnification Standard of Conduct”)
To provide this indemnification, a majority vote of the Director Quorum, excluding Directors currently Indemnification Parties to the Indemnification Proceeding (“Indemnification Director Quorum”), must determine: (1) that the Indemnification Individual met the Indemnification Standard of Conduct; and (2) reasonable Indemnification Expenses.
- Advance for Expenses. Before the final disposition of an Indemnification Proceeding, the Cooperative may pay for, or reimburse, the reasonable Indemnification Expenses incurred by an Indemnification Director, Officer, or Individual who is an Indemnification Party to the Indemnification Proceeding (“Indemnification Advance”) if:
- the Indemnification Director, Officer, or Individual furnishes the Cooperative a written: (A) affirmation of the Indemnification Director, Officer, or Individual’s good faith belief that the Indemnification Director, Officer, or Individual has met the Indemnification Standard of Conduct; and (B) unlimited general obligation of the Indemnification Director, Officer, or Individual which need not be secured, may be accepted without reference to financial ability to repay, may be executed personally or on the Indemnification Director, Officer, or Individual’s behalf, and obligates the Indemnification Director, Officer, or Individual to repay the Indemnification Advance if a majority of the Indemnification Director Quorum ultimately determines that the Indemnification Director, Officer, or Individual did not meet the Indemnification Standard of Conduct; and
- a majority of the Indemnification Director Quorum determines that the facts then known to them would not preclude indemnification for the Indemnification Director, Officer, or Individual under this Bylaw.
Section 6.15 – Insurance. Regardless of indemnification authority or requirement, the Cooperative may purchase and maintain insurance on behalf of an individual who is or was a Cooperative Official. This insurance is against a liability, including judgment, settlement or otherwise, or reasonable expenses, including reasonable attorney fees, asserted against or incurred by the Cooperative or the individual in his or her individual capacity, or arising from the individual’s status, as a Cooperative Official.
Article 7 – Cooperative Operation
Section 7.1 – Nonprofit and Cooperative Operation. The Cooperative:
- shall operate on a nonprofit and cooperative basis for the mutual benefit of all Members; and
- may not pay interest or dividends on capital furnished by Patrons.
Section 7.2 – Allocating Capital Credits. The Cooperative shall allocate Capital Credits as provided in this Bylaw. The Cooperative must allocate Capital Credits in a Patron’s name as shown in the Cooperative’s records, regardless of the Patron’s marital status.
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- Patron. The term “Patron” means, during a fiscal year: (1) a Member; and (2) any other Person Using a Cooperative Service to whom the Cooperative is obligated to allocate Capital Credits, which obligation existed before the Cooperative received payment for the Cooperative Service.
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- Allocating Earnings. For each Cooperative Service Provided during a fiscal year, the Cooperative shall equitably allocate to each Patron, in proportion to the quantity or value of the Cooperative Service Used by the Patron during the fiscal year and timely paid for by the Patron, the Cooperative’s operating earnings from Providing the Cooperative Service during the fiscal year. Operating earnings mean the amount by which the Cooperative’s operating revenues from Providing a Cooperative Service exceed the Cooperative’s operating expenses of Providing the Cooperative Service, all as determined under federal cooperative tax law.
For each fiscal year, the Cooperative may, as determined by the Board, use, retain, or equitably allocate the Cooperative’s non-operating earnings. Non-operating
earnings mean the amount by which the Cooperative’s non-operating revenues during a fiscal year exceed the Cooperative’s non-operating expenses during the fiscal year, less any amount needed to offset an operating loss.
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- Capital Credits. For each amount allocated to a Patron, the Patron shall contribute a corresponding amount to the Cooperative as capital. The Cooperative must credit all capital contributions from a Patron to a capital account for the Patron. The Cooperative shall maintain books and records reflecting the capital contributed by each Patron. At the time of receipt by the Cooperative, each capital contribution is treated as though the Cooperative paid the amount allocated to the Patron in cash pursuant to a pre- existing legal obligation and the Patron contributed the corresponding amount to the
Cooperative as capital. The term “Capital Credits” means the amounts allocated to a Patron and contributed by the Patron to the Cooperative as capital.
Consistent with this Bylaw, the allocation of Capital Credits is in the discretion of the Board and the Board must determine the manner, method, and timing of allocating Capital Credits. The Cooperative may use or invest unretired Capital Credits as determined by the Board. To secure a Patron's obligation to pay amounts owed to the Cooperative, including any compounded interest and late payment fee, and in return for the Cooperative providing a Cooperative Service to the Patron, the Cooperative has a
security interest in Capital Credits allocated to the Patron. The Patron authorizes the Cooperative to perfect this security interest by filing a financing statement.
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- Different and Separate Allocations. As reasonable and fair, the Cooperative may allocate Capital Credits to classes of similarly situated Patrons under different manners, methods, and timing, provided the Cooperative allocates Capital Credits to similarly situated Patrons under the same manner, method, and timing. If the Cooperative is a member, patron, or owner of an Entity from which the Cooperative Uses a good or service in Providing a Cooperative Service and from which the Cooperative is allocated a capital credit or similar amount, then, as determined by the Board and consistent with this Bylaw, the Cooperative may separately identify and allocate to the Cooperative’s Patrons this capital credit or similar amount allocated by the Entity.
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- Joint Memberships. Upon receiving written notice and sufficient proof of the termination, conversion, or alteration of a Joint Membership: (1) through the death of a Joint Member, the Cooperative shall assign and transfer to each surviving Joint Member an equal portion of Capital Credits allocated, or to be allocated, to the Joint Membership; or (2) other than through the death of a Joint Member, and except as otherwise provided by a court or administrative body of competent jurisdiction, and except as otherwise provided by the Joint Members, the Cooperative shall assign and transfer to each Joint Member an equal portion of Capital Credits allocated, or to be allocated, to the Joint Membership.
Section 7.3 – Notification and Assignment of Capital Credits. Within a reasonable time after the end of each fiscal year, the Cooperative may notify each Patron in writing of the Capital Credits allocated to the Patron for the preceding fiscal year.
Except as otherwise provided by the Board or these Bylaws, to assign or transfer a
Patron’s Capital Credits: (1) the Cooperative must receive a written request signed by the Patron to assign or transfer the Capital Credits; (2) the Patron and the assignee or transferee must comply with all reasonable requirements specified by the Cooperative; and (3) the Board must approve the assignment or transfer.
Section 7.4 – Retiring Capital Credits. The Cooperative may retire and pay Capital Credits allocated to Patrons and former Patrons as provided in this Bylaw. If the Cooperative retires and pays Capital Credits, then the Cooperative must retire and pay Capital Credits in a Patron’s name as shown in the Cooperative’s records, regardless of the Patron’s marital status.
- General Capital Credit Retirements. At any time before the
Cooperative’s dissolution, liquidation, or other cessation of existence, the Cooperative may generally retire and pay some or all Capital Credits allocated to Patrons and former Patrons.
- Special Capital Credit Retirements. The Cooperative may specially retire and pay some or all Capital Credits allocated to an individual Patron or former Patron:
(1) after the death of the individual; (2) after receiving a written request from the deceased individual’s legal representative; and (3) according to the terms and conditions agreed upon by the Cooperative and the deceased individual’s legal representative. The Cooperative may not specially retire and pay Capital Credits allocated to an Entity Patron or former Entity Patron during or after the Entity’s dissolution, liquidation, or other cessation of existence. Except as otherwise provided in this Bylaw, the Cooperative may specially retire and pay some or all Capital Credits allocated to Patrons and former Patrons.
- Capital Credit Recoupment and Offset. Regardless of a statute of limitation or other time limitation, after retiring Capital Credits allocated to a Patron or former Patron, the Cooperative may recoup, offset, or setoff an amount owed to the Cooperative by the Patron or former Patron, including any compounded interest and late payment fee, by reducing the allocated or net present value amount of retired Capital Credits paid to the Patron or former Patron by the amount owed to the Cooperative.
- Capital Credit Retirement Discretion. The Cooperative may retire and pay Capital Credits only if the Board determines that the retirement and payment will not adversely impact the Cooperative’s financial condition. Consistent with this Bylaw, the retirement and payment of Capital Credits are in the sole discretion of the Board and are not affected by previous retirements and payments. The manner, method, and timing of retiring and paying Capital Credits may be determined only by the Board.
- Different and Separate Capital Credit Retirements. As reasonable and fair, the Cooperative may retire and pay Capital Credits to classes of similarly situated Patrons and former Patrons under different manners, methods, and timing, provided the Cooperative retires and pays Capital Credits to similarly situated Patrons and former Patrons under the same manner, method, and timing. If the Cooperative separately
identified and allocated Capital Credits representing capital credits or similar amounts
allocated to the Cooperative by an Entity in which the Cooperative is or was a member, patron, or owner, then the Cooperative may retire and pay these Capital Credits only after the Entity retires and pays the capital credits or similar amounts to the Cooperative.
- Discounted Capital Credit Payments. As determined by the Board, before the time the Cooperative anticipates normally retiring and paying Capital Credits, the Cooperative may retire some or all Capital Credits and pay the net present value of the retired Capital Credits. If the Cooperative retires and pays the net present value of Capital Credits to a Patron or former Patron before the time the Cooperative anticipates normally retiring and paying the Capital Credits, then the amount of Capital Credits not paid may be used or retained as permanent, unallocated equity, or equitably allocated .
- Unclaimed Capital Credits. The Cooperative may regularly impose a reasonable dormancy or service charge for each month a Patron or former Patron fails to claim Capital Credits retired and paid to the Patron or former Patron. Through a voluntary written assignment signed by a Patron or former Patron, which assignment is revocable and is not a condition of the Cooperative Providing a Cooperative Service to the Patron, the Patron or former Patron may assign or transfer to the Cooperative any past, present, or future Capital Credits retired and paid to the Patron or former Patron, but not claimed by the Patron or former Patron within three (3) years of retirement and payment, provided the Cooperative undertook or undertakes reasonable measures to notify the Patron or former Patron of the retired and paid Capital Credits.
Section 7.5 – Patron Agreement. Each Patron and former Patron agrees that:
- Capital Credits are not securities under state or federal Law;
- The Patron’s right to Capital Credits vests, accrues, becomes redeemable, and becomes payable only upon the Cooperative retiring the Capital Credits as provided in these Bylaws, and not upon the Cooperative allocating the Capital Credits; and
- As required by Law, each Patron will: (A) report to the appropriate Entity all allocated or retired Capital Credits; and (B) pay the appropriate Entity any tax or similar amount on allocated or retired Capital Credits.
Section 7.6 – Non-Member Patrons and Non-Member Non- Patrons. As a condition of Using a Cooperative Service, and except as otherwise provided by the Board:
- To the same extent as a Member, a Patron who is not a Member (“Non-Member Patron”) and a Person Using a Cooperative Service who is not a Member or
Patron (“Non-Member Non-Patron”) must abide by and be bound to the duties, obligations, liabilities, and responsibilities imposed by the Governing Documents upon Members;
- A Non-Member Patron or Non-Member former Patron has none of the rights granted by the Governing Documents to Members, other than the rights to: (A) be allocated Capital Credits; and (B) be paid retired Capital Credits; and
- A Non-Member Non-Patron has none of the rights granted by the Governing Documents to Members.
Section 7.7 – Reasonable Reserves. Regardless of a contrary Bylaw, and to meet the Cooperative’s reasonable needs, the Cooperative may accumulate and retain amounts exceeding those needed to meet current losses and expenses (“Reasonable Reserves”).
The Cooperative must keep records necessary to determine, at any time, each Patron’s rights and interest in Reasonable Reserves.
Article 8 – Disposition of Cooperative Assets
Section 8.1 – Transfer of Cooperative Assets. Except for a sale, lease, exchange, disposition, conversion, or other transfer (“Transfer”) of Cooperative Assets:
(1) to secure indebtedness; (2) pursuant to condemnation or threat of condemnation; (3) pursuant to an existing legal obligation; (4) associated with a Consolidation or Merger;
(5) consisting of the Cooperative’s ownership in an Entity; (6) to an Entity operating on a cooperative basis and Providing electric energy; or (7) to a Cooperative Subsidiary, the Cooperative may Transfer all or substantially all of the Cooperative’s Assets only if:
- At the expense of the Person seeking to purchase, lease, or acquire the Cooperative’s Assets, the Board appoints three independent appraisers, each of whom, within thirty days of appointment, evaluates and renders an
appraisal valuing the Cooperative’s Assets specified in the proposed Transfer (“Appraisal”);
- The Person seeking to purchase, lease, or acquire the Cooperative’s Assets provides to the Cooperative any information requested by the Cooperative;
- Within thirty (30) days of receiving the Appraisals, the Cooperative invites any other Entity operating on a cooperative basis, Providing electric energy, and primarily located within the same state as, or within a state adjacent to, the state in which the Cooperative is primarily located to submit proposals to purchase,
lease, or acquire the Cooperative’s Assets specified in the proposed Transfer, or to Merge or Consolidate with the Cooperative;
- The Board approves the proposed Transfer;
- At least two-thirds (2/3) of the Total Membership approves the proposed Transfer;
- Notice of a Member Meeting at which Members will consider the proposed Transfer states that one of the purposes of the Member Meeting is to consider the Transfer, and includes a copy or summary of the proposed Transfer; and
- In proportion to the value or quantity of Cooperative Services Used by Members during the period in which the Cooperative owned a Cooperative Asset, the Cooperative allocates to Members as Capital Credits any consideration received for the Cooperative’s Assets that exceeds the amount paid for the Cooperative Assets.
Except as otherwise provided by the Members, after the Members approve a Transfer, the Board may abandon the Transfer. To secure indebtedness by the Cooperative or a Cooperative Subsidiary, the Board may Transfer, mortgage, pledge, dedicate to repayment, or encumber any Cooperative Asset. As used in this Bylaw, a Transfer includes the conversion of the Cooperative to another form of business.
Section 8.2 – Merger or Consolidation. The Cooperative may consolidate or merge only with an Entity operating on a cooperative basis that Provides a Cooperative Service (“Consolidate or Merge”). To Consolidate or Merge, the Cooperative must comply with this Bylaw.
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- Board Approval. To Consolidate or Merge, the Board must approve an agreement or plan to Consolidate or Merge (“Consolidation or Merger Agreement”) stating the:
- terms and conditions of the Consolidation or Merger;
- name of each Entity Consolidating or Merging with the Cooperative;
- name of the new or surviving Consolidated or Merged Entity (“New Entity”);
- manner and basis, if any, of converting memberships or ownership rights of each Consolidating or Merging Entity into memberships or ownership rights of, or payments from, the New Entity;
- number of directors of the New Entity, which must equal or exceed seven (7);
- date of the New Entity’s annual meeting;
- names of New Entity directors who will serve until the New Entity’s first annual meeting; and
- other information required by Law.
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- Member Approval. To Consolidate or Merge:
(1) after the Board approves a Consolidation or Merger Agreement, a majority of the Members voting in person or by Mail Ballot, if permitted by law, must approve the Consolidation or Merger Agreement.
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- Notice. The Cooperative shall notify Directors of a Board Meeting, and Members of a Member Meeting, at which Directors or Members may consider a Consolidation or Merger Agreement. This notice and any material soliciting Member approval of the Consolidation or Consolidation Mail Ballot must contain, or be accompanied by, a summary or copy of the Consolidation or Merger Agreement.
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- Other Requirements. The New Entity directors named in the Consolidation or Merger Agreement must sign and file articles of Consolidation or Merger in a manner, and stating the information, required by Law. The Cooperative shall comply with all other requirements for Consolidation or Merger specified by Law. After a Consolidation or Merger Agreement is approved, and before articles of Consolidation or Merger are filed, the Board or Members may abandon the Consolidation or Merger.
Section 8.3 – Distribution of Cooperative Assets Upon Dissolution.
Upon the Cooperative’s dissolution: (1) the Cooperative shall pay, satisfy, or discharge all Cooperative debts, obligations, and liabilities; (2) the Cooperative shall retire and pay all Capital Credits allocated to Patrons and former Patrons; and (3) after paying, satisfying, or discharging all Cooperative debts, obligations, and liabilities, and after retiring and paying all Capital Credits, the remaining assets will be distributed to the Members pro- rata or as otherwise provided by statute.
Article 9 – Miscellaneous
Section 9.1 – Electronic Documents. If a Member or Director owns, controls, or has reasonable access to the applicable or necessary hardware and software, then, regardless of a contrary Bylaw, as determined by the Board, and as allowed by Law:
- the Member or Director consents and agrees to: (A) use, accept, send, and receive an electronic signature, contract, record, notice, vote, communication, and other document regarding a transaction, business, or activity with, for, or
involving the Cooperative (“Electronic Document”); (B) electronically conduct an action, transaction, business, or activity with, for, or involving the Cooperative; and (C) electronically give or confirm this consent and agreement; and
- an Electronic Document sent to or received from the Member or Director satisfies a requirement imposed by the Governing Documents that the underlying signature, contract, record, notice, vote, communication, or other document be in writing;
- electronically sending an Electronic Document to, or receiving an Electronic Document from, the Member or Director satisfies a requirement imposed by the
Governing Documents that the underlying signature, contract, record, notice, vote, communication, or other document be sent or received personally or by mail; and
- the Member or Director electronically taking an action provided in these Bylaws satisfies a requirement imposed by the Governing Documents regarding the form or manner of taking the action.
An Electronic Document electronically sent to a Member or Director or former Member at the Member or Director or former Member’s last known electronic address is considered sent and received on the date sent by the Cooperative. An Electronic Document electronically received from a Member or Director or former Member is considered sent and received on the date received by the Cooperative.
Section 9.2 – Bylaw Amendment. Except as otherwise provided in these Bylaws, these Bylaws may be adopted, amended, or repealed (“Amended”) only by the vote of a majority of Members voting at a Member Meeting or a majority of Directors. However, any alteration, amendment or repeal of the requirement in Article 8, Section
8.1. number 5 of a two-thirds (2/3) majority vote of all the members of the Cooperative for the approval of the sale or disposition of all or substantially all of the Cooperative’s
property and assets must be by an affirmative vote of two-thirds (2/3) of all the members of the Cooperative. Except as otherwise provided in a Bylaw Amendment, the Amendment is effective immediately after the vote approving the Amendment. The Cooperative must notify Members of Amended Bylaws.
- Sponsorship of Bylaw Amendment. The Board may sponsor or propose a Bylaw Amendment. Except as otherwise provided by the Board, Members may sponsor or propose a Bylaw Amendment. Except as otherwise provided by the Board, to be considered at a Member Meeting, a Bylaw Amendment sponsored or proposed by Members must be:
- sponsored by, and accompanied by a dated petition containing the printed names, addresses, and original dated signatures obtained within sixty days of the petition date for, at least seventy-five Members entitled to vote on the Bylaw Amendment;
- delivered to, and received by, the Cooperative at least ninety (90) business days before the Member Meeting at which the Members will consider the proposed Bylaw Amendment;
- after review by the Board, determined lawful by the Board; and
- not altered or modified after delivery to the Cooperative.
- Notice of Bylaw Amendment. Notice of a Member or Board Meeting at which Members or Directors will consider a proposed Bylaw Amendment must: (1) state that the purpose, or one of the purposes, of the Member or Board Meeting is to consider the proposed Bylaw Amendment; and (2) contain, or be accompanied by, a copy or summary of the proposed Bylaw Amendment. After notice of a proposed Bylaw Amendment, the proposed Bylaw Amendment may not be amended to increase the Amendment or to propose a new Amendment. If Members may vote on a proposed Bylaw Amendment by Mail Ballot with Member Meeting, then the proposed Bylaw Amendment may not be amended at the Member Meeting.
Section 9.3 – Rules of Order. Except as otherwise provided by the Board at any time, and except as otherwise provided in the Governing Documents, Robert’s Rules of Order Newly Revised©, 10th Edition governs all: (1) Member Meetings; (2) Board Meetings; (3) Member Committee meetings; and (4) Board Committee meetings.
Section 9.4 – Fiscal Year. The Board may determine and modify the Cooperative’s fiscal year. Except as otherwise provided by the Board, the Cooperative’s
fiscal year is the twelve months ending June 30.
Section 9.5 – Notice. In these Bylaws:
- Notice Type. Except as otherwise provided in these Bylaws, notice may be: (1) oral or written; and (2) communicated: (A) in person; (B) by telephone, telegraph, teletype, facsimile, electronic communication, or other form of wire or wireless communication; (C) by mail or private carrier; or (D) if the above-listed forms of communicating notice are impractical, then by newspaper of general circulation in the area where published, or radio, television, or other form of public broadcast communication.
If addressed or delivered to an address shown in the Membership List, then a written notice or report delivered as part of a newsletter, magazine, or other publication regularly sent to Members constitutes a written notice or report to all Members: (1) residing at the address; or (2) having the same address shown in the Membership List.
- Notice Effective Date. If communicated in a comprehensible manner, then except as otherwise provided in these Bylaws:
- oral notice is effective when communicated; and
- written notice is effective upon the earliest of: (A) when received; (B) with the postmark evidencing deposit in the United States Mail, if correctly addressed and mailed with first class postage affixed, then five days after deposit in the United States Mail, or if correctly addressed and mailed with other than first class, registered, or certified postage affixed, then thirty days after deposit in the United States Mail; or (C) if sent by registered or certified mail, return receipt requested, and if the return receipt is signed by, or on behalf of, the addressee, then on the date indicated on the return receipt.
Written notice is correctly addressed to a Member if addressed to the Member’s address shown in the Membership List.
Section 9.6 – Governing Law. These Bylaws must be governed by, and interpreted under, the laws of the state in which the Cooperative is incorporated.
Section 9.7 – Titles and Headings. Titles and headings of Bylaw articles, sections, and subsections are for convenience and reference and do not affect the interpretation of a Bylaw article, section, or subsection.
Section 9.8 – Partial Invalidity. When reasonably possible, every Bylaw article, section, subsection, paragraph, sentence, clause, or provision (collectively, “Bylaw Provision”) must be interpreted in a manner by which the Bylaw Provision is valid. The invalidation of a Bylaw Provision by an Entity possessing proper jurisdiction and authority, which invalidation does not alter the fundamental rights, duties, and
relationship between the Cooperative and Members, does not invalidate the remaining Bylaw Provisions.
Section 9.9 – Cumulative Remedies. The rights and remedies provided in these Bylaws are cumulative. The Cooperative or a Member asserting a right or remedy provided in these Bylaws does not preclude the Cooperative or Member from asserting other rights or remedies provided in these Bylaws.
Section 9.10 – Entire Agreement. Between the Cooperative and a Member, the Governing Documents: (1) constitute the entire agreement; and (2) supersede and replace a prior or contemporaneous oral or written communication or representation.
Section 9.11 – Successors and Assigns. Except as otherwise provided in these Bylaws: (1) the duties, obligations, and liabilities imposed upon, and the rights granted to, the Cooperative by these Bylaws are binding upon, and inure to the benefit of, the Cooperative’s successors and assigns; and (2) the duties, obligations, and liabilities
imposed upon a Member by these Bylaws are binding upon the Member’s successors and assigns. The binding nature of the duties, obligations, and liabilities imposed by these Bylaws upon the successors and assigns of the Cooperative or a Member does not relieve the Cooperative or Member of the duties, obligations, and liabilities imposed by these Bylaws.
Section 9.12 – Waiver. The failure of the Cooperative to assert a right or remedy provided in these Bylaws does not waive the right or remedy provided in these Bylaws.
Section 9.13 – Lack of Notice. The failure of a Member or Director to receive notice of a Meeting, action, or vote does not affect, or invalidate, an action or vote taken by the Members or Board.
Heart of Texas Electric Cooperative Inc.
Distributed Generation Procedures & Guidelines Manual for Members
PURPOSE
The purpose of this “Distributed Generation Procedures and Guidelines Manual for Members” (“Manual”) is to provide procedures, guidelines and requirements for a Member to install and connect to the Cooperative’s electric distribution system certain electric generation facilities described and referred to as “Distributed Generation”. The Member is required to submit an application, fulfill the requirements set forth in the Manual, and execute an agreement with the Cooperative prior to connecting the Member’s Distributed Generation facilities to the Cooperative’s electric distribution system.
The Cooperative reserves the right to revise and amend this Manual from time to time.
GENERAL
In order to receive electric service from the Cooperative, a customer must join or become a “member” of the Cooperative. Throughout this manual, customers will be referred to as “Members”. For more information about the Cooperative membership application process, including any applicable membership fees or deposits, see the Cooperative to request new member information (member/customers that intend to only export power to the distribution cooperative will have to become a cooperative member due to billing/metering issues. Any gross metering arrangement will accumulate patronage and may allow member to participate in patronage capital margin allocation)
It is the intent of the Cooperative to allow Members to install Distributed Generation (DG) facilities, provided the Member’s DG facility does not adversely affect the Cooperative or the operation of the Cooperative’s electric system. The Member must conduct his/her own analysis to determine the economic benefit of the DG facility’s operation.
A DG facility that is not connected to the Cooperative’s electric distribution system in any way is known as a “stand-alone” or “isolated” DG. The Member may operate a DG facility in a stand- alone or isolated fashion as long as such DG facility does not adversely affect the Cooperative or the Cooperative’s electric distribution system. A DG facility interconnected in any way to the Cooperative’s electric distribution system shall be considered as operating in “parallel”. For purposes of this Manual, a DG facility is considered operating in “parallel” anytime it is interconnected to the Cooperative’s electric distribution system in any way, even if the Member does not intend to export power to the Cooperative or its Power Supplier. All provisions of this Manual shall apply to any parallel operation of DG facilities.
This Manual is not a complete description or listing of all the laws, ordinances, rules and regulations that a Member must or should follow, nor is this Manual intended to be an installation or safety manual. The Member requesting to interconnect a DG facility to the Cooperative’s electric distribution system is responsible for and must follow, in addition to all provisions of this Manual, the Cooperative’s Rules and Regulations for Electric Service, the Cooperative’s Line Extension Policy, the Policies and Procedures of the Cooperative’s power supplier where applicable, the current IEEE 1547 Standard Guide for Distributed Generation Interconnection, and any and all other applicable governmental and regulatory laws, rules, ordinances or requirements. All legal, technical, financial, and other requirements in the following sections of this Manual must be met prior to interconnection of the DG facility to the Cooperative’s electric distribution system.
A Member may serve all of its loads behind the meter at the location serving the DG facility, but the Member will not be allowed to serve multiple meters, multiple consuming facilities or other Members with a single DG facility or under a single DG application.
DG facilities equal to or larger than 4 MW are not covered by this Manual and will be considered by the Cooperative and its Power Supplier on a case-by-case basis.
- DETERMINE THE CATEGORY OF DISTRIBUTED GENERATION FACILITY
For the purpose of this Manual, each DG facility will be categorized in accordance with the following criteria.
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- Connection Level Category
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- Connected to the Cooperative’s electric distribution system
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The Member requests and/or the Member’s DG facility requires connection to the Cooperative’s system. All provisions of this manual cover facilities in this category less than 4 MW.
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- Connected to the Cooperative’s Power Supplier’s system
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The Member requests and/or the Member’s DG facility requires connection to the Cooperative’s Power Supplier’s system. This manual does NOT cover this category.
- Power Export Category
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- Parallel – no power export
The Member operates a DG system connected in any way to the Cooperative’s electric distribution system but with no intention to export power to the Cooperative and/or its Power Supplier.
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- Parallel – power generated to be both consumed and exported
The Member operates a DG system connected in any way to the Cooperative’s electric distribution system designed primarily to serve the Member’s own load but with the intention to export excess power to the Cooperative.
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- Parallel – power generated to be exported only
The Member operates a DG system connected in any way to the Cooperative’s electric distribution system designed primarily with the intention to export power to the Cooperative,
- Qualifying or Non-Qualifying Category
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- Qualifying Facilities (QF) are defined by the Public Utility Regulatory Policies Act of 1978 (PURPA). Refer to CFR Title 26, Volume 4, Sec. 292.204. Qualifying Facilities will always be given consideration by the Cooperative for connection.
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- The distinction between QF and Non-Qualifying Facilities (NQF) mainly deals with fuel use.
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- In general, a QF must have as its primary energy source biomass, waste, renewable resources, geothermal resources or any combination.
- A DG facility will normally be considered as a NQF by the Cooperative.
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- The Cooperative will provide interconnection for a DG facility to a Member, subject to the provisions of this Manual and all other applicable rules and regulations.
- The Cooperative will negotiate a power purchase agreement with a Member with a DG facility that is a QF, subject to the provisions of this Manual and all other applicable rules and regulations.
- The Cooperative may negotiate a power purchase agreement with a Member with a DG facility that is a NQF.
- Size Category
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- Facilities 25 kW and smaller
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- Facilities ≤ 25 kW of connected generation will be placed in this size category unless the Member requests connection under the > 50 kW and ≤ 4 MW size category
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- Facilities above 50 kW and equal to or below 4 MW
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- Facilities ≤ 25 kW of connected generation may be placed in this size category if so requested by the Member
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- Facilities above 4 MW of connected generation (not considered under this manual)
- MEMBER’S INITIAL REQUIREMENTS
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- Notification
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- The Member must meet all the Cooperative’s membership and service requirements in addition to the requirements in the Manual.
- Anyone owning or operating a DG facility or facilities in parallel with the Cooperative’s electric distribution system must notify the Cooperative of the existence, location and category of the DG facility.
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- Service Request
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- In advance of any request for an interconnection, the Member must contact the Cooperative and complete the “Cooperative Application for DG Interconnection and Parallel Operation” (see Exhibit C)
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- A separate form and application fee must be submitted for each DG facility and each location.
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- Submittal of a DG Plan
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- As a part of the application, the Member shall submit a plan detailing the electrical design, interconnection requirements, size, and operational plans for the DG facility (the “DG Plan”). Either at the time of submission or at any time during the review process, the Cooperative may require additional information or may require the DG Plans to be prepared by a Professional Engineer registered in the State of Texas.
- Prior to review of the application and DG Plan by the Cooperative, the Member shall pay an application fee as indicated below. A separate fee must be submitted for each DG facility.
- In the case of DG facilities (i) to be operated in parallel with the Cooperative’s electric distribution system, (ii) with no intention to export power to the Cooperative and (iii) are of standard manufacture and design and intended entirely as emergency or back-up power supply for the facility, the Cooperative may, at its sole discretion, waive the application fee.
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DG Size (Connected Generation) |
Application Fee |
Additional Engineering Fee |
< 5 kW |
$50 |
None |
5 kW to 25 kW |
$100 |
As Required |
26 kW to 1 MW |
$150 |
As Required |
Over 1 MW to 4 MW |
$250 |
As Required |
> 4 MW |
Not covered by this manual |
- COOPERATIVE REVIEW PROCESS
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- Plan Review Process
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- The Cooperative and its Power Supplier, if requested by Cooperative, will review the application and accompanying documents, plans, specifications, and other information provided and will return an interconnection analysis to the Member within 60 days of receipt of final plans and specifications.
- Technical review will be consistent with guidelines established by the most recent IEEE Standard 1547 Guide for Distributed Generation Interconnection.
- If corrections or changes to the plans, specifications and other information are to be made by the Member, the 60-day period may be reinitialized when such changes or corrections are provided to the Cooperative. In addition, any changes to the site or project requiring new analysis by the Cooperative may require additional costs and a new DG Plan. The cost will be determined by the Cooperative and shall be paid by the Member.
- The Member acknowledges and agrees that any review or acceptance of such plans, specifications and other information by the Cooperative and/or its Power Supplier shall not impose any liability on the Cooperative and/or its Power Supplier and does not guarantee the adequacy of the Member’s equipment or DG facility to perform its intended function. The Cooperative and its Power Supplier disclaims any expertise or special knowledge relating to the design or performance of such generating installations and does not warrant
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the efficiency, cost-effectiveness, safety, durability, or reliability of such DG facilities and installations.
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- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify its electric delivery systems in order to serve the Member’s DG facilities and/or purchase or continue to purchase the output of the Member’s DG facilities, or because the quality of the power provided by the Member’s DG facility adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will be responsible to reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG facilities.
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- SALES TO AND PURCHASES FROM A DG FACILITY
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- For any QFs or NQF where the Member desires to export power:
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- All DG facilities will be connected under one of the Cooperative’s existing rates.
- All sales of electric power and energy by the Cooperative to a Member shall be consistent with the applicable retail rate schedule established by the Cooperative as if there were no DG installation at the Member’s premises.
- All applicable rates and charges included in the Cooperative’s rate shall apply to a DG facility in addition to any special charges listed in the policy.
- The Member shall pay all rates and charges so listed.
- The Cooperative is under no obligation to purchase power from a NQF.
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- For QF ≤ 25 kW where the Member desires to export power:
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- For power produced in excess of the Member’s on-site requirements, the Member will be compensated by the retail purchase meter running in reverse (referred to as “net metering”). The Cooperative shall bill the Member for the excess energy supplied by the Cooperative over and above the energy supplied by the Member during each billing period according to the Cooperative’s applicable retail rate schedule.
- When the energy supplied by the Member exceeds the energy supplied by the Cooperative during a billing period, the monthly charge and/or minimum bill of the Member’s applicable retail rate schedule shall be billed by the Cooperative in addition to the monthly metering charge, and the excess energy shall be provided at no charge to the Cooperative.
- The Member shall sign an approved contract for interconnection service with the Cooperative.
- In addition to all other charges, the Cooperative may bill the Member for any additional facilities charges as determined in the contract for service.
- The Cooperative may, at its sole discretion, purchase power from a NQF under the terms of this section.
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- For QF > 25 kW where the Member desires to export power:
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- No net metering shall be used. The type of metering to be used shall be specified at the sole discretion of the Cooperative. The metering shall provide data so the Cooperative
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can determine each billing period the energy supplied to the Member by the Cooperative and the energy supplied to the Cooperative by the Member.
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- An approved load profile meter shall be used which can be remotely read by the Cooperative and/or its Power Supplier through an approved communications link. If the site selected makes the installation of an approved communications link not feasible, the meter shall be read monthly by Cooperative personnel and the Member shall be billed for the additional cost of reading the meter.
- The Cooperative shall bill the Member for the full energy used by the Member during each billing period according to the Cooperative’s applicable retail rate schedule.
- In addition to all other charges, the Cooperative may add an additional monthly customer charge for Members with DG facilities to recover any additional billing, meter reading and/or customer service costs.
- The Cooperative shall pay the Member on a monthly basis for the energy supplied by the Member to the Cooperative. The rate paid by the Cooperative to the Member shall be the Cooperative’s avoided cost of generation determined as provided in the Cooperative’s Policy. Avoided cost shall be defined as cost avoided by the Cooperative due to purchase of the Member’s energy.
- The Member shall sign approved contracts for Interconnection of Distributed Generation with the Cooperative as required.
- In addition to all other charges, the Cooperative may bill the Member for any additional facilities charges as determined in the contract for service and the Cooperative’s policy.
- The Cooperative may, at its sole discretion, purchase power from a NQF under the terms of this section.
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- The Cooperative shall not be required to make any purchases that will cause the Cooperative to not be in compliance with any applicable contracts or requirements with its power suppliers.
- MEMBER’S RESPONSIBILITY PRIOR TO OPERATION
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- Line Extension and Modifications to Cooperative’s Facilities
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- As a part of the interconnection analysis performed by the Cooperative, the Member will be provided with an estimate of any line extension or other cost to be incurred in providing electric delivery service to the Member’s DG facility.
- Notwithstanding the Cooperative’s line extension policy, the Member shall pay in advance the full cost of the construction of any transmission, substation, distribution, transformation, metering, protective, or other facilities or equipment which, at the sole discretion of the Cooperative and/or its Power supplier, is required to serve the Member’s DG facility.
- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify its electric delivery systems in order to serve the Member’s DG facilities and/or purchase or continue to purchase the Member’s output from the Member’s DG facility, or because the quality of the power provided by the Member’s DG facility adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will be responsible to reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG facilities.
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- In the event the Cooperative at any time in the future changes primary voltage of distribution facilities serving the DG installation or the Member’s premises or location such that metering equipment, transformers and/or any other Member-owned equipment must be changed, the full cost of the change will be borne by the Member.
- In all cases, the Member shall pay the full cost of the installation of a visible load break disconnect switch by and to the sole specification of the Cooperative. The switch will be readily accessible to Cooperative personnel and of a type that can be secured in an open position by a Cooperative padlock.
- Section VII of this Manual includes additional detail and operational and safety requirements. The Member will follow all requirements of Section VII of these Guidelines prior to and during operation of the Member’s DG facility.
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- Applicable Regulations
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- The Member shall comply with all applicable policies and procedures of the Cooperative and/or its Power Supplier. (DG policies and procedures included.)
- The Member shall comply with all applicable laws, ordinances rules and regulations of any federal, county, state, and/or local authority, including, but not limited to: the most recent IEEE Standard 1547 Guide for Distributed Generation Interconnection, applicable ANSI standards, including ANSI C84.1 Range A relating to installation, safety, easements, code restrictions, operation and other matters.
- The Member shall be solely responsible for compliance with all applicable environmental laws, requirements and regulations, including but not limited to reporting and permits.
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- Liability Insurance
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- Facilities 25 kW and smaller
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- Prior to interconnection, the Member must provide a certificate of insurance showing satisfactory liability insurance including contractual liability insurance covering indemnity agreements which insures the Member against all claims for property damage and for personal injury or death arising out of, resulting from or in any manner connected with the installation, operation and maintenance of the Member’s generating equipment.
- The amount of such insurance coverage shall be not less than $500,000 per occurrence. This amount may be increased at the sole discretion of the Cooperative if the nature of the project so requires.
- The insurance policy will not be changed or canceled during its term without thirty days written notice to the Cooperative.
- The Member shall provide proof of such insurance to the Cooperative annually and at any time upon request.
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- Facilities larger than 25 kW
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- Prior to interconnection, the Member must provide a certificate of insurance showing satisfactory liability insurance including contractual liability insurance covering indemnity agreements which insures the Member against all claims for property damage and for personal injury or death arising out of, resulting from or in any manner connected with the installation, operation and maintenance of the Member’s generating equipment.
- The amount of such insurance coverage shall be not less than $500,000 per occurrence. This amount may be increased at the sole discretion of the Cooperative if the nature of the project so requires.
- The certificate shall provide that the insurance policy will not be changed or canceled during its term without thirty days written notice to the Cooperative. The term of the insurance shall be coincident with the term of the interconnection contract or shall be specified to renew throughout the length of the interconnection contract.
- The Member shall provide proof of such insurance to the Cooperative at least annually and at any time upon request.
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- Contracts
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- Interconnection Contract
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- The Member must sign and deliver to the Cooperative an interconnection contract substantially in the form as shown in Exhibit I or II.
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- Purchase Power Contract (where the Member with a QF desires to deliver power or, in the case of a Member with a NQF, the Cooperative agrees to purchase power)
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- ≤ 25 kW: Net Metering: As outlined in the Cooperative’s policy
- > 25 kW and ≤ 4 MW: The Member will sign and deliver a power purchase contract with the Cooperative based on avoided cost data in the Cooperative policy.
- > 4MW: DG facilities of this size are not covered by this manual and will be considered by the Cooperative and its Power Supplier on a case-by-case basis.
- The Cooperative will provide the required contract forms with the manual.
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- Initial Interconnection
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- Upon satisfactory completion of the review process and execution of required agreements as outlined in this Manual, the Cooperative will begin the installation of the interconnection for the DG facilities. The interconnection will be completed as soon as practical after completion of the review process and execution of the necessary contracts. After completion of interconnection requirements and prior to initiation of service, the Cooperative will conduct a final inspection of the facilities and interconnection to the Cooperative’s system. Upon satisfactory final inspection, the Cooperative will initiate service to the Member.
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- The Cooperative’s review process and final inspection is intended as a means to safeguard the Cooperative’s facilities and personnel. Any review by the Cooperative and/or its Power Supplier shall not impose any liability on the Cooperative and/or its Power Supplier and does not guarantee the adequacy of the Member’s equipment to perform its intended function. The Cooperative and its Power Supplier disclaims any expertise or special knowledge relating to the design or performance of generating installations and does not warrant the efficiency, cost-effectiveness, safety, durability, or reliability of such DG installations.
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- REFUSAL TO INTERCONNECT SERVICE OR DISCONNECTION OF INTERCONNECTION SERVICE
The Cooperative may, at its sole discretion, prevent the interconnection, or disconnect the interconnection, of any DG facilities due to reasons such as safety concerns, reliability issues, power quality issues, breach of interconnection contract or any other reasonable issue. Any disconnection may be without prior notice.
- OPERATION OF PARALLEL FACILITY
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- Purpose
The purpose of this section is to outline the Cooperative’s operational requirements for DG facilities operated in parallel with the Cooperative’s electric distribution system and is not intended to be a complete listing of all operational, regulatory, safety and other requirements.
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- Ownership of facilities
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- The Member shall own and be solely responsible for all expense, installation, maintenance and operation of all facilities, including all power generating facilities, at and on the Member’s side of the point of common coupling as defined by the IEEE.
- Exceptions include Cooperative-owned metering equipment and transformers.
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- Self-Protection of DG Facilities
- The Member will furnish, install, operate and maintain in good order and repair all equipment necessary for the safe operation of the DG facilities operated in parallel with the Cooperative’s electric distribution system.
- Member’s equipment will have capability to both establish and maintain synchronism with the Cooperative’s system and to automatically disconnect and isolate the DG facility from the Cooperative’s system.
- The Member’s DG facility will be designed, installed and maintained to be self- protected from normal and abnormal conditions on the Cooperative’s system including, but not limited to, overvoltage, undervoltage, overcurrent, frequency deviation, and faults. Self-protection will be compatible with all applicable Cooperative protection arrangements and operating policies.
- Additional protective devices and/or functions may be required by the Cooperative when, in the sole judgment of the Cooperative, the particular DG installation and/or the Cooperative system characteristics so warrant.
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- Quality of service
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- Member’s DG facility will generate power at the nominal voltage of the Cooperative’s electrical distribution system at the Member’s delivery point as defined by ANSI C84.1 Range A.
- Member’s DG facility will generate power at a frequency within the tolerances as defined by IEEE 1547.
- Member’s DG facility shall produce power at a minimum power factor of at least 95% or shall use power factor correction capacitors to ensure at least a 95% power factor.
- The overall quality of the power provided by the Member’s DG facility including, but not limited to, the effects of harmonic distortion, voltage regulation, voltage flicker, switching surges and power factor, will be such that the Cooperative’s electric distribution system is not adversely affected in any manner.
- In the event that the adverse effects are caused in whole or in part by the Member’s DG facility, the Member will correct the cause of such effects, reimburse the Cooperative for required correction, or be disconnected from the Cooperative’s system.
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- Safety disconnect
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- The Member shall install a visible load break disconnect switch at the Member’s expense and to the Cooperative’s specifications.
- The switch will be located so as to be readily accessible to Cooperative personnel in a location acceptable to both the Member and Cooperative.
- The switch shall be a type that can be secured in an open position by a padlock owned by the Cooperative.
- The Cooperative shall have the right to lock the switch open when, in the judgment of the Cooperative:
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- It is necessary to maintain safe electrical operating and/or maintenance conditions,
- The Member’s DG facility adversely affects the Cooperative system, or
- There is a system emergency or other abnormal operating condition warranting disconnection.
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- The Cooperative reserves the right to operate the disconnect switch for the protection of the Cooperative’s system even if it affects the Member’s DG facility. In the event the Cooperative opens and/or closes the disconnect switch:
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- The Cooperative shall not be responsible for energization or restoration of parallel operation of the DG facility.
- The Cooperative will make reasonable efforts to notify the Member.
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- The Member will not bypass the disconnect switch at any time for any reason.
- Signage shall be placed by the Cooperative at the location of the disconnect indicating the purpose of the switch along with contact names and numbers of both the Member and the Cooperative.
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- Members with DG facilities as defined in this Manual which are solely for the purpose of emergency backup or peak shaving without intent to export power shall not operate their DG facilities unless visibly disconnected from the Cooperative’s system.
- In the event the Cooperative loses power to the line serving a Member’s DG facilities for any reason, any Member with DG facilities which are intended to export power shall not operate its DG facilities unless disconnected from the Cooperative’s system.
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- Access
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- Persons authorized by the Cooperative will have the right to enter the Member’s property for purposes of testing, operating the disconnect switch, reading or testing the metering equipment or other service requirements. Such entry onto the Member’s property may be without prior notice.
- If the Member erects or maintains locked gates or other barriers, the Member will furnish the Cooperative with convenient means to circumvent the barrier for full access for the above-mentioned reasons.
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- Modification of the Cooperative’s System
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- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify its electric delivery systems in order to serve the Member’s DG facilities and/or purchase or continue to purchase the output of the Member’s DG facilities, or because the quality of the power provided by the Member’s DG facilities adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will be responsible to reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG facilities.
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- Liability for Injury and Damages
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- The Member assumes full responsibility for electric energy furnished at and past the point of interconnection and shall indemnify the Cooperative and/or its Power Supplier against and hold the Cooperative and./or its Power Supplier harmless from all claims for both injuries to persons, including death resulting therefrom, and damages to property occurring upon the premises owned or operated by Member arising from electric power and energy delivered by the Cooperative or in any way arising directly or indirectly from the Member’s DG facilities except:
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- When the negligence of the Cooperative or its agent or agents was the sole proximate cause of injuries, including death therefrom, to Member or to employees of Member or in the case of a residential Member, to all people of the household, and
- As to all other injuries and damages, to the extent that injuries or damages are proximately caused by or result in whole or in part from:
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- Any negligence of the Cooperative or its agent or agents independent of and unrelated to the maintenance of Cooperative facilities or any condition on Member’s premises, or
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- The breach by the Cooperative of any provision of any contract regarding purchase and/or sale of electrical energy or service between the Member and the Cooperative.
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- The Cooperative and/or its Power Supplier shall not be liable for either direct or consequential damages resulting from failures, interruptions, or voltage and waveform fluctuations occasioned by causes reasonably beyond the control of the Cooperative and/or its Power Supplier including, but not limited to, acts of God or public enemy, sabotage and/or vandalism, accidents, fire, explosion, labor troubles, strikes, order of any court or judge granted in any bona fide adverse legal proceeding or action, or any order of any commission, tribunal or governmental authority having jurisdiction. For claims resulting from failures, interruptions, or voltage and waveform fluctuations occasioned in whole or in part by the negligence of the Cooperative or its agent or agents, the Cooperative shall be liable only for that portion of the damages arising from personal injury, death of persons, or costs of necessary repairs to or reasonable replacement of electrical equipment proximately caused by the negligent acts of the Cooperative or its agent or agents. ALL PROVISIONS NOTWITHSTANDING, IN NO EVENT SHALL THE COOPERATIVE BE LIABLE TO THE MEMBER FOR ANY INTEREST, LOSS OF ANTICIPATED REVENUES, EARNINGS, PROFITS, INCREASED EXPENSE OF OPERATIONS, LOSS BY REASON OF SHUTDOWN OR NON-OPERATION OF MEMBER’S PREMISES OR FACILITIES FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED, IN WHOLE OR PART, TO THIS AGREEMENT.
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- Metering/Monitoring
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- The Cooperative shall specify, install and own all metering equipment.
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- DG facilities ≤ 25 kW
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The DG facility will be net metered by installing a meter which measures the flow of energy in each direction.
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- DG facilities > 25 kW
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- Power transfer at the point of interconnection will be measured by metering equipment as installed and specified at the sole discretion of the Cooperative and/or its Power Supplier.
- There shall be no net metering.
- The meter shall be read at a time or times of month determined at the Cooperative’s sole discretion for remotely acquiring metering data. The Member shall provide the Cooperative an approved communications link at the Member’s cost for this purpose if so requested by the Cooperative.
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- DG facilities > 4 MW (Not covered by this Manual)
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- The Cooperative may, at its sole discretion, require the Member to reimburse the Cooperative for metering and monitoring equipment and installation expense.
- Meter testing shall follow the Cooperative’s standard policy on metering testing and accuracy.
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- At its sole discretion, the Cooperative may meter the DG facility at primary or secondary level.
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- Notice of Change in Installation
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- The Member will notify the Cooperative in writing thirty (30) days in advance of making any change affecting the characteristics, performance, or protection of the DG facility.
- If any modification undertaken by the Member will create or has created conditions which may be unsafe or adversely affect the Cooperative’s system, the Member shall immediately correct such conditions or be subject to immediate disconnection from the Cooperative’s system.
- Any change in the operating characteristics of the DG facility including, but not limited to, size of generator, total facility capacity, nature of facility, fuel source, site change, hours of operation, or type of generator used, will require a new application process, including, but not limited to, application form, application fee, DG Plan and DG Plan review by the Cooperative.
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- Testing and Record Keeping
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- The Member will test all aspects of the protection systems up to and including tripping of the generator and interconnection point at start-up and thereafter as required. Testing will verify all protective set points and relay/breaker trip timing and shall include procedures to functionally test all protective elements of the system. The Cooperative may witness the testing.
- The Member will maintain records of all maintenance activities, which the Cooperative may review at reasonable times.
- For DG facilities greater than 500 kW, a log of generator operations shall be kept. At a minimum, the log shall include the date, generator time on, generator time off, and megawatt and megavar output. The Cooperative may review such logs at reasonable times.
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- Disconnection of Service
The Cooperative may, at its sole discretion, discontinue the interconnection of DG facilities due to reasons such as safety concerns, reliability issues, power quality issues, breach of interconnection contract or any other reasonable issue.
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- Compliance With Laws, Rules and Policy
The DG installation owned and installed by the member shall be installed and operated subject to and in accordance with the terms and conditions set forth in the Cooperative’s rules, regulations, bylaws, rates and policy, as amended from time to time, and if applicable, approved by the Cooperative’s board of directors, which are incorporated herein by reference, and in compliance with all applicable federal, state and local laws, regulations, zoning codes, building codes, safety rules, environmental restrictions, ordinances and regulations, including without limitation, Electric Reliability Council of Texas (ERCOT) Independent System Operator (ISO) directives and ERCOT guidelines, and in accordance with the industry standard prudent engineering practices.
Heart of Texas Electric Cooperative, Inc. |
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Distributed Generation Application Form |
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(Generation 25kW or less) |
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EXHIBIT C |
This application should be completed as soon as possible and returned to the Cooperative Customer Service representative in order to begin processing the request. See Distributed Generation Procedures and Guidelines Ma additional information. |
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INFORMATION: This application is used by the Cooperative to determine the required equipment configuration for the Member’s Distribu facility. Every effort should be made by the Member to supply as much information as possible. |
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PART 1 |
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OWNER/APPLICANT: |
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Mailing Address: |
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City |
County |
State |
Phone Number: |
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Representative: |
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PROJECT DESIGN/ENGINEERING (as applicable) |
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Company: |
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Mailing Address: |
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City |
County |
State |
Phone Number: |
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Representative: |
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TYPE OF DISTRIBUTED GENERATOR (as applicable) |
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Photovoltaic Wind Microturbine |
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Diesel Engine Gas Engine Turbine Other |
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ESTIMATED LOAD INFORMATION |
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The following information will be used to help properly design the Cooperative’s interconnection for the DG facility. This information is as a commitment or contract for billing purposes. |
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Total Site Load |
(kW) |
Total DG Output |
Mode of Operation (check all that apply) |
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Isolated |
Paralleling |
Power Export |
DESCRIPTION OF PROPOSED DG INSTALLATION AND OPERATION |
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Give a general description of the proposed installation, including when you plan to operate the DG facility. |
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PART 2 |
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(Complete all applicable items. Copy this page as required for each DG facility.) |
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SYNCHRONOUS GENERATOR DATA |
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Unit Number: Total number of units with listed specifications on site: |
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Manufacturer: |
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Type: Date of manufacture: |
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Serial Number (each): |
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Phases: Single Three R.P.M.: Frequency (Hz): |
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Rated Output (for one unit): Kilowatt Kilovolt-Ampere |
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Rated Power Factor (%): Rated Voltage (Volts) Rated Amperes: |
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Field Volts: Field Amps: Motoring power (kW): |
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Synchronous Reactance (X’d): % on KVA base |
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Transient Reactance (X’d): % on KVA base |
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Subtransient Reactance (X’d): % on KVA base |
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Negative Sequence Reactance (Xs): % on KVA base |
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Zero Sequence Reactance (Xo): % on KVA base |
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Neutral Grounding Resistor (if applicable): |
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2 I2 t of K (heating time constant): |
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Additional Information: |
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INDUCTION GENERATOR DATA |
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Rotor Resistance (Rr): ohms |
Stator Resistance (Rs): ohms |
Rotor Reactance (Xr): ohms |
Stator Reactance (Xs): ohms |
Magnetizing Reactance (Xm): ohms |
Short Circuit Reactance (Xd”): ohms |
Design letter: |
Frame Size: |
Exciting Current: |
Temp Rise (deg Cº): |
Reactive Power Required: Vars (no load), Vars (full load) |
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Additional Information: |
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PRIME MOVER (Complete all applicable items) |
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Unit Number: Type: |
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Manufacturer: |
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Serial Number: Date of manufacturer: |
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H.P. Rates: H.P. Max.: Inertia Constant:________________ lb.-ft2 |
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Energy Source (hydro, steam, wind, etc.) |
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GENERATOR TRANSFORMER (Complete all applicable items) |
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TRANSFORMER (between generator and utility system) |
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Generator unit number: Date of manufacturer: |
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Manufacturer: |
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Serial Number: |
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High Voltage: KV, Connection: delta wye, Neutral solidly grounded? |
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Low Voltage: KV, Connection: delta wye, Neutral solidly grounded? |
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Transformer Impedance (Z): % on KVA base |
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Transformer Resistance (R): % on KVA base |
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Transformer Reactance (X): % on KVA base |
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Neutral Grounding Resistor (if applicable: |
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INVERTER DATA (if applicable) |
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Manufacturer: Model: |
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Rate Power Factor (%): Rated Voltage (Volts): Rated Amperes: |
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Inverter Type (ferroresonant, step, pulse-width modulation, etc.): |
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Type commutation: |
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forced |
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line |
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Harmonic Distortion: |
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Maximum Single Harmonic (%) |
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Maximum Total Harmonic (%) |
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Note: |
Attach all available calculations, test reports, and oscillographic prints showing inverter output voltage and cu |
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POWER CIRCUIT BREAKER (if applicable) |
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Manufacturer: Model: |
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Rated Voltage (kilovolts): Rated Ampacity (Amperes) |
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Interrupting rating (Amperes): BIL Rating |
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Interrupting medium / insulating medium (ex. Vacuum, gas, oil) / |
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Control Voltage (Closing): (Volts) |
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AC |
DC |
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Control Voltage (Tripping): (Volts) |
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AC |
DC |
Battery |
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Close energy: |
Spring |
Motor |
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Hydraulic |
Pneumatic |
Othe |
Trip energy: |
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Spring |
Motor |
Hydraulic |
Pneumatic |
Othe |
Bushing Current Transformers: (Max. ratio) Relay Accuracy Class: |
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Multi Ratio? |
No |
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Yes: (available taps) |
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ADDITIONAL INFORMATION |
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In addition to the items listed above, please attach a detailed one-line diagram of the proposed DG facility, all applicable elementary dia (generators, transformers, inverters, circuit breakers, protective relays, etc.), specifications, test reports, etc., and any other applicable dr necessary for the proper design of the interconnection. |
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SIGN OFF AREA |
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The Member agrees to provide the Cooperative with any additional information required to complete the interconnection. The Member shall operate his equipment in accordance with all applicable guidelines set forth by the Cooperative. |
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Applicant |
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Date |
COOPERATIVE CONTACT FOR APPLICATION SUBMISSION AND FOR MORE INFORMATION: |
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Cooperative contact: |
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Title: |
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Address: |
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Phone: |
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Fax: |
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Application |
Applicable to Distributed Generation smaller than 4 MW of connected generation connected in parallel operation to the Cooperative’s electric distribution system in accordance with the Cooperative’s service rules and regulations and the Cooperative’s Distributed Generation Procedures and Guidelines Manual for Members (available on request). |
This rate is not applicable to temporary, shared, or resale service. This rate is applicable to service supplied at one point of delivery and measured through one meter. The Cooperative does not provide shared or resale service. |
Sales to Customer |
Sales to a Distributed Generation Customer shall be consistent with the applicable retail rate schedule established by the Cooperative and in use by the Customer as if there were no Distributed Generation installation. |
Purchases from a Customer – Facility 25 kW of connected generation and smaller |
For power produced in excess of on-site requirements, the Customer will be compensated by the retail purchase meter running in reverse (Net metering). The Cooperative shall bill the Customer for the excess of energy supplied by the Cooperative over and above the energy supplied by the Customer during each billing period according to the Cooperative’s applicable retail rate schedule. |
Net metering is defined as measuring the difference between the electricity supplied by the Cooperative and the electricity generated by the Customer’s |
Distributed Generation facility and delivered to the Cooperative’s electric distribution system over the operable time period. |
When the energy supplied by the Customer exceeds the energy supplied by the Cooperative during a billing period, the monthly charge and/or minimum bill of the retail rate schedule shall be billed by the Cooperative in addition to the monthly metering charge, customer charge, and the excess energy shall be provided at no charge to the Cooperative. |
Customer must be a Qualifying Facility (QF) as defined by the Public Utility Regulatory Policies Act of 1978 (PURPA). If Customer is not a QF, the Cooperative may, at its sole discretion, elect to purchase power from the Customer under the terms of this section. |
Purchases from a Customer – Facility Greater than 25 kW and less than 4 MW of connected generation |
Purchases from a Distributed Generation Customer will be at the Cooperative’s avoided cost. The avoided cost may be calculated periodically. |
Where both sales to the Customer and purchases from the Customer exist in a billing period, the Customer will be compensated by a bill credit at the avoided cost as noted above. |
There shall be no “net metering” for Distributed Generation facilities larger than 25 kW of connected generation. Net metering is defined as measuring the difference between the electricity supplied by the Cooperative and the electricity generated by the Customer’s facility and fed back to the electric grid over the operable time period. |
Customer must be a Qualifying Facility (QF) as defined by the Public Utility Regulatory Policies Act of 1978 (PURPA). If Customer is not a QF, the Cooperative may, at its sole discretion, elect to purchase power from the Customer under the terms of this section. |
Monthly Rate. |
Each billing period the Customer shall be obligated to pay the following charges in addition to all charges indicated on his/her base rate: |
Additional Charge for meter reading by Cooperative personnel where remote access to meter reading is not feasible. |
@ $_50 per meter/month |
As determined at the sole discretion of the Cooperative on a non-discriminatory case-by-case basis to recover any additional operation and maintenance expense caused by the Customer’s facility. |
Data Access – Communications Link |
In addition to all other charges, the Customer will provide the Cooperative at his/her own expense a communications link as approved at the sole discretion of the Cooperative for remotely obtaining meter readings at a time or times of the month as determined at the Cooperative’s sole discretion. |
Contracts |
An Interconnection Contract between the Customer and the Cooperative shall be required in all cases. For Customers greater than 25 kW of connected generation but less than 4 MW of connected generation where power is purchased from the |
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COOPERATIVE AGREEMENT
FOR INTERCONNECTION OF DISTRIBUTED GENERATION
CONTRACT
This Interconnection Agreement (“Agreement”) is made and entered into this day of
, 20 , by Heart of Texas Electric Cooperative, Inc., a corporation organized under the laws of the state of Texas, and (“DG Owner/Operator”), each hereinafter sometimes referred to individually as “Party” or both referred to collectively as the “Parties”. In consideration of the mutual covenants set forth herein, the Parties agree as follows:
The provisions of the Cooperative’s Distributed Generation Manual shall be considered to be a part of this contract.
This agreement provides for the safe and orderly operation of the electrical facilities interconnecting the DG Owner/Operator’s facility at
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and the electrical distribution facility owned by the Cooperative.
This Agreement does not supersede any requirements of any applicable policy in place between the DG Owner/Operator and the Cooperative.
- Intent of Parties: It is the intent of the DG Owner/Operator to interconnect an electric power generator to the Cooperative’s electrical distribution system.
It is the intent of the Cooperative to operate the distribution system to maintain a high level of service to their customers and to maintain a high level of power quality.
It is the intent of both parties to operate the facilities in a way that ensures the safety of the public and their employees.
- Operating Authority: The DG Owner/Operator is responsible for establishing operating procedures and standards within their organization. The operating authority for the DG Owner/Operator shall ensure that the Operator in Charge of the generator is competent in the operation of the electrical generation system and is aware of the provisions of any operating agreements and regulations relating to the safe operation of electrical power systems.
The operating authority for the DG Owner/Operator is:
Name or title of operating authority Address Phone number
- Operator in Charge: The operator in charge is the person identified by name or job title responsible for the real time operation of all electrical facilities related to the interconnection and owned by their organization.
The operator in charge for the DG Owner/Operator is:
Name or title of operating authority Address Phone number
- Suspension of Interconnection: It is intended that the interconnection should not compromise the Cooperative’s protection or operational requirements. The operation of the DG Owner/Operator’s System and the quality of electric energy supplied by the DG Owner/Operator shall meet the standards as specified by the Cooperative. If the operation of the DG Owner/Operator’s system or quality of electric energy supplied (in the case of power export) does not meet the standards as specified, then Heart of Texas Electric Cooperative Inc. will notify the DG Owner/Operator to take reasonable and expedient corrective action. The Cooperative shall have the right to disconnect the DG Owner/Operator’s System, until compliance is reasonably demonstrated. Notwithstanding, the Cooperative may in its sole discretion disconnect the DG Owner/Operator’s generating plant from the Distribution Facility without notice if the operating of the Generating Plant may be or may become dangerous to life and property.
- Maintenance Outages: Maintenance outages will occasionally be required on the Cooperative’s system, and the Cooperative will provide as much notice and planning as possible to minimize downtime. It is noted that in some emergency cases such notice may not be possible. Compensation will not be made for unavailability of Cooperative’s facilities due to outages.
- Access: Access is required by the Cooperative to the DG Owner/Operator’s plant site for maintenance, operating and meter reading. The Cooperative reserves the right, but not the obligation, to inspect the DG Owner/Operator’s facilities.
- Establishment of Point of Interconnection - The point where the electric energy first leaves the wires or facilities owned by the Cooperative and enters the wires or facilities provided by DG Owner/Operator is the "Point of Interconnection." Cooperative and DG Owner/Operator agree to interconnect the Facilities at the Point of Interconnection in accordance with the Cooperative's Rules and Regulations and DG Manual relating to interconnection of Distributed Generation (the "Rules") and as described in the attached Exhibit A. The interconnection equipment installed by the customer ("Interconnection Facilities") shall be in accordance with the Rules as well.
- Responsibilities of Cooperative and DG Owner/Operator for Installation, Operation and Maintenance of Facilities - DG Owner/Operator will, at its own cost and expense, operate, maintain, repair, and inspect, and shall be fully responsible for, its Facilities, unless otherwise specified on Exhibit A. DG Owner/Operator shall conduct operations of its Facilities in compliance with all aspects of the Rules, and Cooperative shall conduct operations of its electric distribution facilities in compliance with all aspects of the Rules, or as further described and mutually agreed to in the applicable Facilities Schedule. Maintenance of Interconnection Facilities shall be performed in accordance with the applicable manufacturers' recommended maintenance schedule. The DG Owner/Operator agrees to cause its Interconnection Facilities to be constructed in accordance with specifications equal to or better than those provided by the National Electrical Safety Code and the National Electrical Code, both codes approved by the American National Standards Institute, in effect at the time of construction.
The DG Owner/Operator covenants and agrees to cause the design, installation, maintenance, and operation of, its Interconnection Facilities so as to reasonably minimize the likeli hood of a malfunction or other disturbance, damaging or otherwise affecting or impairing the System. DG Owner/Operator shall comply with all applicable laws, regulations, zoning codes, building codes, safety rules and environmental restrictions applicable to the design, installation and operation of its Facilities.
Cooperative will notify DG Owner/Operator if there is evidence that the Facilities' operation causes disruption or deterioration of service to other customer(s) served from the System or if the Facilities' operation causes damage to the System. DG Owner/Operator will notify the Cooperative of any emergency or hazardous condition or occurrence with the DG Owner/Operator's Facilities, which could affect safe operation of the System.
- Limitation of Liability and Indemnification
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- Notwithstanding any other provision in this Agreement, with respect to the Cooperative's provision of electric service to DG Owner/Operator and the services provided by the Cooperative pursuant to this Agreement, Cooperative's liability to DG Owner/Operator shall be limited as set forth in the Cooperative's policy and terms and conditions for electric service, which are incorporated herein by reference.
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- Neither Cooperative nor DG Owner/Operator shall be liable to the other for damages for any act or omission that is beyond such party's control, including, but not limited to, any event that is a result of an act of God, labor disturbance, act of the public enemy, war, insurrection, riot, fire, storm, flood, explosion, breakage or accident to any part of the System or to any other machinery or equipment, a curtailment, law, order, or regulation or restriction by governmental, military, or lawfully established civilian authorities.
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- Notwithstanding Paragraph 5.b of this Agreement, the DG Owner/Operator shall assume all liability for, and shall indemnify Cooperative for, any claims, losses, costs, and expenses of any kind or character to the extent that they result from DG Owner/Operator's negligence or other wrongful conduct in connection with the design, construction or operation of the Facilities or Interconnection Facilities. Such indemnity shall include, but is not limited to, financial responsibility for (a) monetary losses; (b) reasonable costs and expenses of defending an action or claim; (c) damages related to death or injury; (d) damages to property; and (e) damages for the disruption of business. This paragraph does not create a liability on the part of the DG Owner/Operator to the Cooperative or a third person, but requires indemnification where such liability exists.
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- Cooperative and DG Owner/Operator shall each be responsible for the safe installation, maintenance, repair and condition of their respective lines, wires, switches, or other equipment or property on their respective sides of the Point of Interconnection. The Cooperative, while retaining the right to inspect, does not assume any duty of inspecting the DG Owner/Operator's lines, wires, switches, or other equipment or property and will not be responsible therefore. DG Owner/Operator assumes all responsibility for the electric service supplied hereunder and the facilities used in connection therewith at or beyond the Point of Interconnection.
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- For the mutual protection of the DG Owner/Operator and the Cooperative, only with Cooperative prior written authorization are the connections between the Cooperative's service wires and the DG Owner/Operator's service entrance conductors to be energized.
- Design Reviews and Inspections - The DG Owner/Operator shall provide to the Cooperative the following documentation and inspection results:
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- One-Line Diagram. The diagram shall include at a minimum, all major electrical equipment that is pertinent to understanding the normal and contingency operations of the DG Interconnection Facilities, including generators, switches, circuit breakers, fuses, protective relays and instrument transformers.
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- Testing Records. Testing of protection systems shall be limited to records of compliance with standard acceptance procedures and by industry standards and practices. These records shall include testing at the start of commercial operation and periodic testing thereafter.
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- The Member acknowledges and agrees that any review or acceptance of such plans, specifications and other information by the Cooperative and/or its Power Supplier shall not impose any liability on the Cooperative and/or its Power Supplier and does not guarantee the adequacy of the Member’s equipment or DG facility to perform its intended function. The Cooperative and its Power Supplier disclaims any expertise or special knowledge relating to the design or performance of such generating installations and does not warrant the efficiency, cost-effectiveness, safety, durability, or reliability of such DG facilities and installations. Put this statement in short form!!!
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- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify its electric delivery systems in order to serve the Member’s DG facilities and/or purchase or continue to purchase the output of the Member’s DG facilities, or because the quality of the power provided by the Member’s DG facility adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will be responsible to reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG facilities.
- Right of Access, Equipment Installation, Removal & Inspection - The Cooperative may send an employee, agent or contractor to the premises of the DG Owner/Operator at any time whether before, during or after the time the Facilities first produces energy to inspect the Interconnection Facilities, and observe the Facility's installation, commissioning (including any testing), startup, and operation.
At all times Cooperative shall have access to DG Owner/Operator's premises for any reasonable purpose in connection with the interconnection described in this Agreement, the Rules, or to provide service to its customers.
- Confidentiality of Information - Unless compelled to disclose by judicial or administrative process, or by other provisions of law or as otherwise provided for in this Agreement, the DG Owner/Operator and the Cooperative will hold in confidence any and all documents and information furnished by the other party in connection with this Agreement.
- Prudent Operation and Maintenance Requirements - The DG Owner/Operator shall operate and maintain its generation and interconnection facilities in accordance with industry standard prudent electrical practices. The said standards shall be those in effect at the time a DG Owner/Operator executes an interconnection agreement with the Cooperative.
- Disconnection of Unit - DG Owner/Operator retains the option to disconnect its Facilities from the System, provided that DG Owner/Operator notifies the Cooperative of its intent to disconnect by giving the Cooperative at least thirty (30) days' prior written notice. Such disconnection shall not be a termination of the agreement unless DG Owner/Operator exercises rights under Section 13.
DG Owner/Operator shall disconnect Facilities from the System upon the effective date of any termination under Section 13.
Subject to the Rules, for routine maintenance and repairs on the System, Cooperative shall provide DG Owner/Operator with seven (7) business days' notice of service interruption.
Cooperative shall have the right to suspend service in cases where continuance of service to DG Owner/Operator will endanger persons or property. During the forced outage of the System serving DG Owner/Operator, Cooperative shall have the right to suspend service to effect repairs on the System, but the Cooperative shall use its efforts to provide the DG Owner/Operator with reasonable prior notice.
- Metering - Metering shall be accomplished as described in the Cooperative’s DG Manual.
- Insurance – Insurance shall be required as described in the Cooperative’s DG Manual.
- Effective Term and Termination Rights - This Agreement becomes effective when executed by both Parties and shall continue in effect until terminated. This agreement may be terminated as follows: (a) DG Owner/Operator may terminate this Agreement at any time by giving the Cooperative sixty days' written notice; (b) Cooperative may terminate upon failure by the DG Owner/Operator to generate energy from the Facilities in parallel within six (6) months after completion of the interconnection; (c) either Party may terminate by giving the other Party at least thirty (30) days prior written notice that the other Party is in default of any of the terms and conditions of the Agreement or the Rules or any rate schedule, policy, regulation, contract, or policy of the Cooperative, so long as the notice specifies the basis for termination and there is opportunity to cure the default; (d) Cooperative may terminate by giving DG Owner/Operator at least sixty (60) days notice in the event that there is a material change in an applicable law, or any requirement of the Cooperative's wholesale electric suppliers or any transmission utility, independent system operator or regional transmission organization having responsibility for the operation of any part of the System.
- Dispute Resolution - Each party agrees to attempt to resolve any and all disputes arising hereunder promptly, equitably and in good faith. If a dispute arises under this Agreement that cannot be resolved by the parties within forty-five (45) working days after written notice of the dispute, the parties agree to submit the dispute to mediation by a mutually acceptable mediator. The parties agree to participate in good faith in the mediation for thirty (30) days. If the parties are unsuccessful in resolving their dispute through mediation, then the parties shall submit to
arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The venue of such arbitration shall be Waco, Texas.
- Compliance with Laws, Rules and Policies - Both the Cooperative and the DG Owner/Operator shall be responsible for complying with all applicable laws, rules and regulations, including but not limited to the laws of the state of Texas, and the Cooperative's DG Manual, Policy, Rules and Regulations, By-Laws and other governing documents. The interconnection and services provided under this Agreement shall at all times be subject to the terms and conditions set forth in the policy schedules and rules of the Cooperative as applicable to the electric service provided by the Cooperative, which policy and rules are hereby incorporated into this Agreement by this reference. The Cooperative shall have the right to publish changes in rates, classification, service or rule, with the proper notification to all DG owners/operators and Cooperative members.
- Severability -If any portion or provision of this Agreement is held or adjudged for any reason to be invalid or illegal or unenforceable by any court of competent jurisdiction, such portion shall be deemed separate and independent, and the remainder of this Agreement shall remain in full force and effect.
- Amendment - This Agreement may be amended only upon mutual agreement of the Parties, which amendment will not be effective until reduced to writing and executed by the Parties.
- Entirety of Agreement and Prior Agreements Superseded - This Agreement, including the Rules and all attached Exhibits and Facilities Schedules, which are expressly made a part hereof for all purposes, constitutes the entire agreement and understanding between the Parties with regard to the interconnection of the facilities of the Parties at the Points of Interconnection expressly provided for in this Agreement. The Parties are not bound by or liable for any statement, representation, promise, inducement, understanding, or undertaking of any kind or nature (whether written or oral) with regard to the subject matter hereof not set forth or provided for herein or in the DG Owner/Operator application, or other written information provided by the DG Owner/Operator in compliance with the Rules. It is expressly acknowledged that the Parties may have other agreements covering other services not expressly provided for herein, which agreements are unaffected by this Agreement.
- Force Majeure -For the purposes of this Agreement, a Force Majeure event is any event:
(a) that is beyond the reasonable control of the affected party; and (b) that the affected party is unable to prevent or provide against by exercising reasonable diligence, including the following events or circumstances, but only to the extent that they satisfy the preceding requirements: acts of war, public disorder, rebellion or insurrection; floods, hurricanes, earthquakes, lighting, storms or other natural calamities; explosions or fires; strikes, work stoppages or labor disputes; embargoes; and sabotage. If a Force Majeure event prevents a party from fulfilling any obligations under this agreement, such party will promptly notify the other party in writing and will keep the other party informed on a continuing basis as to the scope and duration of the Force Majeure event. The affected party will specify the circumstances of the Force Majeure event, its expected duration and the steps that the affected party is taking to mitigate the effect of the event on its performance. The affected party will be entitled to suspend or modify its performance of obligations under this Agreement but will use reasonable efforts to resume its performance as soon as possible.
- Assignment - At any time during the term of this Agreement, the DG Owner/Operator may assign this Agreement to a corporation, an entity with limited liability or an individual (the "Assignee"), provided that the DG Owner/Operator obtains the consent of the Cooperative in advance of the assignment. The Cooperative's consent will be based on a determination that the Assignee is financially and technically capable to assume ownership and/or operation of the DG unit. The company or individual to which this Agreement is assigned will be responsible for the proper operation and maintenance of the unit, and will be a party to all provisions of this Agreement.
- Permits, Fees and Approvals - The Cooperative will have responsibility for the review, approval or rejection of the DG interconnection application. The approval process is intended to ensure that the implementation of the applicant's DG project will not adversely affect the safe and reliable operation of the Cooperative's System. The fees associated with the Application are listed in the most current fee schedule issued by the Cooperative. All fees are to be submitted in the form of a Bank Cashier's check along with the Application, unless other payment terms have been approved in advance by the Cooperative.
- Notices - Notices given under this Agreement are deemed to have been duly delivered if hand delivered or sent by United States certified mail, return receipt requested, postage prepaid, to:
- If to Cooperative:
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- If to DG Owner/Operator:
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The above-listed names, titles, and addresses of either Party may be changed by written notification to the other, notwithstanding Section 17.
- Invoicing and Payment - Invoicing and payment terms for services associated with this Agreement shall be consistent with applicable Rules of the Cooperative.
- Limitations (No Third-Party Beneficiaries, Waiver, etc.) - This Agreement is not intended to, and does not create, rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties. This Agreement may not be assigned by the DG Owner/Operator without the prior written consent of the Cooperative as specified in Section 20. The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered to waive the obligations, rights, or duties imposed upon the Parties.
- Headings - The descriptive headings of the various articles and sections of this Agreement have been inserted for convenience of reference only and are to be afforded no significance in the interpretation or construction of this Agreement.
- Multiple Counterparts - This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument.
REFUSAL TO INTERCONNECT SERVICE OR DISCONNECTION OF INTERCONNECTION SERVICE
The Cooperative may, at its sole discretion, prevent the interconnection, or disconnect the interconnection, of any DG facilities due to reasons such as safety concerns, reliability issues, power quality issues, breach of interconnection contract or any other reasonable issue. Any disconnection may be without prior notice.
I. OPERATION OF PARALLEL FACILITY
- Purpose
The purpose of this section is to outline the Cooperative’s operational requirements for DG facilities operated in parallel with the Cooperative’s electric distribution system and is not intended to be a complete listing of all operational, regulatory, safety and other requirements.
- Ownership of facilities
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- The Member shall own and be solely responsible for all expense, installation, maintenance and operation of all facilities, including all power generating facilities, at and on the Member’s side of the point of common coupling as defined by the IEEE.
- Exceptions include Cooperative-owned metering equipment and transformers.
- Self-Protection of DG Facilities
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- The Member will furnish, install, operate and maintain in good order and repair all equipment necessary for the safe operation of the DG facilities operated in parallel with the Cooperative’s electric distribution system.
- Member’s equipment will have capability to both establish and maintain synchronism, with the Cooperative’s system and to automatically disconnect and isolate the DG facility from the Cooperative’s system.
- The Member’s DG facility will be designed, installed and maintained to be self-protected from normal and abnormal conditions on the Cooperative’s system including, but not limited to, overvoltage, undervoltage, overcurrent, frequency deviation, and faults. Self- protection will be compatible with all applicable Cooperative protection arrangements and operating policies.
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- Additional protective devices and/or functions may be required by the Cooperative when, in the sole judgment of the Cooperative, the particular DG installation and/or the Cooperative system characteristics so warrant.
- Quality of service
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- Member’s DG facility will generate power at the nominal voltage of the Cooperative’s electrical distribution system at the Member’s delivery point as defined by ANSI C84.1 Range A.
- Member’s DG facility will generate power at a frequency within the tolerances as defined by IEEE 1547.
- Member’s DG facility shall produce power at a minimum power factor of at least 95% or shall use power factor correction capacitors to ensure at least a 95% power factor.
- The overall quality of the power provided by the Member’s DG facility including, but not limited to, the effects of harmonic distortion, voltage regulation, voltage flicker, switching surges and power factor, will be such that the Cooperative’s electric distribution system is not adversely affected in any manner.
- In the event that the adverse effects are caused in whole or in part by the Member’s DG facility, the Member will correct the cause of such effects, reimburse the Cooperative for required correction, or be disconnected from the Cooperative’s system.
- Safety disconnect
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- The Member shall install a visible load break disconnect switch at the Member’s expense and to the Cooperative’s specifications.
- The switch will be located so as to be readily accessible to Cooperative personnel in a location acceptable to both the Member and Cooperative.
- The switch shall be a type that can be secured in an open position by a padlock owned by the Cooperative.
- The Cooperative shall have the right to lock the switch open when, in the judgment of the Cooperative:
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- It is necessary to maintain safe electrical operating and/or maintenance conditions,
- The Member’s DG facility adversely affects the Cooperative system, or
- There is a system emergency or other abnormal operating condition warranting disconnection.
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- The Cooperative reserves the right to operate the disconnect switch for the protection of the Cooperative’s system even if it affects the Member’s DG facility. In the event the Cooperative opens and/or closes the disconnect switch:
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- The Cooperative shall not be responsible for energization or restoration of parallel operation of the DG facility.
- The Cooperative will make reasonable efforts to notify the Member.
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- The Member will not bypass the disconnect switch at any time for any reason.
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- Signage shall be placed by the Cooperative at the location of the disconnect indicating the purpose of the switch along with contact names and numbers of both the Member and the Cooperative.
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- Members with DG facilities as defined in this Manual which are solely for the purpose of emergency backup or peak shaving without intent to export power shall not operate their DG facilities unless visibly disconnected from the Cooperative’s system.
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- In the event the Cooperative loses power to the line serving a Member’s DG facilities for any reason, any Member with DG facilities which are intended to export power shall not operate its DG facilities unless disconnected from the Cooperative’s system.
- Access
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- Persons authorized by the Cooperative will have the right to enter the Member’s property for purposes of testing, operating the disconnect switch, reading or testing the metering equipment or other DG and/or service requirements. Such entry onto the Member’s property may be without prior notice.
- If the Member erects or maintains locked gates or other barriers, the Member will furnish the Cooperative with convenient means to circumvent the barrier for full access for the above-mentioned reasons.
- Modification of the Cooperative’s System
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- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify its electric delivery systems in order to serve the Member’s DG facilities and/or purchase or continue to purchase the output of the Member’s DG facilities, or because the quality of the power provided by the Member’s DG facilities adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will be responsible to reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG facilities.
- In the event it is necessary at the time of initial interconnection or at some future time for the Cooperative and/or its Power Supplier to modify electric delivery systems in order to purchase or continue to purchase the Member’s output, or because the quality of the power provided by the Member’s DG adversely affects the Cooperative and/or its Power Supplier’s delivery system, the Member will reimburse the Cooperative and/or its Power Supplier for all costs of modifications required for the interconnection of the Member’s DG installation.
- Liability for Injury and Damages
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- The Member assumes full responsibility for electric energy furnished at and past the point of interconnection and shall indemnify the Cooperative and/or its Power Supplier against and hold the Cooperative and./or its Power Supplier harmless from all claims for both injuries to persons, including death resulting therefrom, and damages to property occurring upon the premises owned or operated by Member arising from electric power and energy delivered by the Cooperative or in any way arising directly or indirectly from the Member’s DG facilities except:
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- When the negligence of the Cooperative or its agent or agents was the sole proximate cause of injuries, including death therefrom, to Member or to employees of Member or in the case of a residential Member, to all people of the household, and
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- As to all other injuries and damages, to the extent that injuries or damages are proximately caused by or result in whole or in part from:
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- Any negligence of the Cooperative or its agent or agents independent of and unrelated to the maintenance of Cooperative facilities or any condition on Member’s premises, or
- The breach by the Cooperative of any provision of any contract regarding purchase and/or sale of electrical energy or service between the Member and the Cooperative.
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- The Cooperative and/or its Power Supplier shall not be liable for either direct or consequential damages resulting from failures, interruptions, or voltage and waveform fluctuations occasioned by causes reasonably beyond the control of the Cooperative and/or its Power Supplier including, but not limited to, acts of God or public enemy, sabotage and/or vandalism, accidents, fire, explosion, labor troubles, strikes, order of any court or judge granted in any bona fide adverse legal proceeding or action, or any order of any commission, tribunal or governmental authority having jurisdiction. For claims resulting from failures, interruptions, or voltage and waveform fluctuations occasioned in whole or in part by the negligence of the Cooperative or its agent or agents, the Cooperative shall be liable only for that portion of the damages arising from personal injury, death of persons, or costs of necessary repairs to or reasonable replacement of electrical equipment proximately caused by the negligent acts of the Cooperative or its agent or agents. ALL PROVISIONS NOTWITHSTANDING, IN NO EVENT SHALL THE COOPERATIVE BE LIABLE TO THE MEMBER FOR ANY INTEREST, LOSS OF ANTICIPATED REVENUES, EARNINGS, PROFITS, INCREASED EXPENSE OF OPERATIONS, LOSS BY REASON OF SHUTDOWN OR NON-OPERATION OF MEMBER’S PREMISES OR FACILITIES FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED, IN WHOLE OR PART, TO THIS AGREEMENT.
- Liability Insurance
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- Facilities 25 kW and smaller
- Prior to interconnection, the Member must provide a certificate of insurance showing satisfactory liability insurance including contractual liability insurance covering indemnity agreements which insures the Member against all claims for property damage and for personal injury or death arising out of, resulting from or in any manner connected with the installation, operation and maintenance of the Member’s generating equipment.
- Facilities 25 kW and smaller
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- The amount of such insurance coverage shall be not less than $500,000 per occurrence. This amount may be increased at the sole discretion of the Cooperative if the nature of the project so requires.
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- The insurance policy will not be changed or canceled during its term without thirty days written notice to the Cooperative.
- The Member shall provide proof of such insurance to the Cooperative upon request.
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- Facilities larger than 25 kW
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- Prior to interconnection, the Member must provide a certificate of insurance showing satisfactory liability insurance including contractual liability insurance covering indemnity agreements which insures the Member against all claims for property damage and for personal injury or death arising out of, resulting from or in any manner connected with the installation, operation and maintenance of the Member’s generating equipment.
- The amount of such insurance coverage shall be not less than $500,000 per occurrence. This amount may be increased at the sole discretion of the Cooperative if the nature of the project so requires.
- The certificate shall provide that the insurance policy will not be changed or canceled during its term without thirty days written notice to the Cooperative. The term of the insurance shall be coincident with the term of the interconnection contract or shall be specified to renew throughout the length of the interconnection contract.
- The Member shall provide proof of such insurance to the Cooperative at least annually.
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- Metering/Monitoring
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- The Cooperative shall specify, install and own all metering equipment.
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- DG facilities ≤ 25 kW
The DG facility will be net metered by installing a meter which measures the flow of energy in each direction.
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- DG facilities > 25 kW
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- Power transfer at the point of interconnection will be measured by metering equipment as installed and specified at the sole discretion of the Cooperative and/or its Power Supplier.
- There shall be no net metering.
- The meter shall be read at a time or times of month determined at the Cooperative’s sole discretion for remotely acquiring metering data. The Member shall provide the Cooperative an approved communications link at the Member’s cost for this purpose if so requested by the Cooperative.
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- DG facilities > 4 MW (Not covered by this Manual)
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- The Cooperative may, at its sole discretion, require the Member to reimburse the Cooperative for metering and monitoring equipment and installation expense.
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- Meter testing shall follow the Cooperative’s standard policy on metering testing and accuracy.
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- At its sole discretion, the Cooperative may meter the DG facility at primary or secondary level.
- Notice of Change in Installation
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- The Member will notify the Cooperative in writing thirty (30) days in advance of making any change affecting the characteristics, performance, or protection of the DG facility.
- If any modification undertaken by the Member will create or has created conditions which may be unsafe or adversely affect the Cooperative’s system, the Member shall immediately correct such conditions or be subject to immediate disconnection from the Cooperative’s system.
- Any change in the operating characteristics of the DG facility including, but not limited to, size of generator, total facility capacity, nature of facility, fuel source, site change, hours of operation, or type of generator used, will require a new application process, including, but not limited to, application form, application fee, DG Plan and DG Plan review by the Cooperative.
- Testing and Record Keeping
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- The Member will test all aspects of the protection systems up to and including tripping of the generator and interconnection point at start-up and thereafter as required. Testing will verify all protective set points and relay/breaker trip timing and shall include procedures to functionally test all protective elements of the system. The Cooperative may witness the testing.
- The Member will maintain records of all maintenance activities, which the Cooperative may review at reasonable times.
- For DG facilities greater than 500 kW, a log of generator operations shall be kept. At a minimum, the log shall include the date, generator time on, generator time off, and megawatt and megavar output. The Cooperative may review such logs at reasonable times.
- Disconnection of Service
The Cooperative may, at its sole discretion, discontinue the interconnection of DG facilities due to reasons such as safety concerns, reliability issues, power quality issues, breach of interconnection contract or any other reasonable issue.
- Compliance With Laws, Rules, and Policy
The DG installation owned and installed by the member shall be installed and operated subject to and in accordance with the terms and conditions ser forth in the Cooperative’s rules, regulations, bylaws, rates and policy, as amended from time to time, and if applicable, approved by the Cooperative’s board of directors, which are incorporated herein by reference, and in compliance with all applicable federal, state and local laws, regulations, zoning codes, building codes, safety rules, environmental restrictions, ordinances and regulations, including without limitation, Electric Reliability Council of Texas (ERCOT) Independent System Operator (ISO) directives and ERCOT guidelines, and in accordance with the industry standard prudent engineering practices. IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized representatives.
[COOPERATIVE NAME] [DG OWNER/OPERATOR NAME] BY: BY:
TITLE: TITLE:
DATE: DATE:
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EXHIBIT A
DESCRIPTION OF FACILITIES AND POINT OF INTERCONNECTION
DG Owner/Operator will, at its own cost and expense, operate, maintain, repair, and inspect, and shall be fully responsible for its Facilities, unless otherwise specified on Exhibit A.
EXHIBIT B
FACILITIES SCHEDULE NO.
[The following information is to be specified for each Point of Interconnection, if applicable]
- Name:
- Facilities location:
- Delivery voltage:
- Metering (voltage, location, losses adjustment due to metering location, and other:
- Normal Operation of Interconnection:
- One line diagram attached (check one):/ Yes /
- Facilities to be furnished by Cooperative:
- Facilities to be furnished by DG Owner/Operator:
- Cost Responsibility:
- Control area interchange point (check one): / Yes / No
- Supplemental terms and conditions attached (check one): / Yes / No
- Cooperative rules for DG interconnection attached (check one): / Yes /
[COOPERATIVE NAME] [DG OWNER/OPERATOR NAME]
BY: TITLE:
DATE:
BY: TITLE:
DATE:
Monthly Rate.
Each billing period the Customer shall be obligated to pay the following charges in addition to all charges indicated on his/her base rate:
Additional Charge for meter reading by Cooperative personnel where remote access to meter reading is not feasible.
@ $_50 per meter/month
As determined at the sole discretion of the Cooperative on a non- discriminatory case-by-case basis to recover any additional operation and maintenance expense caused by the Customer’s facility.
3. Refusal to Purchase
The Cooperative may, at certain times and as operating conditions warrant, reasonably refuse to accept part or all of the output of the Producer’s DG Facility. Such refusal shall be based on system emergency constraints, special operating requirements, adverse effects of the Producer’s DG Facility on the Cooperative’s system, or violation by the Producer of the terms of the Agreement for Interconnection and Parallel Operation of Distributive Generation.
RESPONSIBILITY: General Manager and Board of Directors
This policy supersedes all other existing policies and instructions which may conflict with its provision.
Date Adopted: February, 2006 Date Amended: 5-17-2016
Review Date: April, Annually Attest: