Bylaws

Section 8.01. Interest or Dividends on Capital Prohibited
The Association shall at all times be operated on a non-profi t basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Association on any capital furnished by its patrons, unless otherwise required by law or regulatory authority or by resolution of the Board of Directors.

Section 8.02. Patronage Capital in Connection with Furnishing Electric Energy
(a) In the furnishing of electric energy, the Association’s operations will be so conducted that all patrons will, through their patronage, furnish capital for the Association. In order to induce patronage and to assure that the Association will operate on a non-profi t basis, the Association may account on a patronage basis to all its patrons for all amounts received and receivable from the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy. All such amounts in excess of total operating costs and expenses at the moment of receipt by the Association are received with the understanding that they are furnished by patrons as capital. The
Association may pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Association may be set up and kept in such a manner that at the end of the fiscal year the amount of capital, if any, so furnished by the patron is clearly reflected and credited in an appropriate record to the capital account of each patron. Provided, however, other provisions to the contrary notwithstanding, the Board of Directors may, after the end of each fiscal year, beginning after 1989, allocate Patronage Capital to each patron within each rate class on a pro-rated basis consistent with the excess of revenue over power cost for each particular rate class, as by illustration set forth in REA Bulletin 181-3, Number 503, question 10, effective January 1, 1972.
(b) All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash pursuant
to a legal obligation to do so and the patron had then furnished the Association corresponding amounts for capital.
(c) All other amounts received by the Association from its operations in excess of the costs and expenses shall, insofar as permitted by law, (1) be used to offset any losses incurred during the current or any prior fiscal year and (2) to the extent not so allocated shall be included as part of the capital
credited to the accounts of patrons, as herein provided.
(d) In the event of a bid or proposal of purchase of most or all of the assets of the Association, outstanding capital credits will be calculated and set up
on the books of the Association as an outstanding indebtedness against the Association, to be assumed by the prospective purchaser.
(e) If, at any time prior to dissolution or liquidation, the Board of Directors shall determine that the financial condition of the Association will not be impaired thereby, the capital then credited to the patrons’ accounts may be retired in full or in part. Any such retirements of capital may be made in order of priority according to the year in which the capital was furnished and credited; the capital first received by the Association being first retired, provided, however, that beginning with the year 1985, cash made available for retirement in any year may be used to retire capital furnished by all patrons during the most recent fiscal year, subject to the retirement of at least fifty per cent (50%) of such cash shall be applied to the retirement of the oldest outstanding capital credits as hereinabove provided. The Board of Directors is authorized to provide that any such retirements of capital may be made on a pro-rated basis as a percent of accumulated capital provided by each patron without regard to the day or fiscal year that the credit was earned; provided, however, that the Board of Directors shall have the power to adopt rules providing for the separate retirement of that portion of capital credited to the account of patrons which corresponds to capital credited to the account of the Association by an organization furnishing electric service to the Association. When capital credited to the account of the Association is retired by an organization furnishing electric service to the Association, any funds returned to the Association will be
distributed to the membership on a pro rata basis based on the patronage during the years when the capital was credited to the account of the Association, if so determined by the Board of Directors.
(f) Capital credited to the account of each patron shall be assignable only on the books of the Association pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of such patrons’ premises served by the Association unless the Board of Directors, acting under policies of general application shall determine otherwise.
(g) The Association, before retiring any capital credited to any patron’s account, shall deduct there from any amount owing by such patron to the Association together with interest thereon at the statutory rate on judgments in effect when such amount became overdue, compounded annually.

Section 8.03. Dissolution or Liquidation
(a) In the event of dissolution or liquidation of the Association, after all outstanding indebtedness of the Association shall have been paid, any outstanding capital credits shall be retired without priority on a pro rata basis before any payments are made on account or property rights of members.
(b) The remaining liquidation proceeds, if any, shall be distributed ratably among all members of the Association during the period of its existence. Section 8.04. Patronage Refunds in Connection with Furnishing Other Services In the event that the Association should engage in the business of furnishing goods or
services other than electric energy, all amounts received and receivable there from which are in excess of costs and expenses properly chargeable against the furnishing of such goods or services, shall, insofar as permitted by law, be prorated annually on a patronage basis and returned to those patrons from which such amounts were obtained.