Reliabilityfirst Corporation

“ReliabilityFirst has three classes of members: Regular Members, Associate Members, and Adjunct Members. A Regular Member is any entity that has joined an Industry Sector that either (i) has no Affiliates or Related Parties that are Members or (ii) is the entity designated to be the Regular Member by any related group of Associate Members. Regular Members shall have the right to vote on all matters within their Industry Sector. Regular Members shall have all the rights and obligations of being a member in the Corporation. An Associate Member is any entity that has joined an Industry Sector and is an Affiliate or Related Party of a Regular Member. Associate Members shall not be entitled to vote within their Industry Sector or for any other purpose as a member. Associate Members shall otherwise have all the rights and obligations of being a member in the Corporation. An Adjunct Member is any entity that does not qualify to join an Industry Sector but has been approved for membership. Adjunct Members shall not be entitled to vote for any purpose as a member. Adjunct Members shall otherwise have all the rights of being a member in the Corporation.”

“Members may elect one or more members of the governing body.”

“Member approval is required to amend the Articles of Incorporation. Members elect directors. Two-thirds of the Industry Sector votes cast shall be required to: (a) amend the Bylaws, and (b) approve any proposal to terminate the Corporation.”

“The Form 990 is prepared by RSM US LLP working in conjunction with RF's Finance and Accounting Manager. The completed Form 990 is reviewed by RF's SVP Operations & Risk, Treasurer, Finance and Accounting Manager, and the Chair of the Finance and Audit Committee, who is elected by the members of the governing board. It is at the discretion of the Finance and Audit Committee Chair to discuss the Form 990 with the Finance and Audit Committee and/or Board before filing. The Form 990 may not be presented to the full Finance and Audit Committee and the Board until after filing.”

“ReliabilityFirst employees, officers, and directors complete conflict of interest forms annually that are reviewed and approved by the General Counsel. Any conflicts disclosed by the General Counsel or CEO are reviewed by the Finance and Audit Committee of ReliabilityFirst's Board of Directors, who also determines the appropriate way to address such conflicts. All other conflicts are addressed through mitigation plans specific to the conflict and reviewed and approved by the General Counsel.”

“A full salary and benefits survey is conducted every three years and an update letter is received annually by an independent firm and is presented to the Talent and Compensation Committee of the Board of Directors. This independent firm also advises the organization regarding the President & CEO's total compensation package, which is reviewed annually by the Talent and Compensation Committee. A recommendation for any compensation change is presented to the full Board of Directors for approval. The President & CEO, Sr. Director of Corporate Services, and the Talent and Compensation Committee review the compensation of all other officers, key employees, and staff on an annual basis. The Board minutes document this review at a very high level; however, the Chair of the Talent and Compensation Committee provides written documentation as to the decisions made regarding compensation.”

“Governance documents, including the conflict of interest policy, are available on the ReliabilityFirst public website. Additionally, the governing documents, conflict of interest policy, and financial statements are available upon request for the same period of disclosure as set forth in IRC Section 6104(d).”

“In 2024, ReliabilityFirst Corporation (RF) received assessments, pursuant to section 215(c) of the Federal Power Act. The Federal Energy Regulatory Commission (FERC) has certified the North American Electric Reliability Corporation (NERC), a section 501(c)(6) nonprofit organization, as an Electric Reliability Organization (ERO) to: (1) develop and enforce reliability standards applicable to all owners, operators, and users of the bulk power system and (2) delegate any of these activities to regional entities. RF and NERC have entered into a delegation agreement that designates RF as the regional entity for its region, which consists of all or portions of 13 states and the District of Columbia. As a regional entity, RF is responsible for developing and enforcing federal electric reliability standards in the RF region pursuant to RF's delegation agreement. The purpose of RF's activities is to enhance the reliability of the bulk power system and to prevent or reduce security threats, cyber-attacks, outages, and blackouts that could otherwise cause serious risk to public health, safety, and the economy. Assessments to fund RF's budget are allocated to electric market participants (load-serving entities or designees), based upon their electric usage in the region. This funding mechanism stems from and is consistent with section 215(c)(2)(b) of the Federal Power Act, which provides that the ERO must have rules that "allocate equitably reasonable dues, fees, and other charges among end users for all activities under this section." Load-serving entities include the costs of these assessments in the total cost of electricity sold to their individual ratepayers.”