Blue Grass Energy Cooperative Corp

“Must be a member to receive electric service. Each member has 1 vote. May have more than 1 service per membership.”

“Nominating committee meets every year to select member to run for director. Member may run for director with petition signed by one-half percent or more of eligible members.”

“Bylaws may be altered, amended, or repealed by the board of directors at any regular or special meeting; provided, that notice of the meeting, shall have contained a copy of the proposed alteration, amendment, or repeal.”

“Directors are furnished a draft copy of the 990 prior to filing. May make inquiries of information contained in the filing. Additionally, audit committee meets with the independent auditor in a closed session and are able to ask questions at that time.”

“Annual questionnaire, disclosing any conflicts of interest or related party transactions, are required for all directors and key employees.”

“15a&b. Employee compensation: to best serve its members, blue grass energy is proud to attract and retain employees that are the best of the best. They are compensated from a wage and salary plan that is evaluated annually by consultants. National, regional, and local labor markets are evaluated to ascertain those wages are in-line with the geographical area, the levels of experience of employees, and are a competitive market wage. This is reviewed and approved by the board of directors each year. 15b.director compensation: blue grass energy directors are required to spend a substantial amount of time and energy serving as a director. The cooperative serves approximately 64,000 consumers in 23 kentucky counties and has $320 million in assets in addition to generating $157 million in annual revenue. The board's fiduciary duty requires them to commit to keeping current about the electric industry, prepare for and attend board meetings, and communicate with members. The board also creates the strategic direction for the future of the cooperative. Because of these responsibilities, they are required to obtain and keep a national director certification through the national rural electric cooperatives of america by completing yearly training targets. Directors devote more than 30 hours per month on average, and as as a group devoted over 3,200 hours to cooperative matters.”

“Bylaws and financial statements are given to members on an annual basis. Each year an annual meeting of the members is held.”

“Accumulated comprehensive income 838,606. Margins allocated to members 1,774,333. Memberships issued 18,033. Other equities -383,388. Refunds of capital credits -2,129,287.”

“The audit process has not changed from the prior year.”