RURAL ELECTRIC COOPERATIVE, INC. LINDSAY, OKLAHOMA

MINUTES OF THE 84th ANNUAL MEETING OF THE MEMBERS

October 5, 2023 and

October 7, 2023

The 84th Annual Meeting of the Members of Rural Electric Cooperative, Inc. was a hybrid meeting again. It started off with a drive-thru registration on Thursday, October 5, 2023 from 3:00 p.m. to 7:00 p.m. An in-person meeting was held in the REC Multi-Purpose Center, Lindsay, Oklahoma, Garvin County with registration from 8:00 to 10:00 a.m. and the business portion starting at 10:00 a.m. on Saturday, the 7th day of October, 2023.

A video presentation titled "Hard Hat - Touchstone Energy Cooperatives" opened the meeting.

Welcome

Mr. Gary Jones, President of the Cooperative, welcomed the REC membership and guests to the 84th Annual Meeting and mentioned it was good to see the members in person.

Call to Order

President Jones, who presided over the meeting called the 84^th Annual Meeting of the Membership to order.

Invocation

Vice-President Scott Christian gave the invocation.

Parade of Colors, National Anthem and Pledge of Allegiance

Mr. Christian introduced the Ball Smith Post 23 of the Lindsay American Legion, who presented the Parade of Colors.

Mr. Christian then led the membership in the Pledge of Allegiance with Zach Ray leading the singing of the National Anthem.

Introductions

Mr. Dusty Ricks, CEO of Rural Electric Cooperative, welcomed the group and expressed his appreciation to them for attending the meeting.

Mr. Ricks introduced REC's Board of Trustees, Co-op Attorney and their spouses. He noted that their combined years of service to the co-op was over 152 years. He also thanked Jim Reese, OAEC's Director of Government & Regulatory Affairs and WFEC employee, Sondra Boykin for being in attendance and setting up a booth.

Mr. Ricks introduced retired Trustee Charles Crawford, retired employees, Ed Bevers and Delmar Payne and current employees and thanked them for their dedication to the co-op and its members.

He introduced the Annual Meeting Committee members, including Nominating, Planning and Credential & Elections. He thanked them for their service to the co­ operative.

Determination of Quorum

President Jones reported that based upon a report given by REC's Secretary­ Treasurer, Mr. Brent Bacon, certifying registration of 741 members was the official count and that a quorum was present for the conducting of business at the 2023 Annual Meeting of the Membership of Rural Electric Cooperative, Inc. A total of 5% (323 of REC's 6,466 members) was required to be registered to constitute a quorum.

Notice of Proof of Publication and 2022 Minutes

It was acknowledged that the Annual Meeting Notice was published in seven different area newspapers, as well as in REC's monthly publication "Co-op Comments", Facebook and REC's website and mailed to each member. The Official Notice mailed to each member also included an acknowledgment that the 2022 Annual Meeting minutes are posted on the REC website and the Official Ballot to vote for candidates to be seated on the Board of Trustees for each district.

Motion to Dispense with the Reading of the Notice of Proof of Publications

President Jones presented the Reading of Notice and Proof of Publication to the members. Mr. Dale Schauer made the motion that the membership dispense with the reading of the Notice and Proof of Publication. Ms. Kelly Phillips seconded the motion. With no further discussion, the motion was unanimously adopted.

Motion to Dispense with the Reading of the 2022 Minutes of the Annual Meeting of the Membership

Mr. Jones called for the reading of the minutes of the 2022 Annual Meeting of the Membership. Ms. Anna Gonterman made the motion that the membership dispense with the reading of the minutes of the 2022 Annual Meeting. Mr. Dale Schauer seconded the motion. With no further discussion, the motion was unanimously adopted.

President's Report

President Gary Jones made his remarks to the membership.

Mr. Jones explained how REC charges for the electricity we use.

10-100 watt (W) light bulbs equals 1,000 W equals 1 kilowatt hour (kW). 1 kW used for 1 hour equals 1 kilowatt hour (kWh).

1 kWh costs about 11-12 cents.

Mr. Jones also showed the members examples of how we use electricity.

A/C/Heating uses about 46% of the total number of kilowatt hours in the average home (running 15 minutes per hour); Hot water heater (running 3 hours a day) uses about 14%; Appliances (refrigerator, microwave, freezer) uses about 13%; Washer & Dryer uses about 5%; Electric range & oven uses about 6%; Dishwasher uses about 1%; Lighting about 9%; Electronics (TV, etc.) about 4% and the rest about 2%.

President Jones noted that REC pays about $600,000 a month to our power supplier (WFEC) before we buy any electricity. He added this is our demand charge. This is REC's share of building, maintaining and operating the power plants serving our needs.

He noted that the cost of electricity is down this year as compared to last year because the price of natural gas is down.

Mr. Jones concluded his remarks by thanking the crowd for attending the 84th Annual Meeting.

CEO'S Report

Mr. Jones presented CEO, Dusty Ricks who presented his report to the members. He thanked everyone for attending the 84th Annual Meeting of the Membership. He stated that it is important that we fulfill the requirements of our bylaws and conduct a meeting annually.

Mr. Ricks mentioned the supply chain issue and inflation continues to be a problem. Keeping materials in inventory to continue building and maintaining our system is a daily struggle. It has also caused significant problems when replacing equipment.

Mr. Ricks stated that it has always been our goal to provide you with reliable electricity, as economically as possible - a job that our Board of Directors and employees take seriously.

Mr. Ricks presented an overview of the 2023 REC Annual Report. He reported on the financial condition of Rural Electric Cooperative. Mr. Ricks reported that the value of our plant continues to grow annually. As of December 31, 2022, The Total Value of our Distribution System was $100,266,401 which is up $14,871,488 from five years ago. Also, our equity in that $100 million is $50,100,000 million or 52.5%.

Mr. Ricks noted that twenty years ago, REC had 53 employees and today we have 53 employees providing our services to you. The number of meters we serve has increased by nearly a third and our annual kWh sales has almost doubled during these twenty years.

It was reported that 71% of our accounts are residential and farm accounts providing 29% of our annual revenue. While 29% of our accounts are commercial and industrial customers which provide 71% of our revenue.

Mr. Ricks also noted that 72% of the total cost of providing electricity to our members is to purchase that electricity from WFEC. 28% of that cost is used for maintenance of the plant.

Mr. Ricks updated the members on Green Energy (i.e., solar, wind and hydro power). It continues to be a goal for Rural Electric Cooperative and Western Farmers Electric Cooperative, the Power Generation and Transmission Cooperative that provides electricity to REC. Renewable energy sources are not always reliable.  We simply must have fossil fuels to be there when wind and solar fail.

During 2022, Mr. Ricks reported that REC paid $1,060,921 to the local schools located in the six counties located in our service area. Since 1947, REC has returned $20.6 million dollars to our schools. An additional $1,359,877.28 was paid through WFEC to schools in REC's service area.

Mr. Ricks stated that Rural Electric Cooperative strives to return a portion of our accumulated Capital Credits back to our members. In 2022, REC was able to return $913,113 back to our members. WFEC returned an additional $90,500.

Mr. Ricks noted that REC shares a concern for our communities by participating in several civic, community, youth and school events to support our members. We also support our local volunteer fire departments with financial grants annually and many of you enjoy the trees we give away. We send eight 8th grade students each year to Energy Camp in Hinton OK. We also send three juniors to Youth Tour in Washington D.C., and three students to Youth Leadership Camp in

Steamboat Springs, CO. REC also awarded nine scholarships to seniors to help further their education.

Mr. Ricks reminded the members that Operation Round-Up is a very worthwhile program that we would encourage everyone to participate in if you are not already involved. This program will round up your monthly bill to the next dollar and place that additional money into this fund. The Operation Round-Up Foundation money is used to help families with financial hardships. The most you could donate in a year is $11.88 and the least amount is 12 cents.

Mr. Ricks noted that in 1996, a group of co-op members formed a political action group formerly known as Action Committee for Rural Electrification - ACRE now called America's Electric Cooperatives, PAC. He encouraged the members to join and to contact the co-op to do so.

Mr. Ricks thanked the members for being a part of this meeting. We are proud to serve you daily and strive to continue to maintain the positive reputation Rural Electric Cooperative is recognized for on a local and state level.

In closing, Mr. Ricks made mention that we at REC strive to live up to the Seven Cooperative Principles while providing affordable, dependable and reliable electric service to our members and you can be confident that your Board of Directors and the employees of YOUR co-op have your best interests and well­ being in mind each and every day!

Election Report

Mr. Ricks called on Ms. Lisa Whitman, Co-op Attorney, for presentation of the 2023 Credentials and Elections Committee report.

Ms. Whitman explained the voting procedures and introduced the Credentials and Elections Committee. She reported that Mr. Joe Terrell had been elected Chairperson and Ms. Jessica Jones had been elected Recording Secretary for the committee.

Ms. Whitman then called on the Chairperson of the Credentials and Elections Committee to give his report on the Election of Trustees. Mr. Terrell stated that a total of 608 votes were cast. He then reported to the membership the results of the election as follows:

For Office 2, District 1 - Brent Bacon For Office 2,     573 yes votes      18 no votes

District 2 - Larry Anderson For Office 2,     566 yes votes      16 no votes

District 3 - Sonny Harrison     572 yes votes      13 no votes