CPEP Organizational Structure

CPEP was formed under the Nebraska Interlocal Cooperation Act, Chapter 13,
Article 8, Nebraska Revised Statutes, as amended (the “Act”), which permits
local government units to cooperate with other localities on a basis of mutual
advantage and to provide services and facilities in a manner that will accord
best with the geographic, economic, population and other factors influencing
the needs and development of local communities.

CPEP has the power to engage in any activity concerning the acquisition,
purchase, sale, transportation, storage and management of natural gas and
other related functions to the same extent that such power is possessed by any of its members under applicable law.

The powers of CPEP are exercised under the control, supervision and direction
of its Board. CPEP has two classes of participant:

• A Member, which must be a Public Agency and Governmental Utility within the meaning of the Act, owns and operates a Governmental Utility and is authorized by the laws of the State under which it exists or was created to (i) acquire, purchase, transport, store and manage supplies of natural gas, (ii) issue revenue bonds to finance the cost of obtaining natural gas supplies and (iii) enter into agreements for joint and cooperative action with other Public Agencies. A Member can serve on the Board of Directors; and
  
  • A Project Participant, which must be a Public Agency within the meaning of the Act and is empowered by the laws of the State of its organization or existence to engage in the acts and activities of the Members relating to a particular Project in which it participates. A Project Participant cannot serve on CPEP’s Board of Directors.

A Project Management Committee (“PMC”) is established for each project undertaken by CPEP in order to provide Project Participants with direct representation and voting rights with respect to each project. Once it is formed, a PMC conducts research and reports to the full Board with a recommendation regarding the execution of a particular project.

Each project is separate and distinct from every other project and there is no commingling of finances or sharing of expenses between projects. Project Participants are not required to join any particular project. Project Participants are only responsible for their share of the expenses of the projects in which they participate, although all participants, whether or not they participate in a project, share in the minimal costs required to maintain the Interlocal itself.

To the extent that financing is required for a natural gas purchase, CPEP will
issue the necessary bonds and utilize the proceeds to complete the transaction. In turn, the participants in a particular project will enter into a simultaneous contract with CPEP to purchase the commodity at a price that will generate sufficient cash flow to repay the financing. Any bonds that are issued will be revenue bonds backed solely by the revenues of the particular project for which they were issued. No additional bonds for an individual project will be issued and no financial obligation beyond the revenues produced by a project will accrue to any individual participant or to any other project within CPEP.