Cooperative Transparency

FreeState Believes in Transparency

FreeState Electric Cooperative, Inc. exists to continue to improve the quality of life of our members and the communities we serve by providing services that are safe, reliable and competitively priced. Your cooperative is a not-for-profit cooperative, collectively owned by its membership and member-focused. The cooperative difference is something FreeState is very proud of.

FreeState Electric Cooperative is a 501 (c) (12) Electric Cooperative (not for profit) that is self-regulated by its member-owners.

FreeState Electric scored 77 on its recent American Customer Satisfaction Index (ACSI) member satisfaction survey. It compares favorably to successful companies like Heinz and Levi Strauss and is consistently higher than the national score among all electric cooperatives in the United States. It is also well above the scores for the investor-owned utilities and municipalities: 73 and 74. FreeState is also considered a “High Performing” cooperative by its insurer, Federated Rural Insurance Exchange.

FreeState retires capital credits when the Board of Trustees deems it economically feasible to do so. Last year, FreeState paid back $800,000 to you the members.


FORM 990:
For transparency, FreeState Electric Cooperative, Inc. has filed and made available its FORM 990 for many years.

For income tax purposes, most electric cooperatives in Kansas are tax-exempt entities under I.R.C. 501(c)(12). Although they have no income tax liability, they still report their activities to the Internal Revenue Service on the IRS Form 990, Return of Organization Exempt From Income Tax. The form is intended to give the government and the public a picture of the organization’s activities each year. Part VII of this form lists compensation for current and former officers, directors, trustees, key employees, and up to five independent contractors receiving more than $100,000 in payment from the organization. This data is further detailed in Schedule J, Part II for key employees between reportable and estimated compensation.

The IRS 990 information is public information and can be found online. It is important to understand the full context of what is required to be reported. The 990 includes compensation commonly reported on W-2:

  • Base compensation
  • Bonus & incentive compensation
  • Other reportable compensation

The 990 also includes a column for Estimated Compensation (amounts that are not part of the employee’s take-home pay). Those include:

  • Retirement and other deferred compensation which includes contributions to the employee’s retirement or deferred compensation plan plus the annual change in actuarial value of a defined benefit plan. This actuarial value can impact a 990 significantly.
  • Nontaxable benefits which can include educational assistance, health insurance, medical reimbursement programs, life insurance, disability benefits, long-term care insurance, etc.
  • There are 28 distribution cooperatives in Kansas and more than 900 in the country. Electric cooperative personnel have developed specialized skills that are easily transferrable to another cooperative here in Kansas or across the country.

Therefore, cooperatives consider the local labor market as well as annual compensation studies and other market data to compare compensation with similarly situated cooperatives on a state and national level. That helps the cooperative retain skilled personnel who could be recruited to higher-paying geographical areas and/or larger cooperatives that may have more economic resources.

In addition, this past year Kansas Corporation Commission staff have reviewed the executive salaries at four electric cooperatives as part of their jurisdiction in transmission rate filings and expressly stated that they find the salaries to be just and reasonable.

A safe, reliable and competitively priced electric supply is key to our quality of life and our economic opportunity. FreeState Electric Cooperative, Inc. takes that responsibility seriously and it requires skilled and dedicated staff throughout the organization to achieve that goal and our mission.

If you have any questions, please contact your Cooperative CEO/General Manager or Executive Staff at any time. Click here for FreeState’s 990 FAQ.