MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS

MENARD ELECTRIC COOPERATIVE

PETERSBURG, ILLINOIS

JANUARY 22, 2008

The monthly Board Meeting of the Board of Directors of Menard Electric Cooperative was called to order by President Gary L. Martin at 6:00 P.M. at the headquarters of the Cooperative, 14300 State Highway 97, Petersburg, County of Menard and State of Illinois.

On roll call the following Directors were present: Michael L. Carls, D. Jay Frye, Warren D. Goetsch, James G. Graff, Gary L. Martin, Donald E. McMillan, Roy H. Seaney and Steven L. Worner. Director Jerry W. Brooks was absent. Also present was Manager Lynn A. Frasco and Attorney Charles K. Smith.

President Martin reviewed with the Board the Consensus Agenda. It was moved and seconded that the Consensus Agenda be approved. Motion carried.

Manager Frasco introduced AIEC General Counsel, Norman Conrad and AIEC Vice-President of Governmental Affairs, Don Wood, who made a presentation to the Board with regard to three (3) proposed Policies, being a Draft Net Metering Policy, a Supplemental LiHeap Assistance Policy and a Renewable Energy Resources and Coal Technology Program. Mr. Wood and Mr. Conrad reviewed in detail the terms and provisions of all three (3) Policies and the reasons why they were recommending that the Board consider adoption of the three (3) Policies. Mr. Wood and Mr. Conrad answered questions from the Board. After discussion, it was moved and seconded that the Cooperative proceed with further study and investigation of the three (3) proposed Policies and then consider, after such further study and investigation, the adoption of the Net Metering Policy, LiHeap Assistance Policy and Renewable Energy Resources and Coal Technology Program. Motion carried.

Manager Frasco presented the Manager’s Report for the month of December, 2007. He reviewed the Balance Sheet, Budget, as well as the Outage Summary and Safety Report. Under the Operations Report, Manager Frasco reported on the status of irrigation construction and line extensions. He gave the Board an update on the Virginia Well Project and advised that construction of the nine (9) miles of line by the Cooperative was being pushed back by the City of Virginia. The City of Virginia had advised that the lines do not need to be energized until some time in the summer of 2009. Manager Frasco reviewed a letter that was being sent to Members of Lost Arrow Campground in Mason County. The letter advised that the Cooperative was in the process of upgrading facilities in the area, which involved a major rebuild of the system and was all underground. He advised that as a result of the construction, some Lost Arrow Members were out of service for a period of time and that there had been complaints about Members still receiving monthly facility charge bills. Manager Frasco advised that he was recommending that each Member in the Lost Arrow Campground receive a one (1) month credit of the $24.00 monthly facility charge. After consideration by the Board, it was moved and seconded that the Manager be authorized to give to each Member of Lost Arrow Campground, a one (1) month credit of $24.00 facility charge. Motion carried. Manager Frasco discussed the status of matters with regard to the Cooperative Meter Readers and advised that the Cooperative was providing to each Meter Reader a table lamp, in recognition of their many years of service to the Cooperative. He reminded the Board that the Cooperative had decided to give each Meter Reader three (3) months severance pay due to the fact that the Cooperative was converting to TWACs. President Martin called the Board into Executive Session. President Martin reconvened the monthly Board Meeting. It was moved and seconded the Manager’s Report be approved as presented. Motion carried.

Manager Frasco presented the Financial Report for the Month of December. Year to date margins were $917,688 compared to $1,018,239 a year earlier. Equity as of the end of December was 32.68% and the number of members served was 10,392 compared to 10,275 a year ago. Net Utility Plant at the end of December was $33,071,151 compared to $31,694,519 last year. The cooperative continues to meet the requirements of the RUS, FFB and NRUCFC.

Director Goetsch reported on AIEC Activities.

Director Carls reported on Prairie Power, Inc.

Manager Frasco discussed correspondence received from Attorney Jerry Tice with regard to the Petersburg Vet Clinic. He advised that the Vet Clinic was requesting that the Cooperative allow a portion of its Radio Tower Site to be annexed to the City of Petersburg. This would then make the annexed portion of the Cooperative property contiguous to the Vet Clinic, so that then the Vet Clinic Site itself could be annexed to the City of Petersburg. The purpose was then to make it possible for the Vet Clinic to connect to the City Sewer System. The matter had been proposed and approved by the Board in 2005, but at that point in time, for some reason, the Vet Clinic had not proceeded with the annexation. It was moved and seconded that the annexation of the portion of the Radio Tower Site be approved, subject to Attorney Smith verifying that there would be no zoning problems for the Cooperative as a result of the annexation. Motion carried.

The Board reviewed the Distribution Line Design Criteria Policy. It was moved and seconded the Policy be adopted. Motion carried.

President Martin advised that due to the absence of Director Brooks, there was no Annual Meeting Committee Meeting.

Director Seaney presented the Report of the Capital Credit Committee. He advised that the Committee was recommending that the Cooperative do a general retirement of Capital Credits for the calendar year 2008 in the amount of $240,000.00 and retirement of estates up to $100,000.00. It was moved and seconded that the following Resolution be adopted. Said Resolution is marked Exhibit A, attached hereto and incorporated herein by reference. Motion carried.

It was determined to postpone discussion of the AIEC Statewide Member Survey results to next month’s Board Meeting.

Manager Frasco presented the Capital Credit Estate Refunds Report.

President Martin reminded the Board that next month’s Meeting was scheduled for February 19, 2008 at 6:00 p.m.

Under other business, President Martin reminded the Board that the Prairie Power Annual Meeting was scheduled for March 12, 2008 at the Northfield Inn, Springfield, Illinois, and that the NRECA Annual Meeting was scheduled for February 25 - 27, 2008 in Anaheim, California.

There being no further business to come before the Board, it was moved and seconded the Meeting be adjourned. Motion carried.