**EXHIBIT14.1**

 

**CAPROCK ENERGY CORPORATION****CODEOF BUSINESS CONDUCT AND ETHICS**

 

A fundamental goal at CapRock Energy Corporation and its subsidiaries (“CRE” or the “Company”) is toimplement our core values in a manner that leads to improved quality of lifeand the long-term success of the Company and its stakeholders (“CorporateSustainability”).  Our core values ofSocial Responsibility, Economic Progress, and Environmental Improvement arebound within the framework of ethical business practices.

 

We strive to provideelectrical distribution services at the lowest cost possible to ourcustomers.  We also strive to provideexcellent service to our customers. Adherence to the standards contained in this Code will help to ensuredecisions that reflect care for all of our stakeholders.  This Code of Business Conduct and Ethics(the “Code”) is intended as an overview of the Company’s guiding principles andnot as a restatement of Company policies and procedures.

 

This Code cannot and isnot intended to cover every applicable law or provide answers to all questionsthat might arise; for that we must ultimately rely on each person’s good senseof what is right, including a sense of when it is proper to seek guidance fromothers on the appropriate course of conduct. Because our business depends upon the reputation of the Company and itsdirectors, officers and employees for integrity and principled businessconduct, in many instances this Code goes beyond the requirements of the law.

 

Employees should refer to the confidential andproprietary policies contained in the Company’s Policy Manual (hereinafter, the“Policy Manual”), for a description of the policies and required reportingprocedures applicable to them.  ThisCode is a statement of goals and expectations for individual and businessconduct.  It is not intended to and doesnot in any way constitute an employment contract or assurance of continuedemployment, and does not create any rights in any employee, client, supplier,competitor, shareholder or any other person or entity.

 

It is the obligation of each and every director,officer and employee of CRE to become familiar with the goals and policies ofthe Company and integrate them into every aspect of our business.  Our ethics are ultimately determined by allof us as we do our daily jobs.  Ourstandard has been, and will continue to be, that of the highest ethicalconduct.

 

CONFLICTS OF INTEREST

 

Directors, officers and employees of CRE must acthonestly and ethically and have a duty of loyalty to the Company, and musttherefore avoid any actual or apparent conflict of interest between personaland professional relationships.  Aconflict situation

 

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can arise when an employee, officer or director takes actions or hasinterests that may make it difficult to perform his other work objectively andeffectively.  Conflicts of interest alsomay arise when an employee, officer, or director, or a member of his or herfamily, receives improper personal benefits as a result of his or her positionin the Company.  It is therefore CRE’spolicy to prohibit the extension or maintenance of credit, either directly orindirectly, or arrange for the extension of credit or renewing an extension ofcredit in the form of a personal loan to or for any director or executiveofficer (or person performing similar functions) of CRE; provided however,extensions of credit maintained by CRE prior to July 30, 2002 shall not be soprohibited and the Board of Directors may provide for other limited exceptionsto this prohibition in accordance with the Sarbanes-Oxley Act of 2002.  If such a situation arises, employees mustimmediately report the circumstances to the Legal Department at 1-800-590-7737.  The Chief Executive Officer and members ofthe Board of Directors must report any such circumstances to the CorporateGovernance Committee.

 

CORPORATE OPPORTUNITIES

 

No director, officer or employee may: (a) take forhimself or herself personally opportunities that are discovered through the useof Company property, information or position; (b) use Company property,information or position for personal gain; or (c) compete with theCompany.  Directors, officers andemployees owe a duty to the Company to advance its legitimate interests whenthe opportunity to do so arises.

 

USE OF INSIDE INFORMATION

 

It is the Company’s goal to protect shareholderinvestments through strict enforcement of the prohibition against insidertrading set forth in federal securities laws and regulations.  No director, officer or employee may buy orsell securities of CRE at a time when in possession of “material non-publicinformation.”  (There is however, anexception for trades made pursuant to certain pre-existing trading plansestablished in compliance with applicable law.)  Passing such information to someone who may buy or sellsecurities is also prohibited.  Theprohibition on insider trading applies to CRE’s securities and to securities ofother companies if the director, officer or employee learns of material non-publicinformation about those other companies in the course of his or her duties forCRE.  This prohibition also extends tocertain non-employees who may learn about the “material non-public information”about the Company such as spouses, relatives, and close friends of directors,officers or employees.  Insider tradingis both unethical and illegal and will be dealt with firmly.  See the CRE Insider Trading Policy andInside Information for a more detailed description of the Company’s policyprohibiting insider trading and for specific employee reporting procedures.

 

CORPORATE COMMUNICATIONS

 

The Company is committed, consistent with legal andregulatory requirements, to maintaining an active and open dialogue with itssecurityholders and potential investors. No persons other than Authorized Spokespersons are authorized to speakon behalf of

 

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the Company to securities analysts, broker-dealers, securityholders andcertain other types of persons.

 

FAIR DEALING

 

Each director, officer and employee shall endeavor todeal fairly and in good faith with CRE customers, shareholders, employees,suppliers, regulators, business partners, competitors and others.  No director, officer or employee shall takeunfair advantage of anyone through manipulation, concealment, abuse ofprivileged or confidential information, misrepresentation, fraudulent behavioror any other unfair dealing practice.

 

CONDUCT INVOLVINGINTER-AFFILIATE MATTERS

 

CRE’s directors, officers and employees will complywith all laws, rules, regulations and tariffs pertaining to conduct involvinginter-affiliate and inter-business unit matters.  CRE is subject to state and federal codes of conduct designed toensure that CRE does not subsidize or otherwise grant an undue preference oradvantage to its affiliate companies or non-regulated marketing functions.  All Company directors, officers andemployees are required to know of these restrictions and ensure that theiractions are in compliance with these safeguards against affiliate abuse.  To obtain further information and specificemployee reporting procedures, please contact the Human Resource Manager at(432)684-0339.

 

CONFIDENTIALITY

 

All directors, officers and employees should maintainthe confidentiality of information entrusted to them by the Company, itsbusiness partners, suppliers, customers or others related to CRE’sbusiness.  Such information must not bedisclosed to others, except when disclosure is authorized by CRE or legallymandated.  Confidential informationincludes all non-public information that might be of use to competitors orharmful to CRE, or its customers, if disclosed.

 

PROTECTION AND USE OFCOMPANY ASSETS

 

Company assets, such as information, materials,supplies, time, intellectual property, software, hardware, and facilities,among other property, are valuable resources owned, licensed, or otherwisebelonging to the Company.  SafeguardingCompany assets and ensuring their efficient use is the responsibility of alldirectors, officers and employees.  AllCompany assets should be used for legitimate business purposes.  The personal use of Company assets withoutpermission is prohibited.

 

ENVIRONMENTAL LEADERSHIP

 

CRE’s commitment to the communities we serve demandsno less than superior environmental stewardship.  CRE and its subsidiaries will be concerned with protecting theenvironment.  We will meet or exceed allapplicable regulatory requirements.  We

 

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will conduct our business with respect for the environment, whileproviding our customers with reliable, and efficient energy services.

 

ACCOUNTING PRACTICES

 

It is the policy of CRE to fully and fairly disclosethe financial condition of the Company in compliance with applicable accountingprinciples, laws, rules and regulations. All books and records of CRE shall be kept in such a way as to fully andfairly reflect all Company transactions. Furthermore, the senior financial officers of CRE, including theprincipal financial officer and comptroller, or persons performing similarfunctions, shall prepare full, fair, accurate, timely and understandabledisclosure in reports and documents that CRE’s files with, or submits to, theSEC and in CRE’s other public communications.

 

RECORDS RETENTION

 

Directors, officers and employees are expected tobecome familiar with the Company’s policies regarding records retentionapplicable to them and to strictly adhere to those procedures as outlined inthe policies.

 

COMPLIANCE WITH LAWS,RULES, REGULATIONS

 

CRE takes a proactive stance on compliance with allapplicable laws, rules, and regulations, including, as mentioned above, insidertrading laws.  In addition, CRE requiresthat its officers and employees comply with the following workplace policiesand applicable laws and regulations:

 

**AntitrustLaws**

 

The antitrust laws are a collection of federal andstate laws the purpose of which is to protect and promote competition.  Certain types of anticompetitive conduct arealways prohibited, such as bid-rigging and agreements among competitors toallocate customers, otherwise divide markets or to fix prices or terms ofsale.  Other types of conduct willconstitute a violation.  If the conductharms competition more than it enhances competition.  The Legal Department should always be consulted prior tocommitting the Company to any activity about which there may be questions as tothe competitive impact.

 

**EqualEmployment Opportunity**

 

CRE’s people are a key source of our competitiveedge.  The Company strongly supports andrecognizes its responsibility to provide equal employment opportunities to allqualified individuals.  The Companyplaces a high value on diversity.  TheCompany strongly believes that all people are unique and valuable and should berespected for their individual abilities.

 

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In support of these beliefs the Company hasestablished a corporate policy regarding discrimination or harassment on thebasis of race, gender, age, color, religion, disability status, Veteran status,sexual orientation, marital status, or ethnic, national or Appalachian regionalorigin, or any other characteristic protected by law.  The policy applies to all personnel relationships including, butnot limited to:  promotions, transfers,training, job assignments, job stations, hours of work, rates of pay, workingconditions, terminations, and all terms and conditions of employment.

 

All officers and employees are expected to adhere tothe laws, regulations and Company policies relating to equal opportunity,affirmative action and non-discrimination.

 

**HarassmentFree Workplace**

 

CRE maintains a strict Harassment Free Workplacepolicy.  The Company requires that allofficers and employees treat other, customers, and all other personsencountered in the course of business with respect.  To review the applicable policies and for specific employeereporting procedures, employees should refer to the Company’s policy regardingHarassment Free Workplace in the Policy Manual.

 

**Threats& Violence**

 

CRE strives to maintain a work environment that isfree from intimidation, threats or violent acts.  Violations of CRE’s policy should be immediately reported.  To review the applicable policies and forspecific employee reporting procedures, employees should refer to the Company’spolicy regarding Threats and Violence in the Workplace in the Policy Manual.

 

**Drug& Alcohol Use**

 

CRE wants to establish and maintain a work environmentthat is free from the effects of alcohol and drug abuse.  The Company maintains a strict Alcohol andDrug Use policy.  To review theapplicable policies regarding alcohol and drug use and for specific employeetesting and reporting procedures, employees should refer to the Company’sPolicy Manual.

 

CITIZENSHIP

 

**Civicand Political Participation**

 

CRE is an active participant in the democratic processat the national, state and local levels, within the parameters of the law.  CRE also encourages all employees toparticipate in our political system by voting, speaking out on public issues,and becoming active in civic and political activities.  It is important, however, that directors,officers and employees clearly distinguish their personal views from those ofthe

 

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Company, unless specifically authorized by the Company to speak on theCompany’s behalf.

 

**PoliticalContribution**

 

Laws of certain jurisdictions (including the U.S.federal government) govern CRE’s actions in contributing, directly orindirectly, to any candidate for public office, political parties, or otherpolitical organizations.  However,directors, officers and employees are free to contribute to candidates orotherwise partake in the political process in their individual capacity.  In fact, the Company highly encourages itsdirectors, officers and employees to take part in the political process, butemployees may not be given time off with pay for political activity and may notuse Company funds or assets for contributions of any kind to a political partyor candidate for elected public office.

 

**Lobbying**

 

CRE recognizes the right of any director, officer andemployee, as a citizen, to communicate with his or her elected public officialsand the Company encourages directors, officers and employees to do so.  However, if requested to make such contacton behalf of the Company, such persons must be cognizant of state and/orfederal laws regarding lobbying activities and strictly follow the applicableguidelines and reporting requirements.

 

**Contactwith Courts and State and Federal Agencies**

 

All employees must avoid discussing withdecision-makers any matters pending before courts or agencies affecting theCompany unless the employee is part of the Company’s legal counsel orauthorized by the Company to do so.

 

**CharitableActivities**

 

CRE is committed to maintaining good will and to beinga good civic neighbor.  Directors,officers and employees are encouraged to serve on non-profit boards and inother volunteer capacities.  However, ifa director, officer or employee serves in any capacity with a not-for-profitorganization, such person may not represent either the Company or theorganization in any transactions between them.

 

DUTY TO REPORT ANDCONSEQUENCES

 

Every director, officer, and employee has a duty toadhere to this *Code of business Conduct andEthics* and all existing Company policies and to report to theCompany any suspected violations in accordance with applicable procedures.

 

Employees shall report suspected violations of Companypolicies contained in the Policy Manual by following the reporting proceduresfor that specific policy in the

 

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Policy Manual.  All othersuspected violations of the Code must be reported to that party or telephonenumber stated in the Code, or if no specific reporting procedures are stated,to the Human Resource Manager at (432)684-0339.  The Company will investigate any matter so reported and may takeappropriate disciplinary and corrective action, up to and includingtermination.  The Company forbidsretaliation against employees who report violations of this *Code of Business Conduct and Ethics*ingood faith.

 

SCOPE

 

This Code does not supersede, change or alter theexisting Company policies and procedures already in place as stated in thePolicy Manual and communicated to Company employees.  Certain policies referred to herein are contained in theirentirety in the Policy Manual, and Company employees are instructed to refer tothis Manual for a copy of those policies and required reportingprocedures.  As previously indicated,the Policy manual contains information that is proprietary and confidential,and the Company hereby expressly denies waiving any right to assert claims thatthe contents of the Policy Manual are proprietary and/or confidential.

 

No Company policy can provide definitive answers toall questions.  If employees havequestions regarding any of the goals, or standards discussed or policiesreferenced in this Code or are in doubt about the best course of action in aparticular situation, the employee should refer to the reporting requirementsfor that goal or standard as stated in the Code, or the reporting requirementsfor policies as stated in the Policy manual and contact the person or partydesignated.  If no resource is listedand when in doubt, ask the Human Resource Manager (432)684-0339.

 

Any waivers of this Code for executive officers ordirectors may be made only by the Board of Directors or a Board committee towhich such responsibility has been delegated, and must be publicly disclosed ina prompt manner.

 

 

Approved:  December 2, 2003

 

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