TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or 990-EZ or to provide any additional information.
Attach to Form 990 or 990-EZ.
Go to www.irs.gov/Form990 for the latest information.
OMB No. 1545-0047
2018
Open to Public
Inspection
Inspection
Name of the organization
DAIRYLAND POWER COOPERATIVE
Employer identification number
39-0233059
39-0233059
| Return Reference | Explanation |
|---|---|
| Form 990, Part IV, Line 12a | The consolidated financial statements include the accounts of Dairyland Power Cooperative and Dairyland's wholly owned subsidiary, Genoa FuelTech, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
| Form 990, Part V, Line 3b | Due to IRS Notice 2018-99, Qualified Transportation Fringe, and the implications to a 501(c)12 organization, Dairyland Power Cooperative applied for an automatic 6 month extension to November 15, 2019 on May 10, 2019. |
| Form 990, Part VI, Section A, Line 1a | Dairyland's Board of Directors receive advice and recommendations for action from an Executive Committee, made up of members of the Board of Directors only. The Executive Committee is authorized by the bylaws to act on behalf of the Board on certain matters between meetings of the full Board. |
| Form 990, Part VI, Section A, Line 6 | Dairyland Power Cooperative provides wholesale electric service and other services to five classes of members (A, C, D, E and Special Services). |
| Form 990, Part VI, Section A, Line 7a | Member control of Dairyland is vested in its Board of Directors, consisting of representatives from each of the 24 Class A member distribution cooperatives. Each director is nominated by his or her member cooperative, and then elected by Dairyland's membership at Dairyland's annual meeting in June to serve a one-year term. |
| Form 990, Part VI, Section A, Line 7b | Pursuant to Dairyland's Bylaws, the Board of Directors is charged with directing the management of the Cooperative. The Bylaws provide for the Board to be advised by a technical advisory committee consisting of the managers of the member distribution cooperatives. Member approval is required for amendments to the Articles of Incorporation or Bylaws, for merger or consolidation, or for sale of more than 10% of the Cooperative's property. |
| Form 990, Part VI, Section B, Line 11b | Prior to filing the Form 990, approval of the draft return was obtained at the August 1, 2019 meeting of the Board of Directors' Audit & Risk Management Committee. The Committee then presented its report on the return to the full Board at its August 2019 meeting. A copy of the draft return was provided to each board member. Following approval by the Board, the Form 990 was finalized and filed. |
| Form 990, Part VI, Section B, Line 12c | During June of each year, each director on the newly-elected Board is given a copy of Dairyland's Board Policy #46, Business Ethics, Board Policy #46A, Policy on Suspected Dishonesty or Similar Misconduct, and a Business Ethics disclosure report to be completed in accordance with Policy #46. A similar disclosure report is required of all Dairyland employees during the first quarter of each year. Each Director's completed report is reviewed by the Chairman of the Audit & Risk Management Committee. Any questions are reviewed by Dairyland's outside General Counsel. Any unique responses are presented to the full Committee in executive session. Each employee's report is reviewed by Manager of Employee Benefits/HRIS. The Manager of Employee Benefits/HRIS report, the report of the President and CEO, and the report of any other employee containing any unique responses are reviewed by the Chairman of the Audit & Risk Management Committee and the Chairman of the Board of Directors, and as appropriate by General Counsel and the full Committee. |
| Form 990, Part VI, Section B, Line 15 | The President and CEO's 2018 salary determination was conducted in 2018 by all three of the processes for determining compensation - review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision. The President and CEO received a compensation increase in October of 2018. This increase was a result of reviews conducted by the Board's Governance Committee, with assistance from the Senior Compensation Analyst, who performed compensation surveys of other Generation and Transmission Cooperatives. Results of the surveys, input from a compensation consultant and individual board members' reviews of the CEO's performance were presented to the Governance Committee, who then presented to the full Board for vote as part of an executive session (only Board Members, outside legal counsel and Board recording secretary). Minutes of the Committee and Board meeting document those processes. For Executive Staff/Key Employees, the Senior Compensation Analyst conducts an annual salary increase percentages survey of similar Generation & Transmission Cooperatives and obtains comparable salary data compiled by National Rural Electric Cooperative Association (NRECA), along with input from an outside compensation consultant. The results of the surveys and consultant study, along with current and previous salary information, are presented to the President and CEO. Based on the information provided, the President and CEO determines the applicable compensation for each Key Employee. They included Chief Financial and Administrative Officer, Vice President of Power Delivery, Vice President of Strategic Planning, Vice President of External and Member Relations, and Vice President of Generation. For the tax year covered by this return, this was done in September of 2018. The Executive Staff/Key Employees did receive compensation increases in October of 2018. |
| Form 990, Part VI, Section B, Line 16a | Weston 4, near Wausau, in central Wisconsin, is a 595-megawatt electric generator that uses clean coal technologies. Weston 4 began operating on June 30, 2008. Wisconsin Public Services owns 70% and Dairyland Power Cooperative owns 30%. It is not operated as a joint venture or similar arrangement. |
| Form 990, Part VI, Section C, Line 19 | Dairyland Power Cooperative makes its governing documents, conflict of interest policy, and financial statements available upon request to the public. |
| Form 990, Part VII, Section A, Line 1a | Members of the Board of Directors of Dairyland serve annual terms that run from the annual meeting of members in June of the year of election to the annual meeting in June of the following year. All average hours worked per week were based on a separate questionnaire, specific to the Form 990 filing, that was completed by all directors, officers, key employees and highly compensated employees. |
| Form 990, Part VIII, Line 2a - 2e | Other operating revenue primarily includes revenue received from transmission service and is recorded as services are provided. |
| Form 990, Part VIII, Line 3 | Included in the $8,268,638 is an investment gain, including fund expenses, on nuclear decommissioning funds of $25,330 recorded as decommissioning liabilities of $25,330. |
| Form 990, Part IX, Line 4 | Dairyland Power Cooperative's Board of Directors has adopted a policy of retiring capital credits allocated to members on a first-in, first-out basis. As part of an equity development strategy adopted in 2003, patronage capital retired will be limited to no greater than 2% of the total assigned patronage capital balance as of December 31 of the prior year. Accordingly, $4,372,499 was retired in 2018. Implementation of this policy is subject to annual review and approval by the Board of Directors and the Rural Utilities Service, and no cash retirements are made which would impair the financial condition of the Cooperative or violate any terms of its agreements. Since 2003, the amount of non-operating margins assigned to members each year is at the discretion of the Board of Directors. Any unassigned non-operating margins will become unallocated reserves and part of permanent equity. Patronage capital as of December 31, 2018 included 2018 margins allocated/assignable of $7,040,887 and unallocated reserves of $9,482,339. It is our interpretation of federal cooperative tax law to report capital credits allocated during the tax year of $7,040,887 on Form 990, Part IX, Line 4. |
| Form 990, Part IX, Line 24a - 24d | Dairyland Power is a 501(c)12 electric generation and transmission cooperative association organized under the laws of WI and MN. The Cooperative, whose principal offices are located in Wisconsin, provides wholesale electric service to Class A members engaged in the retail sale of electricity to member consumers located in WI, MN, IA and IL and provides electric and other services to Class C, D, E and Special Services members, all on a cooperative, not-for-profit basis. Dairyland Power Cooperative is under the jurisdiction of the Rural Utilities Service, which requires Dairyland's accounting records to be maintained, with minor modifications, in accordance with the Uniform Systems of Accounts for Public Utilities, as prescribed by the Federal Energy Regulatory Commission (F.E.R.C.). Because of this, we do not have our expenses grouped by function as shown on the Form 990. |
| Form 990, Part X, Line 15 | Dairyland Power Cooperative's accounting policies and the consolidated financial statements conform to accounting principles generally accepted in the United States of America applicable to electric cooperatives. During 2017, Dairyland established a regulatory asset for the unrecovered plant balance and termination of gas purchase agreement related to the discontinuation of landfill operations at the Seven Mile Creek site. The amount was planned to be amortized through rates over 36 months beginning in July 2017. In 2018, the Board of Directors approved early defeasement of this regulatory asset. The asset was removed from the balance sheet and charged to amortization expense. During 2015, Dairyland established a regulatory asset for a contract termination fee related to a power purchase agreement. This is being amortized to purchased power expense over the five-year remaining term of the original contract which began November 2015. As of December 31, 2018, the regulatory asset balance associated with the contract termination fee was $4,556,054. During 2014, Dairyland established a regulatory asset related to the unrecovered plant balances upon closure of the Alma 4 & 5 generating stations. This is being amortized through rates over 10 years beginning in 2015. The December 31, 2018 balance associated with the unrecovered plant balance was $10,360,082. The expected following year's portion of these regulatory assets is included in prepaid expenses and other current assets at December 31, 2018 and 2017, respectively. |
| Form 990, Part XI, Line 9 | Other change in net assets or fund balance is a result of: patronage capital-retired of -$4,372,499, accumulated other comprehensive income of $89,776, and allocation of capital credits for 2018 of $7,040,887. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2018
Additional Data
| Software ID: | 18007995 |
| Software Version: | v1.00 |