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
2019
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 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 4 | Form 990, Part VI, Section A, Line 4 - Several amendments to the Articles of Incorporation and Bylaws were approved by the members of Dairyland Power Cooperative at the 78th annual meeting of the membership held on June 5, 2019. The first amendment was to Article III, Section 7 of the Bylaws (Compensation of Directors). The previous Bylaw effectively tied that compensation to actual attendance at meetings. The amendment allows more flexibility in the form of director compensation. While it does not require any change in the form of compensation or in the amount of compensation, it could in the future allow compensation to be structured differently (for instance, a monthly "retainer"), to better reflect the significant investment of time by directors in preparation and related activities beyond meetings. As amended, Article III, Section 7 of the Bylaws now reads: "Section 7. Compensation of Directors. By resolution or policy of the Board of Directors, compensation and reimbursement of reasonable expenses may be allowed the directors for discharging their responsibilities, including for preparation for and attendance at meetings of the Board and its committees, for service as officers of the Board and of its committees, and for attending such training or meetings of other organizations as the Board may from time-to-time designate. Compensation may be in such form and in such amount as the Board may in its judgment determine. Nothing herein shall be construed to authorize payment by the Cooperative of the expenses of attendance of representatives of members at any meeting of members. Except in emergencies, no director shall receive compensation for serving the Cooperative in any other capacity nor shall any close relative of a director receive compensation for serving the Cooperative, unless such compensation shall be specifically authorized by a vote of the members." The second set of amendments were to Article IX of the Articles of Incorporation (Officers) and to Bylaws Article II, Section 1 (Annual Meeting), Article II, Section 2 (Special Meetings), Article VII (Officers), Section 1 (Number and Title), Article VII, Section 5 (Chair of the Board) and Article VII, Section 6 (Vice Chair). The amendments updated the titles of the principal officers of the Board of Directors to better reflect contemporary business practice. Specifically, the amendments: (a) changed the title of "chairman" to "chair" and the title of "vice chairman" and "vice chairmen" to "vice chair" and "vice chairs" in the referenced article and wherever else those terms appear in the Articles; and (b) changed the title of "Chairman" to "Chair" and the title of Vice Chairman" to "Vice Chair" in the referenced sections and wherever else those terms appear in the Bylaws. |
| 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 5, 2020 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 2020 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 B109 Business Ethics and a Business Ethics disclosure report to be completed in accordance with Policy B109. 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 the President and CEO and Chief Member Relations and HR Officer. The Chief Member Relations and HR Officer's 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 | Pursuant to written policies and guidelines adopted by the Board, the President and CEO's 2019 salary determination was conducted in 2019 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 2019. This increase was a result of reviews conducted by the Board's Governance Committee, with assistance from the HR Business Partner, who performed compensation surveys of other Generation and Transmission Cooperatives and received a compensation survey conducted by an outside compensation consultant. Results of the surveys 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 meetings document those processes. For Executive Staff/Key Employees, the HR Business Partner 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 survey results conducted by an outside compensation consultant. The results of the surveys, 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 Officer and Executive Vice President, Chief Operating Officer, Chief Member Relations and HR Officer, Vice President of Power Supply, Vice President of External and Member Relations, Vice President of Government and Community Relations, Chief Information Officer, Assistant Vice President of Business Analysis and Rates, and Assistant Vice President of Strategy. For the tax year covered by this return, this was done in September of 2019. The Executive Staff/Key Employees did receive compensation increases in October of 2019. |
| 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 $3,658,180 is an investment gain, including fund expenses, on nuclear decommissioning funds of $155,737 recorded as decommissioning liabilities of $155,737. |
| 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, $4,425,867 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 $14,106,563 and unallocated reserves of $4,222,279. It is our interpretation of federal cooperative tax law to report capital credits allocated during the tax year of $14,106,563 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 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, 2019 balance associated with the unrecovered plant balance was $8,288,066. The expected following year's portion of these regulatory assets is included in prepaid expenses and other current assets at December 31, 2019 and 2018, respectively. |
| Form 990, Part XI, Line 9 | Other change in net assets or fund balance is a result of: patronage capital-retired of -$4,425,867, accumulated other comprehensive loss of $558,911, and allocation of capital credits for 2019 of $14,106,563. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2019
Additional Data
| Software ID: | 19009572 |
| Software Version: | v1.00 |