2020-11-06T08:51:14-07:00 2019-12-31 990 2019-01-01 383321875 GREAT LAKES ENERGY COOPERATIVE GREA 2315826521 PO Box 70 Boyne City MI 49712 Stephen Drake VP, CFO 2315826521 2020-11-06 23.137.240.10 2019 2021-04-22 16:20:28Z William M Scott 1323 Boyne Avenue Boyne City MI 49712 217627645 0 X www.gtlakes.com X 1998 MI Provide electric and service to members. 9 9 293 0 1261609 124940 0 0 208016112 214665649 1672999 2914054 35003 36121 209724114 217615824 0 0 14837584 13703895 1088794 1037161 0 0 0 193797736 202874768 209724114 217615824 0 0 523889867 579459258 318092085 365411334 205797782 214047924 The mission of Great Lakes Energy Cooperative is to deliver reliable electric service at the best possible value to members of the electric cooperative. 0 0 217615824 0 214665649 Provide electric service to member/customers - approximately 125,000 member/customers. 0 0 0 217615824 0 0 0 0 0 0 0 0 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 1 120 0 1 293 1 1 1 0 0 0 0 205222834 8804479 0 0 0 X 9 9 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X Stephen F Drake 2315826521 PO Box 70 Boyne City MI 49712 X WILLIAM SCOTT PRES, CHIEF EXECUTIVE OFFICER 55 5 X 433465 11423 145476 STEPHEN DRAKE VP, CHIEF FINANCIAL OFFICER 55 5 X 261778 31789 151347 JENNIFER WILSON VP, HUMAN RESOURCES 49 11 X 197760 44542 90686 SHARI CULVER VP, COMMUNICATIONS AND MEMBER SERVICES 46 14 X 183879 64673 81378 BRIAN MELVIN VP, OPERATIONS 60 0 X 224795 0 101127 SHAUN LAMP VP, INFORMATION TECHNOLOGY 20 40 X 84042 165435 75306 SCOTT BLECKE VP, Engineering 60 0 X 246404 0 59042 PATRICK ANZELL Former VP, MEMBER SERVICES/REG. AFFAIRS & PURCHASING 0 0 X 251880 0 1251 PAUL SCHEMANSKI SECRETARY 8.2 1.60 X 37900 1800 0 MARK CARSON CHAIRMAN 10.6 1.6 X 35200 1950 0 ROBERT KRAN DIRECTOR 9.46 0 X 34100 0 0 JOHN LAFORGE DIRECTOR 8.0 5.0 X 31000 1800 0 RIC EVANS DIRECTOR 10.15 0 X 31200 0 0 LAURENCE MONSHOR TREASURER 10.6 0 X 31000 0 0 DALE FARRIER DIRECTOR 7.9 0 X 30800 0 0 PAUL BYL DIRECTOR 9.2 0 X 27700 0 0 RICHARD WALSWORTH FORMER DIRECTOR 0 0 X 13200 0 0 ROBERT THUROW FORMER DIRECTOR 0 0 X 13200 0 0 TIMOTHY BRECHON DIRECTOR 7.2 0 X 13100 0 0 HOWARD BOWERSOX DIRECTOR 6.23 0 X 9500 0 0 2191903 323412 705613 118 1 1 0 Roemer Utility Services 279 Kaden PO Box 124 Boyne City MI 49712 UG boring contractor 736421 Asplundh Tree Expert LLC PO Box 8527464 Philadelphia PA 19182 Electrical distr. contractor 642958 Trees LLC 1700 Solutions Center Chicago IL 60677 Right of way tree clearing 6060059 Gustafson HDD LLC 8793 N 72nd Avenue Pentwater MI 49449 Underground fiber boring 258690 CC Unlimited LLC 3850 Beebe Road Kalkaska MI 49646 Electric infrastructure construction 248431 8 0 Electricity sold to Members 221000 205222834 205222834 0 0 Program related investment income 221000 7975172 7975172 0 0 Pole rental 221000 516904 0 0 516904 Tower rental 221000 83477 0 83477 0 Fiber optic right of use assets 221000 864465 0 864465 0 2797 0 0 2797 214665649 2654417 0 313667 2340750 0 0 0 0 0 0 0 0 0 6600 0 6600 0 0 0 0 0 0 0 264858 0 5221 0 259637 259637 259637 0 0 36121 36121 0 0 36121 217615824 213493764 1261609 2860451 X 13703895 13703895 1037161 1037161 10659201 10659201 15194308 15194308 Purchased electric power 121179303 121179303 0 0 Operating and maintenance expense 34360377 34360377 0 0 Member service expense 10155222 10155222 0 0 Administration and general expense 7419831 7419831 0 0 3906526 3906526 0 0 217615824 217615824 0 0 7384874 1494051 1002168 1129722 0 0 16905814 23552496 0 0 0 0 137286 1170537 3824809 6296338 7143672 6244237 572913825 154345142 365082349 418568683 1547771 1842213 513900 761639 118642890 116663754 1704334 1735588 0 0 523889867 579459258 33845741 38324867 0 0 0 0 0 0 0 0 0 0 273228626 314105213 0 0 11017718 12981254 318092085 365411334 X 519740 519740 7124581 8444635 198153461 205083549 205797782 214047924 523889867 579459258 X 0 0 0 0 0 8250142 X 0 1 X 1 0 756048 0 756048 14159556 0 6075303 8084253 0 0 0 0 557998221 0 148269839 409728382 0 0 0 0 418568683 Patronage capital from assoc. organizations 112037749 C Coop. finance corp., capital credits 4563878 C Investment in GLE Connections subsidiary 56402 C Investments in other related organizations 5725 C 116663754 0 Def. cr. - contributions in aid of construction 4609953 Power Supply Cost Recovery 2348121 Def. regulatory credits 2019680 Deferred compensation 979430 Post retirement benefits 1189964 Interest rate swap liability 1834106 12981254 X 216236618 0 0 0 0 0 216236618 0 1379206 1379206 217615824 202532723 0 0 0 -1379206 -1379206 203911929 0 13703895 13703895 217615824 Schedule D, Part X, Line 2 Management believes that positions taken during prior years and for 2019 in reporting federal taxable income for the Company and for its subsidiary are not controversial and have a high degree of being sustained upon any future examination by the taxing authority. Schedule D, Part XI, Line 4b In the audited financial statements, fiber infrastructure use and related interest income ($1,178,132) was netted against Other Expenses. Additionally, electrical crew contracted income and expense ($201,074) was netted against Other Income. This revenue, which reduced expenses in the audited financial statements, needs to be added to the audited financial statement revenue because it was shown as revenue in this 990. The total amount added to the audited financial statement revenue is $1,379,206. Schedule D, Part XII, Line 2d In the audited financial statements, fiber infrastructure use and related interest income ($1,178,132) was netted against Other Expenses. Additionally, electrical crew contracted income and expense ($201,075) was netted against Other Income. This revenue, which reduced expenses in the audited financial statements, needs to be added to audited financial statement expenses to reconcile to this 990's expenses that do not include the reduction. The total amount added to the audited financial statement expense is $1,379,206. Schedule D, Part XII, Line 4b $13,703,895 of capital credits are recorded as an expense in this 990, but are not an expense in the audited financial statements. See below and Part O of Form 990, Part IX, Line 4. Please note however that patronage dividends are the process by which Great Lakes Energy operates at cost with our members, and thereby it is a key component to accomplishing the exempt purpose of the cooperative. Therefore, Great Lakes Energy has reported the amount of our 2019 margins ($13,703,895) that have been allocated to our members, subsequent to year end, as an expense. X X X X 1 0 0 WILLIAM SCOTT PRES, CHIEF EXECUTIVE OFFICER 372676 10262 55469 1161 5173 147 120793 3429 30638 870 584749 15869 0 0 STEPHEN DRAKE VP, CHIEF FINANCIAL OFFICER 222628 30470 35356 1320 3555 238 121922 8170 24431 1637 407892 41835 0 0 SHAUN LAMP VP, INFORMATION TECHNOLOGY 65267 152187 17895 13248 293 588 17430 35007 8640 17353 109525 218383 0 0 SHARI CULVER VP, COMMUNICATIONS AND MEMBER SERVICES 153331 62973 29443 1700 848 258 43982 13376 24209 7362 251813 85669 0 0 JENNIFER WILSON VP, HUMAN RESOURCES 167605 42449 29049 2094 904 201 57601 12816 19240 4281 274399 61841 0 0 SCOTT BLECKE VP, Engineering 216967 0 28557 0 880 0 41237 0 23128 0 310769 0 0 0 BRIAN MELVIN VP, OPERATIONS 202620 0 19865 0 2309 0 83322 0 21239 0 329355 0 0 0 PATRICK ANZELL Former VP, MEMBER SERVICES/REG. AFFAIRS & PURCHASING 41698 0 31143 0 179039 0 1251 0 0 0 253131 0 0 0 RICHARD WALSWORTH FORMER DIRECTOR 13200 0 0 0 0 0 0 0 0 0 13200 0 0 0 ROBERT THUROW FORMER DIRECTOR 13200 0 0 0 0 0 0 0 0 0 13200 0 0 0 Schedule J, Part I, Line 3 Amounts listed for CEO, CFO and all employees on Part VII in column F include (per 990 instructions) amounts associated with health care employer premiums, excess life insurance premiums, and employer contributions to a qualified 401k plan. It should be noted that these benefits are available to all employees of Great Lakes Energy and therefore these are not discriminatory benefits. Amounts included for actuarial increase in defined benefit pension plans are also included as Other Compensation and were provided to Great Lakes Energy by the National Rural Electric Cooperative Association (NRECA) which administers the multi-employer pension plan. It should be noted that these actuarial amounts are much higher than the actual cash paid to the plan. The actual cash paid to the plan for the employees listed was 36% less than the actuarial value as reported in column F as Other Compensation. The 36% difference is due to the multi-employer basis of the NRECA defined benefit pension plan. This benefit is also available to all Great Lakes Energy employees and is nondiscriminatory. Schedule J, Part I, Line 4 A former employee separated from Great Lakes Energy in December 2018, pursuant to a severance payment and non-disclosure agreement. All compensation is included in Form 990, Part VII, Section A. Wolverine Power Supply Cooperative Board of Directors 119225959 Purchase electricity for distribution to members 0 Michigan Electric Cooperative Association Board of Directors 3995861 Dues, coop magazine and consulting 0 Schedule L, Part I, Line 1 1)Wolverine Power Supply Cooperative (Wolverine) is the Generation and Transmission company that sells power to Great Lakes Energy (GLE). The power is then delivered to members/consumers of GLE. Three Board members from GLE sit on the Wolverine Board. There are no business transactions between or among the three Board members. 2) Michigan Electric Cooperative Association (MECA) is the Statewide organization of which GLE pays dues and member magazine costs as well as consulting and pass through fees for coordination and implementation of State of Michigan mandated Energy Optimization programs. One GLE Board Director and the CEO of GLE sit on the MECA Board. There are no business transactions between the Board Member and CEO. Form 990, Part VI, Section A, Line 6 Great Lakes Energy is a Cooperative with all electric "customers" of the Cooperative required to be members. Form 990, Part VI, Section A, Line 7a Great Lakes Energy is an electric cooperative utility. All members/consumers vote for candidates to fill the nine member Great Lakes Energy Board. An election is held annually. Board Directors serve three year terms and must be re-elected to serve longer than three years. GLE has nine districts with one Board Member from each district. Form 990, Part VI, Section A, Line 7b Certain Bylaw changes must be ratified by the general membership. This ratification is voted upon in conjunction with the annual Board election. There were no significant bylaw changes in 2019. Form 990, Part VI, Section B, Line 11b The GLE Board of Directors were provided with a questionnaire in May 2020 which was used to assist Management in completing pertinent sections of this 990. At a subsequent Board meeting, prior to filing, the Board reviewed the preliminary 990 and discussed specifics of the 990 return Form 990, Part VI, Section B, Line 12c A questionnaire was delivered to each Board Member and Officers asking each to verify that they had received and read the policy and to certify they had no conflicts of interest. These certificates are on file with the supporting documentation for this 990. Form 990, Part VI, Section B, Line 15 GLE contracts with a nationally recognized compensation consultant to determine salary levels for the Chief Executive Officer and Chief Financial Officer along with certain others in the Company. The consultant performs an annual market survey and position evaluation utilizing comparative financial data for the industry and company size. The results are confidentially disclosed to the Chairman of the Board of Directors and the Board sets the salary level for the CEO each year. The CEO, using the afore mentioned consultant, sets the salary level for the CFO each year. Form 990, Part VI, Section C, Line 19 GLE makes company bylaws available to the public on line at www.gtlakes.com and with printed copies upon request. 2018 audited financial statement summaries were mailed to members in June 2019 Country Lines Magazine. They are also available upon request. GLE does not make the conflict of interest policy available to the public. Form 990, Part VII, Section A, Line 1a (Directors) Amounts listed for Directors are primarily per diem compensation amounts for services provided to Great Lakes Energy (column D), Great Lakes Energy Connections (column E), and for one Director the Michigan Electric Cooperative Association (combined in column C). Per Diem amount levels for Directors are benchmarked with data from over 900 other electric cooperatives though the National Rural Electric Cooperative Association (NRECA) and also benchmarked with over 35 cooperatives from the Association of Large Distribution Cooperatives (ALDC) representing the peer group of Great Lakes Energy. Amounts listed for CEO, CFO and all employees on Part VII in column F include (per 990 instructions) amounts associated with health care employer premiums, excess life insurance premiums, and employer contributions to a qualified 401k plan. It should be noted that these benefits are available to all employees of Great Lakes Energy and therefore these are not discriminatory benefits. Amounts included for actuarial increase in defined benefit pension plans are also included as Other Compensation and were provided to Great Lakes Energy by the National Rural Electric Cooperative Association (NRECA) which administers the multi-employer pension plan. It should be noted that these actuarial amounts are much higher than the actual cash paid to the plan. The actual cash paid to the plan for the employees listed was 36% less than the actuarial value as reported in column F as Other Compensation. The 36% difference is due to the multi-employer basis of the NRECA defined benefit pension plan. This benefit is also available to all Great Lakes Energy employees and is nondiscriminatory. Form 990, Part VII, Section A, Line 1d Compensation from related organizations are amounts related to Great Lakes Energy Connections, for-profit internet provider wholly owned by Great Lakes Energy Cooperative, paid by GLE and reimbursed by Connections. No 1099's or W-2's were issued by Connections. However, to provide transparency, Compensation for both Directors and Employees were broken out between GLE and Related Organization (Connections). Therefore, Compensation listed for GLE and Connections equal the total amounts reported on 1099's or W-2's, for those Directors/Employees, from GLE. Form 990, Part IX, Line 4 The instructions for Form 990 clarifies that the amount of patronage dividends paid to the members should be reported on Part IX, line 4. The phrase "patronage dividends paid" refers to the process, subsequent to year-end by which Great Lakes Energy allocates patronage capital to members and therefore, operates at cost to our members. Please note however that because patronage dividends is the process by which Great Lakes Energy operates at cost with our members, and thereby it is a key component to accomplishing the exempt purpose of the cooperative, Great Lakes Energy has reported the amount of 2019 net margins allocated to our members, subsequent to year-end, as an expense on this 990. Such amounts are an expense for Form 990 reporting but are not an expense for financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP). As a result, the difference between Great Lakes Energy's GAAP-basis financial statements and the revenue less expenses reported on Part I Line 19 is the amount of the patronage dividends reported as benefits paid to members. Form 990, Part XI, Line 9 Changes in equity not included in Great Lakes Energy's net margins consists of Employee post-retirement health benefits and Directors' pension plan adjustments, required by FASB 158, recorded in the financial statements as Other Comprehensive Gain - $528,384 increase; patronage capital refunds to members - $5,271,566 decrease; donated capital from members - $1,057,862 increase; sales tax returned $234,037 increase; unrealized loss on interest rate swap - $2,002,470 decrease; and capital credits allocated and included in Part IX, line 4 that are not recorded in the Cooperative's audited financial statements as an expense in conformity with Generally Accepted Accounting Principles (GAAP) - $13,703,895 increase. The net increase to Net Assets is $8,250,142. Great Lakes Energy Connections Inc 1323 Boyne Avenue Boyne City MI 49712 824426315 Fiber internet MI Great Lakes Energy Cooperative C -2521006 6266585 1 0 1 0 0 1 0 0 0 0 0 1 1 0 0 1 1 0 0 0 0 Great Lakes Energy Connections Inc a-i 313667 Book value/acct. records. Great Lakes Energy Connections Inc a-iv 6600 Book value/acct. records. Great Lakes Energy Connections Inc d 3108064 Book value/acct. records. Great Lakes Energy Connections Inc j 864466 Book value/acct. records. Great Lakes Energy Connections Inc n 82719 Book value/acct. records. Great Lakes Energy Connections Inc o 1909292 Book value/acct. records.