2012-07-25T17:43:56-07:00 2011-12-31 990 2011-01-01 390233059 DAIRYLAND POWER COOPERATIVE DAIR 6087884000 P O Box 817 3200 East Avenue South La Crosse WI 546020817 William L Berg 6087884000 2012-07-15 2011 2016-02-24 21:20:13Z X William L Berg President and CEO 3200 East Ave So PO Box 817 La Crosse WI 54601 414035276 0 X www.dairynet.com X Cooperative 1941 WI Dairyland Power Cooperative is an electric generation and transmission cooperative organized under the laws of WI & MN. The Cooperative, whose principal offices are located in WI, provides wholesale electric service to Class A members engaged in retail sale of electricity to member consumers located in WI, MN, IA and IL, and provides electric and other services to Class B, C, D, and E members. 26 26 662 0 0 0 0 0 417884667 412825000 1047211 1202084 8226 8192 418940104 414035276 0 0 0 15562453 68503429 69643443 0 0 0 337275264 326165273 405778693 411371169 13161411 2664107 1321189101 1350402714 1163745751 1177368130 157443350 173034584 Our Mission is, as a Cooperative organization, to provide reliable and competitively priced energy and services to our customers and maximum value to our owners, consistent with the wise use of resources. We will work with our members to improve the quality of life of their customers, the economic and social well-being of the region, and be environmentally responsible. 0 0 0 0 0 Dairyland Power is an electric generation and transmission cooperative association organized under the laws of WI and MN. The Cooperative, whose prinicipal 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 B, C, D and E members. This provides the basis for Dairyland's exempt purpose. 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 System 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. 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 1 1 0 0 1 0 0 0 0 0 0 0 0 1 0 0 0 1 0 1 0 0 0 0 0 1 0 0 0 1 X 132 0 1 662 1 0 1 AS BD BR CA FR IS KS MX NO UK 0 0 0 384790328 22283696 0 X 26 26 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 0 1 1 X X William L Berg PresidentCEO 6087884000 3200 East Ave So La Crosse WI 54601 X Ray Dreger 7 X 20445 0 5695 Dale Mangskau 5 X 14906 0 3100 Kendal Nichols 4 X 10575 0 1996 Jeffrey Redalen 8 X 13546 0 1756 Dean Fisher 4 X 11762 0 2410 Glenn Peterson 5 X 12977 0 2468 Daniel Korn 14 X 40144 929 4303 Judy Murphy 6 X 11475 0 1044 Brian Kulas 8 X 17382 0 5253 Greg Sacia 5 X 15994 0 1531 Clarence Boettcher 7 X 13664 0 2133 Lynn Peterson 5 X 13687 0 2739 Michael Meier 6 X 9657 0 3684 Ronald Churchill 5 X 14052 0 2561 Gary Woods 7 X 13851 0 1480 Clarence Hoesly 4 X 13745 0 3129 Roger Tjarks 12 X 17606 0 4961 Francis Klatt 5 X 14472 0 3461 Eugene Miller 7 X 10412 0 1996 Marlyn Bottolfson 4 X 10131 0 3245 John Petska 6 X 13948 0 3854 John Donner 6 X 3720 0 1724 Chris Stadel 6 X 11871 0 2712 Barry Radloff 7 X 13766 0 4215 David Stute 4 X 9440 0 2289 Larry Lamborn 4 X 9707 0 1855 Ronda Parker 5 X 6123 0 2345 William L Berg 51 X 518073 0 147410 Phillip Moilien 55 X 171359 7173 65741 Robert C Mueller 52 X 162545 0 11491 Chuck S Callies 47 X 225812 0 173115 Mary L Lund 55 X 152386 0 125135 Dale L Pohlman 40 X 173729 0 71533 Charles V Sans Crainte 50 X 244695 0 93088 Brian D Rude 50 X 179493 0 78702 John P Carr 55 X 154017 0 46619 Kenneth L Schlimgen 50 X 149002 3445 38073 David J Becker 50 X 139249 0 67754 Brian Treadway 45 X 130910 0 15314 Robert Carothers 55 X 130467 0 74240 Keith A Stubbendick 46 X 129508 0 65677 Larry Thorson 30 X 153480 23626 22757 3183783 35173 1174588 51 1 1 0 Hooper Corporation 2030 Pennsylvania Avenue Madison WI 537077455 Electrical line construction. 3609706 Winston & Strawn LLP 36235 Treasury Ctr Chicago IL 60694 Legal Services 2571795 NAC International 3930 E Jones Bridge Rd Ste 200 Norcross GA 30092 Dry Cask Storage Handling 2406492 American Crane & Equip Corp 531 Old Swede Road Douglassville PA 19518 Dry Cask Storage Handling Crane. 2147496 Trivis Inc 4252 N Verrado Way Ste 202 Buckeye AZ 85396 Dry Cask Storage Handling 2060931 95 0 G & T Wholesale Electricity 221000 411362976 411362976 0 0 Other Ancillary Services 221000 1460534 1460534 0 0 SO2 Allowances 221000 1490 1490 0 0 0 0 0 0 412825000 1202084 0 0 1202084 0 0 0 0 0 0 0 0 0 8192 0 0 0 8192 8192 0 0 8192 0 0 0 414035276 412825000 0 1210276 X 0 0 0 15562453 2429109 0 41978004 11514018 9990337 3731975 0 5576106 277379 179204 0 0 775684 0 2887852 0 0 0 0 0 0 41608487 0 37276147 3444357 Production Expenses 245362112 Transmission Expenses 32019655 Distribution Expenses 2123780 Charged to Balance Sheet & Others -42121488 -3244002 411371169 0 0 0 28756835 26071615 25106 16574502 0 0 42390691 43244020 0 0 0 0 881998 944568 86986019 76059393 10492578 10485769 1533656453 503794895 1027468738 1029861558 0 0 100704819 116456499 17748882 17243351 0 0 5733435 13461439 1321189101 1350402714 193609316 233292372 0 0 0 0 0 0 0 0 0 0 856960658 823121599 0 0 113175777 120954159 1163745751 1177368130 X 14620 14642 0 0 157428730 173019942 157443350 173034584 1321189101 1350402714 X 2664107 12927127 X 0 1 1 X 0 0 31063517 31063517 0 1361418060 503336331 858081729 0 0 0 0 0 0 0 0 0 141174876 458564 140716312 1029861558 Nuclear Decommissioning Funds 108493189 F Marketable Securities - RUS Trustee Funds 3762176 F Other Special Funds - Deferred Comp 1363725 F Miscellaneous Investments 2765497 C Invest other Cooperative Associations 1111 C Chippewa-Flambeau Improvements 70801 C 116456499 Asset Retirement Obligation 4199073 Estimated Decommissioning Liabilities 79879408 Non-current Portion of Accruals 1032699 Post Retirement Health Ins Obligations 8115769 Non-current Frozen Sick Leave Benefits 1511399 Deferred Compensation Benefits 1363725 Power Bill Prepayments 14271386 Obligations under Capital Lease 680166 GRE-G3 Coal Deposit Prepayments 9900534 120954159 414035276 411371169 2664107 0 0 0 0 15562453 15562453 18226560 414035276 0 0 0 0 0 414035276 0 0 0 414035276 395808716 0 0 0 0 0 395808716 0 15562453 15562453 411371169 SchD_P06_S00_L01b Schedule D, Part VI, Line 1b 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 System 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. Our Accumulated Depreciation is grouped into just one account. So for purposes of the Form 990, we cannot break out Building and Equipment and the associated depreciation. SchD_P06_S00_L01d Schedule D, Part VI, Line 1d Same as explanation for Schedule D, Part VI, Line 1b. SchD_P11_S00_L08 Schedule D, Part XI, Line 8 As a result of complying with the 2011 requirement of reporting dividends paid by section 501(c)(12) organizations on line 4 of Part IX, Dairyland Power has interpreted this to mean capital credits allocated during the tax year. Because the allocation amount is not a functional expense on Dairyland's audited financial statements, an adjustment of the allocated amount of $15,562,453 was required to reflect the correct audited gross margin for Dairyland of $18,226,560. SchD_P13_S00_L04b Schedule D, Part XIII, Line 4b Same as Statement for Schedule D, Part XI, Line 8. North America (including Canada and Mexico, but not the United States) 0 0 Investments 732000 East Asia and the Pacific 0 0 Investments 250000 Europe (including Iceland and Greenland) 0 0 Investments 387000 Middle East and North Africa 0 0 Investments 33000 South America 0 0 Investments 112000 0 0 1514000 0 0 0 0 0 0 SchF_P01_S00_L03 Schedule F, Part I, Line 3 In 1987, Dairyland Power Cooperative shut down its La Crosse Boiling Water Reactor (LACBWR) nuclear power plant. Although LACBWR has been inactive since 1987, the facility still needs to be maintained until its final decommissioning. Dairyland has set aside over $80 million in a trust to pay for the ultimate decommissioning. In accordance with restrictions enacted by the Nuclear Regulatory Commission, an independent trustee (M & I Trust) holds title to the trust assets, and Dairyland does not control the day-to-day management of nuclear decommissioning trust fund investments. The nuclear decommissioning trust of Dairyland is managed by independent investment managers with discretion to buy, sell, and invest to achieve the broad investment objectives set forth by Dairyland. As of 12/31/11, $1.5 million of the total $80 million nuclear decommissioning trust fund was invested in foreign obligations within a NISA Fund. The NISA Fund invests primarily in the fixed income instruments of companies based in Australia, Mexico, Canada, South Korea, Norway, Europe and others. See Statement 2, Schedule O for the applicable foreign countries. X X 1 1 X X 0 1 0 William L Berg 504462 0 0 0 13611 0 120325 0 32976 0 671374 0 0 0 Phillip Moilien 170913 7173 0 0 446 0 34899 0 32632 0 238890 7173 0 0 Robert C Mueller 78580 0 0 0 83965 0 3329 0 13395 0 179269 0 0 0 Chuck S Callies 223316 0 0 0 2496 0 146066 0 31401 0 403279 0 0 0 Mary L Lund 149378 0 0 0 3008 0 98086 0 31235 0 281707 0 0 0 Dale L Pohlman 167086 0 0 0 6643 0 47485 0 30072 0 251286 0 0 0 Charles V Sans Crainte 239075 0 0 0 5620 0 67040 0 30476 0 342211 0 0 0 Brian D Rude 173698 0 0 0 5795 0 52053 0 31846 0 263392 0 0 0 John P Carr 151464 0 0 0 2554 0 22054 0 27771 0 203843 0 0 0 Kenneth L Schlimgen 146916 3445 0 0 2087 0 38073 0 2932 0 190008 3445 0 0 David J Becker 135238 0 1000 0 3011 0 41305 0 30413 0 210967 0 0 0 Brian Treadway 126942 0 750 0 3218 0 13314 0 5167 0 149391 0 0 0 Robert Carothers 126340 0 750 0 3377 0 49692 0 27193 0 207352 0 0 0 Keith A Stubbendick 124557 0 2250 0 2701 0 40129 0 27763 0 197400 0 0 0 Larry Thorson 101816 23626 14649 0 37014 0 3615 0 21942 0 179036 23626 0 0 SchJ_P01_S00_L01a Schedule J, Part I, Line 1a Dairyland Power owns two smaller company planes and a helicopter. The helicopter is used primarily for line patrol of Dairyland's 3200 miles of transmission lines. Any air travel of a non-business nature or travel by a companion is covered under Dairyland Power Cooperative Administrative Policy #51 and #29, as far as the taxable value of such flights to the individual employee. For calendar year ending 2011, no employees or companions used the company air travel for a non-business nature. Therefore, no taxable income was recognized. Dairyland did cover the cost of an airline club fee for William Berg, President and CEO. The percent of personal use was taxable to that employee in the amount of $102.38 for calendar year ending 2011. In addition, Dairyland Power Cooperative offers reimbursements to employees under a Wellness Program Plan. The Wellness Program Plan includes up to $150 towards each component for the calendar year for the cost of membership to the local YMCA or other selected Fitness Centers, the cost of an approved Weight Loss Program and the cost of an approved Smoking Cessation Program. For 2011, the value of the Fitness Center Reimbursement was included in the reportable compensation for the following Key Employees and Highest Compensated Employees: Charles Sans Crainte, Brian Treadway and Keith Stubbendick. SchJ_P01_S00_L03 Schedule J, Part I, Line 3 Compensation survey performed by Vice President, Human Resources. Results are then presented to a special Executive Committee of the Board of Directors. This committee will then present their recommendation to the full Board for vote as part of an executive session (Board Members Only). SchJ_P01_S00_L04 Schedule J, Part I, Line 4 Dairyland Power Cooperative has a Deferred Compensation Pension Restoration Plan (the Plan) covering President and CEO, William L. Berg. No payments were made from this plan to Mr. Berg in 2011. Gen Sys Energy (GEN SYS) Gen Sys Officer & CEO of Dairyland-William L Berg 521617 Power transactions & tech. services from Dec 2010 paid Jan 2011 1 Gen Sys Energy (GEN SYS) Gen Sys Officer & CFO of Dairyland-Robert Mueller 521617 Power transactions & tech. services for Dec 2010 paid in Jan 2011. 1 Gen Sys Energy (GEN SYS) Gen Sys Officer & Dairyland Chairman of the Board -Dan Korn 521617 Power transactions & tech. services from Dec 2010 paid in Jan 2011 1 SchL_P04_S00_L00 Schedule L, Part IV William Berg, Robert Mueller and Dan Korn were all members/officers of the Board of Directors of Gen Sys Energy (GEN SYS). As of January 1, 2011, GEN SYS was folded into Dairyland's operations. Dairyland was a member of GEN SYS, a power supply and marketing cooperative, the primary purpose of which was to schedule and dispatch generation resources and to provide other power-related support services to its members, which also included Corn Belt Power Cooperative and Distribu-Gen Cooperative. GEN SYS was owned equally by its members, but in fiscal year 2010, substantially all of the GEN SYS activities that produced margin, including energy purchases and sales, were derived from Dairyland. Dairyland consolidated the accounts of GEN SYS in the consolidated balance sheets, the consolidated statements of revenues and expenses in non-utility operations, and the consolidated statements of cash flows for fiscal year 2010. All remaining net assets of GEN SYS were distributed to members during 2011. The transaction amount of $521,617 represents December 2010 net energy services paid on January 18, 2011. F990_P04_S00_L12a Form 990, Part IV, Line 12a The consolidated financial statements include the accounts of Dairyland Power Cooperative, GEN SYS Energy (GEN SYS), and Dairyland's wholly owned subsidiary, Genoa FuelTech Inc. All significant intercompany balances and transactions have been eliminated in consolidation. F990_P05_S00_L04a Form 990, Part V, Line 4a In 1987, Dairyland Power Cooperative shut down its La Crosse Boiling Water Reactor (LACBWR) nuclear power plant. Although LACBWR has been inactive since 1987, the facility still needs to be maintained until its final decommissioning. Dairyland has set aside over $80 million in a trust to pay for the ultimate decommissioning. In accordance with restrictions enacted by the Nuclear Regulatory Commission, Dairyland does not control the day-to-day management of nuclear decommissioning trust fund investments. The nuclear decommissioning trust of Dairyland is managed by independent investment managers with discretion to buy, sell, and invest to achieve the broad investment objectives set forth by Dairyland. As of 12/31/11, $1.5 million of the total $80 million nuclear decommissioning trust fund was invested in foreign obligations within a NISA Fund. The NISA Fund invests primarily in the stocks of companies based in Australia, Mexico, Canada, South Korea, Norway, Europe and others. See Statement 2, Schedule O for the applicable foreign countries. F990_P06_S0A_L06 Form 990, Part VI, Section A, Line 6 Dairyland Power Cooperative provides wholesale electric service and other services to five classes of members (A,B,C,D and E). F990_P06_S0A_L07a 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 25 Class A member distribution cooperatives and a representative of the Class B members. 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. F990_P06_S0A_L07b 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. F990_P06_S0B_L11b Form 990, Part VI, Section B, Line 11b Prior to filing the Form 990, approval of the draft return was obtained at the July 11, 2012 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 July 20, 2012 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. F990_P06_S0B_L12c 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, and a Business Ethics disclosure report to be completed in accordance with the Policy. A similar disclosure report is given to all Dairyland employees in January of each year. Each Director's completed report is reviewed by the Chairman of the Audit & Risk Management Committee and 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 Vice President of Human Resources. Her 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 General Counsel, and as appropriate by the full Committee. F990_P06_S0B_L15 Form 990, Part VI, Section B, Line 15 For the President and CEO, the Vice President of Human Resources conducts a salary survey of similar Generation & Transmission Cooperatives. The results of the survey, current salary and salary history for the President and CEO, and the results of the Directors' performance evaluation of the President and CEO, are presented to the Executive Committee and in turn to the full Board. The Executive Committee reviews all pertinent information and then presents its recommendation to the Board in executive session, for action by the Board. For the tax year covered by this return, this process was completed in September of 2011. For Senior Staff/Key Employees, the Vice President of Human Resources conducts a similar survey. The results of the survey, 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 Vice President of Generation, Vice President and CFO, Vice President of Power Delivery, Vice President of Human Resources, Vice President of Strategic Planning, Vice President of External and Member Relations, and Director of Fuel and Power Marketing. For the tax year covered by this return, this was done in September of 2011. The President and CEO and above employees did receive compensation increases in October of 2011. F990_P06_S0B_L16b Form 990, Part VI, Section B, Line 16b Election Pursuant to Code. Sec 761 to be Wholly Excluded from the Partnership Rules of Subchapter K for tax year ended December 31, 2011. The co-owners of the Weston 4 Generating Station under the Joint Plant Agreement (the Agreement) dated November 23, 2004, hereby elect to be excluded from the application of all the provisions of Subchapter K effective for the tax year ending December 31, 2011, to the return for which year this statement is attached. Qualification for the election is based on meeting the requirements of Reg. Sec. 1.761-2a2 and Reg. Sec. 1.761-2a3. All owners elect that the Weston 4 Generating Station be excluded from all provisions of Subchapter K. The names, addresses and employer identification numbers of the co-owners are: Wisconsin Public Service Corporation, c/o John Wilde, Director of Corporate Tax, 700 N. Adams Street, Green Bay, WI 54307-9001, EIN: 39-0715160 and Dairyland Power Cooperative, c/o Philllip Moilien, Vice President and CFO, PO Box 817, La Crosse, WI 54602-0817, EIN: 39-0233059. F990_P06_S0C_L19 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. F990_P07_S0A_L01a 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. Robert Mueller was an officer through his retirement on May 6, 2011. He did not respond to requests to complete the questionnaire, so his hours worked through his retirement of May 6, 2011 were based on his 2010 data. Phillip Moilien replaced Robert Mueller as an officer as of May 6, 2011. F990_P09_S00_L04 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, $2,602,895 was retired in 2011. This policy is subject to annual review and approval by the Board of Directors and the RUS, and no cash retirements are to be 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, 2011 included 2011 margins allocated/assignable of $15,562,453 and unallocated reserves of $2,664,107. It is our interpretation of federal cooperative tax law to report capital credits allocated during the tax year of $15,562,453 on Form 990, Part IX, Line 4. F990_P09_S00_L24a Form 990, Part IX, Line 24a - 24e 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 B, C, D, and E members. 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 System 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. F990_P11_S00_L05 Form 990, Part XI, Line 5 Other change in net assets or fund balance is a result of: a change of membership fees of 22.00 patronage capital-retired of -2,602,895 accumulated other comprehensive income of -32,453 allocation of capital credits for 2011 of $15,562,453 Genoa FuelTech Inc 3200 East Avenue South La Crosse WI 54601 391828821 Investment Holding Corp WI C 4 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Applied for the appropriate extensions. Applied for the Automatic 3 month extension and received approval from the IRS on April 2, 2012.