ML040780310

Lacrosse Boiling Water Reactor - Response to Request for Additional Information on the Spent Fuel Management and Funding Plan for LACBWR

ML040780310
Person / Time
Site:	La Crosse File:Dairyland Power Cooperative icon.png
Issue date:	03/02/2004
From:	Berg W Dairyland Power Cooperative
To:	Huffman W NRC/NMSS/DWM/DCB
References
-nr, -RFPFR, LAC-13832, TAC L52608
Download: ML040780310 (18)

Text

II DAIRYLAND tV

• 3200 EAST AVE. SO.

• P.O. BOX 817

• LA CROSSE, WISCONSIN 54602-0817 OFFICE (608) 787-1258 FAX (608) 787-1469 WILLIAM L. BERG WEB SITE: www.dairynet.com President and CEO March 2, 2004 In reply, please refer to LAC-13832 DOCKET NO. 50409 William C. Huffman, Project Manager Section A Decommissioning Branch Division of Waste Management Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission Washington, D.C. 20555

SUBJECT:

Dairyland Power Cooperative (DPC)

La Crosse Boiling Water Reactor (LACBWR)

Possession-Only License No. DPR45 Response to Request for Additional Information on the Spent Fuel Mananement and Funding Plan for LACBWR (L52608)

REFERENCE:

(1) NRC Letter (RAI), William C. Huffman to W. L. Berg, dated December 11, 2003 This submittal responds to the referenced RAI, requesting additional information related to spent fuel management and funding plans for LACBWR under 10 CFR 50.54(bb). We are responding to the specific inquiries in the RAI, and providing further background on Dairyland's financial status to provide further assurance concerning the SAFSTOR costs for LACBWR.

1.

SAFSTOR COSTS COMPARED TO DPC ANNUAL OPERATION AND MAINTENANCE COSTS NRC Staff requested "that DPC provide a breakdown of the SAFSTOR costs associated with the wet storage of the spent fuel by major category... for LACBWR as well as the total O&M costs for maintaining all the generation and transmission facilities." Dairyland provides the following information in response to that request:

A Touchstone Energy Cooperative

Mr. William C. Huffman LAC-13832 Page 2 of 6 March 2, 2004 Dairyland annual SAFSTOR costs associated with the wet storage of LACBWR spent fuel break down as follows, based upon costs incurred in 2003:

Category Amount Security costs

$937,551 Operation and maintenance costs

$3,143,250 associated with maintenance of spent fuel pool Licensing costs

$413,066 Insurance cost

$209,899 Other costs

$337,734 For comparison, over the last four years, the total of those SAFSTOR costs had the following range:

Year Total Costs 2003

$5,042,000 2002

$4,672,000 2001

$4,508,000 2000

$3,508,000 DPC total Operation & Maintenance (O&M) costs to maintain all of its generation and transmission facilities are as follows:

Year Generation Transmission Total O&M SAFSTOR O&M O&M O&M as percentage of Total O&M 2003

$45,240,129

$19,338,813

$64,578,942 7.81%

2002

$42,759,030

$18,835,720

$61,594,750 7.59%

2001

$40,110,192

$15,962,130

$56,072,322 8.04%

The following is a more informative comparison of the SAFSTOR costs to Dairyland's entire annual O&M costs, including fuel, for the same period.

Year Total Operating Costs, SAFSTOR O&M as including Fuel percentage of Total Operating Costs 2003

$191,658,210 2.10%

2002

$180,339,574 2.59%

2001

$169,857,207 2.65%

Mr. William C. Huffman LAC-13832 Page 3 of 6 March 2, 2004

2.

DAIRYLAND WHOLESALE POWER CONTRACT NRC Staff also requested that "DPC provide a discussion of the long-term wholesale power contract related to the period covered since the SAFSTOR period for the LACBWR may extend beyond the long-term contract." Dairyland provides the following information in response to that request:

DPC 's wholesale power contract. Dairyland has entered into uniform wholesale power contracts with all of its 25 Class A member distribution cooperatives under which each distribution cooperative agrees to purchase from Dairyland all of its electric power requirements. The wholesale power contracts may be terminated by either party after December 31, 2035, upon six-months notice. The wholesale power contracts may not otherwise be terminated or modified without the prior written consent of the United States Rural Utilities Service, the agency of the United States Department of Agriculture that exercises regulatory authority over Dairyland's rates and operations.

Each wholesale power contract provides that Dairyland's Board of Directors shall determine the rate for the power that Dairyland furnishes to the distribution cooperative based upon the cost of providing such service. Dairyland's Board of Directors is required to review the schedule of rates at least once a year and revise the schedule so that it produces revenues which are sufficient, along with the revenues of Dairyland from all other sources, to meet the cost of operating and maintaining the generating plant, transmission system and the related facilities, the cost of any power purchased for resale by Dairyland, the amount of all taxes and the amount of payments of principal of or interest on all indebtedness of Dairyland, and to provide for reasonable reserves. Any proposed rate changes by Dairyland are subject to prior approval by RUS. The rate schedule adopted under the wholesale power contract includes an automatic adjustment clause for the increased cost of coal, fuel oil, natural gas and purchased power.

A copy of one of the distribution member wholesale power contracts is enclosed with this submittal.

Decommissioning is planned to be completed well before expiration of the current wholesale power contract term. Dairyland anticipates that it will move from SAFSTOR to the DECON phase of decommissioning no later than 2019. At that time, it will begin using funds from its nuclear decommissioning trust to accomplish the final decommissioning. Dairyland anticipates completing that process within 6 years, or by approximately 2025, well within the period of the existing distribution cooperative wholesale power contracts. Dairyland's ability to move to DECON depends upon removal of the LACBWR spent fuel from the wet pool storage. Current Department of Energy ("DOE") planning calls for opening of the Yucca Mountain SNF and HLW repository in 2010, and Dairyland anticipates that it would ship all of its fuel to the repository in the very early years of repository operation. All of Dairyland's fuel is relatively cold compared to that of other operating reactors, and its very small volume of fuel would likely be shipped in a single shipping campaign.

Mr. William C. Huffman LAC-13832 Page 4 of 6 March 2, 2004 Even prudently allowing for a delay of several years beyond the current DOE planning date for Yucca Mountain, Dairyland anticipates that all of its fuel could be removed by 2020. Through a subsidiary, Dairyland participates in the Private Fuel Storage (PFS) initiative now in the final stages of NRC licensing proceedings for a spent fuel storage facility in Utah. Assuming that the PFS facility is approved and constructed, Dairyland would be entitled to an early priority for shipment of all of its fuel to the PFS Utah facility. The Dairyland fuel would remain at the PFS facility in Utah until the federal repository would be open and available to receive it. Dairyland anticipates that the PFS facility will be completed and in operation on a schedule that would allow removal of all of Dairyland's LACBWR fuel by no later than 2010, also well within the current period for the Dairyland member wholesale power contracts.

As an alternative to PFS, Dairyland is currently studying removal of the fuel from the current wet pool storage and storing it in dry storage on the LACBWR site. While construction of the ISFSI would initially be an added cost, it is expected to allow a substantial reduction from the current levels of staffing required for wet pool storage, and is expected to reduce considerably the annual SAFSTOR O&M costs. The planning date for a LACBWR ISFSI has not yet been established, but Dairyland believes that it could be accomplished as early as 2010. DPC has been reluctant to remove its fuel from wet storage due to uncertainty over DOE plans and requirements under the Nuclear Waste Policy Act (NWPA).

3.

CONTINGENCY PLAN TO FUND AND REDUCE SAFSTOR COSTS NRC Staff has requested "that DPC provide a detailed description of the contingency (backup) plan for funding the costs of the SAFSTOR of LACBWR if the existing wholesale power contract is discontinued, or if the projected revenues from the contract are reduced." Dairyland provides the following information in response to that request:

The uniform, all-requirements wholesale power contracts with the member distribution cooperatives, requiring rates adequate to cover all costs and reasonable reserves, are an essential element of the security that Dairyland's lenders have required to finance its generation and transmission systems. Dairyland does not contemplate the discontinuance of those contracts during their term. Considering the relatively small size of the SAFSTOR costs compared to Dairyland's ordinary O&M costs, and the other contingencies, described in this section, that Dairyland is pursuing to be able to reduce SAFSTOR costs in the future and to recover a good share of the those costs in litigation, Dairyland believes it unnecessary to create an additional contingency funding source for SAFSTOR costs.

At the time that LACBWR shut down in 1987, Dairyland had already begun its own funding for anticipated future decommissioning costs. Dairyland informed the Commission in its initial decommissioning plan that it intended to fund SAFSTOR as part of ongoing O&M costs.

Because of those facts, and in recognition of the assured recovery of those costs under its long-

Mr. William C. Huffman LAC-13832 Page 5 of 6 March 2, 2004 term wholesale power contracts, which allow Dairyland to recover all of its O&M costs for its generating plants and system and which cannot be modified without RUS approval, Dairyland did not establish a separate contingency fund for the SAFSTOR costs.

As a means to control and reduce the SAFSTOR costs in the future, Dairyland joined the PFS effort for an alternative, temporary off-site storage facility in Utah. Dairyland has also begun planning for on-site dry storage of the fuel at LACBWR, which would be an alternative plan to reduce its annual SAFSTOR costs. Those alternatives are described above.

As an additional contingency plan to assist in SAFSTOR costs, Dairyland may be able to recover some of the SAFSTOR spent fuel storage costs as part of its damages remedy in breach of contract litigation against the Department of Energy. Dairyland has asserted a breach of contract claim against the Federal Government in the United States Court of Federal Claims, claiming damages for the DOE's delayed acceptance of the LACBWR spent fuel under the contract between Dairyland and the DOE under the Nuclear Waste Policy Act. One element of damages for which Dairyland will seek recovery will be Dairyland's additional LACBWR O&M costs during the ongoing SAFSTOR period. The United States Court of Appeals for the Federal Circuit has already decided that the DOE breached its contractual obligations under the NWPA, and the remaining issue is the damages that the various utilities sustained. The amount of recovery is not yet determined, and the first of those cases, involving other utilities, will go to trial this year. Dairyland's damages recovery, however, would potentially offset a significant portion of Dairyland's ongoing SAFSTOR costs.

4.

WHOLESALE POWER CONTRACT RATES NRC Staff inquired in the final point of the RAI: "First, are DPC's rates set annually or for the term of the long-term contract? Second, are all of the DPC's 25 member cooperatives aware that LACBWR's SAFSTOR costs are included in the overall O&M projected costs? Third, do the 25 member cooperatives have the authority to reduce or eliminate the LACBWR's projected SAFSTOR costs?" Dairyland provides the following information in response to those questions:

As noted above, the Dairyland Board is its rate-making authority, and in that role revises Dairyland's wholesale power rates to the 25 member cooperatives annually, subject to RUS review and approval. Pursuant to the wholesale power contract and Dairyland Board policy, the rates are designed to meet a revenue requirement that recovers all cost of service components, including all LACBWR costs. Dairyland's rates are designed to yield a net margin enabling Dairyland to achieve or exceed the financial performance covenants contained in the Dairyland RUS Mortgage.

Effective May 1, 2001, Dairyland "unbundled" its wholesale rates to its member distribution cooperatives so they more directly reflect and recover the costs of its core business functions.

The former demand charge was separated into the following four components:

Mr. William C. Huffman LAC-13832 Page 6 of 6 March 2, 2004 (1)

"Power Supply," which has causation and utilization components corresponding with the former demand charge; (2)

"Transmission," which is based on the prior calendar year coincident monthly transmission peaks; (3)

"LACBWR Stranded Cost," the cost recovery for the La Crosse Boiling Water Reactor ("LACBWR"), which is based on prior calendar year kWh and; (4)

"Customer Support," also based on prior calendar year kWh.

Each of the 25 Dairyland distribution cooperative members designates a representative to serve on the Dairyland Board of Directors, and thereby each member cooperative has an opportunity to participate directly in the rate determination process. However, no distribution cooperative has a veto on the rate determination, and each is contractually bound by the rates approved by the Board. As noted above, the ongoing LACBWR SAFSTOR costs are explicitly broken-out as part of the wholesale rates, and each of Dairyland's members is explicitly made aware of those costs annually through the budget presentations to the managers of the member distribution cooperatives and to the Dairyland Board. None of the Dairyland distribution cooperative members may unilaterally reduce or eliminate the LACBWR cost recovery as part of Dairyland's rates. The manner in which LACBWR costs are incorporated in the current wholesale rates is attached to this submittal.

Please contact me if you have any further questions.

Sincerely, DAIRYLAND POWER COOPERATIVE William L. Berg, Presidgt and CEO WLB:REC:dh Enclosure

-41-1-,

CORaFILE:

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i CORAFILE:

WHOLESALE POWER CONTRACT - FEDERATED COOPERATIVE AGREEMENT made as of 7

2 1g 2?

? C between Dairyland Power Cooperative, (hereinaftf9 called the "Seller"), a corporation organized and existing unde the laws of the State of Wisconsin, and Allamakee-Clayton Electric Cooperative, Inc. (hereinafter called the "Member"), its successors and assigns, a corporation organized and existing under the laws of the State of Iowa.

WHEREAS, the Seller presently owns and operates electric generation plant and/or transmission system and proposes to construct additional electric generating plant and/or transmission facilities, and may purchase or otherwise obtain power and energy for the purpose, among others, of supplying electric power and energy to borrowers from the Rural Electrification Administration which are or may become members of the Seller; and WHEREAS, the Seller has financed and may, in the future, finance such construction in whole or part through loans made or guaranteed by the United States of America (hereinafter called the "Government"), acting through the Administrator of the Rural Electrification Administration (hereinafter called the "Administrator"); and WHEREAS, the indebtedness created by such loans and loan guarantees made by the Government is evidenced, and, with respect to future indebtedness, shall be evidenced, by certain notes (hereinafter collectively called the "Notes") secured by that Supplemental Mortgage and Security Agreement made by and between the Seller, the Government, National Rural Utilities Cooperative Finance Corporation, and Morgan Guaranty Trust Company of New York (said Supplemental Mortgage and Security Agreement as it may heretofore or hereafter be amended, supplemented, and/or restated from time to time being hereinafter called the "Mortgage"); and WHEREAS, this Agreement and payments due to the Seller under this Agreement shall be pledged and assigned to secure the Notes as provided in the Mortgage; and WHEREAS, the Seller has heretofore entered into or is about to enter into agreements for the sale of electric power and energy similar in form to this Agreement with all of the borrowers from the Rural Electrification Administration which are members of the Seller, and may enter into similar contracts with other such borrowers who may become members; and WHEREAS, the Government is relying on this Agreement and similar contracts between the Seller and other borrowers from the Rural Electrifica-tion Administration to assure that the Notes are repaid and the purposes of the Rural Electrification Act of 1936, as amended, are carried out and the Seller and Member, by executing this Agreement, acknowledge that reliance; WHEREAS, the Member desires to purchase electric power and energy from the Seller and on the terms and conditions herein set forth; and

NOW, THEREFORE, in consideration of the mutual undertakings herein contained the parties hereto agree as follows:

1. General. The Seller shall sell and deliver to the Member and the Member shall purchase and receive from the Seller all electric power and energy which the Member shall require for the operation of the Member's system to the extent that the Seller shall have such power and energy and facilities available.

2. Electric Characteristics and Delivery Point(s).

Electric power and energy to be furnished hereunder shall be alternating current, three phase, four wire, sixty cycle except as otherwise mutually agreed upon. The Seller shall make and pay for all final connections between the systems of the Seller and the Member at the point(s) of delivery.

The point(s) of delivery and delivery voltage shall generally be 7200 volts on the low side of the transforming equipment at the points of delivery specified in Schedule B attached hereto and made a part hereof, and such other point or points or voltages as may be agreed upon by the Seller and the Member.

3. Substation.

The Seller shall install, own, and maintain the necessary substation equipment at the point(s) of connection.

The Seller shall own and maintain switching, protective, and voltage regulating equipment, except distribution circuit reclosers or equivalent apparatus, which may be reasonably necessary to enable the Member to take and use the electric power and energy hereunder and to protect the system of the Seller.

Meters and metering equipment shall be furnished and maintained by the Seller and shall generally be located at the point of delivery on the low voltage side of such transforming equipment.

4. Rate.

(a) The Member shall pay the Seller for all electric power and energy furnished hereunder at the rates and conditions set forth in Rate Schedule A, attached hereto and made a part hereof.

(b) The Board of Directors of the Seller at such intervals as it shall deem appropriate, but in any event not less frequently than once in each calendar year, shall review the rate for electric power and energy furnished hereunder and under similar agreements with other Members and, if necessary, shall revise such rate so that it shall produce revenues which shall be sufficient, but only sufficient, with the revenues of the Seller from all other sources, to meet the cost of the operation and main-tenance (including without limitation, replacements, insurance, taxes and administrative and general overhead expenses) of the generating plant, transmission system and related facilities of the Seller, the cost of any power and energy purchased for resale hereunder by the Seller, the cost of transmission service, make payments on account of principal and interest on all indebtedness of the Seller, and to provide for the establishment and maintenance of reasonable reserves.

The Seller shall cause a notice in writing to be given to the Member and other members of the Seller and the Administrator which shall set out all the proposed revisions of the rate with the effective date thereof, which shall be not less than thirty (30) nor more than forty-five (45 days after the date of the notice, and shall set forth the basis upon which the rate is proposed to be adjusted and established.

The Member agrees that the rate from time to time established by the Board of Directors of the Seller shall be deemed to be substituted for the rate herein provided and agrees to pay for electric power and energy furnished by the Seller to it hereunder after the effective date of any such revisions at such revised rates; provided, however, that no such revision shall be effective unless approved in writing by the Administrator.

5. Meter Readings and Payment of Bills.

Meters shall be read monthly.

Electric Power and energy furnished hereunder shall be paid for at the office of the Seller in La Crosse, Wisconsin, monthly within fifteen (15) days after the bill therefor is mailed to the Member.

If the Member shall fail to pay any such bill within such fifteen-day period, the Seller may discontinue delivery of electric power and energy hereunder upon fifteen (15) days' written notice to the Member of its intention so to do.

6. Meter Testing and Billing Adjustment.

The Seller shall test and calibrate meters by comparison with accurate standards at intervals of twelve (12) months.

The Seller shall also make special meter tests at any time at the Member's request.

The costs of all tests shall be borne by the Seller; provided, however, that if any special meter test made at the Member's request shall disclose that the meters are recording accurately, the Member shall reimburse *the Seller for the cost of such test.

Meters registering not more than two percent (2%) above or below normal shall be deemed to be accurate.

The readings of any meter which shall have been disclosed by test to be inaccurate shall be corrected for the ninety (90) days previous to such test in accordance with the percentage of inaccuracy found by such test.

If any meter shall fail to register for any period, the Member and the Seller shall agree as to the amount of energy furnished during such period and the Seller shall render a bill therefor.

7. Notice of Meter Reading or Test.

The Seller shall notify the Member in advance of the time of any meter reading or test so that the Member's representative may be present at such meter reading or test.

8. Right of Access. Duly authorized representatives of either party hereto shall be permitted to enter the premises of the other party hereto at all reasonable times in order to carry out the provisions hereof.

9. Continuity of Service. The Seller shall use reasonable diligence to provide a constant and uninterrupted supply of electric power and energy hereunder.

If the supply of electric power and energy shall fail or be interrupted, or become defective through act of God or of the public enemy, or because of accident, labor troubles, or any other cause beyond the control of the Seller, the Seller shall not be liable therefor or for damages caused thereby.

10.

Transfers by the Member.

The Member agrees that during the term of this Agreement, so long as any of the Notes are outstanding, the Member will not, without the approval in writing of the Seller and the Administrator, take or suffer to be taken any steps for reorganization or to consolidate with or merge into any corporation, or to sell, lease or transfer (or make any agreement therefor) all or a substantial portion of its assets, whether now owned or hereafter acquired.

Notwithstanding the foregoing, the Member may take or suffer to be taken any steps for reorganization or to con-solidate with or merge into any corporation or to sell, lease or transfer (or make any agreement therefor) all or a substantial portion of its assets, whether now owned or hereafter acquired, so long as the Member shall pay such portion of the outstanding indebtedness on the Notes and of Seller's other long-term obligations as shall be determined by the Seller with the prior written consent of the Administrator and shall otherwise comply with such reasonable terms and conditions as the Administrator and Seller may require.

11.

The Member and Seller agree that the failure or threatened failure of the Member to comply with the terms of the immediately preceding paragraph 10 will cause irreparable injury to the Seller and to the Government which cannot properly or adequately be compensated by the mere payment of money. Member agrees, therefore, that in the event of a breach or threatened breach of paragraph 10 of this Agreement by the Member, the Seller, in addition to any other remedies that may be available to it judicially, shall have the right to obtain from any competent court a decree enjoining such breach or threatened breach of said paragraph 10 or providing that the terms of said paragraph 10 be specifically enforced.

12.

No assignment of this Agreement, or any rights thereunder, by the Seller or the Member shall be valid without the written consent of the Administrator.

13.

Term.

This Agreement shall become effective only upon approval in writing by the Administrator and shall remain in effect until December 31, 2035, and thereafter until terminated by either party's giving to the other not less than six months' written notice of its intention to terminate.

Subject to the provisions of Article I hereof, service hereunder and the obligation of the Member to pay therefor shall commence upon completion of the facilities necessary to provide service. When executed, delivered, and approved as provided above, this Agreement shall supersede all prior wholesale power contracts between the Seller and the Member.

EXECUTED THE day and year first above mentioned.

DAIRYLAND POWER COOPERATIVE Seller By

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/ &2is OPresident ATTEST:

Secretary ALLAMAKEE-CLAYTON ELECTRIC COOPERATIVE, INC.

ATTEST:

1.ce.

a. r Secretary/

My SUPPLEMENTAL AGREEMENT AGREEMENT made as of __

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between Dairvland Power Cooperative (hereinafter called the "Seller"), Allamakee-Clayton Electric Cooperative, Inc.,

(hereinafter called the "Member"), its successors and assigns and the United States of America (hereinafter called the "Government"), acting through the Administrator of the Rural Electrification Administration (hereinafter called the "Administrator").

WHEREAS, the Seller and the Member have entered into a contract for the purchase and sale of electric power and energy, which contract is attached hereto and is hereinafter called the "Power Contract"; and WHEREAS, the execution of the Power Contract between the Member and the Seller is subject to the approval of the Administrator under the terms of the loan contracts entered into with the Administrator by the Seller and the Member respectively; and WHEREAS, the Government is relying on said Power Contract and similar contracts between the Seller and other borrowers from the Rural Elec-trification Administration to assure that the "Notes" referred to in the Power Contract are repaid and the purposes of the Rural Electrification Act of 1936, as amended, are carried out and the Seller and Member by executing this Supplemental Agreement, acknowledge that reliance; NOW, THEREFORE, in consideration of the mutual undertakings herein contained, and the approval by the Administrator of the Power Contract, the parties hereto agree as follows:

1. The Seller, the Member and the Administrator agree that if the Member shall fail to comply with any provision of the Power Contract, the Seller, or the Administrator, if the Administrator so elects, shall have the right to enforce the obligations of the Member under the provisions of the Power Contract by instituting all necessary actions at law or suits in equity, including, without limitation, suits for specific performance.

Such rights of the Administrator to enforce the provisions of the Power Contract are in addition to and shall not limit the rights which the Administrator shall otherwise have as third-party beneficiary of the Power Contract or pursuant to the assignment and pledge of such Power Contract and the payments required to be made thereunder as provided in the "Mortgage" referred to in the Power Contract.

The Government shall not, under any circumstances, assume or be bound by the obligations of the Seller under the Power Contract except to the extent the Government shall agree in writing to accept and be bound by such obligations.

'-S IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above mentioned.

DAIRYLAND POWER COOPERATIVE SELLER By

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air IS 4 ly PRESIDENT ATTEST:

SEGK'E
ARY e

ALLAMAKEE-CLAYTON ELECTRIC COOPERATIVE, INC.

MEMBER By 4

ATTEST:

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4 SECRETARY UNITED STATES OF AMERICA By ADMINISTRATOR OF RURAL ELECTRIFICATION ADMINISTRATION April 2003 DA/IRYLAND COOPERAMiVE A CROSSE WISCONSIN DPC Class A Wholesale Power Rate Report May 1, 2003 - April 30, 2004 Abridged Version Page

• Executive Summary 1 - 6

• Rate Summary and Characteristics 7-13

• A-1 Firm Power 14 - 19

• A-2 Interruptible Power Rate 20 - 23

• A-4 Targeted Time of Use Energy Rate 24 - 25

• A-5 Large Load Guaranteed Rate 26 - 27

• A-7 System Level Guaranteed Rate 28 - 29

• A-8 Sale for Municipal Resale Rate 30 - 33

• RE-1 Renewable Energy Rate Rider 34

• RC-1 Rate Credit Rider 35 - 37

• SL-1 Summer Load Reduction Rate Rider 38 - 39

• AE-1 Annual Energy Reduction Rate Rider 40 - 41

• GP-1 Green Power Energy Rate Rider 42

• Addendum I Power Factor Penalty Charge 43

• Addendum II Power Cost Adjustment 44 A Touchstone Energy' Cooperative

_t__

Page 1 of 6 DAIRYLAND POWER COOPERATIVE WHOLESALE POWER RATE A FIRM POWER Date Effective - May 1, 2003 A. AVAILABILITY:

Available to all Class A members (consumers) of the Dairyland Power Cooperative (seller).

B. MONTHLY RATE:

The consumer shall pay the seller each month for all power and energy furnished by the seller according to the following rate schedule:

1. Annual Fixed Cost Charge:

The annual fixed cost charge per Schedule A on page 5 is comprised of the following charges:

a. Power Supply Demand Charge Per Section C

b. Annual Transmission Charge Per Section D

c. LACBWR Stranded Cost Per Section E

d. Customer Support Charge Per Section F and is billed monthly based on the Dairyland production model pattern as follows:

May 2003 7.1819%

June 2003 7.5110%

July 2003 8.5166%

August 2003 8.1678%

September 2003 7.2665%

October 2003 8.0772%

November 2003 8.9439%

December 2003 9.5485%

January 2004 9.9411%

February 2004 8.7007%

March 2004 8.5339%

April 2004 7.5749%

100.0000%

2. Energy Charge - Time of Use:

All energy purchased for the calendar month shall be billed at the following rates:

a.

Off-Peak 11:00 p.m. to 7:00 a.m. - Monday through Thursday 1.68500/kWh 11:00 p.m. Friday through 7:00 a.m. Monday and all day on holidays as defined in the MAPP Agreement (New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day).

b.

On-Peak 7:00 a.m. to 11:00 p.m. - Monday through Friday 2.22770/kWh 14

Page 2 of 6

3. Power Cost Adiustment: As further defined in Rate Addendum I.

4. Substation Charge:

The substation rate shall be equal to the seller's actual costs of owning the substation for interest, depreciation and taxes plus the cost of operation and maintenance as follows:

a. Basic Service Charge_- $120.00/Substation

b. Direct O&M Charge_- $23.501$1,000 of Investment If two or more consumers are served by one substation, the substation charge shall be prorated between the parties in proportion to the monthly kilowatt load of the parties.

5. Power Factor Penalty Charge:

The monthly Power Factor Penalty Charge shall be equal to the product of the power factor penalty rate of 25 cents and the kvar penalized for each of the consumer's substations, as further defined in Rate Addendum I.

6. Controlled Electric Heat Credit:

A credit to the Annual Demand Charge of 0.45 cents per kWh times the consumer's controlled electric space heating and low temperature crop-drying kWh's of the consumer for the previous year.

C. POWER SUPPLY DEMAND CHARGE (PSDC):

The consumer's PSDC shall be calculated in accordance with the following formulas and definitions:

1. Winter Causation Demand Rate (WCDR)

$22.00/kW

2. Summer Causation Demand Rate (SCDR)

$38.00/kW

3. Utilization Demand Rate (UDR) 0.4069&/kWh

4. Controlled Heat Credit Rate (CHR) 0.45000fkWh PSDC = WCDC + SCDC + UDC - CHC where:

Winter Causation Demand Charge (WCDC) = WCDR

• WCD Summer Causation Demand Charge (SCDC) = SCDR

• SCD Utilization Demand Charge (UDC) = UDR

• CAU Controlled Heating Credit (CHC) = CHR

• CCH The PSDC for each consumer is summarized on Schedule B on Page 6 of this tariff.

Deductions for kW demand and kWh measurements shall be made for loads billed according to the seller's other non-A-I rate schedules. The following definitions apply:

15

a.

Page 3 of 6 WCD:

The Winter Demand (WD) of the consumer (C), expressed in kW, shall be the average of the consumer's demand readings at all points of delivery coincident with the seller's Winter Coincident Peak load.

The Winter Coincident Peak Load of the seller, shall be the average of the highest two (minimum of one) daily coincident peak demands equal to the sum of the coincidental sixty (60) minute demands of the Dairyland distribution substations during the period of November through April when the seller's load control system is employed at its maximum control level to reduce the seller's power supply peak in the MAP Pool.

SCD:

The Summer Demand (SD) of the consumer (C), expressed in kW, shall be the average of the consumer's demand readings at all points of delivery coincident with the seller's Summer Coincident Peak Load.

The Summer Coincident Peak Load of the seller, shall be the average of the highest two (minimum of one) daily coincident peak demands equal to the sum of the coincidental sixty (60) minute demands of the Dairyland Distribution Substations during the period of May through October when the seller's load control system is employed at its maximum control level to reduce the seller's power supply peak in the MAP Pool.

CAU:

The Average Utilization (AU) of the consumer (C), expressed in kWh, shall be based on the kWh sales for the preceding calendar year.

CCH:

The consumer's controlled electric space heating and low temperature crop drying kWh's of the consumer for the previous calendar year, which are eligible for the controlled heating credit.

D. ANNUAL TRANSMISSION CHARGE:

The Annual Transmission Charge (ATC) of the consumer shall be equal to the product of

$49.26IkW times the consumer's demand, expressed in kW, which shall be the average of the consumer's demand readings at all points of delivery coincident with the seller's twelve monthly coincident peaks (12 CP's) as defined under the Network Integrated Transmission Agreement for the preceding calendar year.

E. LACBWR STRANDED COST CHARGE:

The LACBWR Stranded Cost (LSC) charge shall be equal to all costs associated with the operation of the La Crosse Boiling Water Reactor (LACBWR) Nuclear Facility, the LACBWR Nuclear Decommissioning Fund and the Nuclear Fuel Storage Fund. The LSC charge shall be based on the kWh sales for the preceding calendar year (average demand) times the LSC rate as follows:

LACBWR Stranded Cost Charge

.0.18330/kWh 16

Page 4 of 6 F. CUSTOMER SUPPORT CHARGE:

The Customer Support (CSC) Charge shall be equal to the costs of supporting the seller's Class A members such as the Touchstone Energy Annual Fees, the Board Policy 80 Economic Development Loan Costs, Energy Efficiency Rebates and other similar costs associated with support of the Class A members. The CSC charge shall be based on the kWh sales for the preceding calendar year (average demand) times the CSC rate as follows:

Customer Support Charge

.0.0650 ¢fkWh G. LOAD MANAGEMENT ECONOMIC DISPATCH ADJUSTMENT:

An adjustment in the consumer's monthly billing will be made based on the contribution of the consumer's load that is controlled and which contributes to the seller's ability to optimize the hourly generation/purchased power mix and cost. The seller shall calculate the economic value of the prior month's transactions and each consumer's contribution based on control tests, on-peak load and other engineering information.

H. POWER BILL PREPAYMENT:

Members may prepay their wholesale power bills in accordance with Board Policy Number 14, adopted by the Dairyland board of directors on October 19, 1990 and amended December 18, 1992.

I. RATE CREDIT RIDERS:

RC-1, Rate Credit Rider for Economic Development, Load Retention and Annexation.

RC-2, Rate Credit Rider - Preferred Large Load (pending approval)

SL-l, Summer Load Reduction Rate Rider AE-1, Annual Energy Reduction Rate Rider 17