ML19330B649

Annual Financial Rept 1979

ML19330B649
Person / Time
Site:	La Crosse File:Dairyland Power Cooperative icon.png
Issue date:	05/15/1980
From:	DAIRYLAND POWER COOPERATIVE
To:
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ML19330B645	List: ML19330B644 ML19330B649
References
NUDOCS 8008050324
Download: ML19330B649 (32)

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Total operating revenues exceeded $100 million for the first time, while total margins were over $3.4 million.

Net cost of electricity delivered to member cooperatives in-creased 12.26 percent to 2.41 cents per kilowatt-hour.

Power sales to member cooperatives increased 5.4 percent over the previous year. Total power sales increased 11.2 percent.

He completion of the John P. Madgett station at Alma gives Dairyland Power a net capacity in service of 1,043.350 kilowatts.

r-He Siting Study for Project '87 was completed. The prefer-red site is adjacent to the John P. Madgett Unit One and the 1

altemate is in Barron County.

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he Three Mile Island (TMI) incident greatly affected dect-sions to cancel the Tyrone Energy Park and planned phase-out of the La Crosse Boiling Water Reactor (LACBWR) bv 1990.

At mid-year an extensive restructuring of the wholesale power rate was adopted by the board based upon a cost of service study. It will encourage conservation and load man-agement.

The board of directors has approved a load management program which will reduce future new capacity requirements and the cost of electricity.

Page President's Message 2

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Board of Directors....

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General Manager's Report.

6 1979 Operations

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Comparative Sales 17 Finan-lal Statements.

. 19

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Notes to Financial Statements....

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Statistical Comparative Summary.

27 Consolidated Cost Information

. 28 Service Area Map -

(inside back cover)

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More than 1.500.000 tons of coal - purchased at a cost of nearly 539.000.000 - were barged to the Genos #3. Alma and E.J S oneman t

power planes during the 1979 navtgedonal season on the upper Missis #ppi Rher

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When rural electrification began in the 1930s the word

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"mral" was synonymous with " farm." That's not the case any longer.. you might want to substitute the word

" resident" for farm.

Approximately 40 percent of Dairyland Power's consumer members are commercial fanners,57 percent are mral resi-dential and seasonal and three percent are commercial or light indusmal.

Despite the decline in the. umber of farms, most member cooperatives have experienced significant growth in mem-bership as a result of a shift in population from urban areas to rural areas.

An analysis of recent trends reveals that member coopera-tives have been trowing faster in terms of new members than growth in total population of the counties in which they are located. This has resulted in the construction of a larger number c4. single family homes, often electrically heated and with most of the labor saving conveniences. The non-farm residential consumer is cresently the second largest and fastest growing in the Dairyland Power system.

Unfortunately, there is a small and loud group among these residents who are not considering the agncultural value of the mral area. Many of these people were not yet bom when the rural electrification program began 45 years ago.

It's their belief that you flip the switch and the lights will always come on.. and always have.

Cooperative rural electrification was bom as a social pro-gram by people recognizing electric service as a privilege.

Some of the new residents believe electric service is a right, but yet are the very ones who support the numerous road-blocks being thrown in the path of reliable electric service.

There seems to be a distrust of almost everything and everyone associated with' the electric utility industry. Building a new power plant or erecting a new transmission line has tumed into endless rounds of govemment permit procedures and public hearings often spurred on by individuals, including many who are not even consumer-members.

There is aW a longing among a few people to retum to the land and simpler life style. For just a few, that's fine - but for large populations it simply cannot be done.

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Few industnes are subject to the impediments which con-4ghip

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People still want electncity, but they don't want generating

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V k^7 plants in their neighborhoods, nor power lines crossing their j y land. These people should stop and think a minute. Look g

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utilities.

There are times the genera good of the public must take

-c:Q precedence over individual rights. If people want electricity, they are going to have to put up with some power lines and generating plants and somebody's land is going to be used.

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j histonj of the rural electric program. The sad thingis,it seems We are living in one of Se most difficult periods in the sg i

j rA.ra J. Hoidore to be gettirig worse instead of better. Many of our consumers have 2xperienced the benefits of electricity from the begin-ning. They can remember when electricity in the rural areas was unheard of and they don't want to lose those benefits.

Those of us with that type of thinking must start to fight back.. if we want to continue at the same standard of living, or improve it. Dairyland Power needs that type of active support.. we've remained apathetic too long.

How many of us are willing to reduce our present standard of living or our present overall economy? Any change can be p/

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a problem in one way or another, but unrealistic, drastic gfwm..,g: y changes in our lifestyle cannot, and must not, be done.

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Dairyland Power has had an expansion program over the years to keep pace with the rising demand for electric energy.

Edward J. Holdorf, it has become extremely difficult to meet these schedules and President we are running out of time.

A good example of this is the 161 kV transmission line proposed from Dairyland Power's Genoa, Wis., site to Inter-state Power's Lansing, Iowa, site. The line was originally scheduled to be completed in the summer of 1977.. hope-fully, the line will be started this year. It's a vital line for continued reliability of electnc sen. ice throughout a large area of southwestem Wisconsin, northeastem lowa and south-eastern Minnesota.

The public sector creating these delays are not only costing us money but valuable time. A most initating thing is when the brownouts and blackouts come, and they will, these people will blame the electric ut:lities for not having sufficient power.

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I The 1970's are history. The end of the decade marked the f

100th anniversary of Thomas Edison's development of the first practical incandescent light bulb. It was also Dairyland Power's 38th year of existence.

The year 1979 was one of disappointment, uncertainties, and opportunities The numerous and varied events will be looked upon as a ye.n of decisions.

Our major generation constmction project, the 350.000 kilowatt John P. Madgett station, was completed iate in 1979.

The plant went on-line on November 1 and was officially credited in commercial operation by the Mid-Continent Area Power Pool (MAPP) as of November 25,1979. The comple-tion of the Madgett station gives Dairyland Power a net capacity in service of 1,043.000 kilowatts. We now have a surplus of generating capacity - and that's a good feeling.

It's the first time Dairyland Power has had surplus capacity since 1973. However, our load forecast shows that we will again be deficient in 1982.

Initial start-up activities of the Madgett station were excel-lent - even better than anticipated. However, on January 12,1980, there was a boiler accident which kept the plant out of service until May. We are very I.appy that the plant is now in operation for the summer, which will allow us to fulfill capacity exchange ag eements with other utilities.

Our greatest disappointment during the year was the can-cel'ation of the Tyrcne Energy Park. The write-off of $10 million (plus interest) will result in a small power cost increase to consumers. The cancebation of Tyrone will also result in higher power costs in the future, since we will have to develop higher cost altemate generation.

The cancellation came as a result of the Wisconsin Public Service Commission's (WPSC) denial in early 1979 of a permit for the construction of the plant, which was to be a 1,100,000 kilowatt nuclear unit. Dairyland Power's share would have been 13 percent or 143,000 kilowatts. We ap-pealed the decision, but later dropped the appeal.

Our appeal of the WPSC decision came at the time of the incident at the Three Mile Island (TMI) nuclear plant in Penn-sylvania, which without a strong federal policy for develop-ment of new nuclear plants has made the future of nuclear generation much more uncertain.

i of its small size the cost of generating electricity at LACBWR is higher than power costs from the larger nuclear plants.

Most of the new requirements by the NRC increase the power

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!arger plants. At the present time the fuel cost of generating

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electricity at LACBWR is lower than our coal plants. In a few 1

years the nuclear fuel cost will be higher. The higher fuel cost

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3 and anticipated capital additions to the plant required by the s'

NRC will make it uneconomical to continue to operate the plant.

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We still believe that nuclear power is a safe and reliable source of electric energy. If our country is ever to free itself from its dangerous dependence on uncertain and expensive foreign energy sources. nuclear power must be developed as an integral part of the total energy mix.

The decision to phase out LACBWR by 1990 was predi.

Frank under cated upon the planned addition of a major fossil fired unit to the system in 1987, known as Project '87.

i Several municipal electric utilities that we serve plan to own a share of Project '87. We would like to welcome the munici-pal utilities who will be sharing Project '87 with us. This new 1

arrangement between Dairyland Power and the municipal utilities will assure both of us a future power supply at lower costs than each could secure separately.

I represent the tural electric cooperatives on a national The coming year will be crucialin the State of Wisconsin utility industry committee to oversee and coordinate efforts of regulatory process to obtain permits for the new unit. The the industry to address the impacts resulting from the TM1 WPSC has completed advance plan hearings which began in incident. The knowledge gained from the TM! incident has November 1979. We have become very concemed about already been used by the industry to make existing and future the unrealistic attitude of the WPSC in determining the need nuclear plants even more safe and dependable.

for new generating capacity. The effect that inflation and c nserv ti n will have on the use of electric energy is uncer-Our committee has formed a permanent Institute of Nuc-tain, which makes it very difficult to forecast future load lear Power Operations (INPO) whose function is to establish gr wth. However, the cost of some overexpansion, if that j

industrywide benchmarks for excellence in the safe operation shouM occur, k much Mer 6an 6e real social ad i

of nuclear power reactors. I represent the cooperative seg-

",mic c sts f an energy deficiency. A decision by the

• C ment of the utility industry on the INPO board of directors.

WPSL on our future plans is expected later on this year.

This past year has been a frustrating one for the 46.000 kilowatt La Crosse Boiling Water Reactor (LACBWR). Our staff spent a lot of timejustifying the need for and safety of the plant because of the attempts of local intervenor groups to prevent the installation of additional spent fuel storage racks and to shut down the plant. Valuable time was lost that should have been spent on other work. Dairyland Power's application to expand the spent nuclear fuel storage facilities was approved by the Nuclear Regulatory Commission (NRC). We expect new requirements for LACBWR during the coming year as a result of the TMI incident.

In March of this year we announced plans to phase out the operaton of LACBWR by 1990. LACBWR is the smallest operating nuclear power plant in the United States. Because l

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We are seeldng federal funds to study the possible installa-used for dual space heating systems, heat storage systems, tion of a hydroelectric plant at the U.S. Corps of Engineers water heaters, crop driers, irrigation, night lighting, and other Lock and Dam No. 8 near Genoa. Wis. The 10,000 kilo-loads.

watt hydro project would cost an estimated $21.5 million c nd would supply 52 million kilowatt-hours (kWh) of electric-Consentation in the use of energy, including electricity, ity to the Dairyland Power system in an average year.

should be given the highest national priority in energy plan-ning to reduce our country's dependence on oil. We use very We have also announced plans to build a 70.000 square little oil for the generation of electricity; however, when we foot service building which uill be located a few blocks from need to purchase electricity from other utilities, it is often our present headquarters building in La Crosse. The new purchased from oil-fired units. We have experienced a r educ-building will renve crowded conditions at our present head-tion in the rate of our load growth which we beheve is due to quaters and will include a central warehouse, garage, vari-efforts of our consumers to use electricity wisely and reduce ous shops, laboratories and offices.

their usage wherever possible.

Over the past decade, inflation has become a significant Financially,1979 was the first time Dairyland Power has factor in the economy and in our business. It was necessary to topped $100 million in revenues. Our margins were $3.4 increase rates for 1980 by 16.9 percent due mainly to the million. he increase in both revenues and margins was due higher investment and interest cost for the John P. Madgett to the 1979 three mill per kilowatt-hour rate increase and also station compared to our other facilities. Inflation and high to improved operation of our plants.

intcrest rates have, and will continue to have, a largeimpact New transmission line construction continues to receive on increasing power costs. We must increase our efforts t become more efficient in the planning, construction and increased attention from the public and regulatory agencies.

operation of our systent We did receive a crucial approval on an application to the U.S. Army Corps of Engineers for permission to cross the The restructuring cd our wholesale rates for sales to Chippewa River near Durand, Wis., for the construction m:mber distribution cooperatives was completed, and the of the 161 kilovolt (kV) Alma-Crystal Cave line.

new rates became effective on June 1,1979. Le new rates at more cost justified than the previous rates. He distribu-We do hope to begin construction this year on the 161 kV tion cooperatives are modifying their retail rates to reflect the line proposed from our Genoa site to Interstate Power's ch;nge in wholesale rates, thereby gwing consumers new Lansing, Iowa, site. The line was originally scheduled to be incentive to utilize conservation and load management prac-completed in the summer of 1977. It is a vital line for the tices to reduce their load at the time of the total system peak, continued reliability of electric service throughout a large 8'**'

which will reduce the need for future new facilitics and lower th2r cost of electricity.

As we close the decade of the 1970's and review the he rates for sale of power to municipal utilities for resale c mplex events that were never envisioned when the decade wers also restructured to make them more cost related. In the began, we begin the 1980's with renewed confidence in our future all contracts with municipal utilities will be directly with capabilities as a rural electric cooperative.

Dairyland. In the past. municipal utilities with diesel generat-It was through the efforts of our dedicated employees and ing facilities have been served by the distribution coopera-management that we successfully met the challenges of the tives on a resale basis.

1970's - environmental roadbiocks, burdensome regula-In March of this year the Dairyland Board authorized a new ti n and high inflation. It is with renewed determination and dedication that we enter the new decade.

load management program. Dairyland-Power and its member cooperatives will work together to install a modem centrally operated control system which will be capable of i

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switching various consumer appliances off during peak load ht.e+A periods.

With such a system we will be able to reduce our system Frank Linder, load during peak load periods without inconveniencing the General Manager user, he amount of new high-cost generating capacity can May 15,1980 be reduced, resulting in less investment, more efficient use of existing generating facilities, and lower, power costs.

Le control system can be used for switching off electricity

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mes t personnel electroitsh near Dattviand Power plants on the Mississippi Rher. The electrothhing, which notes concentradons of fish,is helpful in carrytag out studies of Datryland Power Construction crew, worts on the four mile N 149 line 49 the effects of thermat effluento on the aqua.

kV Albion Tap off a Northem States Power Co. tinet in Wisconsin near Bf ack or ecology in arena ahere water is returned ro the ther from Dairyland Power steam l

Rher Falls. Thh line was energized June 28.1979.

generating stations. This walleve was measured, melghed and released.

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Power Supply r.

Dairyland Power Cooperative's total system energy require-

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ments climbed 11.1 percent from the 1978 total. The system-wide supply of electric energy reached a record level 4,456,073.000 net kilowatt-hours.-

Dairyland Power generating plants produced 78.3 percent of the total energy while purchased power from members of the Mid-Continent Area Power Pool (MAPP) accounted for the remaining 21.7 percent needed to satisfy the electrical needs of nearly 161,000 consumer members.

The electric energy production from four coal-fired generating plants supplied 72.1 percent of Dairyland Power's system re-quirements. Genoa #3 generated 46.2 percent of the net kilowatt-hour total; Alma #1-5,19 percent; the E.J. Stoneman station,3.8 percent and the John P. Madget station,3.1 percent.

The John P. Madgett station at Alma went on-line in a test status capacity approximately November 1,1979, and was officially credited by MAPP as being operational and commer-cial as of November 25,1979.

The La Crosse Boiling Water Reactor (LACBWR) accounted for 4.5 percent of the system requirements and the Flambeau hydroelectric plant and Twin Lakes diesel plant supplied the l

remaining 1.7 percent.

Dairyland Power's original generating facility, Genoa #1, formerly a coal-buming installation now fueled by oil, remained on standby status throughout the year.

Sales Power sales totaling 4,274,396.249 kilowatt-hours represent an 11.2 percent gain over 1978 electric sales and a 1.1 percent increase over the record kilowatt-hour total established in 1977.

This is the highest in Dairyland Power's 38 years of operation.

Electric sales tc:al of 2,741,331,383 kilowatt-hours to Class A l

members - the 29 distribution cooperatives served by Dairy-land Power - were up 5.4 percent.

Energy sales to Class C and D members - Cooperative Power Association in. Minnesota, other neighboring electric utilities of MAPP and area municipal systems -increased to i

1,533.064,866 kilowatt-hours, a 19.9 percent increase over the previous year.

Revenues Total operating revenues registered a new high of

$100,672E21, an increase of 22.4 percent.

This included $100,547,645 in sales of electric energy. In-come from energy sales to Class A member systems edged up to

$69.598,101, a 24 percent gain, while revenues from Class C

FUEL COST

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Cents Per Million BTU 600 550

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Coal and D members and other power sales climbed to $30,949,544, 500

-a 20 percent increase over the previous year.

450 Rent from electric property accounted for the balance of revenues.

400 Expenses 353 The cost of producing electric power continued its upward spiral throughout 1979. Total operating expenses reached

$89.297,002, up 12.5 percent over the previous year. Operat-300 ing expenditures, interest and other deductions reached 250

$97.398,769, to register a 17.8 percent increase over similar 1978 expenses.

200 At Dairyland Power, the cost of fuel, primari>y coal, is the 150 largest annual expense item. The 1979 fuel expense,

$43,034,502, accounted for nearly 43 cents of each revenue 100 dollar.

Purchased power accounted for a large share of the year's 50 operating expense - $18,360,383. Another significant cash outlay covers payrnents for administrative and general activities f974 including insurance and retirement programs. Disbursements in 1975 1976 1977 1978 1979 this area of operations climbed 30.5 percent, to $4,825,845.

Depreciation and taxes (fixed costs) were $ 11,628,928 in 1979.

Another sizeable expense - amounting to $1,905,750 is the LOAD GROWTH result of the Wisconsin Public Service Commission's (WPSC)

Annual Energy Recuirements -(Not at Generating Plants) rejection of the Tyrone Energy Park project in the spring of union no.are eo r 1979. Dairyland Power had a 13 percent share of the $1.4 billion nuclear facility and committed $10 million (plus interest) i Actual prior to the WPSC action. Dairyland Power's total liability is esti-

. Forecast mated at approximately $11.5 million, including interest. This 5000 totalliability will be expensed over a 60-month period beginning March,1979.

In other 1979 disbursements, there was a decrease in plant maintenance costs. 'Ihe reason being, there were no major plant 4000 outages in 1979 as compared to 1978 when Genoa #3 was down for major overhaul.

3000 2000 1000 0

1970 1975 1980 1985 1990 L

COST OF ELECTRICITY TO MEMBER COOPERATIVES Cents Per kWh 2.8 2.6

. Gross g

Margins E Net 2.2 j

Total margins climbed to $3,430,699 from $591,139 in 1978. Total margins include a non-operating margin of 2.0

$156,647, derived principally of interest income.

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Rates 1s The Dairyland Power Board of Directors, anticipating the

,4 effect of adding the John P. Madgett station as an operating unit j

during 1979, approved a three millincrease in wholesale power 1.2 schedules effecove January 1,1979. At mid-year, an extensive 1~0 restructuring of the wholesale power rate schedule was adopted by the board based upon a cost of service study to reflect the

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curre..t fixed and variable cost pattems.

.6 In September of 1979, the board authorized a 1980 rate

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increase of approximately 16.9 percent or 4.4 mills per kilowatt-hour. The increase was phased in with an 8.9 percent

.2 increase as of January 1,1980, and a 13.6 percent increce on

,o June 1,1980. The two-step increase is designed to meet a board 1974 1975 1976 1977 1978 1979 approved budget of $4.5 million in margins for the year of 1980.

This large increase is due to the higher fixed and operating expenses of the John P. Madgett station for the full year.

TOTAL REVENUE AND EXPENSES Millions of Dollars

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Revenue Cost of Coal 90 Per Ton Delivered 1970.

.5 7.39 80 1971.

9.51 5

1972.

10.17 70 1973.

11.00 1974.

13.93 1

1975.

. 19.13 60

1976, 19.26 1977.

21.91 50 1978.

24.56 1979.

24.46 40 30 i-t 20 10 0

1974 1975 1976 1977 1978 1979

s AN OVERALL COMPARISON

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1969

$21.99

$19.08 l $2.24 l 3.07 1.00 0.80

+ 5.98 1974 47.10 43.02 2.54 4.16 1.32 1.11

+ 3.25 1975 56.41 55.52 018 3.83 1.54 1.50

+34.83 1976 69.41 64.62 4.47 4.28 1.91 1.71

+ 13.93 1977 76.63 73.29 1.91 4.61 1.99 1.86

+ 8.92 1978 81.95 81.36

- 0.25 4.20 2.17 2.15

+ 15.48 1979 100.82 97.39 3.27 4.67 2 54 2.41

+12.26 Net Cost of Power Dairy!and Power has adopted a maturity management pro-The continuing pressures of inflation caused the average cost gram for its permanent FFB financing. The objective of reducing of delivered power for the year to rise to $.024137 (2.41c) per totalinterest expense through the trmporary use of short-term kilowatt-hour which is an increase of 12.26 percent, maturities was adopted by management in 1979. The total amount of short-term FFB maturities to be converted into long-Interest on Long Term Debt term obligations in 1981 is $13,962.000.

Dalryland Power maintained its schedule of repayments, with Field Construction interest, on all long and short term obligations during 1979.

Nine new distribution substations, a 34 mile 161 kilovolt (kV)

Specifically, total 1979 interest payments included transmission line and 30 miles of 69 kV power lines share the

$2.643.119 to the Rural Electri!! cation Administration (REA),

bulk of major field constmetion projects completed last year

$ 11.118,174 to the Federal Finance Bank (FFB), and $827,484 throughout the Dairyland Power system.

to the National Rural Utilities Cooperative Finance Corporation (CFC).

Two of the newly-energized substations - Glen Haven and Lancaster #2 - are Iccated in the service area of Grant REC.

Additionally, another >.789.450 in interest was paid to CFC Two others - Madison and Burr Oak - service Hawkeye covering City of Alma Pollution Control Bonds and $81,014 on Tri-County REC.

unit trains for coal transportation at the John P. Madgett station.

Historically, through 1979, Dairyland Power has paid REA.

$43,995,482 in interest payments. $73,464.598 on principal long-term debt for a total of $117,460,081 throughoutits corpo-rate life.

THE EXPENSE DOLLAR --- Where it went Year On,preciation

' Fuet As tion Pet one e -

Purchased 1969l 13.6%

32.7 %

34% l 13.3% l 4.2%

86%

10.6% ' 13.6%

1974 9.8 41.1 2.3 8.7 6.9 10.6 7.6 13.0 1975 8.8 42.0 --

2.8 1.5 9.0 16.1 7.3 12.5 1976 7.6 45.2 2.0 6.9 5.8 15.9 5.6 11.0 1977 8.4 45.1 1.8 4.3 N 4.9 19.5 4.9 11.1 1978 8.1 40.4 2.2

.7 7.0 '

24.7 5.8 11.1 1979 7.6 42.7 4.6 3.4 4.6 18.4 9.9 8.8 Other new distribution substations are identified as Lyndon Erection of a second outlet 161 kV transmission line from the Station (Oakdale REC), Albion (Jackson REC) Oak Grove John P. Madgett station to Crystal Can, near Spring Valley, (Pierce-Pepin REC), Wilson (Tri-County REC) and Douglas Wis., and constmetion work on a number of other tap lines and (Cedar Valley REC).

distribution substations were in progress at the year's end.

The 161 kV transmission line, which was energized De-Personnel Growth cember 4, links the new John P. Madgett station with a high' capacity transmission substation, Tremval, owned by Northem Dairyland Power Cooperative had a net gain of 32 employees St tes Power Co. near Blair, Wis.

in 1979 bringing the total employment at year's end to 660.

Completion of the line was delayed more than a year due to The greatest share of the new permanent employees were difficulties in obtaining right-of-way and new statutes relating to assigned to Alma as part of the staffing requirement at the John agriculturaliand use. Right of-way and engineering work began P,. Madgett staton which went into commercial operation in late b vember.

e rlyin 1975 and construccon of theline commenced two years later February 1,1977.

A statistical look at personnel transactions in 1979 shows 92 The newly energized 69 kV lines - 10 in all-range in new hires (induding 12 temporary emploi,ees) and 60 termina-Irngths of a quarter-mile to 6.8 miles. These short power-or ti ns, including five retirements and one death.

tap - lines were built to connect new substations with nearby A one-year labor agreement with Local 953, IBEW, effective transmission lines.

Febmary 1,1979, through January 31,1980, was negotiated between the parties. However, after a long series of negotiations the wage amount granted was determined by a three member board of arbitration.

POWER SALES Millions of kWh 5000 Member Cooperatives 4500

! Others E CPA

]

Environmental Requirements 4000 Heavy emphasis was placed, during 1979, on various environmental requirements for compliance on the John P.

3500 l

Madgett station pre-startup permits. Final operating cnteria j

were set to assure protection of air and water quality and complete compliance with all permit requirements.

3000 l

Other important environmental projects included monitor-i 2500 l

ing of existing facilities, observation of legislative and regula-

}

tory activities which would change present environmental 2000 i

regulations, and participation in planning for future projects l

to assure compliance with environmental rules.

1500

}

Transmission lines are receiving increased attention from the public and regulatory agencies, and environmental ac-i i

1000 tivities involving routing and permits for transmission facilities have expanded accordingly.

500 This activity involves close coordination with other Dairy-land Power transmission specialists to assure that constmc-tion of these projects can take place in a timely fashion.

1974 1975 1976 1977 1978 1979 During 1979, Dairyland Power received a crucial approval on an application to the U.S. Army Corps of Engineers for permission to cross the Chippewa River near Durand, Wis.,

POWER GENERATED AND for the construction of the 161 kV Alma Crystal Cave line.

PURCH ASED Millions oi kwh (Net)

This favorable regulatory action permitted Dairyland 5500 Power to resume acquisition of right-of-way casements and t continue construction on the transmission line.

Coal & Nuclear 5000 During the year. final planning was concluded for the

. Purchased permit application for development of a remote site for dis-E Hydro & Diesel posal of waste coal ash material from the John P. Madgett 4500 station site.

4000 i

Other environmental activities included work to maintain the licensed status of the ash disposal facilities at Genoa.

3500 1

Cassville and Alma Wis.

I 3000 i

2500 i

i 2000 1300 i

1000 3

~~

i 500 O

l 1974 1975 1976 1977 1978 1979 i

Planning For The Future One of Dairyland Power's most important concems for the futun is developing new generating capacity to meet the grow-ing load requirements Of member rural electric cooperatives and thi municipal utilities served by Dairyland Power at lowest Generation possible costs.

Some of the municipals served by Dairyland Power will share 1979 GENERATION Grea N

in thz ownership of Dairyland Power's next generating project

... Project '87. The name is given because 1987 is the target Steam - Alma.

910.004.000 847.553.500 M

257 070-data for the project, and is the earliest Dalryla'id Power could

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239$

havs the unit in operation. The next year is a crucial one in the Genoae3.

2.165.086.000 2.061.00s.000 Stat 2 of Wisconsin regulatory process to obtain permits for the Stoneman..

185.289m 169.893m new unit to meet this desired schedule.

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Dairyland Power has iso announced intent to phase out the 77y,,^,Cswn.

L 46,000 kilowatt La Crosse Boiling Water Reactor (IACBWR) at pu, chased r 3.

.2 600 3.

000 965.581.000 965.581.000 Genoa, Wis., by 1990. Continued regulatory activities with their Tocai a,queements.

4.672.819.e00 4.456.073.0u0 cost implications make it increasingly difficult for the small nu-clear plant to show favorable economic retum, given the antici-DISnusUTION SWh) pated additional capital requirements.

Class A Members......

2.741331383 Thz additional generating capacity that is planned to be on class c & D Menbar.

1.533.064.866 line in the Dairyland Power system by 1987 will make it less TOW Saks.

4.2"'4396.249 attractive to operate a small highly technical plant, such as 3",'j'j 'g g ;

3E3$6 7

IACBWR, with its high overhead costs.

Tow woooon,

4.456.073w Total Plant GENERATING STATIONS Net Capaclay Number in kW Type Station of Units (Winter)

Steam - Alma 5

206.950 JPM......

1 350.000 Genoa #1.

4 12.600 Genoa #3.

1 350300 Stoneman.

2 52.800 l

Hydro. Rambeau..

3 16.000 Desel - Twn Lakes.

4 8.700 I

Nuclear - LACBWR-1 46.000 Total Capacity in Sernce.

1.043.350

(

1RANSMISSION LINES Miles as Miles no Voltage.kV Constructed Operating 161.....

507.09 507.09 115!!61 -

2 20 2.20 69...

2.136 21 2.157.61 34 5.

390 83 419 43 Total Mdes.

3.086 33 3.066.33 SUBSTATIONS Total Capaclay.

Type Nussber kVA Rant.

5 1.108.500 Transmisson.

19 8m.000 Distribution.

235 642 315 Total.

M 2.553.815

.)

5 FOR THE YEARS ENDED DECEMBER 31,1979 AND 1978 Member Number of Members kWh Bl!!ed Revenue Cooperatives WISCONSIN Barron*

10,591 10,453 171.072,409 156,730,422

$ 4,233.879 5 3.378,058 Bayfield 5.260 5,117 44,984,988 43,395,994 1,160,996

,956,555

.g.

Buffalo,

3.254 3,207 62,084,371 59.521,458 1,604,873 1,301,791 Chippewa Valley,,

4.706 4,614 67,448,987 63,717,937 1,744.950 1,397,025 Clark.

6,530 6,384 109,336,901 104,522,747 2,862.197 2,305,829 Crawford 2,631 2,552 37,464,961 36,379,286 986,979 802,817 Dunn 5.470 5,4 M 91,617,990 87,110,091 2,383,441 1,916.062 Eau Claire 6,676 6,379 97,131.745 92.361,311 2.487.407 2,001,968 Grant

• 4,874 4,807 119,127.018 113,254,873 3,102.151 2.514,679 Jackson

• 4,260 4,387 55.063.765 51,439,020 1,426,711 1,132,329 Jump River 5,076 4,901 50.893,813 48,492.332 1.317,652 1,062,416 Lafayette

• 2.192 2,169 51,844,680 49,977,367 1,344,736 1,102,590 Oakdale*

8,036 7,821 122,060,736 115,769,273 3,070,585 2,521,757 Pierce-Pepin*

4.446 4,376 106,174,124 113,717,281 2.657.785 2,455,994 Polk-Burnett 11,573 11,139 106,362,408 100,577,729 2.692.903 2,170,138 Price,

5,523 5.327 39,998,334 38,073,557 1,027.677 832,755 Richland,

2.812 2,770 39,918,443 39,362,787 1,029,968 857,144 St. Croix.

4.084 3,938 80,918,896 75,921,555 2,090,463 1,661,226 Taylor.

2.623 2.533 41,056.762 39,187,539 1,062,670 857,531 Trempealeau*

5,930 5,850 122,293.766 111,545,821 3.125,533 2.427,623 Vernon*

7,177 7,083 128,082.975 123,881,129 3,289.719 2,705,642 Total Wisconsin.

113.724 111.214 1,744,938,072 1,614,939,509

$44,703,275

$36,364,929 MINNESOTA Freeborn-Mower

• 5.420 5,417 130,671,044 119.077,498 3.259,067 2,548,097 People's.

10,100 9,914 169,007,920 164.356,755 4,085,139 3,401,813 Tri-County

• 10,264 10,141 227.945,793 216,675,901 5,702,936 4,629.974 Total Minnesota 25,784 25,472 527,624,757 500,110,154

$13,047.142

$10,579.884 IOWA Allamakee-Clayton,

7,333 7,201 115,712,736 109,653,833 2.998,020 2,394,447 Cedar Valley

• 2.964 2,946 85,039,398 74,526,975 2,103,509 1,606,638 Hawkeye 5.588 5,541 116.182.223 107,457,068 2.968,108 2,315,302 Winnebago*

2,136 2,155 98,937,487 92,343,001 2,408.941 2.033,773 Total lowa 18,021 17,843 415,871.844 383,980,880

$10,478,578

$ 8,350,160 ILLINOIS Jo-Carroll.

3,441 3,386 52.896,710 50,810,284

$ 1,369,106

$ 1,105.208 k

Totals including Municipals.

160,970 157,915 2.741,331,383 2,5.N,840,827

$69,598,101

$56,400,181 Totals Excluding Municipals 160.944

• 157,889 2,495,511,489 2,364.561,687

$63,588,906

$51,213,550

• Includes Sales to Munopals Served Through Member Sptems.

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A typical summet f arm scene in the Dalryland Power sersice area.

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I Dairgland Power's new digger derrick mith a re-manuf actured six-by-six vehicle. This vehicle can do a job mhich previously took up to three trucks to accomplish.

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Irrtsstion systems have increased' crop prod ction for many farmers in the Detryland Power System. These large installations have had an effect on the increased electrical demand in the Dalryland Power System and have re-quered Dairyland Power's Engir.eering Department to use precise planning of new transmission lines.

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u. A s' Dairytand Power completed Phase One of its new microwave communica*lons system in 1979. This is one of five microwave towers Dalryland Power in-otalled. Northern States Power Co. also installed sev.

eral new towers in the joint protect. This tower is 205 feet high and is located at Weston. Wis.. west of Menomonie. Phase Two of the program, in the south.

orn half of the Dairpland Pomer system.is expected to be completed in 1980.

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je Overall coordinat.on of the Dalrvland Power System is accomplished at the Operations Control Center located in the general office building at La Crosse. It is here that decisions are made shich correlate the operadon of generating sources. the transfer of bulk power to and from neighboring oystems and transmission network switching in order to achlese opdmum oconomy. stability and security.

BA!ANCE SHEETS - DECEMBER 31,1979 AND 1978 ELECTRIC Pl. ANT (Notes 1,2,3,4 and 6):

Plant end equipment, at original cost.

$403,331,080

$209,470.9M Accumulated depreciation.

(96,196,317)

(88.009,424)

$307,134,763

$121,461,480 Construction work in progress -

Tyrone Energy Park.

7,486.879 John P. Madgett Station 1,809,806 144,215,218 Other 13,775,012 17,138,030 Nuclear fuel, at amortized cost.

14,685,235 10.290,670 Total electric plant

$337,404,816

$300.592.277 l>NESTMENTS, at cost:

Capital term certficates of National Rural Utilities Cooperatve Finance Corporation (Note 5).

$ 10,334,726

$ 8,792,372 Pollution Control Bond proceeds on deposit with trustee.

1,237,324 2.941.655 Other mvestmens.

1,020,912 1,854.090 Total investments

$ 12,592,962

$ 13.5S8,117 CURRENT ASSETS:

Cash.

124,765 389,761 Accounts receivable -

Energy sales.

10,977,671 12.087,69S Other 1,375,910 1,446,874 inventones, at average cost -

Fossil fuels.

44,358,885 40.294.051 Materials and supplies 4.046,801 2.534.703 P.>epaid expenses 468,419 12 09.246 Total current assets.

$ 61,352,451

$ 57,W2.333 DEFERRED CHARGES:

Abandoned facilities, bemg amortized (Note 4)

$ 9,553,391 Other.

1,589,355 646.364

$ 11,142,746 646.364

$422,492,975

$372,789,091 The accompanymg notes to financial statements are an mtegral part cd these balance sheets

CAPITAUZATION:

Long-term obligations, less current maturides included below (Notes 3 and 6) -

Long-term debt.

$295.296,544

$250,7M,197 Subscripdons to capital term certficates of Nadonal Rural Utilides Cooperadve Finance Corporadon, due in varying annual amounts to 1984 (Note 5).

3,318,350 2,663,378 Capitalized lease obligations principally at implicit interest rates of 7%,

due in varying amounts to 1995 7,659,084 7,974,798 Totallong-term obligations

$306.273,978

$261.342,373 Member and patron equides -

Membership fees.

S 9,202 5

8,839 Patronage capital (Notes 8 and 10).

58.289,658 56 704,530 Total member and patron equities.

$ 58.298,860

$ 56,713,369 Total capitalization

$364.572,838

$318,055,742 CONTINGENT UABIUTIES AND COMMITMENTS (Notes 2,3 and 10)

CURRENT UABIUTIES:

Current maturides of long-term obligadons.

$ 7,238,391

$ 6,720,584 28,100,000 22.000,000 Notes payable (Note 7)

Accounts payable -

General 4.891.430 6,497,105 10,144,937 11,149,477 Construccon Accrued liabilities -

1,443,770 1,260,880 Payroll and vacadon pay.

1,704,920 1,118,9M Taxes Interest.

827,399 1,435,473 Nuclear fuel reprocessing costs (Note 1).

2,622,994 2,285.974 946,2 %

2,264.952 Other Total current liabilides

$ 57,920,137 2 54,733,349

$422,492,975

$372,789,091 The accompanyng notes to Anancial statements are an integral part of these balance sheets

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FOR THE YEARS ENDED DECEMBER 31,1979 AND 1978 1E~f

'.E7[

OPERATING REVENUES; Sales of electric energy

$100,547,645 5 82.213.465 Other 125,176 19.755 Total operanng revenues.

$100,672,821 5 82,233.240 OPERATING EXPENSES:

Power generation -

Fuel.

$ 43,034,502 5 33.040,161 Operation.

5,865,730 5.412.069 Maintenance 3,776,033 5,769.027 Purchased and interchanged power.

18.360,383 20.252.806 Transmission -

Operation.

543,595 53S 300 Maintenance 1,261,986 1,217.988 Administrative and general-Operation..

4,702,838 3,602,641 Maintenance 123,007 93.768 Depreciation and amoruzation (Note 1).

7,691,450 6.642,379 Tanes 3,937,478 2.801,947 Total operating expenses.

$ 89,297,002 5 79,371.086 Operating margin, before interest and other deductions.

$ 11,375,819

$ 2,862.154 INTEREST AND OTHER DEDUCTIONS:

Interest on.

Long-term obligations

$ 15.352,985

$ 9,952,491 Short-term obliganons 2.388,349 972.804 Allowance for borrowed funds used during construction (Note 1).

(11,681,830)

(7.825,728)

Amornzanon of abandoned facihties (Note 4).

1,905,750 Other 136,513 18.352 Total interest and other deductions s 8.101.767 5 3.117,919 Operating margin (dehcit)

$ 3.274,052 S

(255,765)

. NONOPERATING MARGIN:

Allowance for funds, other than borrowed funds, used during construction (Note 1) 1.121,072 Other -

156,647 (274,168)

Net margrn.

$ 3,430,699 5

591,139 PATRONAGE CAPITAL BEGINNING OF YEAR.

56,704,530 57.550,907 RETIREMENT OF CAPITAL CREDITS (Note 8)

(1,845,571)

(1,437,516)

PATRONAGE CAPITAL END OF YEAR. including margins cssignable of $3,430.699 in 1979 and $591.139 in 1978.

$ 58,289,658 5 56,704.530 N aucenpanung now to ananca: sw,ments are aunieget pan or ines, swemens

7.

W FUNDS GENERATED INTERNALLY:

Net margms.

$ 3,430,699 591,139 Noncash items -

Depreciation and amortization-Charged to operations.

7,691,450 6.612.379 Charged to clearing and other accounts 1,186,620 1.029,592

- Amortization of abandoned facilities and other deferred charges (Note 4) 1,997.156

- Nuclear fuel amortization.

1,144,817 689.513 Allowance for funds other than borrowed funds used during construction.

(1,121.072)

Funds generated by operations.

$ 15,450,742

$ 7.831,551 Retirement of capital credits (1,845,571)

(1.437.516)

Funds generated internally

$ 13,605,171

$ 6.394.035 FUNDS OBTAINED FROM OUTSIDE SOURCES:

Long-term borrowing from FFB and REA (Note 6).

$ 50,793,034 5 55,464.174 Pollution Control Bond financing less amounts on deposit with trustee 1,494,331 10.658.345 Sale of non-utility property.

875,600 Short-term borrowing.

6,100,000 12.900,000 Repayrnent of long.tenn obligations to REA.

(5,472,880)

(5.456.279)

Reduction of other long-term debt.

(315,714)

(291.909)

Net funds obtained from outside sources

$ 53.474,371 5 73.274.331 OTHER SOURCES (USES) OF FUNDS:

Purchase of capital term certificates, net of change in subscription.

(887,382)

$ (1.065.339)

Decrease in other investments (42,422) 112,346 Abandoned facilities and other deferred charges, net.

(12.493,175)

(276.587)

Changes in other working capital items -

Cash.

264,996 (37,172)

Accounts receivable 1,180,991 (3.355.274)

Inventories.

(5,576,932)

(15.760.684)

Prepaid expense.

740,827 280.811 Accounts payable,

(2,610,215) 3.159,104 Accrued liabilities (820,804) 2,118.992 Total other sources (uses) of funds S (20,244,116)

$ (14.823.803)

FUNDS USED FOR CONSTRUCTION

$ 46,835,426

$ 64.844.563 Add-A!!owance for funds other than borrowed funds used during construction.

1,121.072 ELECTRIC PLANT ADDITIONS. net.

$ 46,835,426 5 65,% 5.635 The accorr panyng noies to e.nanc:al statements are an mtegral part of these statements i

~

Property Additions:

The cost of renewals and betterments of units of property

( s distinguished fmm minor items of property) is

1.

SUMMARY

OF SIGNIFICANT

1. *'9" ACCOUNTING POLICIES -

property retired, sold, or otherwise disposed of, plus Organization:

removal costs, less salvage, is charged to accumulated Dairyland Power Cooperative (the Cooperative) is an provision for depreciation. No profit or loss is recognized electric generation and transruission cooperative associ-in connection with ordinary retirements of property ation organized under the laws of Wisconsin. The units. Maintenance and repair costs and replacement Cooperative provides wholesale electric service to and renewal of items less than units of property are member distribution cooperatives engaged in the retail charged to operating expenses.

sale of electricity to member consumers located in Wis-

2. NUCLEAR REACTOR -

consin and parts of Minnesota, Iowa, Illinois and The Cooperative has operated a nuclear generating facility Michigan.

under a provisional operating license which expired in The accounting records of the Cooperative are main-1975. The reactor is presently being operated under an tained in accordance with the uniform system of ac-informal extension of the provisional operating license.

counts preznbed by the Federal Energy Regulatory The Cooperative has applied to the Nuclear Regulatory Commission as adopted by the Rural Electrification Commission (NRC) for a permanent operating license.

Administration (REA), the Cooperative's pnncipal reg-Because of the Bree Mile Island (TMI) accident, NRC is ulatory agency.

directing its resources towards TMI issues; therefore, its consideration of construction permits and operating licenses, including the Cmperative's application for an Depreciation is provided based on the straight-line perating license, has been delayed. The Cooperative is M a rates which are designed to amortize the to p d et when a permanent operating license original cos: of properties over their estimated useful may be lives. %e provision for depreciation averaged 3.3% of depreciable plant balances for 1979 and 1978.

Recent events indicate that the manner of decommission-ing a nuclear generating plant and the manner of dispost-Amortization of Nuclear Fuel:

ti n I spent nuclear fuel may not be determined for he cost of nuclear fuelis charged to fuel expense based man Wars. A m%, mt a r@renets re-on heat produced for the generation of electricity. The ng m

ews e

a ent haw been &

salvage value of fuel assemblics and cost of disposal of fined. While the provision for depreciation includes a spent fuel are being recorded over the lives of individual factor to provide for estimated decommissioning costs, assemblies based upon managernent's estimate of such the evenutal cost of retiring a nuclear generating unit is uncertain at the present time. The Cooperative continues income Taxes:

to review its decommissioning cost estimates and it ex-The Cooperative is exempt from Federal and state in-pects that any increases in such costs will be provided for come taxes. Accordingly, no provision for such taxes in future rates.

has been made in the accompanying financial state-

3. CONSTRUCTION AND COMMITMENTS -

ments.

The Cooperative's 1980 estimated construction program Allowance for Funds Used During Construction:

is $29 million. Financing of construction is expected to be Allowance for funds used during construction represents provided by borrowings from the Federal Financial Bank the cost of borrowed funds and a retum on other capital (FFB) and short-term lines of credit with the National used for construction purposes and is capitalized as a Rural Utilities Cooperative Finance Corporation component of electric plant. De amount of such allow-(NRUCFC).

ance is determined by applying a rate to the balance of nuclear fuel and certain electric plant additions under constructiun. He rates used varied from 6.4% to 15.5%

in 1979 and 5% to 7.5% in 1978, depending on the source of funds.

4. ABANDONED FACILITIES.

Long-term obligations to the REA are payable in equal The Cooperative was one of four joint owners in a project quarterly principal and interest installments to 2013.

to build an 1,100 megawatt nuclear generating facility in Principal repayments on the long-term obligation to the western Wisconsin to have been known as the Ty one FFB begin in 1981 and extend through 2012.

Energy Park. At December 31.1978. the Cooperative had invested approximately $7.5 million in the project.

Interest on the NRUCFC obligation at prime plus %% is due quarterly and repayment of principal is due in quar-On March 6,1979, the Wisconsin Public Service Commis-terly installments from 1982 through 1984. Pn.ncipal re-sion issued an order denying the application for a certifi-payments and interest on the 8% NRUCFC obligation cate of need for the project. On July 24,1979, the are payable quarterly through 1999.

co-owners reached an agreement to termmate and abandon the project.. At the time of abandonment, the The pollution control bonds are payable in increasing an-Cooperative had incurred or was committed for costs of nual amounts in the years 1980 through 2008.

approximately $11.5 million for its share of the project, Substantially a'<1 of the Cooperative's assets are pledged as includir g allowance for funds used during constmetion.

collateral for these obligations.

The Cooperative has received approval from REA to re-Maturitiec of the Cooperative's long-term debt, subscrip-classify its investment in the Tyrone Energy Park as a tions for capital term certificates and capitalized lease deferred charge and to begin amortization of these costs obligations during each of the next five years are as over a 60 month period commencing March 1,1979.

Such amortization is to be recovered through additional foija y' year Amount rates. Amortization for 1979 was approximately $1.9 million.

1980

$ 7.238.391 1981 21.787.952

5. INVESTMENT IN NATIONAL RURAL UTILITIES 1982 12.306.205 COOPERATP/E FINANCE CORPORATION.

1983 8.466.348 1984 9.938.829 The Cooperasve has purchased or subscribed to purchase 1985-2013 253.774.644 approximately $10.3 million of unsecured subordinated capital term certificates to be issued by the National Rural The amounts due in 1981 inc!ude $13,962,000 of two Utihues Cooperative Finance Corporation. The certifi-year FFB obligations which the Cooperative intends to cates will bear interest at the rate of 3% per year and will refinance under the long-term commitment with FFB.

mature in 2020 202S, and 2030. Of the above amount.

7.

FCRE T

$3.8 million will be purchased during the period 1980 to ESjde enr financing, the Cooperative has ar-1984 in annual installments approximating.7% of ranged lines of credit aggregating $32.850,000, princi-operating revenues, as defined.

pally through NRUCFC. Substantially all borrowings are

6. LONG-TERM OBLIGATIONS -

at an interest rate of prime plus %%. Information relating The Cooperative's long-term debt outstanding as of De-to borrowings under lines of credit during the years is as cember 31, consists of the following:

follows:

1979 1978 1979 1978 REA Obagations (2%)

$106.048.051 $120.919.931 (milBons)

"9'

1. "9 ***

"9 REA ObBgations (5%)

19.267.4 %

3,872.670

• • • """"9 FFB Obagations (7.6% - 11.3%)

146.359.000 113.000.000 NRUCFC Obagations -

interest rate at sear-end 15.5 %

11.7 %

Pnme plus h%

8.025.000 5.325.000 8%

8.425.000 interest rate for the year 12.8 %

9.9%

%u n C N 5 n"ds There are no compensating balance requirements or fees (4.3%. 6%%)

13 t>00.000 13.600.000 relating to the lines of credit.

5301.724.546 5256.717.601

8. RETIREMENT OF CAPITAL CREDITS -

L*$5 The Cooperative's Board of Directors has adopted the Current matuntfes 6.428.002 6.013.404 pol cy of retiring capital credits allocated to patron mem-Total Long-Term Debt 1295.296.544 $250.704.197 bers on a "first-in, first-out" basis so that at all times the Cooperative will not retain as patronage capital any capi-e

e dl contributed or deposited more than twenty years pnor j.

tc the current year. Accordingly, the 1958 capital credits Auditors' Renort were retired in 1978 and the 1959 capital credits were r

. retired in 1979. Implementation of this policyis subject to To the Mernbers and the Board of Directors cnnual review and approval by the Board of Directors Dairylanc' Power Cooperative:

and the REA, and no cash retirements are to be made We have emined the balance cheets of DAIRY-which would impair the financial condition of the 1.AND POWER COOPERATIVE (a Wisconsin Cooperative or violate any terms of its agreements.

cooperative) as of December 31,1979 and 1978, and

- 9. PENSION PL.AN -

the related statements of revenues and expenses and Pension benefits for substantially all employees are pro _

patronage capital and sources of funds used for con-vided through participation in the National Rural Electric stmction for the years then ended. Our examinations were made in accordance with generally accepted Cooperative Association Retirement and Security Pro-auditing standards and, accordingly, included such gram. Pension cost was approximately $944,000 in 1979 tests oMe accmMng mcods and sua de ad and $825.000 in 1978. He Cooperative's policy is to ing procedures as we considered necessary in the fund pension costs accrued.

circumstances.

10, CONTINGENCIES -

In our auditors' report dated March 23,1979, our he Wisconsin Department of Revenue has examined the op nion on the 1978 financial statements was qual.

Cooperative's method of determining gross revenue ified as being subject to the effect on the financial license fees for the years 1973 through 1976, and has statements of such adjustments,if any, as might have assessed deficiencies and interest of approximately $1.1 been required had the outcome of the denial of a million for these years. The Cooperative estimates that certificate of need for construction of the Tyrone additionallicense fees of approximately S600,000 could Energy Park and the subsequent decision by the l

be assessed for 1977 if the Department of Revenue's Cooperative and the other participants to discontinue method of computing the license fee is applied to that the project been known. As explained in Note 4 to the year. These amounts have not been reflected in the financial statements, the project was discontinued in accompanying financial statements.1.icense fees for 1979. The Cooperative's principal regulatory agency 1978 and 1979 have been accrued on a new basis of has approved classifying the accumulated costs of assessment approved by the Wisconsin Department of approximately $11.5 million as deferred charges Revenue. he Cooperative, on the advice of legal coun_

which will be recoverable in the future through in.

sel, is vigorously contesting the findings of the Depart.

creased rates. Accordingly, our present opinion on the l

ment of Revenue and believes that any liability will be 1978 financial statements, as presented herein, is dif-substantially reduced or eliminated; however, the out-ferent from that expressed in our previous report.

come of this matter cannot presently be predicted.

As discussed in Note 10 to the financial statements.

in January.1980, an accident at the Cooperative's John P.

the Wisconsin Department of Revenue is challenging the Cooperative s method of determining its gross Madgett Station caused significant damage to the boiler.

meme cense fedode yean N hwgh M Temporary repairs are being made and it is expected that aa s c n esu,ng epamnent of the plant will be retumed to oP* rations b May 1.1980-Revenue s assessment for additional license fees, Y

Further perr.anent repairs are to be made at a later date.

however, the additional amount to be paid, if any, is in the opinion of management and legal counsel, the cost not determinable at this time.

of these repairs will be substantially covered by builders' risk insurance on the station'or by warranties of the In wr opinion, subject to the effect of the outcome manufacturer and contractors.

f the gross revenue license fee matter descr' bed in the preceding paragraph, the financial stateme. *s re-The Cooperative has been named in severallawsuits and ferred to above present fairly the financial positiu of claims, primarily related to the construction and opera.

Dairyland Power Cooperative as of December 11, tion of the John P. Madgett station. Although the out-1979 and 1978, and the results of its operations ai i come of these matters cannot be determined at the pres-sources of funds used for construction for the year ent time, management and legal counsel believe these then ended, in conformity with generally acceptec actions can be successfully defended or resolved without accounting principles applied on a consistent basis.

a material adverse effect on the financial statements of the ARTHUR ANDERSEN & CO.

Cooperative.

Minneapolis, Minnesota March 14,1980.

g Unaudted REVENUE Class A Member Power Sales S 69,598,101

$ 56.400.181

$ 14,343,101 Class C & D Members and Other Power Sales 31,074,720 25.813.3M 6,801,867 Nonoperating Revenue.

156,648 (2M.414) 669,807 Total Revenue.

$100,829,469

$ 81,959.071

$ 21,814,775 NET GENERATING CAPABILITY-kW 963.350 694,100 655,000 KILOWATT. HOUR OUTPUT NET (000 Omitted)

Steam Generation.

3.217,167 2.718.200 2,403,498 Nuclear Generation.

200,932 174.223 68,000 Hydro Generation.

69,708 77.220 67,481 Diesel Generation 2,685 3.951 10.233 Purchased Power.

965,581 1,037,028 382,984 Total 4.456,073 4.010.622 2,932,196 KILOWATT-HOUR SALES (000 Omitted)

To Class A Members.

2,741,331 2.599.841 1,433,484 To Class C & D Members 1,533,065 1.242.906 1,356,996 Total 4,274,396 3.842,7e.7 2,790,480 AVERAGE kWh COST TO MEMBER SYSTDiS Gross (Before Margins).

.025388

.021694

.010006 Net (After Margins)

.024137

.021466

.007972 MEMBER CONSUMERS AT END OF YEAR.

160,944 157,8S9 115,172 EMPLOYEES (Average During Year).

649 621 496 UTluTY PLANT AT COST Electric Plant in Service

$418,016,315

$219.761.574

$141.574,422 Construction in Progress.

15,584,818 168.840.127 9,640,072 Total Electric Plant

$433,601,133

$388.601.701

$151,214,494 Accrued Depreciation.

(96,196,317)

(88.009.424)

(36,394.979)

Depreciated Cost of Plant

$337,404,816

$300.592.277

$114,819,515 INVESTMENT AT COST Per Consumer.

2,096 1.904 1,313 Per Member System.

$ 11,634,649

$ 10.365.251

$ 5,600,537 TOTAL ASSETS.

$422,492,975

$372.789.091

$142,727.883 TRANSMISSION LINE Miles of 34.5 kV 390.83 420.19 762,98 Miles of 69 kV.

2,186.21 2,127.20 1,714.22 Miles of 161 kV.

509.29 475.68 334.36 Total Miles 3,086.33 3.023.07 2,811.56 235 224 160 DISTRIBUTION SUBSTATIONS MEMBER SYSTD1 SUBSTATIONS DEMAND MAX. kW.

554,054 527.779 291.155 MEMBER SYSTEM ANNUAL LOAD FACTOR "o

56.5 56.2 56.2 kWh MO. CONSUMER USE - WTTH MUNICIPAL.

1,434 1.401 1,048 kWh MO. CONSUMER USE - EXCL MUNICIPAL 1,301 1.274 942 COAL BURNED (Tons).

1,618,448 1.403,655 1,141,242 COAL COST PER TON DELIVERED.

24.46 24.56 6.49

^

' DAIRYl.AND POWER COOPERATIVE-MEMBER DISTRIBUTION COOPERATIVES ASSETS AND OTHER DEBIT:

d','I.".

'""de."

a'Ec"Ed sn A

och.,

A s

rx.= % n Ym.i

^

'*l.". 4' "T -

%D L."',*-

c':0 E'

o.", 'a' ',s

=

c Wisconsin Barron.

$ 11.428.341 '

3,671.211 7,757,130 3,319.835 497.238 1,849,265 13,423.46 BaWield.

8.656,718 2.603.524 6.053.194 273.213 349,458 850.544 7,526,40 Chippewa Valley 3,947,708 1.342,809 2,604,899 1,516,849 173,449 747,940 5.043,13 Buffilo......

4,113.491 1.504,482 2.609,009 1,500.552 287. % 2 635,070 5.032,59 Clark....

6,822.673 2.388,507 4,434.166 2,752,398 517,758 1,321,691 9,026.01:

Crawford.

2,056.984 764,212 1,292.772 926,791 153.023 374.450 2,747,03i Dunn...

5.037,174 1,988,378 3.048,7 %

2.127,548 533,662 612,788 6,322,79' Eau Claire.

6.79S,742 2,009.998 4,788.744 1.886,046 380,181 953,777 8,008.74; Grant.

6.090.937 2.109.325 3,981,612 2,625.449 276,663 667,029 7,550,75' Jackson.

5.168.3S6 1,467.702 3,700,684 1.192,678 299,219 609.763 5.802,34 Jump Rwer.

5.930,945 1,873.399 4.057.546 1,156.130 344,400 1,021,577 6.579.65; Lafayette.

4.097,157 776,439 3,320,718 1,428,152 201,442 40.166 5.354,47; Oakdale.

9.617,806 3,145,093 6.472,713 2,621,094 1,172.868 1,101,949 11,368,62 Pierci.Pepin 5.423,235 1,896 411 3,526.824 2,415,835 417,005 1.270.023 7,629,68'

- Polk.Burnett.

11.539.631 3.325,176 8,214.455 2.203.610 644,512 1,393.992 12.456,56' Pnce....

6.697.166 2.319,946 4,377,220 199,809 232.669 593.991 5,403,68' Richland 3,5N.111 1,113.085 2.391.026 1,026,377 195.390 370,403 3,983,19i St. Croix 5.383,913 1,498 534 3.885.379 1,82S,118 360.637 750.689 6.824,82-Tcylor...

3.283.143 944,191 2.338.952 987,087 288,747 751.395 4.366,18 Trempealeau.

7,563,813 2,074,417 5.489,3 %

2.462,153 331,229 1,377,694 9,660,47 Vernon,

8.914,742 3,030,436 5.884,3 %

3,140,612 416.202 1,760,637 11.201,75'

$132.076,816 41.847,275 90,229,541 37.590,336 8.073,714 19,418.833 155,312,42 Illinois Jo-Carroll

$ 4.593,097 1,406.302 3,186.795 1,078,955 222.427 599,774 5.087,95 Minnesota Freeborn-Mower,

$ 10.234,087 2,764.711 7,469,376 3,101,061 603,761 1,073.180 12.247,371 P1ople's.

14,903,845 4.347,984 10.555.861 3,485.899 650,363 1,912,813 16,604,93:

Tii-County.

13,226,079 4 065,936 9,160,143 5,207,920 753,% 9 1,638,375 16,760,40'

$ 38,361,011 11,178.631 27,?85,380 11,791.880 2,008,093 4,624,368 45.612,72 lowa Allarnakee-Clayton.

$ 9.876,105 3,671,284 6.201.821 2,773,834 551.206 1,441.871 10,971,73:

Cedar Valley...

4,557.950 1,647,991 2.909,959 1,697,304 232,723 1,128,973 5,968,95' Hawkeye Tri-County,

6.447,838 2.492.038 3,955,800 2,636,973 108,981 2.044.780 8.746,53 Winnebago.

2.534,090 1,267,900 1,266,190 1,632,036 391.885

% 6 488 3,846,59'

$ 23,415,983 9.079,213 14,336,770 8,740.147 1,284,795 5,172,112 29,533,82 Total Distribution.

. $198,449,907.

63.511,421 134,938,486 59,204,318 11,589,029 29,815,087 235,546,92(

Dairyland Power,

$446,187,554' 108,782,738 337,404,816 12,592,% 1 72,495,197 422,492,97 Total Dist. & Dairyland,

$644.637,461 172,294,159 472,343,302 59,204,318 24,'81,990 102,310,284 658.039,89<

DPC Patronage Capital,

(58,289,657)

(58.289,65'

,,. $644,637,461 172,294.159 472,343,302 914,661 24,181,990 102,310,284 599,750,23'.

Consolidated *,

"Unaudted (1) incbdes $1296.422 IACBWR Onginal Cost Admstment. $14.685.235 of net Nuclear Fuel. $15.5R4.818 of Construc. son work in Progress, and incbdes $9.124.465 capitahzed lease for borges

M

1. LABILITIES AND OTHER CREDITS 1

Del Toaal

& M aI Mesaber-og Margens &

M

&A ed

& O.

shope Margine Margl=e Espeedes Egisideo Debt IJaWudes Oper. Res.

Credite 47,800 5,656.399 205.565 86,462

-5.9 %.226 6.577.729 713.382 136.131 13.423,468 24.604 800.253 17.508 6,407 848.772 5.520.663 940.535 216,439 7,526,409 9.166 2.758.616 9.338 2.777,120 1.998.057 262.851 5.109 5.043.137 44.998 2.874.038 1,734,121 294,037 130.397 5,032.593 10,960 2.818.080 42.611 6,723.721 68,514 6,834.846 1.419.952 704.004 67.211 9.026.013

'11,820 1.619.865 33.903 18,407 1.683.995 917.463 145.528 50 2,747,036 31.678 5.300,083 44.254 52.573 5.428.588 313.843 334.327 246,036 6.322,794 68.600 3.539.579 62.686 38,636 3,709.501

' 3,870,868 359.8 %

68.483 8.008.748 26.515.

4.836.538 14,346 4.877.399 2.243,940 414,454 14,960 7,550,753 20,119 3,450.7 %

2.850 3.473.675 1.980.286 271.888 76.495 5,802.344 23.535 1.851.844 46.811 1.922,190 4.034.417 526.2M 96.842 6.579.653

-15.138 3,192.505 18.476 3.226.119 1,871.851 212.354 44.154 5,354.478 58.305 4.628.905 61.207 38.606 4.787.023 5.819.312 662,516 99,773 11.368.624 15,770 4,102.767 162.817 9.764 4,291.118 2.682.359 490.012 166.198 7.629,687 63,245 4.574.845 71.131 37.637 4,746,858 6.6 %.355 906.631 106,725 12.456.569 27,553 951.799 14.448 7,579 1.001,379 3.984.813 265,738 151.759 5,403,689 18,837 2,254.912 84 2.273.833 1.374.572 276.121 58,670 3,983,196 19.085 3.621.360 28.269 24.846 3,693,560 2,721.337 396,134 13,792 6.824,823 8.382 2.173,569 33,316 34,435 2.249.702 1.937.647 160.213 18.619 4,366.181 10.752 5.144.968 141.140 68,700 5.365,560 3.685.666 598.341 10.905 9.660,472 38,709 5.925.8 %

53.831 3.441 6.021,877 4,553.529 612.643 13.708-11.201.757 593,184 75,927,210 995.362 567,623 78.083,379 65,938.7S0 9.547,809 1.742.456 155,312.424 28,165 2,749.917 30,670 70.639 2,879.391 1.532.847 660.252 15.461 5,087,951 9.680 5.514.298 106.446 78.916 5,709.340 6,254.923 167,082 116.033 12,247.378 44,488 7.010,958 70.716 312,980 7,439.142 8.313.300 811.824 40,670 16.604,936 17.458 12,652,726 529,751 8.036 13.207,971 2,747.228 801.224 3.984 16,760.407 71.626 25.177,982 706,913 399,932 26,356.453 17,315.451 1,780.130 160.687 45.612.721 38.245 7.417.617 177.432 7.633.294 2,699,626 594.285 44,527 10,971.732 14.395 3.217,551 15.568 473,021 3.720,535 1.981,356 224.578 42.490 5.968.959 27,075 7.585.454 157,790 300.184 8.070,503 11.182 521.809 143.040 8.746.534 11.385 3,291,774 229.758 3,532,917 289,329 23,642 711 3.846,599 91,100 21.512.3 %

350,790 1,002,963 22,957.249 4.981.493 1,364.314 230,768 29,533,824 784,075 125.367.505 2.083,735 2.041,157 130.276.472 89.768.571 13.352,505 2,149,372 235,546,920.

9,202

-58.289.657 58.298,859 313.512,371 49.878,112 803.632 422.492,974 793.277 183.657,162 2,083,735 2,041,157 188,575.331 403.280,942 63.230.617 2.953,004 658,039.894 0

(58,289.657).

(58,289,657)

(58.289,657) 793.277 125.367,505 2.083,735 2,041,157 130.285.674 403.280,942 63.230,617 2.953,0M 599.750.237

DAIRYlAND POWER COOPERATIVE -

'MEMRER DISTRIBUTION COOPERATIVES 1

[_

[ 2 ~ 1~

7.- _ 1 1 b. 7 [.

~

~

,7-

= r c=-

E!F RE:

4EL c !!." ~ ~ r. _.

h-5 a.

Wisconsin Barron..

$ 6,105.846 5.643.061 4.286.546 97.672 260.433 180.649 Bayfield.

2,126.728 1.954.502 1.260,996 65.009 152.669 121.770 26 Buffalo......

2.533,936 2.269.213 1.607.277 101.835 117,393 46.030 29.85 Chippewa Valley 2.433,077 2.275.725 1.744,950 64.512 86.635 47,761 Clark....

3.936.644 3.712.514 2.863,789 108.316 129.730 79.472 Craford.

1.437,312 1.365,723 9S6.979 45.548 88.060 55.805 If 1 Dunn..

3.411.262 3.020.3 %

2.383,441 53.229 112,719 38.848 Eau Claire.

3.495.494 3.203.005 2.487.407 46,447 118.901 100,235 33 Grint.

4.162.241 3.965.961 3.111.560 123.855 154.705 99.395 1,.7.

Jackson.

2.280.770 2.094.701 1.422.681 61.272 128.703 91.418 Jurnp River.

2.435.346 2.186.890 1,307.547 117.063 151.818 86.934 821 Lafiyette.

2.037.994 1.903.878 1.351,963 70.364 114.679 30,94S 43 Oakdale.

4,880,229 4.508.580 3.073,436 200.254 184.436 180.404 3.70 Pierce.Pepin.

3.772,342 3,522.255 2,725.510 57,807 165.090 44.377 9.91 Polk Burnett...

4.335.994 3.945,165 2.692,902 S6,624 258.888 134.031 1.20 Price....

1,890.644 1.759.491 1,028.656 38.436 201.922 69.301 6.76-Richland 1,573,952 1.450,213 1.031,275 55.538 55,402 40.246 St. Croix 3.002.216 2.789,668 2,090.463 73.637 142.956 63.071 Taylor...

1,626.648 1,445,783 1.062.670 34.003 62,866 24.992 8,79~

Trernpealeau.

4.659.375 4.203.031 3.152.018 182.113 142.928 168.286 8.50' Vernon.

4.984.393 4.456.634 3.292.849 136.2 %

222.886 155.105 26-

$ 67,122,443 61,706.389 44.864.915 1,819.830 3.056.819 1.859,078 81,40.

Illinois Jo-Carro!!

$ 2.144.835 1.811,598 1.375.405 24.867 80.457 59,909 19 Minnesota Freeborn-Mower..

$ 5.098,843 4,436.354 3.237.039 222.018 231,160 113.932 People's.

6.329.525 5.785.%1 4.100,792 190.736 3S2.697 200.507 3.17' Tri-County.

8.111.605 7.270.379 5.721.890 291.893 294,961' 153,829 12.30

$ 19.539.973 17.492.694 13.059.721 704.6b 908.818 468.268 15,48 I wa Allarnakee-Clayton.

$ 4,686.235 4.313.511 2,998.020 297.767 190.593 167,075 Cedar Valley..

2.943.221 2.622.827 2.023.470 33.181 118.041 51.551 11,62:

Hawkeye.,

4.018,685

3. % 7.065 2.968.108 216,526 212.644 54,9S3 Wmnebago 2,927.041 2.918.606 2.508.474 92.826 60.965 29,957 5.91(

$ 14,605.182 13,822.009 10.498.072 640.300 582.243 303,566 17.53:

Total Distribution.

$103,412.433 94.832,690 69.798,113 3,189.674 4.628.337 2.690,821 114.60<

Dairyland Power.

$100.672.821 89.297,003 18.509.826 49,443.828 5.161,026 81.91!

Totd Dist. & Dairy!and.

5204.085.254 184,129,693 88.307,939 52.633,502 9.789.363 2.690.821 1%.52:

DPC Sales & Capital.

Credits to Dist. Coops.

$(69,598,101) (69.598.101) (69.598.101)

Consolidated *

$134.487,153 114,531.592 18.709.838 52,633,502 9.789,363 2.691821 1%.52:

'Unaudied di Reprewnts Captal Cred: Datnbunon Pnor to Year End Audt Ad;ustrnents

~

sI.L.

o.U -

o.6

.de P

al 329.395 280,789 207.577

- 462,785 104.367 267.625 2.040 217,317 514.804 214.091 194.078 75,62S 142.226 ~

25.938 127.406 4.578 59.592 95.772 182,575 95.700 88.550 264.723 45.300 76.250 9

82.375 316.139 175.250 74,410 82.207 157.352 19.266 71,864 1,342-89.565 192,977 218.595 165.642

.146.970 224,130 65.900 40.208 1,074 -

146.911 395.659

%,942 39.278 51.792 71,589 21.999 29.988 4.244 50,660 110.016 199.243 126.093 106.823 390.866 46.091

- 6.075 438 122.338 552.782 190.137-149.452 109.591-292.489 69,148 154.860 733 127.674 333,718 -

191.764 145.980 137.529 196.280 45.968 98.977 991 159.228 301.508 188.185 116.737 85.705 186.069 36.537 67,236 312 73.230 228,288 290.345 131.694 93.177 248.456 31.% 9 126,483

.9.666 67,632 181.908 157.011 100,144 78,337 134.116 18,476 97,457 14.839 69,022 109,318 442.322 242.280 181.679

- 371.649 70.233 144.016 66.907 157.607 388.566 260.336 133.110 126.106 250.087 36,520 104.528 319 136.419 318,179 341.953 270.763 158.804 390.829 80,1 %

215.864 -

552 138.222 392.831 184,455 164.612 62.343 131.153 16.262 107.135 52,749 93.029 141.541 71.7%.

54.415-123.739 22,170 46.046 60 52.866 152.669 176.608 141,012 -

101.921 212.548 36.783 110.415 8.298 107.300 237,918 124.684 71,126 56.645 180.865 38.295 84.965 54.545 188.740 225.236 167.922 156.028 '

456.344 43.793 151,637 5.356 160.428 503,572 268.372 210,936 169,924 527,759 66.110 150.863

- 3.298 168.855 608.563 4.599,040 3,093,554 2.331,751 5,416,054 941.321 2,279,898 155.056 2.294.535 6,216.956 129.650 116,568 24.551 -

333.237 19.164 49,954 10.5 %

70.274 362.125 318.949 259,010 54.216 662,489 64,531 268.406 6.005 167.282 619,S91 401.791 371,264 134,997 543.564 84.203 307.276 1,72S 209.682 528,445 442,654 240.310 112.03S 841.226 91,978 119,178 1.242 292,721 1,105,505 1.163.394 871.0S4 301.251 2.047.279 240,712 694.860 8.975 669,685 2,253.S41 320.559 246.299 93,198 372,724 68.626 91,195 1.559 153.883 502,479 250.063 95.667 39.232 320.394 22.941 65,434 10.476 107.969 375.394 270.655 181,543 62,606 81.620 76.980 5

1.511 152.347 309.431 128.883 66.518 25.073 8.435 69.446 5,431 379 123.646 195,717 970.160 590.027 220.109 783,173 237,993 162.065 13.925 537.845 1,383,021 6.862,244 4,671,233 2.877.662 8.579,743 1,439.190 3.186.777-188.552 3.572,339 10.215,943 4.471,480

- 7,691.450 3.937.478 11,375,818 156,648 4.713,704 3 388,063 3,430,699 11.333.724 12,362.683 6,815.140 19,955,561 1,595.838 -

7,900.481 3.576.615 3.572.339 13,646.642 (3.572.339)'

(3.572.339) 11.333,724

-12.362,683 6.815.140 19.955.561 1,595.838 7.900.481 3.576.615 10.074.303 n

i Dairyland Power l

Cooperative WISCONSIN I

Barron Electne Cooperanve i

Barron i

Bayfield Dectnc Cooperanve. Inc.

fron River l

Buffalo Dectnc Cooperaeve i

Alrna i

i Chippewa Valley Dectne Cooperatve Comell l

Clark Dectnc Cooperanve i

Greenuood

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1 Crawford Dectne Cooperanve Dunn n Dectnc Cooperative Menomonie i

Eau Claire Sectne Cooperative Fa!! Creek c

Grant Dectnc Cooperatve Lancaster Jackson Sectric Cooperanve t

Biock Rwer Fails l

Jump River Dectnc Cooperative, Inc.

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Ladysmith 1

Lafa tte Dectnc Cooperanve Oakdt'e ecb Cooperanve

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Price Dectric Cooperative. Inc.

i Phi!Rps Richland Dectne Cooperative Richland Center q'.-

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Baldwin 1

Taylor County Dectnc Cooperanve Medford a$*

Trempealeau Dectnc Cooperative j

Arcadia j

Vernon Dectne Cooperative

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People's Cooperative Power Assoaation Rochester

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Jo-Carroll Dectric Cooperanve. Inc.

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Central Wisconsin Dectncal Cooperatve lola. Wnsconsin Remember the good old days?" Take a few seconds to think of all the Columbus Rural Dectnc Cooperatve. Inc.

conveniences in your home that use electricity... now take a few more Columbus * "**h'acia seconds to think of the adjustments you would have to make without the

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conveniences of electricity. The electric power industry is currently a be-Oconto Dectne Cooperaove to a s s

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..a Dairgland Pomer unit train cars bear the 6dentification letter. DAPA and number from 1 through 242 Tnes are black alth blue ends and white letter.

Ing and are easils identified along the main line of the Burlington Northern Hallroad between Gillette. %go. and Alma. %In Each car cames approki-mately 105 tons of coal Tsc 105-car unit train shipments are scheduled to 1.ain --

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arrtse weekig at Dalryland Power s John P Madgett Station

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A f all scene oserlooking the transmission substation of the 16.000 kilomatt Flambeau Hvdroelec tric plant in Ladyssaith. %'is DAIRYLAND POWER COOPERATIVE GENEPX OFFICES

.A CROSSE WISCONSIN 54W1