ML20249B710

Navigating for Our Future Dairyland Power 1997 Annual Rept. W/O Ltr

ML20249B710
Person / Time
Site:	La Crosse File:Dairyland Power Cooperative icon.png
Issue date:	12/31/1997
From:	Berg W, Koeller G DAIRYLAND POWER COOPERATIVE
To:
References
NUDOCS 9806240084
Download: ML20249B710 (31)

Text

&&NQf  % ,%@ %W J Alad '

?

L g;fgLf &,} i{& h,.l;2hrDiEL@&A5 $k [& N ..L &.m i.

J W. 4xa b. n.

}

' {E 2

• p>w 7 g:nw.,,4 h 9 ' ]9 .,th , t w" h [h.

hq swna . A ff f fu ,,.n

[ [Q [gMjd/  %$ .g f.) ~, -

0, $ -

r.h& N/MM ( QpiM r % fCN 4 CCTH M l yM j%' N4 *

. . . . .A. . 9.w. . .x m. - . . n. .. . Q

, .p

["

a g/

, g w bv'"*

L;. ]_ - [u n ,; A ,:g_ yu MR'k h. b 1 m y -_

A

/

I .1-y t WIgw' *-i[ -f7 ~y M'*

%%y.,4n$fg&- . j-. h,,

c

'(Y if fQ -

' &.7 ye .

1GRii:f RdOW I L' W[ W .k. .." 4'W Warmrd hj%&dl/QT*'O Wl & 1 N .

'?

QMOQ Dr 2%'  %)%l/g' aI  ?? . %v/ D -3

/ p m ra c l [i f" . M . f<

% h,Qy ,4 '

i 2o a wy$ . ,.t %.,%.w WMW.0,bMd$,0#,,.

.o ~ / . ,&-

, .- >~

,m

• ,~.

o, n , m.r M; ' . .. : * '

k.9 ,+&. ~ > v2 , . ,. t-

• Y) ,

j ,i, e*v/. l

M,  ;,, , . ~;

ww-w v -

.. V ,,Wyc @ .s; % f ,,,4 M3e Qf s , N g , <_ga ^;. - a{

- - % m , .,;

"y,4- yf% l '

iH 8- q, * ;- s.

sp&t%g jy%, S  %

4 e ci

' 4I'

>A 4  %

y g'g g gHg , 3. gp < l .a: . -m] ,.. 1); .' mp

. k. " .' -.. ..- . + .,

R.g .g !%g,, - ;p 4fp

? Y Y ,l h . L. }'

y fy ~$ '

Y h %. J,4 d h

f .

&.+ kq k 'yh gf. % %.& 23

% m.

7)9lf,,.g,p $ p' +' e_ L '

. .,?:"

,) _ -f>(p .51m r .~

4CQ y%g yfg<f.eQ, .N((MJeg(Q:

r mo g ' N. c -

- w geggL . p . v ;3 -_.g - .,_-%

g

.~._'--..C..A_-

m - ...y y

,u L k a gifM %hur4 f3' p fNM y g4

4. M uf40r- '

3(y@y, U h' N A V {S,A W M M

[,

1 ha - gi[3 *

[m M., yhggd Q >Q kf[j + bf 'v. j j1Q.v.

/ q4-f h. gm pu.

d f

< .g,,. .

Y,,%

G.1 y) s b g>

,n .,g%v i, t %. ~u ,_ g as ys s

,r . l 7f.y[ $g d I 4 x , N FMER D O U R I F U T UAE E ii,, e . . .QfM.hjgfm. gh,4%'

4 -

OftWDd / - i\(/

"$t, ,MQ[1 (( 13 i gAggd rM T Vj S 91f s

$$ W 7 / ' 4; - - g, g 10 Q W

%g. g & ? ?.gr R & pen 3 %{',;[ R [$cm ' % &* W ngn N

cwrn 994 y;' %T lO U ' ;* Di A Q z 4

% Wildtal Min. .PQ .

f .

j *; 80Ck y  %

j n.

eq1

,M fQb ,et%gr* 7nn g  :

,f~

L #,. . 3 a

e +

4 {0% G*M\

4

. i, g ' -

f,

• n-g hb 7 .

V ~cW R N a~ d [k I 9N I[ '

[

f&Mf& yenj Q' h-13pp[sk M(

gh, ,

Y f ' ^l hTQQu M cs %!D% y t..

Lf [f M st stu f g f x L 4 W '

r. p._os e f;gQ Jg.,

%,,,4-

@4gg;E.M .7 o. g," y@My .3. % - [ t. 7 - _p<-

. .x .W. g 9,, y I 9 7E .

~ g . %I, . rM "  ! ,,i Q[ % i Wy. EM g ';Uplp. 6 .O<

p,#,gNm ,

• h f Qp M]4.m q $*Je e I

• gJ n.2%. g f.~,rmy '

PainA W.

/*

})' 4. .l(;g4 E.

QJ J/

(We(on t a a;A p

WOM 2 a s m y s. A w o - p o.w,%

]

0 an :

L

' N.,>

_ EA@N i ,

h f % py s

+

C 3,. g Nwj f T s v ag.,Cp y1 Ob e L

J- m=n a,my an, &g. %

.y i J,,, .- /[I d pgg ,w;"Tp magg y- - ..u(WQy%,? gg n A ,

g en s V "u ( 0+%n 2 c l a %y. s -qm- . ;, e. . . ' r - fm> 9pN#

. m. y

=-q. 4

=

4 - e , n.e. .m. . s 4

~

'N~.x- -e. e.-~~

- g 4"~

g B an;t 0% N/

e

%& Vp {M%g 1

-14.U Q h N )

dQ y ? fW H .,.(b . Qg ip/ $ 1 1G70',$

4 ML.W M[S.------=.o

.ji S0ldierR

.. . tA~d .k% A 1ta4k

. .g(

i G;.MyPg g.< > e[ph(AQQ to%y .c '".- O 1 q ' f

$ DgggM - y3%- r.Q . ,

][ G,Wf ; g,1.199 F AN Ng U AL R E PO RT%g)w4 fg .

,s y s  ;,

ffyf g Q J/% h 4 Nf k MO f f?hfYjl75&? p fN JTL L : 9806240084 971231

-~N gpa.

- Whnj 4 g7y g gsy$y y .

q l"N$ PDH ADOCK 03000409 .

tc . f, - a._ -q

[%, ,NT

. j%  ; PDR . .i MQy{ J t'4W@d'g ,h

/D '

! xV9.:, A ( l y ,gy

-N,, ' . pyg: qq y% g{o3j,237, { 9 . .? Q:y gWg Gw t Wg r

}.

y. g .2r  ; a;v h g $ye,afy @hi @,fg7_$ , M _3 p E $ c, M 7 M h. ! $; M- O N %

,.:-. . . . . .:. x . . .v. .. +; . . ~ . , . > . .

...sy'. $+,?N h.h h _h N ..

Nghha.... y( ..; '

..a 6 S $..: k .l.k.' .: $. - [.'.h.Ih. h 4; .

. . ; - x ,. . . .

... 7g g ggg;gy g .y; p g g g y

..

w w p_ .a m .m e x m<.xm r - 4. sn

[. . . . l a . max +ww.,e w g, W ang

..w ., , ,[ f,.7 y. L,h, h

av

.. .. ., .. .. .m -

,'h lN g N

,. s  % . . gw -

f.' ((j[f.k_' khh_f_.:y _ MA. g$g(j$I[

[.;

g;. _ .?

- ' $ :. . ;:  ;. ,, .J. .;

(

.  ?~

[w#mg. a

-7 .

' .' . [". ,f... . . f. 7 .. 4: .7,7. 29 -

4 g . i . , q.yl

,- ,,?4 M :p

~

. w J

I. .

. ; f>y , v.f 9; 7; f*t

.. mo

,.  : .. e2,r ? .

y?.

.;.+.g#y.;.

Af ,3 og,.c 4 p 7.;

+; yv.a

. ]%,Qn g4 w !

+4 4 3 g W y; m ;~ g&Q'lg- ; Q

,.. ;_ ~ g;

.- / ; j y g &w33. ,g:yf g" ' ' ..

...,  % m;{r %.. ,f.

... g , :l ;4 :.\

w

[. l .

}. . l  ;

k .

e_ x

. gg_ py_g3

'. f s

.,f._

.c y y; g.;v, b.;,<..;m.,.:39 ;-y f 4 , g Q,. ;; }4.y%27og _, m ag%gfq . p;g j

.. , . . , 7.-

.q

. g 4

.,y;. .. .,. . ;:. >.  ;

._q . , 9 .:

d;.yy%;?lQ;Q 7:. .;y y ; ; ; ;..  ;

3y gig m.: t.t x.px..~hhhh! nx3 qs4

?.i . .

.(. j . Qh i e 1- hh h$

Y; .k sawmun h y3pygg

$h[khhhfnf  ; p )y;;kh pm g

. g.ew_w -s ,

fj

_ _ _ _ ]h

,e**#m**.. - . .---~

i 4

t

}

1 i

n S y 4

)

i

' eo*. v 9* s t\* (o#,, p %3")' o.

, .. \g s W j iocan"% tiW Dgno" .ggid ?

, g coOM to a 3cd"} dC$b", {\o"'*

I pnn secbstd5 New \TOTh ((

i

\

l l

c o # , 8 94 T s psed3entg Gend3 W"^*# 1, me*'E# ?4 KTM jagee*'* ' .p#6 7p6o% .3 casoe ' i3ge B g9930 'spetm* . .page U

,. gem **? . > page 10 i

i ygua0 3 5ee'" '  ;,gst, bad Pdd t

1 4

i i

I i

i

..--,,,----...,....--*,, ,,-#,9*,,m",,.--...--**..-,,,.---- ,,,-*** 4 w

l l

I e

e i

l I

l e

f r o a w A a p l-l As the electric utihty industry continues its competitive journey into the 21st century, DairylanJ Power Cooperative's board of directors, senior l tuanagement team and talented workforce are navigating for the future l by continuing to focus on the needs of their customers.

l l This report offers an opportunity to learn more about DainlanJ's accom- .

l phshments, challenges anJ opportunities as they plot a successful course.

l w w o w a A a m l D.urylanJ Power Cooperanve, La Crosse, Wisconsin, proviJes the l wholesale electrical requirements and other services for 27 electnc Jarri-i l bution cooperatives and 13 municipal utihties which supply the energy l

!  ! needs of more than half a million people.

l i f i l

Dairyland was fonneJ in December 1941. Llay, electncity from the l urneration anJ transmission umperative's four generating stations,970 l megawatt capacity, pniduce electricity which is transmitted via 3.191 miles of transmission lines to 318 substations LicatcJ throughout the sys-l l tem's 44,500 s iuare mile servite area.

l l DainlanJ's a tvice area encompasses 62 counties in five states

! (Wisconsin, hhnnesota, Iowa, !!hnois and Michigan). Dainland has pro.

! vided low-cost, rehable electrical energy and rt lated services to its cus-l tomers in the upper MiJwest for nearly 57 years.

l For more mformation on the way safe, clean, efficient energy enhances the quahty of hfe, visit DairylanJ'i. home page at uw.dunnet.com.

I I

B I

B I

I 6

t e

4 l

I 4 l 8 1

• l 1 i i t

i 1 e

l

$ J 8

4

_ _ _ _ _ _ _d ______ -___ - - _ - - - - - - - - - - - - - - - - - - - - - - -

)

1 N AV I O A 7 I N O F O 8t O U N F U T U N E DairilanJ Ibuer Cooperanve's 1997 achievements were hi;;hhghtcJ by our .

abilny to delner limer wholesalc [wmer costs accompanicJ by enhan(ed

'/

• reliabihty for the over one half million (ustomers of our distribution unipera-tives anJ muniorals. .

Ilur) land at lueved its fifth rcJuction in wholesale rates siixe 1994 These rate redudions p suion I hurgland wah a wholesale rate 21 perc ent Irlow 1986 leveh.

licspite these reduced raics, we continue the des clopment and unriementing of 4

new strategics to better serve our (ustoiners in the future. ,

With (onsumers f ning ever-increasing o nt of hymg expenses, we are again proud to provide tabihty in energy uwis for our member elecinc cooperatives sus s.rs,e...r.:an. ..r m 1991 As sou wdl read m ilus annual report, Itur) land has launched ses oral s reatn e new partnerslups to rnius e o nts, prosiJe enhantcJ customer .. 1 W'.

~

scrs h e and rehabihty and to .nhieve wholesale elettlic rates among the c ,

lowest m the uiuntry. Ibir) land n also workmg closely wiih its distnbunon t s uiperativrs atId intillicipal (ihti inersl tal propire [tir ptitetitial L titupetilltan at , '$g.,

"cL.-

the retaillevel. Y I

.. w I e

Ilur) land b fot using on three str.itegic imti.itives to be successful. First, we are aggrP%is t l} illiplemenling cre.itivo new inik n at tiins hl teJin e oirratuittil o nts ' ' +

and ark re.lse fleMbibt).

Thn first mitiatn e unluJes partnering with emplo3ces to improve generation rt liabdity and otticiency wlule reJuang generation costs and contmuing ettorts to lower pitennally hannful etteus on the enuronment; partnenng wal. ,,,,g ,,, ,,,

neighbiiring utihnes to uuprove transmission reliability anJ tcJute transmnsion o nes; unh:me GEN-Sn Energv, our partne- ' + wnh Cooperante Ibner 1

(CI'), to unprove generation rificiencies and p eer mailerme ettectiveness '

wlule tcJoung wholesale emer unis for our niember oxgranves and pinner-u}g with leading utdatics aaoss the United Staten in the storage of spent nuclear ovi ating for our future is the theme fuel to tcJus c (osts for our members.

ch en for this year's annvol report.

D.nr3 anJ1 is pronJ to be ranted one of the most etticient power pralucers in the Navigation is the science of locating a nanon. While commenJ.ible, we are developing plans to lvcome even inore position and plotting a course to success-rincient. Our strateg) :ncludes initianves to adueve operations unpnn ements m fully reach your objective. At Doiryland, a number of key areas generation unit av.nlabihty, rcJuced plant m.untenante we are "novigating for our future" by onts, plant generation efiniency and snore cost-effectne utth: anon of our lughly- utilizing a strategic planning process and skillcJ workforte. creating innovative new partnerships to ensure we ore achieving goals which benefit our customers. Many new and exciting routes are being token as we rnove forward, conunueL

r, ._ _

c

!NSWw 'J

,y i' - - -

4 am -T i

i w, .. ag ^

- E ,.....................................................................

g r i#

(  ;

4 a

' l Wr

, t

'f -

t 4u J*; o I, - Our violen;.. G ' l DairylanJ has been aggrewive in not only maintaining, but enhancmg the reha-

-I ...is to be the prodder of choice for eneigyf

~

, j bihty of its transmission 16ystem. %ere were 71 miles of transinission line reliuilt p and servicedo our customers; ~ o j or upgraded and 11 nules of new kne buih in 1W7 in order to improve wrvice f .

l and rehabihty to our members. Over the past 10 years, Dairyland has rebuilt or j i

• 1'~ti Cur mission...- o ,

/

/ l upgraded 25 ntcent ofits L200 nule transmission system. l

, l

...is, os a cooperative organization, to pro- fI Since Dairyland's transmission system is interconnected to many other unbries e

vide competitively pr. iced energy and seri l in our region, we work wnh these neighh tring unlities anJ the Mid-Continent

.s, , , <;

f vices to our customers and maximum value l Area Power Pool (MAPP) to ensure Dainland's memler imperatives n ceive r

j .

o

,{ fo our owners, consistent with the wise use l continued rehable transmission wrvice as the regional energy Jemand grows.

of rasov'rces.,- '

7 GEN-93 Energy, Dairylandi partnership with CP *o jointly operate genera ,

/ We'will

. q j l' we-k with our members to improve l tion facihues and market wholesale piwer, is into us third year of optation.

e

, _/ the quality of life of their customers ondthe

, l Accepted as a memler of the MAPP, anJ fonnally authonxd by the Federal ,

ecofnomic and social welbbeing of the . Energy Regulatory Commission in November, GEN-93 Energy has helped l

e

) rrgionT O . _ . _

I strengthen our competinvc p minon, helping us to achieve piwer supply costs e# l P ,

{I among the lowest in the region.

" Thniugh GEN-M3 Energy, Dainland and CP are optimally thspatching their Our Values... - , ,

l Our members are'the reason for our exi$ %  ! elcanc generation resources to serve member had anJ wholesale customers. A l"

. trnce. We will strive to provide services that I l second function is the marketing of piwer (sales and purchases) to maximize the exceed their expectations, emphasizing - l. value of the assets of GEN-M3 Energy's memhen, thus improving their com-

,s .

.t - . ~

[

honesty, quohty and other sound business l

pennve pismon in the marketplace. DainlanJ's 27 member cmperanves are N  ; principles. '

benefaing from these savmgs, as reflected in reduced wholesale rates m IW7 and

' ->~ l stable wholesale rates for 1W8.

Our employees and the people we serve .

I are vifol to our success. To promote excel- Our wcond strategic imtiative is to create innovative new solutions to the isnce/we will suppod and en ouroge changing neeJs of our customers, especially given the pnnpect of increasing l

i, employee development for the purpose of competition. This includes partnering with Jntnbution imperatives in the for-

' matching ' qualified ople to the "right jobs' l'

manon of EnPourt, an innovante new marketing cmperative for cooperatives.

?' .whila being sensitive to the importance of l ob satis.foction. We will encobroge open, .

On Jannan 1, IM the 27 inemlers of the Dainland System of Elecinc honzst and timely two way communicotlon. ' Gontanves became the founJmg memben of EnPouer, the marketing, strategy l

Working as a team, we will respect each  ! ""d"dIC*C""PTdNC C I to ined thdundng neds of enas uwn

"' Jay anJ into the 21st centun.

other and balance empowerment with ,

accountability. l EPmer was createJ by Dainland's Jntnbution cooptatives in a partnership

. As we co duct our business, we will be! . *id' UdI b"U U '""ifer their members the next generation m cooptative servKe.

responsible members of our community hese innovative cooperatives recognixJ the impirtance of providmg their

'"C"'I*" "CCC* t""C"' madenng strategies, state-of the-art technologies, cost-foood stewards of the environment and fol. l low sound safety practices, while continvol?. j savinunam ekwncy pnigrand nJ a vanery of pniJuco and services not eauly l accessible iri their communities talay. By working together and shanne took and

ly improving our processes and services.-

/ ~ 4I l l techniques, panicipanng co-ops will proviJe their memien letter service, imre

^

y ,

l paducts and uhinutely lower. cost pmcr. EnPouer also provides as members a

' /. i l vehicle to sell pn ducts and services to new customen rutionwide.

~l 1

l le....................... . .............. ...m.....0

't g, , }

• Q p 9 '

I '

I, ai ,

t e

a: w,' < , u

')~

L i In <

> L s i o

Ily settmg then unhts on iustomer benefas, IbinlanJ system Jaetton anJ r a e o an e a s a managen ploeied the uinne to ocate ilus lead ng edge markenne and s. des e compass is a device that indi.

organcanon sening the ou y etaines of the Upper MiJwest by proviJme surub cotes direction on the Eorth's sur-markenne and sale programs, tools and strategies to retain customen and face, relat.ive to magnet.ic north. It au rat i new ontomers is the principal instrument of novi-As a o operaine, we reo ngnce the unpirtain e of developing new typt s of part' gotion; without it, a navigator nershyw whn h bencht our inembers. Tbt is win we jomcJ hands wah leadme .

would have diff.iculty in setting the o m grrain es at noss the UrutcJ tstates to create Lulntone Fruytm We, along wnh C " 'S * '

l our Jntnhunon o m qvrain es. are unlemg the Lulntone Dere mutung branJ to l

i etnify (Muselv4's as pickerred prL7th ers (if elet tric servke.

Our distribution cooperatives and IhunlanJ and in members oi,q crain es are pn >ud to I e b. dstone b. iero u.utnen, emphasema our JcJicanon to prondmg st.nc-ofabe-an serrn e to energy their members are the magnetic l

uwn in our region. The values of miennty, o ustomer atcountabihty mnovanon pull that sets Dairyland's course.

and spot of o ,nununny awareness, that thc3 h.n c ahvays Demonstrated. w dl Guided by their needs, insights envue the suo ess of !).unland ns memirr coiytranves anJ their t ustomen.

and requests, we are successfully A (onnnucJ Ley (omuutment to our values and a nnmunmes n our ilurd navigating our way through the strategn unnatnc. Thn unluJes pannenlups wah our usyrrantes and area busi' industry's changing current.

nesus in numerous economic development pn geus; workmg wnh envuonmental gnnyw to provule good stewardslup of air, land and water; anJ working wnh con-sumer advocate uniops to sh.y c future legislanon to beneta alli ustomer classes.

As 3our general manager and boarJ president, we can irli vou that one tlnne is

! t cit.un at I tunland... the customer always onnes hrst. Sunph put, IbinlanJ's pinto ophy is th.n d someilung - a poho, sen n e or w.n of dome busmess - is good ior our os g>cranvc member's oneomers, then m the tmal analysn n n giuJ toi Ibu3 anJ.

t All of these .nluesements. and man) more 3ou w 11 real aluut m thn repirt are the resuh of the dedicatcJ ettoris of our emplo>ces and those of the datnbution i,a grrantes u niun the 1).unland svuem. Their etioris in launtlung and acain cly implemennne these nunantes are what has made IbinlanJ a reo >g-need mJustry leaJer and will conunne to ensure our tuiure suucss We suh cre!) (bank our emploprs and those of the Jntnbunon ou;vratn es unlun the Ibinland nstem for their dedicanon, mnovanon and respunnenes to . < ..a, y

• unnnner necJ . w.

}'

D L Y k -

nmiam a ne,,a u _ ge, -

.m

l l

oonaa or oeaacvoas ~.

. ;. . y . r ,' .

Executive Committee - J

. i GeralJ Koeller PresiJent h.a f'.  !

Grant-Lafayette Electric Qxigerative -

~

c.  !,

Duane Solum Vice President hc

, l-Poll Burneti Electric Gmyrrative l Rultr AnJerson - Treasurer Tri Giunty Elecinc Guiperative l l

JuJy Murphy - Secretary .

M k RichlanJ Electric Gugrranvc Q g p- .

4  !.

John 11 inner - Member At Large  :- ) -

f Jump River Elecinc Oxiperative .

l l

Ken Sonsalla - Memirr At Lirge l Trcinivaleau Electnc G uiperarice  :

l l r .

George Webb -Memlwr At Large -

l Chipirwa Wiley Electric Gni;rrative g .- l w

~-

Laurie Engen Anistant Secretary l D.uryland l'ower Gwiperatn.e p Nile.* llerman - Legal G,unsel l

l Directors .' '.

l Clarence Boetf(her .

j Eau Claire Electric Ga> perative .

. l Sandra DaviJsin .- *e '

. , j Crawford Electric Cooperative ,

/ l l

Richard Dierauer l Iluffalo Electric G=gwrative i - _

l l

Ikanis Engel Taylor Electric O x qvrative h , I

~ '

~ WSP

.. ,M

'i I

k'!

. ~ .. : >% l Ikan Fisher l llaw Leye Tri-County Electric Gsgerarn e -

i R_ m, , .

l Pierce-Pepin Electric Gioperatis c l

l l

1

, n- .

E i

. .4, Ilenry Janench Clark Electric Cxgwratwe

- =

.; 4 ,

M ' '

.. /4., Robert Kelbel

\'ernon Electric G aq,crative

/ Roland Kelley Oakdale Electric Gaswrative 7 _ .g . ,. .

k. ' -

Francis Klart

( .

y St. Croix Elecinc Ox grrative

,f .-

Dale hiangskau

- Freeborn hiower Gaywrative Services t

Scimer Nehon

'** Barron Electric Oxyrrative

_c _ ,y

'g..

^ '

g.

- . .e Leonard Ricle g

' * ~

g j / Jo-Carroll Electric Gugrrative Art Riemer

. s..., . . Bayfield Electric Gagerative Quentm RutLer l' cog >le'n Lixq,crative Servicen

3 .o x

1. 7

, Erv Sihult:

g f

~

• 4 . . . ,

l' rice Electne Gagierative q Y ,.

3 .

Roger Solomonson 4 ' -

'."  !!cartland Power Gugwrative e a Ray Tolley

, Cl.iss B hiemiers T '

Wayne Welwr s

., - G _ ,E, _ ic G ., _ e

. na; 4  :

A.

.jk#g

..[ . k Iktnard Welsh Allamatee-Clayton Electric Oxyrrative f Gary Winxis a

• k. ,i :M Jackson Electric Oxy,erative i

I E

es l

s y s a _w j e s. o y v e w o a e o u a s a

/a .

hi the ute traveled will undoubtedly ' l As unhnes -et s.ul in a sea of competinte thanges to the eletinc industn, include challenges, Doiryland has plotted l Ituo tand l'imer Umperative b employing numerous imls to n.n igate ihmuch

- o course to dependably deliver competi. these onthartered terraories. Our goal is to nangate successfully to our chosen l

lively priced power and the next genero.  ! destinanon.

tion in cooperoilve service to its members.

Our Jesonanon n to ocate a new generation, transnusuon and service coop-During 1997, Doiryland ochieved several erarn e that penomhes die l'oucr of hunun connecnons. We hae a grong her-milestones in its plotted course, including: itage of euclient sertne on whith to bmid. In 1997, we alues ed major

. Working closely with Doiryland j aJvantes iow.ad our goal thniugh ucanvc partnerships u nh our emploices.

member cooperatives in the creation j our Jnmbution cooperatn es, anJ leaJing generanon and transuussion cooper- '

of InPower, on innovative new j anves (G&TL) m our region anJ nanonally. These h.ne resultcJ m rcJuced organization which provides superb operanons costs, im reascJ tleuhhty, mnovative new compenove solutions marketing programs, tools, strategies and sustaincJ comnutmeni to our core values.

and resources to help cooperatives retain and attroci customers. l

• Developing, with other G&Ts ocross o c a y a u o o u a o s s y : o u f h. s=

the United States, Touchstone - l I'"" "" I"""

• 1"'" " P""""" '"'"*I"'"" '" " C"b Energy, o unifying co-branding effort  !

I"9I' II"nlanJ was n.uncJ one of the nanoni top 10 G&T, best pounoncJ for leading cooperatives which share l for c ompetnion l'y liesource l)ata Internanonal (11131).111)] n a leaJme con-common values of integnty, occount-sulung otanu anon [ironding in.ukd and (ompennw imelhecnce to the ener-obihty, innovation and community

' gy industry. llainland\ low wholesale pima rates stratreic actions and innov-involvement.

,um new w olmle nne options th.n innt tlw nuds of tlu new ud1 plan,

• Formalized creation of GEN-KYS {

j conenbutd to ib lu6 raung.

Ensrgy, Doiryland's generation dispatch and power marketing In a nanonal suney. cooperain es were ratcJ lugher than other unhties b) l partnership with Cooperative Power, uinuunch A guA uinJuacJ h KRC Resem h mJ Gin + lung compared the which has demonstrated its value in .ninndes mJ opmions of ieuJennal memben of the llunimd wsu m ca>peni-optimolly dispatching Doiryland and In es to memlyn of other unopennins a niss the nanon. The gudy found th.a Cooperative Power system resources ,

an overuhehning m.uonn of memlyn of the llunland system gne their

- ond moximizing their volve within the g ,gpggy , .ull b5 inomhlm unna A wnuJeubly gre.nu m4orm a regional energy market, 04 pman more) of llunimJ memien thm c% unte memirn nanin-

+ Implementing improvements to wiJe uv they w ould Ir un IM m cononue wnh their u>iinunw .n sense -

Doiryland's generation and p,gna, gg ,u.n a agg.

transmission systemn which increase l S*"l" '""* 'i"" ""i"C' "m founJ w hen the mJepenJent market rescan h cfficiency, reduce energy costs and l f'"" Sd"'f^ """W"' k ' '""d"' "d " '""V "I l'V '"""""""I ""d " 'd "'" "I increose system reliability.  !

l (Chl) t ustomen of Ilunland member o= >peantes. The report sutes that, e

' "llunlanJ cooperatives are Joing an excellent job of meetmg their C&l cus-1 ' tomers' current exgvcutions." In f at,"97 pen ent of (:&l untomen sa) then i

cooperanvc deserves their future buuness."

1 l

e e.

11ur) land inanagernent, ducttors anJ oioperatn c start uere proud of this nanonal recogrunon and these lugh rannes, but are Jctennined not to rest on their laurel,. lxaders of uxiperatn es throughout the i turslanJ syston reah:c we niust all pay ecen rnore anennon to buih:ing (ustoiner lovahy as we prepare for a tune u hen ihcir customers ina) h.n e a (hohe iif prouJers.1),ur)lanJ and its db-inhunon oioperatnes are Jciernuned to be the " prouder of chonc" that con-sumers ilesne and (hoir,c.

In IW7,1),unland and ns distnbunon uioperain es nunated a new phase m illeir strategh j'!allnille ['n k ess ni des c!ilp a tiliarse til IC.R b ikth destirulli nn.

Cicanng innotainc new partnerslups o meer the (hanging needs of couomers

.mJ markets is a Ley oimponent for our strategy to oinonne to be a leaJmg rn'uJer of enogy mio the next tentury anJ besonJ.

Ilurglan I marugement unpleinented several Ley strategic nunatn'es m lW7 Y E S E X Y A N 7 ulm h are resolong m substaniully lower uses, unproved operanonal flexibihrv.

umovatne new pniJuus, enhan<cJ (ustomer sen ac upabihnes anJ mcrea ed ,e sextant is used to measure the setem iclubihty.

ongular elevation of astronomical objects from the horizon, and from ENNANCED GENERA 7 ION EFF8C8ENCY positions (latitude).

1).unland n pleased to be reuigni:cJ as bemg one of the mi t othuent power pnshners m the nanon. Ilowever, l)unlan& Generanon thuuon employees h,n e < hallenged themselves an I set a course to benime even more etta sent. They increasing competition is the object have Jeveloped and are unplemennng a strategs to by which electric utilities are meo-

.- . atlueve operanonal a ivaninuents wlus h unprove genera- suring their latitude in the market-j .

non nmi av.nlabihty, redote plant nuuncrunte costs-place. Through the strofegic pari-J mcrease plant generating effn iency, moic citectn cly utih:e

• + p nersh.ips of EnPower, GEN ~SYS

.g

().unlanA lughlv-sLdicJ wo L ton e and redut e genermion onts b) ,e pertent,io $b ivr MW,h b3 the scar AW Energy, Touchstone Energy and

' 4 wiih our employees, we are posi-To help ailueve these goah, a %rk thess s ,

tioning ourselves for o successful hurrovement l'rogram was unplemented in lW7. Tlus Joh. n L.u.e, ettort is expn tcJ to resuh m mcreaseJ n habihty anJ V Y 98-Assistant General m===oer,o==*r=H = I""""I*""""'""'

I)ainland nunagement tecogru:es that to Ircome the most efficient pimer pro-Juter, employees must le involved and gnen respon,ahhty for the pnwess. As a resuh, in IW7, employees at exh generanne stanon have estabbshed theu own, Mnsion, Vision and Values.

The einplo3ces iit eat h generatitig site have creatcJ a wilal wiiil criliiire fourwla-tion by mstitunne "lvst" woil praaites and are working toward optunal unh:a-tion of all asseis: hunun, methamcal and fuuncial.

l t......................................................................................................................

Cenerating Comtlens Total Net Ceacity Net in MW MWh 4- s= n a v a v E r u E s. SvonaoE INIy8AvIVE

'Tm Station (Winter) (OtM) Tml

Gal; Alma . .. 198 560 8.9) FMTa a sulisiduty of 11ur31and, a among eight U.S. unhnes whit h G.

JPM . . 377 1,591 25.40 174 - 2,170 34.61 luve fanncJ Pnvate Fuel Storage, Lumted Liahhts Company (LLC). Tlus t

Genm al .

!T d Gul. . 949 4,323 68.94 gn,up has signed a lease agreement for the development of a iemiurary storace

[llyJro- ' flamlwu . 21 78 1.24 faahty for pent nutlear fuel on the Goshute InJun reservation m Utah.

iT4Kxneranun ' . . 970 4,401 70.18 D.ur3 and's l involvement in this pn jea n a strategic measure to rcJuce future i PurchacJ Power . . 1,870 29.82

(" f"r as niembers.11un tand owns the 50 megawan La Crosse Ik ilmg IT atal Requireinent . . . 6.271 100 00 Water Reactor at Genoa, Wis., whah closcJ in April of 1957. Dair3 1.ind safely iTransenissiese 8.Ines mimams tlw nmor's ynt nd ar fuel on site uld m .wm-rely H e hidesas MJes as Const ructed imlhon annually.

y %1 tace-KV l 161 604.89 69 2,533.27 D,ursland has gutential resunsthhty of nuinnuning the spent fuel for anoth-34.5 52.67 er 25 30 years and has Iren reuew mg o>sodtecove, enuninmentall 3-safe 3J 90 83

i. opuuns for fuel storage.

I Cwittations Thn umiam e is a moperante ettort amone elettnt unhnes to enwurage the

? Teil l Type Number Carmcity KVA tcJeral govenunent to estal hsh a pernunent spent fuel storage sne (wluth was

• Plant 3 954,000 pninuscJ for 1998). 4,nh os er 20 peuent of the nanon,s elcernoty poklused

> Transnumon 4 lo 1,381.000 922,750 by notlear generanon, the iwne w dl soon ivtome a reluhht3 nsue it a tentral Dntribution 285

Total . 31H 3.259.750 sunage sne is not appn' sed and m operanon carh m the 21st t enturw Power Generatest sa S E N E n G Y O E N S Y Parsleeseal -

(Thoumb of MWh)

I hirylanJ and Cooivrante Power (( T) of Eden Praine, hhnn., are m the 4,000- "

ilurd 3 ear of operanon of GEN-5TS Encigv, a strategic generanon Jrpattlung and power nutteiing alhante.

8,000 . . ulesa,nes reached m 1997 unluJeJ FeJeral Energ3 Regulatory Conumssion authont3 for tuwer nuilenng in Octoler and hhJ Cononent Area Power Pool (htAIT) memberslup in Novemirr. GEN-STS Energy also statted as 4,000 . . - Perdiend nunagement team and Jeseloped an operanng buJ.xt for 1998, connnume to

• B unh:e statt of both 11ursland and CP.

Hydro I" "M""" '" "' '"'"'" in gennanng nononue nein for as members by 3,000 - 3

$9s! Lipalinally Mkleduling l}leir generaring resources, LtHHk'ined eik'rg) Alles for I

1997 lute ineicased to over 1.5 nulhon megawatt. hours.

2,660 1,000- re.. orn-srs s ,sr s..,4.

s m i.e.e.re si.e. w.id..

xi ..., em s.es, s.i.

m n.,..a o.. s.n .r,

'*"'*"d""***""*'**"

e~ .. ... . ... -

a ch.,s u s . c,.i.e. j 1993 1994 1995 1994 1997 .

== -

.n e

' sLossAay oy 7Eams By integranne the two parincis' diverse generation resounes, GEN-SYS Encro athieves siemhcant cost j . .

Capacity - Foca.lities in place to serve

- cffa n.,qes for both 1)airyland l'ower G niperative anJ l F . electric customers. Fixed capital cost per 0% 0.operatn e l'ower. GEN-SYS Enern at comphshes l e

kilowatt (kW). Known os " demand c "cw_

these bt ncfn3 through jomt power m.ukenne, etonomic l 6* . charges.,

thspanh of energy, toordmatcJ power plant mamte- l nante stheJohne, expansion of effetove madet atras l

. Cap?alization - the total of long-

' term debt, preferred stock and common and nunganon of risk assonated u nh otf-system sales

""d """ ""'dMW "U "I"lut h tesuh in benefu s for j stock epty.

ca..,s.. v. s... c,.i ..,

e...w... ..a c s o,  !) air 31 andi membert l Cogeneration - j. .oin t production of o m -srs s..rer l GEN-STS Encrn will be ta usme on turther Jevelop. j electricity and commercially useful. heat i

me as powcr vn,uletmg c..pabihnes to assure ihe masi. l frorn a common source.

GEN-SYS .

un: nion of the value of these resonn es to 1).miland and Decommissioning costs - expens-( :!', and des clopment of pn slut t, in meet ihe Jemand of A es incurred in connection with the l

H members in the future. ENERGY  ! removoi and disposoi of components of a nuclear power plant thof has permo-l nently stopped producing electricity 94 E L 5 A B I L 8 Y Y A N 53 mESPONstVENE5S l Demand. side management -

I) ur31.mJ asluesed siemin ant unpnivements to us transnussion systein m 1997 l monoging electric demand with pro-tesubmg m un trascJ reh.ibihis, wlule rcJui me iosts and suppornne new (us- l. grams ihot help customers use energy tomer growth. l more efficiently or shift usoge to non.

I l peak times, reducing the need for oddi-

,I.o enhante etem ichabi utl 11.ursl.mJ n contuunng an au cler.acd pnigram l

. i tional generation supply.

to trbmlJ our irainmnsion f aohtiet in 199<, s I nules of' transnuwion ime were l ichmh or uperadeJ and 11 nules of new hne constnu tel  ! Energy - Delivered power measured in kilowott-hours (kWh). Typically priced Over the pet 10 years,1).ur3 and 1 has rchmh or upciaded h. pen ent of as near-of variable cost (fuel and O&M).

h U00 nule it.unnussion sysicm. These proictis h.n e unprm cJ servu e and j rehabihn io member uniperatn es, wlule atluvung rcJus nons m energs loss and EnPower - The new marketing, strate-cost s,n mgv

' gy and sales cooperative developed to l meet the rapidly changing needs of elec-In addition,104 nules of new kne h.n c been con tnu ted These new hnes icsuli

• tric distribution cooperatives and their m improved t ap.n n) to sen ing loa l and implos cJ tcliabiht). '

members into the 21st century.

Ilutil.nul statt also work u nh othet unhoes anJ the mal'I' to ensurc j FERC - Federol Energy Regulatory Itm31anJi mendict o operative:, rc< en e t oniinucJ tchal le transmission sen a e l

. Commission-o federal agency created as regional encre> demands grow. Cunentis, ihrsland n workma wnh a neigh- l s in 1977 to regulate, among other things, loting utilit) to enhatne transnuwion rehabillt) in nortliwestern Wntotnin and . .

8 snterstate wholesale electric roles that eastern Mnmesota, Grow,ng busmess anJ resiJcnnal elecincal use m ilus reemn j investor-owned utihties charge other have enhan(ed the necJ tot the proiused Cluw'o l'roiccr. l l

wholesole utilities. Ah.o licenses hydro-I I

l

' electric projects. Formerly the Federal 4

l Power Comm% ion.

B l continued..

e 0

l

3

.h

,.............. d........

l -

. continued.., **************"~'****"~"*******'"""**

y..,s e. ..h..e. ele. p.,0.rs...s. 9 wl.d e.,b8..e was.h .....reeh. ws.d<. .n.. i.e. . .hs. .s.o ,y GEN ~5YS Energy ...,,y.Th. ...,,y0.,eh. s.r...,tr.rer... p,..

- Strategic ofiionce of ; ,,.= win s.. pr.dowd ..a., eh. s...o s. ws.d ......

! .e s.. ...h..s.,y.

l the generating tesources and power ,

marketing octivities of /

Dairyland Power The proposal t aus for conomenng 7<

1,.

Cooperative oj a Nkdovok transmission hne Coop $rolive Power. from NSP's Clusago County (hhnn.) substation to 11unlanfs 3, .

IDEW - International Apple Rner substation near Amen, Brotherhood of Wnconun. These structures coull

1. g Electrical Worker 5 ab,o (arry a 1iRiovok hne from the Chisago Counn subsanon to a kilowatt (kW)'- c . l unit of power or copocity. A kilowatt-hour P'"l*Cd "C* $"h*'""on near Ta31 ors Falls, Mmnesoir ,,,,,,,,,,,,,,

l I (kWh) is equal to one kW of power sup- l The proposal also nidado a IWilovolt hne imm Nsp; os,.o., .9 as.ori..e i s..i...,s ,

plied for one' hour. A 100-watt light bulb S'""C I"'IC '"buanan neir llayw arJ. Wnconsm, to NSPi l

burned for 10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br /> uses 1 kWh. One Ba3 Front subvanon in Ashland Wnconun, wka h will mcrc+e rehabihty in l  !

thousand kWs is a megawatt (MW). One 'h' "'C' EC""'"i"M h"' begun for the prom t ni hhnnesota and Wnconun.

l thousand kWhs is o rnegowott-hour (MWh).

l W'ods nA r m dma wom uns %ImM. Trmummm l MAPP - Mid-Continent Are, Power Pool.  ! Ihvbion anJ Safeiy emplo3ees prouJe emergenc3 response trauung usmg l 11onlandi muque sw attune trauung tr.nler ulut h rephcates a wwkmg substa.

Peak demand - the maximum amount l tion on w heels. Thu unit allou s performance-beed ir.unmg for member coo;*

l

, of electricity required during periods of l

!- i crative hoeworkers throughout the llunland syvem, greatly shortemng emer-

' highest usage. l l l gency response tune for our (ustomers.

Reliability - o measure of a utility's in sep w nh t urrent federal anJ state regulatory trends, l).unlanJ he support-

-obihty to deliver uninterrupted electric ser- f' ed the Jewlopment of a independent Sysicm O.perator (ISO) by the MAPP vice to its cublomers. .

l T.he purpine of the ISO woulJ be to estabbsh a subuJiary of the MAPP as an Retall wheeling - the dehvery of elec- mJependent operaior of the it.unmission systems w nhm the mal'P area and tricity to end-users by a third party using insibly beyond

• the focol utility's transmission system. l l

The pnnciple of an ISO is to operate the transuussion gnJ "mdepenJenth" ,

Strarided Costs - Investment in electric - ,

trom the oivranon of generation facihnes. A properly struoured ISO woulJ gainerotion and transmission facihties that is enhante the Jewlopment of a (onyietirne wholesale generanon market, level l

fiot price competitive in a market-based the pla3 i ng held relante to transmisuon access w nlun a region, anJ streamhne l

and o=>rJmate the regional transnussion rianmne pnicess.

economy.l l l

- - WWMPG - Western Wisconsin Municir il l 11unland he aJJmonally been acnce in the honsin Pubhc Service Power Group. Cinnnusuon ISO process and partiopatcJ in the renew of the Interstate

! l Encigy Merger (WP&L, IES and Interstare Powcr) ISO specifications.

1-e

'~ *

, 4

!)alr) find also b il cibttHlier un ci Niirtliern Stain Power's (NSP) netwiirk y

3 transmissilln Idtli . 11% incans t lat kilr) an bas jkMile lth translHhshin f ate i'

i i t

tin u nh NSP and others (incluJmg G operatn e Power, UmicJ i'ower T H L 0 O M T H O U S s Awsiatnin and Sin.them Mmnesota Munnipal Power Agenc)) mio a larger l I ' . th >use provides ships with a transnuun,n una to improve rehahbry anJ g.un eost etTioenties.

navigational point of reference by day and by night and often to indi-a m s- s. o y a a s i. s a o T H a way cote dangerous rocks or shoals as 1

The mnovatne Pannenhqi Agreemenn inmated and signcJ in 1995 hetwecn well. Lighthouses have safeguard-Ituri anJ l and latur omon IllEW 951 are an uniunani #pect in charting a u>urse ed mariners since early times.

for llunlanA future suuew. The agre- -ms allow greater ficxihiny to turet ihanging iustomer needs wlule fostenn_ an atmosphere of set unty and cre.un ny For nearly 57 years, Da.iryland and far emplosces. Two maior cominnents of these pannerslup agreements melude no its member cooperatives have layotts for the duration of the latur agreement and the purson of safe muin4Ldl temune of personnel. sailed the same waters. The course was one most of us knew well and The lluryland litEW Ldur Management G unnunce (LMC) n (ononume m a c uld e sily navigate. Over the new role Jetunne and expanJme the partnenlup plulosophy and pnsess. Tim wdl enh.uwe th ongmal pannership nuwson siatement to make l'.unland a more sur past few years, however, the waters t ewf ul, n siurisive busmew t hrough the combmeJ. (AuscJ citons of all of IlunlanJs have changed, and we searched wa%,ac b> oinonumg to build an environment of mutual trust and unJentanJ<na for a point of reference to guide us Dunne 1997, the iluman Remiurces liepanment woikcJ tlosely wnh an Employee to our destination. Comprehensive 11cnefus Tek Fone (EllTF) to develop the ( )pnom Pim llenefas PatLage w hith educational seminars, such as the offers employees several new Irneta options to meet then mJn ilual needs. annual Dairyland customer sympo-l The goal of tim ininante n to maxmn:e the value of the ivnetns avadable to siums, and the informational cath employee for the s.une or lower cost for the employee and 1).unland. The resources of EnPower created by 16 person EllTF ionyuscJ of solunteen from luth non-union and umon-repre- the 27 cooperative members of the

. . . . sentcJ arce, evaluaicJ the Irst of Irnt lun.uked henctns

'1' .

Dairyland system, are helping light and have Jes cloivd the opuom Plm benetas pmposal f. or conuderanon b) the woittiine. lf approved, the pmgr.un the way for cooperative members

. wdl become ett'ecove January 1,1999 across the region.

9ly-

/. 8 Dntnbunon uuperatnes are able to unh:e llunlanJs M

llum . Itesources expenne for awwante m a Jnerse vari-cty of pt ople-related nsuc% For the past two years, Ibinland ha serveJ as the Job Training and Safety m.,, a t..a ow.o., UT&S) pronder for all 25 Wnconsm electne ooirratives, p

.e n.-.. m. . ." thmugh a Woconun Electnc Cooperanve Awicianon "Pannetslup for Safety" wah 11unland.

The trauung mtlodes tlassroom sessions ai cat h of the noperatives several mes a 3 car on varioin OSIIA regulanons and other job safcry reqmrements for ihe opperative emplo3ees. EwlJ vnns to ooperatn e crews aho play a major pan of f e:t i the JINS citorts to help reduce Imses at the uuperantes due to a(cilents and i pers mnel injuneA

.(

e-

8 Iluoland safety staff also prouJe vahuble expero e for empl Set s, member cooperatives and municipal unhoes in the areas of s.ifen anJ secun,y consub-ing and tr,uning, as well as OSHA and other regularory comphante is ue<

l-lunun Resources staff provide expertise for other Jiverse requests mtluJma:

developing protective clothing guiJehnes and internal pohcies for other regula-torprelated measures, lahir relanons awistante, creanne anJ updanne coopera-ris e hurJ anJ aJunnistrative pohcies, workers' compensanon iwues, ru ruit-ment anJ resong.

Y a C N N O L O O Y Y O N A V 5 O A T E Iluri and l launtlieJ a view infiirnutive anJ c:ispio-use internet web site in c.ulv m O c u 6 A a a 1995 (uuu J.urvnet.com) to provide tustomers instant actew to product and ser-m e intornution. The new sne proudes aduhs and cluldren ahke an opportunity i uk are a hand. held optical to learn ahint encrev dticiency, the pniduaion of cleariary. the 1).unland sys-instrument composed of two tele. tem anJ the benetns of cleonc oxperativet scopes and a focusing device and .

In .ulbnon,1).unlanJ cononnes to upgrade the capahhnes of Dit,()nine, a usually having prisms to increase umque personal computer-based network develorcJ to taohrate mfornunon magnifying ability...usually used in transfer among liainland, as member uioivrantes, municipal customers and auunce panners This is aaoniplished through file transfers E nuil anJ elec-

plural, tronic bullenn hurd fonuns u ha h eiuble parnupants to share eyrnences on sut h issues as sateiy, pimer qiuhty and member en ice.

Through their values and their I" I"U' 'I"' I"f"*"""n Tn hnology Wraninent fuub:ni plans w hic h wiu cc,mmitment to community, gicaily enlunte 1),unland's ahhty to slure inforuution more ettecinely mter-Dairyland and its member cooper.

nalh and u nh it's businew partners.

? ,... .

olives have developed a strong These pnyet ts include the complete replacement of focus on customer and community 1)ainland's financial intonnanon system; a nujor upgrade

~

needs. Providing direction and clor. .

of the AutonuicJ Mamtenance I,lanmne System ity, this focus is helping to clarify ( AMl'Sh and conversion of l).unland's personal comput- g and define our new business strate- er network to Wnulou;s NT and the Microsoft oj] ice smte .

gies and tactics, of pniJucis.

limployees from throuchout the orgam: anon workcJ mi.h.a 4. s .h.,,

together to i lenniv an ortunal solunon to meet ,,,,,,,,,,,,,,,,,,,,,

I)ainlanJ's t ombined needs for mamtenant e, nuterials wh=d.sv and financia! iippliuilli lls ulbonlutiill) s)steln%

l The new inaiiitenaiwe ni.ituecinetit systein is expec ted ti, pnn ide ilw neces-Niry tools to a!!ow 1).un!anJi generation plants io achieve a ht in Claw' level tif relubilit) and eithleiwy Ibat Will lic regulrcJ in ilns age ist (iimpetiriim.

The new system is expn t, J to le operanonal in carh 1999 MERA

aN P O W E R A N E W F R O N T I E R .

5 P WEN OFFERS MEW CMOSCES e ,gniz .g cust mes' incre sing needs i r On January 1,199M, the 27 menders of the Rurgland Srtem of Eleonc _

G operatnrs creatcJ an innovative new m.nletmg t otverative to help them etti-

'*Ii I*' I * ~C S' P ** "3"" " 'i "**

st ndby generation program was developed uently n,nigate the w.pers of the itu rcasingly competitive electnc unhty industry.

by EnPower to assist Doiryland member finihrer, the ocw mark eting, strategy and sales ooperatne, was de velopul to c per tives in pr viding expertise nd equip-meet the rapidly thanging needs of cletinc distnhution congrratives and their nwnt or key commercial, industriol and agri.

meinlvis mio the 21st tentury.

cultural customers. Cooperative energy profes-Enlherr b a leadmg-edge marketing and s. des organi:atpin scrung the o ojvra- sionals provide total project monogement, aves of the Upivr MiJwest by providma them wah superb marketmg and sales pr"- working with customers to design the most grann, tot ds and strategies to retain exbimg memlers anJ attrati new customers. efficient, reliable and cost-effective system toi-I red t meet e ch customer's needs.

w Vanous uoperatnes throughout the sprem have mJn1J,

, e E.,1 - .O ual suengths that can he leveraged for the benefn of all. One of the new energy choices being offered y linl%cer w dl help o nperatives reah:e their [vtennal hV to cooperative members is EnPbwer

~ ; woiling together to adopi "the lvst of the best?

~

g f Evergreen *. This new progam lets customers

• invest in the future of the planet. The dividend

. "I,he creation of finikrer exemphfies the next cooperatne is o supply of electricity from on energy source generation as eletint uoperain es work together to expand that is abundant and completely renewable -

[n the su re of their capahihnes and reah:e syncigies as they

' .w t.> - the wind.

hudd on their tradmon of great Lical scruce to their mem-a,s . s. the-a., hers wnh new types of marketing pnigrams and innovatn e The Evergreen

• program was developed for pr sa..e ..a eso, s e.-...Thi-i. .i scrut es. customers des .inng the option of investing to

.. .. o .ner s =.d'. .

help develop a new renewable energy source.

aus ..e o.....i EnIhrer n hundhng anJ repadagmg many of the to+ps' .

m...s. , c..e...' The energy for th.is program will be produced exisung programs and ottering these new pat Lages to other s.ev.... a r..a.8.s using the latest i,n enhanced w,ndi generation memlvt aupctatives. In Joing so, elecinc ouperanves w di technology.

g.un strength and colletlive expertise from their partner uoperantes to proside an es en greater ivrtioho of new programs and scruces to ret.nl members. linihrer o Although wind generation costs more than aho ocanne and helpmg unplement new siate-of the. art marketmg strategies, pn* Doiryland's existing portfolio of clean, efficient grams anJ toob to assist local clet tnc uupt rantes in strengthening their compen- cool and hydroelectric generation resources,

,in e posmon and fonn new relationships Iv3ond their auperatives. the benefits of the new Evergreen" program

1. F"N ore priceless. Immediately, these energy As the organi: anon grows and evoh es,linl%cer'.s leaJers F/

A sources will save thousands of tons of cool and

' ate .nsessing the gutennat of Jevelopmg partnerslups w nh atlhtional niojvratnes throughout the Upper Midwest.

O ne sm 1, NU mw u sn-significantly reduce greenhouse gas emissions.

The Evergreen" program not only benefits the environment, it enhances the image and com-pe+itive position of Dairyland's distribution O ;8"F"*" cooperatives. By providing this new service, c per tives strengthen their relationships with ane . .. a .e .,i,...

" e. r .e . , er.- see,, the many customers interested in renewoble m.y oveh .., all . energy sources.

... p

... . on. . . 3 ,.ee 9 n

,,,,,,,,,,,,, w .m c.ec. o - w j$ k

o at w e ir u aw uw yy Meir new pn>Joos JevelopeJ and wucewfully launtheJ Junng 1997 include the

. Scone llomc program, a fanuly of Msrge supprewit in pnklucts ladored to pninde nerylo recognized the need to create protectwe siih'*u"w for the four most common home and fann apphcations innovative new methods to educate mem-

" ' " " " " "" " " " P '" ^"" ""

bers and non-members obout the advan.

thniuchout the U.S. to provide a comprehen We array of powet quahty proJoos tages of electric cooperatives. New chal-anJ scri ac t. We are esitcially prouJ ut our strong relationslup with Best l'wer, lenges of a chang.ing endustry and new Nu edah, Wn., a untomer of OalJale Electnc G operatn e anJ a leadine provider types of emerging competition require new of unnnenuptible p ourr scruce etpupment.

strateg.ies and tools.

" """"""'*" *"'""""""4"9""*""*M" "'""# # P"""

Based on the most extensive research of

""""" "*'""I*"*""" "**" "" # * " ""'

r.ooperative members ever conducted, region to become focused on emergmg aimpetinve and industry relateJ nsues. -

Do.iryland teamed w.it h 20 other generation

'" " " "'"N " " """#'""' ** " " "" """" '""""*'

ond tron mission cooperatives and with the symposium hell m frbruary 1991 htyor customer forums sut h as the symp nium .

National Ruf al Electn.c Coopevotive

. anJ annual meeting are augmentcJ by workshops, newsletten, magaanes and udeos.

Association (NRECA) to develop a unify.ing .

biond identity for leading electric coopero-tives or_ross the United States. Branding is emerging as on increasingly widespread COMM 87ME N T TO Y H E COMMU N 8YY strategy as the prospect of setoil electric I id unun M wo'k wnh ns memivo md unmmen m be leaJers in utility competition has emerged. the 6ue n LWeion of the cleunc untm mJuan m pniteo the imam 4

Touchstone Energy is a unifying co-brand of all(onsuuer (lawes by supportmg industry th mues that wdl result m lower which captures the spirit of service of the cosh for all ennunnen looding electric distribution cooperatives Athieune some of the lowest elecinc generanon costs m the Upper hhducst nationwide. Touchstone Energy will be uti-region and pmndmg tomp note w holesale rates to our u holesale customers (on-

. lized to educate consumers on the superior, .

tmue to be one of 11uryland's best coninbutions to the economy of the region.

customer-oriented responsiveness of their Ilursland.s coinounc developu ent pnigrams and watt cywrine help ns Jntnbunon local cooperative. The Touchstone Energy oulwrain es attract new busmewes and expand othen m rural o stumunities initiative recognizes that while each distrib- .

throughout the scrut e area. These pnyeos help to nuprove the qualas of hte of ution cooperative is relatively small, when omsumen anJ the econonuc and soaal well Irmg of the region.

electric cooperatives work together they i

con be os powerful as any competitor, in 1997, the Ibir3 and l luarJ of Juemon appniveJ 20 eumomic Development pnyeos proviJing neady $1.4 nulhon of low-interest,10-year financme whith w di This new notional communication partner-promote economic growth throughout the senite area. Smce 1990,Ilur3 1anJ he.

ship is just one of the numerous initiatives pmsiJed 108 of these etononne development loans totahng approximartly $6, nub which Dairyland utilizes to effectively com-hon. In addition, nonomic desclopment speaahsis a sntcJ member o operatnes municate with its members, customers and wnh a number of other Development pnyeco anJ m.yor new customer opponuni-potential customers.

nes m their scruce alcas.

Consntent wnh its values to provide good ennronmental stewardslup, IbrylanJ li.n JcimiintratcJ its oincem fiir ennr inmental protectairl sii inany w;iyt s

m With in er $50 nulhon mvested in gullution control eqmpment,11ur3 1and nergy p -

Ouc 1 stone rem.uns aimnuneJ m mac+ing the etiiaeno of n, operations, whac wnciv usme tour [Urtl)s resieurte%

)

k db k.g[,@Ng a o >3( x y - - au [fy , h=

l l

l

' y a y r s. a s c o rs l

ie telescope is on instrument that mognifies the image of distant I objects.

l l

l Looking ahead, it is apparent that

! many challenges and opportunities owoit us os we chart a new course c......e.,-i..i. .!

ey,i..i .i... 6. j into the future. By implementing 6mye.,-i..a ...,

innovative new capabilities,

,6. mi s ippisis..,

6i.6 6.ra . w improving eff.iciencies

.i....s.... ,.,,es... l and increas-

'a 'h* *-kv'*"d l ing our flexibility, Dairyland and its s v..... .

l member cooperatives have

! brought the opportunities - pre-sent and distant - into focus.

} 11unland oirrates in coal-fued unns u nh hmer emissions than federal and j state cintinitunellt.nl st.indtrds ret]ture, %})ile pniviJing ciistoiners with reliable j iniJ cinugietitis ely pricetl cricrey. l 1

I 11onland controh sulfur dioxide enussions ugruficantly klow the level auth+ l n:cJ by the Entuonmental Proteuion Agency. In 1997,1).unland atlueveJ a sulfur dioxide enussions rate of 0.92 pionJs irr nuthon litu wluth is the lowest  !

eser for us faabnes. l l

Itorn svi6 cnt of the coal ash pniJuced by 1).unlanJ's three wal-fircJ generanns j e t.nions was ret p led m 1997. The ash is oscJ as a strength enhancer in inany l OillcIcIe af iielIitins an als a sll isIIInic fLir cnis le linesI41ne in nld lul inn pnycos. This means 1).unland n landfilhng less a h, proteuing the environ- j ment, rcJuang msts and Jela>ing the need for alhtional lanJfdl capacny f ar- l t )ct' intLI t le LiIlue.

l All remanung ICIHpolythionn.ncJ bipheml) upacitors in the liainland sys-  !

tem have been reared fnim senice and sent for pniper doposal.1)ainland was l wmnutted to phasing out all PC11 capacnors b31998, and is proud that tius goal  !

bas !MTn lucI a} lead of stkletlule. k).linlathi Gintmues to rep! ace geller.ifing Sta' tion ICitfilled transformed. The Genoa anJ Ilambeau snes are PCB free. l l

I)ainland staff wntinue to work w nh the Electric Power Researth Insutute to j study the effet ts of mercury enussions from wal-fircJ plants. This rescart h. wluth j I).unland supports jouuly wnh the other Wnconsm electric unknes, is mnducted l by the Wnconsm lieparnuent of Natural Resources on northern Wnconsin lakes. l....

• 88 8' - *

• 8' 8- 8' In early 1998, Danyland's environmental Lduratory was honored as RegntercJ Liboraiory of the Year by the State of Waconsm Department of Natural Appropn.otely, Earth Day 1997 marked Resoortes (DNR). The DNR commenJeJ D.nolanJ's envuonmental sample another significant m.lestone i a.n Da.iryland,s analysh program noting that high quahty data is a prionty for both the agency environmental stewordsh.ip efforts. On that day, peregrine folcons occupied the nest box of Doiryland's Almo generating site. The nest Dair31and is proud of as hydro-electnc generation facihty anJ recreational box was oloced as a joint effori between opgertunnies it provides to the pul hc. The 21 MW Flambeau Station at Doiryland and the Raptor Resource Project Lidysmnh. Wn., continues (for 47 3 cars) to be an effuient low cost faahty.

from Ridgeway, lowo. Doiryland is pleased to Dair31anJ proviJes a 2,000-acre resenuir at the Flambeau liydroelectnc Station.

report the two birds nesting in this box, In pannership with Rust Giunty, Wo., Dmniand jointly mmntains five recre-named Alma and Nelson, produced three anon areas on the reservoir.

• hoolthy offspring..

3 Em ironmental momtonng is currently unJerway as a Ley part of The young successfully flew the rehcensma pnwess of Dair31 anJ's Flambeau Hydniclecinc

% / St.uion. To renew the stanonk hcense, w hich expires in February from the nest and Icomed i

i 2001. DainlanJ stati have conducteJ studies and prepared regerts to hunt on their own near t y for the Federal Energy Regulatory Ginunisuon (FEC). The the plant site. Another pair -f .

• Jraf t hcense applicanon wJI be fded wnh FERC in Arn! 19PS of falcons nested at .

anJ the (mal in January 1999 Dairyland's Genoo #3 s r}

Station, however they did ~ bM Ue- m eu.d4 not produce chicks. Peregnne falcons have been on the Wisconsin Endangered and F I N A N C I A L M I O M L I O M T S Threatened Species List since 1975. The two Dair31and has reJuted as wholesale rate for as member cooperatives five omes nesting pair of Alma and Genoa are a real 4;g

9q g success story. The falcons returned to both Power sales

,3 I  ; ;9g g4 g fikun.h of MWM sites .in the Spring of 1998 ond it is hoped 1997, Dair31anJ achies ed an actual ,'g,g .

they will nest at both sites onnually.

wholesale taic of b., cents per Ldo-watt-hour (LWh) which was lower Many state and federal agencies as well as dm b4wd Tk 1993 b4.W s,000-environmental groups have been worliing to 4,  ; ,

, g; g ,

preserve or restore remnant prairies and g, g ,

4 g, native prairie grosses in western Wisconsin 4,000-gg 3 f-ond southeastern Minnesota. Dairyland is others transnussion, odminhtrative and gen-assisting in this environmental effort by }

st #

g E

eral, sales anJ m.irken.ng, serme g ,. cp maintaining its closed ash disposal site of development, financmg and inve- a Genoa, Wis., as a natural proirie. The site mober nn Q n in dinchnin nm a "" "

has been tevegetoted with about 60 species is extremely competitn e luth in the 2,000-of native prairie plants. In the spring of region and nationwide.

1998, Doiryland worked with the Prairie Enthusiasts to conduct a troining workshop t,000 on buming proirie gross, which is essential

to prairie gross management, g.. ... . . .. .. .

1993 1994 1995 1996 1997

l l

l 11on tanJi total operanne revenues increascJ 1.2 percent to $1m nulhon m j 1997 M*ves*** D IIar 1997. Revenues from energy sales to 1).unlanJi Claw A memler cuiperanves l (1).un tandi owners) JeocascJ shchtly in 1997 to $124.1 nuthon. Revenues fnnn j wh,lesale sales inucawd 1.5 percent to $55 nulhun. l l  :

11orylanJi total clet tric sales JetreascJ 2 6 pcrtent to j 1 5.9 bdhon kWh. Eletinc sales to Class A memlvrs were {

i 3.4 bdhon LWh. a shght inacase over 1996 sales. Clau l e i

• A sales mnstitute 57 percent of total encrey sales Sales j to t : law C, I) & E members decreased shghtly to 2 6 bil-

{

hon LWh m IW7.

l l

l Total margms, the difference irtu een revenues and expenses,inurased to $4.2 nulhon m 1997 from $2 nul- l

. Class Other Class A c.a re c. m..es.r, C, D & I 4.40%

lion m 199h llamlandi margms cononne to be posinve- l Sales amaze.., o*****' Seles 64.01%

m... ,, es .... a ly m.tluentcJ ($3.4 nulhon) by the income fnim n' f 17.35%

ad.d teer es.. mvesonent pnigram.1)airylandi marums are gooJ new$ f 1224%

for our mcmler u operatnes luause, as owners, the margms are returncJ in the tonn of patronage capital thudends. l l

The mst of fuel burncJ, the largest smule annual expense item at 11.urgland, y,,7 ,,,,,,

amounicJ to $59.7 mdl on or 11.7 (ents of cath revenue Jollar m 1997.  ;

l).unland took Jehvery of 2.1 nulhon ions of mal in IC fnnu nunes m f

Wyonung and !!hnois

=-

l l

l  %^

ily changmg us transportation arrangements and ialma advantage of more l f avorable coal supply optiom,1).ur31and has Iren succewful m rcJut ing Jchvered l 0

uul msts in nine of the last 10 years. As noted earher m tim reiun,11urylandi j muumnuent to the envuonment and us members is refleacJ m its fuel supply j strategies whith int.ludes not only selecmg low-mst sources, but also blenJmg l I

vanous n pes of mal to at hieve favorable econonne and ennroninental goals l These etions have directly lowcred msis, contnbunng to wholesale raic Jeacaws basscJ on to I).unland s memlvrt l

Sinte 1994,liainland has repnted 42 of us 50 Federal Emancing Bank (FFB) l advances totahne $176,000,000. The ettetove interest rate for the 42 repnceJ  ! las :

f ,,,,,,,, ,,,,,

aJvant es Jeacased in un 811 to 619. The estimated net present value of the l

& weges Perchased 15.80 % FI ,a Power interest saungs over the remaisung hfe of the IFB Advances is $27,400,000. 47.57%

4 C 4.42% 29.96%

Dainlandi fmanaal credennah are euclient as reatfirmed by Standard & j l'oori AA lund ratmg. Whde the financial rannes of many orher unhties has e l Iren Jowngraded Jue to the volanhty of the industry, liainland remains one of l the only two(WTs m the country wah a AA lunJ rating. l l

The acunnpanying msen luchhghts the 1997 audacJ hnancial statements of j llunlandi operations. l l

l l

p A I N Y L A N O P O W E R C O O P E R A 7 I V E S Y S T E M M A P P

MINNESOTA A.

o e, 94 re ,3 7.%. n. ,, 39

/-

"W iQ .

y; Clau 11 Member.

AJann-Gilumha Electne G = rerarn e/Enend>her, Wn.

• [ " o WISCONSIN Central honsm Electnc G = rnan-/loia, Wn (rsC%# % Y" n wnto Eletinc G=peranvel N "'" IdIk T S-

['u4-,,,p ft,1

=

( O * -,

Rot L Giunty Electnc G= prante

_ 90 ,a,7p" Av,.uanon/Janoville, Wn.

J k?

e,"u la O'i ].

- 'Ap Nue e

we s" 4 C~ Nww!J ' ,,,,

G & T Cooperatives 4 7 ~L 94j Claw C Members IOWA 4"*'

9o >

"""kt Mlun Ira Iou er G k yrLit n e, ' "'""-

( incJGranJ Forks, N.I'.

i i '

, i UnneJ Power Awcanon/

35, ,

1 Elk Rnrr, Mmn.

f i lLLINOIS- ,

i * + i /  ! Dairyland Facilities 9 frdcares facday Lean.nt Member Distribution 14. Poll-Ibrnett Elaint G=1rratnel 11eadquaners/La Crov.c Wn.

Cooperatives Cenruna Alma Generanng Sac

15. Pik e i la inc G = peratn c, In'l Flamira i I hdro Stanon inJuates Sluled Sente Arcas Plully, oi.noa cenuanne siie lei. Rahland Elatnc G=peranvel Claw A Members r b=qvratnel Municipal Customers Wneinnm IL St I 1, Ibrnin Electne G=gerainr/Ibnon iblJuin j,dcares Mmuepd Cusnnnen 2 Ibyfield Elecinc G=pranve,Inc./ 1is T.nlor ilet tnc G=gwrarnc/

Inni River Medford Clau D Memtwrs 1 Ib0alo Elainc Gxperative/ Alma It Tremivaleau Elatnt G=pratnc/ a. On of Arc.sha, Wis.

4. Cluppewa Valley Electnc Art adia h Village of Arnle, Wn.

20. Vernon Electnc G=reratne/Westb> c- Village of Cashion, Wn.

Gssieratn e/Gwnell

5. Clark Electne Gwerativel J. Cay siCumberland. Wn.

GnynwonJ fou u . Oty of Elroy, Wn-

6. CrawforJ Elninc Oxperanvel EI"'"' f. Gty of Fennimore, Wn.

gay, y,jg 2 l AIId*"k""'CI^'"."/lbstville G peratne, Inc u Cut of Foresi Cuy, Iowa

7. Ibnn Gunty Electnc G=peratnel 22. Ilauteve Tn Counn Eintn' h. Grow Grv. Minn.*

pc3,monic U " PT 3'"'C/O '

i. City of inJegyndera e,6

8. Eau Claire Elecenc G=grranvel :L licartlanJ Power G=rerative i. Ory of La f arge,4 paji on.g Tluimmn/St. Ansgar L. Cny of Late Milk toua

9. Grant.Lafay-tte Electnc I~ C"Y "' I h '" M " * '

Mmnewra G= gerarn e/Lancaster 24 Frechwn.Mouer G=peranve '" '" Y "N'""'"'k"'

10. J.a kun Electnc G=gerativel s.n.x-gAig.,, y n. Mill. ige of Merrillan, I"*Kis" .

Illak Rnrr Falb o- ( av of New Enhin, W n.

25 pny c, a,p.nyn.c sen,cesf d I1. Jump River Liectric Gaveranve, Ra hester P' I;:"Y "'b" I".*M mn.'

inc./Ladysmith & Tn-Giunty Elatnc G=pratnel 4 ( V "' N"'htorJ r L;"ity of St. Charle>, Minn.*

12. OakJale Electnc Guveranvel g ,j g ,,3 OakJale 5. Village of Viola, Wn.

IL Pierce-Perm Eintnc Oxperanve/ llimon fil.sworth 27. Jo-Carroll Elatnc G=prarne,

• GEN-SYS Energy customers Inc /Elcabeth

N AV I O .* T I N O FOR OUR FUTURE 1

M P ,

4

-n mew 4 s

D A B St Y L A N D P O W ESt C O O P R R A 7 8 V E 1997 FBN ANCI AL REPORT

' ~

f .

d TT j$ 'l,

~

9 I *

-m st:,

-J- a M b-9g -

am; 6 mm- ,4 .

, L ~

y........ - __ __... - - ._--.- .-. ------- ----.--- - -

7 -

• l l

a eP o a v o F m a N a o a m e N v a a s P o N. s s a e ga vv j Management is.responuble for the preparanon and integnty of the hnancial statements and reprewntations m the annual j sgort. Marcgement uses the best judeement and resources to ensure that such siatementa present fairly the 6nareial posi- j tions, resuhs of operanons and cash flow of Dainland Power Guperative. .  ;

IhntanJ m.nntams a system of intemal controls whic h is designed to provide reasonable assurance e, hat transacnons ire temrdeJ in acwrdam e wah management's authon ation, that hnancial statements are PreparcJ in confonnity wah gene. l ally au.epted accounting punaples apphed on a cornistera basis and that awers are safeguarded.  ;

a .

The h >ard of direttors,ihn> ugh an Auda Q>mmmee, ho respormbihty for detennirung that mana;ement ful6lh as j resionsibJmes for preparanon of 6nancial statementi and (mancial mnenil of operations. The Authe Conuninee meets j fcgularly with management, Dainland's internal au'Joor and thg Goperanvei mdependeMt pubhc accountants to Jacuss s suernal connol, haancial reponing and audamg mauers. ,

- DAIRYLANDlOWER COOPERATIVE l La Crowr, Th(OnAin -

[thruary 27,19W

• f R S P oR Y oF sN D E P R N D E N 7 P U's L e 'C A C C oU N Y A N 7 s To the Members and floard of Dire (tors of Dainland Power Onperatne:

l We have audited the accompans mg consohdateJ balante sheets of Dainland Power G uperative (a Wnconsin coopera- ,

tive) and Subsidianes as of Ikcember R 1997 and 1906, and the related mnsohdated i.tatements of res enues, expenses  ;

and patronage capaal and cash flows for the years then ended. Thise consohdated (mancial statements are the responsibih-  !

iy of ehe Goperativei management. Our responubday is to express an opauon on these wn ohdated financial statemerus  !

l hascJ on our aulas.

- l We wnJuard our audas in accordance wah generally accericJ audairig standards and the stanJarJ, apphcable to finan- l cial audas containcJ m Gwemmeur Audamg St.md.nJs (1994 Revisionh issued by the Comptroller Gene ral of the United ]

States. Those standards req <me that we plan anJ perform the auda to obt4un reasonaHe assurance alour whether the i Tin.uu.ial statements air free of matenal misstatement. An audit mt1.Jes examining, on a test basis, evidente supponmg j the amounts and Jmlosures m the fmanual statements. An auda aho incluJes assessing the acmunting prinoples used l

• and sigru6 cant estunates maJe by management, as well as evaluatmg the overall 6nancial stan ment presentanon. We  !

lwhere that our andas pmvide a teasonable basis for our opinion.  ;

In our opmion, the mnsohdated hoanaal statements referred to aleve present f,utly, m all matenal respetts, the hnanaal  :

imsaion of Dainlanti Power Quperative and Subsidianes as of ikember 31,1997 and 1996, and the resuhs of their oper-  :

i l ations and their cash flows for the 3 ears then ended in confomury wah gen e~ rally accepted accounung pnnaples. j

. l In accotJant e wah Gwennnent Atdnng SundarJs, we have aho issueJ our 'eport, Jared February 27,1998, on our consh

'l eration of the Guperatis c's nuernal control over fmanaal regurtmg and our tests of as comphance with certain pnn mons  :-

of 1.avs, regulations, wntracts and grantt  :

ARTIR'R ANDERSEN LLP L--.

Ma,neapoln, Minnesota. .

February 27,1998 ,

Y'  %

j y$(

'u 1; k-r v -

n

e s l l

c o w s o s. e o a v s o a a s. a a e a a a s,e r s  :

Assets- Decemler 31  ;

1997 1996 (In Thousands)  !

ELECTRIC PLANT:  !

• $ 612,308 $ 602,146 Plant and equipment, at original cost. ,

[

L.ea- Au umulated Jerreci'a non. (303,690) (291,893)  :

308,618 310.253  !

f Construction work m progress . , , ... 24,019 10,711 Total electric plant , , 332,637 320,964.  :

OTHER ASSETS: l MarLetable securitie3 52,277- 52,435' ,

Econonuc development loans and other investments. I1,503 9,822 investments m capital term certificates of National Rural ,

Utihties Coopetanve Finance Corporation . 9.176 9,;856  :

Pollution Control ibnd pmceeds on deposit wnh trustee - 2,291' Deferred charges 7,556 14,223 Nutlear decommissioning trust 54,865 44 59_2 ,

Tbtal other assets . I35,377 133,219  :

CURRENT ASSETS: r l Cash and (ash equn alents . 950 1,115 Accounts receival le.

Energy sales . 15,029 16,336 Oiher 5.290 2.S94 inventones, at averade cost-Fossil fuels 18.498- 29,629 ,

, Maienals and supphes . - 9 788 9 220  :

Prepaid expenses . ,

990 b35 ,

Tbtal cunent assets 50.545 '60,024 ,

I 5 518.559 5 514.212 f

5 l

. l l

• 4 He aaompany.nc notes are an integral part of these conwh4ncJ balance sherrs.

g&% .

ghh k

h - . . . . - - . . - - --

e o n s o L e o A Y s o a A L A N C E 5 H E 5 7, 5 Capitalization and Liabilities Deceriiber 31 1997 . 1996 (In Thousands) i CAPITALIZATION: ,

hiernber anJ patron equities.

hienderslap feo. . $ $ 11

. 12

. Pat ron.,ge vpital - 58,088 87.184 -

Net unrt alecJ gain on marketable secontic>.

• 757 148 Total merniwr and patron eqtnties 88.857 87.343 Long-ictm obligations. , 318.638 334.188 Total capitah:ation . . 407 495 421,531 ESTIMATED DECOMMISSIONING LI AlilLITIES . .

54,865 44,759 COMMITMENTS AND(XWTINGENCIES (Note 7)

CURRENT LIAltiLITIES:

Current inatunnes of long.tenn obbeations . 12,778 12.178 22,000 16,000 Shon-tenn lun owmus .

Advances from inember uoperatives . . 3.241 1,656 Accounts payable . 6,737 7834 Au rocJ expenses-Payroll and vacatui pay. 5,707 5,264

^

Taxes 1,941 2.202

^ interest. 872 767 Other 2.923 1.921

, Total turrent habilities . ___56.199 ' 4L.922_ .

5 518.559 $ 514.212, r

a The accompan3 ing notes are an mtegral part of these consohdated balance sheets. ,

. g=.,,

f: , A.

[V g- .- T s,? ,. Ag

^

..- - --.. . -- - -.- -- - .--- . - - - . -- ---- -- ~- ---- --- - - - - - --- - - --- --- ----

a C O N S O L 8 p AT E D STATEMENTS OF REVENUES, EXPENSES s. P A T R O N A G E CAP 8TAL

's For the Year EndcJ December 31

_1997 'l996 (In Thou. sands) .

OPERATING llEVENUES: '

Sales of electric energy.

i 179,976 $ 182,282 -

Other , H,292 3,807 Total operatmg revenues . 188,268 186.0S9 OPERATING EXPENSES: .

Fuel . .r. 59,676 -

47,235 Punhased and interthangcJ power 29,875 45,295 Other operanne expenses. 36.264 34,608" ,

Maintenant e 12,173 13,281 Depict unon and amorti:ation. 26,157 21,970 Taxes, other than income. 7,960 7,856 Total operat mg expenses . ,

172,105 170,24,5 Operanng margin irfore interest and other JeJactions . 16,163 15,844 i INTEllEST AND OTilER DEDUCTIONS (INCOME):

Interest 22,546 20,S44 l

Or her , net (2 58_) (245)

T it al interest an., other JcJut nons . 22,258 20,599 Operanng Jc6 cit . (6,125) (4,755)

NONOl'EliATING MAftGIN, pnncipally investment income 10,369 6,774 Net margm .s. 4,243 2,019 PATitON AGE CAPITAL, begmning of year .- 67,184 90.262

-lleurement of capital cu<dits ( 3,3 39) ' (5,093 l'ATitON AGE cal'IldL, end of year, inc luJme margins awinnable of $4,243 and $2,019. S SM 05S' $ 87,184' 0

9

' e e

The ac companying notes are an mtegral part of these consohJated balance sheets.

hcT7Ps:gf

- .. u }

+

.--... -----.- -------n--- ------+----------+---------- *- e- ---------- ---- ~~~-----------~~--~~~~~-~~ i l

l C O M S O L O'D A 7 8 p S T A T E A3 E N 7 S O F" C A S H F L O W S

- l For the Year Ended Decernber 31 l 1997 1996 l

~

(In Thousands) j OPEl(ATING ACTIVITIES: , j Net margm . $ 4,243 $ 2,019  :

Adjustments to reconcde net margin to net cash proviJcJ by , l

. operating ac tivines- l Depreciation and amorn:ation . 26,157 21,970 l

956 ~ 1,727 Other. . .

Changes in operating elements:

Accounts receivaHe (1,069) (2,503) ' -

l (4,169)

• 10,563 Inventories . ,  :

Prepaid expenses. (155) 227 Accounts payable . (1,197) (1,558)  :

Accr$cd expenses .

1,289 ( 2,'639) l Net cash provided by operating acovities. 40,767 15,074 l

INVESTING ACTIVITIES:

Electnc plant aJJitions. (27,6S8) (18,266)  !

(9,089) (17,429) j -

Port hase of investments . ,

Sale of invespnenis. ,

11,147 22,202 l Advances to miclear decommissioning trest .

(8,054) '5,578) {

Pnneeds from sale of plant . .s. - 3,670 l

DefencJ charges, net 3,456 (17,371)  ;

Net cash uscJ in investing activities. (30,228) (32,772) l l

, FINANCING ACTIVITIES: .

Short tenn borrowings, net . 6,000 5,500 l Ibrrowings under long,crm obligation 3 23,605 34,372  !

iterayments of long term obbeations -

, (38,555) (16,988) l lletiieiuent of capital crethis.. ,

(3,339) (5,097) l Advances from (to) manber cooperatives. 1,585 (1,067) l Net cash provideJ by (useJ in) financing activities (10,704) 16,720 l l

Net decrease in cash anJ cash equivalents . (165) (978)  !

l l CASH 'AND CASil EQUIVALENTS:  !

Ikgmuing'of year 1,)15 2,093 j e

End of 3car . $ 950 $ 1.115 l l

SUPPLEMENTAL CASil FLOW INFORM ATION:  !

Cash paid for inierest, net of amounts capitali:cJ . .$ 22.441 $ 24.312 l _

k f K,

e l

• N O T S S T O C O N S O L 0 D A Y 5 D F 0 N A N C 8 A L S YA Y S A4 E N 7 S l

! NOTR 9. No. ewe. 9 Sweise.se essee8 Sesenesseeney bh onv lan l .e se .e eses.a.. , A... .es. , e .sa.s.o.

. .Ilm G..n ratire n gun vally rsemp from inh rat anJ w. aar l mu.mc tau s and u unJmrly, no pn.uuon 1.n ua h taxes n l n airJnl in the u.nsohdoniinuns ul uatrna no

( Nancaron and Dwarvu 4 kur) lib .w ( i k bl. j.t't;li f s f ki le k I. .lit I.liin i is .dk ekn lih '

l gewr.nn.n mo! tr m.anisuon t oopri.u nc orgain:nl under the Propeny Annons '

laws of Wn.omm and Mmnnoia 11w coopo.o n t, a host U"' '"" "I "'" w ah ;uul kurnin'nn of uinn of nopeni y 6n p mural off a n air 1.n . uni m hu,nsm. en.nics w hohwh l """""""I i in int sava e to Chm A im ud.cn nicaeni m ihr rev I ute d """f""I "d h "'" "!"I I " " "I "' "" "IP"I'" d "' ' h.ugal to dn -

P"P " Y ""I' '"bI l of iin on n> to nwnils u,nsonwn b.ont m h onsm. '"'O"d""""""

l l

Muninoia, lowa. Illn.on and Ma locan and pouJn e in tra -"' "'I"'"'w Jnpoud of, plus tonos al i ilsn. kw ubm n l .a ! othe rwru; n to (l.m C. !) .nul l nwmbi n d '" P d ' " d" """ 'l""UG '"' ""'" h ' P 'I " "' I"" " ' " ~

l orineni to ionnn non u ah n Jnun ictnorwnn of empeny -

l 1 hr .u u.unime en ouh of tlw (inpo.ane arr mamtanini m umn M.una nant e .md n p ut o sa an I erplat rnwni an.1 ai u ndmm e u nh the umform % . tem of ,u u nan pnoJ ni rentual of nana m nn of prop n> .no 6 h ornl to on ranons.

l l'y the i nloal liwrgy 1(irolaton ( k.nmusw.o e aJ.rted tw l the f(un! Unhon 5cru e (IM M tln ('< =.poanu's punt i

] pJ n gulatory acong l >cpco, gun l 1 tin nt e January 1. UN6. ilw Gion rain r entoni nuo an Depu unon n pos oh J l au J on ilw r.u.ncia hne nwthat at niegiaint genuanon allunt e agrn nwni u nh ( '."p atn r r.on ulnsh arr Jeugm J to .unoinx the ongnul u.st of pop-

, Poc.o (CP) llos aartmeni meco.on the poun gencianon non ou, ihru rsonutni ua tul In n and milu.h, a pouuon i apahdain of ihe ( inperain c and ( P. Ira.hng io nu irmnl to the o nt of irmm mg .mJ Jnomonsuonme the pninlon

< fra wnq of hoih enimn' pium gennanon nurun and 'Ilm pouuon f pr ih pn unon .nmaerJ 4 % an.1 i n of l irJtu nl op ranonal u nt t 1. flu me Noronho 1. I'N7 ilos Jenn uhlr phno l,alani n n. UN7 and itN6.

] l alb.nu r wa, legally organerJ to 6 ome (irn Sn I in try

((ico 'sp) an,I to tuni non in an roucy m.ul enne oin nn..t l i son llw Coop 1anu .a (ounn for us 50% ou nctslop nuo- gy . p, f una i Iwd burgorum non

. s u m (;rn Sp un lo the npot, nmibod unh the

, ( ~oop ranu's sh.nc of(;<n Sp opaanne inohs nu bicJ m Allow.nu r toi tunJs mnl duong wounn t on icporna ihr

pun has. J anJ narn h.utgol piuo m ihr an ompun me ion iosi of ruunal and mn mal ton h mni tor t omnu, non pun l anhdocJ u,ntna nn of imnun, orun and ranonage imo and n unoha J # a comp nu ni of cln oa i tant and Ig l venah un h ammna u.n not man nal m i N7 Ihe applune a r.ac (n 4"o m UN7 an i n W m 1WM to o nam l t imp uine n ol bgaicJ to pouJe up to $5 0 nothon anno ein on plant adhuom unJet wnunn ton l he 'an mur a of l ally to hnal(icn Se op i.a sm, d on nuny. un h alh.u anu n nu luJed m nanni and otha Jnim nons a appounuird $77l AY m PN7 anJ $674 AY m UN6

. launne IW6, the (len taen e u toir ott in un. unent of l $ 1651W m dw hh w ah to Pmin t. u ha h had lun oicaiu:rd l h 1 i onhtws m niahhsh a sur eo quir spent innIcar forl

(.anh anJ ( ,aa l .iun aknn .

. i an.1 un e uc.l. alonc u oh wine of the s.une unhun. $4i.s7.M3 g l

m Pnvair Iin l Storage I i C (PIM toi the umc purp nc w.nh rqun alenn t.n lu.h all hichly h.i.nJ un nmwnn u nh

. Thi # 'non rain e un nini an ad hoonal S40nAY m iW7 m ongmal nuinnnn of daer n oiule. ni h s< (. ash an I onh M %nh ihr unninwns nabird m oJwi assen in ihr equn ahan mouu pnnunis of wnnnen ul pap 1. van J ai

at companpog wnsa1.ucJ hahun c shn n. mA t, nini h appmunu,n u.u Tiw(implainrtleuhn un,un unh anJ < ash ovan alenn + nu rtuwnn w hen ihn

' rrhm io oust tuna eali for long tenn purn.sn (sn Non D Punoph of Conmhlnon ,

l T be nunohdaini hnanual cartnwnn un lule ihr .u wuros I""'"'#""

of the Genlarne anJ ns wholh ownrJ mhulurn. (:unn l Trh wnnuuna anum, ha . anJ (ion ia i uri ru h. Int . All ue- Imnonenn m nu,ktalle Jols and npun snunonila sihed l mhonit mien.unrant lukuu n and u.nsu nom hn r bn n .n he hl m nunna, are n p nnl .a amoinent wu. sn unon l e lumn.drJ m wnsohl mon t hv,uhnl e n Ahng are icp inni si tan s alur, w n h uintah:rJ l g.nns and losw nu bh J m nonopaanne nuran, anJ sn unon

. t knuhcJ as .n nlable fonsalc .nr ren.ncJ at tan salue, u nh

~ '

unreahwJ gams and lossn tu luJul f nim nung.en and rep uted

, as a wpu,ac o nnnnwns of nwnJ.cr and panon npunn.

p' C- Dg. $4 p n

_ _ . . ~ . __. .._. . _ . . . . .. _____ - ._ . _ _ _ . . . - .... .. ._ ..__ .. _ ___ . . ...... ...._ .

RmLwy Asus L:se of Esumaws The Ox perative's accotmting pibcies anJ the acc unpany The preparanon of(mucial sutements m confmmry with mg unnohJatcJ financial atatements confonn to generally generally accepicJ accounnng pnnoples reqmres manage-aucpted auumune pnnciples appbcable to electric u.oper- ment to male esumates and assumpmns that affect the anves m anordance with the pninsionu f Statement of repirted amounts of assets and luhlines and disclosures of linanaal Acwunone Standards (SFAS) Na 71, connngent assets and hahhnen at the date of the finanual "Accountmg for the Effects of Certam Tyra, of Regulanon." statements anJ the reportcJ amounts of revenues and expens-In the event that a permin of the Cooperative's operatons is es Junne the returong perial Ultimate results could differ

, no longer subject to the pronsmns of SrAS Na 71 as a from those esumates.

result of the effects of competnion, the Ox peranve muld he requucJ to detenmne any impaument to assets and wate down the aswis to their fair value- RcJamfacanoeu s Durme 1996, the Ox.peranvc entered mto a wrilement Q rtam 1996 amounts base been reclassified to conform to aperment wnh one of nunal supphers to huy nut the the 1997 presentanon. These reclassif cations had no effect rem.under of as wntract by maling a lump 4um payment in on net maram or patronage capital as ptenously reported.

liet ember 1996 m fulfdl thi, obhgation. In May 1996, the 4 xincianve also mlJ a nonoperaung coal fued eleuric gen-eranne plant to an unrelated thaJ parts The gam recon- wo n m.sa.rh.e.as. s....m...

.m:cJ fr.,,m the sale of the plant aH the amount of the coal Invesunents dassified as aradable-foi-s.de, includmg the contrxt settiemenn have been JefencJ and are bemg rerov.

n(x lear decomnussionmg trust, at December 31 mclude the cred m scrute rates oser ilure years.

followmg (in thousandsh

• in 1996. the Ox peranve's hmJ of Jueuors authon:cJ a plan whereby all regulainry assets or hahhnes reflectcJ as IW7 W Fair fwr defened tharges or creJas were aunmutated anJ are to be W "" ',"" "" ' , "

recovereJ m wrnte rares over a penod no longer th m three yec,rs. Accordmgh? periously deferred charges .unsnnng '"h d"d '"* N"'utenn52,378 . 5 (W $ (W48,22}

51,924

$ m24s,32i qs gownunent m unnes pnuunly of wal contract settlernents. Jebt repnung penal, 24.wi 25,148 C'quore bona 26

• 64 26.442 on anJ earl) retirernent awts totahne $24,764,000 were rec-Gimnwinanth. 21.517 17.059 17.7 W 11 0 %

ogtu:cd as extraotJmary expense. Defened ocJn, conusung 5 i9 %m ,

prunardy of advantcJ iunsmi% ion payments and the gain from the sale of plant totaling $24,764.000 were recogtu:cd as extraorJitur3 mtome Remanung defericJ charges of Since the Cooperative intends to aJiust rates m the future to

$5 25 3,000 are bemg amoru:ed to expense wnh apprornate reflect ihanun m the marLei value of mvestments held in its s

nsoetuhon m :crute res ento m 1998 and 1999. The nutlear Jewmnu+ionmg trust, unreah:eJ gams of $6,397,000 cxtraorJmary nems haJ no impact on the staternent of rev- and $t622.000 at December 31,1997 anJ 1996, on these enun, exp nses anJ patronage cantal and, theretoie, are not unesnuents are mduJed m estunatcJ Jewmnusuotung shown on that statemeni, hahhne3. ,

SI AS Na 121,"AuounorIg for the impunnent of I one he unirauual matunties of marketable Jrbt wcunnes,

• d u ed Asseis and for Long Lived Awets to Ik Dnn,scJ Of," ulut h mdade U.S. -amernment secunnes and corp > rate wluch became etteune for 1996, estabbshes aemunnng hma, at Decanber 31,1997, were as follow s (in :housana)-

smnlua for the recogmnon of unpunnent of lonehved " '

een. 51-AS Na 121 also requirn that recul nory awers h. y o ,q w hn h are no loncer pohable of rewvery through future rev- g g y,; gy ,, $ ggg; 3 gg enon be (harged to earntngs. AJoption of th( proviuons of N-en m- r ihme (we we 29J12 M016 SEAS Na 121 Jd not h,n e a inaten J eHect on ihe Iwe aher tne yean throuuh icn yun 25.ws 2 s.2e Cooperat n e s inuncul pwit on or re:,ults of operations. 1%e after ten wan R711 K4W

• . 5 N 041 5 7(w, Rescrme Recogmnon Gn>ss unreah:ed gai" and ten at December 31 (excluJmg Bevenue imm elet tne energy Jehvenes n re(ogiu:cJ uhen mvntments in the nudear Jewmnussoning trust) were as such electue muev is Jelnen J. follows (m thousana).

iW7 IW6 Unrealced gamo 3 2,014 5 '4s5 Umulced lowes . U19) (117)

Net . i 76 5 la p k f}' )

k Intornurain regarJing the sale of nunletaMe seconnes for thE Qunerb pnnupJ .  : r .,,nents on the long-term

> cars erded Ih t mher 31 n as follows (in thous.usb). obhgations to the Fedt ng Ibnl (FFB) extend through 2021. lene-ten u. . i im to the RUS are payable ,

I m, I .w6 Iw cea from safe obet onem

'" '4""I 4 """"b P"""P"I "d ""*'t instauniam elaough 2016. I'nncipal arwl interest payrnents on the NRUCFC .

.bulatantully all of wha h have lu n ' C"""*"" ' " ' " * '"" "" #CI"Y" '""*"#

rantoucd) ' $11'14"' $'n m installnients tbnaugh 2(Yb.'

firalerJ gams 11 4 w' Rrala d ! = .,. 177 45 Re Qty of La Crosse, hansm l'ollutuin Gintrol ibnds (1997 lbnds) were ducJ m 1997 mith the proteeds used pri-

• For the purposes of detenmnmg gross unrealced gants anJ - nunty to repay previously eut ,tanJme long tenn debt.

lowes, the cost of sn unnes sold is based upin speuht idenn. Approumatriy $7,545,0N of the 1997 lbnJs is due m

- fianon, Serrember 2014 and $16,060,000 n due m Fehnury 2015

- unless previoush called for redempnon? Ibnk lettus of credit aggregating $2 L6 nullion. wlat h expue m July 2002, have N O Ta s. s.sn.. es cre.sst. Iren imicJ on Irloilf <if the Geperatne to the trustee to .

proude futub for payment of pnnapal of any snt h bonds

. ~h.e priWide inirrirn firura ing, tiie Cooperative has arranced n Jeerned or repurcliascJ pri<>r tii ritit date f

hnes of (redit aggregating approxmutely $4I mdhain, ptind-pally thningh the Nanonal Rural Unknes Oqrratne Sutrtantulh all J the Cwperanvoi awers are pledged as col-

} Finalate Corpiiraf bin (NRUCIC) at a rate no greater than lateral for these i.bh :at n ins The G= gerative is requircJ to

_)

and has inanntained tertain finanaal ratius rtlatcJ to carrungs prinie plus lii. Ik uruuings outstapJung utre $22 ruiUioti and

$16 ndia an at I hetulrr ll,1997 and 1096, rispectluly. anJ lh{ukht) in aGordtnt e with the (osenants of its loan Aserage lorrow mps outstanding were $12 mdli4in in 1997 aral agreenierit t ,

1996 ($linpenutIng balante requirements and hc3 relnine .

NheduleJ matunties of the G.x iirrative 3 long-term obhga-n e the hnes of.(redit were tiot sigtuh. cant in IV9,4 or 1996. tions at lhender 31. j494 were as follows (m thousanJs);

ne G geratne also allows member uqtrarnes ta prepay w..n  %,

their power hdis anJ pays interest on these rn payments based g, .

,g g on t urrent short-term borrowine rates. Interest expen e on g q, g3 gg mender cooperatn e advantes ($377.000 in 1997 and pgg ' .

ph

$ b5,000 in 1906) has tren induJcJ m mrerest expense. y. . g gg ,

2002 . I 1,5M nerratr<r 244397 NOTE 4. Losey.Tersee OlsIlgefleeses $ iH 416 1,ong term obbeanom at I b endrr 31 comistcJ of the .

following (m thou andd NOTE 5. PesIr Vaslue of Otleer P8seesseslast IW7 le s .,,. ,,,

l'cderal I mant mg Ibok of kanons 6 0% io 9 9% . $201.141 He?,* ;3 Re fair value of the Gyrarnei tuunnal mstruments RLN of huan,w 2% h?1 11.720 other than marketaMe se unnes and short-term hornmings, RLN of bganons,5% 25.714 26.t,s7 hascJ on the rates for sundar snunnes, n esunutcJ to it as

• NRUCFC of heanons. 6.4% . i . 1.54 0 2246 foHow' at therr' cr 31 (in thousand-):

NHi R 'IC meermelare lain. 6.4% 4 U04 11.104 jg gag Gty of Alma. % onun. Ibilunan (Tarn mg luur (:arrung i air Connol lionJs. repaid m 1947. 22.045 v., lor G h a. LLw Lloc

(:n> of La En % h onun, Indusmal Aurn Iblopment Ren nur ibnds, b"""""' deulornent repnJ m iW7 4.1fe loan .md other Cuy of la Cn w, Wmonun, I ollunon 8""",nuenn . $ 11,5N $ 10.7le 5 9N $ .N413 Conitolluna,i nut le r.ut. . hn cumenn in waal 51% at Ikember 11, lW7 2W5 """ ""'f" "' "I Dihce rain ranging bom 4% to n, NRUCR: 9.176 5.A l n 9.u6 7,500 Joe m untallmenn ihniuch 2025. I U"O 18.576 I"II""< '" ( '"""I II"nJ 511.416 H6, )t.n pru rel on dep wn im Cun(nt nutunun . ( 12.77'n (12,17M) * "h ""*N 22*I 2 29I Total long trnn obhcanob $HK6m $u41u g l ong term othganon- 331.416 126.541 146,566 40.149 O

/  %

ple

{'H[,Y . .na A

i

. . .. -  ?- -

wors o.n.es,.m.. .ec.pse.:e,..sse.. n o v a ,, u..s.., si.....,.

The La Crowe B< nhng Water Nu&ar Reactor (LACBWR)

The Co i;rrativenurJ <4 Jirectors has adepred a p,hty of was voluntarily reinosed frocri service by the Guperatne rennne captal urdits allocated to memhen on a firstan, effechve AP"I 30 1987. The intent was to tenninate opera.

hnt out hasn, so that at no time wdl the Gnperative retain non of the reauor and a "pissemon only" hcense was as paroruge urnal any cantal nintnbutcJ or depisned obtaincJ fn,m the Nuclear Regulatory Gimnusmin in ,

more than 20 wars prior to the current year. Accordmely, '

Augwt 1987, The f auhty n in a %fe storage" status anJ ts 1977 and 1976 capital oeJus were rented in 1997 and 1996. '

expeueJ to remain so until at least the yesir 2019, at wiuch implementation of thih pohcy a subjett to annual resicw and tune Janmnumomna n expected to commenee, although approval by the lua:J of direuors arid the RUS, ai:J no cash the manner of Jecomnussioning has not been detenmned. ,

rehrt1nents are to be made which woulJ unpair the fmancial All I.ACBWR.related aswts, totahng $18.4 nullen, were l ainshtion of the Gnperative or violate any tenns of us transferred to a deterred charge in 1937 and have been amor- l agreement s.

, tceJ to operattng expense over a ten-year renod ending in l IW7, with appropnate recogruhon in rates c harged to mem- l wovs 7. commsem.ne. ...s c nesmo. .s... len for elatnc wrm {

Tbc Gnperanve's estimated 1998 wnsmntion program n . The pronuon for Jerrniation to pronde for the esumated j cosa of Jaomrnissioning the notlear generating faahty is ,

$31.6 mdhon. hnancmg of con.struc non is expecteJ to be 1 prosided by Ivrrowmes in>m the ITB and intenully generat- C4""l1" the aniounts contnbund to the nuchar Juoinnue  ;

j uonmg trust as well as the related eanungs of the trust. The  ;

rd funA pninson for the cost of Jeovnnussionma was $6.5 nulhon , ,

in wnnection wnh the tenmnanon of a coal supply agree- in 1997 and $53 nuthon in 1996. The Gnperante has l nient, the Gioivrante has estabbshed .m esuow account to adoped a pohcy of fundmg Jewmmissiomna costs currently, ,

l fund any future wntmgenacs relannu to the termmarcJ and the relatcJ investments of $54.9 nulhon are included m l agreement. The escrow account n mcludcJ m other mvest- other asseis, wlule the estinuteJ Decommissioning habihnes l ments on the acwmpin3ing wnsohjated fulance sheets. of $54.9 nulhon are refleucJ as a long term habihty.

{

The G operatne is a puty to a inunirr of generanon, tran- l numon anJ thsenbunon agreements, under wluch costs

) anJ!or resenues are recounccJ wnently luwd upon the  :

Ca,peranve's nuerpretanons of the pronsions of the relatcJ l agreemenet [htferences beturen the estunates uscJ in the . l wnsohJatcJ hnanual,,tatemenn anJ the hnal wulements ,

l are rewrJed m the war of settlement. ,

The Cuoperante has iten named a defendant in several law-  ! ,

smts anhiaum, pununl related 3 to wnstrucnon an i opera- -l non of as cleane plant. Ahhough the outwme of these

• matters cannot be deternuned at the present inne, manage- l ment and legal counwl beheve these ac tions un be suaess-fully defenJed or resolved wahout a marenal effeu on the fmanaal pismon or resuhs of operanons of the Coperanve.

p ov s s. P. .s.n Ps.. ...e p.. ,.ese.m.no -

s. . .ese . '

l ' l'ension lenchts for substantially all employees are pronJed l .

j through partiapanon in the Nanonal Rural Ileonc  ;

1 Cooperante Assonation (NRECA) Retnement and Secunty ,

i l l'rogram. Contnbutions are detennined m accorJance with the provisens of the program and are based on salanes, as

'l Jenned, of eah partiagunt. A moratonum on sulwtantially  ;

all plan wninbunons was m effeu from July 1.1987 thniugh ' '

Octoba 1996, an3 acwrdingly, normal pension egense was l' sulwtannally reduced m 1996. Perwon wsts for tlus pension plan were $1,592.000 in 1997 and $732,000 in 1996. As of  ;

January 1,1996, the date of the last available actuanal valua- -

tion, neiassets of the plan exceeded the actuarial pesent .

value of accumulated plan benefas.

6 g

A ~

• l l

.y N1 ' ~ " ,

. /

o w

, i se s >

• t' f

- h 1

e B

i

)

e

}  !

3 .

l l

] .

t As an effort to preserve the environment, the contents of this report are printed on recycled paper. ,

,O .

g .

Dairyland Power Cooperative '

La Crosse, Wisconsin -

9

\'isit our web site: www.dairynet.com f

a

-f