ML23192A064: Difference between revisions

From kanterella
Jump to navigation Jump to search
(StriderTol Bot insert)
 
(StriderTol Bot change)
Line 15: Line 15:


=Text=
=Text=
{{#Wiki_filter:}}
{{#Wiki_filter:2022 ANNUAL REPORT DAIRYLAND POWER COOPERATIVE
                                  ~
A Touchstone Energy* Cooperative
        /Ji-/6501 A.J"-155
 
PRESIDENT & CEO / BOARD CHAIR MESSAGE 4-5    BOARD OF DIRECTORS 6    EXECUTIVE TEAM 7  DAIRYLAND MANAGERS ASSOCIATION 8-19    ALL IN 20-24    INDEPENDENT AUDITOR'S REPORT FINANCIAL STATEMENTS 25-31    NOTES TO CONSOLIDATED      ANCIAL STATEMENTS MEMBERS & FACILITIES/ SYSTEM MAP DAIRYLAND POWER COOPERATIVE - - - - - - - - - - - - - - - - - - - - - - - -
 
Dairyland Power Cooperative provides the wholesale electrical requirements and other services for 24 member distribution cooperatives and 27 municipal utilities in the Upper Midwest. In turn, these cooperatives and municipals deliver the electricity to consumers, meeting the energy needs of about 700,000 people.
Dairyland was formed in December 1941 to improve the quality of life for cooperative members with electricity. Today, while maintaining that mission, Dairyland is focused on sustainability and reliably transitioning to a lower carbon future.
Dairyland has been purposefully diversifying its generating resources, which currently include wind, solar, renewable-enabling natural gas, coal, hydro and biogas. Electricity is delivered via 3,300 miles of transmission lines and 232 substations located throughout the service area.
Dairyland, a Touchstone EnergyCooperative, is headquartered in La Crosse, Wis. Its service area encompasses parts of Wisconsin, Minnesota, Iowa and Illinois.
To learn more, please visit www.dairylandpower.com and follow us on Facebook, Twitter or Linkedln for more information.
                      ------------......------~
1111111111111111111.-i---._--
DAIRYLAND POWER COOPERATIVE A Touchstone Energy* Cooperative
                                                      ~~
                                                                          ~~-~~
_ ___ ~ mro 1 2022 ANNUAL REPoRr        1
 
Dairyland Power Cooperative's Board of Directors and leadership team are united in our mission to "power our communities and empower cooperative members to improve the quality of their lives."
Central to achieving that mission is the delivery of safe, reliable and affordable power to our members every moment of every day.
Dairyland's leadership and Board of Directors make deliberate decisions aligned with our Strategic Priorities and an overarching goal of Sustainability as we transition to a lower carbon generation portfolio. As the energy industry evolves, our Sustainable Generation Plan outlines Dairyland's plans for future transformation . This includes strategically developing power supply plans, determining the optimal future energy mix and anticipating members' long-term needs.
Targeting a 50 percent reduction in carbon intensity (from 2005 levels) by 2030, our resource plans include increases in renewable resources, such as wind and solar. As we add more intermittent renewable resources, the grid needs renewable-enabling flexible facilities like natural gas lo provide reliable, quick-start generation.
Essential to providing power on-demand is the Nemadji Trail Energy Center (NTEC). This combined-cycle natural gas plant, planned in partnership with Minnesota Power and Basin Electric Power Cooperative, will deliver up to 625 MW of flexible power. NTEC is expected to be an always available critical capacity resource. We are advocates to streamline the permitting process for critical projects such as NTEC that will fortify our ability to reliably transition to a lower carbon future.
ALL IN ON INNOVATION Innovation and new technologies are integral to the future. Dairyland is exploring batteries, energy storage and carbon-free power supply technologies, including small modular reactor nuclear plants and pumped storage hydropower.
Operational excellence of our existing generation fleet is critical with planned maintenance and ample fuel supply to ensure power is always available. Dairyland is strengthening our power delivery system and investing in regional transmission opportunities. By working with other utilities, regional transmission infrastructure will support growing renewable resources, while maintaining reliability and adding value for members.
Nothing is sustainable without a culture of safety and we are dedicated to continuous improvement. Whether working onsite, in the field or remotely, Dairyland team members are dedicated to safety with 200% accountability for ourselves and each other.
ALL IN ON PROVIDING VALUE Growth and innovation foster sustainable business and long-term value for our member cooperatives. The Dairyland system expanded the number of municipals served from 17 to 27 with the additions of Manitowoc Public Utilities and Great Lakes Utilities (GLU) members in eastern Wisconsin as new power supply customers beginning Jan. 1, 2023.
This past year, our team achieved significant milestones in our multi-year Dairyland Systems Modernization plan. The implementation of our enterprise D365 business applications and Workday human resources systems have increased operational efficiency throughout the organization.
Our Business Development team is creating new revenue opportunities and shared services. Dairyland has expanded economic development support for our members and is pursuing grant opportunities to support business and job growth, which will benefit the entire Dairyland system.
Financial and competitive strength are critical to sustainability, and we are pleased with Dairyland's solid 2022 margins and strong credit ratings. Dairyland is not immune to the economic forces of supply chain, interest rates, fuel prices and energy market price fluctuations that impact our wholesale power rate. The Dairyland team worked diligently to mitigate the impact of these challenges throughout 2022 .
Dairyland employees are innovative and cost-conscience to provide value to our members. As our members' needs and the energy industry evolves, we are committed to being ALL IN and always available for you.
2    DAIRYLAND POWER COOPERATIVE
 
DAIRYlANO POWER
          ,. ,.  , '
* a MISSION To power our communities and empower cooperative members to improve the quality of their lives.
Brent Ridge          Jenny Scharmer                  VISION President and CEO    Chair, Board of Directors  To grow, innovate and deliver value as a premier member-driven energy cooperative through safe, reliable and sustainable solutions.
- - - - - - - - - - - - - - - - - - - - - - - - - ~ mn I 2022 ANNUAL REPORT 3
 
Courtney Cuta Dunn Energy Cooperative    Scenic Rivers              Dairyland Power Energy Cooperative Cooperative  Cooperative 4 DAIRYLAND POWER COOPERATIVE
 
Board of Directors Cooperative
_________________________  ~ ~~    I 2022 ANNUAL REPORT 5
* LEADERSHIP TRANSITION April Wehling will serve as Executive Vice President & Chief Financial Officer, following Phil Moilien's July 2023 retirement.
Vice President, Transmission Services &
Business Development 6    DAIRYLAND POWER COOPERATIVE
 
DAIRYLAND MANAGERS ASSOCIATION Class A Member Leadership Barron Electric      Bayfield Electric  Chippewa Valley              Clark Electric Cooperative          Cooperative      Electric Cooperative          Cooperative Dunn Energy          Eau Claire Energy      Freeborn Mower      Heartland Power            Jackson Electric Cooperative            Cooperative      Electric Cooperative    Cooperative                Cooperative Jo-Carroll Energy      Jump River Electric MiEnergy Cooperative  Oakdale Electric            People's Energy Cooperative                              Cooperative                Cooperative Pierce Pepin Cooperative Services        Cooperative                                Cooperative
__________________________                                                  ~~~I        2022 ANNUAL REPORT      7
 
200% ACCOUNTABILITY As a critical services provider, Dairyland's Speak Up & Listen Up safety culture guides every aspect of business and operations. Dairyland President & CEO Brent Ridge leads with the ethos that everyone al Dairyland is accountable for safety, as an individual and as part of a team, for 200% accountability. By that token, all employees have Stop Work Authority from the day they are hired to the day they retire.
Through a renewed commitment to effective safety tailgates and the use of Human Performance Tools, Dairyland lowered its lost time injury rate by 23 percent from 2020 to 2022. Continuous safety improvement is Dairyland's top priority, with root cause analysis process improvements underway across the organization.
SHELTER FROM THE STORM Food, shelter and safety are the bedrock of a stable existence.
Electricity makes them possible. From a warm home in winter to a cool respite in summer, the safe delivery of electricity allows us to go about the business of our daily lives.
The Restoration of Power in an Emergency (ROPE) program enables electric cooperatives to give and receive help from neighboring cooperatives during a major outage by sharing crews, equipment and materials. ROPE is administered by Dairyland on behalf of its members. A tornado and widespread storms caused significant damage to power delivery infrastructure in Dairyland's service territory in June 2022. Heavy snow and winds also caused damage in December 2022. Together, Dairyland and member cooperative field crews worked safely lo restore power as efficiently as possible, with many outages resolved within a day.
Just like a vehicle, regular maintenance of critical infrastructure is essential for reliability and safety. Power delivery professionals safely rebuild approximately 50 miles of 69 kV transmission line annually.
TRANSMISSION ROADMAP: DELIVERING ON A SUSTAINABLE FUTURE Generating electricity 24/7/365 is one thing. Delivering it is another. Regional transmission line projects serve the dual role of ensuring the continued safe delivery of electricity while facilitating the region's transition towards low-carbon energy resources.
Dairyland is a 9 percent owner in the 345 kV Cardinal-Hickory Creek transm ission line project, under construction between Dubuque, Iowa, and Middleton, Wis. The line will be a critical link to meet renewable energy goals and consumer energy needs, connecting wind and solar power to millions of homes and businesses in the Upper Midwest.
As a member of Grid North Partners, Dairyland welcomed the Midcontinent Independent System Operator's (MISO) approval of the first set of projects in its Long Range Transmission Plan, seeking to support the clean energy transition while meeting the power delivery needs of nearly 3 million consumers.
Power delivery and access to information is for everyone. In addition to major projects, Dairyland crews are      EVE also leading fiber communications work to help bring broadband internet service to rural areas.                    SAFE EVERY DAY 8    DAIRYLAND POWER COOPERATIVE
 
__________________________ ~ ~00 I 2022 ANNUAL REPORT 9 KEEPING THE LIGHTS ON The Dairyland system reached a new winter peak load of 1,038 MW on Dec. 22, 2022, surpassing the former winter peak record of 1,034 MW, set in 2019. Dairyland's 503 MW RockGen Energy Center (Cambridge, Wis.) and Elk Mound (Wis.)
Generation Station both reached their second highest annual generation records in 2022, while achieving industry top quartile in plant availability. Sustainability requires ongoing investments in core power supply and delivery infrastructure for Dairyland to meet its obligations as a critical services provider.
Operational Excellence includes scheduled maintenance, which is essential for the safe, reliable operation of Dairyland's power plant assets. Power plant maintenance is scheduled during the spring and fall when energy loads are typically lower due to moderate seasonal temperatures resulting in less heating and air conditioning.
A major maintenance project was planned for spring 2023 at the 387 MW John P. Madgett (JPM) power plant (Alma, Wis.). The project supports grid reliability and the environment, while creating a significant economic boost for area communities. Overhaul of the turbine and generator helps ensure peak performance, while environmental equipment improvements will more than double the amount of fly ash collected during the coal combustion process.
Dairyland markets the Ay ash for beneficial reuse, where it is recycled as a highly valued additive to cement and concrete applications.
CLEAR THE PATH FOR CLEAN ENERGY The Nemadji Trail Energy Center (NTEC) is now targeting a 2027 operational date due to regulatory and litigation delays. The highly efficient and flexible combined-cycle natural gas power plant will complement solar and wind growth, with the ability to ramp up in minutes when the sun doesn't shine or the wind doesn't blow.
In part due to its experience with NTEC, Dairyland has taken an active role in advocating for permitting process modernization, including testifying before the U.S. Congress, as the current process delays clean energy deployment and raises energy prices through inefficient reviews and costly litigation.
The 149 MW Badger State Solar project will begin construction in 2024 for operation in 2025, with the ability to power over 20,000 homes.
SUSTAINABILITY Diversification is made possible through planning and preparation for a reliable grid. To that end, Dairyland is exploring viable, renewable-supporting technologies including NuScale Power's small modular reactor nuclear plants and Mine Storage's underground pumped storage hydropower at closed mines.
Nuclear is the only non-carbon emitting resource that can support the integration of renewable resources and ensure a 24/7/365 power supply. Pumped hydro supports grid reliability and renewable energy generation while innovatively repurposing retired industrial sites.
1Q    DAIRYLAND POWER COOPERATIVE
 
A winter orm brought dangerous conditions o Dairy/end's service territory during the 2022 holida week. The MISO dee/or~ a Maximum Guiotion Emergency,,,Event on D)ec. 23, 2022, du      :focced gen,,otion outa~ ~d Jiigher than~            oad:-Relia fiility    rns have
                                            'lfll~,
                                            ~*        co~e need fo r well ma,1
                                          }6n~emaml. neration.
ENERGY              ~  it., ...
RESOURCES (NAMEPLATE CAPACITY)
Coal Natural Gas 1
Wind & Solar Other Renewables Other  Energy*
* Renewable technology without Renewable
:Maintenance work at qt,iryland's John P. Madg.,,
power plant in spring 2023 brought operationql and sliJwardship benefits.
Wisconsin economic:
modeling estimated an
.,,roximately $500, advantage to regional businesses from rite in of ,.orkers.
________________________                            ~ ~~I      2022 ANNUAL REPORT            11
 
BUSINESS & ECONOMIC DEVELOPMENT Growth strengthens enterprise-wise sustainability and advances Dairyland's Mission to improve quality of life by supplying safe, reliable, cost-competitive power and community support.
Dairyland is focused on growing services for its members and others, including transmission construction and storm recovery support. The successful rebuild of the Rochesler-Wabaco 161 kV transmission line in 2022 and successful bid for another 161 kV project in 2023 help support long-term competitive rates.
Systemwide load growth of approximately 13 MW was achieved in 2022. Dairyland continued its focus on sustainability and service with the addition of 10 new municipal power supply customers as of Jan. 1, 2023.
BENEFICIAL ELECTRIFICATION Dairyland is a national leader in the establishment of electric vehicle (EV) charging infrastructure in its four-stale rural service territory.
Supporting the expansion of EV charging stations aligns with Dairyland's goal lo reduce carbon emissions. Since 2018, Dairyland has supported the insta llation of over 150 EV chargers in rural communities in Wisconsin, Minnesota, Iowa and Illinois.
NEW TECHNOLOGIES, BETTER STRATEGIES Dairyland is col la borating with Mine Storage and Michigan Technological University lo explore the potential for pumped storage hydropower. Eva luating this new technology that supports grid reliability, renewable energy and repurposes retired industrial sites aligns with Dairyland's sustainability goal.
ws so e rns a Dairyland employees work closely with members on long-term strategies                                                          tic line on existing lo deliver value across the system. Together, Dairyland and member                                                      transmission structures to cooperatives are developing an Innovation Strategy & Roadmap to form                                                    support mission-critical a strategic framework and identify priorities for the future.                                                            communications, advance smart grid capabilities and Internally, moderniza tion of Dairyland's load ma nagement program is                                                  bring broadband capacity to in progress to expand functionality and improve overall system                                                          rural areas.
efficiency. The program benefits members through participation in varied rate prog rams and relieves system imba lances during an outage.
SUCCESS IN EVERY NEIGHBORHOOD Access lo broadband fosters economic growth in rural communities.
Installation of midd le-mi le fiber optic line on transmission structures supports broadband service in the communities Dairyland's member cooperatives serve.
Dai ryland's Economic Development team works in tandem with members lo grow load in their rural and suburban service territories through business and community development opportunities. In 2022, Dairyland secured $5 .1 million of economic development financing on behalf of its members to support projects in their service territories.
NEW CHAPTERS BRING NEW OPPORTUNITIES Dairyland's Genoa Site Redevelopment & Reuse project seeks lo identify optimal reuses of the retired Genoa Station #3 power plant site, focused on the vitality of the local community. At the same lime, materials salvaged from the site are being recycled or repurposed, bringing          Dairyland's newest in-house EV investment is a zero-emissions environmental benefits while helping to deflect decommissioning costs. Ford E-Transit cargo van, used daily for local and regional deliveries by the Powered Printing team. Powered Printing offers professional print, mail and graphic design services to members and other businesses.
12    DAIRYLAND POWER COOPERATIVE
 
Innovation is essential to su,PPort critical infrastructure and
                                          ., eJllployee engagement ip1he comp!,,t sxste:m o~rations environment Modernization ofJ>6iryland',--S-ystem Cf'perati ns Cente (SOC) b ugbJ a !J)-lllfifunctiolld1 video
                                                                  .                                  d chargEV*
ct POWERED BY CO-OPS Dairyland is among 94 affiliates of CHARGE EV, LLC, a national electric vehicle charging network powered by electric cooperatives that supports the growing number of electric-powered cars, trucks, buses and EV chargers. Dairyland's member cooperatives serve chargers at eight sites along interstate highways.
_________________________                                  ~ ~~          I 2022 ANNUAL REPORT 13
 
GREAT PLACE TO WORK Dairyla nd is proud to be Certified' by Great Place to Work. The award is based entirely on real-time survey feedback from employees. For 2022, Dairyland ranked 20 percent higher in employee satisfaction than the average U.S. company.
According to Great Place to Work, employees at Certified workplaces are 93 percent more likely to look forward to coming to work and are twice as likely to be paid fairly and have a fair chance at promotion.
A LEARNING ORGANIZATION Employee experience and engagement are high priorities.
Dairyland's Leadership Academy emphasizes leadership Human Resources Business Partners engage with students and development, teamwork and personal growth. It includes teachers about Dairyland's diverse opportunities, excellent total three tracks for all employees: Mem ber Experience, Employee            rewards and People First culture at career, job and education fairs.
Experience and Leadership Experience. In align ment with Cooperative Principle #5: Education, Training & Information, the Academy is designed to help develop employees into knowled gea ble and effective leaders within Dai ryland and the greater com munity.
Investing in growth and development is also key for recruitment and retention of a skilled, diverse team. The Dairyland Board, Executive Team and enterprise-wide workforce prioritizes diversity, equity and incl usion (DEi}, and values professiona l and persona l growth.
WORK-LIFE INTEGRATION Da iryland's People First culture encourages new opportunities for productive and satisfying work-life integration . By offering a Aexible workplace that includes telecommuting, Aextime and co mpressed work week options, the Dairyland team exceeds expectations for members without sacrificing health and ha ppiness. Dairyla nd's new You First program centers around three areas: physical, mental and financial wellness with expert information sharing, reduced-fee fitness memberships and other health incentives.
COMMUNITY ENGAGEMENT Dairyland is coordinating the first annual Cooperative Day of Service, to be held at six sites throughout its service territory in October 2023. Employees from Dairyland and its member cooperatives will work together on service projects directly benefiting local communities. For 2023, projects will be in or near a community that hosts a Dairyland faci lity: Alma, Wis.; Elk Mound, Wis.; Harmony, Minn.; La Crosse, Wis.; Ladysmith, Wis.; and Lancaster, Wis.
New in 2023, Dairyland's Cooperative Contributions Program will lead partnerships to support its member cooperatives with charitable contributions of up to $1,000 to nonprofit organizations in each member service area. A variety of contribution options ore available, including community service and development, education, stewardship and emergency funding .
14    DAIRYLAND POWER COOPERATIVE
 
President and CEO Brent Ridge and his wife, Lisa, join Dairyland team members with garden worlc and by personally supporting a neighborhood elementary school.
Dairyland's leadership Academy supports continuous opportunities to grow and develop. The most recent worlcshap focused on the importance of Human Performance as part of a strong safety cutur..
_________________________ /Al!J!. m~ I 2022 ANNUAL REPORT                                    15
 
How do we achieve sustainability?
WORKING WITH POLICYMAKERS I
Safe, nliable & ~ .......... of Legislative and regulatory decisions regarding energy diversification, infrastructure
* elodricity                ---,
construction and the storage of nuclear fuel impact Dairyland's operations, reliability and the cost consumers pay for electricity. Dairyland regularly welcomes elected officials to learn about energy issues and the work Dairyland does on behalf of its members.
Dairyland is a nonpartisan organization and works with policymakers to find solutions We ore in the people business to energy issues that could impact cooperative members. Dairyland has advocated for more coordinated, consistent and timely agency decision making. As a not-for-profit generation and transmission cooperative, Dairyland is committed to advancing clean energy in a way that does not sacrifice safety, reliability or affordability for consumers.
STRENGTHENING RURAL COMMUNITIES In collaboration with local, state and federal partners, Dairyland strives to secure economic opportunities to help member communities prosper. Dairyland's economic development team is actively seeking grant opportunities and projects to grow and support its members and communities.
Competitive rates and low interest loans support community businesses. Financing has assisted new and existing businesses in the purchase of buildings, machinery and equipment. Dairyland has helped its 24 member cooperatives access 90 loans and grants totaling nearly $31.5 million. Through the USDA Rural Economic Development Loan and Grant program, Dairyland and its members have provided zero percent interest rate financing for business and community development projects. These projects include business expansions, industrial park development, health care facilities, assisted living facilities, day cares, schools and fire stations.
BUILDING COOPERATIVE CONNECTIONS Dairyland builds strong connections through numerous channels with members, other cooperatives and communities. Dairyland's "A Day with Your G&T" is a popular program that returned in 2022. Member cooperative directors and emp loyees spend a day learning about their generation and transmission cooperative, connecting with Dairyland employees and louring a power plant.
Dairyland is a founding regional member of Touchstone EnergyCooperatives, a national network of cooperatives created in 1998 lo form a national brand, engage cooperative members and strengthen rural communities.
Branding, market research, social media, educational programs and developing powerful engagement tools, such as the Co-op Web Builder and Touchstone Energy Social programs, exemplify the strength of cooperatives collaborating to engage their members.
COMMITMENT TO COMMUN ITY Employees are focused on benefitting communities in Dairyland's four-state region.
Using their unique talents, employees raise money, volunteer and support numerous community service organizations. In 2022, over $90,000 was raised by Dairyland and its employees to support the United Way.
Dairyland also collaborates with the La Crosse Public Education foundation on its Adopt-a-School program lo support a neighborhood school and the families of students.
Financial contributions totaling over $100,000 support many other community organizations to improve the quality of life throughout its service area : Habitat for Humanity, YMCA, American Red Cross, Salvation Army, Rotary, Children's Museum, area fire departments, education programs and many others.
16    DAIRYLAND POWER COOPERATIVE
 
U.S. Senator Tommy Baldwin        Engagement and edu lion a. CON (D-WI) and CEO Brent Ridge        lo tlte Cooperative Pri    s. Di'9Cfors discuss energy issues impactin_g_ and members parlicipt,. ti a facility co-op members.                    tour of the John P. Madgett Station.
~ Touchstone Energy* Cooperatives
- - - - -- - - - - - - - - - - - - - - - - - - ~1111 m:ro I 2022 ANNUAL REPORT 17
 
COMPETITIVE FOR MEMBERS Dairyland's balanced and measured approach to providing safe and reliable electricity also applies to its financial and competitive strength. Dairyland has credit ratings of "A3" with a stable outlook from Moody's and "A+" also with a stable outlook from Standard and Poor's.
In 2022, Dairyland was $15 million under budget through divisional cost control, which helped offset increased power market prices. Increased revenues due to higher loads were returned to member cooperatives through $5.2 million in Revenue Volatility Adjustments (RVA). Last October, the Board of Directors approved the 2022 capital credit retirement of more than $4.9 million.
Unlike 2021, market volatility did not work in Dairyland's favor in 2022.
The effects of increased fuel prices, challenges with coal supply and rail transportation, supply chain congestion, increased equipment costs and international unrest all impacted Dairyland's power costs. The result was a need to utilize Power Cost Adjustment (PCA) charges of nearly $16 million.
To achieve Dairyland's strategic business plan, members supported a 5.63 percent average wholesale rate increase effective Jan. 1, 2023. Dairyland will continue to pass through PCAs, which are credits or charges dependent on the differences in the base cost of wholesa le power against actual costs. PCAs provide flexibility for power cost fl uctuations without having lo contin ua lly restructure electricity rates.
COST MANAGEMENT PROVIDES VALUE The Dairyland team works year-round on cost management measures to help keep wholesale power rates stable for its member cooperatives and their members at the end of the lines.
Da iryland established an internal General Counsel and Legal Services Department in mid-2022 to manage all legal activities, which resulted in a 30 percent reduction in spending in the last half of 2022. The team provides a full range of legal services including drafting and reviewing contracts and other legal documents, providing legal counsel, serving on cross-functional teams, and advising Dairyland's staff and Board of Directors on compliance and governance issues.
Previously contracted support for the RockGen Energy Center, including information technology and accounting, was also brought in-house at the end of 2022.
Transitioning lo Dairyland-supported functions benefits members through cost containment and efficiency.
GROWING AND INVESTING IN TH E FUTURE On Jan. 1, 2023, Dairyland gained new municipal power supply customers including Manitowoc Public Utilities and members of Great Lakes Utilities (GLU) in eastern Wisconsin, which increased the number of municipals served by Dairyland from 17 to 27.
Enterprise risk management, cost management and business development initiatives will foster long-term competitive rates. Sustainability, safety and reliability are guardrails as Dairyland invests in modernizing systems, energy resources and infrastructure.
A milestone was achieved to reduce costs in managing the former La Crosse Boiling Water Reactor (LACBWR) site in Genoa, Wis. In March 2023, the U.S. Nuclear Regulatory Commission (NRC) released the site for unrestricted public use. The site's license was transferred from Dairyland to LaCrosse Solutions LLC in 2016 to complete decommissioning and transferred back following decommissioning. The licensed site is now reduced to the area covered by the Independent Spent Fuel Storage Installation (ISFSI).
18    DAIRYLAND POWER COOPERATIVE
 
_________________________ ~~~I 2022 ANNUAL REPORT 19 INDEPENDENT AUDITOR'S REPORT Board of Directors Dairyland Power Cooperative La Crosse, Wisconsin Opinion We have audited the consolidated financial statements of Dairyland        whether due to fraud or error, and to issue an auditor's report that Power Cooperative and subsidiary (the "Cooperative"), which              includes our opinion. Reasonable assurance is a high level of assurance comprise the consolidated balance sheets as of December 31, 2022          but is not absolute assurance and therefore is not a guarantee that an and 2021 , and the related consolidated statements of revenue,            audit conducted in accordance with GMS will always detect a material expenses and comprehensive income, member and patron equities,            misstatement when it exists. The risk of not detecting a material and cash flows for the years then ended, and the related notes to        misstatement resulting from fraud is higher than for one resulting from the consolidated financial statements (collectively referred to as the    error, as fraud may involve collusion, forgery, intentional omissions, "financial statements").                                                  misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Cooperative as of individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
December 31, 2022 and 2021 , and the results of its operations and its cash flows for the years then ended in accordance with accounting    In performing an audit in accordance with GMS, we:
principles generally accepted in the United States of America.
* Exercise professional judgment and maintain professional skepticism throughout the audit.
Basis for Opinion We conducted our audits in accordance with auditing standards
* Identify and assess the risks of material misstatement of the generally accepted in the United States of America (GMS). Our                  financial statements, whether due to fraud or error, and design responsibilities under those standards are funher described in the              and perform audit procedures responsive to those risks. Such Auditor's Responsibilities for the Audit of the Financial Statements            procedures include examining, on a test basis, evidence regarding section of our report. We are required to be independent of the                the amounts and disclosures in the financial statements.
Company and to meet our other ethical responsibilities, in accordance
* Obtain an understanding of internal control relevant to the with the relevant ethical requirements relating to our audits. We              audit in order to design audit procedures that are appropriate believe that the audit evidence we have obtained is sufficient and              in the circumstances, but not for the purpose of expressing an appropriate to provide a basis for our audit opinion.                          opinion on the effectiveness of the Company's internal control.
Responsibilities of Management for the Financial                              Accordingly, no such opinion is expressed.
Statements
* Evaluate the appropriateness of accounting policies used and Management is responsible for the preparation and fair presentation            the reasonableness of significant accounting estimates made by of the financial statements in accordance with accounting principles            management, as well as evaluate the overall presentation of the generally accepted in the United States of America, and for the design,        financial statements.
implementation, and maintenance of internal control relevant to the
* Conclude whether, in our judgment, there are conditions or preparation and fair presentation of financial statements that are free        events, considered in the aggregate, that raise substantial doubt from material misstatement, whether due to fraud or error.                      about the Company's ability to continue as a going concern for a In preparing the financial statements, management is required to                reasonable period of time.
evaluate whether there are conditions or events, considered in the        We are required to communicate with those charged with governance aggregate, that raise substantial doubt about the Company's ability      regarding, among other matters, the planned scope and timing of the to continue as a going concern for one year after the date that the      audit, significant audit findings, and certain internal control-related financial statements are available to be issued.                          matters that we identified during the audit.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Minneapolis, Minnesota                I Deloitte & Touche LLP financial statements as a whole are free from material misstatement,                                                              April 3, 2023 20 DAIRYLAND POWER COOPERATIVE
 
~                                                                                  .
CONSOLIDATED BALANCE SMEETS As of December 31, 2022 & 2021 (All dollar amounts in thousands)
ASSETS ELECTRIC PLANT:                                                                        2022            2021 Plant and equipment--ot original cost .................................... .  $  2,055,884    $  2,055,575 Less accumulated depreciation ................................... .                (906,391 l      (867,431)
Net plant and equipment ................................... .          1,149,493        1,188,144 Construction work in progress .................................... .                142,025          87,032 Total electric plant ........................................ .        1,291,5 18      1,275.176 OTHER ASSETS:
Nuclear decommissioning funds . ... ........... .. .. .......... .....      .        2,013            1,987 Intangible asset- net (Note 2) ....................................          .      27,568          30,566 Other investments (Note 8) ......... ....... .... . . ........ ........      .        7,417          12,350 Investments in capital term certificates of National Rural Uti lities Cooperative Finance Corporation (Note 8) ....................  .        9,176            9,176 Regulatory assets (Note 2) .......... ............... ......... .....        .      21,059          25,614 Investment for deferred compensation ..............................          .        1,581            1,776 Deferred charges (Note 2) .......................................            .      15 479          19 357 Total other assets .........................................      .      84,293          100.826 CURRENT ASSETS:
Cash and cash equivalents ......................................            .      25,878          46,244 Designated funds (Note 2) ......................................            .      19,880          22,668 Accounts receivable:
Energy sales ................................................              .      43,867          37, 111 Other ... ................... ....... ................ . ... . ..          .        1,100            7,105 Inventories:
Fossil fuels .................................................            .      27,163          24,234 Materials and supplies ........ . . ..... .............. ........ .. .    .      19,315          17,936 Prepaid expenses and other ......................................            .      14 951          12 675 Total current assets ..... . .................. ... .... . ....... .      152,154          167,973 TOTAL ................. .. ........ ..... ... .. ................ .
1 1,527,965    1  1,543.975 (Continued)
________________________                                                        ~ 0~ I 2022 ANNUAL REPORT    21
 
CONSOLIDATED BALANCE SHEETS As of December 31, 2022 & 2021 (All dollar amounts in thousands)
CAPITALIZATION AND LIABILITIES CAPITALIZATION:                                                                            2022                  2021 Member and patron equities:
Membership fees ............................................              .    $              l      $              l Patronage capital (Note 9) ................ ... ..................      .            354,555                341,427 Accumulated other comprehensive income ..........................        .              2,877                  1,Z53 Total member and patron equities ........ .... .................    .            357,433                343,181 Long-term obligations (Note 6) ...................................        .          1,003,445                820,090 Total capitalization ........................................      .          1,360,878            l, 163,271 OTHER LIABILITIES:
Deferred credits (Note 2) ........................................        .              4,528                  9,418 Obligations under finance leases (Note 7) ...........................      .              6,588                  7,934 Postretirement health insurance obligation (Note 11) ....................  .              4,006                  5,164 Decommissioning and asset retirement obligations (Note 14) ..............  .              2,257                  2,231 Other non-current liabilities ......................................      .              4,413                  4,5Z7 Total other liabilities .............. ....... ............... . .. .            21,792                29,324 COMMITMENTS AND CONTINGENCIES (Note 10)
CURRENT LIABILITIES:
Current maturities of long-term obligations and obligations under finance leases .................................      .            56,073                45,654 Line of credit (Note 5) ..........................................        .              6,000              209,707 Nuclear decommissioning obligations (Note 14) .......................      .                  56                    56 Advances from member cooperatives and other prepayments ..............    .              6,847                20,584 Regulatory liabilities (Note 2) .....................................      .            19,880                22,668 Accounts payable ............ .... ......... . ........ .. .........      .            31,602                33,985 Accrued expenses:
Payroll, vacation and benefits ...................................      .              6,521                  5,669 Interest ...................................................            .              7,098                  6,841 Property and other taxes .......................................        .              3,244                  3,642 Other ..... ..................... ................. .... .....          .              7,974                  2,~24 Total current liabilities .....................................    .            145,295                351,380 TOTAL ..................................................... .                    $    1,527,965        $    1,543,975 (Concluded}
See notes to consolidated financial statements, 22 DAIRYLAND POWER COOPERATIVE
 
Consolidated Statements of REVENUES, EXPENSES & COMPREHENSIVE INCOME For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)
UTILITY OPERATIONS:                                                                                        2022                    2021 Operating revenues:
Sales of electric energy .. . . . ..... .. . . .. . .. ... .... . ..... . .... .. . .        $      499,262          $    449,340 Other ....... . ..................... . .. . . . ......... . .. . .... .                              31,861                14,254 Total operating revenues .. ..... ... . . .. . . . . .... ... .. . . ... ... .                531. 123              463.594 Operating expenses:
Fuel .... . .... . .... . .. . .. ......... .. . .. . . . .. .. ........ . .. ..      .            146,519                  91,261 Purchased and intercha nged power ........................ . .... . .                  .            116,420                107,852 Other operating expenses ... .. . . . . ... . .. ... ... . . . ..... . ... . ... .    .            117,739                126,704 Depreciation and amortization . . . . . . .. . ................ . . . ... . ...        .              65,029                53,515 Maintena nce ..... .. ...................... . .... . .......... . .                  .              26,212                29,284 Property and other taxes . .... .. .. . . . .... ..... ... .. . . . ..... .....        .                9,652                    9,534 Total operating expenses ....... .... ....... .. . .. .... . .. .... .          .            481,571                418,150 Operating margin before interest and other . .... ......... .... ....            .              49,552                45,444 Interest and other:
Interest expense .... . . .. ... .. ..... . .. .....      . . . . .... . ...... .. ..  .              34,557                28,855 Allowance for funds used in construction-equity . .      . ... .......... .    ....  .              (1, 165)                  (963)
Other- net ..... ... .... .. .. ... . . . .. . . . ..    ..... . ........ .    .. ..  .                (212)                      (6Q)
Total interest and other . ... ....... .......    .............. .      ....  .              33,180                  27,832 OPERATING MARGIN .. . .... .. . . . .. . ...... . . . .. . .... .. .. . . .. . .                          16,372                17,612 NONOPERATING MARGIN . . .. ..... .... . ... . .... .. ...... .. . ... .                                    1,658                    1.878 NET MARGIN AND EARNINGS ... .. .. ..... . . .. . ..... . .... . ... . .                                  18,030                19,490 OTHER COMPREHENSIVE INCOME Postretirement health insurance obligation adjustments . . . . .. .. . ...... . . .                    1,124                      377 COMPREHENSIVE INCOME .. .. .. ..... ... .. . .... . .............. .                            $        19,154        $        19,867 See notes to consolidated financial statements.
Consolidated Statements of MEMBER & PATRON EQUITIES For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)
Membership      Patronage        Accumulated Other      Total Member Fees        Capital  Comprehensive Income and Patron Equities BALANCE-January 1, 2021 . .. . .... ....... .. . .                      $        $ 326,600                  $ 1,376        $ 327,977 Net margin and earnings . . . . ..... .. . . ...... . . . .                          19,490                                    19,490 Postretirement health insurance obligation adjustments ..                                                        377                377 Retirement of capital credits (Note 9) . .. ..... . ..... .                          (4,663)                                    (4,663)
BALANCE-December 31, 2021 .. . .. . . .. . . . .. . .                              341,427                    1,753          343,181 Net margin and earnings . . .. .. . . . . . .. .. . . ..... .                        18,030                                    18,030 Postretirement health insurance obligation adjustments ..                                                      1,124              1,124 Retirement of capital credits (Note 9) . . . ... . .... ... .                        (4,902)                                    (4,902)
BALANCE-December 31, 2022 ... .. . . . . ...... .                      $        $ 354.555                  $ 2.877        $ 357.433 See notes to consolidated financial statements.
_________________________                                                                    ~~~I 2022 ANNUAL REPORT                  23
 
Consolidated Statements of CASH FLOWS For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                        2022              2021 Net margin and earnings ............................................                          .    $    18,030        $ 19,490 Adjustments to reconcile net margin and earnings to net cash provided by operating activities:
Loss (gain) on disposal of assets ....................... ...............                    .              87            (2,685)
Depreciation and amortization:
C harged to operating expenses ......................................                      .          65,029            53,515 Charged through other operating elements such as fuel expense ..............              .            2,356 All owance for funds used in construction-equity ..........................                  .          (1, 165)            (963)
Changes in operating elements:
Accounts receivable ..............................................                        .            (751)          (7,364)
Inventories .....................................................                          .          (4,706)          15,292 Prepaid expenses and other assets ....................................                    .            (990)          (1,939)
Accounts payable ............................. ... ................                        .          (7,406)            7,730 Accrued expenses and other liabilities .................................                  .            6,258          10,963 Deferred charges and other .........................................                      .              235          23,327 Total adjustments ..............................................                      .          58,947            97,876 Net cash provided by operating activities ........ .... ..................            .          76,977          117,366 CASH FLOWS FROM INVESTING ACTIVITIES:
Electric plant additions ..............................................                        .        (83,328)          (62,971)
Asset acquisition ...................................................                          .            (724)      (205,221)
Proceeds from sale of assets ..........................................                        .          13,245 Purchase of investments .............................................                          .            (215)        (14,154)
Proceeds from sale of investments and economic development loans .............                .            1,763          14,722 Net cash used in investing activities .................................                .        (69,259)        (267,554)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit ........................................                      .          20,707          209,707 Repayments under line of credit ........................................                      .      (224,414)
Borrowings under long-term o bligations ..................................                    .        242,886            23,902 Repaym ents of lo ng-term obligati ons ....................................                    .        (50,653)        (36,135)
Retirement of capital credits ...........................................                      .          (4,902)          (4,663)
Borrowings of advances from member cooperatives .........................                      .        400,568          388,140 Repayments of advances from member cooperatives .........................                      .      (414,629)        (381,386)
Net cash (used in) provided by financing activities ......................            .        (30,437)        199,565 NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH                                    (22,719)            49,377 CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of year .. .                                          68,912            19,535 CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of year ........ .                                    $    46, 193      $ 68,212 See notes to consolidated financial statements.
24 DAIRYLAND POWER COOPERATIVE
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of and for the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)
: 1. NATURE OF BUSINESS AND ORGANIZATION                                          respectively). The equity component of AFUDC for 2022 and 2021 was
                                                                                $1,165 and $963, respectively, (representing 1.724% and 1.790% in 2022 Business-Dairyland Power Cooperative and subsidiary ("Dairyland" or and 2021, respectively). The borrowed funds components were included as the "Cooperative") is an electric generation and transmission cooperative a reduction of interest expense in the consolidated statements of revenues, organized under the laws of the states of Wisconsin and Minnesota. The expenses and comprehensive income.
Cooperative, whose principal offices are located in Wisconsin, provides wholesale electric service to class A members engaged in the retail sale of      Designated Funds-Designated funds represent the amounts collected from electricity to member consumers located in Wisconsin, Minnesota, Iowa and        customers rhrough rates and deferred for future use. Designated funds are Illinois, and provides electric and other services to class C, D and E members. held in cash.
Principles of Consolidation-The consolidated financial statements                Asset Acquisitions-In December 2021, rhe Cooperative completed include the accounts of D airyland and Dairyland's wholly owned subsidiary,      their purchase of the assets of RockGen Energy Center in the amount of Genoa FuelTech, Inc. All intercompany balances and transactions have been        $210,079. RockGen Energy Center, located in Cambridge, WI, is a 503 eliminated in consolidation.                                                    megawatt (MW) simple-cycle, dual fuel power generating facility rhat runs primarily on natural gas. The facility will help the Cooperative meet its Accounting System and Reporting-The accounting records of rhe Members' power needs as the Cooperative transitions to more renewable Cooperative are maintained in accordance wirh the uniform system of resources.
accounts prescribed by the Federal Energy Regulatory Commission as adopted by the Rural Utilities Service (RUS), the Cooperative's principal        Intangible Asset-In D ecember 2021, the Cooperative recorded an regulatory agency.                                                              intangible asset as part of their purchase of the RockGen Energy Center in rhe amount of $30,211. The intangible asset consists of the assignable
: 2. SIGNIFICANT ACCOUNTING POLICIES                                              capacity agreements that were defined in rhe asset purchase agreement.
Electric Plant-The cost of renewals and betterments of units of property        The carrying basis and accumulated amortization of the intangible asset as of (as distinguished from minor items of property) includes contract work,          December 31, 2022 and 2021 were as follows:
direct labor and materials, allocable overhead, and allowance for funds used during construction, and is charged to electric plant accounts. Included                                                                        2022      2021 in accumulated depreciation are nonlegal or noncontractual costs of              Gross intangible asset                                    $ 29,806 $ 30,630 removal components. As a result, the cost of units of property retired, sold    Less accumulated amortization                                (2,238)      (64) or otherwise disposed of, plus removal costs, less salvage, is charged to        Intangible asset, net                                      $ 27.568 $ 30,566 accumulated depreciation and no profit or loss is recognized in connection      Amortization expense for the year ended December 3 1, 2022 was $1,511.
with ordinary retirements of property units. A provision for these nonlegal Estimated amortization expense for each of the following five years and or nonconcractual costs of removal components is recognized based on thereafter is:
depreciation rates determined by a third-party depreciation study completed in September 2021 and approved by RUS in 2021 for rates effective in            Years Ending December 31 2022 rhrough 2026. The Cooperative is unable to obtain rhe information to        2023 ................................................ $ 4,935 separate the cumulative removal costs as of D ecember 31, 2022 and 2021.        2024 ............................................... .                    5,951 Maintenance, repair costs and replacement or renewal of minor items of          2025 ............................................... .                    3,993 property are charged to operations.                                              2026.....................*..........................                      2,077 2027 ............................................... .                    1,731 Significant components of electric plant were as follows as of December 31:
Thereafter ........................................... .                  8,881 Depreciable Lives                  2022            2021 Total ........................................... *****$ 27.568 Production                      11-60 years      $ 1,2 10,889 $ 1,208,130 Regulatory Assets-The Cooperative's accounting policies and the Transmission                    23-50 years            656,156        642,029 consolidated financial statements conform to accounting principles generally Distribution                        38 years            82,085        101,890 accepted in rhe United States of America applicable to electric cooperatives.
General plant                    5-47 years            104,993        101,764 Orher                                32 years              1,761          1,762 The noncurrent portion of regulatory assets as of December 31, 2022 and Construction work in process                            142,025          87,032 2021, include rhe following:
2,197,909      2,142,607                                                                  2022      2021 Less accumulated depreciation                          (906,391}      (867,431) Genoa #3 unrecovered plant balances ............ . $20,414            $ 25,614 Electric plant                                    $ 1,291.518      $ 1,275,176  RockGen regulatory asset .......*..............                  645 Depreciation-Depreciation, which is based on the straight-line merhod            Total regulatory assets ........................ . $21.059            $ 25,614 at rates that are designed to amortize the original cost of properties over      Genoa #3 Unrecovered Plant Balances- During 2020, the Cooperative rheir estimated useful lives, includes a provision for rhe cost of removing      established a regulatory asset related to rhe unrecovered plant balances upon and decommissioning rhe properties. The provision for depreciation              closure of the Genoa #3 generating station rhat occurred in 2021. Immaterial averaged 2.7% and 2.5% of depreciable plant balances for 2022 and 2021,          additional costs associated wirh rhe closure were added to the regulatory asset respectively.                                                                    in 2022. Amounts are being recovered in rates rhrough 2029.
Allowance for Funds Used During Construction-Allowance for                      The current portion of the Genoa #3 regulatory asset as of December 31, funds used during construction (AFUDC) represents rhe cost of external          2022 and 2021 is $5,390 and $5,621, respectively. These amounts are and internal funds used for construction purposes, and is capitalized as        recorded in prepayments and other assets.
a component of electric plant by applying a rate (4.169% in 2022 and 4.719% in 2021) to certain construction work in progress. The amount            RockGen Regulatory Asset-During 2022, rhe Cooperative established a of such allowance was $2,870 in 2022 and $2,549 in 2021. The borrowed            regulatory asset related to the difference in the amount being recovered in funds component of AFUDC for 2022 and 2021, was $1,705 and                      rates on a straight-line basis over the 20-year life of the RockGen Energy
$1,586, respectively (representing 2.445% and 2.929% in 2022 and 2021,          Center and amortization on a GAAP basis which is being amortized based
________________________                                                                                        ~~~~ I        2022 ANNUAL REPORT            25
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED on the underlying capacity contracts which have an estimated useful life of          the amount of $6,000. The Board of Directors also approved an additional seven years. The difference between the GAAP amortization and the amounts            regulatory liability revenue deferral in 2021 in the amount of $1,400 for recovered in rates are deferred as the regulatory asset.                              business growth and development. This amended deferral plan was approved by RUS in January 2022. In December 2022, the Board of Directors Deferred Charges-Deferred charges represent future revenue to the approved the amendment to carryforward the revenue deferral balance in Cooperative associated with costs that will be recovered from customers the amount of $6,880 into 2023 previously set for use in 2022. The plan was through the rate-making process. As of December 31 , 2022 and 2021, approved by RUS in January of 2023.
the Cooperative's deferred charges are being reflected in rates charged to customers, except the deferred nuclear litigation as noted below. If all or a        Planned 2 022 John P. Madgett Outage Costs-In November 2021 , the separable portion of the Cooperative's operations become no longer subject to        Board of Directors approved the creation of a regulatory liability revenue the provisions of regulatory accounting, a write-off of deferred charges would        deferral plan in the amount of $1,900. The deferral plan was approved by be required, unless some form of transition recovery (refund) continues              RUS in February of 2022. The Cooperative recognized this amount in 2022.
through rares established and collected for the Cooperative's remaining Electric Vehicle Charging- In January 2022, the Board of Directors regulated operations. In addition, the Cooperative would be required to approved the carryforward of a 2020 revenue deferral plan in the amount of determine any impairment to the carrying costs of deregulated plant and
                                                                                      $368. The amended deferral plan was approved by RUS in February 2022.
inventory assets.
The Cooperative recognized this amount in 2022.
The noncurrent portion of deferred charges as of December 31, 2022 and Deferred Credits-Deferred credits represent both future revenue to 2021 , include the following:
the Cooperative associated with customer prepayments and noncurrent 2022    2021  obligations and reserves related to operations. As of December 31 , 2022, the Nemadji Trail Energy Center . .................. $ 14,775 $ 9,986                    Cooperative's deferred credits are being considered when determining rates Deferred Nuclear Litigation . . . . . . . . . . . . . . . . . . . .      44    8,858 charged to customers.
Other ..................................... _ _6=6=0~--5-1-3 Deferred credits as of December 31, 2022 and 2021 were comprised of the Total deferred charges .. ....................... =$===15=,4=7=9====$=====19=,3!:!5=7 following:
Nemadji Trail Energy Center-Costs relating to the Nemadji Trail Energy 2022      2021 Center natural gas project are being accumulated in deferred charges. These Customer energy prepayments .................. $                      - $ 7,924 charges will be amortized when the plant is in service (currently estimated for RockGen startup revenue deferral. . . . . . . . . . . . . . . . 2,607 2027).
Elk Mound startup revenue deferral. . . . . . . . . . . . . . 1,853      1,432 Deferred Nuclear Litigation-Litigation expenses from the third nuclear                Other .................................... *--~6,._,8~--~6=2 contract damages claim against the United States government were deferred                                                                            $ 4,528 $ 9,418 in 2021. Settlement was reached on the third claim in January 2022 and Sales of Electric Energy-Revenues from sales of electric energy are 2021 deferred charges were extinguished and offset the proceeds. See further recognized when energy is delivered. The class A wholesale rates approved by discussion in Note 14.
the Board of Directors have a power cost adjustment that allows for increases Cash and Cash Equivalents-Cash equivalents include all highly liquid                  or decreases in class A member power billings based upon actual power investments with original maturities of three months or less. Cash equivalents        costs compared to plan. For 2022 and 2021 , the power cost adjustment consist primarily of commercial paper, stated at cost, which approximates            co the class A members resulted in credits to sales billed of $15,613 and market.                                                                              $3,834, respectively. These amounts are recorded in sales of electric energy in operating revenues on the consolidated statements of revenues, expenses and Fossil Fuels and Materials and Supplies-Coal inventories, as well as comprehensive income.
materials and supplies inventories, are stated at the lower of average cost or net realizable value.                                                                Other Operating Revenue--Ocher operating revenue primarily includes revenue received from transmission service and is recorded as services are Regulatory Liabilities-As of December 31 , 2022 and 2021, the provided.
Cooperative had various revenue deferrals reflected as regulatory liabilities.
The revenue deferrals pertained to favorable results from market credits              Accounting for Energy Contracts-The Cooperative does not have any through transactions with the Mid-Continent Independent System Operator              energy contracts that are required co be accounted for at fair value as of (MISO) in addition to favorable results due to market conditions. The                December 31, 2022 and 2021.
summary of regulatory liabilities as of December 31, 2022 and 2021 is as Leases - The Cooperative determines if an arrangement is a lease at follows:
inception of the contract. The right-of-use assets represent the right co use 2022    2021  the underlying assets for the lease term and lease liabilities represent the Planned 2023 John P. Madgett outage costs ........ $ 13,000 $ 13,000                  obligation to make lease payments arising from the leases. Right-of-use Business growth and development. ..............                        6,880    7,400 assets and lease liabilities are recognized at lease commencement date based Planned 2022 John P. Madgett outage costs . . . . . . . .                      1,900 on the present value of lease payments over the lease term. The Cooperative Electric vehicle charging stations ................ ________3-6-8                    uses the implicit rate noted within the contract, when available. Otherwise,
                                                                    $ 19,880 $ 22,668 the Cooperative uses its incremental borrowing rate estimated using recent debt issuances that correspond to various lease terms. The Cooperative does Planned 2023 John P. Madgett Outage Costs-The Board of Directors not recognize leases, for operating or finance type, with an initial term of 12 approved the creation of a regulatory liability revenue deferral plan in the months or less ("short-terms leases") on the consolidated balance sheets, and amount of $13,000 in 2021. The Cooperative deferred $13,000 of2021 the lease expense for these short-term leases is recognized on a straight-line revenue and plans to recognize this amount in 2023. The deferral plan was basis over the lease term within.
approved by RUS in February of 2022.
Use of Estimates-The preparation of consolidated financial statements Business Growth and Deve/.opment-In December 2021, the Board of in conformity with accounting principles generally accepted in the United Directors approved the carryforward of the 2020 revenue deferral plan in States of America requires management to make estimates and assumptions 26 DAIRYLAND POWER COOPERATIVE
 
that affect the reported amounts of assets and liabilities, and the disclosure            borrowing rates. Advances from member cooperatives totaled $6,847 and of contingent assets and liabilities at the date of the consolidated financial            $20,584 at December 31, 2022 and 2021, respectively. Interest expense statements, and the reported amounts of revenue and expenses during                        on member cooperative advances was $324 and $125 for the years ended the reporting period. Significant estimates in the consolidated financial                  December 31, 2022 and 2021, respectively. These amounts have been statements relate to postretirement benefit obligations, asset retirement                  included in interest expense on the consolidated statements of revenues, obligation liabilities, fixed-asset depreciable lives, and litigation and                  expenses, and comprehensive income.
contingencies. Actual results could differ from those estimates.
: 6. LONG-TERM OBLIGATIONS Concentration of Risk-Approximately 36.6% of the labor force for the Cooperative is under a collective bargaining agreements that expire between                Long-term obligations as of December 31, 2022 and 2021, consist of the January 31, 2024 and January 31, 2025.                                                    following:
Subsequent Events-The Cooperative considered events for recognition or                                                                                      2022        2021 disclosure in the consolidated financial statements that occurred subsequent              Federal Financing Bankobligations-1.24%---4.49% $ 595,514 $584,270 to December 31, 2022, through April 3, 2023, the date the consolidated                    Fedetal Financing Bank obligations-4.50°/-5.20%.              190,826      201,942 financial statements were available to be issued.                                                  Total Federal Financing Bank . . . . . . . . . . . . 786,340      786,212 RUS obligations-4.125% and grant funds.......                    2,036        2,557
: 3. ACCOUNTING STANDARDS                                                                    CoBank notes-2.9% and 4.3% * . . . . . . . . . . . . . . 201,220              3,362 Private bonds placement obligations-3.42% * . . . .            67.500        70,833 Adopted- In February 2016, the FASB issued new accounting guidance for Long-term debt. ...................... 1,057,096                  862,964 leases. The new guidance increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance Less current maturities.......................                (53,651) (42,874)
Net long-term obligations ...................... $1,003,445 $ 820,090 sheet and disclosing key information about leasing arrangements in the financial statements. In January 2018, the FASB issued additional accounting              Quarterly principal and interest payments on the long-term obligations to the guidance on leases, amending the guidance issued in 2016, to simplify the                  Federal Financing Bank (FFB) extend through 2053.
transition to the new guidance for land easements. The Cooperative adopted Long-term obligations to the RUS are payable in equal monthly principal the new lease guidance on January 1, 2022 using the modified retrospective and interest installments through 2024. Payments on the CoBank 2.6% and approach. The adoption of the new lease guidance did not have a material 4.32% notes are due quarterly, respectively, through 2023. The private bond impact on the Cooperative's financial statements.
placement is an amortizing 30 year term loan at an interest rate of 3.42%.
: 4. INCOME TAXES                                                                            Quarterly principal and interest payments on this obligation extend through 2043.
The Internal Revenue Service has determined that Dairyland is exempt from federal income taxes under Section 501(c)(12) of the Internal Revenue Code.                The Cooperative executed, filed and recorded an indenture of mortgage, Accordingly, the Cooperative's utiliry operations are generally exempt from                security agreement and financing statement, dated as of September 13, 2011 federal and state income taxes and no provision for such taxes is recorded in              and as supplemented (the "Indenture"), between the Cooperative, as grantor the consolidated financial statements.                                                    and U.S. Bank National Association, as trustee. The perfected lien of the Indenture on substantially all of the Cooperative's assets secured equally
: 5. LINES OF CREDIT                                                                        and ratably all of the Cooperative's long-term debt with the exception of To provide interim financing capabilities, the Cooperative has arranged                    unsecured notes to Co Bank (balances of $1,345 and $3,362 at December 31, committed lines of credit with CoBank. The original line was executed on                  2022 and 2021, respectively). The Cooperative is required to maintain and November 30, 2015, and amended on November 20, 2019, with availability                    has maintained certain financial ratios related to earnings in accordance with aggregating approximately $350,000. This facility has a five-year term and                the covenants of its loan agreemen ts as of December 31, 2022.
provides funds both for short-term working capital requirements and for                    Scheduled maturities of the Cooperative's long-term obligations as of capital projects until permanent financing can be obtained. Some capital                  December 31, 2022, were as follows:
projects will last longer than one year, but the intent is to pay down the line Years Ending December 31 of credit as permanent funding is received.
2023 .............................................. $                        53,651 In December 2021, the Cooperative arranged a second line of credit for                    2024 ............................................. .                          63,618
$215,000. The purpose of these funds was to finance the purchase of the                    2025 ............................................. .                          54,609 RockGen plant. In June of 2022, this line of credit was converted into long-              2026 .................................... * * * * * * * * *
* 56,082 term financing with Cobank.                                                                2027 ....................... * * * * * * * * * * * * * * * * * * * * * *
* 57,461 Compensating balance requirements and fees relating to the lines of credit                Thereafter ......................................... .                      771,675 were not significant in 2022 and 2021. Information regarding line of credit                Total .............................................. $ 1,057,096 balances and activity for the years ended December 31, 2022 and 2021, is as                7. LEASES follows:
The Cooperative has entered into several finance lease agreements for large 2022        2021  vehicles and heavy equipment. The transactions are covered in the master Interest rate at year-end . . . . . . . . . . . . . . . . . . . . . . . 5.39 %      1.11% lease agreement with lease terms not exceeding seven years. At the end of the Line l - $350M ........................... $ 6,000 $                                      lease, the Cooperative can purchase the equipment for a bargain purchase Line2-$215M ........................... _ _ _ _ _                              20~2~,Z~O~Z price. The assets are amortized over the lesser of their related lease terms or Total borrowings outstanding at year-end ........ =$==6=,0=0=0=====$=2=0=9==,7=0=7        their estimated productive lives.
Average borrowings outstanding during year ..... =$=1=0=1=,2=7=6=====$===1=7=,4=7=6 The following table presents the components of the Cooperative's right-The Cooperative also allows member cooperatives to prepay their power                      of-use assets and liabilities related to leases and their classification in the bills and pays interest on these prepayments based on current short-term                  consolidated balance sheets as of December 31:
_________________________                                                                                                  ~        ~fn I 2022 ANNUAL REPORT                27
 
NOTES TO Tl:IE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ctas..ification in Consolidated                                                    similar securities and present value models using current rates available as of Component ofl.ease Balances                    Balance Sheets                                                              2022 December 31, 2022 and 2021, is estimated to be as follows:
Assets:
Finance lease right-of-use assets              Plantandequipmem-atoost. ................ $ 17,521                                                                                                            2022                          2021 Liabilities:                                                                                                                                                                                        Recorded          Fair      Recorded          Fair Current portion of finance lease liability    Current marurities oflong-tenn obligations and .. $                          2,302                                                                    Value          Value          Value        Value obligations and obligations undet finance leases                                Assets:
Long-tetm portion of finance lease liability Obligations under finance leases .............*                              6,588  Othet investments . . . . . . . . . . . . * . . * . . . . . . $    7,417    $ 7,147        $ 12,350        $ 12,350 The components of lease and their classification in the consolidated                                                                Investments in capital tetm certificates ofNRUCFC. ................                          9,176          9,176        9,176          9,176 statements of revenues, expense, and comprehensive income for the year                                                              Liabilities-long-term debt ............... 1,057,096                          950,059        862,964        979,972 ended December 31 were as follows:
Assets and Liabilities Measured at Fair Value--Accounting principles ctas..ification in Slatements of Component ofl.ease&penses                      Rffenues, Expenses and Comp,:d,eosm, lnrome 2022                                  generally accepted in the United States of America establish a framework Operating lease expense                        Othet opetating c:xpen.sc, .................... $                              455 for measuring fair value by creating a hierarchy for observable independent Finance lease amortization                      Dcp=iation and amortization . . . . . . . . . . . . . . .                    1,834 market inputs and unobservable market assumptions and provides for Fmance lease interest                          Interest expense. . . . . .. . . . . . . . . . . . . . . . . . . . . .        287 Shon-term lease expense                        Othet opetating and maintenance expenses ...*. ---21.6 required disclosures about fair value measurements. Considerable judgment Total lease expense                                                                                                    $ 3,492    may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily The weighted average remaining lease term and weighted average discount indicative of the amounts that could be realized in a current market exchange.
rate as of and for the year ended December 31, 2022, were as follows:
A description of the inputs used in the valuation of assets and liabilities are as Weighted Average Remaining                              Weighted Average follows:
Lease Term (Years)                                Discount Rate Finance leases                                    5.05                                              3.12 %                        Level 1 inputs utilize observable market data in active markets for identical assets or liabilities. Level 2 inputs consist of observable market data, other Supplemental cash flow information related to leases for the year ended than that included in Level 1, that are either directly or indirectly observable.
December 31, 2022 was as follows:
Level 3 inputs consist of unobservable market data, which are typically based Cash paid for amounts included in the measurement oflease liabilities:                                                            on an entity's own assumptions of what a market participant would use in Operating cash outflows from finance leases ..................... $                                                    3,149    pricing an asset or liability as there is little, if any, related market activity. In Right-to-use assets obtained in exchange for lease obligations:                                                                    instances where the determination of the fair value measurement is based on Finance leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    977  inputs from different levels of the fair value hierarchy, the level in the fair The reconciliation of the future undiscounted cash flows to the lease liabilities                                                  value hierarchy within which the entire fair value measurement falls is based presented on the Consolidated Balance Sheet as of December 31, 2022, were                                                          on the lowest-level input that is significant to the fair value measurement in as follows:                                                                                                                        its entirety. The Cooperative's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and Finance Leases                  considers factors specific to the asset or liability.
2023 .............................................. $                                                                  2,683 2024..............................................                                                                      2,186      The following table summarizes the Cooperative's assets and liabilities 2025..............................................                                                                      2,114      measured at fair value on a recurring basis as of December 31, 2022 and 2026..............................................                                                                      1,619      2021, aggregated by the level in the fair value hierarchy within which those 2027.................. . ...........................                                                                      997      measurements fall:
Thereafter .......................................... _ _ _9....5=6                                                                                                                                        Fair Value Measurements Usiqg Total lease payments... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  10,555                                                                                    Q,,o,,d!',xain    sag...-...
Adlw,Mad<mb          OIi,,,      s;g,,fum Less discount ....................................... - ~{..,.1=.6=6...,5)
Total lease liabilities .................................. ,.,$= ===8,..,8.,.9=0                                                  2022                                                          Fair Value md Liab;Jitb (Lewel 1) lnpaa oi-..blo (l.e.el 2)
Unol.n,l,le (Lewel3)
Assets--investments:
The undiscounted annual minimum leases payments due under the Cooperative's finance leases following the previous lease accounting standard Nuclear d<<ornmissioning funds ........... $ 2.o70                            $ 2.o70      $            -  $
Othet investments ......................                          7,417            435        1,428            5,554 as of December 31, 2021, were as follows:                                                                                            Investments in capital term certificates of ..*.
National Rural Utilities Finance Corporation                      9,176                                        9,176 Finance Leases 2022 .............................................. $                                                                  3,130 Investment fur deferred compensation....*..                        1.z~                          l.Z1!!
                                                                                                                                                                                                  $ 20,411      $ 2,505        $ 3,176        i  14,730 2023..............................................                                                                      2,388 2024..............................................                                                                      1,890                                                                              Fair Value Measurements Usiqg Sipl&mt 2025............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                    1,818                                                                                    Q,,o,,dl',xaiD Adlw,l\wlm,,b        OIi,,,      s;g,,fum 2026..............................................
Thereafter .......................................... _ _ _9~2=6 1,323 2021                                                          Fair Value
                                                                                                                                                                                                                  ,nd u.bilm,s (Lewel 1) oi-..blo (l.e.el 2)
Unol.n,l,le (Lewel3)
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              11,525      Assets--investments:
Amounts representing interest .......................... --~{8_1-1-)                                                                Nuclear d<<ommissioning funds . . . . . . . . . . . $              2,043    $ 2,043        $            -  $
Present value of minimum lease payments..... . . . . . . .                                                10,714        Other investments ......................                          12,350          4,235          1,364          6,751 Investments in capital term certificates of Current maturities ................................... _ _ (=2=.7~4=0=)                                                              National Rural Utilities Finance Corporation                                                                    9,176 9,176 Long-term obligations ................................ =                                                    $====      7!=,9=7=4    Investment fur deferred compensation. ***.*.                      l~l                          l~l      -
: 8. FINANCIAL INSTRUMENTS                                                                                                                                                                          $ 25,210      $    6,278    $ 3,305        i  l:?,927 The changes in Level 3 recurring fair value measurements using significant The fair value of the Cooperative's financial instruments other than unobservable inputs for the years ended December 31, 2022 and 2021, are as marketable securities and short-term borrowings, based on the rates for follows:
28      DAI RYLAND POWER COOPERATIVE
 
2022          2021    11. EMPLOYEE BENEFITS Other investments:
Multiemployer Defined-Benefit Pension Plan-Pension benefits for Balance-beginning of year                                                    $ 6,751          $ 8,096 New investment and loans made                                                                              substantially all employees are provided through participation in the Loan repayments received and current maturities                                                    (409)  National Rural Electric Cooperative Association (NRECA) Retirement Security Plan ("RS Plan''). This is a defined benefit pension plan qualified Patronage capital allocations                                                            52            55 Patronage capital retirements                                                      (1,242)                  under Section 401 and tax-exempt under Section 501 (a) of the Internal (221)
Revenue Code. Pension benefits are funded in accordance with the Balance--end of year                                                          $ 5,554          $ 6,751 provisions of the RS Plan and are based on salaries, as defined, of each The valuation of these assets involved management's judgment after                                            participant. The Employee Retirement Income Security Act of 1974, consideration of market factors and the absence of market transparency,                                      as amended by the Multiemployer Pension Plan Amendment Act of market liquidity and observable inputs.                                                                      1980, imposes certain liabilities on employers who are contributors to multiemployer plans in the event of a plan termination or an
: 9. RETIREMENT OF CAPITAL CREDITS employer's withdrawal. These plans have not been terminated, nor has The Cooperative's Board of Directors has adopted a policy of retiring                                        the Cooperative undertaken any plans to withdraw from participation.
capital credits allocated to members on a first-in, first-out basis. As part of                              Since the RS Plan is a multiemployer plan for accounting purposes, all an equity development strategy adopted in 2003, patronage capital retired                                    plan assets are available to pay benefits of any plan participant. Separate will be limited to no greater than 2% of the total assigned patronage capital                                asset accounts are not maintained for participating employers. This means balance as of December 31 of the prior year. This policy is subject to annual                                that assets contributed by one employer may be used to provide benefits review and approval by the Board of Directors and the RUS, and no cash                                      to employees of other participating employers. The Cooperative may be retirements are to be made which would impair the financial condition of the                                contingently liable for its share of the RS Plan's unfunded vested liabilities.
Cooperative or violate any terms of its agreements. Since 2003, the amount The Cooperative's contributions to the RS Plan in 2022 and 2021 of nonoperating margins assigned to members each year is at the discretion represented less than 5% of the total contributions made to the plan by of the Board of Directors. Any unassigned nonoperating margins will become all participating employers. In 2013, the Cooperative made a voluntary unallocated reserves and part of permanent equity. Patronage capital amounts prepayment of $26,899 to this plan to reduce future contribution for the years ended December 31, 2022 and 2021, are as follows:
amounts. The remaining prepayment was fully amortized in 2021 .
                                                          .Asmgned Unasggned                          Total Expense for the RS Plan was $8,712 in 2022 and $15,161 in 2021. The Balance-December 31, 2020                              $ 233,138 $ 93,461                      $ 326,600    2022 expense includes contributions to the plan of $8,712 and $0 of Retirement of capital credits                              (4,663)                              (4,663)  prepayment amortization. The 2021 expense includes contributions to the Current year margins                                        16,642                2,841          12.420    plan of $9,781 and $5,380 of prepayment amortization.
Balance-December 31, 2021                                  245,124              96,302          341,427 In the RS Plan, a "wne status" determination is not required, and therefore Retirement of capital credits                              (4,902)                              (4,902) not determined, under the Pension Protection Act (PPA) of 2006. In Current year margins                                        15,208                2,823          18,030 addition, the accumulated benefit obligations and plan assets are not Balance-December 31, 2022                              $ 255,430 $ 99,125                      $ 354,555 determined or allocated separately by individual employer. In total, the RS
: 10. COMMITMENTS AND CONTINGENCIES                                                                            Plan was over 80% funded on both January 1, 2022 and 2021, based on the PPA funding target and PPA actuarial value of assets on those dates.
The Cooperative is a party to a number of generation, transmission and distribution agreements, under which costs and/or revenues are recognized                                    Because the provisions of the PPA do not apply to the RS Plan, funding currently based upon the Cooperative's interpretations of the provisions                                      improvement plans and surcharges are not applicable. Future contribution of the related agreements. Differences between the estimates used in the                                      requirements are determined each year as part of the actuarial valuation of consolidated financial statements and the final settlements are recorded in the                              the plan and may change as a result of plan experience.
year of settlement.                                                                                          Postretirement Health Insurance Obligation-Certain employees of The Cooperative has entered into various coal purchase contracts with one-                                    the Cooperative retiring at or after age 5 5 are eligible to participate in to four-year terms. The estimated commitments under these contracts as of                                    a postretirement health care plan through age 65. Eligible dependents December 31, 2022, is as follows:                                                                            of the retired Cooperative employees are also eligible to participate in this plan through age 65. Retirees pay 100% of the premium amount Years Ending December 31 for this coverage. The premium is based upon the combined medical 2023 .............................................. $                                                45,198 claims experiences of all active employees and retirees. If premiums were 2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      32,388 determined based upon the medical claims experience of retirees only, the 2025..............................................                                                  14,629 resulting premium for retirees would be higher. The difference between 2026 ............................................ . . _ _...,1,..._                                      14-2 the premium paid by retirees and the potential actual premium amount is Total .............................................. ,..$==93.,.,3=6=4 the basis for the postretirement benefit obligation. The Cooperative uses The Cooperative has been named as a defendant in various lawsuits and                                        a December 31 measurement date for its plan. The postretirement health claims arising in the normal course of business. Although the outcome of                                      care plan is unfunded.
these matters cannot be determined at the present time, management and The accumulated postretirement benefit obligation (APBO) and the legal counsel believe these actions can be successfully defended or resolved amounts recognized in the consolidated financial statements as of and for without a material effect on the consolidated financial position, results of the years ended December 31, 2022 and 2021, are as follows:
operations or cash flows of the Cooperative.
________________________                                                                                                                    ~~~ I          2022 ANNUAL REPO RT              29
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 2022                    2021      All amounts of compensation deferred under the plans and all income Amount recognized in the consolidated balance sheets:                                                                                anributable to those amounts (until paid or made available to the Total accrued qualified and nonqualified benefit obligation ... $                                4,392 $ 5,560                      employee or other beneficiary) are solely the properry and rights of the Les.s current portion included in accrued expenses----other. . . . _ _.....(3.,,8.,6),,__ _.....C.,_39.,,,6)
Cooperative (not restricted to the payment of benefits under the plan),
Long-term portion ................................... =$==4='=006                                        =====    $ =._5,..164 =
subject only to the claim of general creditors. Participants' rights under Change in benefit obligation:
APBO-beginningofyeat ...............* ............ $                                              5,560 $ 5,825                      the plans are equal to those of general creditors of the Cooperative in an Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        295                    354    amount equal to the fair market value of the deferred account for each Interest cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        137                    117    participant. The related assets and liabilities, totaling $1,748 and $1,941 Actuarial loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (1,204)                    (434)    as of December 31, 2022 and 2021, respectively, are reported at contract Benefits paid ...................... , ................ _ __,.(3~9=6)"-_ __,.(3..,0., , 2)                                          value, which approximates fair value.
APBO--end of year ................................. =$==4.!=                                        23..,9;;;,
2 ===$=.,.5,..,560  =
Funded status of plan-December 31 .................... =$==(4,!!,                                  23..,92;.il===3$===-(5:1,,5=6='0) The Cooperative also provides employees with medical insurance Accrued postretirement health inswance obligations                                                                                    coverage, vision and dental insurance coverage, short-term and long-term recorded at yeat-end ................................. =$===!""========5=-,                      4,392 $                    5=6=0  disabiliry, and life insurance, which are funded by employer and employee Change in plan assets:                                                                                                                contributions. The Cooperative's costs related to these benefits were $9,180 Employer contribution ............................... $                                            (396) $                (302)    and $9,867 for 2022 and 2021, respectively. The liability for these plans of Benefits paid . * . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . --~=---~30=2 3%                              $47 and $59 as of December 31, 2022 and 2021, respectively, are recorded in other accrued expenses on the consolidated balance sheets.
Change in accumulated other comprehensive income:
Net income at prior measurement date................... $                                        1,753 $ 1,376                      12. RELATED-PARTY TRANSACTIONS Actuarial assumption changes ......................... .                                          1,204                      434 Recognition in expense:                                                                                                              The Cooperative provides electric and other services to its class A members.
Amortization of prior service cost. .................... .                                                                        The Cooperative received revenue of $408,146 and $376,523 in 2022 Amortization of unrecognized actuarial gain ............. - - - - ' =(80)                              '----:uL            (57)
J    and 2021, respectively, for these services. The Cooperative has accounts Accumulated other comprehensive income ................ =                                          2,877 $ 1,753
                                                                                              $==================                    receivable from its class A members of $35,879 and $30,829 as of Components of ner periodic postretirement benefit cost:
December 31, 2022 and 2021, respectively.
Service cost-benefits attributed to service during the year..... $                                  295 $                  354 Interest cost on accrued postretirement health                                                                                      The Cooperative has advances from class A members of $6,847 and insurance obligation ............................... .                                            137                    117    $20,584 as of December 31, 2022 and 2021, respectively, related to the Amortization of prior service cost. ..................... .                                                                          prepayment program. Class A members have the option of paying their Amortization of unrecogni7.ed actuarial gain ............. .                                        (80)                    /57)  electric bill in advance, and in turn, the Cooperative pays the members' Net periodic postretirement benefit expense ................ =$======~                                352 ======== $          414 interest income. The Cooperative's interest expense related to the Employer cash contributions expected to be made to the plan during the                                                                prepayment program was $324 and $125 for the years ended December fiscal year ending December 31, 2023, is $386. The amount of accumulated                                                              31, 2022 and 2021, respectively.
other comprehensive income expected to be recognized during the fiscal yeat ending December 31, 2023, is an actuacial gain of $162 and amortization of                                                            13. ASSET RETIREMENT OBLIGATIONS prior service cost of $0. All prior service costs have been fully amortized.                                                          An asset retirement obligation (ARO) is the result of legal or contractual For measurement purposes, a 4.93% and 2.55% discount rate was assumed                                                                obligations associated with the retirement of a tangible long-lived asset for 2022 and 2021, respectively, to determine net periodic benefit cost.                                                              that results from the acquisition, construction, or development and/or The 2022 and 2021 annual health care cost increase assumed is 6.25% and                                                              the normal operation of a long-lived asset. The Cooperative determines 6.50%, respectively, decreasing gradually to 4.46% for 2041 and thereafter.                                                          these obligations based on an estimated asset retirement cost adjusted for inflation and projected to the estimated settlement dates and discounted Estimated future benefit payments from the plan as of December 31, 2022,                                                              using a credit-adjusted risk free interest rate. Upon initial recognition of a are as follows:                                                                                                                      liability for ARO, the Cooperative capitalizes the asset retirement cost by Years Ending December 31                                                                                                              increasing the carrying amount of the related long lived asset by the same 2023 .............................................. $                                                                          386  amount as the liability. The Cooperative allocates that asset retirement cost 2024..............................................                                                                              330  to expense using the straight-line method over the remaining useful life of 2025..............................................                                                                              339  the related long-lived asset. The accretion of the obligation is recognized 2026..............................................                                                                              402  over time up to the senlement date. Any future change in estimate will 2027..............................................                                                                              357  be recognized as an increase or a decrease in the carrying amount of the 2028-2032. ........................................                                                                        1,466    liability for an ARO and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset.
Defined-Contribution Plan-Dairyland has a qualified tax-deferred savings plan for eligible employees. Eligible patticipants hired prior to January 1,                                                          The Cooperative determined that it has AROs related to future removal 2020 may make pretax contributions, as defined, with the Cooperative                                                                  and disposal of asbestos at its power plants. There are no assets legally matching up to 2.5% of the patticipants' annual compensation. Eligible                                                                restricted for purpose of settling the ARO related to future removal and participants hired after December 31, 2019 may make pretax contributions,                                                            disposal of asbestos. The ARO balance related to the future removal and as defined, with the Cooperative matching up to 13% of the participants'                                                              disposal of asbestos was $244 as of both December 31, 2022 and 2021.
annual compensation. Contributions to this plan by the Cooperative were                                                              The balance is recorded within Other Liabilities on the consolidated
$1,589 and $1,409 for 2022 and 2021, respectively.                                                                                    balance sheets.
Other Plans-The Cooperative offers key employees deferred compensation                                                                The Cooperative has established a decommissioning trust to accumulate plans available through NRECA. The plans permit qualifying employees to                                                                the estimated amounts necessary to decommission a nuclear power plant defer a portion of their salary until future years. The accumulated deferred                                                          that the Cooperative formerly operated and the related Independent Spent compensation balance is not available to employees until termination,                                                                  Fuel Storage Installation (ISFSI). The assets of this trust in the amount of retirement or death.                                                                                                                  $2,070 and $2,043 as of December 31, 2022 and 2021, respectively, ate JQ DAIRYLAND POWER COOPERATIVE
 
outside the Cooperative's administrative control and are available solely to    incurred, Solutions submits requests for withdrawals to the Cooperative for satisfy the future costs of decommissioning. As the expected completion is      release of funds from the nuclear decommissioning trust.
planned for 2023, the balance of the trust as of December 31, 2022 of $57 is recorded as current in the consolidated balance sheet. The remaining $2,013    15. SUPPLEMENTAL DISCLOSURES OF CASH is related to the annual ISFSI costs that will remain after completion of the  FLOW INFORMATION decommissioning.                                                              The statement of cash flows includes the following supplemental information The Cooperative did not record a conditional ARO related to the                  as of December 31, 2022 and 2021:
dismantlement of the dam and drainage reservoir for the hydro generation                                                                                                    2022        2021 plant at Flambeau, the removal of transmission lines in various corridors, and  Cash paid for interest ......................... $ 35,928                                            $ 24,062 RockGen Energy Center because the Cooperative does not have sufficient        Electric plant additions funded through accounts payable information to estimate the fair value of the ARO.                              and accrued expenses ....................... .                                            5,367      4,357
: 14. NUCLEAR REACTOR                                                            Electric plant additions under capital leases ....... .                                        977      4,337 License--The La Crosse Boiling Water Nuclear Reactor (LACBWR) was              The amount shown in the consolidated statements of cash flows for cash, voluntarily removed from service by the Cooperative effective April 30, 1987. cash equivalents and restricted cash as of December 31, 2022 of $46,193 The intent was to terminate operation of the reactor, and a possession-only    is comprised of cash and cash equivalents of $25,878, designated funds of license was obtained from the Nuclear Regulatory Commission (NRC) in            $19,880 and $435 of restricted cash included in other investments. The August 1987. LACBWR will remain in safe storage status (SAFSTOR) until          amount shown in the consolidated statements of cash flows for cash, cash the final stage of decommissioning ofLACBWR, involving dismantlement          equivalents and restricted cash as of December 31, 2021 of $68,912 is and decontamination, can be completed. In May 2016, the NRC approved            comprised of cash and cash equivalents of $46,244 and designated funds of transfer of the license to La CrosseSolutions LLC (Solutions), a subsidiary    $22,668.
of EnergySolutions LLC. Solutions will temporarily hold the license and          16. REVENUE FROM CONTRACTS WITH assumes responsibility for the decommissioning of the site. The license will revert back to the Cooperative following completion of decommissioning CUSTOMERS activities. While Solutions undertakes decommissioning, the Cooperative        Sales of electric energy consists of sales to members pursuant to long-term retains a license for its continued ownership of the spent fuel.              wholesale electric contracts. Dairyland recognizes revenue based on the amount of energy delivered to each customer at agreed upon rates. The Nuclear Waste Policy Act of 1982 (NWPA)-Under the NWPA, the measurement of energy sales to customers is generally based on meter data, United States government is responsible for the storage and disposal of spent which is collected through the last day of the month. At the end of each nuclear fuel removed from nuclear reactors. By statute and under contract, month, amounts of energy delivered to customers is recognized.
the United States government was to have begun accepting spent fuel in January 1998, but has not yet licensed and established a repository.            We are an active participant in the MISO Energy Markets, where we bid our generation into the Day Ahead and Real Time markets and procure The Cooperative has filed two successful breach of contract damage claims electricity for our wholesale customers and sell energy at prices determined against the United States government in the United States Court of Federal by the MISO Energy Markets. Purchase and sale transactions are recorded Claims to recover its costs generally incurred after 1998 through 2013 related using settlement information provided by MISO. Purchase transactions to spent fuel remaining at LACBWR. The Cooperative received damage are accounted for on a net hourly position. Net purchases in a single hour award payments of $37,659 and $73,500 in January 2013 and November are recorded as purchased and interchanged power. Sales of excess energy 2017, respectively. Proceeds from the award payments were used to defease transacted through MISO are recorded on a gross basis in other sales. For the nuclear related regulatory asset and deferred charges for nuclear related sales to the MISO Energy Markets, we have no performance obligation until litigation and plant costs. Remaining proceeds have been refunded to Class A the energy is sold.
Members.
The Cooperative's members consist of Class A, C, D, and E members. Class In January of 2022, the Board of Directors approved a motion to accept a A members purchase wholesale electric service and rates are set annually partial summary judgement in the amount of $23.1 million from the United with approval by the Board of Directors. Contract term is determined by the States government related to the NWPA third contract damage claim. Claim Wholesale Power Contract that is in effect until December 31, 2062. The proceeds, less accrued legal fees, were refunded back to Class A Members in contract automatically extends an additional (2) years in each odd-numbered February 2022.
year beginning January 1, 2021 unless either the Cooperative or member Subsequent damage claims will be filed to recover the continuing costs arising  give notice no later than the preceding September 1 of its election not to from the presence of the spent fuel.                                            extend further. Class C member revenue represents contractual sales to GRE ISFSI-The Cooperative completed the temporary dry storage facility project      which were recognized through 2021. Class D member revenues are based located on the LACBWR site and completed the move of the LACBWR                on various contracts with wholesale municipal members. Class E member spent nuclear fuel to this ISFSI facility in September 2012. The spent          revenues primarily reflect sales to MISO.
nuclear fuel will remain at the ISFSI until it is able to be transferred to the The following table disaggregates revenue by major source for the years ended government. Annual ISFSI costs are recorded on an as incurred basis and        December 31, 2022 and 2021:
incorporated into the annual budget and rate making process.
2022        2021 Decommissioning-The Solutions decommissioning plan anticipates                  Class A .......................................... $ 408,146 $ 376,522 completion of decommissioning LACBWR, not including the ISFSI, in              Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              2,387 2023. The estimated costs of decommissioning the nuclear generating facility    Class D..........................................                                          21,423      16,879 are based on the Solutions cost study and decommissioning plan filed with      Class E, including MISO............................                                        69,693      53,552 the NRC as part of the license transfer. Costs incurred for decommissioning    Other sales ....................................... __                                      31-,8~6=1_ _1~4....2...54'""
projects are charged against the decommissioning liability. As costs are        Total ..........................*................. =$=53=1=,1=2=3==$=46=!!:3,!!!=59~4
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~[bl!.~~                                                                                            I 2022 ANNUAL REPORT 31
 
MEMBERS As of January 1, 2023 CLASS A MEMBERS                                  SPECIAL SERVICES MEMBERS                        FACILITIES ON MAP WISCONSIN                                        Adams-Columbia Electric Cooperative I            Headquarters I La Crosse, Wis.
Barron Electric Cooperative I Barron                Friendship, Wis.                              John P. Madgett Station I Alma, Wis.
Bayfield Electric Cooperative I Iron River      Central Wisconsin Electric Cooperative I        Elk Mound Generating Station I Chippewa Valley Electric Cooperative I              Iola, Wis.                                        Elk Mound, Wis.
Cornell                                      Oconto Electric Cooperative I Oconto Falls, Wis. Flambeau Hydro Station I Ladysmith, Wis.
Clark Electric Cooperative I Greenwood                                      I Rock Energy Cooperative Janesville, Wis.        Genoa Site I Genoa, Wis.
I Dunn Energy Cooperative Menomonie                                                                                              I RockGen Energy Center Cambridge, Wis.
Eau Claire Energy Cooperative I Fall Creek      CLASS C MEMBERS                                  Sartell Hydro Station I Sartell, Minn.
Jackson Electric Cooperative I                  Great River Energy I Maple Grove, Minn.            (Eagle Creek Renewable Energy, LLC)
Black River Falls                            Minnkota Power Cooperative I                    Weston 4 Generating Station I I
Jump River Electric Cooperative Ladysmith          Grand Forks, N.D.                                Wausau, Wis.
I Oakdale Electric Cooperative Oakdale Pierce Pepin Cooperative Services I                                                              Planned Energy Resources MUNICI PAL CUSTOMERS Ellsworth                                                                                      Nemadji Trail Energy Center I Superior, Wis.
Polk-Burnett Electric Cooperative I Centuria 0 CLASS D MUNICIPAL MEMBERS Badger State Solar I Jefferson, Wis.
City of Arcadia, Wis.
Price Electric Cooperative I Phillips                                                                (Ranger Power)
Village of Argyle, Wis.
Richland Electric Cooperative I Village of Cashton, Wis.
Richland Center                                                                                Wind Facilities City of Cumberland, Wis.
Riverland Energy Cooperative I Arcadia                                                            Gundersen Wind I Lewiston, Minn.
City of Elroy, Wis.
St. Croix Electric Cooperative I Hammond                                                                                    I McNeilus (Juhl) Wind Adams, Minn.
City of Fennimore, Wis.
Scenic Rivers Energy Cooperative I                                                                McNeilus Dodge I Dodge Center, Minn.
City of Forest City, Iowa Lancaster                                                                                      Prairie Star Wind I Austin, Minn.
Village of La Farge, Wis.
Taylor Electric Cooperative I Medford                                                            Quilt Block Wind I Darlington, Wis. (EDP City of Lake Mills, Iowa Vernon Electric Cooperative I Westby                                                                  Renewables)
City of Lanesboro, Minn.
Tetonka Ridge Wind I Deuel County, S.D.
McGregor Municipal Utilities, Iowa IOWA/ MINNESOTA                                                                                      (Tetonka Ridge Wind, LLC)
Village of Merrillan, Wis.
Mi Energy Cooperative      I Cresco & Rushford                                                    Winnebago Wind I Thompson, Iowa City of New Lisbon, Wis.
(Avangrid)
Osage Municipal Utilities, Iowa IOWA City of St. Charles, Minn.
Allamakee-Clayton Electric Cooperative      I                                                    Solar Energy Sites City of Strawberry Point, Iowa Postville                                                                                      Wisconsin: Arcadia, Centuria, Conrath, Village of Viola, Wis.
Heartland Power Cooperative I                                                                        Hallie, Hillsboro, Liberty Pole, Medford, Thompson & St. Ansgar                                                                              Menomonie, Mt. Hope, Necedah, New 0 POWER SUPPLY CUSTOMERS                              Auburn, Phillips, Roberts, Viola & Westby MINNESOTA                                        Village of Bangor, Wis.
Freeborn Mower Electric Cooperative I            City of Clintonville, Wis.                      M innesota: Albert Lea & Oronoco Albert Lea                                    City of Cornell, Wis.
People's Energy Cooperative I Oronoco            City of Kiel, Wis.                              Illinois: Thomson City of Manitowoc, Wis.
ILLINOIS                                        City of Medford, Wis.                            Iowa: Decorah & Strawberry Point Jo-Carroll Energy    I Elizabeth                City of Shawano, Wis.
Village of Stratford, Wis.
Village of Trempealeau, Wis.
FACILITIES NOT SHOWN Waste Management, Inc., Facilities:
City of Wisconsin Rapids, Wis.
I Central Disposal Landfill Lake Mills, Iowa I
Timberline Trail Landfill Weyerhaeuser, Wis.
CLASS E MEMBERS Alliant Energy I Madison, Wis.
Northwestern Wisconsin Electric Co. I Frederic, Wis.
NSP-Minnesota I St. Paul, Minn.
NSP-Wisconsin I Eau Claire, Wis.
Southern Minnesota Municipal Power Agency I Rochester, Minn.
32  DAIRYLAND POWER COOPERATIVE
 
SAIITELL HYDRO WESTON4 TATANKA RIDGE WIND (SOUIH DAKOTA)
MINNESOTA                                                                    WISCONSIN ROCKGEN ENERGY CENTER BADGER STAT!
SOLAR*
IOWA
                                                  *PLANNED FACILITIES ILLINOIS Generating Stations                                        Under Contract Gas Engine YorkJCE .............. 2 .1 Coal (Steam)                                                Solar        Small solar .......... 44.91 John P. Madgett ............ . .. .3 87                        (40 sites)                            Wind            Gundersen Wind ........ 5 Weston# 4 * .................. 165                Digesters                                                          McNeilus (Juhl) ....... 17.4 Small digesters ....... 1.94 Hydro                                                      (Biogas)                                                            McNeilus Dodge ...... 5.7 (3 sites)
Flambeau .................... 18.8                                                                                    Prairie Star Wind* * ...... 5 Combustion Turbine (Gas/Oil)                                Hydro        Manitoba Hydro Quilt Block Wind ....... 98 Elk Mound 1-2 . . . . . . . . . . . . . . . . 74                  Exchange ............ 50 TatankaWind* ** .... 51.6 RockGen ................... . . 503                            Sartell Hydro ........... 10 Winnebago Wind Farm .. 20 TOTAL DAIRYLAND CAPACITY                          1,147.8  Landfill Gas Tim berline Trails . ....... 5.6                      Small Wind (< 5 MW) .... 4
* Dairyland Share of Wes/on # 4                                      Central Disposal ....... 4 .8
  *
* 5% Shore of 100 MW Wind Farm
  * *
* 33% Shore of 154.8 MW Wind Farm                      TOTAL UNDER CONTRACT *************************************** 326.05 Some wind, solo, and digester technologies do not have associated Renewable Energy Credits (RECs)            TOTAL CAPACITY IN SERVICE ************************************ 1, 473.85
_________________________                                                                                      ~ ~~          I 2022 ANNUAL REPORT        33
 
DAIRYLAND POWER COOPERATIVE
                                        ~
A Touchstone Energy* Cooperative 3200 East Avenue South
* P.O. Box 817
* la Crosse, WI 54602-0817
* www.DairylandPower.com A      As part of our sustainability efforts to preserve the environment,
-../,,J  this report was designed and printed on FSC Certified paper by FSC    Powered Printing, a service of Dairyland Power.                        ERED Dairyland Power Cooperative is an equal opportunity provider & employer.
PRINTING Design/Print/Mail Follow us on:  II CJ mt}}

Revision as of 09:12, 17 July 2023

Annual Report
ML23192A064
Person / Time
Site: La Crosse File:Dairyland Power Cooperative icon.png
Issue date: 12/31/2022
From:
Dairyland Power Cooperative
To:
Document Control Desk, Office of Nuclear Material Safety and Safeguards
References
Download: ML23192A064 (1)
v • d • e


Text

2022 ANNUAL REPORT DAIRYLAND POWER COOPERATIVE

~

A Touchstone Energy* Cooperative

/Ji-/6501 A.J"-155

PRESIDENT & CEO / BOARD CHAIR MESSAGE 4-5 BOARD OF DIRECTORS 6 EXECUTIVE TEAM 7 DAIRYLAND MANAGERS ASSOCIATION 8-19 ALL IN 20-24 INDEPENDENT AUDITOR'S REPORT FINANCIAL STATEMENTS 25-31 NOTES TO CONSOLIDATED ANCIAL STATEMENTS MEMBERS & FACILITIES/ SYSTEM MAP DAIRYLAND POWER COOPERATIVE - - - - - - - - - - - - - - - - - - - - - - - -

Dairyland Power Cooperative provides the wholesale electrical requirements and other services for 24 member distribution cooperatives and 27 municipal utilities in the Upper Midwest. In turn, these cooperatives and municipals deliver the electricity to consumers, meeting the energy needs of about 700,000 people.

Dairyland was formed in December 1941 to improve the quality of life for cooperative members with electricity. Today, while maintaining that mission, Dairyland is focused on sustainability and reliably transitioning to a lower carbon future.

Dairyland has been purposefully diversifying its generating resources, which currently include wind, solar, renewable-enabling natural gas, coal, hydro and biogas. Electricity is delivered via 3,300 miles of transmission lines and 232 substations located throughout the service area.

Dairyland, a Touchstone EnergyCooperative, is headquartered in La Crosse, Wis. Its service area encompasses parts of Wisconsin, Minnesota, Iowa and Illinois.

To learn more, please visit www.dairylandpower.com and follow us on Facebook, Twitter or Linkedln for more information.

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

1111111111111111111.-i---._--

DAIRYLAND POWER COOPERATIVE A Touchstone Energy* Cooperative

~~

~~-~~

_ ___ ~ mro 1 2022 ANNUAL REPoRr 1

Dairyland Power Cooperative's Board of Directors and leadership team are united in our mission to "power our communities and empower cooperative members to improve the quality of their lives."

Central to achieving that mission is the delivery of safe, reliable and affordable power to our members every moment of every day.

Dairyland's leadership and Board of Directors make deliberate decisions aligned with our Strategic Priorities and an overarching goal of Sustainability as we transition to a lower carbon generation portfolio. As the energy industry evolves, our Sustainable Generation Plan outlines Dairyland's plans for future transformation . This includes strategically developing power supply plans, determining the optimal future energy mix and anticipating members' long-term needs.

Targeting a 50 percent reduction in carbon intensity (from 2005 levels) by 2030, our resource plans include increases in renewable resources, such as wind and solar. As we add more intermittent renewable resources, the grid needs renewable-enabling flexible facilities like natural gas lo provide reliable, quick-start generation.

Essential to providing power on-demand is the Nemadji Trail Energy Center (NTEC). This combined-cycle natural gas plant, planned in partnership with Minnesota Power and Basin Electric Power Cooperative, will deliver up to 625 MW of flexible power. NTEC is expected to be an always available critical capacity resource. We are advocates to streamline the permitting process for critical projects such as NTEC that will fortify our ability to reliably transition to a lower carbon future.

ALL IN ON INNOVATION Innovation and new technologies are integral to the future. Dairyland is exploring batteries, energy storage and carbon-free power supply technologies, including small modular reactor nuclear plants and pumped storage hydropower.

Operational excellence of our existing generation fleet is critical with planned maintenance and ample fuel supply to ensure power is always available. Dairyland is strengthening our power delivery system and investing in regional transmission opportunities. By working with other utilities, regional transmission infrastructure will support growing renewable resources, while maintaining reliability and adding value for members.

Nothing is sustainable without a culture of safety and we are dedicated to continuous improvement. Whether working onsite, in the field or remotely, Dairyland team members are dedicated to safety with 200% accountability for ourselves and each other.

ALL IN ON PROVIDING VALUE Growth and innovation foster sustainable business and long-term value for our member cooperatives. The Dairyland system expanded the number of municipals served from 17 to 27 with the additions of Manitowoc Public Utilities and Great Lakes Utilities (GLU) members in eastern Wisconsin as new power supply customers beginning Jan. 1, 2023.

This past year, our team achieved significant milestones in our multi-year Dairyland Systems Modernization plan. The implementation of our enterprise D365 business applications and Workday human resources systems have increased operational efficiency throughout the organization.

Our Business Development team is creating new revenue opportunities and shared services. Dairyland has expanded economic development support for our members and is pursuing grant opportunities to support business and job growth, which will benefit the entire Dairyland system.

Financial and competitive strength are critical to sustainability, and we are pleased with Dairyland's solid 2022 margins and strong credit ratings. Dairyland is not immune to the economic forces of supply chain, interest rates, fuel prices and energy market price fluctuations that impact our wholesale power rate. The Dairyland team worked diligently to mitigate the impact of these challenges throughout 2022 .

Dairyland employees are innovative and cost-conscience to provide value to our members. As our members' needs and the energy industry evolves, we are committed to being ALL IN and always available for you.

2 DAIRYLAND POWER COOPERATIVE

DAIRYlANO POWER

,. ,. , '

  • a MISSION To power our communities and empower cooperative members to improve the quality of their lives.

Brent Ridge Jenny Scharmer VISION President and CEO Chair, Board of Directors To grow, innovate and deliver value as a premier member-driven energy cooperative through safe, reliable and sustainable solutions.

- - - - - - - - - - - - - - - - - - - - - - - - - ~ mn I 2022 ANNUAL REPORT 3

Courtney Cuta Dunn Energy Cooperative Scenic Rivers Dairyland Power Energy Cooperative Cooperative Cooperative 4 DAIRYLAND POWER COOPERATIVE

Board of Directors Cooperative

_________________________ ~ ~~ I 2022 ANNUAL REPORT 5

  • LEADERSHIP TRANSITION April Wehling will serve as Executive Vice President & Chief Financial Officer, following Phil Moilien's July 2023 retirement.

Vice President, Transmission Services &

Business Development 6 DAIRYLAND POWER COOPERATIVE

DAIRYLAND MANAGERS ASSOCIATION Class A Member Leadership Barron Electric Bayfield Electric Chippewa Valley Clark Electric Cooperative Cooperative Electric Cooperative Cooperative Dunn Energy Eau Claire Energy Freeborn Mower Heartland Power Jackson Electric Cooperative Cooperative Electric Cooperative Cooperative Cooperative Jo-Carroll Energy Jump River Electric MiEnergy Cooperative Oakdale Electric People's Energy Cooperative Cooperative Cooperative Pierce Pepin Cooperative Services Cooperative Cooperative

__________________________ ~~~I 2022 ANNUAL REPORT 7

200% ACCOUNTABILITY As a critical services provider, Dairyland's Speak Up & Listen Up safety culture guides every aspect of business and operations. Dairyland President & CEO Brent Ridge leads with the ethos that everyone al Dairyland is accountable for safety, as an individual and as part of a team, for 200% accountability. By that token, all employees have Stop Work Authority from the day they are hired to the day they retire.

Through a renewed commitment to effective safety tailgates and the use of Human Performance Tools, Dairyland lowered its lost time injury rate by 23 percent from 2020 to 2022. Continuous safety improvement is Dairyland's top priority, with root cause analysis process improvements underway across the organization.

SHELTER FROM THE STORM Food, shelter and safety are the bedrock of a stable existence.

Electricity makes them possible. From a warm home in winter to a cool respite in summer, the safe delivery of electricity allows us to go about the business of our daily lives.

The Restoration of Power in an Emergency (ROPE) program enables electric cooperatives to give and receive help from neighboring cooperatives during a major outage by sharing crews, equipment and materials. ROPE is administered by Dairyland on behalf of its members. A tornado and widespread storms caused significant damage to power delivery infrastructure in Dairyland's service territory in June 2022. Heavy snow and winds also caused damage in December 2022. Together, Dairyland and member cooperative field crews worked safely lo restore power as efficiently as possible, with many outages resolved within a day.

Just like a vehicle, regular maintenance of critical infrastructure is essential for reliability and safety. Power delivery professionals safely rebuild approximately 50 miles of 69 kV transmission line annually.

TRANSMISSION ROADMAP: DELIVERING ON A SUSTAINABLE FUTURE Generating electricity 24/7/365 is one thing. Delivering it is another. Regional transmission line projects serve the dual role of ensuring the continued safe delivery of electricity while facilitating the region's transition towards low-carbon energy resources.

Dairyland is a 9 percent owner in the 345 kV Cardinal-Hickory Creek transm ission line project, under construction between Dubuque, Iowa, and Middleton, Wis. The line will be a critical link to meet renewable energy goals and consumer energy needs, connecting wind and solar power to millions of homes and businesses in the Upper Midwest.

As a member of Grid North Partners, Dairyland welcomed the Midcontinent Independent System Operator's (MISO) approval of the first set of projects in its Long Range Transmission Plan, seeking to support the clean energy transition while meeting the power delivery needs of nearly 3 million consumers.

Power delivery and access to information is for everyone. In addition to major projects, Dairyland crews are EVE also leading fiber communications work to help bring broadband internet service to rural areas. SAFE EVERY DAY 8 DAIRYLAND POWER COOPERATIVE

__________________________ ~ ~00 I 2022 ANNUAL REPORT 9 KEEPING THE LIGHTS ON The Dairyland system reached a new winter peak load of 1,038 MW on Dec. 22, 2022, surpassing the former winter peak record of 1,034 MW, set in 2019. Dairyland's 503 MW RockGen Energy Center (Cambridge, Wis.) and Elk Mound (Wis.)

Generation Station both reached their second highest annual generation records in 2022, while achieving industry top quartile in plant availability. Sustainability requires ongoing investments in core power supply and delivery infrastructure for Dairyland to meet its obligations as a critical services provider.

Operational Excellence includes scheduled maintenance, which is essential for the safe, reliable operation of Dairyland's power plant assets. Power plant maintenance is scheduled during the spring and fall when energy loads are typically lower due to moderate seasonal temperatures resulting in less heating and air conditioning.

A major maintenance project was planned for spring 2023 at the 387 MW John P. Madgett (JPM) power plant (Alma, Wis.). The project supports grid reliability and the environment, while creating a significant economic boost for area communities. Overhaul of the turbine and generator helps ensure peak performance, while environmental equipment improvements will more than double the amount of fly ash collected during the coal combustion process.

Dairyland markets the Ay ash for beneficial reuse, where it is recycled as a highly valued additive to cement and concrete applications.

CLEAR THE PATH FOR CLEAN ENERGY The Nemadji Trail Energy Center (NTEC) is now targeting a 2027 operational date due to regulatory and litigation delays. The highly efficient and flexible combined-cycle natural gas power plant will complement solar and wind growth, with the ability to ramp up in minutes when the sun doesn't shine or the wind doesn't blow.

In part due to its experience with NTEC, Dairyland has taken an active role in advocating for permitting process modernization, including testifying before the U.S. Congress, as the current process delays clean energy deployment and raises energy prices through inefficient reviews and costly litigation.

The 149 MW Badger State Solar project will begin construction in 2024 for operation in 2025, with the ability to power over 20,000 homes.

SUSTAINABILITY Diversification is made possible through planning and preparation for a reliable grid. To that end, Dairyland is exploring viable, renewable-supporting technologies including NuScale Power's small modular reactor nuclear plants and Mine Storage's underground pumped storage hydropower at closed mines.

Nuclear is the only non-carbon emitting resource that can support the integration of renewable resources and ensure a 24/7/365 power supply. Pumped hydro supports grid reliability and renewable energy generation while innovatively repurposing retired industrial sites.

1Q DAIRYLAND POWER COOPERATIVE

A winter orm brought dangerous conditions o Dairy/end's service territory during the 2022 holida week. The MISO dee/or~ a Maximum Guiotion Emergency,,,Event on D)ec. 23, 2022, du :focced gen,,otion outa~ ~d Jiigher than~ oad:-Relia fiility rns have

'lfll~,

~* co~e need fo r well ma,1

}6n~emaml. neration.

ENERGY ~ it., ...

RESOURCES (NAMEPLATE CAPACITY)

Coal Natural Gas 1

Wind & Solar Other Renewables Other Energy*

  • Renewable technology without Renewable
Maintenance work at qt,iryland's John P. Madg.,,

power plant in spring 2023 brought operationql and sliJwardship benefits.

Wisconsin economic:

modeling estimated an

.,,roximately $500, advantage to regional businesses from rite in of ,.orkers.

________________________ ~ ~~I 2022 ANNUAL REPORT 11

BUSINESS & ECONOMIC DEVELOPMENT Growth strengthens enterprise-wise sustainability and advances Dairyland's Mission to improve quality of life by supplying safe, reliable, cost-competitive power and community support.

Dairyland is focused on growing services for its members and others, including transmission construction and storm recovery support. The successful rebuild of the Rochesler-Wabaco 161 kV transmission line in 2022 and successful bid for another 161 kV project in 2023 help support long-term competitive rates.

Systemwide load growth of approximately 13 MW was achieved in 2022. Dairyland continued its focus on sustainability and service with the addition of 10 new municipal power supply customers as of Jan. 1, 2023.

BENEFICIAL ELECTRIFICATION Dairyland is a national leader in the establishment of electric vehicle (EV) charging infrastructure in its four-stale rural service territory.

Supporting the expansion of EV charging stations aligns with Dairyland's goal lo reduce carbon emissions. Since 2018, Dairyland has supported the insta llation of over 150 EV chargers in rural communities in Wisconsin, Minnesota, Iowa and Illinois.

NEW TECHNOLOGIES, BETTER STRATEGIES Dairyland is col la borating with Mine Storage and Michigan Technological University lo explore the potential for pumped storage hydropower. Eva luating this new technology that supports grid reliability, renewable energy and repurposes retired industrial sites aligns with Dairyland's sustainability goal.

ws so e rns a Dairyland employees work closely with members on long-term strategies tic line on existing lo deliver value across the system. Together, Dairyland and member transmission structures to cooperatives are developing an Innovation Strategy & Roadmap to form support mission-critical a strategic framework and identify priorities for the future. communications, advance smart grid capabilities and Internally, moderniza tion of Dairyland's load ma nagement program is bring broadband capacity to in progress to expand functionality and improve overall system rural areas.

efficiency. The program benefits members through participation in varied rate prog rams and relieves system imba lances during an outage.

SUCCESS IN EVERY NEIGHBORHOOD Access lo broadband fosters economic growth in rural communities.

Installation of midd le-mi le fiber optic line on transmission structures supports broadband service in the communities Dairyland's member cooperatives serve.

Dai ryland's Economic Development team works in tandem with members lo grow load in their rural and suburban service territories through business and community development opportunities. In 2022, Dairyland secured $5 .1 million of economic development financing on behalf of its members to support projects in their service territories.

NEW CHAPTERS BRING NEW OPPORTUNITIES Dairyland's Genoa Site Redevelopment & Reuse project seeks lo identify optimal reuses of the retired Genoa Station #3 power plant site, focused on the vitality of the local community. At the same lime, materials salvaged from the site are being recycled or repurposed, bringing Dairyland's newest in-house EV investment is a zero-emissions environmental benefits while helping to deflect decommissioning costs. Ford E-Transit cargo van, used daily for local and regional deliveries by the Powered Printing team. Powered Printing offers professional print, mail and graphic design services to members and other businesses.

12 DAIRYLAND POWER COOPERATIVE

Innovation is essential to su,PPort critical infrastructure and

., eJllployee engagement ip1he comp!,,t sxste:m o~rations environment Modernization ofJ>6iryland',--S-ystem Cf'perati ns Cente (SOC) b ugbJ a !J)-lllfifunctiolld1 video

. d chargEV*

ct POWERED BY CO-OPS Dairyland is among 94 affiliates of CHARGE EV, LLC, a national electric vehicle charging network powered by electric cooperatives that supports the growing number of electric-powered cars, trucks, buses and EV chargers. Dairyland's member cooperatives serve chargers at eight sites along interstate highways.

_________________________ ~ ~~ I 2022 ANNUAL REPORT 13

GREAT PLACE TO WORK Dairyla nd is proud to be Certified' by Great Place to Work. The award is based entirely on real-time survey feedback from employees. For 2022, Dairyland ranked 20 percent higher in employee satisfaction than the average U.S. company.

According to Great Place to Work, employees at Certified workplaces are 93 percent more likely to look forward to coming to work and are twice as likely to be paid fairly and have a fair chance at promotion.

A LEARNING ORGANIZATION Employee experience and engagement are high priorities.

Dairyland's Leadership Academy emphasizes leadership Human Resources Business Partners engage with students and development, teamwork and personal growth. It includes teachers about Dairyland's diverse opportunities, excellent total three tracks for all employees: Mem ber Experience, Employee rewards and People First culture at career, job and education fairs.

Experience and Leadership Experience. In align ment with Cooperative Principle #5: Education, Training & Information, the Academy is designed to help develop employees into knowled gea ble and effective leaders within Dai ryland and the greater com munity.

Investing in growth and development is also key for recruitment and retention of a skilled, diverse team. The Dairyland Board, Executive Team and enterprise-wide workforce prioritizes diversity, equity and incl usion (DEi}, and values professiona l and persona l growth.

WORK-LIFE INTEGRATION Da iryland's People First culture encourages new opportunities for productive and satisfying work-life integration . By offering a Aexible workplace that includes telecommuting, Aextime and co mpressed work week options, the Dairyland team exceeds expectations for members without sacrificing health and ha ppiness. Dairyla nd's new You First program centers around three areas: physical, mental and financial wellness with expert information sharing, reduced-fee fitness memberships and other health incentives.

COMMUNITY ENGAGEMENT Dairyland is coordinating the first annual Cooperative Day of Service, to be held at six sites throughout its service territory in October 2023. Employees from Dairyland and its member cooperatives will work together on service projects directly benefiting local communities. For 2023, projects will be in or near a community that hosts a Dairyland faci lity: Alma, Wis.; Elk Mound, Wis.; Harmony, Minn.; La Crosse, Wis.; Ladysmith, Wis.; and Lancaster, Wis.

New in 2023, Dairyland's Cooperative Contributions Program will lead partnerships to support its member cooperatives with charitable contributions of up to $1,000 to nonprofit organizations in each member service area. A variety of contribution options ore available, including community service and development, education, stewardship and emergency funding .

14 DAIRYLAND POWER COOPERATIVE

President and CEO Brent Ridge and his wife, Lisa, join Dairyland team members with garden worlc and by personally supporting a neighborhood elementary school.

Dairyland's leadership Academy supports continuous opportunities to grow and develop. The most recent worlcshap focused on the importance of Human Performance as part of a strong safety cutur..

_________________________ /Al!J!. m~ I 2022 ANNUAL REPORT 15

How do we achieve sustainability?

WORKING WITH POLICYMAKERS I

Safe, nliable & ~ .......... of Legislative and regulatory decisions regarding energy diversification, infrastructure

  • elodricity ---,

construction and the storage of nuclear fuel impact Dairyland's operations, reliability and the cost consumers pay for electricity. Dairyland regularly welcomes elected officials to learn about energy issues and the work Dairyland does on behalf of its members.

Dairyland is a nonpartisan organization and works with policymakers to find solutions We ore in the people business to energy issues that could impact cooperative members. Dairyland has advocated for more coordinated, consistent and timely agency decision making. As a not-for-profit generation and transmission cooperative, Dairyland is committed to advancing clean energy in a way that does not sacrifice safety, reliability or affordability for consumers.

STRENGTHENING RURAL COMMUNITIES In collaboration with local, state and federal partners, Dairyland strives to secure economic opportunities to help member communities prosper. Dairyland's economic development team is actively seeking grant opportunities and projects to grow and support its members and communities.

Competitive rates and low interest loans support community businesses. Financing has assisted new and existing businesses in the purchase of buildings, machinery and equipment. Dairyland has helped its 24 member cooperatives access 90 loans and grants totaling nearly $31.5 million. Through the USDA Rural Economic Development Loan and Grant program, Dairyland and its members have provided zero percent interest rate financing for business and community development projects. These projects include business expansions, industrial park development, health care facilities, assisted living facilities, day cares, schools and fire stations.

BUILDING COOPERATIVE CONNECTIONS Dairyland builds strong connections through numerous channels with members, other cooperatives and communities. Dairyland's "A Day with Your G&T" is a popular program that returned in 2022. Member cooperative directors and emp loyees spend a day learning about their generation and transmission cooperative, connecting with Dairyland employees and louring a power plant.

Dairyland is a founding regional member of Touchstone EnergyCooperatives, a national network of cooperatives created in 1998 lo form a national brand, engage cooperative members and strengthen rural communities.

Branding, market research, social media, educational programs and developing powerful engagement tools, such as the Co-op Web Builder and Touchstone Energy Social programs, exemplify the strength of cooperatives collaborating to engage their members.

COMMITMENT TO COMMUN ITY Employees are focused on benefitting communities in Dairyland's four-state region.

Using their unique talents, employees raise money, volunteer and support numerous community service organizations. In 2022, over $90,000 was raised by Dairyland and its employees to support the United Way.

Dairyland also collaborates with the La Crosse Public Education foundation on its Adopt-a-School program lo support a neighborhood school and the families of students.

Financial contributions totaling over $100,000 support many other community organizations to improve the quality of life throughout its service area : Habitat for Humanity, YMCA, American Red Cross, Salvation Army, Rotary, Children's Museum, area fire departments, education programs and many others.

16 DAIRYLAND POWER COOPERATIVE

U.S. Senator Tommy Baldwin Engagement and edu lion a. CON (D-WI) and CEO Brent Ridge lo tlte Cooperative Pri s. Di'9Cfors discuss energy issues impactin_g_ and members parlicipt,. ti a facility co-op members. tour of the John P. Madgett Station.

~ Touchstone Energy* Cooperatives

- - - - -- - - - - - - - - - - - - - - - - - - ~1111 m:ro I 2022 ANNUAL REPORT 17

COMPETITIVE FOR MEMBERS Dairyland's balanced and measured approach to providing safe and reliable electricity also applies to its financial and competitive strength. Dairyland has credit ratings of "A3" with a stable outlook from Moody's and "A+" also with a stable outlook from Standard and Poor's.

In 2022, Dairyland was $15 million under budget through divisional cost control, which helped offset increased power market prices. Increased revenues due to higher loads were returned to member cooperatives through $5.2 million in Revenue Volatility Adjustments (RVA). Last October, the Board of Directors approved the 2022 capital credit retirement of more than $4.9 million.

Unlike 2021, market volatility did not work in Dairyland's favor in 2022.

The effects of increased fuel prices, challenges with coal supply and rail transportation, supply chain congestion, increased equipment costs and international unrest all impacted Dairyland's power costs. The result was a need to utilize Power Cost Adjustment (PCA) charges of nearly $16 million.

To achieve Dairyland's strategic business plan, members supported a 5.63 percent average wholesale rate increase effective Jan. 1, 2023. Dairyland will continue to pass through PCAs, which are credits or charges dependent on the differences in the base cost of wholesa le power against actual costs. PCAs provide flexibility for power cost fl uctuations without having lo contin ua lly restructure electricity rates.

COST MANAGEMENT PROVIDES VALUE The Dairyland team works year-round on cost management measures to help keep wholesale power rates stable for its member cooperatives and their members at the end of the lines.

Da iryland established an internal General Counsel and Legal Services Department in mid-2022 to manage all legal activities, which resulted in a 30 percent reduction in spending in the last half of 2022. The team provides a full range of legal services including drafting and reviewing contracts and other legal documents, providing legal counsel, serving on cross-functional teams, and advising Dairyland's staff and Board of Directors on compliance and governance issues.

Previously contracted support for the RockGen Energy Center, including information technology and accounting, was also brought in-house at the end of 2022.

Transitioning lo Dairyland-supported functions benefits members through cost containment and efficiency.

GROWING AND INVESTING IN TH E FUTURE On Jan. 1, 2023, Dairyland gained new municipal power supply customers including Manitowoc Public Utilities and members of Great Lakes Utilities (GLU) in eastern Wisconsin, which increased the number of municipals served by Dairyland from 17 to 27.

Enterprise risk management, cost management and business development initiatives will foster long-term competitive rates. Sustainability, safety and reliability are guardrails as Dairyland invests in modernizing systems, energy resources and infrastructure.

A milestone was achieved to reduce costs in managing the former La Crosse Boiling Water Reactor (LACBWR) site in Genoa, Wis. In March 2023, the U.S. Nuclear Regulatory Commission (NRC) released the site for unrestricted public use. The site's license was transferred from Dairyland to LaCrosse Solutions LLC in 2016 to complete decommissioning and transferred back following decommissioning. The licensed site is now reduced to the area covered by the Independent Spent Fuel Storage Installation (ISFSI).

18 DAIRYLAND POWER COOPERATIVE

_________________________ ~~~I 2022 ANNUAL REPORT 19 INDEPENDENT AUDITOR'S REPORT Board of Directors Dairyland Power Cooperative La Crosse, Wisconsin Opinion We have audited the consolidated financial statements of Dairyland whether due to fraud or error, and to issue an auditor's report that Power Cooperative and subsidiary (the "Cooperative"), which includes our opinion. Reasonable assurance is a high level of assurance comprise the consolidated balance sheets as of December 31, 2022 but is not absolute assurance and therefore is not a guarantee that an and 2021 , and the related consolidated statements of revenue, audit conducted in accordance with GMS will always detect a material expenses and comprehensive income, member and patron equities, misstatement when it exists. The risk of not detecting a material and cash flows for the years then ended, and the related notes to misstatement resulting from fraud is higher than for one resulting from the consolidated financial statements (collectively referred to as the error, as fraud may involve collusion, forgery, intentional omissions, "financial statements"). misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Cooperative as of individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

December 31, 2022 and 2021 , and the results of its operations and its cash flows for the years then ended in accordance with accounting In performing an audit in accordance with GMS, we:

principles generally accepted in the United States of America.

  • Exercise professional judgment and maintain professional skepticism throughout the audit.

Basis for Opinion We conducted our audits in accordance with auditing standards

  • Identify and assess the risks of material misstatement of the generally accepted in the United States of America (GMS). Our financial statements, whether due to fraud or error, and design responsibilities under those standards are funher described in the and perform audit procedures responsive to those risks. Such Auditor's Responsibilities for the Audit of the Financial Statements procedures include examining, on a test basis, evidence regarding section of our report. We are required to be independent of the the amounts and disclosures in the financial statements.

Company and to meet our other ethical responsibilities, in accordance

  • Obtain an understanding of internal control relevant to the with the relevant ethical requirements relating to our audits. We audit in order to design audit procedures that are appropriate believe that the audit evidence we have obtained is sufficient and in the circumstances, but not for the purpose of expressing an appropriate to provide a basis for our audit opinion. opinion on the effectiveness of the Company's internal control.

Responsibilities of Management for the Financial Accordingly, no such opinion is expressed.

Statements

  • Evaluate the appropriateness of accounting policies used and Management is responsible for the preparation and fair presentation the reasonableness of significant accounting estimates made by of the financial statements in accordance with accounting principles management, as well as evaluate the overall presentation of the generally accepted in the United States of America, and for the design, financial statements.

implementation, and maintenance of internal control relevant to the

  • Conclude whether, in our judgment, there are conditions or preparation and fair presentation of financial statements that are free events, considered in the aggregate, that raise substantial doubt from material misstatement, whether due to fraud or error. about the Company's ability to continue as a going concern for a In preparing the financial statements, management is required to reasonable period of time.

evaluate whether there are conditions or events, considered in the We are required to communicate with those charged with governance aggregate, that raise substantial doubt about the Company's ability regarding, among other matters, the planned scope and timing of the to continue as a going concern for one year after the date that the audit, significant audit findings, and certain internal control-related financial statements are available to be issued. matters that we identified during the audit.

Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Minneapolis, Minnesota I Deloitte & Touche LLP financial statements as a whole are free from material misstatement, April 3, 2023 20 DAIRYLAND POWER COOPERATIVE

~ .

CONSOLIDATED BALANCE SMEETS As of December 31, 2022 & 2021 (All dollar amounts in thousands)

ASSETS ELECTRIC PLANT: 2022 2021 Plant and equipment--ot original cost .................................... . $ 2,055,884 $ 2,055,575 Less accumulated depreciation ................................... . (906,391 l (867,431)

Net plant and equipment ................................... . 1,149,493 1,188,144 Construction work in progress .................................... . 142,025 87,032 Total electric plant ........................................ . 1,291,5 18 1,275.176 OTHER ASSETS:

Nuclear decommissioning funds . ... ........... .. .. .......... ..... . 2,013 1,987 Intangible asset- net (Note 2) .................................... . 27,568 30,566 Other investments (Note 8) ......... ....... .... . . ........ ........ . 7,417 12,350 Investments in capital term certificates of National Rural Uti lities Cooperative Finance Corporation (Note 8) .................... . 9,176 9,176 Regulatory assets (Note 2) .......... ............... ......... ..... . 21,059 25,614 Investment for deferred compensation .............................. . 1,581 1,776 Deferred charges (Note 2) ....................................... . 15 479 19 357 Total other assets ......................................... . 84,293 100.826 CURRENT ASSETS:

Cash and cash equivalents ...................................... . 25,878 46,244 Designated funds (Note 2) ...................................... . 19,880 22,668 Accounts receivable:

Energy sales ................................................ . 43,867 37, 111 Other ... ................... ....... ................ . ... . .. . 1,100 7,105 Inventories:

Fossil fuels ................................................. . 27,163 24,234 Materials and supplies ........ . . ..... .............. ........ .. . . 19,315 17,936 Prepaid expenses and other ...................................... . 14 951 12 675 Total current assets ..... . .................. ... .... . ....... . 152,154 167,973 TOTAL ................. .. ........ ..... ... .. ................ .

1 1,527,965 1 1,543.975 (Continued)

________________________ ~ 0~ I 2022 ANNUAL REPORT 21

CONSOLIDATED BALANCE SHEETS As of December 31, 2022 & 2021 (All dollar amounts in thousands)

CAPITALIZATION AND LIABILITIES CAPITALIZATION: 2022 2021 Member and patron equities:

Membership fees ............................................ . $ l $ l Patronage capital (Note 9) ................ ... .................. . 354,555 341,427 Accumulated other comprehensive income .......................... . 2,877 1,Z53 Total member and patron equities ........ .... ................. . 357,433 343,181 Long-term obligations (Note 6) ................................... . 1,003,445 820,090 Total capitalization ........................................ . 1,360,878 l, 163,271 OTHER LIABILITIES:

Deferred credits (Note 2) ........................................ . 4,528 9,418 Obligations under finance leases (Note 7) ........................... . 6,588 7,934 Postretirement health insurance obligation (Note 11) .................... . 4,006 5,164 Decommissioning and asset retirement obligations (Note 14) .............. . 2,257 2,231 Other non-current liabilities ...................................... . 4,413 4,5Z7 Total other liabilities .............. ....... ............... . .. . 21,792 29,324 COMMITMENTS AND CONTINGENCIES (Note 10)

CURRENT LIABILITIES:

Current maturities of long-term obligations and obligations under finance leases ................................. . 56,073 45,654 Line of credit (Note 5) .......................................... . 6,000 209,707 Nuclear decommissioning obligations (Note 14) ....................... . 56 56 Advances from member cooperatives and other prepayments .............. . 6,847 20,584 Regulatory liabilities (Note 2) ..................................... . 19,880 22,668 Accounts payable ............ .... ......... . ........ .. ......... . 31,602 33,985 Accrued expenses:

Payroll, vacation and benefits ................................... . 6,521 5,669 Interest ................................................... . 7,098 6,841 Property and other taxes ....................................... . 3,244 3,642 Other ..... ..................... ................. .... ..... . 7,974 2,~24 Total current liabilities ..................................... . 145,295 351,380 TOTAL ..................................................... . $ 1,527,965 $ 1,543,975 (Concluded}

See notes to consolidated financial statements, 22 DAIRYLAND POWER COOPERATIVE

Consolidated Statements of REVENUES, EXPENSES & COMPREHENSIVE INCOME For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)

UTILITY OPERATIONS: 2022 2021 Operating revenues:

Sales of electric energy .. . . . ..... .. . . .. . .. ... .... . ..... . .... .. . . $ 499,262 $ 449,340 Other ....... . ..................... . .. . . . ......... . .. . .... . 31,861 14,254 Total operating revenues .. ..... ... . . .. . . . . .... ... .. . . ... ... . 531. 123 463.594 Operating expenses:

Fuel .... . .... . .... . .. . .. ......... .. . .. . . . .. .. ........ . .. .. . 146,519 91,261 Purchased and intercha nged power ........................ . .... . . . 116,420 107,852 Other operating expenses ... .. . . . . ... . .. ... ... . . . ..... . ... . ... . . 117,739 126,704 Depreciation and amortization . . . . . . .. . ................ . . . ... . ... . 65,029 53,515 Maintena nce ..... .. ...................... . .... . .......... . . . 26,212 29,284 Property and other taxes . .... .. .. . . . .... ..... ... .. . . . ..... ..... . 9,652 9,534 Total operating expenses ....... .... ....... .. . .. .... . .. .... . . 481,571 418,150 Operating margin before interest and other . .... ......... .... .... . 49,552 45,444 Interest and other:

Interest expense .... . . .. ... .. ..... . .. ..... . . . . .... . ...... .. .. . 34,557 28,855 Allowance for funds used in construction-equity . . . ... .......... . .... . (1, 165) (963)

Other- net ..... ... .... .. .. ... . . . .. . . . .. ..... . ........ . .. .. . (212) (6Q)

Total interest and other . ... ....... ....... .............. . .... . 33,180 27,832 OPERATING MARGIN .. . .... .. . . . .. . ...... . . . .. . .... .. .. . . .. . . 16,372 17,612 NONOPERATING MARGIN . . .. ..... .... . ... . .... .. ...... .. . ... . 1,658 1.878 NET MARGIN AND EARNINGS ... .. .. ..... . . .. . ..... . .... . ... . . 18,030 19,490 OTHER COMPREHENSIVE INCOME Postretirement health insurance obligation adjustments . . . . .. .. . ...... . . . 1,124 377 COMPREHENSIVE INCOME .. .. .. ..... ... .. . .... . .............. . $ 19,154 $ 19,867 See notes to consolidated financial statements.

Consolidated Statements of MEMBER & PATRON EQUITIES For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)

Membership Patronage Accumulated Other Total Member Fees Capital Comprehensive Income and Patron Equities BALANCE-January 1, 2021 . .. . .... ....... .. . . $ $ 326,600 $ 1,376 $ 327,977 Net margin and earnings . . . . ..... .. . . ...... . . . . 19,490 19,490 Postretirement health insurance obligation adjustments .. 377 377 Retirement of capital credits (Note 9) . .. ..... . ..... . (4,663) (4,663)

BALANCE-December 31, 2021 .. . .. . . .. . . . .. . . 341,427 1,753 343,181 Net margin and earnings . . .. .. . . . . . .. .. . . ..... . 18,030 18,030 Postretirement health insurance obligation adjustments .. 1,124 1,124 Retirement of capital credits (Note 9) . . . ... . .... ... . (4,902) (4,902)

BALANCE-December 31, 2022 ... .. . . . . ...... . $ $ 354.555 $ 2.877 $ 357.433 See notes to consolidated financial statements.

_________________________ ~~~I 2022 ANNUAL REPORT 23

Consolidated Statements of CASH FLOWS For the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES: 2022 2021 Net margin and earnings ............................................ . $ 18,030 $ 19,490 Adjustments to reconcile net margin and earnings to net cash provided by operating activities:

Loss (gain) on disposal of assets ....................... ............... . 87 (2,685)

Depreciation and amortization:

C harged to operating expenses ...................................... . 65,029 53,515 Charged through other operating elements such as fuel expense .............. . 2,356 All owance for funds used in construction-equity .......................... . (1, 165) (963)

Changes in operating elements:

Accounts receivable .............................................. . (751) (7,364)

Inventories ..................................................... . (4,706) 15,292 Prepaid expenses and other assets .................................... . (990) (1,939)

Accounts payable ............................. ... ................ . (7,406) 7,730 Accrued expenses and other liabilities ................................. . 6,258 10,963 Deferred charges and other ......................................... . 235 23,327 Total adjustments .............................................. . 58,947 97,876 Net cash provided by operating activities ........ .... .................. . 76,977 117,366 CASH FLOWS FROM INVESTING ACTIVITIES:

Electric plant additions .............................................. . (83,328) (62,971)

Asset acquisition ................................................... . (724) (205,221)

Proceeds from sale of assets .......................................... . 13,245 Purchase of investments ............................................. . (215) (14,154)

Proceeds from sale of investments and economic development loans ............. . 1,763 14,722 Net cash used in investing activities ................................. . (69,259) (267,554)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings under line of credit ........................................ . 20,707 209,707 Repayments under line of credit ........................................ . (224,414)

Borrowings under long-term o bligations .................................. . 242,886 23,902 Repaym ents of lo ng-term obligati ons .................................... . (50,653) (36,135)

Retirement of capital credits ........................................... . (4,902) (4,663)

Borrowings of advances from member cooperatives ......................... . 400,568 388,140 Repayments of advances from member cooperatives ......................... . (414,629) (381,386)

Net cash (used in) provided by financing activities ...................... . (30,437) 199,565 NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (22,719) 49,377 CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of year .. . 68,912 19,535 CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of year ........ . $ 46, 193 $ 68,212 See notes to consolidated financial statements.

24 DAIRYLAND POWER COOPERATIVE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of and for the years ended December 31, 2022 & 2021 (All dollar amounts in thousands)

1. NATURE OF BUSINESS AND ORGANIZATION respectively). The equity component of AFUDC for 2022 and 2021 was

$1,165 and $963, respectively, (representing 1.724% and 1.790% in 2022 Business-Dairyland Power Cooperative and subsidiary ("Dairyland" or and 2021, respectively). The borrowed funds components were included as the "Cooperative") is an electric generation and transmission cooperative a reduction of interest expense in the consolidated statements of revenues, organized under the laws of the states of Wisconsin and Minnesota. The expenses and comprehensive income.

Cooperative, whose principal offices are located in Wisconsin, provides wholesale electric service to class A members engaged in the retail sale of Designated Funds-Designated funds represent the amounts collected from electricity to member consumers located in Wisconsin, Minnesota, Iowa and customers rhrough rates and deferred for future use. Designated funds are Illinois, and provides electric and other services to class C, D and E members. held in cash.

Principles of Consolidation-The consolidated financial statements Asset Acquisitions-In December 2021, rhe Cooperative completed include the accounts of D airyland and Dairyland's wholly owned subsidiary, their purchase of the assets of RockGen Energy Center in the amount of Genoa FuelTech, Inc. All intercompany balances and transactions have been $210,079. RockGen Energy Center, located in Cambridge, WI, is a 503 eliminated in consolidation. megawatt (MW) simple-cycle, dual fuel power generating facility rhat runs primarily on natural gas. The facility will help the Cooperative meet its Accounting System and Reporting-The accounting records of rhe Members' power needs as the Cooperative transitions to more renewable Cooperative are maintained in accordance wirh the uniform system of resources.

accounts prescribed by the Federal Energy Regulatory Commission as adopted by the Rural Utilities Service (RUS), the Cooperative's principal Intangible Asset-In D ecember 2021, the Cooperative recorded an regulatory agency. intangible asset as part of their purchase of the RockGen Energy Center in rhe amount of $30,211. The intangible asset consists of the assignable

2. SIGNIFICANT ACCOUNTING POLICIES capacity agreements that were defined in rhe asset purchase agreement.

Electric Plant-The cost of renewals and betterments of units of property The carrying basis and accumulated amortization of the intangible asset as of (as distinguished from minor items of property) includes contract work, December 31, 2022 and 2021 were as follows:

direct labor and materials, allocable overhead, and allowance for funds used during construction, and is charged to electric plant accounts. Included 2022 2021 in accumulated depreciation are nonlegal or noncontractual costs of Gross intangible asset $ 29,806 $ 30,630 removal components. As a result, the cost of units of property retired, sold Less accumulated amortization (2,238) (64) or otherwise disposed of, plus removal costs, less salvage, is charged to Intangible asset, net $ 27.568 $ 30,566 accumulated depreciation and no profit or loss is recognized in connection Amortization expense for the year ended December 3 1, 2022 was $1,511.

with ordinary retirements of property units. A provision for these nonlegal Estimated amortization expense for each of the following five years and or nonconcractual costs of removal components is recognized based on thereafter is:

depreciation rates determined by a third-party depreciation study completed in September 2021 and approved by RUS in 2021 for rates effective in Years Ending December 31 2022 rhrough 2026. The Cooperative is unable to obtain rhe information to 2023 ................................................ $ 4,935 separate the cumulative removal costs as of D ecember 31, 2022 and 2021. 2024 ............................................... . 5,951 Maintenance, repair costs and replacement or renewal of minor items of 2025 ............................................... . 3,993 property are charged to operations. 2026.....................*.......................... 2,077 2027 ............................................... . 1,731 Significant components of electric plant were as follows as of December 31:

Thereafter ........................................... . 8,881 Depreciable Lives 2022 2021 Total ........................................... *****$ 27.568 Production 11-60 years $ 1,2 10,889 $ 1,208,130 Regulatory Assets-The Cooperative's accounting policies and the Transmission 23-50 years 656,156 642,029 consolidated financial statements conform to accounting principles generally Distribution 38 years 82,085 101,890 accepted in rhe United States of America applicable to electric cooperatives.

General plant 5-47 years 104,993 101,764 Orher 32 years 1,761 1,762 The noncurrent portion of regulatory assets as of December 31, 2022 and Construction work in process 142,025 87,032 2021, include rhe following:

2,197,909 2,142,607 2022 2021 Less accumulated depreciation (906,391} (867,431) Genoa #3 unrecovered plant balances ............ . $20,414 $ 25,614 Electric plant $ 1,291.518 $ 1,275,176 RockGen regulatory asset .......*.............. 645 Depreciation-Depreciation, which is based on the straight-line merhod Total regulatory assets ........................ . $21.059 $ 25,614 at rates that are designed to amortize the original cost of properties over Genoa #3 Unrecovered Plant Balances- During 2020, the Cooperative rheir estimated useful lives, includes a provision for rhe cost of removing established a regulatory asset related to rhe unrecovered plant balances upon and decommissioning rhe properties. The provision for depreciation closure of the Genoa #3 generating station rhat occurred in 2021. Immaterial averaged 2.7% and 2.5% of depreciable plant balances for 2022 and 2021, additional costs associated wirh rhe closure were added to the regulatory asset respectively. in 2022. Amounts are being recovered in rates rhrough 2029.

Allowance for Funds Used During Construction-Allowance for The current portion of the Genoa #3 regulatory asset as of December 31, funds used during construction (AFUDC) represents rhe cost of external 2022 and 2021 is $5,390 and $5,621, respectively. These amounts are and internal funds used for construction purposes, and is capitalized as recorded in prepayments and other assets.

a component of electric plant by applying a rate (4.169% in 2022 and 4.719% in 2021) to certain construction work in progress. The amount RockGen Regulatory Asset-During 2022, rhe Cooperative established a of such allowance was $2,870 in 2022 and $2,549 in 2021. The borrowed regulatory asset related to the difference in the amount being recovered in funds component of AFUDC for 2022 and 2021, was $1,705 and rates on a straight-line basis over the 20-year life of the RockGen Energy

$1,586, respectively (representing 2.445% and 2.929% in 2022 and 2021, Center and amortization on a GAAP basis which is being amortized based

________________________ ~~~~ I 2022 ANNUAL REPORT 25

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED on the underlying capacity contracts which have an estimated useful life of the amount of $6,000. The Board of Directors also approved an additional seven years. The difference between the GAAP amortization and the amounts regulatory liability revenue deferral in 2021 in the amount of $1,400 for recovered in rates are deferred as the regulatory asset. business growth and development. This amended deferral plan was approved by RUS in January 2022. In December 2022, the Board of Directors Deferred Charges-Deferred charges represent future revenue to the approved the amendment to carryforward the revenue deferral balance in Cooperative associated with costs that will be recovered from customers the amount of $6,880 into 2023 previously set for use in 2022. The plan was through the rate-making process. As of December 31 , 2022 and 2021, approved by RUS in January of 2023.

the Cooperative's deferred charges are being reflected in rates charged to customers, except the deferred nuclear litigation as noted below. If all or a Planned 2 022 John P. Madgett Outage Costs-In November 2021 , the separable portion of the Cooperative's operations become no longer subject to Board of Directors approved the creation of a regulatory liability revenue the provisions of regulatory accounting, a write-off of deferred charges would deferral plan in the amount of $1,900. The deferral plan was approved by be required, unless some form of transition recovery (refund) continues RUS in February of 2022. The Cooperative recognized this amount in 2022.

through rares established and collected for the Cooperative's remaining Electric Vehicle Charging- In January 2022, the Board of Directors regulated operations. In addition, the Cooperative would be required to approved the carryforward of a 2020 revenue deferral plan in the amount of determine any impairment to the carrying costs of deregulated plant and

$368. The amended deferral plan was approved by RUS in February 2022.

inventory assets.

The Cooperative recognized this amount in 2022.

The noncurrent portion of deferred charges as of December 31, 2022 and Deferred Credits-Deferred credits represent both future revenue to 2021 , include the following:

the Cooperative associated with customer prepayments and noncurrent 2022 2021 obligations and reserves related to operations. As of December 31 , 2022, the Nemadji Trail Energy Center . .................. $ 14,775 $ 9,986 Cooperative's deferred credits are being considered when determining rates Deferred Nuclear Litigation . . . . . . . . . . . . . . . . . . . . 44 8,858 charged to customers.

Other ..................................... _ _6=6=0~--5-1-3 Deferred credits as of December 31, 2022 and 2021 were comprised of the Total deferred charges .. ....................... =$===15=,4=7=9====$=====19=,3!:!5=7 following:

Nemadji Trail Energy Center-Costs relating to the Nemadji Trail Energy 2022 2021 Center natural gas project are being accumulated in deferred charges. These Customer energy prepayments .................. $ - $ 7,924 charges will be amortized when the plant is in service (currently estimated for RockGen startup revenue deferral. . . . . . . . . . . . . . . . 2,607 2027).

Elk Mound startup revenue deferral. . . . . . . . . . . . . . 1,853 1,432 Deferred Nuclear Litigation-Litigation expenses from the third nuclear Other .................................... *--~6,._,8~--~6=2 contract damages claim against the United States government were deferred $ 4,528 $ 9,418 in 2021. Settlement was reached on the third claim in January 2022 and Sales of Electric Energy-Revenues from sales of electric energy are 2021 deferred charges were extinguished and offset the proceeds. See further recognized when energy is delivered. The class A wholesale rates approved by discussion in Note 14.

the Board of Directors have a power cost adjustment that allows for increases Cash and Cash Equivalents-Cash equivalents include all highly liquid or decreases in class A member power billings based upon actual power investments with original maturities of three months or less. Cash equivalents costs compared to plan. For 2022 and 2021 , the power cost adjustment consist primarily of commercial paper, stated at cost, which approximates co the class A members resulted in credits to sales billed of $15,613 and market. $3,834, respectively. These amounts are recorded in sales of electric energy in operating revenues on the consolidated statements of revenues, expenses and Fossil Fuels and Materials and Supplies-Coal inventories, as well as comprehensive income.

materials and supplies inventories, are stated at the lower of average cost or net realizable value. Other Operating Revenue--Ocher operating revenue primarily includes revenue received from transmission service and is recorded as services are Regulatory Liabilities-As of December 31 , 2022 and 2021, the provided.

Cooperative had various revenue deferrals reflected as regulatory liabilities.

The revenue deferrals pertained to favorable results from market credits Accounting for Energy Contracts-The Cooperative does not have any through transactions with the Mid-Continent Independent System Operator energy contracts that are required co be accounted for at fair value as of (MISO) in addition to favorable results due to market conditions. The December 31, 2022 and 2021.

summary of regulatory liabilities as of December 31, 2022 and 2021 is as Leases - The Cooperative determines if an arrangement is a lease at follows:

inception of the contract. The right-of-use assets represent the right co use 2022 2021 the underlying assets for the lease term and lease liabilities represent the Planned 2023 John P. Madgett outage costs ........ $ 13,000 $ 13,000 obligation to make lease payments arising from the leases. Right-of-use Business growth and development. .............. 6,880 7,400 assets and lease liabilities are recognized at lease commencement date based Planned 2022 John P. Madgett outage costs . . . . . . . . 1,900 on the present value of lease payments over the lease term. The Cooperative Electric vehicle charging stations ................ ________3-6-8 uses the implicit rate noted within the contract, when available. Otherwise,

$ 19,880 $ 22,668 the Cooperative uses its incremental borrowing rate estimated using recent debt issuances that correspond to various lease terms. The Cooperative does Planned 2023 John P. Madgett Outage Costs-The Board of Directors not recognize leases, for operating or finance type, with an initial term of 12 approved the creation of a regulatory liability revenue deferral plan in the months or less ("short-terms leases") on the consolidated balance sheets, and amount of $13,000 in 2021. The Cooperative deferred $13,000 of2021 the lease expense for these short-term leases is recognized on a straight-line revenue and plans to recognize this amount in 2023. The deferral plan was basis over the lease term within.

approved by RUS in February of 2022.

Use of Estimates-The preparation of consolidated financial statements Business Growth and Deve/.opment-In December 2021, the Board of in conformity with accounting principles generally accepted in the United Directors approved the carryforward of the 2020 revenue deferral plan in States of America requires management to make estimates and assumptions 26 DAIRYLAND POWER COOPERATIVE

that affect the reported amounts of assets and liabilities, and the disclosure borrowing rates. Advances from member cooperatives totaled $6,847 and of contingent assets and liabilities at the date of the consolidated financial $20,584 at December 31, 2022 and 2021, respectively. Interest expense statements, and the reported amounts of revenue and expenses during on member cooperative advances was $324 and $125 for the years ended the reporting period. Significant estimates in the consolidated financial December 31, 2022 and 2021, respectively. These amounts have been statements relate to postretirement benefit obligations, asset retirement included in interest expense on the consolidated statements of revenues, obligation liabilities, fixed-asset depreciable lives, and litigation and expenses, and comprehensive income.

contingencies. Actual results could differ from those estimates.

6. LONG-TERM OBLIGATIONS Concentration of Risk-Approximately 36.6% of the labor force for the Cooperative is under a collective bargaining agreements that expire between Long-term obligations as of December 31, 2022 and 2021, consist of the January 31, 2024 and January 31, 2025. following:

Subsequent Events-The Cooperative considered events for recognition or 2022 2021 disclosure in the consolidated financial statements that occurred subsequent Federal Financing Bankobligations-1.24%---4.49% $ 595,514 $584,270 to December 31, 2022, through April 3, 2023, the date the consolidated Fedetal Financing Bank obligations-4.50°/-5.20%. 190,826 201,942 financial statements were available to be issued. Total Federal Financing Bank . . . . . . . . . . . . 786,340 786,212 RUS obligations-4.125% and grant funds....... 2,036 2,557

3. ACCOUNTING STANDARDS CoBank notes-2.9% and 4.3% * . . . . . . . . . . . . . . 201,220 3,362 Private bonds placement obligations-3.42% * . . . . 67.500 70,833 Adopted- In February 2016, the FASB issued new accounting guidance for Long-term debt. ...................... 1,057,096 862,964 leases. The new guidance increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance Less current maturities....................... (53,651) (42,874)

Net long-term obligations ...................... $1,003,445 $ 820,090 sheet and disclosing key information about leasing arrangements in the financial statements. In January 2018, the FASB issued additional accounting Quarterly principal and interest payments on the long-term obligations to the guidance on leases, amending the guidance issued in 2016, to simplify the Federal Financing Bank (FFB) extend through 2053.

transition to the new guidance for land easements. The Cooperative adopted Long-term obligations to the RUS are payable in equal monthly principal the new lease guidance on January 1, 2022 using the modified retrospective and interest installments through 2024. Payments on the CoBank 2.6% and approach. The adoption of the new lease guidance did not have a material 4.32% notes are due quarterly, respectively, through 2023. The private bond impact on the Cooperative's financial statements.

placement is an amortizing 30 year term loan at an interest rate of 3.42%.

4. INCOME TAXES Quarterly principal and interest payments on this obligation extend through 2043.

The Internal Revenue Service has determined that Dairyland is exempt from federal income taxes under Section 501(c)(12) of the Internal Revenue Code. The Cooperative executed, filed and recorded an indenture of mortgage, Accordingly, the Cooperative's utiliry operations are generally exempt from security agreement and financing statement, dated as of September 13, 2011 federal and state income taxes and no provision for such taxes is recorded in and as supplemented (the "Indenture"), between the Cooperative, as grantor the consolidated financial statements. and U.S. Bank National Association, as trustee. The perfected lien of the Indenture on substantially all of the Cooperative's assets secured equally

5. LINES OF CREDIT and ratably all of the Cooperative's long-term debt with the exception of To provide interim financing capabilities, the Cooperative has arranged unsecured notes to Co Bank (balances of $1,345 and $3,362 at December 31, committed lines of credit with CoBank. The original line was executed on 2022 and 2021, respectively). The Cooperative is required to maintain and November 30, 2015, and amended on November 20, 2019, with availability has maintained certain financial ratios related to earnings in accordance with aggregating approximately $350,000. This facility has a five-year term and the covenants of its loan agreemen ts as of December 31, 2022.

provides funds both for short-term working capital requirements and for Scheduled maturities of the Cooperative's long-term obligations as of capital projects until permanent financing can be obtained. Some capital December 31, 2022, were as follows:

projects will last longer than one year, but the intent is to pay down the line Years Ending December 31 of credit as permanent funding is received.

2023 .............................................. $ 53,651 In December 2021, the Cooperative arranged a second line of credit for 2024 ............................................. . 63,618

$215,000. The purpose of these funds was to finance the purchase of the 2025 ............................................. . 54,609 RockGen plant. In June of 2022, this line of credit was converted into long- 2026 .................................... * * * * * * * * *

  • 56,082 term financing with Cobank. 2027 ....................... * * * * * * * * * * * * * * * * * * * * * *
  • 57,461 Compensating balance requirements and fees relating to the lines of credit Thereafter ......................................... . 771,675 were not significant in 2022 and 2021. Information regarding line of credit Total .............................................. $ 1,057,096 balances and activity for the years ended December 31, 2022 and 2021, is as 7. LEASES follows:

The Cooperative has entered into several finance lease agreements for large 2022 2021 vehicles and heavy equipment. The transactions are covered in the master Interest rate at year-end . . . . . . . . . . . . . . . . . . . . . . . 5.39 % 1.11% lease agreement with lease terms not exceeding seven years. At the end of the Line l - $350M ........................... $ 6,000 $ lease, the Cooperative can purchase the equipment for a bargain purchase Line2-$215M ........................... _ _ _ _ _ 20~2~,Z~O~Z price. The assets are amortized over the lesser of their related lease terms or Total borrowings outstanding at year-end ........ =$==6=,0=0=0=====$=2=0=9==,7=0=7 their estimated productive lives.

Average borrowings outstanding during year ..... =$=1=0=1=,2=7=6=====$===1=7=,4=7=6 The following table presents the components of the Cooperative's right-The Cooperative also allows member cooperatives to prepay their power of-use assets and liabilities related to leases and their classification in the bills and pays interest on these prepayments based on current short-term consolidated balance sheets as of December 31:

_________________________ ~ ~fn I 2022 ANNUAL REPORT 27

NOTES TO Tl:IE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ctas..ification in Consolidated similar securities and present value models using current rates available as of Component ofl.ease Balances Balance Sheets 2022 December 31, 2022 and 2021, is estimated to be as follows:

Assets:

Finance lease right-of-use assets Plantandequipmem-atoost. ................ $ 17,521 2022 2021 Liabilities: Recorded Fair Recorded Fair Current portion of finance lease liability Current marurities oflong-tenn obligations and .. $ 2,302 Value Value Value Value obligations and obligations undet finance leases Assets:

Long-tetm portion of finance lease liability Obligations under finance leases .............* 6,588 Othet investments . . . . . . . . . . . . * . . * . . . . . . $ 7,417 $ 7,147 $ 12,350 $ 12,350 The components of lease and their classification in the consolidated Investments in capital tetm certificates ofNRUCFC. ................ 9,176 9,176 9,176 9,176 statements of revenues, expense, and comprehensive income for the year Liabilities-long-term debt ............... 1,057,096 950,059 862,964 979,972 ended December 31 were as follows:

Assets and Liabilities Measured at Fair Value--Accounting principles ctas..ification in Slatements of Component ofl.ease&penses Rffenues, Expenses and Comp,:d,eosm, lnrome 2022 generally accepted in the United States of America establish a framework Operating lease expense Othet opetating c:xpen.sc, .................... $ 455 for measuring fair value by creating a hierarchy for observable independent Finance lease amortization Dcp=iation and amortization . . . . . . . . . . . . . . . 1,834 market inputs and unobservable market assumptions and provides for Fmance lease interest Interest expense. . . . . .. . . . . . . . . . . . . . . . . . . . . . 287 Shon-term lease expense Othet opetating and maintenance expenses ...*. ---21.6 required disclosures about fair value measurements. Considerable judgment Total lease expense $ 3,492 may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily The weighted average remaining lease term and weighted average discount indicative of the amounts that could be realized in a current market exchange.

rate as of and for the year ended December 31, 2022, were as follows:

A description of the inputs used in the valuation of assets and liabilities are as Weighted Average Remaining Weighted Average follows:

Lease Term (Years) Discount Rate Finance leases 5.05 3.12 % Level 1 inputs utilize observable market data in active markets for identical assets or liabilities. Level 2 inputs consist of observable market data, other Supplemental cash flow information related to leases for the year ended than that included in Level 1, that are either directly or indirectly observable.

December 31, 2022 was as follows:

Level 3 inputs consist of unobservable market data, which are typically based Cash paid for amounts included in the measurement oflease liabilities: on an entity's own assumptions of what a market participant would use in Operating cash outflows from finance leases ..................... $ 3,149 pricing an asset or liability as there is little, if any, related market activity. In Right-to-use assets obtained in exchange for lease obligations: instances where the determination of the fair value measurement is based on Finance leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 977 inputs from different levels of the fair value hierarchy, the level in the fair The reconciliation of the future undiscounted cash flows to the lease liabilities value hierarchy within which the entire fair value measurement falls is based presented on the Consolidated Balance Sheet as of December 31, 2022, were on the lowest-level input that is significant to the fair value measurement in as follows: its entirety. The Cooperative's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and Finance Leases considers factors specific to the asset or liability.

2023 .............................................. $ 2,683 2024.............................................. 2,186 The following table summarizes the Cooperative's assets and liabilities 2025.............................................. 2,114 measured at fair value on a recurring basis as of December 31, 2022 and 2026.............................................. 1,619 2021, aggregated by the level in the fair value hierarchy within which those 2027.................. . ........................... 997 measurements fall:

Thereafter .......................................... _ _ _9....5=6 Fair Value Measurements Usiqg Total lease payments... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,555 Q,,o,,d!',xain sag...-...

Adlw,Mad<mb OIi,,, s;g,,fum Less discount ....................................... - ~{..,.1=.6=6...,5)

Total lease liabilities .................................. ,.,$= ===8,..,8.,.9=0 2022 Fair Value md Liab;Jitb (Lewel 1) lnpaa oi-..blo (l.e.el 2)

Unol.n,l,le (Lewel3)

Assets--investments:

The undiscounted annual minimum leases payments due under the Cooperative's finance leases following the previous lease accounting standard Nuclear d<<ornmissioning funds ........... $ 2.o70 $ 2.o70 $ - $

Othet investments ...................... 7,417 435 1,428 5,554 as of December 31, 2021, were as follows: Investments in capital term certificates of ..*.

National Rural Utilities Finance Corporation 9,176 9,176 Finance Leases 2022 .............................................. $ 3,130 Investment fur deferred compensation....*.. 1.z~ l.Z1!!

$ 20,411 $ 2,505 $ 3,176 i 14,730 2023.............................................. 2,388 2024.............................................. 1,890 Fair Value Measurements Usiqg Sipl&mt 2025............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,818 Q,,o,,dl',xaiD Adlw,l\wlm,,b OIi,,, s;g,,fum 2026..............................................

Thereafter .......................................... _ _ _9~2=6 1,323 2021 Fair Value

,nd u.bilm,s (Lewel 1) oi-..blo (l.e.el 2)

Unol.n,l,le (Lewel3)

Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,525 Assets--investments:

Amounts representing interest .......................... --~{8_1-1-) Nuclear d<<ommissioning funds . . . . . . . . . . . $ 2,043 $ 2,043 $ - $

Present value of minimum lease payments..... . . . . . . . 10,714 Other investments ...................... 12,350 4,235 1,364 6,751 Investments in capital term certificates of Current maturities ................................... _ _ (=2=.7~4=0=) National Rural Utilities Finance Corporation 9,176 9,176 Long-term obligations ................................ = $==== 7!=,9=7=4 Investment fur deferred compensation. ***.*. l~l l~l -

8. FINANCIAL INSTRUMENTS $ 25,210 $ 6,278 $ 3,305 i l:?,927 The changes in Level 3 recurring fair value measurements using significant The fair value of the Cooperative's financial instruments other than unobservable inputs for the years ended December 31, 2022 and 2021, are as marketable securities and short-term borrowings, based on the rates for follows:

28 DAI RYLAND POWER COOPERATIVE

2022 2021 11. EMPLOYEE BENEFITS Other investments:

Multiemployer Defined-Benefit Pension Plan-Pension benefits for Balance-beginning of year $ 6,751 $ 8,096 New investment and loans made substantially all employees are provided through participation in the Loan repayments received and current maturities (409) National Rural Electric Cooperative Association (NRECA) Retirement Security Plan ("RS Plan). This is a defined benefit pension plan qualified Patronage capital allocations 52 55 Patronage capital retirements (1,242) under Section 401 and tax-exempt under Section 501 (a) of the Internal (221)

Revenue Code. Pension benefits are funded in accordance with the Balance--end of year $ 5,554 $ 6,751 provisions of the RS Plan and are based on salaries, as defined, of each The valuation of these assets involved management's judgment after participant. The Employee Retirement Income Security Act of 1974, consideration of market factors and the absence of market transparency, as amended by the Multiemployer Pension Plan Amendment Act of market liquidity and observable inputs. 1980, imposes certain liabilities on employers who are contributors to multiemployer plans in the event of a plan termination or an

9. RETIREMENT OF CAPITAL CREDITS employer's withdrawal. These plans have not been terminated, nor has The Cooperative's Board of Directors has adopted a policy of retiring the Cooperative undertaken any plans to withdraw from participation.

capital credits allocated to members on a first-in, first-out basis. As part of Since the RS Plan is a multiemployer plan for accounting purposes, all an equity development strategy adopted in 2003, patronage capital retired plan assets are available to pay benefits of any plan participant. Separate will be limited to no greater than 2% of the total assigned patronage capital asset accounts are not maintained for participating employers. This means balance as of December 31 of the prior year. This policy is subject to annual that assets contributed by one employer may be used to provide benefits review and approval by the Board of Directors and the RUS, and no cash to employees of other participating employers. The Cooperative may be retirements are to be made which would impair the financial condition of the contingently liable for its share of the RS Plan's unfunded vested liabilities.

Cooperative or violate any terms of its agreements. Since 2003, the amount The Cooperative's contributions to the RS Plan in 2022 and 2021 of nonoperating margins assigned to members each year is at the discretion represented less than 5% of the total contributions made to the plan by of the Board of Directors. Any unassigned nonoperating margins will become all participating employers. In 2013, the Cooperative made a voluntary unallocated reserves and part of permanent equity. Patronage capital amounts prepayment of $26,899 to this plan to reduce future contribution for the years ended December 31, 2022 and 2021, are as follows:

amounts. The remaining prepayment was fully amortized in 2021 .

.Asmgned Unasggned Total Expense for the RS Plan was $8,712 in 2022 and $15,161 in 2021. The Balance-December 31, 2020 $ 233,138 $ 93,461 $ 326,600 2022 expense includes contributions to the plan of $8,712 and $0 of Retirement of capital credits (4,663) (4,663) prepayment amortization. The 2021 expense includes contributions to the Current year margins 16,642 2,841 12.420 plan of $9,781 and $5,380 of prepayment amortization.

Balance-December 31, 2021 245,124 96,302 341,427 In the RS Plan, a "wne status" determination is not required, and therefore Retirement of capital credits (4,902) (4,902) not determined, under the Pension Protection Act (PPA) of 2006. In Current year margins 15,208 2,823 18,030 addition, the accumulated benefit obligations and plan assets are not Balance-December 31, 2022 $ 255,430 $ 99,125 $ 354,555 determined or allocated separately by individual employer. In total, the RS

10. COMMITMENTS AND CONTINGENCIES Plan was over 80% funded on both January 1, 2022 and 2021, based on the PPA funding target and PPA actuarial value of assets on those dates.

The Cooperative is a party to a number of generation, transmission and distribution agreements, under which costs and/or revenues are recognized Because the provisions of the PPA do not apply to the RS Plan, funding currently based upon the Cooperative's interpretations of the provisions improvement plans and surcharges are not applicable. Future contribution of the related agreements. Differences between the estimates used in the requirements are determined each year as part of the actuarial valuation of consolidated financial statements and the final settlements are recorded in the the plan and may change as a result of plan experience.

year of settlement. Postretirement Health Insurance Obligation-Certain employees of The Cooperative has entered into various coal purchase contracts with one- the Cooperative retiring at or after age 5 5 are eligible to participate in to four-year terms. The estimated commitments under these contracts as of a postretirement health care plan through age 65. Eligible dependents December 31, 2022, is as follows: of the retired Cooperative employees are also eligible to participate in this plan through age 65. Retirees pay 100% of the premium amount Years Ending December 31 for this coverage. The premium is based upon the combined medical 2023 .............................................. $ 45,198 claims experiences of all active employees and retirees. If premiums were 2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,388 determined based upon the medical claims experience of retirees only, the 2025.............................................. 14,629 resulting premium for retirees would be higher. The difference between 2026 ............................................ . . _ _...,1,..._ 14-2 the premium paid by retirees and the potential actual premium amount is Total .............................................. ,..$==93.,.,3=6=4 the basis for the postretirement benefit obligation. The Cooperative uses The Cooperative has been named as a defendant in various lawsuits and a December 31 measurement date for its plan. The postretirement health claims arising in the normal course of business. Although the outcome of care plan is unfunded.

these matters cannot be determined at the present time, management and The accumulated postretirement benefit obligation (APBO) and the legal counsel believe these actions can be successfully defended or resolved amounts recognized in the consolidated financial statements as of and for without a material effect on the consolidated financial position, results of the years ended December 31, 2022 and 2021, are as follows:

operations or cash flows of the Cooperative.

________________________ ~~~ I 2022 ANNUAL REPO RT 29

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 2022 2021 All amounts of compensation deferred under the plans and all income Amount recognized in the consolidated balance sheets: anributable to those amounts (until paid or made available to the Total accrued qualified and nonqualified benefit obligation ... $ 4,392 $ 5,560 employee or other beneficiary) are solely the properry and rights of the Les.s current portion included in accrued expenses----other. . . . _ _.....(3.,,8.,6),,__ _.....C.,_39.,,,6)

Cooperative (not restricted to the payment of benefits under the plan),

Long-term portion ................................... =$==4='=006 ===== $ =._5,..164 =

subject only to the claim of general creditors. Participants' rights under Change in benefit obligation:

APBO-beginningofyeat ...............* ............ $ 5,560 $ 5,825 the plans are equal to those of general creditors of the Cooperative in an Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 354 amount equal to the fair market value of the deferred account for each Interest cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 117 participant. The related assets and liabilities, totaling $1,748 and $1,941 Actuarial loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,204) (434) as of December 31, 2022 and 2021, respectively, are reported at contract Benefits paid ...................... , ................ _ __,.(3~9=6)"-_ __,.(3..,0., , 2) value, which approximates fair value.

APBO--end of year ................................. =$==4.!= 23..,9;;;,

2 ===$=.,.5,..,560 =

Funded status of plan-December 31 .................... =$==(4,!!, 23..,92;.il===3$===-(5:1,,5=6='0) The Cooperative also provides employees with medical insurance Accrued postretirement health inswance obligations coverage, vision and dental insurance coverage, short-term and long-term recorded at yeat-end ................................. =$===!""========5=-, 4,392 $ 5=6=0 disabiliry, and life insurance, which are funded by employer and employee Change in plan assets: contributions. The Cooperative's costs related to these benefits were $9,180 Employer contribution ............................... $ (396) $ (302) and $9,867 for 2022 and 2021, respectively. The liability for these plans of Benefits paid . * . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . --~=---~30=2 3% $47 and $59 as of December 31, 2022 and 2021, respectively, are recorded in other accrued expenses on the consolidated balance sheets.

Change in accumulated other comprehensive income:

Net income at prior measurement date................... $ 1,753 $ 1,376 12. RELATED-PARTY TRANSACTIONS Actuarial assumption changes ......................... . 1,204 434 Recognition in expense: The Cooperative provides electric and other services to its class A members.

Amortization of prior service cost. .................... . The Cooperative received revenue of $408,146 and $376,523 in 2022 Amortization of unrecognized actuarial gain ............. - - - - ' =(80) '----:uL (57)

J and 2021, respectively, for these services. The Cooperative has accounts Accumulated other comprehensive income ................ = 2,877 $ 1,753

$================== receivable from its class A members of $35,879 and $30,829 as of Components of ner periodic postretirement benefit cost:

December 31, 2022 and 2021, respectively.

Service cost-benefits attributed to service during the year..... $ 295 $ 354 Interest cost on accrued postretirement health The Cooperative has advances from class A members of $6,847 and insurance obligation ............................... . 137 117 $20,584 as of December 31, 2022 and 2021, respectively, related to the Amortization of prior service cost. ..................... . prepayment program. Class A members have the option of paying their Amortization of unrecogni7.ed actuarial gain ............. . (80) /57) electric bill in advance, and in turn, the Cooperative pays the members' Net periodic postretirement benefit expense ................ =$======~ 352 ======== $ 414 interest income. The Cooperative's interest expense related to the Employer cash contributions expected to be made to the plan during the prepayment program was $324 and $125 for the years ended December fiscal year ending December 31, 2023, is $386. The amount of accumulated 31, 2022 and 2021, respectively.

other comprehensive income expected to be recognized during the fiscal yeat ending December 31, 2023, is an actuacial gain of $162 and amortization of 13. ASSET RETIREMENT OBLIGATIONS prior service cost of $0. All prior service costs have been fully amortized. An asset retirement obligation (ARO) is the result of legal or contractual For measurement purposes, a 4.93% and 2.55% discount rate was assumed obligations associated with the retirement of a tangible long-lived asset for 2022 and 2021, respectively, to determine net periodic benefit cost. that results from the acquisition, construction, or development and/or The 2022 and 2021 annual health care cost increase assumed is 6.25% and the normal operation of a long-lived asset. The Cooperative determines 6.50%, respectively, decreasing gradually to 4.46% for 2041 and thereafter. these obligations based on an estimated asset retirement cost adjusted for inflation and projected to the estimated settlement dates and discounted Estimated future benefit payments from the plan as of December 31, 2022, using a credit-adjusted risk free interest rate. Upon initial recognition of a are as follows: liability for ARO, the Cooperative capitalizes the asset retirement cost by Years Ending December 31 increasing the carrying amount of the related long lived asset by the same 2023 .............................................. $ 386 amount as the liability. The Cooperative allocates that asset retirement cost 2024.............................................. 330 to expense using the straight-line method over the remaining useful life of 2025.............................................. 339 the related long-lived asset. The accretion of the obligation is recognized 2026.............................................. 402 over time up to the senlement date. Any future change in estimate will 2027.............................................. 357 be recognized as an increase or a decrease in the carrying amount of the 2028-2032. ........................................ 1,466 liability for an ARO and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset.

Defined-Contribution Plan-Dairyland has a qualified tax-deferred savings plan for eligible employees. Eligible patticipants hired prior to January 1, The Cooperative determined that it has AROs related to future removal 2020 may make pretax contributions, as defined, with the Cooperative and disposal of asbestos at its power plants. There are no assets legally matching up to 2.5% of the patticipants' annual compensation. Eligible restricted for purpose of settling the ARO related to future removal and participants hired after December 31, 2019 may make pretax contributions, disposal of asbestos. The ARO balance related to the future removal and as defined, with the Cooperative matching up to 13% of the participants' disposal of asbestos was $244 as of both December 31, 2022 and 2021.

annual compensation. Contributions to this plan by the Cooperative were The balance is recorded within Other Liabilities on the consolidated

$1,589 and $1,409 for 2022 and 2021, respectively. balance sheets.

Other Plans-The Cooperative offers key employees deferred compensation The Cooperative has established a decommissioning trust to accumulate plans available through NRECA. The plans permit qualifying employees to the estimated amounts necessary to decommission a nuclear power plant defer a portion of their salary until future years. The accumulated deferred that the Cooperative formerly operated and the related Independent Spent compensation balance is not available to employees until termination, Fuel Storage Installation (ISFSI). The assets of this trust in the amount of retirement or death. $2,070 and $2,043 as of December 31, 2022 and 2021, respectively, ate JQ DAIRYLAND POWER COOPERATIVE

outside the Cooperative's administrative control and are available solely to incurred, Solutions submits requests for withdrawals to the Cooperative for satisfy the future costs of decommissioning. As the expected completion is release of funds from the nuclear decommissioning trust.

planned for 2023, the balance of the trust as of December 31, 2022 of $57 is recorded as current in the consolidated balance sheet. The remaining $2,013 15. SUPPLEMENTAL DISCLOSURES OF CASH is related to the annual ISFSI costs that will remain after completion of the FLOW INFORMATION decommissioning. The statement of cash flows includes the following supplemental information The Cooperative did not record a conditional ARO related to the as of December 31, 2022 and 2021:

dismantlement of the dam and drainage reservoir for the hydro generation 2022 2021 plant at Flambeau, the removal of transmission lines in various corridors, and Cash paid for interest ......................... $ 35,928 $ 24,062 RockGen Energy Center because the Cooperative does not have sufficient Electric plant additions funded through accounts payable information to estimate the fair value of the ARO. and accrued expenses ....................... . 5,367 4,357

14. NUCLEAR REACTOR Electric plant additions under capital leases ....... . 977 4,337 License--The La Crosse Boiling Water Nuclear Reactor (LACBWR) was The amount shown in the consolidated statements of cash flows for cash, voluntarily removed from service by the Cooperative effective April 30, 1987. cash equivalents and restricted cash as of December 31, 2022 of $46,193 The intent was to terminate operation of the reactor, and a possession-only is comprised of cash and cash equivalents of $25,878, designated funds of license was obtained from the Nuclear Regulatory Commission (NRC) in $19,880 and $435 of restricted cash included in other investments. The August 1987. LACBWR will remain in safe storage status (SAFSTOR) until amount shown in the consolidated statements of cash flows for cash, cash the final stage of decommissioning ofLACBWR, involving dismantlement equivalents and restricted cash as of December 31, 2021 of $68,912 is and decontamination, can be completed. In May 2016, the NRC approved comprised of cash and cash equivalents of $46,244 and designated funds of transfer of the license to La CrosseSolutions LLC (Solutions), a subsidiary $22,668.

of EnergySolutions LLC. Solutions will temporarily hold the license and 16. REVENUE FROM CONTRACTS WITH assumes responsibility for the decommissioning of the site. The license will revert back to the Cooperative following completion of decommissioning CUSTOMERS activities. While Solutions undertakes decommissioning, the Cooperative Sales of electric energy consists of sales to members pursuant to long-term retains a license for its continued ownership of the spent fuel. wholesale electric contracts. Dairyland recognizes revenue based on the amount of energy delivered to each customer at agreed upon rates. The Nuclear Waste Policy Act of 1982 (NWPA)-Under the NWPA, the measurement of energy sales to customers is generally based on meter data, United States government is responsible for the storage and disposal of spent which is collected through the last day of the month. At the end of each nuclear fuel removed from nuclear reactors. By statute and under contract, month, amounts of energy delivered to customers is recognized.

the United States government was to have begun accepting spent fuel in January 1998, but has not yet licensed and established a repository. We are an active participant in the MISO Energy Markets, where we bid our generation into the Day Ahead and Real Time markets and procure The Cooperative has filed two successful breach of contract damage claims electricity for our wholesale customers and sell energy at prices determined against the United States government in the United States Court of Federal by the MISO Energy Markets. Purchase and sale transactions are recorded Claims to recover its costs generally incurred after 1998 through 2013 related using settlement information provided by MISO. Purchase transactions to spent fuel remaining at LACBWR. The Cooperative received damage are accounted for on a net hourly position. Net purchases in a single hour award payments of $37,659 and $73,500 in January 2013 and November are recorded as purchased and interchanged power. Sales of excess energy 2017, respectively. Proceeds from the award payments were used to defease transacted through MISO are recorded on a gross basis in other sales. For the nuclear related regulatory asset and deferred charges for nuclear related sales to the MISO Energy Markets, we have no performance obligation until litigation and plant costs. Remaining proceeds have been refunded to Class A the energy is sold.

Members.

The Cooperative's members consist of Class A, C, D, and E members. Class In January of 2022, the Board of Directors approved a motion to accept a A members purchase wholesale electric service and rates are set annually partial summary judgement in the amount of $23.1 million from the United with approval by the Board of Directors. Contract term is determined by the States government related to the NWPA third contract damage claim. Claim Wholesale Power Contract that is in effect until December 31, 2062. The proceeds, less accrued legal fees, were refunded back to Class A Members in contract automatically extends an additional (2) years in each odd-numbered February 2022.

year beginning January 1, 2021 unless either the Cooperative or member Subsequent damage claims will be filed to recover the continuing costs arising give notice no later than the preceding September 1 of its election not to from the presence of the spent fuel. extend further. Class C member revenue represents contractual sales to GRE ISFSI-The Cooperative completed the temporary dry storage facility project which were recognized through 2021. Class D member revenues are based located on the LACBWR site and completed the move of the LACBWR on various contracts with wholesale municipal members. Class E member spent nuclear fuel to this ISFSI facility in September 2012. The spent revenues primarily reflect sales to MISO.

nuclear fuel will remain at the ISFSI until it is able to be transferred to the The following table disaggregates revenue by major source for the years ended government. Annual ISFSI costs are recorded on an as incurred basis and December 31, 2022 and 2021:

incorporated into the annual budget and rate making process.

2022 2021 Decommissioning-The Solutions decommissioning plan anticipates Class A .......................................... $ 408,146 $ 376,522 completion of decommissioning LACBWR, not including the ISFSI, in Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,387 2023. The estimated costs of decommissioning the nuclear generating facility Class D.......................................... 21,423 16,879 are based on the Solutions cost study and decommissioning plan filed with Class E, including MISO............................ 69,693 53,552 the NRC as part of the license transfer. Costs incurred for decommissioning Other sales ....................................... __ 31-,8~6=1_ _1~4....2...54'""

projects are charged against the decommissioning liability. As costs are Total ..........................*................. =$=53=1=,1=2=3==$=46=!!:3,!!!=59~4

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ~[bl!.~~ I 2022 ANNUAL REPORT 31

MEMBERS As of January 1, 2023 CLASS A MEMBERS SPECIAL SERVICES MEMBERS FACILITIES ON MAP WISCONSIN Adams-Columbia Electric Cooperative I Headquarters I La Crosse, Wis.

Barron Electric Cooperative I Barron Friendship, Wis. John P. Madgett Station I Alma, Wis.

Bayfield Electric Cooperative I Iron River Central Wisconsin Electric Cooperative I Elk Mound Generating Station I Chippewa Valley Electric Cooperative I Iola, Wis. Elk Mound, Wis.

Cornell Oconto Electric Cooperative I Oconto Falls, Wis. Flambeau Hydro Station I Ladysmith, Wis.

Clark Electric Cooperative I Greenwood I Rock Energy Cooperative Janesville, Wis. Genoa Site I Genoa, Wis.

I Dunn Energy Cooperative Menomonie I RockGen Energy Center Cambridge, Wis.

Eau Claire Energy Cooperative I Fall Creek CLASS C MEMBERS Sartell Hydro Station I Sartell, Minn.

Jackson Electric Cooperative I Great River Energy I Maple Grove, Minn. (Eagle Creek Renewable Energy, LLC)

Black River Falls Minnkota Power Cooperative I Weston 4 Generating Station I I

Jump River Electric Cooperative Ladysmith Grand Forks, N.D. Wausau, Wis.

I Oakdale Electric Cooperative Oakdale Pierce Pepin Cooperative Services I Planned Energy Resources MUNICI PAL CUSTOMERS Ellsworth Nemadji Trail Energy Center I Superior, Wis.

Polk-Burnett Electric Cooperative I Centuria 0 CLASS D MUNICIPAL MEMBERS Badger State Solar I Jefferson, Wis.

City of Arcadia, Wis.

Price Electric Cooperative I Phillips (Ranger Power)

Village of Argyle, Wis.

Richland Electric Cooperative I Village of Cashton, Wis.

Richland Center Wind Facilities City of Cumberland, Wis.

Riverland Energy Cooperative I Arcadia Gundersen Wind I Lewiston, Minn.

City of Elroy, Wis.

St. Croix Electric Cooperative I Hammond I McNeilus (Juhl) Wind Adams, Minn.

City of Fennimore, Wis.

Scenic Rivers Energy Cooperative I McNeilus Dodge I Dodge Center, Minn.

City of Forest City, Iowa Lancaster Prairie Star Wind I Austin, Minn.

Village of La Farge, Wis.

Taylor Electric Cooperative I Medford Quilt Block Wind I Darlington, Wis. (EDP City of Lake Mills, Iowa Vernon Electric Cooperative I Westby Renewables)

City of Lanesboro, Minn.

Tetonka Ridge Wind I Deuel County, S.D.

McGregor Municipal Utilities, Iowa IOWA/ MINNESOTA (Tetonka Ridge Wind, LLC)

Village of Merrillan, Wis.

Mi Energy Cooperative I Cresco & Rushford Winnebago Wind I Thompson, Iowa City of New Lisbon, Wis.

(Avangrid)

Osage Municipal Utilities, Iowa IOWA City of St. Charles, Minn.

Allamakee-Clayton Electric Cooperative I Solar Energy Sites City of Strawberry Point, Iowa Postville Wisconsin: Arcadia, Centuria, Conrath, Village of Viola, Wis.

Heartland Power Cooperative I Hallie, Hillsboro, Liberty Pole, Medford, Thompson & St. Ansgar Menomonie, Mt. Hope, Necedah, New 0 POWER SUPPLY CUSTOMERS Auburn, Phillips, Roberts, Viola & Westby MINNESOTA Village of Bangor, Wis.

Freeborn Mower Electric Cooperative I City of Clintonville, Wis. M innesota: Albert Lea & Oronoco Albert Lea City of Cornell, Wis.

People's Energy Cooperative I Oronoco City of Kiel, Wis. Illinois: Thomson City of Manitowoc, Wis.

ILLINOIS City of Medford, Wis. Iowa: Decorah & Strawberry Point Jo-Carroll Energy I Elizabeth City of Shawano, Wis.

Village of Stratford, Wis.

Village of Trempealeau, Wis.

FACILITIES NOT SHOWN Waste Management, Inc., Facilities:

City of Wisconsin Rapids, Wis.

I Central Disposal Landfill Lake Mills, Iowa I

Timberline Trail Landfill Weyerhaeuser, Wis.

CLASS E MEMBERS Alliant Energy I Madison, Wis.

Northwestern Wisconsin Electric Co. I Frederic, Wis.

NSP-Minnesota I St. Paul, Minn.

NSP-Wisconsin I Eau Claire, Wis.

Southern Minnesota Municipal Power Agency I Rochester, Minn.

32 DAIRYLAND POWER COOPERATIVE

SAIITELL HYDRO WESTON4 TATANKA RIDGE WIND (SOUIH DAKOTA)

MINNESOTA WISCONSIN ROCKGEN ENERGY CENTER BADGER STAT!

SOLAR*

IOWA

  • PLANNED FACILITIES ILLINOIS Generating Stations Under Contract Gas Engine YorkJCE .............. 2 .1 Coal (Steam) Solar Small solar .......... 44.91 John P. Madgett ............ . .. .3 87 (40 sites) Wind Gundersen Wind ........ 5 Weston# 4 * .................. 165 Digesters McNeilus (Juhl) ....... 17.4 Small digesters ....... 1.94 Hydro (Biogas) McNeilus Dodge ...... 5.7 (3 sites)

Flambeau .................... 18.8 Prairie Star Wind* * ...... 5 Combustion Turbine (Gas/Oil) Hydro Manitoba Hydro Quilt Block Wind ....... 98 Elk Mound 1-2 . . . . . . . . . . . . . . . . 74 Exchange ............ 50 TatankaWind* ** .... 51.6 RockGen ................... . . 503 Sartell Hydro ........... 10 Winnebago Wind Farm .. 20 TOTAL DAIRYLAND CAPACITY 1,147.8 Landfill Gas Tim berline Trails . ....... 5.6 Small Wind (< 5 MW) .... 4

  • Dairyland Share of Wes/on # 4 Central Disposal ....... 4 .8
  • 5% Shore of 100 MW Wind Farm
  • *
  • 33% Shore of 154.8 MW Wind Farm TOTAL UNDER CONTRACT *************************************** 326.05 Some wind, solo, and digester technologies do not have associated Renewable Energy Credits (RECs) TOTAL CAPACITY IN SERVICE ************************************ 1, 473.85

_________________________ ~ ~~ I 2022 ANNUAL REPORT 33

DAIRYLAND POWER COOPERATIVE

~

A Touchstone Energy* Cooperative 3200 East Avenue South

  • P.O. Box 817
  • la Crosse, WI 54602-0817
  • www.DairylandPower.com A As part of our sustainability efforts to preserve the environment,

-../,,J this report was designed and printed on FSC Certified paper by FSC Powered Printing, a service of Dairyland Power. ERED Dairyland Power Cooperative is an equal opportunity provider & employer.

PRINTING Design/Print/Mail Follow us on: II CJ mt

Retrieved from "https://kanterella.com/w/index.php?title=ML23192A064&oldid=3579070"