2019-10-25T12:48:59-05:00 2018-12-31 390859910 BAKER TILLY VIRCHOW KRAUSE LLP 225 S 6TH ST 2300 MINNEAPOLIS MN 55402 990 2018-01-01 043736566 MIDWEST RELIABILITY ORGANIZATION MIDW 6518551760 380 ST PETER STREET NO 800 ST PAUL MN 55102 SARA PATRICK PRESIDENT/CEO 6518551707 2019-10-08 1 LAWRENCE H MOHR CPA P00447603 6128764500 38.88.188.75 2019-10-08 11:56:57 CD P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 EDB264CAD7F9F6CD2E19D356927987B2A35A11B0 2018 2019-02-21 02:37:17Z SARA PATRICK 380 ST PETER STREET NO 800 ST PAUL MN 55102 15567793 0 X WWW.MIDWESTRELIABILITY.ORG X 2002 DE ENSURE THE RELIABILITY OF THE BULK POWER SYSTEM IN THE CENTRAL PART OF NORTH AMERICA. THE PRIMARY FOCUS IS ASSESSING COMPLIANCE WITH RELIABILITY STANDARDS ON ENTITIES THAT OWN, OPERATE OR USE THE BULK POWER SYSTEM ("BPS"), PERFORMING ASSESSMENTS OF THE BPS, AND TECHNICAL ANALYSIS OF MATTERS IMPACTING THE RELIABILITY OF THE BPS IN THE CENTRAL PART OF NORTH AMERICA. 19 17 58 17 0 52466 10494345 15425792 0 0 0 0 166250 142001 10660595 15567793 0 0 0 0 8038288 9992826 0 0 0 2790041 3533587 10828329 13526413 -167734 2041380 6074256 8980130 3548213 3682314 2526043 5297816 X ENSURE THE RELIABILITY OF THE BULK POWER SYSTEM IN THE CENTRAL PART OF NORTH AMERICA. THE PRIMARY FOCUS IS ASSESSING COMPLIANCE WITH RELIABILITY STANDARDS ON ENTITIES THAT OWN, OPERATE OR USE THE BULK POWER SYSTEM ("BPS"), PERFORMING ASSESSMENTS OF THE BPS, AND TECHNICAL ANALYSIS OF MATTERS IMPACTING THE RELIABILITY OF THE BPS IN THE CENTRAL PART OF NORTH AMERICA. 1 0 4148565 7756469 COMPLIANCE MONITORING ENFORCEMENT PROGRAM: THE MRO STAFF WILL MONITOR, ASSESS, AND ENFORCE COMPLIANCE OF RELIABILITY STANDARDS FOR EACH REGISTRANT (ALSO KNOWN AS REGISTERED ENTITY) THAT HAS COMPLIANCE RESPONSIBILITIES AS DEFINED IN THE MRO REGISTRY IN A NON-DISCRIMINATORY MANNER WITH THE APPROPRIATE DUE PROCESS. IN THE UNITED STATES, MRO ENFORCES RELIABILITY STANDARDS ACCORDING TO COMMISSION-APPROVED RULES (COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM OR "CMEP"). IN SASKATCHEWAN, MRO CARRIES OUT ITS RESPONSIBILITIES ACCORDING TO AN AGREEMENT WITH THE APPLICABLE PROVINCIAL AUTHORITY. IN MANITOBA, MRO CARRIES OUT ITS RESPONSIBILITIES ACCORDING TO THE APPLICABLE STATUTORY FRAMEWORK IN THE PROVINCE. 1721169 4695689 TRANSITION OF SOUTHWEST POWER POOL RE:THE MRO UNDERWENT A GEOGRAPHICAL EXPANSION THAT INCLUDED 87 PERCENT OF THE REGION FORMERLY KNOWN AS SOUTHWEST POWER POOL. THIS EXPANSION INCLUDED THE EXTENSION OF PROGRAM SERVICES FROM ALL PROGRAM AREAS TO THE NEW TERRITORY. ADDITIONALLY EFFORTS UNDER THIS EXPANSION INCLUDED THE INTEGRATION OF NEW REGISTRANTS (KNOWN AS REGISTERED ENTITIES) FROM WITHIN THE NEW EXPANDED AREA. THIS TRANSITION PROGRAM IS A ONE-TIME EVENT. 1524356 2361808 RELIABILITY ASSESSMENT:THE MRO ANALYZES, ASSESSES, AND REPORTS ON RELIABILITY AND ADEQUACY IN THE PAST, PRESENT, AND FUTURE. THIS INCLUDES THE LONG-TERM AND SEASONAL ASSESSMENTS DEVELOPED BY THE RELIABILITY ASSESSMENT COMMITTEE ("RAC") AND ITS SUBCOMMITTEES AS REQUIRED BY THE RDA. IN 2008, NERC ADDED A FOURTH ASSESSMENT, CALLED THE SCENARIO ASSESSMENT, TO ITS REQUIREMENTS. THIS FOURTH ASSESSMENT WILL BE PERFORMED EVERY ONE TO TWO YEARS IN CONJUNCTION WITH THE LONG-TERM ASSESSMENT. 3057903 753827 MRO IS ACCOUNTABLE TO REGULATORS IN THE UNITED STATES AND CANADA FOR THE CONDUCT OF ITS WORK AND MUST SUBMIT PERFORMANCE ASSESSMENTS ON A PERIODIC BASIS AND ITS BUDGET IS SUBJECT TO REVIEW AND COMMENTS BY THE PUBLIC AND ULTIMATELY APPROVED BY US REGULATORY AUTHORITIES. 3057903 753827 10451993 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 25 0 58 1 1 1 0 0 0 0 0 0 0 0 0 0 0 X 19 17 0 0 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 0 0 MN X SARA PATRICK 6518551760 380 ST PETER STREET STE 800 ST PAUL MN 55102 SILVIA PARADA MITCHELL BOARD CHAIR 5.00 X X 0 0 0 THOMAS KENT BOARD VICE CHAIR 5.00 X X 0 0 0 RICHARD DOYING BOARD MEMBER 6.50 X 0 0 0 PAUL BARBER BOARD MEMBER 8.50 X 92800 0 0 MICHELINE CASEY BOARD MEMBER 6.50 X 74000 0 0 ANTHONY CLARK BOARD MEMBER 5.00 X 0 0 0 BRAD COX BOARD MEMBER 6.50 X 0 0 0 IQBAL DHAMI BOARD MEMBER 5.00 X 0 0 0 CHRIS FLEEGE BOARD MEMBER 5.00 X 0 0 0 JEFF GUST BOARD MEMBER 5.00 X 0 0 0 DOUG JOHNSON BOARD MEMBER 5.00 X 0 0 0 LLOYD LINKE BOARD MEMBER 5.00 X 0 0 0 LARRY KOSHIRE BOARD MEMBER 5.00 X 0 0 0 JOE MCGOVERN BOARD MEMBER 5.00 X 0 0 0 TERESA MOGENSEN BOARD MEMBER 5.00 X 0 0 0 GORDON PIETSCH BOARD MEMBER 5.00 X 0 0 0 JOANN THOMPSON BOARD MEMBER 5.00 X 0 0 0 KRISTA TANNER BOARD MEMBER 5.00 X 0 0 0 RAY WAHLE BOARD MEMBER 5.00 X 0 0 0 DAN SKAAR PRESIDENT/CEO (PART YEAR) 45.00 X 582965 0 17590 MIGGIE CRAMBLIT SECRETARY 45.00 X 290645 0 55510 SUE CLARKE TREASURER 45.00 X 250366 0 79310 SARA PATRICK PRESIDENT/CEO 45.00 X 417049 0 70565 DAN SCHOENECKER VP OF OPERATIONS 45.00 X 313103 0 75673 RICHARD BURT SR. VP & COO 45.00 X 267760 0 44595 VALERIE AGNEW VP OF ENFORCEMENT 45.00 X 229746 0 48236 JOHN SEIDEL MANAGER OF RELIABILITY OPE 45.00 X 178160 0 56547 RUSSEL MOUNTJOY MANAGER OF STANDARDS, CERTIF., REGIST 45.00 X 167462 0 44219 WILLIAM STEINER DIRECTOR OF RISK ASSESS. 45.00 X 170206 0 45261 STEEN FJALSTAD SECURITY PRINCIPAL 45.00 X 153862 0 33889 KEN GARTNER DIRECOF INTERNAL AFFAIRS 45.00 X 152178 0 36494 JEFF NORMAN DIRECTOR OF COMPLIANCE 45.00 X 150191 0 31113 SALVA ANDIAPPAN MANAGER OF RELIABILITY ASSESS. 45.00 X 148526 0 49982 MARK FLANARY PRINCIPAL RISK ASSESS. ENGINEER 45.00 X 147124 0 36948 3786143 0 725932 31 0 1 0 RUSSELL REYNOLDS ASSOCIATES INC CHURCH STREET STATION PO BOX 6427 NEW YORK NY 10249 PROFESSIONAL RECRUITMENT SERVICES 231600 ATOMIC DATA LLC 250 MARQUETTE AVE SUITE 225 MINNEAPOLIS MN 55401 IT CONSULTING 127826 2 15425792 15425792 PENALTY SANCTIONS 900099 142001 142001 142001 15567793 142001 0 0 2506034 1227657 1278377 5836251 5169198 667053 915892 792079 123813 244084 203307 40777 490565 408611 81954 32386 10208 22178 62495 62495 542415 375035 167380 444442 336623 107819 612660 464031 148629 741981 603334 138647 385991 292351 93640 87054 65935 21119 554045 450516 103529 70118 53108 17010 13526413 10451993 3074420 0 4203712 7237467 306060 167671 4407925 2872791 1524626 1535134 39858 39858 6074256 8980130 1176679 1398458 749798 1224601 1621736 1059255 3548213 3682314 X 2526043 5297816 2526043 5297816 6074256 8980130 X 2041380 730393 X 0 1 X 1 0 X 9426018 10891562 10494345 15425792 46237717 9426018 10891562 10494345 15425792 46237717 46237717 395000 136249 166250 142001 839500 47077217 X SCHEDULE A, PART II, LINE 10, EXPLANATION OF OTHER INCOME: PENALTY SANCTIONS - 2015 AMOUNT: $ 395,000. 2016 AMOUNT: $ 136,249. 2017 AMOUNT: $ 166,250. 2018 AMOUNT: $ 142,001. 976320 288098 688222 2239644 1693573 546071 1191961 891120 300841 1535134 POSTRETIREMENT BENEFIT OBLIGATIONS 463404 ACCRUED RETIREMENT PLAN CONTRIBUTIONS 595851 1059255 X 15567793 0 15567793 0 15567793 12796020 -730393 -730393 13526413 0 13526413 PART X, LINE 2: THE INTERNAL REVENUE SERVICE HAS DETERMINED THAT THE ORGANIZATION IS EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. THEY ARE ALSO EXEMPT FROM STATE INCOME TAXES UNDER APPLICABLE STATE OF MINNESOTA PROVISIONS. HOWEVER, ANY UNRELATED BUSINESS INCOME MAY BE SUBJECT TO TAXATION. THE ORGANIZATION FOLLOWS THE ACCOUNTING STANDARDS FOR CONTINGENCIES IN EVALUATING UNCERTAIN TAX POSITIONS. THIS GUIDANCE PRESCRIBES RECOGNITION THRESHOLD PRINCIPLES FOR THE FINANCIAL STATEMENT RECOGNITION OF TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN ON A TAX RETURN THAT ARE NOT CERTAIN TO BE REALIZED. NO LIABILITY HAS BEEN RECOGNIZED BY THE ORGANIZATION FOR UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2018 AND 2017. THE ORGANIZATION'S TAX RETURNS ARE SUBJECT TO REVIEW AND EXAMINATION BY FEDERAL AND STATE AUTHORITIES. PART XII, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN POSTRETIREMENT MEDICAL BENEFIT OBLIGATIONS -730,393. NORTH AMERICA - CANADA AND MEXICO, BUT NOT THE UNITED STATES 0 0 PROGRAM SERVICE DELEGATION OF AUTHORITY BY PROVINCIAL AGREEMENT 2106225 0 0 0 0 0 0 2106225 0 2106225 0 0 0 0 0 0 X X X X X 1 1 0 0 0 0 0 0 0 DAN SKAAR PRESIDENT/CEO (PART YEAR) 54670 0 143959 0 384336 0 2042 0 15548 0 600555 0 0 0 MIGGIE CRAMBLIT SECRETARY 210035 0 78630 0 1980 0 44692 0 10818 0 346155 0 0 0 SUE CLARKE TREASURER 163864 0 76350 0 10152 0 54171 0 25139 0 329676 0 0 0 SARA PATRICK PRESIDENT/CEO 276520 0 138630 0 1899 0 53969 0 16596 0 487614 0 0 0 DAN SCHOENECKER VP OF OPERATIONS 202620 0 94140 0 16343 0 64490 0 11183 0 388776 0 0 0 RICHARD BURT SR. VP & COO 212878 0 53000 0 1882 0 27117 0 17478 0 312355 0 0 0 VALERIE AGNEW VP OF ENFORCEMENT 188039 0 40333 0 1374 0 38005 0 10231 0 277982 0 0 0 JOHN SEIDEL MANAGER OF RELIABILITY OPE 166559 0 10000 0 1601 0 41878 0 14669 0 234707 0 0 0 RUSSEL MOUNTJOY MANAGER OF STANDARDS, CERTIF., REGIS 153637 0 12500 0 1325 0 35776 0 8443 0 211681 0 0 0 WILLIAM STEINER DIRECTOR OF RISK ASSESS. 159245 0 10000 0 961 0 24177 0 21084 0 215467 0 0 0 STEEN FJALSTAD SECURITY PRINCIPAL 142612 0 10000 0 1250 0 16870 0 17019 0 187751 0 0 0 KEN GARTNER DIRECOF INTERNAL AFFAIRS 140965 0 10000 0 1213 0 19797 0 16697 0 188672 0 0 0 JEFF NORMAN DIRECTOR OF COMPLIANCE 139020 0 10000 0 1171 0 19522 0 11591 0 181304 0 0 0 SALVA ANDIAPPAN MANAGER OF RELIABILITY ASSESS. 137315 0 10000 0 1211 0 30128 0 19854 0 198508 0 0 0 MARK FLANARY PRINCIPAL RISK ASSESS. ENGINEER 141489 0 4792 0 843 0 20736 0 16212 0 184072 0 0 0 PART I, LINE 3 METHODS USED TO DETERMINE CEO/EXECUTIVE DIRECTOR COMPENSATION IN ANY GIVEN YEAR MAY INCLUDE ALL OR SOME OF THE FOLLOWING: COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER ORGANIZATIONS, WRITTEN EMPLOYMENT CONTRACT, COMPENSATION SURVEY OR STUDY, APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. IT IS AT THE DISCRETION OF THE COMPENSATION COMMITTEE TO REQUEST ANY OR ALL OF THE LISTED METHODS DESCRIBED ABOVE. PART I, LINES 4A-B DAN SKAAR RECEIVED A SEVERANCE PAYMENT OF $312,264 AND A PAYMENT OF $38,714 FROM A 457(F) PLAN. SARA PATRICK, DAN SCHOENECKER, SUE CLARKE, MIGGIE CRAMBLIT AND JOHN SEIDEL PARTICIPATED IN A 457(B) PLAN AND DEFERRED AMOUNTS OF $17,469, $17,594, $23,671, $8,192 AND $5,378 RESPECTIVELY FOR 2018. DAN SCHOENECKER AND VALERIE AGNEW RECEIVED A PAYMENT OF $2,726 AND $1,505 RESPECTIVELY FROM A 457(F) PLAN IN 2018. FORM 990, PART III, LINE 2 THE MRO UNDERWENT A ONE-TIME GEOGRAPHICAL EXPANSION THAT INCLUDED 87 PERCENT OF THE REGION FORMERLY KNOWN AS SOUTHWEST POWER POOL. THE TRANSITION RELATED TO THIS GEOGRAPHICAL GROWTH INCLUDED THE EXTENSION OF PROGRAM SERVICES FROM PROGRAM I AND III TO THE NEW TERRITORY. ADDITIONALLY, EFFORTS UNDER THIS PROGRAM INCLUDED THE INTEGRATION OF NEW REGISTRANTS (KNOWN AS REGISTERED ENTITIES) FROM WITHIN THIS NEW AREA. FORM 990, PART VI, SECTION A, LINE 4 MRO DELEGATION AGREEMENT WAS MODIFIED TO INCLUDE ADDITIONAL TERRITORY ADOPTED INTO THE MRO REGION. FORM 990, PART VI, SECTION A, LINE 6 THE CORPORATION HAS TWO CLASSES OF MEMBERS, MEMBERS AND ADJUNCT MEMBERS: A MEMBER MAY BE ANY ENTITY ELIGIBLE TO BE A MEMBER OF ANY INDUSTRY SECTOR. EACH MEMBER/ENTITY IN GOOD STANDING IS ENTITLED TO ONE VOTE IN THE INDUSTRY SECTOR IN WHICH IT IS A MEMBER ON MATTERS SUBMITTED TO A VOTE OF MEMBERS. VOTING OF THE MEMBERS IS BY SECTOR, WITH EACH SECTOR ENTITLED TO THE SAME NUMBER OF VOTES AS IT HAS DIRECTORS ON THE BOARD. ADJUNCT MEMBERS MAY BE ANY ENTITY THAT IS NOT ELIGIBLE TO BELONG TO ANY INDUSTRY SECTOR, HAS MATERIAL INTEREST IN RELIABILITY ISSUES IN THE CORPORATION'S REGION AND BECOMES AN ADJUNCT MEMBER OF THE CORPORATION. ADJUNCT MEMBERS RECEIVE ALL MEETING NOTICES AND MAY ATTEND MEETINGS. ADJUNCT MEMBERS DO NOT HAVE VOTING RIGHTS. FORM 990, PART VI, SECTION A, LINE 7A AS PROVIDED IN THE CORPORATION'S BYLAWS, 17 OF THE BOARD MEMBERS ARE ELECTED BY MEMBERS OF THE ORGANIZATION BELONGING TO THE FOLLOWING INDUSTRY SECTORS: TRANSMISSION SYSTEM OPERATORS SECTOR, GENERATORS AND POWER MARKETERS SECTOR, INVESTOR OWNED UTILITIES SECTOR, COOPERATIVE SECTOR, MUNICIPAL UTILITIES SECTOR, FEDERAL POWER MARKETING AGENCIES, AND THE CANADIAN UTILITIES SECTOR. FORM 990, PART VI, SECTION A, LINE 7B THE CORPORATION MAY SELL, LEASE, TRANSFER, OR DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS PROPERTY, ASSETS, INCLUDING ITS GOODWILL, NOT IN THE USUAL AND REGULAR COURSE OF ITS ACTIVITIES, UPON THOSE TERMS AND CONDITIONS AND FOR THOSE CONSIDERATIONS, WHICH MAY BE MONEY, SECURITIES, OR OTHER INSTRUMENTS FOR THE PAYMENT OF MONEY OR OTHER PROPERTY AS THE BOARD OF DIRECTORS CONSIDERS EXPEDIENT ONLY WHEN APPROVED AT A REGULAR OR SPECIAL MEETING OF THE MEMBERS BY THE AFFIRMATIVE VOTE OF 2/3 OF ALL THE MEMBERS. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 IS SUBMITTED TO THE GOVERNING BODY IN DRAFT FORM PRIOR TO SUBMISSION TO THE IRS. THE BOARD MEMBERS ARE GIVEN THE OPPORTUNITY TO REVIEW AND COMMENT OR ASK QUESTIONS REGARDING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C ANY DIRECTOR, OFFICER, EMPLOYEE AND AGENT OF MRO AND ANY MEMBER AND ITS REPRESENTATIVES WHO SERVE ON ANY MRO COMMITTEE, ORGANIZATIONAL GROUP, WORKING GROUP OR TASK FORCE MUST DISCLOSE THE EXISTENCE OF ANY FINANCIAL INTEREST THAT MAY CREATE ANY ACTUAL OR POSSIBLE CONFLICT OF INTEREST IN ANY TRANSACTION OR ARRANGEMENT. A PERSON HAS A FINANCIAL INTEREST IF THE PERSON HAS, DIRECTLY OR INDIRECTLY, THROUGH BUSINESS, INVESTMENT, OR FAMILY: AN OWNERSHIP OR INVESTMENT INTEREST IN ANY ENTITY WITH WHICH MRO HAS A TRANSACTION OR ARRANGEMENT; OR A COMPENSATION ARRANGEMENT WITH MRO OR WITH ANY ENTITY OR INDIVIDUAL WITH WHICH MRO HAS A TRANSACTION OR ARRANGEMENT; OR A POTENTIAL OWNERSHIP OR INVESTMENT INTEREST IN, OR COMPENSATION ARRANGEMENT WITH, ANY ENTITY OR INDIVIDUAL WITH WHICH MRO IS NEGOTIATING A TRANSACTION OR ARRANGEMENT. FORM 990, PART VI, SECTION B, LINE 15A A PERFORMANCE EVALUATION OF THE MRO PRESIDENT IS PERFORMED BY THE GOVERNANCE AND PERSONNEL COMMITTEE WITH INPUT AND REVIEW BY THE ENTIRE BOARD OF DIRECTORS, AND IS BASED UPON THE ORGANIZATION'S GOALS AND OBJECTIVES. IN ADDITION, THE BOARD MAY INITIATE AN INDEPENDENT COMPENSATION REVIEW OF THE POSITION OF MRO PRESIDENT WHEN APPROPRIATE. THE MRO PRESIDENT'S COMPENSATION IS APPROVED BY THE BOARD. FORM 990, PART VI, SECTION C, LINE 19 MRO'S GOVERNING DOCUMENTS, POLICIES, AND AUDITED STATEMENTS WITH INDEPENDENT REPORTS ARE AVAILABLE FOR REVIEW ON ITS WEBSITE. FORM 990, PART XI, LINE 9: CHANGE IN POSTRETIREMENT MEDICAL BENEFIT OBLIGATIONS 730,393.