2018-08-03T15:22:16-07:00 2017-12-31 990 2017-01-01 383321875 GREAT LAKES ENERGY COOPERATIVE GREA 2315826521 PO Box 70 Boyne City MI 49712 Stephen Drake VP, CFO 2315826521 2018-08-03 2017 2022-09-23 18:48:47Z William M Scott 1323 Boyne Avenue Boyne City MI 49712 197882748 0 X www.gtlakes.com X 1998 MI Provide electric service to members. 9 9 257 0 80344 77845 0 0 192754550 195501031 2024771 2347431 34748 33673 194814069 197882135 0 0 10488998 10480453 1231525 1075680 0 0 0 183093546 186326002 194814069 197882135 0 0 487956364 491870160 297183194 297250233 190773170 194619927 The mission of Great Lakes Energy Cooperative is to deliver reliable electric service at the best possible value to members of the electric cooperative. 0 0 197882135 0 195501013 Provide electric service to member/customers - approximately 125,000 member/customers. 0 0 0 197882135 0 0 0 0 0 0 0 0 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 137 0 1 257 1 1 1 0 0 0 0 185962240 11919895 0 X 9 9 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 MI X Stephen F Drake 2315826521 PO Box 70 Boyne City MI 49712 X MARK CARSON CHAIRMAN 9.9 0.0 X 37200 0 0 PAUL BYL SECRETARY 9.2 0.0 X 24700 0 2726 LAURENCE MONSHOR TREASURER 9.2 0.0 X 35800 0 0 RIC EVANS DIRECTOR 10.4 0.0 X 36500 0 0 PAUL SCHEMANSKI DIRECTOR 8.4 0.0 X 35700 0 0 TIMOTHY BRECHON DIRECTOR 6.2 0.0 X 35350 0 0 JOHN LAFORGE DIRECTOR 8.0 0.0 X 33200 0 0 DALE FARRIER DIRECTOR 7.8 0.0 X 28600 0 2436 ROBERT KRAN DIRECTOR 9.0 0.0 X 28600 0 0 WILLIAM SCOTT PRES, CHIEF EXECUTIVE OFFICER 55.0 0.0 X 405742 0 139884 STEPHEN DRAKE VP, CHIEF FINANCIAL OFFICER 55.0 0.0 X 220190 0 105296 PATRICK ANZELL VP, MEMBER SERVICES/REG. AFFAIRS & PURCHASING 55.0 0.0 X 225158 0 125447 JENNIFER WILSON VP, HUMAN RESOURCES 55.0 0.0 X 224068 0 84155 SHARI CULVER VP, COMM/MARKETING 55.0 0.0 X 220018 0 79214 SHAUN LAMP VP, INFORMATION TECHNOLOGY 55.0 0.0 X 202966 0 58805 SCOTT BLECKE VP, Engineering 55.0 0.0 X 184705 0 45856 RICHARD WALSWORTH FORMER DIRECTOR 0.0 0.0 X 13200 0 0 ROBERT THUROW FORMER DIRECTOR 0.0 0.0 X 13200 0 0 2004897 0 643819 83 1 1 0 Roemer Utility Services 279 Kaden PO Box 124 Boyne City MI 49712 UG boring contractor 256497 Dykema Gossett PLLC 400 Renaissance Center Detroit MI 49712 Attorney 162424 CC Unlimited LLC 3850 Beebe Rd Kalkaska MI 49646 Electrical distr. contractor 154329 Willey Construction LLC 9485 Ingleside Road Levering MI 49755 Electric utilitiy construction 131484 4 0 Electricity sold to members 221000 185962240 185962240 0 0 Program related investment income 221000 8974559 8974559 0 0 Pole rental income 221000 481204 0 0 481204 Tower rental 221000 80344 0 80344 0 Real property rental income 221000 2684 0 0 2684 0 0 0 0 195501031 2308168 0 0 2308168 0 0 0 0 0 0 0 0 0 0 0 39876 0 613 0 39263 39263 39263 0 0 33673 33673 0 0 33673 197882135 195009735 80344 2792056 X 10480453 1075680 10415748 14245706 Purchased electric power 116664257 Operating and maintenance expenses 26784697 Member service expenses 10245497 Administration and general expenses 7562111 407986 197882135 0 0 0 6392009 1623206 1297159 1217986 0 0 18033521 16935706 0 0 0 0 424387 219455 2567991 2616270 7833211 7414633 483040042 141768496 331234227 341271546 1407871 1621901 396623 472353 116708357 116796142 1661008 1680962 0 0 487956364 491870160 29911629 30298419 0 0 0 0 0 0 0 0 0 0 250462890 253837991 0 0 16808675 13113823 297183194 297250233 X 519740 519740 5398884 6182932 184854546 187917255 190773170 194619927 487956364 491870160 X 0 136774 0 0 0 3709983 X 0 1 X 1 0 0 756045 756045 0 14012743 5523797 8488946 0 0 0 0 0 468271254 136244699 332026555 0 0 0 0 341271546 Patronage capital from assoc. organizations 112226539 C Coop. Finance Corp., capital certificates 4563878 C Investments in other related organizations 5725 C 116796142 0 Def. cr. - contributions in aid of construction 5719091 Def. regulatory credits 3379951 Post retirement benefits 340075 Directors' post retirement benefits 2058593 Other long-term liabilities 643401 Deferred revenue 410572 Deferred compensation 562140 13113823 X 197813201 0 0 0 0 0 197813201 0 68934 68934 197882135 187332748 0 0 0 -68934 -68934 187401682 0 10480453 10480453 197882135 Schedule D, Part X, Line 2 Management believes that positions taken during prior years and to be taken for 2017 in reporting federal taxable income for the Company and for its subsidiary are not controversial and have a high degree of being sustained upon any future examination by the taxing authority. Schedule D, Part XI, Line 4b In the audited financial statements, loss on sale of assets ($613), gain on sale of assets ($39,875) and miscellaneous non-operating income ($29,672) were combined ($68,934) and netted against Other Expenses. This revenue, which reduced expenses in the audited financial statements, needs to be added to the audited financial statement revenue because it was shown as revenue in this 990. The total amount added to the audited financial statement revenue is $68,934. Schedule D, Part XII, Line 2d In the audited financial statements, loss on sale of assets ($613), gain on sale of assets ($39,875) and miscellaneous non-operating income ($29,672) were combined ($68,934) and netted against Other Expenses. This revenue, which reduced expenses in the audited financial statements, needs to be added to audited financial statement expenses to reconcile to this 990's expenses that do not include the reduction. Schedule D, Part XII, Line 4b $10,480,453 of capital credits are recorded as an expense in this 990, but are not an expense in the audited financial statements. See below and Part O of Form 990, Part IX, Line 4. Please note however that patronage dividends are the process by which Great Lakes Energy operates at cost with our members, and thereby it is a key component to accomplishing the exempt purpose of the cooperative. Therefore, Great Lakes Energy has reported the amount of our 2017 margins ($10,480,453) that have been allocated to our members, subsequent to year end, as an expense. X X X X 0 0 0 WILLIAM SCOTT PRES, CHIEF EXECUTIVE OFFICER 342250 0 58136 0 5355 0 120389 0 20742 0 546872 0 0 0 SHARI CULVER VP, COMM/MARKETING 185296 0 33930 0 791 0 56082 0 24977 0 301076 0 0 0 JENNIFER WILSON VP, HUMAN RESOURCES 189046 0 33930 0 1091 0 64773 0 20308 0 309148 0 0 0 STEPHEN DRAKE VP, CHIEF FINANCIAL OFFICER 190242 0 26780 0 3168 0 84801 0 22341 0 327332 0 0 0 PATRICK ANZELL VP, MEMBER SERVICES/REG. AFFAIRS & PURCHASING 189046 0 33930 0 2181 0 112782 0 16498 0 354437 0 0 0 SHAUN LAMP VP, INFORMATION TECHNOLOGY 178732 0 23549 0 686 0 36823 0 23827 0 263617 0 0 0 SCOTT BLECKE VP, Engineering 160983 0 22961 0 761 0 28161 0 19809 0 232675 0 0 0 RICHARD WALSWORTH FORMER DIRECTOR 13200 0 0 0 0 0 0 0 0 0 13200 0 0 0 ROBERT THUROW FORMER DIRECTOR 13200 0 0 0 0 0 0 0 0 0 13200 0 0 0 Schedule J, Part I, Line 3 Amounts listed for CEO, CFO and all employees on Part VII in column F include (per 990 instructions) amounts associated with health care employer premiums, excess life insurance premiums, and employer contributions to a qualified 401k plan. It should be noted that these benefits are available to all employees of Great Lakes Energy and therefore these are not discriminatory benefits. Amounts included for actuarial increase in defined benefit pension plans also included as Other Compensation were provided to Great Lakes Energy by the National Rural Electric Cooperative Association (NRECA) which administers the multi-employer pension plan. It should be noted that these actuarial amounts are much higher than the actual cash paid to the plan. The actual cash paid to the plan for the employees listed was 37% less than the actuarial value as reported in column F as Other Compensation. The 37% difference is due to the multi-employer basis of the NRECA defined benefit pension plan. This benefit is also available to all Great Lakes Energy employees and is nondiscriminatory. Wolverine Power Supply Cooperative Board of Directors 116998558 Purchase of electricity for distribution 0 Michigan Electric Cooperative Assoc Board of Directors 3937993 Dues, Coop magazine and consulting 0 Schedule L, Part IV 1)Wolverine Power Supply Cooperative (Wolverine) is the Generation and Transmission company that sells power to Great Lakes Energy (GLE). The power is then delivered to members/consumers of GLE. Three Board members from GLE sit on the Wolverine Board. There are no business transactions between or among the three Board members. 2) Michigan Electric Cooperative Association (MECA) is the Statewide organization of which GLE pays dues and member magazine costs as well as consulting and pass through fees for coordination and implementation of State of Michigan mandated Energy Optimization programs. One GLE Board Director and the CEO of GLE sit on the MECA Board. There are no business transactions between the Board Member and CEO. Form 990, Part VI, Section A, Line 6 Great Lakes Energy is a Cooperative with all electric "customers" of the Cooperative required to be members. Form 990, Part VI, Section A, Line 7a Great Lakes Energy is an electric cooperative utility. All members/consumers vote for candidates to fill the nine member Great Lakes Energy Board. An election is held annually. Board Directors serve three year terms and must be re-elected to serve longer than three years. GLE has nine districts with one Board Member from each district. Form 990, Part VI, Section A, Line 7b Certain Bylaw changes must be ratified by the general membership. This ratification is voted upon in conjunction with the annual Board election. There were no bylaw changes in 2017. Form 990, Part VI, Section B, Line 11b The GLE Board of Directors were presented with a questionnaire in May 2018 which was used to assist Management in completing pertinent sections of this 990. At a subsequent Board meeting, the Board reviewed the preliminary 990 and discussed specifics of the 990 return. Form 990, Part VI, Section B, Line 12c A questionnaire was delivered to each Board Member and Officers asking each to verify that they had received and read the Conflict of Interest policy and to certify they had no conflicts of interest. These certificates are on file with the supporting documentation for this 990. Form 990, Part VI, Section B, Line 15 GLE contracts with a nationally recognized compensation consultant to determine salary levels for the Chief Executive Officer and Chief Financial Officer/Chief Operating Officer along with certain others in the Company. The consultant performs an annual market survey and position evaluation utilizing comparative financial data for the industry and company size. The results are confidentially disclosed to the Chairman of the Board of Directors and the Board sets the salary levels for the Officers each year. Form 990, Part VI, Section C, Line 19 GLE makes company bylaws available to the public on line at www.gtlakes.com and with printed copies upon request. 2016 audited financial statement summaries were mailed to members in June 2017 Country Lines Magazine. They are also available upon request. GLE does not make the conflict of interest policy available to the public. Form 990, Part VII, Section A, Line 1a Amounts listed for CEO, CFO and all employees on Part VII in column F include (per 990 instructions) amounts associated with health care employer premiums, excess life insurance premiums, and employer contributions to a qualified 401k plan. It should be noted that these benefits are available to all employees of Great Lakes Energy and therefore these are not discriminatory benefits. Amounts included for actuarial increase in defined benefit pension plans also included as Other Compensation were provided to Great Lakes Energy by the National Rural Electric Cooperative Association (NRECA) which administers the multi-employer pension plan. It should be noted that these actuarial amounts are much higher than the actual cash paid to the plan. The actual cash paid to the plan for the employees listed was 37% less than the actuarial value as reported in column F as Other Compensation. The 37% difference is due to the multi-employer basis of the NRECA defined benefit pension plan. This benefit is also available to all Great Lakes Energy employees and is nondiscriminatory. Form 990, Part IX, Line 4 The instructions for the 2017 Form 990 clarifies that the amount of patronage dividends paid to the members should be reported on Part IX, line 4. The phrase "patronage dividends paid" refers to the process, subsequent to year-end by which Great Lakes Energy allocates patronage capital to members and therefore, operates at cost to our members. Please note however that because patronage dividends is the process by which Great Lakes Energy operates at cost with our members, and thereby it is a key component to accomplishing the exempt purpose of the cooperative, Great Lakes Energy has reported the amount of our 2017 margins that has been allocated to our members subsequent to year-end. Such amounts are an expense for Form 990 reporting but are not an expense for financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP). As a result, the difference between Great Lakes Energy's GAAP-basis financial statements and the revenue less expenses reported on Part I Line 19 is the amount of the patronage dividends reported as benefits paid to members. Form 990, Part XI, Line 9 Changes in equity not included in Great Lakes Energy's net margins consists of Employee post-retirement health benefits and Directors' pension plan adjustments, required by FASB 158, recorded in the financial statements as Other Comprehensive Gain - $2,564,082 increase; patronage capital refunds to members - $10,618,594 decrease; donated capital from members - $850,054 increase; sales tax returned $1,461 decrease; unrealized gain on interest rate swap - $435,448 increase; $1 rounding adjustment; and capital credits allocated and included in Part IX, line 4 that are not recorded in the Cooperative's audited financial statements as an expense in conformity with Generally Accepted Accounting Principles (GAAP) - $10,480,453 increase. The net increase to Net Assets is $3,709,983.