Energy Utility Basics: The Cooperative Model October 1, 2012 Nathan Franklin Government Relations Dairyland Power Cooperative

1930 - 11% of farms had electricity Depression limited development options Growing population demanded better rural economy

1935 Executive Order created the Rural Electrification Administration Congress formalized in 1936 Local cooperatives built system

First system in Wisconsin was Richland Electric in 1937 By 1945, today's network of 24 Wisconsin cooperatives in place 520,000 residents served

930 cooperatives in 47 states 42 million people, 11% of the population 10% of kilowatt hours 43% of all power lines in country Rural Utilities Service (RUS) available funding

Cooperative Model Owned & controlled by consumers Governed by board of directors; elected at annual meeting One member; one vote Not for profit Revenues over budget called "margins" are returned to customers

Cooperative Principles Voluntary and open membership Democratic member control Members' economic participation Autonomy and independence Education, training, and information Cooperation among cooperatives Concern for community

Organization of the Industry 864 distribution cooperatives associated w/ G&Ts Some buy from other sources (TVA, IOUs, etc.) 66 Generation and transmission cooperatives (G&Ts)

Touchstone Energy Branding

Wisconsin Six cooperatives purchase from other sources Mainly Alliant 18 are members of Dairyland Power Cooperative Wisconsin’s only cooperative G&T

Dairyland headquartered in La Crosse Generating facilities in Alma, Genoa, Ladysmith, Elk Mound, and Eau Claire, Wisconsin and Adams, Minnesota Serve 253,000 meters/600,000 people in four states

Renewables on the Dairyland System Wind (Iowa and Minnesota) 44 MW Landfill gas (Iowa and Wisconsin) 15 MW Manure digesters (Wisconsin) 4 MW Hydroelectric (Wisconsin) 24 MW Biomass (Wisconsin) 40 MW

Renewables on the Dairyland System (cont.) ~300 installations in DPC territory 200+ in Wisconsin (over half of state total) Solar installations on the rise Up 1000% since 2006 60/70 installs in 2011

Dairyland Power Cooperative Service Territory MN WI IA IL Dairyland Power Cooperative Service Territory

Our Mission… "To provide competitively priced energy and services to our customers and maximum value to our owners, consistent with the wise use of resources. We will work with our members to improve the quality of life of their customers and the economic and social well-being of the region." www.dairynet.com

Challenges Facing the Industry EPA rules, e.g. coal ash designation One size fits all environmental upgrades to existing plants Cost of fuel & transportation New renewable facilities in face of energy surplus New transmission facilities for growth, renewables