Great Lakes Energy Cooperative

“Great Lakes Energy is a Cooperative with all electric "customers" of the Cooperative required to be members.”

“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.”

“Certain Bylaw changes must be ratified by the general membership. This ratification is voted upon in conjunction with the annual Board election. There was one Bylaw changed in 2014. The Membership voted to split GLE's service territory into nine member balanced districts with each district electing one board member.”

“The GLE Board of Directors were presented with a questionnaire in June 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”

“Great Lakes Energy's conflict of interest policy was delivered to each Board Member and Officers asking each to verify that they had received and read the policy and to certify they had no conflicts of interest. These certificates are on file with the supporting documentation for this 990.”

“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.”

“GLE makes company bylaws available to the public on line at www.gtlakes.com and with printed copies upon request. 2014 audited financial statement summaries were mailed to members in June 2014 Country Lines Magazine. They are also available upon request. GLE does not make the conflict of interest policy available to the public.”

“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 34% less than the actuarial value as reported in column F as Other Compensation. The 34% 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.”

“The instructions for the 2014 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 2014 margins that have 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.”

“Part IX, line 5 captures only the current year expense (not the actuarial increase) of Directors and Officers retirement amounts. Therefore, the compensation in Part IX, line 5 for current Directors and Officers is less than that reported on Part VII by $57,058 which is the difference between the actual pension expense and the estimated increase in actuarial value for 2015.”

“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 - $16,463 increase; patronage capital refunds to members - $7,479,531 decrease; donated capital from members - $233,310 increase; sales tax refund $181,864 increase; a small amount of unrelated business income was not recorded in the Cooperative's financial statements - $512 decrease; rounding increase of $1 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) - $15,365,384 increase. The net increase to Net Assets is $8,316,979.”