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 were no significant bylaw changes in 2018.”

“The GLE Board of Directors were presented with a questionnaire in May 2019 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.”

“A questionnaire 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. 2017 audited financial statement summaries were mailed to members in June 2018 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 VIII, Section A (Directors) Amounts listed for Directors are primarily per diem compensation amounts for services provided to Great Lakes Energy (column D), Great Lakes Energy Connections (column E), and for one Director the Michigan Electric Cooperative Association (combined in column C). Per Diem amount levels for Directors are benchmarked with data from over 900 other electric cooperatives through the National Rural Electric Cooperative Association (NRECA) and also benchmarked with over 35 cooperatives from the Association of Large Distribution Cooperatives (ALDC) representing the peer group of Great Lakes Energy. 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 are also included as Other Compensation and 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 43% less than the actuarial value as reported in column F as Other Compensation. The 43% 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. Additionally, amounts listed as reportable compensation from related organizations, for Directors, were paid by Great Lakes Energy and then reimbursed by the related organization. The combined amounts of columns (D) and (E) equal reported 1099 amounts from Great Lakes Energy Cooperative.”

“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 - $112,655 increase; patronage capital refunds to members - $5,146,808 decrease; donated capital from members - $782,291 increase; sales tax returned $157,897 increase; unrealized gain on interest rate swap - $816,507 increase; change in investment of subsidiary - $1,778,965 decrease; 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) - $14,837,583 increase. The net increase to Net Assets is $9,781,160.”