Powerfully Present
CORN BELT POWER COOPERATIVE
2021 ANNUAL REPORT
It’s simple.
In a world of infinite distractions, we hunger for and value an engaged presence. Corn Belt Power Cooperative embraces our history; works for the betterment of the next; and engages and responds for the good of our membership in the now. Corn Belt Power serves our members with powerful presence.
CORN BELT POWER IS
“powerfully present” EMBRACING OUR HISTORY.
Executive Report Mike Cowell, shift operator, monitors Wisdom Unit 2 fuel oil pressure gauges during rounds on Feb. 16 to ensure efficient plant operation.
David Onken
President, Corn Belt Power Cooperative Board of Directors
Kenneth H. Kuyper
Executive Vice President and General Manager
“
Connect
This year, Corn Belt Power Cooperative will celebrate the 75th anniversary of filing the organization’s articles of incorporation. This annual report theme “Powerfully Present,” in part, embraces our history and the work we do for the betterment of future generations.
Just like our founders did almost 75 years ago on August 28, 1947, our job is to lay groundwork for future generations of cooperative members. However, while doing that, we must also engage and respond to today’s membership with powerful presence.
”
2021, much like 2020, was full of challenges. In February, due to historic, prolonged low temperatures, we witnessed our first-ever energy emergency alert Level 3. Utilities across the Midwest, including Corn Belt Power Cooperative, implemented load control measures and curtailments to some accounts on Feb. 15 and 16. Southwest Power Pool (SPP) ordered these load curtailments, leaving Corn Belt Power and its member-cooperatives little time to act.
This unprecedented event raises many questions about the future of power generation across the United States. Corn Belt Power continues to refine its processes to help mitigate future energy emergency alerts. Furthermore, we’re working with our industry partners, including SPP, to address root causes of the event.
Jon Behounek, chief system operator, reviews SPP protocol during a March Corn Belt Power standards review meeting.
5 CBPC 2021 EXECUTIVE REPORT | Powerfully Present
Fuel trucks deliver around the clock for 12 days to maintain Wisdom Station power plant operations during the February weather event. Wisdom Unit 2 ran continuously on fuel oil Feb. 8-19.
Corn Belt Power remains strong financially. In 2021, we received another “A” rating from our ratings agencies. Again, we were able to keep rates stable, while also returning $5.14 million in our annual quick roll to members. Furthermore, in December, Basin Electric Power Cooperative, N.D., returned $30 million to members. Corn Belt Power returned our $2.1 million share to our member-cooperatives. These accomplishments are indicative of strong financial metrics and bode well for future rate stability. Our membership in the SPP regional market continues to produce positive economic results. We aggressively continue upgrading and rebuilding our electric system as a byproduct of that relationship.
Give energy Powerfully Present | CBPC 2021 EXECUTIVE REPORT
Carlos Garcia, control operator, inspects a valve at Corn Belt Power’s Wisdom Station during a planned April outage.
TOTA L S A L E S 2500 Million kWh
2000
1500
1000
500
0
1963
1973
1983
1993
2003
2013
2021
M E M B E R CO O P E R AT I V E R AT E S 2 0 2 1 80
Mills
70 60 50 40 30 20 10 0
1980
1985
1990
1995
2000
2005
2010
2015
2020
Average member system cost, including substation charge; calculated average member co-op rate reflects power sold to municipals and others served by the cooperatives.
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CBPC 2021 EXECUTIVE REPORT | Powerfully Present
Corn Belt Power upgraded more than 40 miles of its transmission infrastructure in 2021. The Algona-Hancock-Klemme line saw 28.52 miles of rebuild. In total, when complete, more than 40 miles on that stretch of line will be rebuilt. System improvements increase system reliability and provide for future load growth. Corn Belt Power crews began construction on the Whalen Substation inside the Butler Logistics Park. This substation will serve a new soy processing facility inside the park.
Elsewhere across the system, our electrical maintenance department upgraded buses and switches at Pocahontas, Galbraith and Burt switching stations. Corn Belt Power replaced transformers at Bradford, Eagle and Lake Cornelia. Our system improvement and upgrade plan included regulator replacements at Meadowbrook, Bauman South, Rembrandt and Pocahontas. Contractors construct a self-supporting steel tower on the Algona-Hancock-Klemme line rebuild.
Luke Bormann, apprentice electrician, loads copper bus for a Galbraith Switching Station upgrade.
8 Powerfully Present | CBPC 2021 EXECUTIVE REPORT
Corn Belt Power electricians began constructing Whalen Substation in Dec. 2021 to power new load growth from Shell Rock Soy Processing. Crews will complete substation construction in the spring of 2022.
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Our power supply department continued its practice of proactive inspections and preventive maintenance at Wisdom Station in 2021. Wisdom Unit 2 underwent a routine borescope inspection following the extended fuel oil operations that occurred in February. During this inspection issues were discovered with the thermal barrier coating on multiple components in the unit’s combustion section. These components were replaced during a planned outage that occurred in December. The Wisdom Unit 2 generator step-up transformer underwent routine electrical testing which led to the discovery of an issue with one of its high voltage bushings. The bushing was then replaced and the transformer was returned to service without issues. These projects show how routine, proactive inspections help prevent more costly, unplanned outages in the future.
Give attention Cody Montgomery, control operator, cleans a boiler safety valve during a Wisdom Unit 2 maintenance outage.
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Carlos Garcia, control operator, exits the steam drum on Wisdom Unit 2 during a routine inspection.
From left, Carlos Garcia, control operator; Adam Bird, journeyman lineman; and Peyton Vote, apprentice electrician; network during Corn Belt Power’s first all-employee training day in October.
Crews also replaced the firewalls in the Wisdom Unit 1 transformer bay and upgraded the control system for the Wisdom Unit 1 cooling tower. Both of these items were original to the unit. The battery bank and battery charger were also replaced in 2021 due to age. These batteries supply DC power to the Wisdom Unit 1 control system and various emergency equipment, such as lighting and lube oil systems. Training the future leaders of Corn Belt Power is a goal that remains unchanged. Our second Leadership Exploration and Development (LEAD) class graduated in 2021. The LEAD program helps develop and identify future leaders. As part of the LEAD program, graduates must complete and/or pitch a project for potential implementation to Corn Belt Power’s management. In 2021, we saw several of those projects come to fruition, including an allemployee training day and LED lighting improvements at Wisdom Station.
Brittany Dickey, a graduate of the inaugural LEAD class in 2019, created an employee engagement committee. The committee organized an allemployee training day in October, where employees heard updates from all Corn Belt Power departments. Employees also heard from guests about topics of safety and leadership. John Naber, a 2021 LEAD graduate, helped to install LED lighting improvements at the cooperative’s Wisdom Station plant. This lighting improvement enhances safety for operators and employees while they do rounds and work in and outside of the plant. Corn Belt Power and our board is confident in LEAD and what it fosters in the employees who commit to growing their own leadership and development.
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Finally, we’d like to thank our former employees and board members for their years of dedicated service. Without their foresight and leadership, we wouldn’t be where we are today. We’d also like to thank our current Corn Belt Power board of directors and employees. The board’s flexibility and decision-making and our employees’ steadfast adherence to Corn Belt Power’s mission and values give powerful presence to the way we serve our members and communities.
” 11 CBPC 2021 EXECUTIVE REPORT | Powerfully Present
CORN BELT POWER IS
“powerfully present” WORKING FOR THE BETTERMENT OF THE NEXT.
Year in Review Corn Belt Power crews rebuild an H-structure near Waverly on July 15 following a tornado outbreak the night before when ten tornadoes ripped across Iowa.
2021
BEGAN WITH OUR FIRST-EVER LOAD CURTAILMENT EVENT Utilities across the Midwest, including Corn Belt Power Cooperative, implemented load control measures and temporary service disruptions to some accounts Feb. 15 and 16. When Southwest Power Pool issued unprecedented
Emergency Energy Alert Level 2 and Level 3 orders to its member utilities across several states. SPP called for high levels of electric load reduction and curtailment to match available supply. To put it simply, there was not enough available generation
supply to meet the exceptionally high electric demand. These highly unusual control measures protected the supply and demand balance of the grid. Demand exceeded available electric generation because extremely cold weather impacted SPP’s entire footprint. CORN BELT POWER’S TIMES OF CURTAILMENT INCLUDED: • Monday, February 15, Corn Belt Power curtailed five megawatts of load for approximately 45 minutes around the noon hour. Approximately 1,500 accounts were without power.
System experts manually shed load in the Corn Belt Power control center Feb. 15 and 16 to comply with SPP’s Energy Emergency Alert orders. The control center is where operators receive the orders and remotely control substations and switching stations.
14 Powerfully Present | CBPC 2021 YEAR IN REVIEW
• Tuesday, February 16, Corn Belt Power was asked to curtail 24 megawatts of load from 6:45 a.m. – 10:15 a.m. Approximately 12,500 accounts were without power at some point during the event.
These outages occurred without much advanced warning as SPP manages electric supply and demand minuteby-minute in real time. Corn Belt Power Cooperative had minutes to shed specific electric load levels in compliance with SPP Level 3 orders. Outages and load curtailment measures are necessary to protect the entire SPP grid. If electric generation cannot keep up with electric demand, grid reliability can be severely compromised. In the worst-case scenario, power plants across the SPP footprint would have been at risk of cascading outages that could have left tens of thousands of electric consumers in the dark for hours, possibly even days. When possible, electric utilities
work to avoid interrupting service to critical facilities. During the event, Corn Belt Power’s Wisdom Unit 2 ran continuously on fuel oil.
Scott Gilderhus, mechanic, closes the transfer valve during a fuel oil delivery to Wisdom Station Feb. 16 during the SPP event.
A semi-truck transfers one of 115 truckloads of fuel oil to Wisdom Station between Feb. 8 and 19 accounting for 922,808 total gallons delivered in that time.
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SPP RELEASES KEY OBSERVATIONS FOLLOWING A STUDY ON FEBRUARY EVENT In March, the Southwest Power Pool’s board of directors directed a comprehensive review of SPP’s first-ever Energy Emergency Alert Level 3 event to identify how SPP can better prepare for future extreme reliability threats. Five teams and several hundred stakeholders including Corn Belt Power, conducted an in-depth analysis. SPP announced the analysis produced the following key observations: • Lack of available generation was the primary cause of the event’s reliability impacts. Lack of fuel was the biggest cause of generation unavailability. • Extremely high natural gas prices were the primary driver of recordhigh energy offers, exceeding SPP’s market offer caps for the first time. • Rapid spike in SPP’s market prices raised concerns about market participants’ liquidity and exponentially increased short-term credit exposure.
16 Powerfully Present | CBPC 2021 YEAR IN REVIEW
• Relationships and interconnections with neighboring systems facilitated critical assistance. • Full use of generation in certain locations was limited by congestion on SPP’s system. • Early preparation, timely decisions and effective communication helped minimize reliability impacts while effective execution of load-shed procedures mitigated the risk of uncontrolled blackouts. • Stakeholders indicated general satisfaction with SPP’s emergency communications, information sharing and credibility, while recognizing the need for improvements.
TRANSMISSION AND ELECTRICAL MAINTENANCE WORK In mid-June, transmission crews began overhauling a 10 mile stretch of line between Corn Belt Power’s Parkersburg Switching Station and the Bristow area. Along that stretch of line, crews replaced 147 poles due to age. They also replaced the current 4-OTT (4/0) wire with a more robust 336 aluminum conductor steel-reinforced cable.
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“ The original line was built in 1950,” said Jeremy Stattelman, transmission superintendent, Corn Belt Power. “Engineering specifications in the 1950s are far different than what we use today. We’re using larger conductors to help provide for larger loads. Using larger conductors means we need bigger poles and more advanced infrastructure. Most new crossarms are fiberglass and many insulators are polymer. As we have with many of our more recent jobs, we also installed fiber on this line section.”
”
Parkersburg to Bristow line rebuild.
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2021 TRANSMISSION WORK RECONDUCTORED LINE:
NEW LINE:
• Parkersburg-Bristow: 10.6 miles • Pocahontas-Dover: 10.7 miles (modification done, new wire to be strung in 2022)
• Plum Creek Tap: 0.1 miles • Burt Double-Circuit: 0.5 miles • Sherwood-Manson: 1.75 miles
RE-BUILT LINE: • Algona-Hancock-Klemme: 41.5 miles of which 28.53 were complete in 2021 • Sherwood-Manson: (in progress) 29.1 miles
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RE-LOCATED LINE: • Neal-Waverly Jct: 1.23 miles TOTAL COMPLETE: 40.96 MILES TOTAL IN PROGRESS: 41.55 MILES
Travis Hefty, line foreman, sets a new pole.
Elsewhere across the system, transmission crews spent the summer of 2021 strengthening Corn Belt Power’s line. These jobs included: • Removal of three miles of old poles and wire near the Klemme Switching Station • Construction of a half-mile of dual-circuit line at the Burt Switching Station • Fiber installation between Burt Switching Station and Algona Substation • 10 miles of line modifications between Pocahontas and Dover, including new conductor and fiber Crews rebuild an H-structure following tornadic activity outside of Waverly on July 15.
• Fiber installation at Corn Belt Power’s Hampton microwave location Corn Belt Power’s electrical maintenance crews continued system upgrades and repairs in 2021. Crews upgraded buses and switches at Pocahontas, Galbraith and Burt switching stations. Corn Belt Power replaced transformers at Bradford, Eagle and Lake Cornelia substations with regulator replacements at Meadowbrook, Bauman South, Rembrandt and Pocahontas substations.
Jon Girres, journeyman electrician, adjusts a new switch at the Galbraith Switching Station on Aug. 18.
19 CBPC 2021 YEAR IN REVIEW | Powerfully Present
WISDOM STATION UNDERGOES INSPECTIONS In April, both units at Corn Belt Power’s Wisdom Station power plant were in a planned outage.
Wisdom Unit 2 underwent a borescope inspection, which indicated a few coating issues in the combustion section of the generator. Crews also replaced the 69 kilo-volt bushing and performed electrical testing on the generator step-up transformer.
In December, Wisdom Unit 2 underwent a combustion inspection. A combustion inspection is the removal and replacement of the primary fuel nozzles, secondary fuel nozzles, combustion liners and transition pieces from each of the ten combustors. In order to do this, all of the associated fuel, water injection, purge air and atomizing air lines need to be disconnected from each combustor. This process took 10 days, with crews working 12 hours per day.
Wisdom Unit 1 underwent an internal boiler inspection required by regulation. During the outage, crews replaced firewalls in the transformer bay.
When Corn Belt Power performed its 2019 combustion inspection on Wisdom Unit 2, the cooperative purchased a complete set of new combustion components prior to the
This normal, proactive maintenance yielded positive results for the co-op.
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outage. This allowed crews to install the new parts as soon as the old parts were removed from the unit, which also minimized the outage time. Following the 2019 combustion inspection, Corn Belt Power sent the old components in to be refurbished, returned and stored at Wisdom Station for spare use. During the 2021 combustion inspection, the combustion components that were installed in 2019 were removed from the unit and the refurbished original parts were reinstalled.
Carlos Garcia, control operator, left, and Patrick Connor, plant manager, inspect secondary superheater loops inside the Wisdom Unit 1 boiler. Internal boiler inspection is required on a two-year cycle.
W I S D O M S TAT I O N A N N U A L O P E R AT I N G H O U R S 800 700 600 500 400 300 200 100 0
Wisdom Unit 1 2017
2018
Wisdom Unit 2 2019
Total 2021
2020
2021 WISDOM SOLAR PRODUCTION Total Energy (kWh)
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
6,822
7,515
13,510
13,932
14,022
17,094
15,519
15,953
6,023
6,534
9,564
8,182
134,670
6,173
10,114
14,229
15,672
16,864
22,078
20,668
19,443 15,560
11,373
7,832
6,410
166,416
Wisdom - Fixed Tilt
Inside view of the seven-story-tall Wisdom Unit 1 boiler that plant workers canvassed during a required 2021 internal inspection.
Wisdom - Single Axis Tracker
21 CBPC 2021 YEAR IN REVIEW | Powerfully Present
Crews stage to begin restoration efforts in the early morning hours of Dec. 16 following tornadic activity that damaged parts of Corn Belt Power’s service territory.
A section of line along old Highway 20 outside of Fort Dodge sustained heavy damage during the Dec. 15 storms.
Powerfully Present | CBPC 2021 YEAR IN REVIEW
Mutual aid from neighboring states helped Corn Belt Power crews repair broken poles and downed wire north of old Highway 20 following Dec. 15 and 16 storms.
DECEMBER STORMS ROCK COOPERATIVE’S SERVICE TERRITORY Corn Belt Power maintains 156 substations across its footprint. Twice in December, lines from many of those substations sustained damage and power outages due to severe weather. Between Dec. 10 and 11, Corn Belt Power’s control center received 7,021 Supervisory Control and Data Acquisition (SCADA) alarms. High winds coupled with freezing rain led to outages that spanned 42 substations. These transmission outages were short-lived as crews responded and repaired damage. Unfortunately, the same can’t be said for the summer-like storms that rolled through the cooperative’s service territory Dec. 15 and 16.
Powerfully Present | CBPC 2021 YEAR IN REVIEW
The line of storms, packing tornadoes and 80 mile-per-hour winds, led to 8,677 SCADA alarms, 204 broken transmission poles and multiple downed lines throughout Corn Belt Power’s service territory.
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“This December outage ranks in our top 5 for most Corn Belt Power damage,” said Kevin Bornhoft, vice president, engineering and operations, Corn Belt Power. “The storm, for the most part, was rare. We don’t normally see severe thunderstorms and tornadoes in December.”
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Storm damage was scattered throughout Corn Belt Power’s service territory. Lake Cornelia, Snell, Renwick and south of Clarion sustained some of the heaviest damage. Corn Belt Power received mutual aid from Northeast Missouri Power Cooperative and East River Electric Cooperative (South Dakota). Contract crews from Primoris Services and Highline Construction also assisted in restoration efforts. In all, it took crews five days to get all lines and poles back in the air. Corn Belt Power’s control center was able to isolate many problem areas, helping to minimize outage times for distribution cooperatives. 23
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Corn Belt Power transmission crews frame a new pole during restoration efforts south of Clarion following Dec. 15 and 16 tornado damage.
CORN BELT POWER SEES RECORD SUMMER PEAK DEMAND IT WAS A HOT SUMMER, AND CORN BELT POWER HAS THE DATA TO PROVE IT. The cooperative set new summer peak demand records in June and July. June’s 319.8-megawatt peak and July’s 324.2-megawatt peak each set new monthly records. Jacob Olberding, vice president, power supply, Corn Belt Power, says prolonged high temperatures played a role in record peaks.
A return of normal ethanol plant operations from a 2020 pandemic decrease also contributed to Corn Belt Power’s 2021 summer peak. From July 2020 to July 2021, Corn Belt Power’s ethanol load increased 8.7 megawatts. New and expanded commercial and industrial projects also accounted for an additional 6.5 megawatts of system load growth.
CO R N B E LT P O W E R S Y S T E M P E A K D E M A N D - M O N T H LY 350
MW
300
250
200 JAN
FEB
MAR
APR 2018
MAY
JUN 2019
JUL
AUG 2020
SEP
OCT
NOV
DEC
2021
25 CBPC 2021 YEAR IN REVIEW | Powerfully Present
MRO AUDIT COMPLETE In March, Corn Belt Power Cooperative completed its off-site Compliance Audit conducted by the Midwest Reliability Organization (MRO). The audit is part of the North American Reliability Corporation (NERC) compliance program. The focus of NERC’s compliance program is to improve the reliability of the bulk power system in North America by fairly and consistently enforcing compliance with NERC Reliability Standards. Specifically, the program is designed to ensure that the right practices are in place so the likelihood and severity of future system disturbances are substantially reduced. MRO and NERC utilize several methods to carry out compliance functions, including regularly scheduled compliance audits, spot checks and self-certifications.
JERRY BECK ELECTED TO REPRESENT CORN BELT POWER ON BASIN ELECTRIC BOARD OF DIRECTORS Corn Belt Power’s board of directors elected Jerry Beck to represent Corn Belt Power on the Basin Electric Power Cooperative board of directors in Bismarck, N.D. Beck was elected Aug. 26 at Corn Belt Power’s regular meeting of directors to represent District 11. Basin confirmed Beck’s election at their Nov. 10 annual meeting. Beck is a director for Iowa Lakes Electric Cooperative, headquartered in Estherville, IA. He succeeds Charlie Gilbert of Midland Power Cooperative as Corn Belt Power’s next Basin Electric board delegate. Gilbert has served on the Basin board since Corn Belt Power joined Basin in 2009.
2021 NEW AND EXPANDING LOADS Grundy County REC Heartland State Economic Development Corp. – Bitcoin Miner – 2.5 MW Snittjer Grain – Grain Facility – 1 MW Agriculture – 700 KW Prairie Energy Cooperative Hawkeye Pride Egg Farms – Poultry Facilities – 750 KW Daybreak Foods – Poultry Facilities – 400 KW Agriculture – 230 KW City of Webster City Stonega Elevator – Grain Facility – 350 KW C&I, Housing and Medical – 625 KW Butler County REC Commercial, Grain Facilities and Housing – 885 KW Calhoun County Electric Cooperative Association Agriculture, Housing and Communications – 250 KW Franklin REC Residential and Communications – 70 KW Iowa Lakes Electric Cooperative C&I – 600 KW Midland Power Cooperative Agriculture, Grain Storage and Residential – 400 KW Raccoon Valley Electric Cooperative Agriculture, Livestock, Housing and C&I – 592 KW
Charlie Gilbert, left, hands off Corn Belt Power’s Basin Electric board seat to Jerry Beck at the end of 2021.
Powerfully Present | CBPC 2021 YEAR IN REVIEW
Total Load Growth: 9.352 MW
2 0 2 1 LO A D M A N A G E M E N T S TAT I S T I C S 35 30 25 20 15 10 5 0 JAN
FEB
MAR APR MAY JUN JUL AUG Approaching Peak Hours Peak Alert Hours
SEP OCT Control Days
NOV
DEC
JAN
FEB
MAR
SEP
NOV
DEC
12,000 10,000 8,000 6,000 4,000 2,000 0 APR
MAY
JUN
JUL
AUG
OCT
Estimated Demand Reduction, kW PREPARING FOR CYBER EVENT Corn Belt Power facilitated its first-ever tabletop exercise dedicated to cybersecurity on October 15. Scott Meinecke, director of safety, Iowa Association of Electric Cooperatives, led the training which was part of the Rural Cooperative Cybersecurity Capabilities Program (RC3). Corn Belt Power previously took part in different assessments that relate to the organization’s preparedness and information technology infrastructure. Staff across all departments at Corn Belt Power participated in the exercise.
2 0 2 1 L O A D S E G M E N T AT I O N 11.24% 26.85%
SWINE 7.61%
POULTRY COMM/MFG
23.97%
7.36%
ETHANOL/BIODIESEL MUNICIPALS
22.97%
RESIDENTIAL
27 CBPC 2021 YEAR IN REVIEW | Powerfully Present
2021 REVOLVING LOAN FUND ACTIVITY REDL&G: Rural Economic Development Loan & Grant REDG: Rural Economic Development Grant REDL: Rural Economic Development Loan IRP: Intermediary Relending Program RLF: Revolving Loan Fund
LOANS CLOSED:
The Dwellings new housing development.
Butler-Grundy Development Alliance, Shell Rock • Loan funds used to purchase acreage next to Butler Logistics Park for business expansion opportunities. • Corn Belt Power loaned $52,000 from their RLF. • Butler County REC loaned $208,000 from their RLF. D.R.A.A.H. (Coon Rapids Hardware), Coon Rapids • Building renovation for the new location of the Coon Rapids Hardware store. • New store opened in July, will create 2 new jobs. • Corn Belt Power loaned $150,000 for the project from IRP RLF. • Raccoon Valley Electric Cooperative loaned $50,000 towards the project. Robert R. Pipho DDS, PLC, Denver • Constructing new 2,100-square-foot building to expand Denver Family Dental. • Will create 10 new jobs. • Corn Belt Power loaned $360,000 from a new REDG and $176,000 from their RLF. • Butler County REC requested Corn Belt Power’s financial participation. The Dwellings at Indian Hills, LLC, Spirit Lake • New housing development next to Indian Hills Golf Course in Spirit Lake. • Constructing 30 triplex/duplex buildings with over 80 units. • Corn Belt Power loaned $250,000 from their RLF. • Iowa Lakes Electric Cooperative loaned $500,000 from their RLF.
Pipho Family Dentistry expansion.
Hancock County Health System, Britt • 15,000-square-foot renovation for surgical services, emergency, laboratory and Senior Life Solution departments. • Will create 14 new jobs. • Corn Belt Power loaned $640,000 REDL for the project. • Prairie Energy loaned $360,000 from a new REDG for the project. Graettinger Economic Development Council, Graettinger • Homes for Iowa house to be placed in Graettinger for sale. • Corn Belt Power, Iowa Lakes Electric Cooperative and Homeward each loaned $50,000 towards the project from their RLFs. Ennis Transportation, Eagle Grove • New location and truck wash in Wright County Agri-Business Park. • $150,000 each from Corn Belt Power and Prairie Energy Cooperative’s RLFs. • Will create 4 new jobs.
Enjoy where Grundy Center Development Corporation, Grundy Center • Infrastructure for Phase I of new Prairie Ridge housing addition. • 26 lots will be developed for Phase I. • Corn Belt Power loaned $200,000 from their RLF. • Grundy County REC loaned $100,000 from their RLF.
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Powerfully Present | CBPC 2021 YEAR IN REVIEW
2 021 S A L E S TO CO R N B ELT P OW ER M EM B ER CO O PER AT I V E S 2020 KWH BILLED BY CORN BELT POWER
COOPERATIVE BOONE VALLEY ELECTRIC COOPERATIVE
2021 KWH BILLED BY CORN BELT POWER
10,6291 8, 7
BUTLER COUNTY REC
1 9 5 ,8 5 7
2802 5, 0,505
CALHOUN COUNTY REC
1, 74 34, 8
FRANKLIN REC
1 5,6 1,2 5 9
GRUNDY COUNTY REC
30 0,722,13 9 46,2,067 2 3 3, 4 6 9 7
9058,694
50 ,9 2,734
IOWA LAKES ELECTRIC COOPERATIVE
50 47, 0,257
13, 75 724, 6
MIDLAND POWER COOPERATIVE
,073 496,
53,421907, 6
NIMECA/ WEBSTER CITY
1062 5 ,6 4 7 ,
1081,4 87,63
PRAIRIE ENERGY COOPERATIVE
13,94 21,1 58
503 ,0 01,057
RACCOON VALLEY ELECTRIC COOPERATIVE
121,90 0,02 3
1350 , 7 3, 0 4 0
Includes sales to member cooperatives for special loads and municipals
2021 DEEMED K WH SAVINGS FROM ENERGY EFFICIENC Y PROGR AMS Residential Rebate Category
kWh Savings
Geothermal Heat Pumps Air Source Heat Pumps Residential Lighting High Efficiency Water Heaters Insulation & Weatherization ENERGY STAR Appliances Low Income Kits AC and Other 0
50,000
0
200,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
C+I Agriculture Rebates C&I/Ag Lighting C&I/Ag Motors Ag and Other 400,000
600,000
800,000
1,000,000
1,200,000
re you’re at 29
CBPC 2021 YEAR IN REVIEW | Powerfully Present
CO R N B E LT P O W E R G E N E R AT I O N M I X 2 0 2 1* Delivered to member systems
COAL ............................................................................................42.0% PURCHASE...................................................................................25.5% RENEWABLE OTHER................................................................ 19.5% NATURAL GAS..............................................................................6.6% RENEWABLE HYDRO .................................................................6.3% NUCLEAR.......................................................................................0.0% OIL/DIESEL..................................................................................... 0.1% TOTAL ......................................................................................... 100% * Estimated percentages comprise Basin Electric Power Cooperative’s and Western Area Power Administration’s generation supplies. This information does not allow any cooperative member to claim environmental attributes of power supply since some renewable energy certificates are sold to improve the economics of the renewable generation. For more information, contact Ryan Cornelius, vice president, corporate relations, Corn Belt Power Cooperative, 1300 13th St. North, Humboldt, IA 50548, (515) 332-7726; ryan.cornelius@cbpower.coop
2021 ENERGY SUPPLIED Location
Fuel
MWH
MWH
2020
2021
*WISDOM 1 *WISDOM 2 **DAEC WALTER SCOTT 3 WALTER SCOTT 4 NEAL 4 CROSSWIND HANCOCK ILEC WIND
Supplied by Corn Belt Power to Basin Electric and NIMECA **DAEC closed in 2020 * Total generation minus online + offline station service.
Powerfully Present | CBPC 2021 YEAR IN REVIEW
Annual Capacity Factor 2021
NEW VOLUNTEER CONTEST: SHINE THE LIGHT With the goal of shining the light on community volunteers across Iowa, three G&T electric co-ops have joined forces with the Iowa Association of Electric Cooperatives in 2021 to create a new contest called Shine the Light. The cooperative principle of commitment to community drives this collaboration among Central Iowa Power Cooperative, Corn Belt Power Cooperative, Northwest Iowa Power Cooperative and IAEC.
A judging panel selected Marlene Walhart, Iowa Lakes Electric Cooperative member; George North, Butler County REC member; and Suzanne Askelsen, Midland Power Cooperative as winners. Each won a $1,500 donation to give to a charity of their choice.
George North, Butler County REC member and Shine The Light winner, creates an affordable recreational area and outdoor classroom of Wilder Park, Allison, Iowa.
Marlene Walhart, Iowa Lakes Electric Cooperative member and Shine The Light winner, rescues animals at Emmet County Animal Shelter.
31 CBPC 2021 YEAR IN REVIEW | Powerfully Present
Virtual advocacy with Representative Randy Feenstra.
REC DAY ON THE HILL HELD VIRTUALLY On Wednesday, March 17, Corn Belt Power Cooperative participated virtually in REC Day on the Hill. The annual advocacy event is typically held at the Iowa State Capitol during the legislative session. The event provides co-op leaders a prime opportunity to discuss issues important to co-op members. Due to the ongoing pandemic, co-op advocates used virtual platforms to discuss important issues with legislators. This year’s topics included vegetation management, expanding broadband connectivity and balancing sales tax treatment of utilities.
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Co-ops advocate for Iowa co-op priorities with Senator Chuck Grassley.
IOWA’S COOPERATIVES TAKE PART IN VIRTUAL ADVOCACY, THEN FLY TO D.C. As part of NRECA’s annual Legislative Conference, April 20 and 21, directors and staff from Iowa’s electric cooperatives met with Iowa members of Congress virtually to discuss important issues and priorities. Iowa co-op leaders highlighted three priorities during visits with Senator Ernst, Senator Grassley, Congresswoman Axne, Congressman Feenstra, Congresswoman Hinson and Congresswoman Miller-Meeks. The group discussed Rural Utility Services loan refinancing, rural broadband and comparable tax credits for energy innovation.
In the fall, Iowa cooperative representatives returned in-person to Washington, D.C. to conduct the fall legislative fly-in. The group discussed a variety of issues with the ongoing reconciliation and federal budget debate. The group asked lawmakers to include realistic and reasonable timelines in any clean energy program, while also not hindering electric cooperatives’ ability to provide affordable and reliable electricity to member-owners.
Representative Randy Feenstra visits Corn Belt Power’s Emmetsburg warehouse April 6 as part of his 39 county tour.
FEENSTRA VISITS CORN BELT POWER
HOMMEL RECEIVES SCHOLARSHIP
On Tuesday, April 6, first-term U.S. Representative Randy Feenstra visited Corn Belt Power’s Emmetsburg service center. The stop was part of Feenstra’s promised 39 county tour.
Ella Hommel, Grundy Center High School, and member of Grundy County Rural Electric Cooperative, won this year’s Corn Belt Power member cooperative consumer scholarship.
At his Emmetsburg stop, Rep. Feenstra visited with employees from Corn Belt Power, Iowa Lakes Electric Cooperative and the Iowa Association of Electric Cooperatives. The group spoke to Rep. Feenstra on issues ranging from Rural Utilities Service loan refinancing to biofuels and the 2023 Farm Bill.
Hommel is a member of her school’s 4-H, FFA, First Tech Challenge, Student Senate, Academic Decathlon, Speech, Band, National Honor Society, Tennis, Soccer and Cross Country programs. She is her class president and maintains fantastic grades.
Ella Hommel
Reflect Daily.
33
CBPC 2021 YEAR IN REVIEW | Powerfully Present
ANNUAL MEETING HELD IN HYBRID STYLE Like in 2020, Corn Belt Power canceled its in-person annual meeting and opted for a hybrid meeting — digital and in-person. Corn Belt Power hosted its annual meeting Friday, April 30. Board members and Corn Belt Power department heads attended. Managers and voting delegates had the opportunity to join via Zoom. During the meeting, directors and others in attendance heard Ken Kuyper, executive vice president and general manager, Corn Belt Power; Dennis Puckett, attorney, Sullivan & Ward; and Karen Berte, senior vice president, finance and administration. Puckett conducted the election of directors. Berte and Larry Rohach, board treasurer, presented the 2020 financial report. During the annual meeting, Larry Rohach, Grundy County REC, and Brad Honold, NIMECA, were re-elected to another three-year term on Corn Belt Power’s board of directors. Their seats were the only seats up for election.
OFFICERS REMAIN THE SAME: • Dave Onken, President • Dale Schaefer, Vice President • Jerry Beck, Secretary • Larry Rohach, Treasurer • Gary Poppe, Assistant Secretary/Treasurer CORN BELT POWER, PRAIRIE ENERGY, BASIN ELECTRIC AND COBANK DONATE TO ART MUSEUM Prairie Energy Cooperative and Corn Belt Power Cooperative made donations to the Jenison-Meacham Memorial Arts Center to help bring the 1,000-horsepower, 750-kilowatt generator to the area for permanent display. Basin Electric Power Cooperative and CoBank matched the donations, which totaled $2,500. The steam engine, built by Murray Machine Works in Burlington, IA, generated electricity for the Iowa State Penitentiary at Fort Madison. It was retired in the early 1950s and donated to the Waukee Tractor Club by the state in 1982 where it was on display until 2008.
Jim Gossett, Raccoon Valley Electric Cooperative
GOSSETT TO TOUCHSTONE ENERGY BOARD In July, the Touchstone Energy board of directors appointed Jim Gossett, chief executive officer, Raccoon Valley Electric Cooperative, to fill the vacant board position left by Tresa Hussong, Iowa Lakes Electric Cooperative. Hussong retired August 2021. Throughout Gossett’s eight-year tenure at RVEC, the last four as CEO, he has used his media experience, legislative engagement, extensive business development network and leadership to extend the reach of the Touchstone Energy® brand.
Corn Belt Power hosts a hybrid annual meeting on April 30.
34 Powerfully Present | CBPC 2021 YEAR IN REVIEW
In December, the Touchstone Energy membership elected Gossett to his first three-year term.
CALHOUN CLOSES ON ITS FIRST BUSINESS PARK
CORN BELT POWER PRESENTED WITH IMPACT AWARD
After years of in-depth research and careful planning, Calhoun County has an industrial park.
In September, Corn Belt Power Cooperative was awarded an IADG Impact Award for site development. Recent examples of Corn Belt Power’s commitment to site development include support for the Calhoun County Business Park, the first in the county.
Calhoun County Electric Cooperative Association partnered with Corn Belt Power, Calhoun County Board of Supervisors and Calhoun County Economic Development Corporation to develop this project located at the intersection of Highway 20 and Highway 4. The planning and organizing group hosted a groundbreaking ceremony on-site June 3. Studies show that the area is primed to attract warehousing and distribution businesses. Those businesses will support travelers and logistics support in the region. Vermeer, who has been developing industrial parks in the Corn Belt Power system for more than two decades, says industrial parks are critical to a county’s and cooperative’s success.
Calhoun County broke ground on its first industrial park on June 3. The area is primed to attract warehousing and distribution businesses.
Corn Belt Power provided funding to aid in the purchase of 134 acres of property near Humboldt for future commercial and industrial growth, as
well as additional property near the Butler Logistics Park. Corn Belt Power also assisted with the expansion of the Estherville Industrial Park with a 40-acre expansion and is helping to answer the housing need in Spencer by supporting the Westfield housing development. This is a two and threebedroom home development at the former Jacobson Trailer Park. Corn Belt Power also operates an estimated $8 million Revolving Loan Fund to support business and community development projects across north-central Iowa.
Jim Vermeer, vice president, business development, left, and Brittany Dickey, development finance director, receive an IADG Impact Award on behalf of Corn Belt Power for 2021 site development.
35
existing employees. The program was created in conjunction with Kathy Peterson of PeopleWorks, Inc. Throughout the year, participants learned about topics such as setting goals, leading change, managing stress and dealing with difficult conversations. Those in the program attend sessions about cooperative financials, generating sources, electric rates and the cooperative business model. Participants also take part in self and peer 360 evaluations.
2021’s graduating class includes back row, from left, Rod Stephas, assistant plant manager; Jon Myer, IT administrator; Jim Mertz, electrical maintenance foreman; and front row, from left, Courtney Christensen, administrative assistant; Connor Almond, journeyman lineman; John Naber, electrical and control; and Eric Hankey, SCADA technician (pictured right)
SECOND-EVER LEAD CLASS GRADUATES Following the success of 2019’s Leadership Exploration and Development program (LEAD), Corn Belt Power’s second LEAD class began in 2020 and graduated May 5, 2021. LEAD is a program to help develop leadership skills in
2021’s graduating class includes Rod Stephas, assistant plant manager; Jon Myer, IT administrator; Jim Mertz, electrical maintenance foreman; Courtney Christensen, administrative assistant; Connor Almond, journeyman lineman; John Naber, electrical and control; and Eric Hankey, SCADA technician.
CORN BELT POWER COOPERATIVE SYSTEM MAP 1. Iowa Lakes Electric Cooperative 2. Midland Power Cooperative 3. Boone Valley Electric Cooperative 4. Prairie Energy Cooperative 5. Franklin REC 6. Butler County REC 7. Raccoon Valley Electric Cooperative 8. Calhoun County Electric Cooperative Association 9. Grundy County REC orth Iowa Municipal Electric N Cooperative Association (NIMECA) ( Serving municipal utilities of Algona, Alta, Bancroft, Coon Rapids, Graettinger, Grundy Center, Laurens, Milford, New Hampton, Spencer, Sumner, Webster City and West Bend)
36 Powerfully Present | CBPC 2021 YEAR IN REVIEW
3
1 2 45 8 7 2
6 9
KBRA NOTED THE FOLLOWING AS POSITIVE RATING FACTORS: • Corn Belt Power’s members are required to purchase essentially all power requirements from Corn Belt Power subject to take and pay contracts extending through 2075. • Corn Belt Power is not state-regulated. It sets its own rates which it can implement within a monthly period. Corn Belt Power’s firm service territory boundaries are statutorily set. KBRA NOTED THE FOLLOWING AS POTENTIAL CREDIT CHALLENGES: • Although Corn Belt Power and Basin Electric have taken steps to diversify their respective energy portfolios, both remain highly dependent on coal-fired power. • The number of ultimate customers is small relative to Corn Belt Power’s peers. RATING SENSITIVITIES INCLUDE: • Ongoing load growth that results in consistently stronger financial metrics would be a positive credit factor.
A
Kroll Bond Rating Agency (KBRA) affirmed its ‘A’ issuer credit rating for Corn Belt Power Cooperative and noted the outlook is stable.
In its ratings report, KBRA noted the stable rural economy of the Corn Belt Power service area is supportive of demand. Regional unemployment remains well below the national average and has shown relatively low volatility during periods of economic stress. The co-op’s rural service base, which is dominated by the agricultural sector, has proven resilient to recessionary downturns. A recent trend of regional economic development is expected to support increased electricity sales and a stable load. Corn Belt Power Cooperative added 12.57 MW of new and/or expanded load in 2020 to meet the continued expansion of businesses and industries.
• Significant reductions in average cost to members resulting from generation efficiencies on the part of Basin Electric and/or Corn Belt Power would be a positive credit factor. • Debt service and TIER that are consistently lower than 1.1x and 1.2x, respectively, would be a negative credit factor. • Regulatory costs that necessitate non-competitive or unaffordable rate increases would be a negative credit factor. 37 CBPC 2021 YEAR IN REVIEW | Powerfully Present
HUMAN RESOURCES UPDATE PROMOTIONS Devin Chesler apprentice to journeyman lineman Jeff Codner apprentice to journeyman lineman Brittany Dickey development finance director to manager, business development Alex Hartwig apprentice to journeyman electrician RETIREMENTS Scott Greene custodian/groundskeeper Jim Vermeer vice president, business development NEW HIRES Jack Arndt apprentice lineman Jena Blackett building custodian Luke Bormann apprentice electrician Carlos Garcia control operator Zachary Thompson SCADA technician
38
Spring blossoms arrive at Corn Belt Power headquarters.
BOARD OF DIRECTORS
DAVID ONKEN
President, Raccoon Valley Electric Cooperative
DALE SCHAEFER
Vice President, Franklin REC
CHARLES GILBERT
JERRY BECK
Secretary, Basin Electric Power Cooperative Representative, Iowa Lakes Electric Cooperative
BRAD HONOLD
Midland Power Cooperative
North Iowa Municipal Electric Cooperative Association
LARRY ROHACH
Treasurer, Grundy County REC
LAVERNE ARNDT
Calhoun County Electric Cooperative Association
GARY POPPE
Assistant Secretary/Treasurer, Butler County REC
TED HALL
Prairie Energy Cooperative
DEPARTMENT HEADS
KEN KUYPER
Executive Vice President and General Manager
KAREN BERTE
Senior Vice President, Finance and Administration
KEVIN BORNHOFT RYAN CORNELIUS Vice President, Engineering and System Operations
Vice President, Corporate Relations
JACOB OLBERDING Vice President, Power Supply
BRITTANY DICKEY Manager, Business Development
39 CBPC 2021 YEAR IN REVIEW | Powerfully Present
Corn Belt Power Cooperative is a generation and transmission electric cooperative owned by its member systems. Corn Belt Power provides electricity to nine member cooperatives and one member municipal cooperative that serve farms, rural residences, small towns and commercial and industrial members in 41 counties in northern Iowa.
Audited Financial Report
CORN BELT POWER IS
“powerfully present” ENGAGING AND RESPONDING FOR THE GOOD OF OUR MEMBERSHIP IN THE NOW.
43 CBPC 2021 FINANCIAL REPORT | Powerfully Present
Balance Sheets DECEMBER 31, 2021 AND 2020 ASSETS
2021
2020
ELECTRIC PLANT: $
582,783,702
569,442,215
(322,929,026)
(317,850,297)
259,854,676
251,591,918
8,212,171
11,266,367
268,066,847
262,858,285
158,958
158,958
4,926,793
4,859,922
Decomisngfud
72,779,925
67,315,770
Otherinvsm
90,147,128
82,903,303
1,313,848
1,246,882
ecivablNotsr
8,462,044
7,490,290
Otheras
1,845,477
2,177,731
179,634,173
166,152,856
egulatorysDcmin
-
2,595,144
egulatorysnciBd
996,431
1,063,606
996,431
3,658,750
Cashndcequivlt
2,688,894
10,610,685
Specialfunds
3,700,000
3,700,000
ecivablMmrounts
10,295,412
12,132,165
ecivablsOthr
2,215,438
5,902,678
Fuel
4,204,601
6,436,778
Materilsndup
9,426,557
9,104,495
317,221
213,440
32,848,123
48,100,241
481,545,574
480,770,132
Inservic eciatonLs,umldpr
esogrCntuciwkp
OTHER PROPERTY AND INVESTMENTS: opertyNnuil InvestmihNaolRurUCp FinaceCorpt(NRU)
Specialfunds
DEFERRED CHARGES:
CURRENT ASSETS:
Invetoris:
epaymntsPr $
44
See accompanying notes to financial statements.
Powerfully Present | CBPC 2021 FINANCIAL REPORT
Balance Sheets
20 D N A 1 20 , 1 3 R E B M C D
MEMBERSHIP CAPITAL AND LIABILITIES
2021
2020
AL: MEBRSHIPCT $ 01,1
Memberships, at $100 per membership
01,1 0 2 , 18 9 4 0
Deferred patronage dividends, restricted
, 7 3 9 48 63, 15
Other equities
,950614 -
Accumulated other comprehensive income 6 ,1 2 0 3 LONG-TERMDB
3 8 6 ,4 5 ,2561309
: Federal Financing Bank
,9 3 0 8 1
,6 8 9 4 7 0 1
Revenue bonds
6 7 2 1 ,0 9
,62 7 1 3
NRUCFC
8 6 , 4 25
9 0, 8 3 6 4
CoBank
3 72 , 5 0 1
2 ,50
USDA Intermediary Relending Program
9 0, 81 3 7
6 , 25 9 3
26 7 0 , 4
6 , 1 3 6 7 1 ,9 2 1 3 , 9 41 0 8 6
Less, current maturities of long-term debt
3 , 84 2 61 9
9 2 , 4 51 3 6 7
2075,3461
OTHERLNG-MIABS: 8 7 96, 2 1
DAEC decommissioning liability
, 69 75 1
Ash landfill retirement obligation
8 73 5 ,
Decommissioning regulatory liability
4 , 325 6
,9 4 0 3 1 2,601
Deferred compensation plan
0 4 1 3 5,
6 ,7 9 4 5 3
27, 8 46 5
3 , 9 41 0 8 6
3 , 84 2 61 9
CURENTLIABS: Current maturities of long-term debt 4, 5 0 1
Short-term debt
,0 2 1 5 4
Accounts payable
3 9 1 , 3 27 1 , 6 4 2 3 78
Accrued property and other taxes
2 ,8 67
0 73 8 , 2
Deferred credits
2 , 8 51 3 123 7 6 ,
Accrued interest and other
6 9 , 25 0
4 5, 8 0 3 8 $ See accompanying notes to financial statements.
,4 5 1 8 7
1 4 , 3 57 1 4 3 2 1 4 8 70 ,
45 CBPC 2021 FINANCIAL REPORT | Powerfully Present
Statements of Revenue and Expenses 2021
46
See accompanying notes to financial statements.
Powerfully Present | CBPC 2021 FINANCIAL REPORT
2020
Statements of Comprehensive Income 2021
2020
2021
2020
Statements of Cash Flows
(Continues)
See accompanying notes to financial statements.
47 CBPC 2021 FINANCIAL REPORT | Powerfully Present
Statements of Cash Flows 2021
2020
Statements of Membership Capital Other Equities
Total
48
See accompanying notes to financial statements.
Powerfully Present | CBPC 2021 FINANCIAL REPORT
Membership
Deferred patronage dividends
Statutory surplus
Reserve for contingent losses
Accumulated other comprehensive income (loss)
Notes to Financial Statements DECEMBER 31, 2021 AND 2020 (1) Organization Corn Belt Power Cooperative (the Cooperative) is a Rural Utilities Service (RUS) financed generation and transmission cooperative created and owned by nine distribution cooperatives and one municipal cooperative association. Electricity supplied by the Cooperative serves farms, small towns, and commercial and industrial businesses in northern Iowa. The Cooperative’s Board of Directors (Board of Directors) is composed of one representative from each member cooperative and is responsible for, among other things, establishing rates charged to the member cooperatives.
(2) Significant Accounting Policies The Cooperative maintains its accounting records in accordance with the Uniform System of Accounts as prescribed by the RUS. The financial statements and the accompanying notes to the financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The significant accounting policies are as follows: (a) Cash and Cash Equivalents For the purpose of reporting the statements of cash flows, the Cooperative considers investments purchased with an original maturity of three months or less to be cash equivalents, except for cash held for investing as part of the decommissioning fund, relending program, and special funds which are restricted for use. These restricted cash and cash equivalents are included in footnotes 2(c), 2(d) and 2(g). (b) Inventories Inventories consist of fuel (primarily coal), emission allowances, and materials and supplies carried at cost. The cost for inventories is determined on a weighted-average cost basis. The 1990 Clean Air Act (the Act) established the requirement for fossil fuel electric generating plants to hold sulfur dioxide (SO2) emission allowances under the Acid Rain Program (ARP). In 2015, the Cross-State Air Pollution Rule (CSAPR) established an additional SO2 allowance requirement along with adding nitrogen oxide (NOx) annual and seasonal allowances. The Act and CSAPR allocate a certain number of emission allowances to owners of fossil fuel generating plants that are affected by the rules and established corresponding ARP SO2, CSAPR SO2, CSAPR NOx annual, and CSAPR NOx seasonal emission allowance trading programs. Emission allowances that have been granted to the Cooperative as a result of the Act and CSAPR do not have any cost, and therefore, the use of these emission allowances does not result in expense. From time to time, the Cooperative will purchase a quantity of each type of emission allowance to ensure an adequate number of allowances are held. The purchased allowances are combined with the allocated allowances to derive an average allowance cost each year for each type of emission allowance. Emission allowances purchased are capitalized in inventory and are charged to fuel expense as they are used in operations. (c) Other Investments Other investments consist of funds held in trust (mainly from patronage income), cash held for the Cooperative’s intermediary relending program (note 9), and common and preferred stock. These equity investments do not have readily determinable fair values and are accounted for at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. No impairment or observable price changes were recorded during 2021 or 2020. (d) Special Funds Special funds are funds set aside to cover future expenses, pay regulatory liabilities or pay future debt payments. Debt investments held in special funds are reported at fair value. Remaining deposits are recorded at their original cost as their cost approximates fair value due to the nature of the deposit. At December 31, 2021 and 2020, special funds included commercial paper of $3,700,000 and $3,700,000, respectively. (e) Notes Receivable The Cooperative determines any impairment of notes receivable based on various factors that ultimately are used to calculate collectability. As part of the review, the Cooperative reviews the terms of the original note, nature of the transaction, history of repayment, and knowledge of borrower’s financial strength. No impairments were indicated for the years ended December 31, 2021 and 2020.
49
CBPC 2021 FINANCIAL REPORT | Powerfully Present
Notes to Financial Statements DECEMBER 31, 2021 AND 2020 (f) Regulatory Matters The Cooperative’s utility operations are subject to provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 980, Regulated Operations. Therefore, its utility operations recognize the effects of rate regulation by the Board of Directors and, accordingly, have recorded regulated assets to reflect the impact of regulatory items for which future rates will be increased to recover costs and regulated liabilities for revenue deferred at the discretion of the Board of Directors. The regulatory assets are included within deferred charges and the regulatory liabilities are included within deferred credits on the balance sheets. (g) Decommissioning of Duane Arnold Energy Center (DAEC) The Cooperative recognizes and estimates an asset retirement obligation (ARO) for its 10% share of the estimated cost to decommission DAEC. A Nuclear Regulatory Commission (NRC) estimate of the decommissioning costs of DAEC was performed in 2015 and updated in 2018. This report estimated the Cooperative’s share of the decommissioning costs of DAEC to be approximately $83,357,100 (in 2018 U.S. dollars). The Cooperative is providing for overall nuclear decommissioning costs using a funding method designed to accumulate a decommissioning reserve sufficient to cover the Cooperative’s share of decommissioning costs by 2021. In 2021, DAEC was shut down in accordance with the decommissioning plan. The total fair value of the decommissioning funds accumulated at December 31, 2021 was $72,779,925, of which $46,171,431 has been placed in a fund legally restricted for use in decommissioning DAEC. The remaining $26,608,494, while not legally restricted, has been designated by the Cooperative for use in decommissioning DAEC. The total fair value of the decommissioning funds accumulated at December 31, 2020 was $67,315,770, of which $42,357,224 was placed in a fund legally restricted for use in decommissioning DAEC. The remaining $24,958,546, while not legally restricted, was designated by the Cooperative for use in decommissioning DAEC. Decommissioning investments classified as equity securities are reported at fair value with realized and unrealized gains and losses included as a component of regulatory assets. Decommissioning investments classified as available-for-sale debt securities are reported at fair value with unrealized gains and losses included as a component of comprehensive income. As of December 31, 2021 and 2020, available-for-sale securities consisted of the following: Amortiz e d cost
U n realiz e d
gains
U n realiz e d losses
Fair value
201: Corporate bonds
$
-
-
-
-
-
-
-
-
$
-
-
-
-
$
11,366,392
352,056
-
11,718,448
532,259
34,400
-
566,659
11,898,651
386,456
-
12,285,107
Foreign investments in government funds 20: Corporate bonds Foreign investments in government funds $
Realized gains and losses from equity securities and available-for-sale securities are determined on a specic-identication basis. Realized gains/(losses) on investments classied as equity securities and available-for-sale securities were 0,9465 $2 and 028,65 1 ,$2 for 1 02 and ,02 respectively. These gains/(losses) on available-for-sale securities result in a reclassication from accumulated other comprehensive income (AOCI) to the decommissioning regulatory asset.
50 Powerfully Present | CBPC 2021 FINANCIAL REPORT
51 CBPC 2021 FINANCIAL REPORT | Powerfully Present
Notes to Financial Statements DECEMBER 31, 2021 AND 2020 (m) Cost of Power The Cooperative recognizes the cost of electric energy produced or purchased when energy is delivered to customers. (n) Major Maintenance Activities The Cooperative incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred. (o) Interest During Construction Interest during construction represents the cost of funds used for construction and nuclear fuel refinement. The average rate was 1.82% and 2.28% for 2021 and 2020, respectively, and is based on the Cooperative’s costs of financing. (p) Income Taxes The Cooperative is exempt from federal and state income taxes under sections 501(c)(12) of the Internal Revenue Code. Accordingly, no provision for income taxes has been included in the Cooperative’s financial statements. The Cooperative recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. (q) Related Party Transactions The Cooperative serves nine distribution cooperatives and one municipal cooperative association (the Members), all of which are member/ owners of the Cooperative. The Cooperative has concentrations of revenue and receivables with the Members. During the years ended December 31, 2021 and 2020, the Cooperative had sales of electricity to the Members of $138,515,889 and $135,862,371, respectively. The Cooperative had outstanding accounts receivables from the Members of $10,295,412 and $12,132,165 at December 31, 2021 and 2020, respectively.
(3) Agreements with Basin Electric Power Cooperative On September 1, 2009, the Cooperative became a Class A member of Basin Electric Power Cooperative (Basin Electric). As part of this agreement, energy and capacity needs of the Cooperative above the Western Area Power Administration allocation and a 50 MW power purchase agreement with Basin Electric are to be provided by Basin Electric at Class A member rates. Further, the Cooperative sells the energy from its generation facilities at cost to Basin Electric, but continues to own and be responsible for those facilities. During 2021 and 2020, respectively, as part of these agreements, the Cooperative purchased $124,578,985 and $120,059,522 of power and sold $38,808,933 and $66,143,296 of power to Basin Electric, which is recorded in purchased power, net, in the statements of revenue and expenses. At December 31, 2021, the Cooperative had accounts receivable from and accounts payable to Basin Electric of $3,168,005 and $8,289,070, respectively.
(4) Fair Value Measurements ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Cooperative has the ability to access at the measurement date. Level 2 - Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 - Inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.
52 Powerfully Present | CBPC 2021 FINANCIAL REPORT
53 CBPC 2021 FINANCIAL REPORT | Powerfully Present
Notes to Financial Statements Fair value measurements at December 31, 2020 using
December 31 2020
u Q oted prices in active markets for identical assets (Level 1)
Significant other observable inputs (Level 2)
Significant unobservable inputs (Level 3)
The portion of unrealized gains and losses for the periods relating to equity securities still held at December 31, 2021 and 2020 is as follows:
2021
54 Powerfully Present | CBPC 2021 FINANCIAL REPORT
2020
Notes to Financial Statements DECM E BER , 1 3 20 AND 02
Fair value of the Cooperative’s financial instruments is determined using the methods and assumptions as set forth below. While the Cooperative believes that its valuation methods are appropriate and consistent with those of other market participants, use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value at the reporting date. There were no changes in valuation methodology from 2020 to 2021. Cash and cash equivalents - Cash equivalents consist of demand deposit accounts and investments with original maturities of three months or less when purchased. These are recorded at fair market using quoted market prices. These are classified as Level 1 as they are traded in an active market for which closing prices are readily available. Commercial paper - Investments in commercial paper are reported at fair value plus accrued interest at the reporting date. These investments are classified as Level 2. Cushion of credit - Cushion of credit funds consist of advance payments to Federal Finance Bank (FFB) and is valued based on the amount of cash held in the account. The cushion of credit funds earned 5% and were restricted for payment of debt obligations. As such, these funds are classified as Level 1. Certificates of deposit - Certificates of deposit approximate fair value based on estimates using current market rates offered for deposits with similar remaining maturities and are classified as Level 2 securities. Corporate bonds and government obligations - Fixed income securities and government and agency obligations are valued based upon observable market prices on the reporting date. When quoted prices of identical investment securities in active markets are not available, the fair values for the investment securities are obtained primarily from pricing services; one evaluated price is received for each security. The fair values provided by the pricing services are estimated using matrix pricing or other pricing models, where the inputs are based on observable market inputs or recent trades of similar securities. Such investment securities are generally classified as Level 2. Common and preferred stock - Investments in publicly traded equity securities and mutual funds are measured at fair value using quoted market prices. These are classified as Level 1 if they are traded in an active market for which closing market prices are readily available.
(5) Investment in the NRUCFC, Notes Receivable, and Other Investments The Cooperative has investments in the following:
2021 Common and preferred stock
$
2020
9 4, 8 5
Funds held in trust
9 7 ,3 4
, 92 5 4 1 8
6 3 4, 82 7
Restricted other assets
5 1 3, 2 1 9 ,
4306,89 7,
Investment in NRUCFC
93 7 ,62 4
29 , 8 5 4
Economic development notes receivable
0 4 , 26 8 $
49,20 7,
2 4 , 1 3 08 5
46 , 2 1 4 3 , 7 9
The above investments are included in the accompanying balance sheets as follows:
1 20 Investment in NRUCFC
$
20
4,926,793
4,859,922
Notes receivable
8,462,044
7,490,290
Other investments
90,147,128
82,903,303
Other assets
1,845,477
2,177,731
105,381,442
97,431,246
$
55 CBPC 2021 FINANCIAL REPORT | Powerfully Present
56 Powerfully Present | CBPC 2021 FINANCIAL REPORT
o N tes to Financial tS atements DECEMBER 31, 2021 AND 2020
Decommissioning Regulatory Asset and Liability - In connection with the costs related to decommissioning of DAEC, the Cooperative has established a regulatory asset or liability in conjunction with recording of the decommissioning liability. This regulatory asset or liability is the difference between the decommissioning liability and the fair value of the investments in the decommissioning funds. Bond Refinancing Regulatory Asset - In 2019, the Cooperative refinanced its outstanding Webster City revenue bonds. Bond refinancing costs, discount, and the loss on refinancing costs of $1,175,565 were set up as a regulatory asset and will be amortized over the life of the bonds. Deferred Credit - In 2018, the Board of Directors established a deferred credit of $3,700,000. The revenue deferral was set aside in a cash account to cover expenditures through 2023. In 2020, $8,100,000 was recorded as a deferred credit to reflect the pending settlement with Missouri River Energy Services on the grandfathered agreements and the settlement on the Annual Transmission Revenue Settlement, see discussion in footnote 11.
(8) Short-Term Debt In October 2020 the Cooperative signed a five year credit facility with NRUCFC for $100,000,000. The Cooperative has drawn down on its credit facilities $14,500,000 and $0 as of December 31, 2021 and 2020, respectively.
(9) Long-Term Debt The Cooperative executed an Indenture of Mortgage, Security Agreement and Financing Statement, dated as of August 30, 2013 (Indenture) between the Cooperative, as Grantor, to U.S. Bank National Association, as Trustee. The Indenture provides secured note holders with a prorated interest in substantially all owned assets. Secured debt includes FFB, CoBank and certain parts of NRUCFC loans. Long-term debt consists of mortgage notes payable to the United States of America acting through the RUS from the FFB, NRUCFC, CoBank, revenue bonds issued due to agreements with Webster City, and notes borrowed through the USDA Intermediary Relending Program (IRP Notes) and Rural Economic Development Loan and Grant (REDLG Loans) Program. The proceeds of these IRP Notes and REDLG Loans are then lent to other eligible businesses within certain approved counties in the Cooperative’s service area. Substantially all the assets, rent, income, revenue, and net margin of the Cooperative are pledged as collateral for the long-term debt of the Cooperative, except for IRP Notes and REDLG Loans, which are not secured by assets of the Cooperative. Long-term debt has the following components:
1 20
20
Mortgage notes due in quarterly installments: FFB 1.63%-4.692%, due 2022-2039
$
CoBank 3.47%, due 2022-2024 NRUCFC 2.90%-4.40%, due 2022-2050 NRUCFC 2.95%, due 2022-2024
Revenue bonds 2.95%-4.20%, due 2022-2036 USDA Intermediary Relending Program - 0%-1%, due 2022-2042 $
99,091,389
107,689,948
1,732,500
2,502,500
85,420,168
88,613,445
1,032,697
1,470,203
187,276,754
200,276,096
$12,009,167
12,631,667
7,190,839
6,259,553
206,476,760
219,167,316
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Notes to Financial Statements DECEMBER 31, 2021 AND 2020
(13) Asset Retirement Obligation The Cooperative has ARO arising from regulatory requirements to perform certain asset retirement activities at the time of decommissioning DAEC and disposing of certain electric plant. The liability was initially measured at fair value and subsequently is adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The Cooperative recognizes and estimates an ARO for its 10% share of the estimated cost to decommission DAEC. During 2018, an NRC estimate of the decommissioning costs was updated. This report estimated the Cooperative’s share of the costs to be approximately $83,357,100 (in 2018 U.S. dollars). The following table presents the activity for the AROs for the years ended December 31, 2021 and 2020:
2021 Balance at January 1
$
Accretion expense Obligations incurred Balance at December 31
$
2020
69,691,957
67,917,292
2,867,000
3,161,000
(3,937,168)
(1,386,335)
68,621,789
69,691,957
The Cooperative also recognizes a liability o f r its share of the estimated cost to remove the ash landfills at a W lter Scott #3 and Neal #4. A reconciliation of the changes in the ARO is depicted below:
2021 Balance at January 1
$
3,019,404
2020 $
3,008,096
Changes in estimates, including timing
647,677
11,308
Accretion expense
132,493
-
(14,241)
-
Obligations incurred Balance at December 31
$
3,785,333
$
3,019,404
(14) Nuclear Insurance Program Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both private sources and an industry retrospective payment plan. In accordance with this Act, DAEC maintains $450 million of private liability insurance, which is the maximum obtainable, and participates in a secondary financial protection system, which provides up to $13.1 billion of liability insurance coverage per incident at any nuclear reactor in the United States. The Cooperative’s assessment on its 10% ownership in DAEC is approximately $13.8 million per nuclear incident. Pursuant to provisions in various nuclear insurance policies, the Cooperative could be assessed retroactive premiums in connection with future accidents at a nuclear facility owned by a utility participating in the particular insurance plan. In addition, the Cooperative could be assessed annually approximately $2.0 million related to coverage for excess property damage if the insurer’s losses relating to an accident exceed its reserves. While assessment also may be made for losses in certain prior years, the Cooperative is not aware of any losses in such years that it believes are likely to result in an assessment. In the unlikely event of a catastrophic loss at DAEC, the amount of insurance available may not be adequate to cover property damage, decontamination, and premature decommissioning. Uninsured losses, to the extent not recovered through rates, would be borne by the Cooperative and Basin Electric, through the power purchase agreement, and could have a materially adverse effect on the Cooperative’s financial position and results of operations.
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Notes to Financial Statements DECEMBER 31, 2021 AND 2020 (15) Benefit Plans The Retirement Security (RS) Plan, sponsored by NRECA, is a defined-benefit pension plan qualified under Section 401 and tax-exempt under Section 501(a) of the Internal Revenue Code. It is considered a multi-employer plan under the accounting standards. The plan sponsor’s Employer Identification Number is 53-0116145 and the Plan Number is 333. A unique characteristic of a multi-employer plan compared with a single-employer plan is that all plan assets are available to pay benefits of any plan participant. Separate asset accounts are not maintained for participating employers. This means that assets contributed by one employer may be used to provide benefits to employees of other participating employers. The Cooperative’s contributions to the Retirement Security (RS) Plan in 2021 and 2020 represented less than 5% of the total contributions made to the RS Plan by all participating employers. The Cooperative made contributions to the RS Plan of $1,677,063 and $1,546,301 in 2021 and 2020, respectively. For the RS Plan, a “zone status” determination is not required, and therefore, not determined, under the Pension Protection Act (PPA) of 2006. In addition, the accumulated benefit obligations and plan assets are not determined or allocated separately by individual employers. In total, the RS Plan was over 80% funded on January 1, 2021 and 2020 based on the PPA funding target and PPA actuarial value of assets on those dates. Because the provisions of the PPA do not apply to the RS Plan, funding improvement plans and surcharges are not applicable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience. The Cooperative also provides a 401(k) plan, available to all employees, with the Cooperative matching 40% of the employees’ contributions up to 5% of the employees’ wages. For the years ended December 31, 2021 and 2020, the Cooperative contributed $162,764 and $152,559, respectively, to the 401(k) plan. The Cooperative also offers key employees a deferred compensation plan available through NRECA. The plan permits qualifying employees to defer a portion of their salary until future years. The accumulated deferred compensation balance is not available to the employees until termination, retirement or death. All amounts of compensation deferred under the plan and all income attributable to those amounts (until paid or made available to the employee or other beneficiary) are solely the property and rights of the Cooperative (not restricted to the payment of benefits under the plan), subject only to the claim of general creditors. Participants’ rights under the plan are equal to those of general creditors of the Cooperative in an amount equal to the fair market value of the deferred account for each participant. The related assets and liabilities total $212,601 and $135,104 as of December 31, 2021 and 2020, respectively, are reported as contract value, which approximates fair value.
(16) NIMECA Combined Transmission System In 1989, the Cooperative and one of its members, NIMECA, entered into a joint transmission agreement that allows several members of NIMECA an individual undivided ownership interest in and access to the Cooperative’s transmission system. The Cooperative will continue to operate and maintain the system. NIMECA members will reimburse the Cooperative for the proportionate share of operating expenses of the system and will contribute proportionately for all future capital additions of the system.
(17) Environmental Matters The EPA CSAPR was in effect January 1, 2015. This rule regulates interstate emissions of NOx and SO2 contributing to nonattainment areas of fine particulate and ozone. In 2015, EPA proposed a more stringent NOx seasonal Phase II. The NOx seasonal Phase II of the rule was finalized in 2016 and became effective in May 2017. The effects on the Cooperative are minimal due to the number of hours its coal plants operate during the year. In January 2021 the U.S. Court of Appeals for the D.C. Circuit struck down the Affordable Clean Energy (ACE) rule. This ruling allows the current administration to begin developing new CO2 emissions reduction rules. Impacts due to new CO2 regulations won’t be known until details of those new regulations are released, but are expected to be more significant than they would have been under the ACE rule. Adverse impacts that CO2 regulations would have on Corn Belt’s generating resources are significantly mitigated by power purchase agreements in place with Basin Electric.
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Notes to Financial Statements DECEMBER 31, 2021 AND 2020 (18) Other Matters The outbreak of the COVID-19 pandemic has resulted in governments and customers enacting emergency measures to combat the spread of the virus. These measures have included the implementation of travel bans, self-imposed quarantine periods, social distancing, additional safety protocols, and temporary customer facility shutdowns. To-date, the Cooperative has not experienced any material adverse impacts. It is not currently possible to estimate the length, severity, or financial impact of these developments in the future. Any prolonged restrictive measures put in place in order to contain the outbreak of the virus could adversely affect the Cooperative’s financial results.
(19) Subsequent Events The Cooperative has evaluated subsequent events from the balance sheet date through March 4, 2022, the date at which the financial statements were available to be issued and noted no additional items to disclose. In 2022, the Cooperative executed a loan agreement with FFB for $91,085,000. There have been no amounts advanced on this loan as of the issuance date.
62 Powerfully Present | CBPC 2021 FINANCIAL REPORT
Purpose:
Corn Belt Power Cooperative enhances the quality of life for members, employees and communities.
Mission:
Responsibly provide reliable, safe and affordable electricity. Support member cooperatives’ success. Enhance employees’ effectiveness. Improve communities’ vitality.
Values:
Integrity, Accountability, Commitment, Teamwork
iL ts en Corn Belt Power Cooperative
www.cbpower.coop 515.332.2571 1300 13th Street North P.O. Box 508 Humboldt, IA 50548
This institution is an equal opportunity provider and employer.