THE POWER OF PARTNERSHIP
2024 ANNUAL REPORT
Table of Contents
Letter From The Chair
Gerry Bundle, Wolverine Power Cooperative Board Chair
It is my honor to present Wolverine Power Cooperative’s 2024 Annual Report, reflecting another year of progress, innovation, and strategic growth. Our commitment to delivering reliable, affordable, and sustainable energy remains at the forefront of every decision we make, and I am proud to share the progress we have made together.
Cooperation among cooperatives is one of the fundamental principles that defines us, and in the past year, we have seen this principle in action. Our longstanding relationship with RESCO ensures access to critical materials and supply chain efficiencies, while our partnership with Hoosier Energy enhances our ability to optimize generation resources for the benefit of our members. Most notably, we welcomed Thumb Electric Cooperative into the Wolverine family, further
Cooperation among cooperatives is one of the fundamental principles that defines us, and in the past year, we have seen this principle in action.
strengthening our collective ability to serve Michigan’s rural communities. These partnerships exemplify the cooperative spirit—working together to achieve more than any of us could alone.
The strength of our power supply portfolio remains a cornerstone of our success. Wolverine has long prioritized a balanced approach, ensuring that our members have access to power that is reliable, affordable and sustainable. With the addition of carbon-free baseload power from the Palisades Power Plant upon its restart, we have an opportunity to further enhance reliability and environmental stewardship of our portfolio. Securing power from Palisades highlights our proactive approach to securing resources that position us well for the future.
Our ability to navigate an ever-changing energy landscape is made possible
by the agility of our organization. Through the New ERA grant process, we’ve demonstrated how quickly we can move, ensuring our planning aligns with the evolving needs of local communities. But agility is not just about strategic initiatives—it is about people. None of this would be possible without the dedicated professionals who power Wolverine’s success.
As we reflect on the past year and set our sights on the future, I extend my heartfelt gratitude to our members, partners, and employees. Your commitment and collaboration fuel our continued success. Together, we will navigate the challenges ahead and seize the opportunities that will shape Wolverine’s bright future.
Letter From The President & CEO
Eric Baker, President & CEO of Wolverine Power Cooperative
The powerful theme that defined our journey in 2024 is partnership.
Our strategic and operational success results from Wolverine’s strong partnerships—with our members, communities, employees, and industry peers. Together, we have proven that collaboration provides a catalyst for innovation, anchors our culture of safety and resilience, and drives meaningful growth.
First, I want to highlight several key operational accomplishments by Wolverine’s dedicated employees. They completed another 76 miles of transmission construction and began offering bulk transportation fiber services over a 1,000mile network. They completed a major overhaul of Alpine Unit #2, including the improved design for the compressor rotor and a controls replacement at Sumpter. Wolverine’s generation units continue to set the mark for reliability and availability in the Midwest. Wolverine field employees delivered mutual aid to its members and travelled to Florida to work with 25 other Michigan cooperative lineworkers to restore electric service after Hurricane Milton. Wolverine’s finance department delivered a well-executed longterm debt placement to maintain high liquidity and achieve competitive interest rates. Wolverine field employees completed nearly 200,000 hours of work with no lost time accidents.
We are Wolverine...
Wolverine Power Cooperative is more than just an organization, it’s a team of 180 passionate employees working across 14 locations statewide. United by an entrepreneurial spirit and a shared commitment to problemsolving, we are driven to serve and empower our members every day.
At the heart of Wolverine Power Cooperative are our member cooperatives—the foundation of our mission and the reason we exist. We work strategically and relentlessly to meet their evolving needs, ensuring access to reliable, affordable power while delivering exceptional service. Every investment we make reflects our dedication to long-term reliability, cost-efficiency, and innovation.
With creativity, collaboration, and purpose, we are powering a stronger, brighter future for our members and communities we serve.
2024 YEAR IN REVIEW
Because everything is beyond your grasp, until you reach for it…
POWERFUL PARTNERSHIPS: PALISADES
The road to restart: Palisades progress fueled by teamwork
A nuclear power plant doesn’t come online by itself. It takes teamwork, vision, and commitment to achieve something this transformative.
A major milestone came in fall 2024 when Wolverine was selected as a recipient of a $650 million New ERA grant—thanks in part to broad bipartisan support from state officials and Michigan’s congressional delegation. Once the Palisades Nuclear Power Plant is back online, this funding will help keep its carbon-free power affordable for nearly 300,000 homes and businesses in rural Michigan. As a not-for-profit wholesale power provider, Wolverine will pass 100% of the grant funds directly to its member cooperatives, ensuring every dollar
helps lower wholesale power costs and strengthen energy security in the communities we serve.
Grant dollars are a valuable boost, but restarting a nuclear plant takes more than funding. In 2024, Wolverine took critical steps to ensure Palisades’ energy could seamlessly integrate into the grid once operational. Working alongside Holtec International and Hoosier Energy, Wolverine collaborated with Michigan Electric Transmission Company (METC), Midcontinent Independent System Operator (MISO), and the Federal Energy Regulatory Commission (FERC) to preserve the plant’s interconnection rights before they expired.
Looking ahead, Wolverine’s partnerships with Holtec and Hoosier Energy remain strong, with discussions underway to expand collaboration beyond the Palisades Power Purchase Agreement. Future opportunities include small modular reactors (SMRs) and broader portfolio sharing to further strengthen cooperative energy resources.
Through bold action and strategic partnerships, Wolverine is shaping the future of nuclear power in rural Michigan—proving that teamwork fuels progress.
Strong Investor Confidence Fuels Wolverine’s Growth
In October 2024, Wolverine successfully secured $125 million in long-term funding, demonstrating strong investor confidence in our financial strength and strategic vision. Originally seeking $100 million, we received nearly three times the interest, allowing us to expand our request and secure competitive pricing.
Two of the six participating investors were new to Wolverine, reflecting our growing reputation in the financial community. This success builds on our history of prudent financial management, dating back to our first private placement in 2010.
Investor interest remains high due to Wolverine’s consistent performance, transparency, and engagement with lenders and rating agencies. We deeply value the organizations that believe in our mission and support our long-term stability. Their confidence ensures we remain well-positioned to serve our members with reliable, affordable power for years to come.
POWERFUL PARTNERSHIPS: THUMB ELECTRIC COOPERATIVE
TEC joins Wolverine for a stronger energy future
In 2024, Wolverine Power Cooperative welcomed Thumb Electric Cooperative (TEC) as its newest member, a partnership that underscores the transformative power of collaboration. This milestone reinforces both cooperatives’ shared mission to deliver reliable, affordable, and increasingly clean energy to the communities they serve.
With widespread generation retirements and ambitious clean energy mandates reshaping the industry, TEC embraced this partnership as a forward-thinking step to ensure long-term stability and innovation. By aligning with Wolverine’s diverse energy portfolio, TEC positions itself to navigate these challenges while remaining steadfast in its commitment to member satisfaction.
Wolverine’s energy mix—and future capacity from the Palisades Nuclear Power Plant—provides TEC and all member-owners with access to a reliable, sustainable energy supply. Together, they become part of the lowest carbon footprint of any utility in Michigan.
The addition of TEC to the Wolverine family exemplifies the cooperative principle that partnerships drive progress. This collaboration strengthens the cooperative model, enabling both organizations to overcome challenges, seize opportunities, and deliver meaningful results. By working together, Wolverine and TEC are shaping a resilient, sustainable energy future for their members and Michigan communities alike.
Alpine’s Turbine: 30 Years of Reliability
When a critical issue arose with the Alpine Power Plant turbine, Wolverine didn’t settle for a quick fix. With the support of our board of directors, we took the harder—but smarter—road, trusting the power of teamwork and collaboration to get the job done right.
Instead of relying on temporary fixes to keep things running, we made the bold decision to take apart the entire turbine. This was no small task. Crews worked 24-hour shifts, coordinating every step with engineers, technicians, and operators to uncover the root problem and ensure a lasting repair.
The result? Thanks to the dedication and partnership of everyone involved, Alpine’s turbine is now set to run reliably for another 30 years. By working together and committing to the long-term solution, we’ve secured greater stability and reliability for our members.
POWERFUL PARTNERSHIPS: MUTUAL AID
Co-ops unite to power through crisis
Electric cooperatives are built on a simple but powerful principle: We are stronger together. Whether responding to local outages, supporting neighboring co-ops, or aiding communities across the country, mutual aid ensures that members always have the power they depend on.
When storms strike, infrastructure is challenged, or demand surges unexpectedly, co-ops step up for one another. In October 2024, after Hurricane Milton tore through Florida, four Wolverine lineworkers joined another 25 Michigan co-op lineworkers and more than 6,000 counterparts from across the country, proving that when co-ops work together, they can overcome even the toughest challenges. The effort in Florida underscored the cooperative difference. Wolverine Power Cooperative and Michigan crews worked seamlessly alongside local
teams, tackling damaged infrastructure and complex logistics to restore electricity—and hope—to communities in need.
This collaboration isn’t just about crisis response. It’s about reliability, resilience, and the shared commitment to keeping power flowing. Whether through daily operations, large-scale restoration efforts, or the exchange of knowledge and resources, co-ops work together to ensure no member is left behind.
Mutual aid is more than a service; it’s a promise. It’s what sets electric cooperatives apart—neighbors helping neighbors, communities standing together, and partnerships that turn challenges into opportunities. By working as one, we don’t just keep the lights on—we power the lives and businesses that keep our communities strong.
Embarking on a New Frontier—Commercial Fiber
In 2024, Wolverine successfully installed and operationalized the first 500 miles of lit commercial fiber network. This initial step allows Wolverine to provide reliable, fast, and secure wholesale fiber services to internet service providers throughout rural and remote areas of the Lower Peninsula.
Today, Wolverine is serving two customers, including Presque Isle Electric and Gas Cooperative. These customers are utilizing Wolverine’s commercial fiber network to support the deployment of fiber-to-the-home to areas of the state that were not previously served with high-speed internet.
Looking forward, Wolverine will finish its installation and operationalization of the commercial fiber network in 2025. Once complete, Wolverine will have over 1,000 miles of commercial fiber network capable of supplying upwards of 400G service with the highest levels of reliability. This network will serve as a backbone of rural vibrancy for decades to come.
100% CARBON-FREE BY 2030
Wolverine and its member cooperatives are navigating the clean energy transition thoughtfully, integrating clean and renewable resources while maintaining affordable rates and reliable electricity. Today, we power nearly 300,000 homes, businesses, and farms with energy that is 20% renewable and over 60% carbon-free. We’re on track to reach the state’s 2040 carbon-free target 10 years early, helping Michigan meet its statewide clean energy goals.
CLEAN + AFFORDABLE + RELIABLE ENERGY
SUSTAINABLE, RELIABLE ENERGY SOURCES
60% Carbon-free and Counting
Wolverine and Michigan’s electric cooperatives have been ahead of the curve on renewable energy for decades.
2024 BY THE NUMBERS
TRANSMISSION STATIONS REBUILT MILES OF FIBER INSTALLED 2 100 99.1%
RELIABILITY RATING
(highest reliability rate for peaking fleet in MISO footprint)
MUTUAL AID HOURS
76
1,075 MILES OF TRANSMISSION LINES REBUILT
4
NEW DISTRIBUTION SUBSTATIONS
(Three rebuilt, one newly constructed)
Wolverine’s Strong Financial Performance Benefits Members
Wolverine continues to demonstrate financial strength, with Standard & Poor’s (S&P) reaffirming its ‘A’ credit rating with a stable outlook and Fitch affirming its ‘A’ stable rating. These excellent ratings reflect Wolverine’s commitment to financial stability and reliability in the electric utility industry. Thanks to the diligent efforts of Wolverine’s finance team, the cooperative remains well-positioned to serve its members with confidence and long-term security.
At a Glance
SENIOR LEADERSHIP
Leading with Vision
Wolverine’s senior leadership team is more than a group of decision-makers—they are passionate leaders dedicated to shaping our cooperative’s future. With a commitment to innovation, collaboration, and excellence, they guide our operations and culture, ensuring we deliver reliable, competitive power to our members.
Their leadership extends beyond strategy; it’s about fostering a workplace where ideas thrive and challenges become opportunities. Through their vision and dedication, Wolverine continues to navigate an evolving energy landscape, always staying strong for the members and communities we serve.
Eric Baker President & CEO
Zach Anderson Chief Operating Officer
Craig Borr Executive Vice President
Joseph Baumann Chief Legal Officer
Casey Clark Vice President of Communications & Member Services
Kacy Wickenhauser Chief Human Resources Officer
Dawn Coon Vice President of Administration
Dan Calverley Vice President of Generation & Operations
Jon Johnson Vice President of Engineering & Technical Services
Dustan Daniel Vice President of Accounting & Finance
Tom King Vice President of Regulatory Affairs
Celebrating Member Impact
CHERRYLAND ELECTRIC COOPERATIVE
Rachel Johnson, CEO
Headquartered in Grawn, Michigan, Cherryland Electric Cooperative’s membership includes more than 39,000 homes and business spanning six counties and 1,400 square miles.
In 2024 Cherryland returned $500,000 in capital credits to its members. The cooperative also facilitated more than $875,000 in economic development and community support. The co-op distributed $165,310 in scholarships, grants, and sponsorships to local nonprofits and $710,000 through three new economic development loans, expanding the revolving loan program by $360,000.
Cherryland’s employee-funded member assistance program paid out $6,860 to 14 members in need in 2024. Gifts included Visa gift cards, help with electric bills, and donations to the Suttons Bay Elementary and Lake Ann Elementary winter gear pantries. The cooperative matches all employee contributions, and the fund is overseen by a volunteer group of employees.
GREAT LAKES ENERGY COOPERATIVE
Shaun Lamp, President & CEO
Headquartered in Boyne City, Michigan, Great Lakes Energy (GLE) serves more than 130,000 meters spanning 26 counties with over 14,500 miles of power line. This makes GLE the largest cooperative utility in Michigan and fourth largest in the country in terms of miles of power line.
In 2024, GLE connected more than 5,000 members to Truestream, their fiber-to-the-home network project, and built more than 870 miles of fiber to provide high-speed internet and voice to underserved rural areas.
Additionally, Great Lakes Energy awarded more than $300,000 in grants to support its local communities, including more than $30,000 in classroom grants, $21,000 through its Community Grant Giveaway program, and just over $262,000 in People Fund grants.
HOMEWORKS TRI-COUNTY ELECTRIC COOPERATIVE
Chris O’Neill, President & CEO
Headquartered in Portland, Michigan, HomeWorks serves more than 23,000 electric members across 13 counties in rural mid-Michigan.
In 2024, the cooperative helped its members save over 1 million kWh and earn over $260,000 in rebates through its Energy Optimization program. The co-op also continued to fulfill its mission to serve the underserved by expanding its HomeWorks Connect fiber internet network to more than 12,500 homes by the end of the year. Additionally, HomeWorks continued to provide reliable propane service through HomeWorks Tri-County Propane, which grew to over 4,350 customers by December. 2024 also saw the co-op embracing Cooperative Principle #6: Cooperation Among Cooperatives by sending five linemen to assist a Florida co-op with power restoration in the wake of Hurricane Milton. Throughout the year, HomeWorks fostered its commitment to supporting local communities through over $70,000 in Tri-County Electric People Fund grants and $80,000 in community sponsorships, classroom grants, and scholarships.
2024 Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Wolverine Power Supply Cooperative, Inc.
Opinion
We have audited the financial statements of Wolverine Power Supply Cooperative, Inc., which comprise the consolidated balance sheets as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income, equity, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Wolverine Power Supply Cooperative, Inc. as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Wolverine Power Supply Cooperative, Inc. and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Wolverine Power Supply Cooperative Inc.’s ability to continue as a going concern for one year from the date the financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
Consolidated Balance Sheets
plant – at cost (Note 3)
Consolidated Statements of Equity
Years Ended December 31
1
Nature of Operations
Wolverine Power Supply Cooperative, Inc. (“Wolverine” or the “Cooperative”) is a not-for-profit generation and transmission electric cooperative incorporated in Michigan. It provides wholesale electric service to its seven members, also located in Michigan.
Wolverine has five distribution cooperative members that include Cherryland Electric Cooperative, Great Lakes Energy Cooperative, HomeWorks Tri-County Electric Cooperative, Midwest Energy & Communications, and Presque Isle Electric & Gas Co-op. These cooperatives purchase generation and transmission services from Wolverine and resell electricity to approximately 268,000 service locations, primarily in Michigan’s Lower Peninsula. These services are provided in accordance with the terms of all-requirements power purchase agreements that expire on December 31, 2057.
Wolverine’s other two members, Spartan Renewable Energy, Inc. (Spartan) and Wolverine Power Marketing Cooperative
(WPMC), operate as licensed alternative electric suppliers in Michigan.
The Federal Energy Regulatory Commission regulates most aspects of Wolverine’s business, including the rates it charges its members. While the Michigan Public Service Commission regulates certain aspects of Wolverine’s seven members’ operations, it does not regulate the rates they charge to their customers.
New Member Added
Thumb Electric Cooperative (Thumb) agreed to join Wolverine as its sixth distribution cooperative member on October 30, 2024, with an effective date of January 1, 2025. Thumb serves approximately 12,000 retail membercustomers primarily in Michigan’s eastern “thumb” region.
NOTE 2
Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Wolverine, its wholly owned subsidiary, Peninsula Generation Cooperative (Peninsula), and its majority-owned member, Spartan. All significant intercompany transactions and balances have been eliminated upon consolidation.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results may differ from these estimates.
Revenue Recognition
Revenue from contracts with customers: Wolverine primarily generates revenue by providing wholesale electric services to its members, along with electrical, transmission, and other miscellaneous services to others. Its main customers include member distribution cooperatives,
WPMC, and Spartan. For the years ended December 31, 2024, and 2023, all of Wolverine’s revenue was derived from contracts with customers.
Revenue from the sale of energy and related products: Wolverine’s wholesale power sales include energy and related charges to members under power purchase and transmission service contracts, non-members via bilateral agreements, and energy sales into the Midcontinent Independent System Operator (MISO) and PennsylvaniaNew Jersey-Maryland Interconnection (PJM) markets. These revenues qualify as revenue from contracts with customers and are recognized over time as energy is delivered or transmitted, based on metered quantities at applicable contractual or market rates.
The member contract rate schedule includes a power cost adjustment (true-up) that adjusts member power bills based on actual power costs versus planned costs for certain revenue and expense categories. The variable cost adjustment is recognized monthly. The fixed cost adjustment resulted in charges to Wolverine members of $8,364,461 in 2024 and $2,197,997 in 2023, with settlements occurring in the following year.
Revenue from the sale of capacity and related products: Revenue from wholesale capacity sales is derived from ensuring demonstrated capacity is available in the correct market for the required period. Revenue is recognized over time as the performance obligation is met.
Revenue from transmission fees and related products:
Transmission revenue includes charges for electricity transmission under MISO rate tariffs or other integrated transmission agreements. This revenue stream qualifies as revenue from contracts with customers. The performance obligations associated with operating the transmission system are highly integrated and interdependent, meaning they cannot be separated into distinct obligations. Transmission revenue is recognized over time as Wolverine maintains readiness to provide transmission services or as electricity flows through the system, in alignment with the applicable tariff agreements.
Revenue from distribution substation fees: Wolverine owns and maintains substations for its members and co-owns substations with other parties. Revenue is earned through monthly fees and recognized over time as services are provided.
Revenue from miscellaneous other programs and services: This includes management services contracts for accounting and other support to members and third parties. All except for one contract’s services are not distinct and revenue is recognized over time, either monthly or hourly, based on contract terms.
Revenue from the sale of renewable energy credits: Revenue from renewable energy credits primarily comes from sales to Spartan’s third-party customers. Performance obligations are satisfied at a point in time when electricity is delivered.
Significant payment terms: Payment terms vary by contract, typically requiring payment within 10 days of the invoice date for specific Spartan contracts to 30 days for miscellaneous Wolverine contracts. Most invoices are issued at month-end.
Contract Balances: Accounts receivable represent invoiced trade receivables for revenue streams noted above. As of December 31, 2024, and 2023, Wolverine had no contract assets or liabilities recorded on the consolidated balance sheets.
Cost to obtain or fulfill a contract: As of December 31, 2024, and 2023, Wolverine had no costs to obtain or fulfill contracts.
Electric Plant
Electric plant additions are recorded at cost. Additions and improvements are capitalized, while maintenance and repair expenses are recognized as incurred. When assets are retired or sold, their cost and accumulated depreciation are removed from the respective accounts, and any resulting gain or loss is recognized as revenue or expense.
Individual additions of $5,000 or more, with an expected useful life of more than one year, are capitalized at cost. The straight-line method is used for computing depreciation. Assets are depreciated over their estimated useful lives.
Impairment of Long-lived Assets
The Cooperative reviews the recoverability of long-lived assets, when events or changes in circumstances occur that indicate the carrying value of the assets may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected pretax cash flows of the related operations. If these cash flows are less than the carrying value of the asset, an impairment loss is recognized for the difference between the estimate fair value and the carrying value. The measurement of impairment requires management to make estimates.
There was no impairment losses recorded for the years ended December 31, 2024, or 2023.
Intangible Assets
Wolverine classifies its intangible assets into four categories, which include the cost of rights to: 1) procure power from the Ohio Valley Electric Corporation (OVEC), 2) access power or gas through another party’s infrastructure, 3) utilize the Michigan Public Safety Communication System (MPSCS) for internal communications, and 4) use software and other licenses with a duration exceeding one year. These intangible assets are amortized on a straight-line basis over their respective useful lives.
Leases
At the inception of an arrangement, the Cooperative determines whether the arrangement constitutes a lease based on all relevant factors. Leases are classified as either operating or finance leases at the commencement date. As of December 31, 2024, and 2023, the Cooperative did not have finance leases. Operating leases are recorded as operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities— net of current portion on the consolidated balance sheets.
Short-term leases with an initial term of one year or less are not recorded on the consolidated balance sheets. The Cooperative does not separate lease and fixed non-lease components for all asset classes. Variable lease components are expensed as incurred.
ROU assets represent the Cooperative’s right to use an underlying asset during the lease term, while lease liabilities reflect the obligation to make lease payments. ROU assets and lease liabilities are recognized at lease commencement based on the present value of lease payments. ROU assets also include prepaid rent and are adjusted by any unamortized lease incentives. As the implicit rate for leases is generally not readily determinable, Wolverine elects to use a practical expedient by applying the risk-free rate available at lease commencement to determine the present value of lease payments.
Wolverine and Spartan adhere to policies that exclude de minimis lease amounts for individual leases or groups of similar leases if the resulting lease liability would be $200,000 or less for Wolverine and $12,000 or less for Spartan. De minimus lease amounts are recognized as billed.
Deferred Financing Costs
Deferred financing costs refer to debt issuance expenses associated with line of credit arrangements, which are capitalized and amortized on a straight-line basis over the term of the related line of credit.
Investments
Wolverine engages in business with and holds membership in various other cooperatives, which allocate a portion of their net margins to Wolverine. These allocations are reflected in Wolverine’s consolidated statements of operations and comprehensive income as patronage allocations from other cooperatives. The cumulative unpaid amounts of these allocations are recorded as investments on Wolverine’s consolidated balance sheets.
Wolverine holds a variety of investments at cost, including unsecured subordinated securities and capital securities issued by the National Rural Utilities Cooperative Finance Corporation (CFC) and membership fees required for joining various cooperatives.
Investments in equity securities without readily determinable fair values are recorded at cost and adjusted for any observable price changes. Impairment losses are recognized when incurred. No impairment losses were recorded for 2024 or 2023.
Cash and Cash Equivalents
The Cooperative considers all cash and short-term, highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents.
Accounts Receivable
Accounts receivable are stated at net invoice amounts. The Cooperative monitors its accounts receivable and records an expense for potential credit losses. Factors considered in determining these estimates include the length of time trade receivables are past due, prior loss history, and the customer’s current ability to meet its obligations. Economic conditions, industry-specific factors, and overall economic outlook are also considered. As of December 31, 2024, and 2023, management determined that no allowance for credit losses was necessary.
Material and Supplies Inventory
Material and supplies inventory primarily consist of parts used for standard operations and maintenance. This inventory is recorded at the lower of average cost or net realizable value.
Equity
Wolverine has several categories of equity, which are described below.
• Memberships are $200 non-refundable investments that are required to become a member of Wolverine.
• Patronage capital consists of allocations of Wolverine’s net margins to its members.
• Unallocated accumulated deficit consists of unallocated losses incurred by Wolverine, offset by non-operating margins. There was no unallocated accumulated deficit balance as of December 31, 2024, or 2023.
• Retained earnings in subsidiary is the accumulated net income of Wolverine’s for-profit subsidiary, Spartan.
• Accumulated other comprehensive loss reflects the changes in the financial position of Wolverine’s defined benefit pension plan and a post-employment benefit plan (see Note 8). Related expenses are recorded in net margins when the associated benefits are paid or when specific criteria are met.
• Non-controlling interest in subsidiary is the portion of the accumulated net income of Wolverine’s forprofit subsidiary, Spartan, which are allocated to the minority shareholder.
Electric Plant
Electric plant assets are summarized as of December 31 as follows:
Depreciation expense for 2024 and 2023 was $38,685,772 and $36,327,263, respectively.
3 NOTE 4
Intangible Assets and Deferred Financing Costs
Intangible assets are summarized as of December 31 as follows:
Amortization expense for 2024 and 2023 was $6,927,815 and $6,840,985, respectively. The projected annual amortization expenses for intangible assets are summarized as follows:
Deferred financing costs refer to debt issuance expenses associated with line of credit arrangements. The long-term portion associated with these costs are capitalized on the consolidated balance sheets as deferred financing costs—net, whereas the short-term portion is included on the consolidated balance sheets as prepaid expenses and other current assets. Deferred financing costs are summarized for the years ended December 31 as follows:
Amortized interest expense associated with deferred financing costs for 2024 and 2023 was $161,307 and $160,032, respectively.
Long-term Debt
Long-term debt at December 31, 2024 and 2023 is as follows:
On August 4, 2009, Wolverine issued and sold $20 million of its Series 2009A Notes, with a fixed interest rate of 7.25%. The notes mature on August 1, 2039, with principal and interest payments made monthly. Under this note, Wolverine is required to adhere to certain financial covenants, including a minimum debt service coverage ratio of 1.0 and a minimum equity ratio of 10%. $ 9,777,777 $ 10,444,444
On December 9, 2009, Wolverine issued and sold $50 million of its Series 2009B Notes, with a fixed interest rate of 5.78%. The notes mature on December 1, 2039, with principal and interest payments made monthly. Under this note, Wolverine is required to adhere to certain financial covenants, including a minimum debt service coverage ratio of 1.0 and a minimum equity ratio of 10%. 24,999,999 26,666,666
On May 20, 2010, Wolverine issued and sold $120 million of its First Mortgage Bonds, Series 2010A, with a fixed interest rate of 5.04%. The bonds mature on May 31, 2040, with principal and interest payments made semi-annually. 62,000,000 66,000,000
On December 2, 2013, Wolverine issued and sold $170 million of its First Mortgage Bonds, Series 2013A, with a fixed interest rate of 4.21%. The bonds mature on December 2, 2043, with principal and interest payments made semi-annually. 107,666,674 113,333,340
On September 10, 2015, Wolverine issued and sold $115 million of its First Mortgage Bonds, Series 2015A, with a fixed interest rate of 3.83%. The bonds mature on September 10, 2045, with principal and interest payments made semi-annually. 80,500,000 84,333,333
On September 15, 2015, Wolverine issued and sold $20 million of its First Mortgage Bonds, Series 2015B, with a fixed interest rate of 3.70%. The bonds mature on August 31, 2030, with principal and interest payments made semi-annually. 9,230,766 10,769,228
On May 21, 2019, Wolverine issued and sold $200 million of its First Mortgage Bonds, Series 2019A, with a fixed interest rate of 3.87%. The bonds mature on May 21, 2049, with principal and interest payments made semi-annually. 163,333,333 170,000,000
On February 17, 2021, Wolverine issued and sold $75 million of its First Mortgage Bonds, Series 2021A, with a fixed interest rate of 3.19%. The bonds mature on February 17, 2051, with principal and interest payments made semi-annually. 70,982,143 73,660,714
On February 17, 2021, Wolverine issued and sold $75 million of its First Mortgage Bonds, Series 2021B, with a fixed interest rate of 2.78%. The bonds mature on March 31, 2051, with principal and interest payments made semi-annually. 66,250,000 68,750,000
On June 22, 2022, Wolverine issued and sold $100 million of its First Mortgage Bonds, Series 2022A, with a fixed interest rate of 3.22%. The bonds mature on June 22, 2052, with principal and interest payments made semi-annually. 91,666,667 95,000,000
Total
debt
Total long-term debt - net 683,443,473 715,851,885 Less: current portion (32,408,412) (32,408,412) Long-term portion 651,035,061 683,443,473
Lines of Credit
As of December 31, 2024, and 2023, the following line of credit agreements were effective:
Wolverine held a syndicated line of credit agreement with Bank of America, N.A. acting as the administrative agent and four other banks as lenders, totaling $200 million. This line is set to mature on September 17, 2026, and offers interest rates based on the Secured Overnight Funding Rate (SOFR) plus an applicable margin or the prime rate, with effective rates of 5.58% and 6.58% as of December 31, 2024, and 2023, respectively. Interest expense on this line of credit was $5,549,899 and $733,424 for the years 2024 and 2023, respectively. Under this line, the Cooperative is required to adhere to certain financial covenants, including a minimum debt service coverage ratio of 1.0 and a minimum equity ratio of 10%.
Wolverine maintained a $50 million line of credit agreement with CFC, requiring full repayment annually and a zero balance for at least five consecutive days. This line is scheduled to mature on November 9, 2026, and features a variable interest rate that is periodically adjusted by CFC, with effective rates of 6.50% and 7.25% as of December 31, 2024, and 2023, respectively. Interest expense on this line of credit totaled $204,795 in 2024, with no related interest expense incurred in 2023.
50,000,000 -
Wolverine maintained a line of credit agreement with CFC totaling $50 million. This line of credit automatically renews indefinitely unless either party requests cancellation, which requires at least 90 days’ notice before the maturity date. It was subsequently renewed on March 9, 2025, with a scheduled maturity date of March 9, 2026. The credit line carries a variable interest rate, periodically adjusted by CFC, with effective rates of 6.30% and 7.05% as of December 31, 2024, and 2023, respectively. Interest expense on this line of credit were $279,718 and $40,101 for the years 2024 and 2023, respectively. 50,000,000 20,000,000
Spartan held a line of credit agreement with CoBank totaling $2 million. This line is set to mature on December 16, 2026, and offers interest rates based on SOFR plus an applicable margin, with effective rates of 5.78% and 6.67% as of December 31, 2024, and 2023, respectively. There was no interest expense on this line of credit for the years 2024 and 2023. This line of credit is guaranteed by Wolverine, who is required to adhere to a minimum debt service coverage ratio of 1.0. - -
Total long-term lines of credit 140,000,000 40,000,000
Less: current portion (50,000,000)Long-term portion 90,000,000 40,000,000
Operating Leases
Spartan leases a solar array under a long-term agreement set to expire on December 31, 2030. The lease includes a renewal option, which Spartan does not intend to exercise. Monthly lease payments decrease starting in December 2027, aligning with the expected decline in energy production and revenue as the solar array ages. As a result, Spartan does not recognize lease expense on a straight-line basis over the lease term.
Spartan is responsible for costs related to insurance, sales tax, property tax, and maintenance, which are expensed as incurred. The Cooperative has recorded an operating lease right-of-use asset, a current portion of operating lease liability, and an operating lease liability—net of current portion, on the consolidated balance sheets.
The discount rate applied was 1.73%. Operating lease expense for 2024 and 2023 amounted to $140,008.
As of December 31, 2024, future minimum annual commitments under the operating lease are as follows:
Pension
and Post-retirement Benefit Plans
Wolverine provides several retirement benefits and deferred compensation plans for its employees and directors.
Defined Benefit Plans
Wolverine has two qualified defined benefit pension plans for both union and non-union employees. These plans are part of the Retirement Security Plan (RS Plan), a multi-employer plan administered by the National Rural Electric Cooperative Association (NRECA). The RS Plan is a tax-exempt, defined benefit pension plan qualified under Section 401 and exempt under Section 501(a) of the Internal Revenue Code. It is classified as a multi-employer plan under accounting standards and a multiple-employer plan under the Employee Retirement Income Security Act of 1974. The RS Plan sponsor’s Employer Identification Number is 53-0116145, and the Plan Number is 333.
In both 2024 and 2023, Wolverine’s contributions to the RS Plan accounted for less than 5% of the total contributions made by all participating employers. Wolverine contributed $3,527,417 in 2024 and $3,178,624 in 2023.
The RS Plan determines separate annual contribution rates for each employer based on employee compensation, average age, years of service, and specific pension benefits provided. Pension benefits under Wolverine’s plans are primarily based on years of service, employee compensation, and a benefit multiplier. Wolverine’s collective bargaining agreement does not mandate minimum future contributions to the union-defined benefit plan.
The Pension Protection Act of 2006 does not require a “zone status” determination for the RS Plan. Additionally, accumulated benefit obligations and plan assets are not allocated separately for individual employers. NRECA reported that the RS Plan was over 90% funded as of January 1, 2024, and January 1, 2023, based on the Pension Protection Act’s funding target and actuarial asset valuation.
Because the RS Plan is not subject to certain Pension Protection Act provisions, funding improvement plans and surcharges do not apply. Future contribution requirements are determined annually based on actuarial valuations and may be adjusted depending on plan experience.
The financial risks associated with participation in multiemployer plans differ from those of single-employer defined benefit plans in several ways:
• Multi-employer plans may have reduced investment risk due to their larger scale, which allows for dedicated investment management resources.
• All plan assets are pooled and used to fund benefits for any plan participant, without individual employer asset segregation. As a result, contributions made by one employer may support benefits for employees of other employers.
• If a participating employer defaults on its contributions, the remaining employers may bear responsibility for the plan’s unfunded obligations.
Defined Contribution Plans
Wolverine sponsors two defined contribution (401(k)) plans, one for union employees and another for non-union employees. Wolverine contributed $916,268 in 2024 and $850,705 in 2023 to these plans.
Other Post-Retirement Benefit Plans
Wolverine provides healthcare and life insurance benefits to retired employees through several unfunded postretirement benefit plans. In 2024, Wolverine paid $97,906 in benefits under these plans, up from $76,540 in 2023. As of December 31, 2024, and 2023, Wolverine’s consolidated balance sheets reflected accumulated other comprehensive loss of $320,793 and $636,337, respectively, related to these unfunded plans.
Additionally, Wolverine maintains an unfunded, nonqualified 457(f) deferred compensation plan for its directors. Although future benefit accruals under this plan were suspended in 2010, accrued benefits continue to be paid over time. In 2024, Wolverine paid $94,800 in benefits under this plan, compared to $94,200 in 2023.
Accrued pension and post-retirement liability are summarized as of December 31 as follows:
NOTE 9
Income Taxes
The provisions for Spartan’s income taxes for the years ended December 31 are detailed below:
The income tax expense provision is determined by applying the statutory tax rate to the taxable income of the respective legal entity. An income tax benefit arises from taxable losses or credits that can be used to offset future taxable income or tax liabilities. Differences between the calculated provision and statutory rates primarily result from adjustments to prior-year estimates.
All components of the income tax provision reflected in the consolidated statements of operations and comprehensive income relate to continuing operations. As of December 31, 2024, and 2023, Spartan reported income taxes payable of $12,129 and $12,694, respectively, which are included in taxes payable on the consolidated balance sheets.
In 2016, Spartan claimed an investment tax credit (ITC) of $853,501 ("2016 vintage ITC") for a solar array that commenced commercial operation that year. In 2018, Spartan claimed an ITC of $353,627 ("2018 vintage ITC") for another solar array that became operational in 2018. During 2023, Spartan applied $63,108 of the 2016 vintage ITC to reduce its tax liability. At the beginning of 2024, Spartan carried forward $662,217 from the 2016 vintage ITC and $353,627 from the 2018 vintage ITC. In 2024, Spartan utilized an additional $61,389 of ITC to offset taxable income. As of December 31, 2024, Spartan’s remaining 2016 vintage ITC carryforward balance is $600,828, available through 2036, while the 2018 vintage ITC carryforward balance remains $353,627, available through 2038.
Deferred Tax Assets and Liabilities
A current tax liability or asset is recorded for the estimated taxes owed or refunds expected on tax returns for the year. Deferred tax liabilities or assets are recognized for the anticipated future tax implications of temporary differences between financial reporting and tax accounting. Deferred tax liabilities primarily arise from temporary differences related to Spartan’s solar array and the future taxation of patronage capital allocations received by Spartan. In 2016, Spartan started recognizing accelerated (and bonus) depreciation for tax purposes related to its solar array. This accelerated depreciation has also been applied to the tax treatment of its 2019 solar array. Accelerated tax depreciation results in a timing difference, allowing depreciation expenses to be deductible for tax purposes before they are recognized in financial reports. While patronage capital allocations are recorded as revenue in financial reports, they are not considered taxable revenue until received from the corresponding organization. Deferred tax assets arise from expenses recognized in financial reporting that are not deductible for tax purposes until paid, as well as from future tax benefits.
Deferred tax assets and liabilities are presented at net value on the consolidated balance sheets under prepaid expenses and other current assets. As of December 31, these assets are summarized as follows:
Related Party Transactions
Wolverine provides management and administrative services to its member, WPMC. Fees billed to WPMC are reported as operating revenue in the consolidated statements of operations and comprehensive income. In 2024 and 2023, these amounts were $622,181 and $587,098, respectively.
Commitments and Contingencies
Energy Power Purchase Agreement Commitments
Wolverine has power and capacity purchase agreements with multiple counterparties to supplement the energy and capacity needs not covered by its owned generating units. These agreements have terms ranging from 1 to 22 years, with the longest contract expiring in 2046. The table below outlines the energy volumes Wolverine is committed to purchasing under these agreements as of December 31, 2024, for the next five years and beyond.
Additionally, effective the same date, Wolverine entered into an agreement with Hoosier, under which Hoosier will transfer approximately 212,000 megawatt-hours annually to Wolverine at a fixed price from the effective date through December 31, 2027.
OVEC Commitments
Peninsula procures electric power from OVEC under the Inter-Company Power Agreement. While Peninsula has the option to decline energy from OVEC, it remains obligated to cover its 6.65% share of OVEC’s non-energy-related costs. For the years ended December 31, 2024, and 2023, Peninsula’s portion of these costs amounted to $30,928,915 and $28,609,850, respectively. Non-energy-related costs over the next five years are projected to remain within a similar range.
Equipment and Services Commitments
Wolverine entered into a Power Purchase Agreement (PPA) with Holtec Palisades, LLC (Holtec) on September 11, 2023, for a portion of the output from the 800-megawatt Palisades Nuclear Generating Station (Palisades). Under the agreement, Wolverine will purchase 54% of Palisades’ output at a fixed price, while the remaining output will be acquired by Hoosier Energy Electric Cooperative (Hoosier) for the same contract period.
The timing of the start of this PPA is contingent upon several factors, including Holtec obtaining all necessary regulatory approvals (such as approval from the Nuclear Regulatory Commission for the facility’s restart), executing required transmission agreements, and securing funding for the restart. The PPA term extends from the plant’s restart through 2051, subject to a license renewal required in 2031. With a projected restart window between fall 2025 and spring 2027, it is reasonably expected that operations will resume within this timeframe.
Effective February 1, 2025, Wolverine was assigned as the purchaser under a PPA previously held by Hoosier with Rail Splitter Wind Farm, LLC (Rail Splitter). Under this agreement, Wolverine will acquire approximately 65,000 megawatthours annually at a fixed price from Rail Splitter through November 30, 2029.
Beyond its committed energy purchases and OVEC obligations, Wolverine has also committed to procuring certain equipment and services. The table below details these commitments as of December 31, 2024, for the next five years and beyond.
$ 79,460,736
Contingencies
As an owner of electric generation, transmission, and distribution assets, the Cooperative is subject to various federal, state, and local environmental laws and regulations governing the discharge of materials and environmental protection. To ensure compliance, the Cooperative has established policies and maintains insurance coverage for certain environmental matters.
However, there is no guarantee that existing or future federal, state, or local laws and regulations will not require the Cooperative to incur significant costs to remain in compliance.