Dairyland Director Report

As a generation and transmission (G&T) cooperative, Dairyland is member-owned by 24 distribution cooperatives, including People’s Energy Cooperative. I have the honor of serving as People’s representative on the Dairyland Board of Directors. We meet monthly to ensure our cooperatives’ needs are heard in these dynamic times, working together to achieve strong outcomes for our members. Following are key highlights from the past year.

System Growth

As of August 1, 2025, Dairyland began supplying power for the members of People’s, Freeborn Mower Electric Cooperative, and MiEnergy, who were served by Southern Minnesota Energy Cooperative (SMEC) as a result of the 2015 acquisition of Alliant Energy’s service territory in Minnesota. This added 80 MW of peak load to the Dairyland system, which equated to a load growth of seven percent.

On June 1, 2026, Norris Electric Cooperative (Newton, IL) and Oconto Electric Cooperative (Oconto Falls, WI) will become power supply customers of Dairyland, bringing 100 MW of peak load to the Dairyland system. These additions, along with other large load integrations, provide long-term benefits to the entire Dairyland membership by helping to spread out costs.

New ERA Grant Still Intact

In April 2025, Dairyland was pleased to receive confirmation from the Trump Administration that its $595 million Empowering Rural America (New ERA) grant from September 2024 would be funded. Initiatives made possible by the grant will benefit Dairyland’s members and the region with:

• Resource diversification to support rural communities, economic growth, and U.S. energy independence.
   
• Downward rate pressure for rural residents.
   
• Increased grid reliability and resilience resulting from critical transmission line upgrades.

Because of this award, Dairyland will be able to pursue 500 to 1,000 megawatts (MW) of power purchase agreements for clean energy projects.  The first project, secured in February, was for 250 MW from Buffalo Ridge II Wind Farm in South Dakota. Buffalo Ridge generates enough wind energy to power about 70,000 homes. Additionally, the award supports important upgrades and rebuilds for parts of Dairyland’s existing transmission infrastructure – ensuring communities have access to reliable electricity for decades to come.

Regional Transmission Projects

As a participant in one of the largest transmission buildouts in history, Dairyland is supporting regional reliability that benefits our members.  MISO has named Dairyland a developer for three projects in its Long-Range Transmission Plan for Tranches 1 and 2.1. Two of them are in our region.

The Wabasha Relocation Project is part of Tranche 1 and will relocate about 13 miles of existing 161 kV transmission lines in Wabasha County to a new right-of-way. This project was identified by MISO in 2022 with the route development and public and stakeholder outreach processes happening in 2023.

The MariBell Transmission Project is part of Tranche 2.1 and is the southern segment of the Gopher to Badger Link transmission project. MariBell is a partnership between Dairyland and GridLiance Heartland, LLC, to jointly develop and co-own a 765 kV/161 kV double-circuit line between Marion, Minnesota, and Bell Center, Wisconsin
(139 miles) on existing right-of-way. Community open houses have been hosted along the proposed route, with more to come. These events have been ways to
meet with landowners and community members to answer questions and share more information about the process and benefits these lines will provide.

The northern segment of the Gopher to Badger Link transmission project is also part of MISO’s long-range transmission plan in Tranche 2.1 and will be owned by Xcel Energy. This portion spans from the North Rochester Substation near Pine Island to Marion where it will connect with the MariBell project.

PowerOn Midwest is a series of transmission projects spanning from eastern South Dakota and traveling through parts of our service territory on the west side of Rochester. These projects are also part of MISO’s long-range planning in Tranche 2.1 being developed by Great River Energy, ITC Midwest, Otter Tail Power Company, and Xcel Energy.  Dairyland is not part of these projects. For more details about these projects, I encourage you to visit www.poweronmidwest.com.

The 765kV lines are new to the region but will be able to carry more electricity over longer distances between power generation resources to where electricity is needed. One 765-kV line carries as much electrical capability as six, 345-kV lines, minimizing the land needed by as much as 70 to 80 percent, while improving reliability.

Investing in higher-capacity lines now avoids the cost of upgrading or building additional lines in the future. Because Dairyland will be an owner and operator of the Maribell project that will follow existing rights-of-way, the guaranteed return on investment will apply downward pressure to rates in the future for Dairyland’s member cooperatives.

Meeting Energy Needs of the Future

Transmission projects as outlined above are essential to ensure infrastructure is in place to support an “all-of-the-above” fuel mix for power generation. Dairyland currently generates and obtains electricity from natural gas, coal, solar, wind, hydroelectric, and biomass facilities. At the end of 2025, Dairyland acquired the Rocky Road Energy Center (East Dundee) and Elgin Energy Center (Elgin) in Illinois. The purchase of existing natural gas-fired power plants supports the Cooperative’s focus on sustainability and reliability for its members while transitioning to a lower-carbon future.

As part of its overall sustainable power supply plan, Dairyland continues to explore small modular nuclear reactors. With nuclear as a viable future energy option,
Dairyland hired Grover Hettel in September to be the Executive Vice President & Chief Nuclear Officer.

Concern for Community

Through the Cooperative Contributions Program, Dairyland and its member cooperatives are able to make a positive impact on local communities. Annually, Dairyland donates $1,000 to a charitable organization selected by each member cooperative. In 2025, PEC selected the Eyota Fire Department to be the recipient of this donation.

PEC was proud to participate in one of five Day of Service sites on October 1 by helping refresh the paint in the Albert Lea YMCA’s gymnasium. On that day, about 200 volunteers from Dairyland, its member cooperatives, and the Wisconsin Electric Cooperative Association traveled to five sites to offer helping hands on a variety of projects.

Beginning this spring, Dairyland is supporting an additional $1,000 scholarship for PEC’s scholarship program. This award will be presented at our Annual Meeting on March 26.

Dairyland’s Economic Development team advocates for community growth and new business establishments.  In 2025, the team supported 27 projects that resulted in
more than 34 megawatts (MW) of organic growth.  Projects include new businesses or business expansions that also increase economic activity and new jobs.  Dairyland offers its member cooperatives access to the USDA’s Rural Economic Development Loan and Grant Program (REDLG), as well as Dairyland’s Revolving Loan Fund and cost-share program.

In closing, Dairyland remains dedicated to powering our communities with reliable, affordable, and sustainable energy, while embracing new opportunities and addressing challenges head-on. As we look to the future, our commitment to innovation, collaboration, and community support will continue to shape a stronger, more resilient cooperative for all our members. Thank you for your trust and partnership as we work together to ensure a brighter tomorrow.

Arthur Friedrich
Dairyland Board Representative