Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 31, 2023 | Jun. 30, 2022 | |
Cover [Line Items] | |||
Entity Registrant Name | MGE Energy, Inc. | ||
Entity Central Index Key | 0001161728 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Amendment Flag | false | ||
Trading Symbol | MGEE | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,808,969,657 | ||
Entity Common Stock, Shares Outstanding | 36,163,370 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Security Exchange Name | NASDAQ | ||
Security 12(b) Title | Common Stock, $1 Par Value Per Share | ||
Entity Tax Identification Number | 39-2040501 | ||
Entity File Number | 000-49965 | ||
Entity Incorporation, State or Country Code | WI | ||
Entity Address, Address Line One | 133 South Blair Street | ||
Entity Address, City or Town | Madison | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53788 | ||
City Area Code | 608 | ||
Local Phone Number | 252-7000 | ||
Document Transition Report | false | ||
Document Annual Report | true | ||
Documents Incorporated By Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of MGE Energy, Inc.'s definitive proxy statement to be filed before April 30, 2023 , relating to its annual meeting of shareholders, are incorporated by reference into Part III of this annual report on Form 10-K. | ||
MGE [Member] | |||
Cover [Line Items] | |||
Entity Registrant Name | Madison Gas and Electric Company | ||
Entity Central Index Key | 0000061339 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 17,347,894 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Tax Identification Number | 39-0444025 | ||
Entity File Number | 000-1125 | ||
Entity Incorporation, State or Country Code | WI | ||
Entity Address, Address Line One | 133 South Blair Street | ||
Entity Address, City or Town | Madison | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53788 | ||
City Area Code | 608 | ||
Local Phone Number | 252-7000 | ||
Document Transition Report | false | ||
Document Annual Report | true |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor [Line Items] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 238 |
MGE [Member] | |
Auditor [Line Items] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 238 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Revenues: | |||
Electric revenues | $ 465,847 | $ 420,964 | $ 394,372 |
Gas revenue | 248,672 | 185,620 | 144,261 |
Total Operating Revenues | 714,519 | 606,584 | 538,633 |
Operating Expenses: | |||
Fuel for electric generation | 61,329 | 54,633 | 41,684 |
Purchased power | 46,821 | 39,395 | 42,883 |
Cost of gas sold | 152,570 | 99,690 | 63,697 |
Other operations and maintenance | 209,875 | 199,316 | 186,430 |
Depreciation and amortization | 85,549 | 76,983 | 74,188 |
Other general taxes | 20,632 | 19,273 | 19,754 |
Total Operating Expenses | 576,776 | 489,290 | 428,636 |
Operating Income | 137,743 | 117,294 | 109,997 |
Other income, net | 26,080 | 16,694 | 25,365 |
Interest (expense) income, net | (26,647) | (24,112) | (23,521) |
Income before income taxes | 137,176 | 109,876 | 111,841 |
Income tax provision | (26,224) | (4,115) | (19,423) |
Net Income Including Noncontrolling Interest | 110,952 | 105,761 | 92,418 |
Net Income | $ 110,952 | $ 105,761 | $ 92,418 |
Earnings Per Share of Common Stock, Basic | $ 3.07 | $ 2.92 | $ 2.60 |
Earnings Per Share of Common Stock, Diluted | 3.07 | 2.92 | 2.60 |
Dividends per share of common stock | $ 1.59 | $ 1.52 | $ 1.45 |
Weighted Average Shares Outstanding, Basic | 36,163 | 36,163 | 35,612 |
Weighted Average Shares Outstanding, Diluted | 36,174 | 36,167 | 35,612 |
MGE [Member] | |||
Operating Revenues: | |||
Electric revenues | $ 465,847 | $ 420,964 | $ 394,372 |
Gas revenue | 248,672 | 185,620 | 144,261 |
Total Operating Revenues | 714,519 | 606,584 | 538,633 |
Operating Expenses: | |||
Fuel for electric generation | 61,329 | 54,633 | 41,684 |
Purchased power | 46,821 | 39,395 | 42,883 |
Cost of gas sold | 152,570 | 99,690 | 63,697 |
Other operations and maintenance | 209,007 | 198,552 | 185,450 |
Depreciation and amortization | 85,549 | 76,983 | 74,188 |
Other general taxes | 20,627 | 19,269 | 19,750 |
Total Operating Expenses | 575,903 | 488,522 | 427,652 |
Operating Income | 138,616 | 118,062 | 110,981 |
Other income, net | 17,626 | 9,121 | 15,019 |
Interest (expense) income, net | (26,687) | (24,153) | (23,642) |
Income before income taxes | 129,555 | 103,030 | 102,358 |
Income tax provision | (24,063) | (2,248) | (16,835) |
Net Income Including Noncontrolling Interest | 105,492 | 100,782 | 85,523 |
Less Net Income Attributable to Noncontrolling Interest, net of tax | (21,576) | (22,391) | (22,393) |
Net Income | $ 83,916 | $ 78,391 | $ 63,130 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities: | |||
Net Income | $ 110,952 | $ 105,761 | $ 92,418 |
Items not affecting cash: | |||
Depreciation and amortization | 85,549 | 76,983 | 74,188 |
Deferred income taxes | 23,435 | 4,837 | 10,363 |
Provision for doubtful receivables | 1,764 | 1,550 | 1,415 |
Employee benefit plan (credit) cost | (8,142) | (2,203) | (3,716) |
Equity earnings in investments | (9,136) | (9,270) | (10,221) |
Other items | (1,535) | 120 | (2,750) |
Changes in working capital items: | |||
Accounts receivable and unbilled revenues | (16,726) | (24,651) | (5,451) |
Inventories | (22,226) | (6,342) | (842) |
Prepaid taxes | 1,082 | (5,035) | 1,713 |
Other current assets | (3,729) | (192) | (1,057) |
Accounts payable | 5,102 | 2,729 | 14,353 |
Other current liabilities | (5,562) | (6,734) | (5,635) |
Dividends from investments | 7,090 | 7,832 | 8,998 |
Cash contributions to pension and other postretirement plans | (7,308) | (6,935) | (6,296) |
Other noncurrent items, net | (6,875) | (923) | 4,963 |
Cash Provided by Operating Activities | 153,735 | 137,527 | 172,443 |
Investing Activities: | |||
Capital expenditures | (175,030) | (153,169) | (203,139) |
Capital contributions to investments | (5,185) | (4,027) | (5,601) |
Other | 70 | 221 | (1,672) |
Cash Used for Investing Activities | (180,145) | (156,975) | (210,412) |
Financing Activities: | |||
Issuance of common stock, net | 0 | 0 | 79,635 |
Cash dividends paid on common stock | (57,500) | (54,788) | (51,729) |
Repayment of long-term debt | (4,889) | (4,771) | (38,959) |
Issuance of long-term debt | 25,000 | 100,000 | 19,300 |
Proceeds from (repayments of) short-term debt | 65,000 | (47,000) | 52,500 |
Other | (2,068) | (2,197) | (1,553) |
Cash Provided by (Used for) Financing Activities | 25,543 | (8,756) | 59,194 |
Change in cash, cash equivalents, and restricted cash: | (867) | (28,204) | 21,225 |
Cash, cash equivalents, and restricted cash at beginning of period | 18,835 | 47,039 | 25,814 |
Cash, cash equivalents, and restricted cash at end of period | 17,968 | 18,835 | 47,039 |
Supplemential Disclosures of Cash Flow Information: | |||
Interest paid | 25,957 | 23,502 | 23,898 |
Income taxes paid | 7,966 | 4,000 | 8,127 |
Income taxes received | (4,800) | 0 | 0 |
Significant noncash investing activities: | |||
Accrued capital expenditures | 5,970 | 14,414 | 5,719 |
MGE [Member] | |||
Operating Activities: | |||
Net Income | 105,492 | 100,782 | 85,523 |
Items not affecting cash: | |||
Depreciation and amortization | 85,549 | 76,983 | 74,188 |
Deferred income taxes | 22,767 | 3,654 | 8,543 |
Provision for doubtful receivables | 1,764 | 1,550 | 1,415 |
Employee benefit plan (credit) cost | (8,142) | (2,203) | (3,716) |
Other items | 672 | 2,002 | (1,828) |
Changes in working capital items: | |||
Accounts receivable and unbilled revenues | (16,697) | (24,680) | (5,453) |
Inventories | (22,226) | (6,342) | (842) |
Prepaid taxes | 912 | (4,531) | 616 |
Other current assets | (3,774) | (148) | (1,157) |
Accounts payable | 5,104 | 2,775 | 14,603 |
Accrued interest and taxes | (2,737) | 244 | 1,651 |
Other current liabilities | (2,541) | (11,107) | (4,909) |
Cash contributions to pension and other postretirement plans | (7,308) | (6,935) | (6,296) |
Other noncurrent items, net | (7,768) | (1,804) | 3,980 |
Cash Provided by Operating Activities | 151,067 | 130,240 | 166,318 |
Investing Activities: | |||
Capital expenditures | (175,030) | (153,169) | (203,139) |
Other | (1,065) | (1,709) | (2,122) |
Cash Used for Investing Activities | (176,095) | (154,878) | (205,261) |
Financing Activities: | |||
Cash dividends paid to parent by MGE | (33,500) | (5,000) | 0 |
Distributions to parent from noncontrolling interest | (22,000) | (15,000) | (21,500) |
Capital contributions from parent | 0 | 0 | 30,000 |
Repayment of long-term debt | (4,889) | (4,771) | (38,959) |
Issuance of long-term debt | 25,000 | 100,000 | 19,300 |
Proceeds from (repayments of) short-term debt | 65,000 | (47,000) | 52,500 |
Other | (1,881) | (2,197) | (1,523) |
Cash Provided by (Used for) Financing Activities | 27,730 | 26,032 | 39,818 |
Change in cash, cash equivalents, and restricted cash: | 2,702 | 1,394 | 875 |
Cash, cash equivalents, and restricted cash at beginning of period | 7,798 | 6,404 | 5,529 |
Cash, cash equivalents, and restricted cash at end of period | 10,500 | 7,798 | 6,404 |
Supplemential Disclosures of Cash Flow Information: | |||
Interest paid | 25,957 | 23,502 | 23,898 |
Significant noncash investing activities: | |||
Accrued capital expenditures | $ 5,970 | $ 14,414 | $ 5,719 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Current Assets: | |||
Cash and cash equivalents | $ 11,604 | $ 17,438 | |
Accounts receivable, less reserves | 55,407 | 46,205 | |
Other accounts receivables, less reserves | 11,418 | 16,094 | |
Unbilled revenues | 43,086 | 34,812 | |
Materials and supplies, at average cost | 33,465 | 29,863 | |
Fuel for electric generation, at average cost | 7,962 | 6,429 | |
Stored natural gas, at average cost | 32,848 | 15,668 | |
Prepaid taxes | 19,132 | 20,214 | |
Regulatory asset - current | 9,541 | 1,465 | |
Other current assets | 19,017 | 11,183 | |
Total Current Assets | 243,480 | 199,371 | |
Other long-term receivables | 556 | 1,155 | |
Regulatory assets | 103,900 | 107,547 | |
Pension and other postretirement benefit asset | 68,872 | 58,757 | |
Other deferred assets and other | 23,809 | 27,548 | |
Property, Plant, and Equipment: | |||
Property, plant and equipment, net | 1,865,352 | 1,828,171 | |
Construction work in progress | 105,748 | 50,603 | |
Total Property, Plant, and Equipment | 1,971,100 | 1,878,774 | |
Investments | 105,883 | 98,754 | |
Total Assets | 2,517,600 | 2,371,906 | |
Current Liabilities: | |||
Long-term debt due within one year | 54,314 | 4,889 | |
Short-term debt | [1] | 70,500 | 5,500 |
Accounts payable | 59,334 | 64,149 | |
Accrued interest and taxes | 7,868 | 10,385 | |
Accrued payroll related items | 13,064 | 12,951 | |
Regulatory liabilities - current | 11,925 | 9,365 | |
Other current liabilities | 8,057 | 10,608 | |
Total Current Liabilities | 225,062 | 117,847 | |
Other Credits: | |||
Deferred income taxes | 252,190 | 231,149 | |
Investment tax credit - deferred | 48,735 | 44,836 | |
Regulatory liabilities | 156,988 | 154,298 | |
Accrued pension and other postretirement benefits | 53,607 | 73,085 | |
Finance lease liabilities | 17,108 | 17,322 | |
Other deferred liabilities and other | 96,990 | 91,690 | |
Total Other Credits | 625,618 | 612,380 | |
Common shareholders' equity: | |||
Common stock | 36,163 | 36,163 | |
Additional paid-in capital | 395,657 | 394,903 | |
Retained earnings | 649,854 | 596,402 | |
Total Common Shareholders' Equity | 1,081,674 | 1,027,468 | |
Long-term debt | 585,246 | 614,211 | |
Total Capitalization | 1,666,920 | 1,641,679 | |
Commitments and contingencies (see Footnote 16) | |||
Total Liabilities and Capitalization | 2,517,600 | 2,371,906 | |
MGE [Member] | |||
Current Assets: | |||
Cash and cash equivalents | 4,136 | 6,401 | |
Accounts receivable, less reserves | 55,407 | 46,205 | |
Other accounts receivables, less reserves | 11,416 | 16,092 | |
Unbilled revenues | 43,086 | 34,812 | |
Materials and supplies, at average cost | 33,465 | 29,863 | |
Fuel for electric generation, at average cost | 7,962 | 6,429 | |
Stored natural gas, at average cost | 32,848 | 15,668 | |
Prepaid taxes | 18,467 | 19,379 | |
Regulatory asset - current | 9,541 | 1,465 | |
Other current assets | 19,479 | 11,629 | |
Total Current Assets | 235,807 | 187,943 | |
Affiliate receivable long-term | 1,059 | 1,589 | |
Regulatory assets | 103,900 | 107,547 | |
Pension and other postretirement benefit asset | 68,872 | 58,757 | |
Other deferred assets and other | 23,758 | 27,907 | |
Property, Plant, and Equipment: | |||
Property, plant and equipment, net | 1,865,380 | 1,828,199 | |
Construction work in progress | 105,748 | 50,603 | |
Total Property, Plant, and Equipment | 1,971,128 | 1,878,802 | |
Investments | 115 | 230 | |
Total Assets | 2,404,639 | 2,262,775 | |
Current Liabilities: | |||
Long-term debt due within one year | 54,314 | 4,889 | |
Short-term debt | 70,500 | 5,500 | |
Accounts payable | 59,317 | 64,130 | |
Accrued interest and taxes | 7,912 | 10,649 | |
Accrued payroll related items | 13,064 | 12,951 | |
Regulatory liabilities - current | 11,925 | 9,365 | |
Other current liabilities | 6,062 | 8,108 | |
Total Current Liabilities | 223,094 | 115,592 | |
Other Credits: | |||
Deferred income taxes | 219,258 | 198,885 | |
Investment tax credit - deferred | 48,735 | 44,836 | |
Regulatory liabilities | 156,988 | 154,298 | |
Accrued pension and other postretirement benefits | 53,607 | 73,085 | |
Finance lease liabilities | 17,108 | 17,322 | |
Other deferred liabilities and other | 98,217 | 92,152 | |
Total Other Credits | 593,913 | 580,578 | |
Common shareholders' equity: | |||
Common stock | 17,348 | 17,348 | |
Additional paid-in capital | 252,917 | 252,917 | |
Retained earnings | 583,958 | 533,542 | |
Total Common Shareholders' Equity | 854,223 | 803,807 | |
Noncontrolling interest | 148,163 | 148,587 | |
Total Equity | 1,002,386 | 952,394 | |
Long-term debt | 585,246 | 614,211 | |
Total Capitalization | 1,587,632 | 1,566,605 | |
Commitments and contingencies (see Footnote 16) | |||
Total Liabilities and Capitalization | $ 2,404,639 | $ 2,262,775 | |
[1] MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables, Net | ||
Reserve for uncollectible accounts receivable | $ 7,050 | $ 6,940 |
Reserve for uncollectible other accounts receivable | $ 1,323 | $ 1,364 |
Common shareholders' equity | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 36,163,000 | 36,163,000 |
Common stock, shares outstanding | 36,163,000 | 36,163,000 |
MGE [Member] | ||
Receivables, Net | ||
Reserve for uncollectible accounts receivable | $ 7,050 | $ 6,940 |
Reserve for uncollectible other accounts receivable | $ 1,323 | $ 1,364 |
Common shareholders' equity | ||
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares outstanding | 17,348,000 | 17,348,000 |
MGE Energy Inc Consolidated Sta
MGE Energy Inc Consolidated Statements of Common Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss)/ Income [Member] |
Beginning balance, shares at Dec. 31, 2019 | 34,668,000 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 855,676 | $ 34,668 | $ 316,268 | $ 504,740 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 92,418 | 92,418 | |||
Common stock dividends declared | (51,729) | (51,729) | |||
Common stock issued during period | 1,495,000 | ||||
Issuance of common stock, net | 79,635 | $ 1,495 | 78,140 | ||
Ending balance, shares at Dec. 31, 2020 | 36,163,000 | ||||
Ending balance, value at Dec. 31, 2020 | 976,000 | $ 36,163 | 394,408 | 545,429 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 105,761 | 105,761 | |||
Common stock dividends declared | (54,788) | 54,788 | |||
Issuance of common stock, net | 0 | ||||
Equity-based compensation plans and other | 495 | 495 | |||
Ending balance, shares at Dec. 31, 2021 | 36,163,000 | ||||
Ending balance, value at Dec. 31, 2021 | 1,027,468 | $ 36,163 | 394,903 | 596,402 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 110,952 | 110,952 | |||
Common stock dividends declared | (57,500) | (57,500) | |||
Issuance of common stock, net | 0 | ||||
Equity-based compensation plans and other | 754 | 754 | |||
Ending balance, shares at Dec. 31, 2022 | 36,163,000 | ||||
Ending balance, value at Dec. 31, 2022 | $ 1,081,674 | $ 36,163 | $ 395,657 | $ 649,854 | $ 0 |
MGE Energy Inc - Consolidated S
MGE Energy Inc - Consolidated Statements of Common Equity (Parentheticals) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends per share of common stock | $ 1.59 | $ 1.52 | $ 1.45 |
Madison Gas and Electric Compan
Madison Gas and Electric Company Consolidated Statements of Equity - USD ($) $ in Thousands | Total | MGE [Member] | Common Stock [Member] | Common Stock [Member] MGE [Member] | Additional Paid-in Capital [Member] MGE [Member] | Retained Earnings [Member] MGE [Member] | Accumulated Other Comprehensive (Loss)/ Income [Member] MGE [Member] | Noncontrolling Interest [Member] MGE [Member] |
Beginning balance, shares at Dec. 31, 2019 | 34,668,000 | 17,348,000 | ||||||
Beginning balance, value at Dec. 31, 2019 | $ 777,589 | $ 17,348 | $ 222,917 | $ 397,021 | $ 0 | $ 140,303 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | $ 92,418 | 85,523 | 63,130 | 22,393 | ||||
Capital contributions from parent | 30,000 | 30,000 | ||||||
Cash dividends paid to parent by MGE | 0 | |||||||
Distributions to parent from noncontrolling interest | (21,500) | (21,500) | ||||||
Ending balance, shares at Dec. 31, 2020 | 36,163,000 | 17,348,000 | ||||||
Ending balance, value at Dec. 31, 2020 | 871,612 | $ 17,348 | 252,917 | 460,151 | 0 | 141,196 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | 105,761 | 100,782 | 78,391 | 22,391 | ||||
Capital contributions from parent | 0 | |||||||
Cash dividends paid to parent by MGE | (5,000) | (5,000) | ||||||
Distributions to parent from noncontrolling interest | (15,000) | (15,000) | ||||||
Ending balance, shares at Dec. 31, 2021 | 36,163,000 | 17,348,000 | ||||||
Ending balance, value at Dec. 31, 2021 | 952,394 | $ 17,348 | 252,917 | 533,542 | 0 | 148,587 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Income | $ 110,952 | 105,492 | 83,916 | 21,576 | ||||
Capital contributions from parent | 0 | |||||||
Cash dividends paid to parent by MGE | (33,500) | (33,500) | ||||||
Distributions to parent from noncontrolling interest | (22,000) | (22,000) | ||||||
Ending balance, shares at Dec. 31, 2022 | 36,163,000 | 17,348,000 | ||||||
Ending balance, value at Dec. 31, 2022 | $ 1,002,386 | $ 17,348 | $ 252,917 | $ 583,958 | $ 0 | $ 148,163 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 1. Summary of Sign ificant Accounting Policies. a. Basis of Presentation - MGE Energy and MGE. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which give recognition to the rate making accounting policies for regulated operations prescribed by the regulatory authorities having jurisdiction, principally the PSCW and FERC. MGE's accounting records conform to the FERC uniform system of accounts. b. Principles of Consolidation - MGE Energy and MGE. MGE, a wholly owned subsidiary of MGE Energy, is a regulated electric and gas utility headquartered in Madison, Wisconsin. MGE Energy and MGE consolidate all majority owned subsidiaries in which they have a controlling influence. Additional wholly owned subsidiaries of MGE Energy include CWDC, MAGAEL, MGE Power, MGE State Energy Services, MGE Services, MGE Transco, and MGEE Transco. CWDC owns 100 % of North Mendota, a subsidiary created to serve as a development entity for property. MGE Power owns 100 % of MGE Power Elm Road and MGE Power West Campus. MGE Power and its subsidiaries are part of MGE Energy's nonregulated energy operations, which were formed to own and lease electric generation projects to assist MGE. MGE Transco and MGEE Transco are nonregulated entities formed to own the investments in ATC and ATC Holdco, respectively. MGE did not own any subsidiaries as of December 31, 2022. MGE Energy and MGE consolidate variable interest entities (VIEs) for which it is the primary beneficiary. Variable interest entities are legal entities that possess any of the following characteristics: equity investors who have an insufficient amount of equity at risk to finance their activities, equity owners who do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownership interest), or equity holders who do not receive expected losses or returns significant to the VIE. If MGE Energy or MGE is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, all relevant facts and circumstances are considered, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. Ongoing reassessments of all VIEs are performed to determine if the primary beneficiary status has changed. MGE has consolidated MGE Power Elm Road and MGE Power West Campus. Both entities are VIEs. MGE is considered the primary beneficiary of these entities as a result of contractual agreements. See Footnote 3 for more discussion of these entities. The consolidated financial statements reflect the application of certain accounting policies described in this note. All intercompany accounts and transactions have been eliminated in consolidation. c. Use of Estimates - MGE Energy and MGE. In order to prepare consolidated financial statements in conformity with GAAP, management must make estimates and assumptions. These estimates could affect reported amounts of assets, liabilities, and disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management's estimates. d. Cash, Cash Equivalents, and Restricted Cash – MGE Energy and MGE. The following table presents the components of total cash, cash equivalents, and restricted cash on the consolidated balance sheets. (In thousands) MGE Energy MGE As of December 31, 2022 2021 2022 2021 Cash and cash equivalents $ 11,604 $ 17,438 $ 4,136 $ 6,401 Restricted cash 867 847 867 847 Receivable - margin account 5,497 550 5,497 550 Cash, cash equivalents, and restricted cash $ 17,968 $ 18,835 $ 10,500 $ 7,798 Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. Restricted Cash MGE has certain cash accounts that are restricted to uses other than current operations and designated for a specific purpose. MGE's restricted cash accounts include cash held by trustees for certain employee benefits and cash deposits held by third parties. These are included in "Other current assets" on the consolidated balance sheets. Receivable – Margin Account Cash amounts held by counterparties as margin collateral for certain financial transactions are recorded as Receivable – margin account in "Other current assets" on the consolidated balance sheets. The costs being hedged are fuel for electric generation, purchased power, and cost of gas sold. e. Trade Receivables, Allowance for Doubtful Accounts, and Concentration Risk - MGE Energy and MGE. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. A 1 % late payment charge is recorded on all receivables unpaid after the due date. The allowance for credit losses associated with these receivables represents MGE's best estimate of the amount of probable credit losses for existing accounts receivable. MGE manages concentration of credit risk through its credit and collection policies, which are consistent with state regulatory requirements. The allowance for credit losses is estimated based on historical write-off experience, regional economic data, review of the accounts receivable aging, and reasonable and supportable forecasts that affect the collectability of the reported amount. As of December 31, 2022 and 2021, MGE had a reserve balance of $ 8.4 million and $ 8.3 million, respectively, against accounts receivable. For the years ended December 31, 2022 and 2021, MGE recorded $ 3.8 million and $ 2.2 million, respectively, in write-offs. For the years ended December 31, 2022 and 2021, MGE recorded $ 3.9 million and $ 3.4 million, respectively, of additional reserves. The current accounting treatment for bad debt expense allows MGE to defer any differential between bad debt expense reflected in rates and actual costs incurred in its next rate case filing. See Footnote 8 for further details of deferred bad debt expense. f. Inventories - MGE Energy and MGE. Inventories consist of natural gas in storage, fuel for electric generation, materials and supplies, and renewable energy credits (RECs). MGE values natural gas in storage, fuel for electric generation, and materials and supplies using average cost. REC allowances are included in "Materials and supplies" on the consolidated balance sheets and are recorded based on specific identification. These allowances are charged to purchase power expense as they are used in operations. MGE's REC allowance balance as of December 31, 2022 and 2021, was $ 0.2 million and $ 1.0 million, respectively. g. D erivative and Hedging Instruments - MGE Energy and MGE. As part of regular operations, MGE enters into contracts, including options, swaps, futures, forwards, and other contractual commitments, to manage its exposure to commodity prices. MGE recognizes derivatives, excluding those that qualify for the normal purchases or normal sales exclusion, in the consolidated balance sheets at fair value, with changes in the fair value of derivative instruments to be recorded in current earnings or deferred in accumulated other comprehensive income (loss), depending on whether a derivative is designated as, and is effective as, a hedge and on the type of hedge transaction. Derivative activities are in accordance with the company's risk management policy. If the derivative qualifies for regulatory deferral, the derivatives are marked to fair value and are offset with a corresponding regulatory asset or liability depending on whether the derivative is in a net loss or net gain position, respectively. Cash flows from such derivative instruments are classified on a basis consistent with the nature of the underlying hedged item. h. Regulatory Assets and Liabilities - MGE Energy and MGE. Regulatory assets and regulatory liabilities are recorded consistent with regulatory treatment. Regulatory assets represent costs which are deferred due to the probable future recovery from customers through regulated rates. Regulatory liabilities represent the excess recovery of costs or accrued credits which were deferred because MGE believes it is probable such amounts will be returned to customers through future regulated rates. Regulatory assets and liabilities are amortized in the consolidated statements of income consistent with the recovery or refund included in customer rates. MGE believes it is probable that its recorded regulatory assets and liabilities will be recovered and refunded, respectively, in future rates. See Footnote 8 for further information. i. Debt Issuance Costs - MGE Energy and MGE. Premiums, discounts, and expenses incurred with the issuance of outstanding long-term debt are amortized over the life of the debt issue. Any call premiums or unamortized expenses associated with refinancing higher-cost debt obligations used to finance utility-regulated assets and operations are amortized consistent with regulatory treatment of those items. These costs are included as a direct reduction to the related debt liability on the consolidated balance sheets. j. Property, Plant, and Equipment - MGE Energy and MGE. Property, plant, and equipment is recorded at original cost. Cost includes indirect costs consisting of payroll taxes, pensions, postretirement benefits, other fringe benefits, and administrative and general costs. Also, included in the cost is AFUDC for utility property and capitalized interest for nonregulated property. Additions for significant replacements of property are charged to property, plant, and equipment at cost; and minor items are charged to maintenance expense. Depreciation rates on utility property are approved by the PSCW, based on the estimated economic lives of property, and include estimates for salvage value and removal costs. Removal costs of utility property, less any salvage value, are adjusted through regulatory liabilities. Depreciation rates on nonregulated property are based on the estimated economic lives of the property. See Footnote 4 for further information. Provisions at composite straight-line depreciation rates approximate the following percentages for the cost of depreciable property: 2022 2021 2020 Electric 3.2 % 3.2 % 3.5 % Gas 2.1 % 2.2 % 2.2 % Nonregulated 2.3 % 2.4 % 2.3 % k. Asset Retirement Obligations - MGE Energy and MGE. A liability is recorded for the fair value of an asset retirement obligation (ARO) to be recognized in the period in which it is incurred if it can be reasonably estimated. The offsetting associated asset retirement costs are capitalized as a long-lived asset and depreciated over the asset's useful life. The expected present value technique used to calculate the fair value of ARO liabilities includes assumptions about costs, probabilities, settlement dates, interest accretion, and inflation. Revisions to the assumptions, including the timing or amount of expected asset retirement costs, could result in increases or decreases to the AROs. All asset retirement obligations are recorded as "Other long-term liabilities" on the consolidated balance sheets. MGE has regulatory treatment and recognizes regulatory assets or liabilities for the timing differences between when it recovers legal AROs in rates and when it would recognize these costs. See Footnote 17 for further information. l. Repairs and Maintenance Expense - MGE Energy and MGE. MGE utilizes the direct expensing method for planned major maintenance projects. Under this method, MGE expenses all costs associated with major planned maintenance activities as incurred. m. Purchased Gas Adjustment Clause - MGE Energy and MGE. MGE's natural gas rates are subject to a fuel adjustment clause designed to recover or refund the difference between the actual cost of purchased gas and the amount included in rates. Differences between the amounts billed to customers and the actual costs recoverable are deferred and recovered or refunded in future periods by means of prospective monthly adjustments to rates. As of December 31, 2022 and 2021, MGE had over collected $ 4.9 million and $ 1.4 million, respectively. These amounts are included in "Regulatory liabilities – current" on the consolidated balance sheets. n. Revenue Recognition - MGE Energy and MGE. Operating revenues are recorded as service is rendered or energy is delivered to customers. Meters are read on a systematic basis throughout the month based on established meter-reading schedules. At the end of the month, MGE accrues an estimate for the unbilled amount of energy delivered to customers. The unbilled revenue estimate is based on daily system demand volumes, weather factors, estimated line losses, estimated customer usage by class, and applicable customer rates. See Footnote 20 for further information. o. Utility Cost Recovery - MGE Energy and MGE. MGE's tariff rates include a provision for fuel cost recovery. The PSCW allows Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. Over-collection of fuel-related costs that are outside the approved range will be recognized as a reduction of revenue. Under-collection of these costs will be recognized in "Purchased power" expense in the consolidated statements of income. The cumulative effects of these deferred amounts will be recorded as a regulatory asset or regulatory liability until they are reflected in future billings to customers. See Footnote 9.b. for further information. p. Regional Transmission Organizations - MGE Energy and MGE. MGE reports on a net basis transactions on the MISO markets in which it buys and sells power within the same hour to meet electric energy delivery requirements. q. Allowance for Funds Used During Construction - MGE Energy and MGE. Allowance for funds used during construction is included in utility plant accounts and represents the cost of borrowed funds used during plant construction and a return on shareholder's capital used for construction purposes. In the consolidated income statements, the cost of borrowed funds (AFUDC-debt) is presented as an offset to "Interest expense" and the return on shareholder's capital (AFUDC-equity funds) is shown as an item within "Other income." For 2022, 2021, and 2020 , as approved by the PSCW, MGE capitalized AFUDC-debt and equity on 50 % of applicable average construction work in progress as shown in the following table: 2022 2021 2020 Approved AFUDC retail rates 7.11 % 6.89 % 7.03 % MGE received specific approval to recover 100 % AFUDC on certain costs for Saratoga, Two Creeks, Badger Hollow I and II, Paris, its customer information and billing project, and on certain environmental costs for Columbia. These amounts are recovered under the ratemaking process over the service lives of the related properties. For the years ended 2022, 2021, and 2020, MGE recorded AFUDC-debt and AFUDC-equity as shown in the following table: (In millions) 2022 2021 2020 AFUDC-debt $ 1.1 $ 1.7 $ 2.1 AFUDC-equity $ 3.0 $ 5.0 $ 5.9 r. Investments - MGE Energy and MGE. Investments in limited liability companies that have specific ownership accounts in which MGE Energy or MGE's ownership interest is more than minor and are considered to have significant influence are accounted for using the equity method. For equity security investments without readily determinable fair values and for which MGE Energy and MGE do not have significant influence, MGE Energy and MGE have elected to use the practicability exception to measure these investments, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. Changes in measurement are reported in earnings. Equity security investments with readily determinable fair values are carried at fair value. Realized and unrealized gains and losses are included in earnings. See Footnote 7 for further information on investments and Footnote 19 for further information on fair value of investments. s. Capitalized Software Costs - MGE Energy and MGE. The net book value of capitalized costs of internal use software included in property, plant, and equipment was $ 76.2 million and $ 85.8 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, accumulated amortization was $ 53.4 million and $ 42.6 million, respectively. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 10.8 , million, $ 5.7 million and $ 5.1 million, respectively, of amortization expense. MGE implemented a new customer information system which went live in September 2021. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the assets. The useful lives range from fou r to fifteen years. t. Capitalized Software Assets – Hosting Arrangements – MGE Energy and MGE. The net book value of capitalized costs of internal use software incurred in a hosting arrangement was $ 12.9 million and $ 15.6 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, accumulated amortization was $ 8.5 million and $ 5.4 million, respectively. Capitalized software assets for hosted arrangements and the related accumulated amortization expense are recorded in "Other deferred assets and other" on the consolidated balance sheets. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 3.1 million, $ 2.2 million, and $ 1.8 million, respectively, of amortization expense related to software assets for hosted arrangements. These costs are recognized in "Other operations and maintenance" expense in the consolidated statements of income and are amortized on a straight-line basis over the term of the hosted contract, which includes renewable option periods. Software assets for hosted arrangements have terms ranging from three to ten years. u. Impairment of Long-Lived Assets - MGE Energy and MGE. MGE reviews plant and equipment and other property for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. MGE's policy for determining when long-lived assets are impaired is to recognize an impairment loss if the sum of the expected future cash flows (undiscounted and without interest charges) from an asset are less than the carrying amount of that asset. If an impairment loss is recognized, the amount that will be recorded will be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When it becomes probable that a generating unit will be retired before the end of its useful life, MGE assesses whether the generating unit meets the criteria for probability of abandonment. If a generating unit meets the applicable criteria to be considered probable of abandonment, MGE assesses the likelihood of recovery of the remaining net book value of that generating unit at the end of each reporting period. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded for the difference of the remaining net book value of the generating unit that is greater than the present value of the amount expected to be recovered from ratepayers. There was no significant impairment of long-lived assets during 2022, 2021, and 2020. v. Income Taxes and Excise Taxes - MGE Energy and MGE. Income taxes Under the liability method, income taxes are deferred for all temporary differences between pretax financial and taxable income and between the book and tax basis of assets and liabilities using the tax rates scheduled by law to be in effect when the temporary differences reverse. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. A valuation allowance is recorded for those benefits that do not meet this criterion. Accounting for uncertainty in income taxes applies to all tax positions and requires a recognition threshold and measurement standard for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in an income tax return. The threshold is defined for recognizing tax return positions in the financial statements as "more likely than not" that the position is sustainable, based on its merits. Subsequent recognition, derecognition, and measurement is based on management's best judgment given the facts, circumstances, and information available at the reporting date. Regulatory and accounting principles have resulted in a regulatory liability related to income taxes. Excess deferred income taxes result from past taxes provided in customer rates higher than current rates. The income tax regulatory liability and deferred investment tax credit reflect the revenue requirement associated with the return of these tax benefits to customers. Investment tax credits from regulated operations are amortized over related property service lives. Excise taxes MGE Energy, through its utility operations, pays a state license fee tax in lieu of property taxes on property used in utility operations. License fee tax is calculated as a percentage of adjusted operating revenues of the prior year. The electric tax rate is 3.19 % for retail sales and 1.59 % for sales of electricity for resale by the purchaser. The tax rate on sales of natural gas is 0.97 %. The tax is required to be estimated and prepaid in the year prior to its computation and expensing. License fee tax expense, included in "Other general taxes," was $ 14.7 million, $ 13.5 million, and $ 14.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Operating income taxes, including tax credits and license fee tax, are included in rates for utility related items. w. Share-Based Compensation - MGE Energy and MGE. Eligible employees and non-employee directors may receive awards of restricted stock, restricted stock units, performance units, and dividend equivalents, or any combination of the foregoing. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Awards classified as equity awards are measured based on their grant-date fair value. Awards classified as liability awards are recorded at fair value each reporting period. Forfeitures are recognized as they occur, rather than estimating potential future forfeitures and recording them over the vesting period. See Footnote 12 for additional information on MGE's share-based compensation plans. |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | 2. New Acco unting Standards - MGE Energy and MGE. MGE Energy and MGE reviewed FASB authoritative guidance recently issued, none of which are expected to have a material impact on the consolidated results of operations, financial condition, or cash flows. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities Disclosure [Abstract] | |
Variable Interest Entities | 3. Variable Inte rest Entities - MGE Energy and MGE. MGE Power Elm Road and MGE Power West Campus are not subsidiaries of MGE, but they have been consolidated in the financial statements of MGE. MGE Power Elm Road and MGE Power West Campus were created for the purpose of owning new generating assets and leasing those assets to MGE. MGE Power Elm Road's sole principal asset is an undivided ownership interest in two coal-fired generating plants (the Elm Road Units) located in Oak Creek, Wisconsin, which it leases to MGE pursuant to long-term leases. MGE Power West Campus's sole principal asset is an ownership interest in WCCF, which it leases to MGE pursuant to a long-term lease. Based on the nature and terms of the contractual agreements, MGE is expected to absorb a majority of the expected losses or residual value associated with the ownership of the generation assets by MGE Power Elm Road and MGE Power West Campus and therefore MGE holds a variable interest despite the absence of an equity interest. In accordance with applicable accounting guidance, MGE Energy and MGE consolidate VIEs of which they are the primary beneficiary. MGE has the power to direct the activities that most significantly impact both the Elm Road Units' and the WCCF's economic performance and is also the party most closely associated with MGE Power Elm Road and MGE Power West Campus. As a result, MGE is the primary beneficiary. MGE has included the following significant accounts on its consolidated balance sheets related to its interest in these VIEs as of December 31: MGE Power Elm Road MGE Power West Campus (In thousands) 2022 2021 2022 2021 Property, plant, and equipment, net $ 161,167 $ 163,325 $ 77,280 $ 79,183 Construction work in progress 3,410 898 809 493 Affiliate receivables — — 1,668 2,211 Accrued interest and accrued (prepaid) taxes 51 37 ( 8 ) ( 75 ) Deferred income taxes 30,770 30,696 14,986 14,726 Long-term debt (a) 46,343 48,968 33,354 35,563 Noncontrolling interest 103,333 101,507 44,830 47,080 (a) MGE Power Elm Road's long-term debt includes debt issuance costs of $ 0.3 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power Elm Road for use of the Elm Road Units pursuant to the related long-term leases. MGE Power West Campus's long-term debt includes debt issuance costs of $ 0.1 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power West Campus for use of the cogeneration facility pursuant to the long-term lease. See Footnote 14 for further information on the long-term debt securities. MGE is permitted by PSCW order to recover lease payments made to MGE Power Elm Road and MGE Power West Campus in customer rates. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant, and Equipment - MGE Energy and MGE. Property, plant, and equipment consisted of the following as of December 31: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Utility: Electric $ 1,585,847 $ 1,516,533 $ 1,585,864 $ 1,516,550 Plant anticipated to be retired early (a) 147,659 158,983 147,659 158,983 Gas 566,551 546,390 566,562 546,401 Utility property, plant, and equipment, gross 2,300,057 2,221,906 2,300,085 2,221,934 Less: Accumulated depreciation and amortization 673,669 636,804 673,669 636,804 Utility property, plant, and equipment, net 1,626,388 1,585,102 1,626,416 1,585,130 Nonregulated: Nonregulated 318,443 317,881 318,443 317,881 Less: Accumulated depreciation and amortization 79,479 74,812 79,479 74,812 Nonregulated property, plant, and equipment, net 238,964 243,069 238,964 243,069 Construction work in progress: Utility construction work in progress (b) 101,529 49,211 101,529 49,211 Nonregulated construction work in progress 4,219 1,392 4,219 1,392 Total property, plant, and equipment $ 1,971,100 $ 1,878,774 $ 1,971,128 $ 1,878,802 (a) An asset that will be retired in the near future and substantially in advance of its previously expected retirement date is subject to abandonment accounting. In the second quarter of 2021, the operator of Columbia received approval from MISO to retire Columbia Units 1 and 2. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022, early retirement of Columbia was probable. "Plant anticipated to be retired early" in table above is the net book value of these generating units. Assets for Columbia Unit 1 and Unit 2 are currently included in rate base, and MGE continues to depreciate them on a straight-line basis using the composite depreciation rates approved by the PSCW that included retirement dates of 2029 for Unit 1. The PSCW approved in its 2023 electric rate case limited reopener to revise the depreciation schedule for Columbia Unit 2 to 2029 to align with Unit 1. See Footnote 9 for further details on MGE's rate proceedings. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded to the extent that the remaining net book value of the generating unit exceeds the present value of the amount expected to be recovered from ratepayers. No impairment was recorded as of December 31, 2022. (b) Includes Badger Hollow II and Paris solar projects. See Footnote 6 for further information on renewable projects. MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust. See Footnote 14 for further discussion of the mortgage indenture and the entitlement of certain unsecured notes to be equally and ratably secured if MGE issues additional first mortgage bonds. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease | 5. Leas es - MGE Energy and MGE. As part of its regular operations, MGE enters into various contracts related to IT equipment, substations, cell towers, land, wind easements, and other property in use for operations. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Determination as to whether an arrangement is or contains a lease is completed at inception. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; lease expense for these leases are recognized on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as operating or financing leases on the consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. For leases that do not provide an implicit rate, a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, is used in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net lease costs are recorded and when costs are recognized. As of December 31, 2022 , MGE had no significant leases not yet commenced that would create significant future rights and obligations. The following table shows lease expense for the years ended December 31: (In thousands) 2022 2021 Income Statement Location Finance lease expense: Amortization of leased assets $ 1,633 $ 1,609 Depreciation and amortization Interest on lease liabilities 752 771 Interest expense, net Operating lease expense 541 506 Other operations and maintenance Total lease expense $ 2,926 $ 2,886 The following table shows the lease assets and liabilities on the consolidated balance sheets as of December 31: (In thousands) 2022 2021 Balance Sheet Location Lease assets: Finance lease assets $ 14,756 $ 15,545 Property, plant, and equipment, net Operating lease assets 7,786 7,961 Other deferred assets and other Total lease assets $ 22,542 $ 23,506 Lease liabilities: Finance lease liabilities - current $ 1,039 $ 1,050 Other current liabilities Finance lease liabilities - long-term 17,108 17,322 Finance lease liabilities Operating lease liabilities - current 136 161 Other current liabilities Operating lease liabilities - long-term 7,915 7,965 Other deferred liabilities and other Total lease liabilities $ 26,198 $ 26,498 The following table shows other lease information for the years ended December 31: (In thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Finance leases - Financing cash flows $ 1,304 $ 1,495 Finance leases - Operating cash flows 752 771 Operating leases - Operating cash flows 442 362 Lease assets obtained in exchange for lease liabilities: Finance leases 1,094 1,026 Operating leases 126 2,178 The following table shows the weighted average remaining lease terms and discounts as of December 31: Weighted-average remaining lease terms (in years): 2022 2021 Finance leases 38 38 Operating leases 34 35 Weighted-average discount rates: Finance leases 4.34 % 4.30 % Operating leases 3.07 % 3.07 % The following table shows maturities of lease liabilities as of December 31, 2022: (In thousands) Finance Operating 2023 $ 1,782 $ 372 2024 1,463 347 2025 1,203 294 2026 969 299 2027 884 304 Thereafter 38,913 11,830 Subtotal 45,214 13,446 Less: Present value discount ( 27,067 ) ( 5,395 ) Lease liability 18,147 8,051 Less: current portion ( 1,039 ) ( 136 ) Noncurrent lease liability $ 17,108 $ 7,915 |
Joint Plant Ownership
Joint Plant Ownership | 12 Months Ended |
Dec. 31, 2022 | |
Regulated Operations [Abstract] | |
Joint Plant Ownership | 6. Joint Plant Ownership - MGE Energy and MGE. MGE has undivided ownership interests in jointly owned facilities. Generation and operating expenses are primarily divided between the joint owners under the same method as ownership. MGE provides its own financing, and the respective portion of facilities and costs are included in the corresponding operating expenses (fuel for electric generation, purchased power, other operations and maintenance, etc.) in the consolidated statements of income. The following table shows MGE's interest in utility plant in service, and the related accumulated depreciation reserves and other information related to MGE's jointly owned facilities: (In thousands, except for Columbia (a) Elm Road (b) West Campus (c) Forward Wind (d) Two Creeks (e) Badger Hollow (f) Ownership interest 19 % 8.33 % 55 % 12.8 % 33 % 33 % Share of generation (MW) 211 MW 106 MW 157 MW 18 MW 50 MW 100 MW For the year ended December 31, Operating expense - 2022 $ 26,141 $ 18,613 $ (g) $ 662 $ 1,032 $ 787 Operating expense - 2021 33,284 18,478 (g) 669 953 140 Operating expense - 2020 27,127 17,259 (g) 664 118 — As of December 31, 2022 Utility plant $ — $ 202,118 $ 115,137 $ 34,117 $ 67,890 $ 74,941 Accumulated depreciation — ( 40,951 ) ( 37,857 ) ( 15,952 ) ( 5,145 ) ( 2,566 ) Plant anticipated to be 147,659 — — — — — Construction work in progress 4,805 3,410 809 68 — 52,187 As of December 31, 2021 Utility plant $ — $ 202,604 $ 114,090 $ 34,084 $ 67,814 $ 69,178 Accumulated depreciation — ( 39,279 ) ( 34,907 ) ( 14,945 ) ( 2,932 ) ( 227 ) Plant anticipated to be 158,983 — — — — — Construction work in progress 2,388 898 493 21 — 19,748 (a) MGE and the other co-owners announced plans to retire Columbia, a two unit coal-fired generation facility located in Portage, Wisconsin. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022 and 2021, early retirement of Columbia was probable. See Footnote 4 for further information. (b) Two coal-fired generating units in Oak Creek, Wisconsin. In November 2021, MGE announced plans to end the use of coal as a primary fuel at the Elm Road Units and transition the plant to natural gas. By the end of 2030, MGE expects coal to be used only as a backup fuel at the Elm Road Units. This transition will help MGE meet its 2030 carbon reduction goals. By 2035, MGE expects that the Elm Road Units will be fully transitioned away from coal, which will eliminate coal as an internal generation source for MGE. (c) MGE Power West Campus and the UW jointly own the West Campus Cogeneration Facility (WCCF) located on the UW campus in Madison, Wisconsin. The UW owns a controlling interest in the chilled-water and steam plants, which are used to meet the needs for air-conditioning and steam-heat capacity for the UW campus. MGE Power West Campus owns a controlling interest in the electric generation plant, which is leased and operated by MGE. (d) The Forward Wind Energy Center (Forward Wind) consists of 86 wind turbines located near Brownsville, Wisconsin. (e) The Two Creeks solar generation array is located in the Town of Two Creeks and the City of Two Rivers in Manitowoc and Kewaunee Counties, Wisconsin. Date of commercial operation of the solar array was November 2020. (f) The Badger Hollow I and II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. Date of commercial operation of Badger Hollow I was November 2021. Construction of Badger Hollow II is expected to be completed in the second half of 2023. (g) Operating charges are allocated to the UW based on formulas contained in the operating agreement. Under the provisions of this arrangement, the UW is required to reimburse MGE for their allocated portion of fuel and operating expenses. For the years ended December 31, 2022, 2021, and 2020, the UW's allocated share of fuel and operating costs was $ 8.7 million, $ 6.2 million, and $ 5.2 million, respectively. MGE currently has ongoing jointly-owned generation construction projects. Paris Solar-Battery Park is located in the Town of Paris in Kenosha County, Wisconsin. MGE's ownership interest is 10 % and its share of generation is 31 MW. Red Barn Wind Farm is located in the Towns of Wingville and Clifton in Grant County, Wisconsin. MGE's ownership interest is 10 % and its share of generation is 9.16 MW. As of December 31, 2022, $ 23.4 million and $ 0.4 million, respectively, (excluding AFUDC) related to Paris and Red Barn is reflected in "Construction work in progress" on the consolidated balance sheets. Construction of Paris is expected to be completed in 2023 and Red Barn early 2023. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments Disclosure [Abstract] | |
Investments | 7. Investme nts - MGE Energy and MGE. a. Equity Securities, Equity Method Investments, and Other Investments. MGE Energy MGE (In thousands) 2022 2021 2022 2021 Equity securities $ 22,960 $ 20,529 $ 115 $ 230 Equity method investments: ATC and ATC Holdco 80,586 75,862 — — Other 39 39 — — Total equity method investments 80,625 75,901 — — Other investments 2,298 2,324 — — Total $ 105,883 $ 98,754 $ 115 $ 230 Equity securities represent publicly traded securities and private equity investments in common stock of companies in various industries. For the years ended December 31, 2022, 2021, and 2020 , there were no liquidated investments for MGE. For the years ended December 31, 2022, 2021, and 2020, certain investments were liquidated for MGE Energy. As a result of these liquidations, the following was received: (In thousands) 2022 2021 2020 Cash proceeds $ 924 $ 1,684 $ 622 Gain on sale 1,382 1,543 379 b. ATC and ATC Holdco. ATC owns and operates electric transmission facilities primarily in Wisconsin. MGE received an interest in ATC when it, like other Wisconsin electric utilities, contributed its electric transmission facilities to ATC as required by Wisconsin law. That interest is presently held by MGE Transco, a subsidiary of MGE Energy. ATC Holdco was formed by several members of ATC, including MGE Energy, to pursue electric transmission development and investments outside of Wisconsin. The ownership interest in ATC Holdco is held by MGEE Transco, a subsidiary of MGE Energy. As of December 31, 2022 and 2021, MGE Transco held a 3.6 % ownership interest in ATC. As of December 31, 2022 and 2021, MGEE Transco held a 4.4 % ownership interest in ATC Holdco. MGE Transco and MGEE Transco have accounted for their investment in ATC and ATC Holdco, respectively, under the equity method of accounting. Equity earnings from investments are recorded as "Other income" on the consolidated statements of income of MGE Energy. For the years ended December 31, MGE Transco recorded the following: (In thousands) 2022 2021 2020 Equity earnings from investment in ATC $ 9,025 $ 9,774 $ 10,167 Dividends received from ATC 7,090 7,832 8,633 Capital contributions to ATC 2,678 — 1,249 In January 2023, MGE Transco made a $ 0.4 million capital contribution to ATC. ATC Holdco was formed in December 2016. ATC Holdco's transmission development activities have been suspended for the near term. In 2020, MGEE Transco recorded capital contributions of $ 0.3 million to ATC Holdco. In 2022 and 2021 , MGEE Transco recorded no capital contributions to ATC Holdco. ATC's summarized financial data is as follows: (In thousands) Income statement data for the year ended December 31, 2022 2021 2020 Operating revenues $ 751,158 $ 754,838 $ 758,117 Operating expenses ( 381,528 ) ( 376,153 ) ( 372,463 ) Other income 1,171 1,144 1,922 Interest expense, net ( 124,091 ) ( 115,089 ) ( 112,818 ) Earnings before members' income taxes $ 246,710 $ 264,740 $ 274,758 Balance sheet data as of December 31, 2022 2021 Current assets $ 89,606 $ 89,747 Noncurrent assets 5,997,780 5,628,127 Total assets $ 6,087,386 $ 5,717,874 Current liabilities $ 511,945 $ 436,918 Long-term debt 2,612,980 2,513,009 Other noncurrent liabilities 485,795 421,997 Members' equity 2,476,666 2,345,950 Total members' equity and liabilities $ 6,087,386 $ 5,717,874 MGE receives transmission and other related services from ATC. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 31.4 million, $ 32.0 million, and $ 30.7 million, respectively, for transmission services received from ATC. MGE also provides a variety of operational, maintenance, and project management work for ATC, which is reimbursed by ATC. As of December 31, 2022 and 2021, MGE had a receivable due from ATC of $ 4.8 million and $ 7.0 million, respectively, related primarily to transmission interconnection at Badger Hollow and Paris solar generation sites. MGE will be reimbursed for these costs after the new generation assets are placed into service. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of Regulatory Assets and Liabilities [Text Block] | 8. Regulator y Assets and Liabilities - MGE Energy and MGE. The following regulatory assets and liabilities are reflected in MGE's consolidated balance sheets as of December 31: (In thousands) 2022 2021 Regulatory Assets Asset retirement obligation $ 14,721 $ 13,081 Deferred fuel costs 12,067 3,292 Deferred bad debt expense 7,650 5,600 Debt related costs 7,580 8,173 Deferred pension and other postretirement costs — 1,017 Derivatives 5,094 — Leases 3,656 2,992 Tax recovery related to AFUDC equity 10,851 10,347 Unfunded pension and other postretirement liability 50,072 63,728 Other 1,750 782 Total Regulatory Assets $ 113,441 $ 109,012 Regulatory Liabilities Deferred pension and other postretirement costs $ 5,454 $ 8,112 Elm Road 1,092 — Income taxes 109,112 110,817 Non-ARO removal costs 31,664 29,694 Pension and other postretirement non-service costs 16,160 11,451 Purchased gas adjustment 4,857 1,448 Other 574 2,141 Total Regulatory Liabilities $ 168,913 $ 163,663 MGE expects to recover its regulatory assets and return its regulatory liabilities through rates charged to customers based on PSCW decisions made during the ratemaking process or based on PSCW long-standing policies and guidelines. The adjustments to rates for these regulatory assets and liabilities will occur over the periods either specified by the PSCW or over the corresponding period related to the asset or liability. Management believes it is probable that MGE will continue to recover from customers the regulatory assets described above based on prior and current ratemaking treatment for such costs. Asset Retirement Obligation See Footnote 17 for a discussion of asset retirement obligations. Deferred Fuel Costs/Savings The fuel rules require Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band. Any over- or under-recovery of the actual costs is determined on an annual basis and is adjusted in future billings to electric retail customers. See Footnote 9.b. for further discussion. Deferred bad debt expense In March 2020, the PSCW issued an order authorizing deferral of expenditures incurred to ensure the provision of safe, reliable, and affordable access to utility services during the COVID-19 pandemic and late payment charges. Expenditures include items such as bad debt expense. Recovery of expenditures is expected to be addressed in future rate proceedings. While management believes that cost recovery is probable, the timing of collection from customers cannot be estimated at this time. Management will continue to assess the probability of recovery of deferred costs. As part of the 2021 and 2022/2023 settlement agreement, the PSCW approved MGE to defer any differential between bad debt expense reflected in rates and actual costs incurred in its next rate filing. Debt Related Costs This balance includes debt issuance costs of extinguished debt and other debt related expenses, including make-whole premiums paid on redemptions of long-term debt. The PSCW has allowed rate recovery on unamortized issuance costs for extinguished debt facilities. When the facility replacing the old facility is deemed by the PSCW to be more favorable for the ratepayers, the PSCW will allow rate recovery of any unamortized issuance costs related to the old facility. These amounts are recovered over the term of the new facility. Deferred Pension and Other Postretirement Costs The current accounting treatment for Pension and Other Postretirement costs allows MGE to reflect any differential between pension and other postretirement costs reflected in rates and actual costs incurred in its next rate filing. Derivatives MGE has physical and financial contracts that are accounted for as derivatives. The amounts recorded for the net mark-to-market value of the commodity based contracts is offset with a corresponding regulatory asset or liability because these transactions are part of the PGA or fuel rules clause authorized by the PSCW. See Footnote 18 for further discussion. Leases As part of its regular operations, MGE enters into various contracts related to IT equipment, substations, cell towers, land, wind easements, and other property in use for operations. Leases with initial terms in excess of 12 months are recorded as operating or financing leases on the consolidated balance sheets. For ratemaking all leases are treated as operating leases. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net lease costs are recovered and when costs are recognized. See Footnote 5 for further information. Tax Recovery Related to AFUDC Equity AFUDC equity represents the after-tax equity cost associated with utility plant construction and results in a temporary difference between the book and tax basis of such plant. It is probable under PSCW regulation that MGE will recover in future rates the future increase in taxes payable represented by the deferred income tax liability. The amounts will be recovered in rates over the depreciable life of the asset for which AFUDC was applied. Tax recovery related to AFUDC equity represents the revenue requirement related to recovery of these future taxes payable, calculated at current statutory tax rates. Unfunded Pension and Other Postretirement Liability MGE is required to recognize the unfunded or funded status of defined benefit pension and other postretirement pension plans as a net liability or asset on the balance sheet with an offset to a regulatory asset or liability. The unfunded status represents future expenses that are expected to be recovered in rates. See Footnote 11 for further discussion. Elm Road Costs associated with Elm Road are estimated in MGE's rates and include costs for lease payments, management fees, community impact mitigation, and operating costs. Costs are collected in rates over a one to two-year period. The current accounting treatment for these costs allows MGE to reflect any differential between costs reflected in rates and actual costs incurred in its next rate filing. Income Taxes Excess deferred income taxes result from a decrease in tax rates subsequent to ratemaking settlements. The settlements were reached using tax rates that are higher than the currently applicable rates, and MGE is required to return these tax benefits to customers. The regulatory liability and deferred investment tax credit reflects the revenue requirement associated with the return of these tax benefits to customers. Changes in income taxes are generally passed through in customer rates for the regulated utility. The one-time 2017 impact on timing differences related to income taxes passed through to customer rates of the 2017 Tax Act was recorded as a regulatory liability. The amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, which will be subject to review by the PSCW. A portion of the regulatory liability will be returned to customers based on a mandated timeframe dictated by applicable tax laws. Non-ARO Removal Costs In connection with accounting for asset retirement obligations, companies are required to reclassify cumulative collections for non-ARO removal costs as a regulatory liability, with an offsetting entry to accumulated depreciation. Under the current rate structure, these removal costs are being recovered as a component of depreciation expense. Pension and Other Postretirement Non-Service Costs These Pension and Other Postretirement non-service costs represents the non-service components of net periodic benefit cost capitalized in rates. The FASB issued authoritative guidance within the codification's Compensation-Retirement Benefits topic that only allows the service cost component of net periodic benefit cost to be eligible for capitalization within the consolidated balance sheets, all non-service costs are expensed. Under the current rate structure non-service cost is eligible for capitalization. The portion of net periodic benefit costs that are capitalized are being recovered as a component of depreciation expense. The non-service capitalized costs will be recovered in rates over the depreciable life of the asset for which net periodic benefit costs was applied. See Footnote 11 for further discussion. Purchased Gas Adjustment MGE's natural gas rates are subject to a fuel adjustment clause designed to recover or refund the difference between the actual cost of purchased gas and the amount included in rates. Differences between the amounts billed to customers and the actual costs recoverable are deferred and recovered or refunded in future periods by means of prospective monthly adjustments to rates. Transmission Costs The current accounting treatment for transmission costs allows MGE to reflect any differential between transmission costs reflected in rates and actual costs incurred in its next rate filing. |
Rate Matters
Rate Matters | 12 Months Ended |
Dec. 31, 2022 | |
Regulated Operations [Abstract] | |
Public Utilities Disclosure [Text Block] | 9. Rate Mat ters - MGE Energy and MGE. a. Rate Proceedings. Rate increase Return on Common Equity Common Equity Component of Regulatory Capital Structure Effective Date Approved 2021 settlement (a) Electric — % 9.8 % 55.8 % 1/1/2021 Gas 4.00 % 9.8 % 55.8 % 1/1/2021 Approved 2022/2023 settlement (b) Electric 8.81 % 9.8 % 55.6 % 1/1/2022 Gas 2.15 % 9.8 % 55.6 % 1/1/2022 Gas 0.96 % 9.8 % 55.6 % 1/1/2023 Approved limited 2023 reopener (c) Electric 9.01 % 9.8 % 55.6 % 1/1/2023 (a) The electric rate settlement included an increase in rate base but the associated rate increase was primarily offset by lower fuel and purchased power costs and a one-time $ 18.2 million return to customers of the portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. The gas rate increase covered infrastructure costs and technology improvements. The settlement agreement also included escrow accounting treatment for pension and other postretirement benefit costs, bad debt expense, and customer credit card fees. Escrow accounting treatment allows MGE to defer any difference between estimated costs in rates and actual costs incurred until a future rate filing. Any difference would be recorded as a regulatory asset or regulatory liability. (b) The electric and gas rate increases were driven by an increase in rate base including our investments in Badger Hollow I and a new customer information system. Also driving the requested electric increase were higher fuel and purchased power costs as well as the completion in 2021 of the one-time return of the electric excess deferred tax credit related to the 2017 Tax Act not restricted by IRS normalization rules. Included in the electric residential rate is a reduction in the customer charge. (c) The electric rate increase is driven by generation assets including our investments in Badger Hollow II (solar), Paris (solar and battery), Red Barn (wind), and West Riverside (natural gas). In addition, the reopener request includes an increase in fuel costs and the recovery of deferred 2021 fuel costs. The reopener also revises the depreciation schedule for Columbia Unit 2 and shared equipment to 2029 to align with the depreciation schedule for Columbia Unit 1. Sierra Club and Vote Solar have filed petitions with the Dane County Circuit Court seeking review of the PSCW decisions approving MGE's electric and gas 2022/2023 rate settlement and 2023 electric limited reopener. The Dane County Circuit Court affirmed the PSCW’s decision to approve the 2022/2023 rate settlement, and Sierra Club and Vote Solar have now appealed that decision to the Wisconsin Court of Appeals. The PSCW is named as the responding party; MGE is not named as a party. The petitions challenge the amount of the customer fixed charge that does not vary with usage. The requested relief is unclear. The revenue requirement approved by the PSCW in the settlement and limited reopener have not been challenged. The PSCW is expected to vigorously defend its approval of the rate case settlement and limited reopener. MGE has intervened in the proceedings to further defend the PSCW's decision. A petition filed challenging the 2021 rate settlement was dismissed by the circuit court in December 2022. b. Fuel Rules. Fuel rules require Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. The fuel rules bandwidth is set at plus or minus 1 % in 2022 and increased to 2 % in 2023.The electric fuel-related costs are subject to an excess revenues test. Excess revenues are defined as revenues in the year in question that provide MGE with a greater return on common equity than authorized by the PSCW in MGE's latest rate order. The recovery of under-collected electric fuel-related costs would be reduced by the amount that exceeds the excess revenue test. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral. The following table summarized deferred electric fuel-related savings and costs: Fuel Costs ( in millions ) Refund or Recovery Period 2019 deferred fuel savings $( 1.5 ) (a) January 2021 through December 2021 2020 deferred fuel savings $( 3.2 ) (a) October 2021 2021 deferred fuel costs $ 3.3 (a) January 2023 through December 2023 (b) 2022 deferred fuel costs $ 8.8 (c) (a) There was no change to the recovery (refund) in the fuel rules proceedings from the amount MGE deferred. (b) In August 2022, the PSCW issued a final decision in the 2021 fuel rules proceedings for MGE to include the recovery of these costs as part of the 2023 electric limited reopener, and the recovery of such costs was included in the reopener. (c) These costs will be subject to the PSCW's annual review of 2022 fuel costs, expected to be completed in 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 10. Income Ta xes. a. MGE Energy and MGE Income Taxes. MGE Energy files a consolidated federal income tax return that includes the operations of all subsidiary companies. The subsidiaries calculate their respective federal income tax provisions as if they were separate taxable entities. On a consolidated and separate company basis, the income tax provision consists of the following provision (benefit) components for the years ended December 31: MGE Energy MGE (In thousands) 2022 2021 2020 2022 2021 2020 Current payable: Federal $ 2,102 $ ( 2,589 ) $ 4,179 $ 934 $ ( 3,434 ) $ 3,716 State 2,385 3,002 5,095 2,060 3,163 4,790 Net-deferred: Federal 14,770 ( 1,473 ) 6,181 14,397 ( 1,951 ) 4,756 State 8,665 6,310 4,182 8,370 5,605 3,787 Amortized investment tax credits ( 1,698 ) ( 1,135 ) ( 214 ) ( 1,698 ) ( 1,135 ) ( 214 ) Total income tax provision $ 26,224 $ 4,115 $ 19,423 $ 24,063 $ 2,248 $ 16,835 The consolidated income tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes, as follows: MGE Energy MGE 2022 2021 2020 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 6.2 6.2 6.3 6.2 6.2 6.3 Amortized investment tax credits ( 0.7 ) ( 1.5 ) ( 0.2 ) ( 0.7 ) ( 1.5 ) ( 0.2 ) Credit for electricity from wind energy ( 5.4 ) ( 6.0 ) ( 6.2 ) ( 5.7 ) ( 6.4 ) ( 6.8 ) AFUDC equity, net ( 0.3 ) ( 0.9 ) ( 1.2 ) ( 0.3 ) ( 1.0 ) ( 1.4 ) Amortization of utility excess deferred tax (a) ( 2.0 ) ( 14.8 ) ( 2.0 ) ( 2.1 ) ( 15.8 ) ( 2.2 ) Other, net, individually insignificant 0.3 ( 0.3 ) ( 0.3 ) 0.2 ( 0.3 ) ( 0.3 ) Effective income tax rate 19.1 % 3.7 % 17.4 % 18.6 % 2.2 % 16.4 % (a) Included are impacts of the 2017 Tax Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting in recognition of IRS rules that restrict the rate at which the excess deferred taxes may be returned to utility customers. For the years ended December 31, 2022, 2021, and 2020, MGE recognized $ 4.1 million, $ 2.6 million, and $ 2.2 million, respectively. Included in the 2021 rate settlement was a one-time return to customers of the electric portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2021, MGE recognized $ 13.2 million. Included in the 2022 and 2023 rate settlement was a net collection from customers of the gas portion of deficient deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2022, MGE recognized $ 1.3 million. The significant components of deferred tax assets and liabilities that appear on the consolidated balance sheets as of December 31 are as follows: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Deferred tax assets Investment in ATC $ 20,098 $ 20,868 $ — $ — Federal tax credits 46,282 39,161 46,282 39,161 Accrued expenses 10,642 11,053 10,644 11,047 Pension and other postretirement benefits 20,687 24,888 20,687 24,888 Deferred tax regulatory account 42,999 42,401 42,999 42,401 Derivatives 1,416 241 1,416 241 Leases 7,137 7,218 7,137 7,218 Other 17,438 17,390 17,490 17,442 Gross deferred income tax assets 166,699 163,220 146,655 142,398 Less valuation allowance — — — — Net deferred income tax assets $ 166,699 $ 163,220 $ 146,655 $ 142,398 Deferred tax liabilities Property-related $ 295,872 $ 274,613 $ 295,872 $ 274,613 Investment in ATC 52,840 52,731 — — Bond transactions 472 534 472 534 Pension and other postretirement benefits 35,590 34,781 35,590 34,781 Derivatives 1,416 241 1,416 241 Tax deductible prepayments 10,308 10,222 10,308 10,210 Leases 7,137 7,218 7,137 7,218 Other 15,254 14,029 15,118 13,686 Gross deferred income tax liabilities 418,889 394,369 365,913 341,283 Deferred income taxes, net $ 252,190 $ 231,149 $ 219,258 $ 198,885 The components of federal and state tax benefit carryovers as of December 31, are as follows: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Federal tax credits $ 46,282 $ 39,161 $ 46,282 $ 39,161 State net operating losses 3 3 3 3 Valuation allowances for state net operating losses ( 3 ) ( 3 ) ( 3 ) ( 3 ) Federal tax credit carryovers begin to expire in 2040 and state net operating loss carryforwards expire in 2023. Federal tax credits represent the deferred tax asset and net operating loss amounts represent the tax loss that is carried forward. The state valuation allowance reduces state carryforward losses to estimated realizable value due to the uncertainty of future income in various state tax jurisdictions. b. Accounting for Uncertainty in Income Taxes - MGE Energy and MGE. The difference between the tax benefit amount taken on prior year tax returns, or expected to be taken on a current year tax return, and the tax benefit amount recognized in the financial statements is accounted for as an unrecognized tax benefit. A tabular reconciliation of unrecognized tax benefits and interest is as follows: (In thousands) Unrecognized Tax Benefits: 2022 2021 2020 Unrecognized tax benefits, January 1, $ 2,353 $ 2,281 $ 2,093 Additions based on tax positions related to the current year 731 714 796 Additions based on tax positions related to the prior years — — — Reductions based on tax positions related to the prior years ( 599 ) ( 642 ) ( 608 ) Unrecognized tax benefits, December 31, $ 2,485 $ 2,353 $ 2,281 (In thousands) Interest on Unrecognized Tax Benefits: 2022 2021 2020 Accrued interest on unrecognized tax benefits, January 1, $ 150 $ 154 $ 176 Reduction in interest expense on uncertain tax positions ( 95 ) ( 98 ) ( 124 ) Interest expense on uncertain tax positions 134 94 102 Accrued interest on unrecognized tax benefits, December 31, $ 189 $ 150 $ 154 Unrecognized tax benefits are classified with "Other deferred liabilities" on the consolidated balance sheets. The interest component recoverable in rates is offset by a regulatory asset. As of December 31, 2022, 2021, and 2020, MGE Energy and MGE have an unrecognized tax benefit primarily related to temporary tax differences associated with the change in income tax method of accounting for electric generation and electric and gas distribution repairs. As of December 31, 2022, 2021, and 2020 , there were no unrecognized tax benefits relating to permanent differences and tax credits. The unrecognized tax benefits as of December 31, 2022 , are not expected to significantly increase or decrease within the next twelve months. In addition, statutes of limitations will expire for MGE Energy and MGE tax returns. The impact of the statutes of limitations expiring is not anticipated to be material. The following table shows tax years that remain subject to examination by major jurisdiction: Taxpayer Open Years MGE Energy and consolidated subsidiaries in federal return 2019 through 2022 MGE Energy Wisconsin combined reporting corporation return 2018 through 2022 |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Benefits [Text Block] | 11. Pension Plans and Othe r Postretirement Benefits - MGE Energy and MGE. MGE maintains qualified and nonqualified pension plans, health care, and life insurance benefits, and defined contribution 401(k) benefit plans for its employees and retirees. MGE's costs for the 401(k) plans were $ 5.4 million, $ 5.1 million, and $ 4.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. A measurement date of December 31 is utilized for all pension and postretirement benefit plans. All employees hired after December 31, 2006, have been enrolled in the defined contribution pension plan rather than the defined benefit pension plan previously in place. a. Benefit Obligations and Plan Assets. (In thousands) Pension Benefits Other Postretirement Benefits Change in Benefit Obligations: 2022 2021 2022 2021 Net benefit obligation as of January 1, $ 460,666 $ 461,215 $ 84,526 $ 86,360 Service cost 5,064 5,730 1,293 1,448 Interest cost 11,161 9,109 1,940 1,549 Plan participants' contributions — — 986 992 Actuarial loss (gain) (a) ( 120,166 ) 3,871 ( 19,484 ) ( 685 ) Gross benefits paid ( 21,437 ) ( 19,259 ) ( 5,725 ) ( 5,405 ) Less: federal subsidy on benefits paid (b) — — 292 267 Benefit obligation as of December 31, $ 335,288 $ 460,666 $ 63,828 $ 84,526 Change in Plan Assets: Fair value of plan assets as of January 1, $ 473,953 $ 429,538 $ 54,844 $ 51,735 Actual return on plan assets ( 84,562 ) 61,487 ( 8,958 ) 6,814 Employer contributions 2,217 2,187 720 708 Plan participants' contributions — — 986 992 Gross benefits paid ( 21,437 ) ( 19,259 ) ( 5,725 ) ( 5,405 ) Fair value of plan assets at end of year 370,171 473,953 41,867 54,844 Funded Status as of December 31, $ 34,883 $ 13,287 $ ( 21,961 ) $ ( 29,682 ) (a) In 2022, higher discount rates were the primary driver of the actuarial gain. (b) In 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law authorizing Medicare to provide prescription drug benefits to retirees. For both the years ended December 31, 2022 and 2021, the subsidy due to MGE was $ 0.3 million. The accumulated benefit obligation for the defined benefit pension plans as of December 31, 2022 and 2021, was $ 319.6 million and $ 431.3 million, respectively. The amounts recognized in the consolidated balance sheets to reflect the funded status of the plans as of December 31 are as follows: Pension Benefits Other Postretirement Benefits (In thousands) 2022 2021 2022 2021 Long-term asset $ 68,872 $ 58,757 $ — $ — Current liability ( 2,408 ) ( 2,342 ) — — Long-term liability ( 31,581 ) ( 43,128 ) ( 21,961 ) ( 29,682 ) Net asset (liability) $ 34,883 $ 13,287 $ ( 21,961 ) $ ( 29,682 ) The following table shows the amounts that have not yet been recognized in our net periodic benefit cost as of December 31 and are recorded as regulatory assets in the consolidated balance sheets: Pension Benefits Other Postretirement Benefits (In thousands) 2022 2021 2022 2021 Net actuarial loss (gain) $ 51,148 $ 57,777 $ ( 1,085 ) $ 6,256 Prior service benefit — ( 20 ) — ( 297 ) Transition obligation — — 9 12 Total $ 51,148 $ 57,757 $ ( 1,076 ) $ 5,971 The projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets as of December 31 are as follows : (In thousands) Pension Benefits Projected Benefit Obligation in Excess of Plan Assets 2022 2021 Projected benefit obligation, end of year $ 33,989 $ 45,470 Fair value of plan assets, end of year — — The accumulated benefit obligation and fair value of plan assets with an accumulated benefit obligation in excess of plan assets as of December 31 are as follows: (In thousands) Pension Benefits Other Postretirement Benefits Accumulated Benefit Obligation in Excess of Plan Assets 2022 2021 2022 2021 Accumulated benefit obligation, end of year $ 33,211 $ 43,831 $ 63,828 $ 84,526 Fair value of plan assets, end of year — — 41,867 54,844 b. Net Periodic Benefit Cost. (In thousands) Pension Benefits Other Postretirement Benefits Components of Net Periodic Benefit Cost: 2022 (a) 2021 (a) 2020 (a) 2022 (a) 2021 (a) 2020 (a) Service cost $ 5,064 $ 5,730 $ 5,296 $ 1,293 $ 1,448 $ 1,264 Interest cost 11,161 9,109 12,210 1,940 1,549 2,278 Expected return on assets ( 31,391 ) ( 29,487 ) ( 27,229 ) ( 3,365 ) ( 3,277 ) ( 3,154 ) Amortization of: Transition obligation — — — 3 3 3 Prior service (credit) cost ( 20 ) ( 124 ) ( 114 ) ( 297 ) ( 1,518 ) ( 2,669 ) Actuarial loss 2,416 6,646 5,357 145 493 217 Net periodic benefit cost (credit) $ ( 12,770 ) $ ( 8,126 ) $ ( 4,480 ) $ ( 281 ) $ ( 1,302 ) $ ( 2,061 ) (a) As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. For the years ended December 31, 2022, 2021, and 2020 MGE recovered approximately $ 1.0 million, $ 4.3 million, and $ 0.9 million, respectively, of pension and other postretirement costs. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above. See Footnote 8 for further information. For the years ended December 31, 2022 and 2021 , MGE deferred and recorded as a regulatory liability $ 1.5 million and $ 8.1 million, respectively, of savings from employee benefit plan costs. For the year ended December 31, 2022 , MGE refunded in rates $ 4.2 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above. See Footnote 8 for additional information. The components of net periodic benefit cost, other than the service cost component, are recorded in " Other income, net " on the consolidated statements of income. The service cost component is recorded in "Other operations and maintenance" on the consolidated statements of income. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net periodic benefit costs are recovered and when costs are recognized. c. Plan Assumptions. The weighted-average assumptions used to determine the benefit obligations were as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2022 2021 2022 2021 Discount rate 5.47 % 2.94 % 5.45 % 2.85 % Rate of compensation increase 3.21 % 3.19 % N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for next year N/A N/A 7.00 % 5.75 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) N/A N/A 4.75 % 4.75 % Year that the rate reaches the ultimate trend rate N/A N/A 2032 2027 MGE uses individual spot rates, instead of a weighted average of the yield curve spot rates, for measuring the service cost and interest cost components of net periodic benefit cost. The weighted-average assumptions used to determine the net periodic cost were as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2022 2021 2020 2022 2021 2020 Discount rate 2.94 % 2.70 % 3.42 % 2.85 % 2.52 % 3.30 % Expected rate of return on plan assets 6.75 % 7.00 % 7.20 % 6.40 % 6.61 % 6.75 % Rate of compensation increase 3.24 % 3.23 % 3.26 % N/A N/A N/A MGE employs a building-block approach in determining the expected long-term rate of return for asset classes. Historical markets are studied and long-term historical relationships among asset classes are analyzed, consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as interest rates and dividend yields, are evaluated before long-term capital market assumptions are determined. The expected long-term nominal rate of return for plan assets is primarily a function of expected long-term real rates of return for component asset classes and the plan's target asset allocation in conjunction with an inflation assumption. Peer data and historical returns are reviewed to check for appropriateness. d. Investment Strategy. MGE employs a total return investment approach whereby a mix of equities, fixed income, and real estate investments are used to maximize the expected long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan-funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity, fixed income, and real estate investments. Investment risk is measured and monitored on an ongoing basis through periodic investment portfolio reviews and liability measurements. The asset allocation for MGE's pension plans as of December 31, 2022 and 2021, and the target allocation for 2023, by asset category, follows: Target Percentage of Plan Allocation 2022 2021 Equity securities (a) 63.0 % 65.0 % 65.0 % Fixed income securities 30.0 % 26.0 % 29.0 % Real estate 7.0 % 9.0 % 6.0 % Total 100.0 % 100.0 % 100.0 % (a) Target allocations for equity securities are broken out as follows: 45.5 % United States equity and 17.5 % non-United States equity. The fair value of plan assets for the postretirement benefit plans is $ 41.9 million and $ 54.8 million as of December 31, 2022 and 2021, respectively. Of this amount, $ 36.3 million and $ 48.7 million as of December 31, 2022 and 2021, respectively, were held in the master pension trust and are allocable to postretirement health expenses. The target asset allocation and investment strategy for the portion of assets held in the master pension trust are the same as that explained for MGE's pension plans. The remainder of postretirement benefit assets are held either in an insurance continuance fund for the payment of retiree life benefits or health benefit trusts for payment of retiree health premiums. The asset allocation for the insurance continuance fund is determined by the life insurer. The target asset allocation for the health benefit trusts are established based on a similar investment strategy as assets held in the master pension trust, with consideration for liquidity needs in the health benefit trusts. e. Concentrations of Credit Risk. MGE evaluated its pension and other postretirement benefit plans' asset portfolios for the existence of significant concentrations of credit risk as of December 31, 2022. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, and foreign country. As of December 31, 2022 , there were no significant concentrations (defined as greater than 10 percent of plan assets) of risk in MGE pension and postretirement benefit plan assets. f. Fair Value Measurements of Plan Assets. Pension and other postretirement benefit plan investments are recorded at fair value. See Footnote 19 for more information regarding the fair value hierarchy. The following descriptions are the categories of underlying plan assets held within the pension and other postretirement benefit plans as of December 31, 2022: Cash and Cash Equivalents – This category includes highly liquid investments with maturities of less than three months which are traded in active markets. Equity Securities – These securities consist of U.S. and international stock funds. The U.S. stock funds are primarily invested in domestic equities. Securities in these funds are typically priced using the closing price from the applicable exchange, NYSE, Nasdaq, etc. The international funds are composed of international equities. Securities are priced using the closing price from the appropriate local stock exchange. Fixed Income Securities – These securities consist of U.S. bond funds and short-term funds. U.S. bond funds are priced by a pricing agent using inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. The short-term funds are valued initially at cost and adjusted for amortization of any discount or premium. Real Estate – Real estate funds are funds with a direct investment in pools of real estate properties. These funds are valued by investment managers on a periodic basis using pricing models that use independent appraisals. The fair value of real estate investments is determined using net asset value. Insurance Continuance Fund (ICF) – The ICF is a supplemental retirement plan that includes assets that have been segregated and restricted to pay retiree term life insurance premiums. Fixed Rate Fund – The Fixed Rate fund is supported by an underlying portfolio of fixed income securities, including public bonds, commercial mortgages, and private placement bonds. Public market data and GAAP reported market values are used when available to determine fair value. All of the fair values of MGE's plan assets are measured using net asset value, except for cash and cash equivalents which are considered level 1 investments. The fair values of MGE's plan assets by asset category as of December 31 are as follows: (In thousands) 2022 2021 Cash and Cash Equivalents $ 1,715 $ 1,428 Equity Securities: U.S. Large Cap 121,884 162,060 U.S. Mid Cap 28,392 38,755 U.S. Small Cap 35,372 47,657 International Blend 75,843 87,781 Fixed Income Securities: Short-Term Fund 3,807 5,222 High Yield Bond 17,895 25,190 Long Duration Bond 85,767 119,867 Real Estate 38,418 37,170 Insurance Continuance Fund 1,613 1,599 Fixed Rate Fund 1,332 2,068 Total $ 412,038 $ 528,797 g. Expected Cash Flows. MGE does no t expect to need to make any required contributions to the qualified plans for 2023. The contributions for years after 2023 are not yet currently estimated. MGE has adopted the asset smoothing as permitted in accordance with the Pension Protection Act of 2006, including modifications made by WRERA. Due to uncertainties in the future economic performance of plan assets, discount rates, and other key assumptions, estimated contributions are subject to change. MGE may also elect to make additional discretionary contributions. In 2022, MGE made $ 7.3 million in employer contributions to its pension and postretirement plans. h. Benefit Payments. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: Pension Other Postretirement Benefits (In thousands) Pension Benefits Gross Postretirement Benefits Expected Medicare Part D Subsidy Net Postretirement Benefits 2023 $ 20,715 $ 5,051 $ ( 332 ) $ 4,719 2024 21,304 5,363 ( 365 ) 4,998 2025 21,864 5,637 ( 400 ) 5,237 2026 22,305 5,544 ( 447 ) 5,097 2027 22,789 5,560 ( 483 ) 5,077 2028 - 2032 117,798 27,199 ( 2,833 ) 24,366 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement [Text Block] | 12. Share-Based Compe nsation - MGE Energy and MGE. In 2020, MGE Energy shareholders approved the 2021 Long-Term Incentive Plan (the 2021 Incentive Plan). It provides for the issuance of up to 500,000 shares of MGE Energy common stock in connection with awards made under the 2021 Incentive Plan. The 2021 Incentive Plan authorizes awards of restricted stock, restricted stock units, performance units, and dividend equivalents, or any combination of the foregoing for eligible employees and non-employee directors. The 2020 Performance Unit Plan (the 2020 Plan) was adopted in February 2020 for eligible employees. Plan participants may receive awards of performance units, restricted units, or both. Prior to the adoption of the 2020 plan, eligible employees could receive awards of performance units under the 2006 Performance Unit Plan. Under the 2013 Director Incentive Plan, eligible non-employee directors could receive awards of performance units. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 1.3 million, $ 2.9 million, and $ 1.3 million, respectively, related to share-based compensation awards under the 2006 Performance Unit Plan, the 2020 Performance Unit Plan, the 2013 Director Incentive Plan, and the 2021 Incentive Plan in "Other operations and maintenance" on the consolidated statements of income. 2013 Director Incentive Plan and 2006 Performance Unit Plan - Liability Awards - Under MGE Energy's 2013 Director Incentive Plan and its 2006 Performance Unit Plan, non-employee directors and eligible employees, respectively, could receive performance units that entitled the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend equivalent payments thereon, at the end of the performance period set in the award. In accordance with the plans' provisions. These awards are subject to prescribed vesting schedules and must be settled in cash. Accordingly, no shares of common stock will be issued in connection with those plans. On the grant date, the cost of the director or employee services received in exchange for a performance unit award is measured based on the current market value of MGE Energy common stock. The fair value of the awards is remeasured quarterly, including as of December 31, 2022, as required by applicable accounting standards. Changes in fair value as well as the original grant are recognized as compensation cost. Since this amount is remeasured throughout the vesting period, the compensation cost is subject to variability. For nonretirement eligible employees under the 2006 Performance Unit Plan, stock-based compensation costs are accrued and recognized using the graded vesting method. Compensation cost for retirement eligible employees or employees that will become retirement eligible during the vesting schedule are recognized on an abridged horizon as retirement eligibility accelerates vesting. Payouts under the 2013 Director Incentive Plan are subject to a three -year vesting schedule. Payouts under the 2006 Performance Unit Plan are subject to a five -year vesting schedule. The following activity occurred: 2022 2021 Director Performance Director Performance Nonvested awards January 1, 1,472 5,760 4,286 17,420 Granted — — — — Vested ( 1,472 ) ( 3,756 ) ( 2,814 ) ( 11,660 ) Nonvested awards December 31, — 2,004 1,472 5,760 No cash settlements have occurred on the awards shown in the table above as cash payments are only made at the end of the period covered by the awards. In January 2022, cash payments of $ 1.8 million were distributed relating to awards that were granted under the plans in 2019, for the 2013 Director Incentive Plan, and in 2017, for the 2006 Performance Unit Plan. Restricted Stock Units - Equity Awards - Payouts of restricted stock units under the 2021 Incentive Plan are based on the expiration of a three-year time-vesting period. Restricted stock units granted are to be paid out in shares of MGE Energy common stock and are accounted for as equity awards. The fair value of each restricted stock unit granted is based on the closing market price of one share of MGE Energy common stock on the grant date of the award. Compensation expense is recorded ratably over the performance period based on the fair value of the awards on the grant date. The following activity occurred: 2022 2021 Units Weighted Average Grant Date Fair Value (per share) Units Weighted Average Grant Date Fair Value (per share) Nonvested awards January 1, 13,126 $ 65.83 — N/A Granted 15,931 $ 72.46 16,267 $ 65.83 Vested — — Undistributed vested awards (a) ( 1,687 ) $ 72.46 ( 3,141 ) $ 65.83 Nonvested awards December 31, 27,370 $ 69.28 13,126 $ 65.83 (a) Represents restricted stock units that vested but were not distributed to retirement-eligible employees. Restricted Stock Units - Liability Awards - Payouts of restricted stock units granted prior to 2021 are based on the expiration of a three-year time-vesting period and will be paid out in cash and accounted for as a liability award. Compensation expense is recorded ratably over the performance period based on the fair value of the awards at each reporting period. The following activity occurred: 2022 2021 Nonvested awards January 1, 6,064 7,003 Granted — — Vested ( 6,064 ) — Undistributed vested awards (b) — ( 939 ) Nonvested awards December 31, — 6,064 (b) Represents restricted stock units that vested but were not distributed to retirement-eligible employees. Performance Units - Liability Awards - Performance units under the 2020 Plan entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend-equivalent payments thereon. Performance units under the 2021 Incentive Plan can be paid out in shares of MGE Energy common stock, cash or a combination of cash and stock. MGE assumes it will make future payouts of its performance units granted in cash; therefore, these performance units are accounted for as liability awards. Compensation expense for these performance units is recorded ratably over the performance period based on the fair value of the awards at each reporting period. The payout is based upon achievement of specified performance goals during a performance period set by the Compensation Committee of MGE Energy's Board of Directors. Awards are subject to vesting provisions providing for 100% vesting at the end of the performance period. Compensation cost for retirement eligible employees or employees that will become retirement eligible during the vesting schedule are recognized on an abridged horizon as retirement eligibility accelerates vesting. The performance units contain market and performance conditions. The market condition is based on total shareowner return relative to an investor-owned utility peer group. The performance condition is based on achievement of targets specified in the award agreement (such as an earnings growth target). The fair value of each performance unit is based on the fair value of the underlying common stock on the grant date and the probability of satisfying the market and performance conditions contained in the award agreement during the three -year performance period. The actual payments upon vesting depends upon actual performance and may range from zero to 200 % of the granted number of performance units. The following activity occurred : 2022 2021 Nonvested awards January 1, 13,870 7,003 Granted 10,395 10,187 Vested ( 6,064 ) — Undistributed vested awards (c) ( 1,687 ) ( 3,320 ) Nonvested awards December 31, 16,514 13,870 Weighted average fair Value of each nonvested award $ 76.87 $ 104.76 Weighted average estimated payout % based on performance criteria 109.2 % 127.4 % (c) Represents performance units that vested but were not distributed to retirement-eligible employees. |
Notes Payable to Banks, Commerc
Notes Payable to Banks, Commercial Paper, and Lines of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Short-Term Debt [Text Block] | 13. Notes Payable to Ban ks, Commercial Paper, and Lines of Credit - MGE Energy and MGE. Information regarding lines of credit and short-term borrowings is shown below: (In thousands) MGE Energy (a) MGE As of December 31, 2022 2021 2022 2021 Lines of credit (b) $ 150,000 $ 150,000 $ 100,000 $ 100,000 Available capacity under line of credit $ 78,815 $ 143,815 $ 28,815 $ 93,815 Short-term debt outstanding $ 70,500 $ 5,500 $ 70,500 $ 5,500 Letters of credit issued inside credit facilities $ 685 $ 685 $ 685 $ 685 Required ratio of consolidated debt to 65.00 % (c) 65.00 % (c) 65.00 % (d) 65.00 % (d) Weighted-average interest rate 4.32 % 0.15 % 4.32 % 0.15 % Year Ended December 31, Maximum short-term borrowings $ 70,500 $ 64,000 $ 70,500 $ 64,000 Average short-term borrowings $ 20,177 $ 28,583 $ 20,177 $ 28,583 Weighted-average interest rate 3.46 % 0.15 % 3.46 % 0.15 % (a) MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper. (b) In November 2022, MGE Energy and MGE amended and restated their existing credit agreements, which extended their maturity dates to November 8, 2027. In January 2023, MGE amended one of its existing credit agreements to increase the available credit by an additional $ 30 million. As of December 31, 2022, MGE Energy and MGE had no borrowings outstanding under these credit facilities and were in compliance with the covenant requirements of the credit agreements. (c) A change in control constitutes a default under the agreement. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. (d) The ratio calculation excludes assets, liabilities, revenues, and expenses included in MGE's financial statements as the result of the consolidation of VIEs, such as MGE Power West Campus and MGE Power Elm Road. A change in control constitutes a default under the agreements. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 14. Long-Term De bt - MGE Energy and MGE. a. Long-Term Debt. December 31, (In thousands) 2022 2021 First Mortgage Bonds: (a) 7.70 %, 2028 Series $ 1,200 $ 1,200 Tax Exempt Debt: 2.05 %, 2023 Series, Industrial Development Revenue Bonds 19,300 19,300 Medium-Term Notes: (c) 6.12 %, due 2028 20,000 20,000 7.12 %, due 2032 25,000 25,000 6.247 %, due 2037 25,000 25,000 Total Medium-Term Notes 70,000 70,000 Other Long-Term Debt: (d) 3.09 %, due 2023 (e) 30,000 30,000 3.29 %, due 2026 (e) 15,000 15,000 3.11 %, due 2027 (e) 30,000 30,000 2.94 %, due 2029 (e) 50,000 50,000 2.48 %, due 2031 (e) 60,000 60,000 5.43 %, due 2032 (b)(e) 25,000 — 5.68 %, due 2033 (f) 20,184 21,510 5.19 %, due 2033 (f) 13,237 14,133 2.63 %, due 2033 (e) 40,000 40,000 5.26 %, due 2040 (e) 15,000 15,000 5.04 %, due 2040 (g) 28,472 30,139 4.74 %, due 2041 (g) 18,167 19,167 4.38 %, due 2042 (e) 28,000 28,000 4.42 %, due 2043 (e) 20,000 20,000 4.47 %, due 2048 (e) 20,000 20,000 3.76 %, due 2052 (e) 40,000 40,000 4.19 %, due 2048 (e) 60,000 60,000 4.24 %, due 2053 (e) 20,000 20,000 4.34 %, due 2058 (e) 20,000 20,000 Total Other Long-Term Debt 553,060 532,949 Long-term debt due within one year ( 54,314 ) ( 4,889 ) Unamortized discount and debt issuance costs ( 4,000 ) ( 4,349 ) Total Long-Term Debt $ 585,246 $ 614,211 (a) MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust, under which its first mortgage bonds are issued. The Mortgage Indenture provides that dividends or any other distribution or purchase of MGE shares may not be made if the aggregate amount thereof since December 31, 1945, would exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2022, approximately $ 650.1 million was available for the payment of dividends under this covenant. (b) In November 2022, MGE entered into a private placement Note Purchase Agreement in which it committed to issue $ 25 million of new long-term debt (Series A), $ 15 million of new long-term debt (Series B), carrying an interest rate of 5.43 % per annum over its 10-year life, and $ 35 million of new long-term debt (Series C), carrying an interest rate of 5.53 % per annum over its 12-year life. Funding occurred on December 1, 2022, for Series A and will occur on February 28, 2023, for Series B and Series C. The proceeds of the debt financing will be used to assist with capital expenditures and other corporate obligations. (c) The indenture under which MGE's Medium-Term notes are issued provides that those notes will be entitled to be equally and ratably secured in the event that MGE issues any additional first mortgage bonds. (d) Unsecured notes issued pursuant to various Note Purchase Agreements with one or more purchasers. The notes are not issued under, or governed by, MGE's Indenture dated as of September 1, 1998, which governs MGE's Medium-Term Notes. (e) Issued by MGE. Under that Note Purchase Agreement: (i) note holders have the right to require MGE to repurchase their notes at par in the event of an acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy, (ii) MGE must maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65 %, and (iii) MGE cannot issue "Priority Debt" in an amount exceeding 20 % of its consolidated assets. Priority Debt is defined as any indebtedness of MGE secured by liens other than specified liens permitted by the Note Purchase Agreement and certain unsecured indebtedness of certain subsidiaries. As of December 31, 2022 , MGE was in compliance with the covenant requirements. (f) Issued by MGE Power West Campus. The Note Purchase Agreements require MGE Power West Campus to maintain a projected debt service coverage ratio of not less than 1.25 to 1.00, and debt to total capitalization ratio of not more than 0.65 to 1.00. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power West Campus for use of the WCCF pursuant to a long-term lease. As of December 31, 2022 , MGE Power West Campus was in compliance with the covenant requirements. (g) Issued by MGE Power Elm Road. The Note Purchase Agreement requires MGE Power Elm Road to maintain a projected and actual debt service coverage ratio at the end of any calendar quarter of not less than 1.25 to 1.00 for the trailing 12-month period. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power Elm Road for use of the Elm Road Units pursuant to long-term leases. As of December 31, 2022 , MGE Power Elm Road was in compliance with the covenant requirements. b. Long-Term Debt Maturities. Below is MGE Energy's and MGE's aggregate maturities for all long-term debt for years following December 31, 2022. (In thousands) 2023 2024 2025 2026 2027 Thereafter Long-term debt maturities $ 54,314 $ 5,146 $ 5,285 $ 20,433 $ 35,588 $ 522,794 MGE includes long-term debt held by MGE Power Elm Road and MGE Power West Campus in the consolidated financial statements (see Footnote 3 for further information regarding these VIEs). |
Common Equity
Common Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 15. Common Equ ity. a. Common Stock - MGE Energy and MGE. MGE Energy sells shares of its common stock through its Direct Stock Purchase and Dividend Reinvestment Plan (the Stock Plan). Those shares may be newly issued shares or shares that are purchased in the open market by an independent agent for participants in the Stock Plan. Sales of newly issued shares under the Stock Plan are covered by a shelf registration statement that MGE Energy filed with the SEC. For the years ended December 31, 2022 and 2021 , MGE Energy issued no new shares of common stock under the Stock Plan. For the years ended December 31, 2022 and 2021, MGE Energy paid $ 57.5 million (or $ 1.59 per share) and $ 54.8 million (or $ 1.52 per share), respectively, in cash dividends on its common stock. Dividend payments by MGE to MGE Energy are subject to restrictions arising under a PSCW rate order and, to a lesser degree, MGE's first mortgage bonds. The PSCW order restricts any dividends, above the PSCW authorized amount that MGE may pay MGE Energy if MGE's common equity ratio, calculated in the manner used in the rate proceeding, is less than 55 %. This restriction did not restrict MGE's payment of dividends in 2022. See Footnote 14 for further discussion of the mortgage indenture covenants regarding the payment of dividends. For the years ended December 31, 2022 and 2021, MGE paid $ 33.5 million and $ 5.0 million, respectively, in cash dividends to MGE Energy. b. Dilutive Shares Calculation - MGE Energy. As of December 31, 2022, 10,949 shares were included in the calculation of diluted earnings per share related to nonvested equity awards. See Footnote 12 for additional information on shared-based compensation awards. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Contingencies and Guarantees [Text Block] | 16. Commitments and Contin gencies. a. Environmental - MGE Energy and MGE. Columbia In February 2021, MGE and the other co-owners of Columbia announced plans to retire that facility. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. Effects of environmental compliance discussed below will depend upon the final retirement dates approved and compliance requirement dates. Water Quality Water quality regulations promulgated by the EPA and WDNR in accordance with the Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), impose restrictions on discharges of various pollutants into surface waters. The CWA also regulates surface water quality issues that affect aquatic life, such as water temperatures, chemical concentrations, intake structures, and wetlands filling into Waters of the U.S. (WOTUS), defined by EPA regulation. The CWA also includes discharge standards, which require the use of effluent-treatment processes equivalent to categorical "best practicable" or "best available" technologies. The CWA regulates discharges from "point sources," such as power plants, by establishing discharge limits via water discharge permits. MGE's power plants operate under Wisconsin Pollution Discharge Elimination System (WPDES) permits issued by the WDNR to ensure compliance with these discharge limits. Permits are subject to periodic renewal. Effluent Limitations Guidelines and Standards for Steam Electric Power Generating Point Source Category The EPA has promulgated water Effluent Limitations Guidelines (ELG) and standards for steam electric power plants which focus on the reduction of metals and other pollutants in wastewater from new and existing power plants. In July 2021, the PSCW approved a Certificate of Authority (CA) application, filed by MGE and the other owners of Columbia. The CA application commits to close Columbia's wet pond system (as described in further detail in the CCR section below). By committing to close the wet pond system, Columbia will be in compliance with ELG requirements. The Elm Road Units must satisfy the ELG rule's requirements no later than December 2023, as determined by the permitting authority. In December 2021, the PSCW approved a CA application for installation of additional wastewater treatment equipment to comply with the ELG rule. MGE's share of the costs to comply with the rule is estimated to be approximately $ 4 million. Construction began in March 2022 and is scheduled to be completed by the end of 2023. Based on previous treatment of environmental compliance projects, management believes that any compliance costs will be recovered in future rates. Cooling Water Intake Rules (Section 316(b)) Section 316(b) of the Clean Water Act require cooling water intake structures at electric power plants meet best available technology (BTA) standards to reduce mortality from entrainment (drawing aquatic life into a plant's cooling system) and impingement (trapping aquatic life on screens). The EPA finalized its Section 316(b) rule for existing facilities in 2014. Section 316(b) requirements are implemented in Wisconsin through modifications to plants' WPDES permits, which govern plant wastewater discharges. WCCF, Blount, and Columbia are considered existing plants under this rule. WCCF employs a system that meets the Section 316(b) rule. Blount's WPDES permit assumes that the plant meets BTA standards for the duration of the permit, which expires in 2023. Before the next permit renewal, MGE is required to complete an entrainment study and recommend a BTA along with alternative technologies considered. MGE completed the entrainment study in 2021 and submitted the results to the WDNR. The WDNR will make the final BTA determination and include any BTA requirements in Blount's next permit renewal, which is expected to be completed and effective in 2023. Management believes that the BTA determination at Blount will not be material for MGE. Intakes at the Columbia plant are subject to this rule. Columbia's operator received a permit in 2019 requiring studies of intake structures to be submitted to the WDNR by November 2023 to help determine BTA. BTA improvements may not be required given that Columbia is scheduled to retire both units by June 2026. MGE will continue to work with Columbia's operator to evaluate all regulatory requirements applicable to the planned retirements. Management believes that the Section 316(b) rule will not have a material effect on its existing plants and that any compliance costs will be recovered in future rates based on previous treatment of environmental compliance projects. Air Quality Federal and state air quality regulations impose restrictions on various emissions, including emissions of particulate matter (PM), sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), and other pollutants, and require permits for operation of emission sources. These permits have been obtained by MGE and must be renewed periodically. Current EPA initiatives under the Clean Air Act, including the Cross-State Air Pollution Rule (CSAPR) and National Ambient Air Quality Standards (NAAQS), have the potential to result in additional operating and capital expenditure costs for MGE. Greenhouse Gas (GHG) Reduction Guidelines under the Clean Air Act 111(d) Rule WCCF, the Elm Road Units, Blount, and Columbia could be impacted by GHG reduction guidelines and approval criteria established under the Clean Air Act for the control of GHG emissions from fossil fuel-fired electric generating units (EGUs). The EPA is undertaking a new rulemaking under section 111(d) of the Clean Air Act to establish emission guidelines and limit GHG emissions from existing fossil fuel-fired EGUs. The EPA is also conducting a comprehensive review of the New Source Performance Standards (NSPS) and may set new emission standards for GHG emissions from new, modified, and/or reconstructed fossil fuel-fired power plants. The EPA anticipates issuing a proposed rule in spring 2023 and promulgating a final rule by summer 2024. MGE will continue to evaluate greenhouse gas rule developments, including any new EPA actions towards rule development, and any further court decisions on the EPA's authority to regulate greenhouse gases. National Ambient Air Quality Standards (NAAQS) and Related Rules The EPA's NAAQS regulations have been developed to set ambient levels of six pollutants to protect sensitive human populations (primary NAAQS) and the environment (secondary NAAQS) from the negative effects of exposure to these pollutants at higher levels. The Clean Air Act requires that the EPA periodically review, and adjust as necessary, the NAAQS for these six air pollutants. The EPA's NAAQS review can result in a lowering of the allowed ambient levels of a pollutant, a change in how the pollutant is monitored, and/or a change in which sources of that pollutant are regulated. States implement any necessary monitoring and measurement changes and recommend areas for attainment (meets the ambient requirements) or nonattainment (does not meet these standards). The EPA makes final attainment and nonattainment determinations. States must come up with a State Implementation Plan (SIP) to get nonattainment areas into attainment and maintain air quality in attainment areas. A company with facilities located in a nonattainment area will be most affected. Its facilities in nonattainment areas may be subject to additional data submission and emission measurement requirements during permitting renewals, its facilities may need to meet new emission limitations set by the SIP (which could result in significant capital expenditures), and it may have additional expenses and/or difficulties expanding existing facilities or building new facilities. The process, which starts with determining acceptable primary and/or secondary NAAQS and ends with executing SIPs can take years. Since the NAAQS regulations have the potential to affect both existing and new facilities, MGE continuously monitors changes to these rules to evaluate whether changes could impact its operations. In addition, the EPA has adopted interstate transport rules, such as CSAPR, to address contributions to NAAQS nonattainment from upwind sources in neighboring states. In the following paragraphs we discuss specific NAAQS and transport rule developments that may affect MGE. Ozone NAAQS The Elm Road Units are located in Milwaukee County, Wisconsin, a nonattainment area. In October 2022, the EPA reclassified Milwaukee County from "marginal" to "moderate" nonattainment under the 2015 ozone NAAQS. The Wisconsin Department of Natural Resources (WDNR) must develop a SIP for the area, and this reclassification will result in more stringent SIP requirements for both constructing new development and modifying or expanding existing plants in the area. The deadline for moderate classified areas to meet attainment standards is August 2024. MGE will continue to monitor the WDNR's SIP development and the extent to which the requirements will impact the Elm Road Units. At this time, the operator of the Elm Road Units does not expect that the 2015 Ozone NAAQS will have a material effect on its existing plants based on final designations. Fine Particulate Matter (PM2.5) NAAQS In January 2023, the EPA published a proposed rule to lower the average annual PM2.5 NAAQS from its current level. The EPA has also solicited comments on whether to lower the annual standard further than the proposed level, and whether or not to also lower the maximum 24-hour limit to be consistent with recommendations from its Clean Air Scientific Advisory Committee (CASAC). As the rule is currently proposed, the annual PM2.5 NAAQS and the 24-hour limit recommended by the CASAC is not expected to impact the counties where Columbia and the Elm Road Units are located. However, if the annual PM2.5 NAAQS is lowered further than the EPA's currently proposed value, the county where the Elm Road Units are located may be in nonattainment with the standard. A nonattainment designation would require the State of Wisconsin to develop a plan to get into attainment. However, we will not know the impact of this rule with any certainty until it is finalized, counties' attainment status is determined by the EPA, and the State of Wisconsin develops an attainment implementation plan. MGE will continue to follow the rule's developments. Cross-State Air Pollution Rule The EPA's CSAPR and its progeny are a suite of interstate air pollution transport rules designed to reduce ozone and fine PM2.5 ambient air levels in areas that the EPA has determined as being significantly impacted by pollution from upwind states. This is accomplished in the CSAPR through a reduction in SO 2 and NO x from qualifying fossil-fuel fired power plants in upwind "contributing" states. NO x and SO 2 contribute to fine particulate pollution and NO x contributes to ozone formation in downwind areas. Reductions are achieved through a cap-and-trade system. Individual plants can meet their caps through reducing emissions and/or buying allowances on the market. In April 2022, the EPA published a proposed Federal Implementation Plan (FIP) to address state obligations under the Clean Air Act "good neighbor" provisions for the 2015 Ozone NAAQS. This proposed rule impacts 26 states, including Wisconsin, and is designed to both revise the current NO x CSAPR ozone season cap-and-trade obligations for fossil-fuel generated power plants and add NO x limitations for certain industries in specified states. For Wisconsin, the proposed rule includes revisions to the current obligations for fossil-fuel power generation as well as the new limitations for certain industries. If finalized, the proposed rule would be effective beginning with the 2023 ozone season and start with emissions budgets that can be achieved with what the EPA has defined as immediately available measures, including consistently operating emissions controls already installed at power plants. In 2026, additional obligations would go into effect, including potential daily emissions limits and technology upgrades to coal-fired power plants without existing emission controls. Wisconsin would need to submit a SIP to meet its obligations or accept the EPA's proposed FIP. MGE expects the rule, if finalized as written, to impact our fossil-fueled generation assets. However, we will not know the impact of this rule with any certainty until it is finalized. We will continue to monitor rule developments. Clean Air Visibility Rule (CAVR) Columbia is subject to the best available retrofit technology (BART) regulations, a subsection of CAVR, which may require pollution control retrofits. Columbia's existing pollution control upgrades, and the EPA's stance that compliance with the CSAPR equals compliance with BART, should mean that Columbia will not need to do additional work to meet BART requirements. Wisconsin's 2021 SIP argues that Wisconsin will meet its current regional haze goals based on expected emissions reductions, which include Columbia unit retirements. Given that the Wisconsin SIP recognizes the Columbia unit retirements as part of its emission reduction plan, MGE does not anticipate further obligations with this rule at Columbia. MGE will continue to monitor legal developments and any future updates to this rule. Solid Waste Coal Combustion Residuals Rule The CCR rule regulates as a solid waste coal ash from burning coal for the purpose of generating electricity and defines what ash use activities would be considered generally exempt beneficial reuse of coal ash. The CCR rule also regulates landfills, ash ponds, and other surface impoundments used for coal combustion residuals by regulating their design, location, monitoring, and operation. The CCR rule requires owners or operators of coal-fired power plants to stop transporting CCR and non-CCR wastewater to unlined surface impoundments. In addition, regulated entities must initiate impoundment closure as soon as feasible and in no event later than April 2021, unless the EPA grants an extension. A site-specific extension to initiate closure of the primary ash pond at Columbia by March 31, 2023, was requested. The EPA has not formally approved the extension. In July 2021, the PSCW approved a CA application filed by MGE and the other owners of Columbia to install technology required to cease bottom ash transport water discharges rather than extend the longevity of the ash ponds. The coal combustion residuals system that will replace the unlined surface impoundment is undergoing final testing. Construction is expected to be completed by the end of the first quarter of 2023. MGE's share of the costs of the project is expected to be approximately $ 4 million. Review of the Elm Road Units has indicated that the costs to comply with the CCR rule are not expected to be significant. b. Legal Matters - MGE Energy and MGE. MGE is involved in various legal matters that are being defended and handled in the normal course of business. MGE maintains accruals for such costs that are probable of being incurred and subject to reasonable estimation. The accrued amount for these matters is not material to the financial statements. MGE does not expect the resolution of these matters to have a material adverse effect on its consolidated results of operations, financial condition, or cash flows. Certain environmental groups have filed petitions against the PSCW regarding MGE's rate settlement and electric limited reopener. MGE has intervened in the petitions in cooperation with the PSCW. See Footnote 9.a. for more information regarding this matter. c. Purchase Contracts - MGE Energy and MGE. MGE Energy and MGE have entered into various commodity supply, transportation, and storage contracts to meet their obligations to deliver electricity and natural gas to customers. Management expects to recover these costs in future customer rates. As of December 31, 2022, the future minimum commitments related to these purchase contracts were as follows: (In thousands) 2023 2024 2025 2026 2027 Thereafter Coal (a) $ 23,886 $ 17,104 $ 7,782 $ 2,868 $ — $ — Natural gas Transportation and storage (b) 25,446 25,446 25,446 14,736 1,892 10,549 Supply (c) 30,778 — — — — — Purchase power (d) 5,513 5,623 5,735 5,850 5,967 266 Renewable energy (e) 25,024 2,025 2,040 2,056 2,072 26,592 Other 6,105 2,224 350 359 108 689 $ 116,752 $ 52,422 $ 41,353 $ 25,869 $ 10,039 $ 38,096 (a) Total coal commitments for MGE's share of the Columbia and Elm Road Units, including transportation. Fuel procurement for MGE's jointly owned Columbia and Elm Road Units is handled by WPL and WEPCO, respectively, who are the operators of those facilities. (b) MGE's natural gas transportation and storage contracts require fixed monthly payments for firm supply pipeline transportation and storage capacity. The pricing components of the fixed monthly payments for the transportation and storage contracts are approved by FERC but may be subject to change. (c) These commitments include market-based pricing. (d) MGE has a purchase power agreement to help meet future electric supply requirements. (e) Operational commitments for solar and wind facilities. d. Other Commitments. MGE Energy holds investments in nonpublic venture capital funds. From time to time, these entities require additional capital infusions from their investors. MGE Energy has committed to contribute $ 8.0 million in capital for such infusions. The timing of these infusions is dependent on the needs of the investee and is therefore uncertain at this time. In addition, MGE Energy has a three -year agreement with a venture debt fund expiring in December 2025. MGE Energy has committed to invest up to a total of $ 1.5 million into this fund. As of December 31, 2022 , MGE Energy has $ 0.9 million remaining in commitments. The timing of infusions is dependent on the needs of the fund and is therefore uncertain at this time. MGE has several other commitments related to various projects. Payments for these commitments are expected to be as follows: (In thousands) 2023 2024 2025 2026 2027 Thereafter Other commitments $ 333 $ 333 $ 333 $ 333 $ 333 $ 2,332 |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Disclosure [Text Block] | 17. Asset Retirement Obliga tions - MGE Energy and MGE. MGE recorded an obligation for the fair value of its legal liability for asset retirement obligations (AROs) associated with removal of the West Campus Cogeneration Facility and the Elm Road Units, electric substations, combustion turbine generating units, wind generating facilities, and solar generating facilities, all of which are located on property not owned and would need to be removed upon the ultimate end of the associated leases. The significant conditional AROs identified by MGE included the costs of abandoning in place gas services and mains, the abatement and disposal of equipment and buildings contaminated with asbestos and PCBs, and the proper disposal and removal of tanks, batteries, and underground cable. Changes in management's assumptions regarding settlement dates, settlement methods, or assigned probabilities could have a material effect on the liabilities and the associated regulatory asset recorded as of December 31, 2022. MGE also may have AROs relating to the removal of various assets, such as certain electric and gas distribution facilities. These facilities are generally located on property owned by third parties, on which MGE is permitted to operate by lease, permit, easement, license, or service agreement. The asset retirement obligations associated with these facilities cannot be reasonably determined due to the indeterminate life of the related agreements. The following table summarizes the change in AROs. Amounts include conditional AROs . (In thousands) 2022 2021 Balance as of January 1, $ 46,580 $ 31,196 Liabilities incurred (a) 1,947 8,589 Accretion expense 1,909 1,526 Liabilities settled ( 317 ) ( 354 ) Revisions in estimated cash flows (b) 141 5,623 Balance as of December 31, $ 50,260 $ 46,580 (a) In 2021, MGE recorded an obligation of $ 4.9 million and $ 3.4 million, respectively, for the fair value of its legal liability for AROs associated with Badger Hollow I and other completed renewable projects. See Footnote 6 for additional information on Badger Hollow I . (b) In 2021, MGE revised the AROs associated with certain Columbia assets. |
Derivative and Hedging Instrume
Derivative and Hedging Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 18. Derivative and Hedging Instruments - MGE Energy and MGE. a. Purpose. As part of its regular operations, MGE enters into contracts, including options, swaps, futures, forwards, and other contractual commitments, to manage its exposure to commodity prices. To the extent that these contracts are derivatives, MGE assesses whether or not the normal purchases or normal sales exclusion applies. For contracts to which this exclusion cannot be applied, the derivatives are recognized in the consolidated balance sheets at fair value. MGE's financial commodity derivative activities are conducted in accordance with its electric and gas risk management program, which is approved by the PSCW and limits the volume MGE can hedge with specific risk management strategies. The maximum length of time over which cash flows related to energy commodities can be hedged is four years. If the derivative qualifies for regulatory deferral, the derivatives are marked to fair value and are offset with a corresponding regulatory asset or liability depending on whether the derivative is in a net loss or net gain position, respectively. The deferred gain or loss is recognized in earnings in the delivery month applicable to the instrument. Gains and losses related to hedges qualifying for regulatory treatment are recoverable in gas rates through the PGA or in electric rates as a component of the fuel rules mechanism. b. Notional Amounts. The gross notional volume of open derivatives is as follows: December 31, 2022 December 31, 2021 Commodity derivative contracts 353,600 MWh 278,000 MWh Commodity derivative contracts 8,070,000 Dth 5,735,000 Dth FTRs 1,945 MW 2,127 MW PPA — MW 250 MW c. Financial Statement Presentation. MGE purchases and sells exchange-traded and over-the-counter options, swaps, and future contracts. These arrangements are primarily entered into to help stabilize the price risk associated with gas or power purchases. These transactions are employed by both MGE's gas and electric segments. Additionally, as a result of the firm transmission agreements that MGE holds on electricity transmission paths in the MISO market, MGE holds financial transmission rights (FTRs). An FTR is a financial instrument that entitles the holder to a stream of revenues or charges based on the differences in hourly day-ahead energy prices between two points on the transmission grid. The fair values of these instruments are offset with a corresponding regulatory asset/liability depending on whether they are in a net loss/gain position. Depending on the nature of the instrument, the gain or loss associated with these transactions will be reflected as cost of gas sold, fuel for electric generation, or purchased power expense in the delivery month applicable to the instrument. As of December 31, 2022, the cost basis of exchange traded derivatives and FTRs exceeded their fair value by $ 5.1 million. As of December 31, 2021, the fair value of exchange traded derivatives and FTRs exceeded their cost basis by $ 2.8 million. MGE was a party to a purchased power agreement that provided MGE with firm capacity and energy during a base term from June 1, 2012, through May 31, 2022. The agreement was accounted for as a derivative contract and was recognized at its fair value on the consolidated balance sheets. However, the derivative qualified for regulatory deferral and was recognized with a corresponding regulatory asset or liability depending on whether the fair value was in a loss or gain position. The actual cost was recognized in purchased power expense in the month of purchase. The following table summarizes the fair value of the derivative instruments on the consolidated balance sheets. All derivative instruments in this table are presented on a gross basis and are calculated prior to the netting of instruments with the same counterparty under a master netting agreement as well as the netting of collateral. For financial statement purposes, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral. (In thousands) Derivative Derivative Balance Sheet Location December 31, 2022 Commodity derivative contracts (a) $ 2,164 $ 7,687 Other current liabilities Commodity derivative contracts (a) 802 476 Other deferred liabilities and other FTRs 103 — Other current assets December 31, 2021 Commodity derivative contracts (b) $ 2,959 $ 811 Other current assets Commodity derivative contracts (b) 420 38 Other deferred charges FTRs 227 — Other current assets PPA N/A 2,140 Other current liabilities (a) As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. (b) As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. The following tables show the effect of netting arrangements for recognized derivative assets and liabilities that are subject to a master netting arrangement or similar arrangement on the consolidated balance sheets. Offsetting of Derivative Assets (In thousands) Gross Gross Amounts Collateral Posted Net Amount December 31, 2022 Commodity derivative contracts $ 2,966 $ ( 2,966 ) $ — $ — FTRs 103 — — $ 103 December 31, 2021 Commodity derivative contracts $ 3,379 $ ( 849 ) $ ( 1,254 ) $ 1,276 FTRs 227 — — 227 Offsetting of Derivative Liabilities (In thousands) Gross Gross Amounts Collateral Posted Net Amount December 31, 2022 Commodity derivative contracts $ 8,163 $ ( 2,966 ) $ ( 5,197 ) $ — December 31, 2021 Commodity derivative contracts $ 849 $ ( 849 ) $ — $ — PPA 2,140 — — 2,140 The following tables summarize the unrealized and realized gains/losses related to the derivative instruments on the consolidated balance sheets and the consolidated statements of income. 2022 2021 Current and Other Current and Other (In thousands) Balance as of January 1, $ ( 617 ) $ 770 $ 13,989 $ 1,162 Unrealized gain ( 9,527 ) — ( 23,173 ) — Realized gain (loss) reclassified to a deferred account 1,472 ( 1,472 ) 2,563 ( 2,563 ) Realized gain reclassified to income statement 13,766 3,449 6,004 2,171 Balance as of December 31, $ 5,094 $ 2,747 $ ( 617 ) $ 770 Realized Losses (Gains) 2022 2021 (In thousands) Fuel for Electric Generation/ Purchased Power Cost of Gas Sold Fuel for Electric Generation/ Purchased Power Cost of Gas Sold Year Ended December 31: Commodity derivative contracts $ ( 14,806 ) $ ( 350 ) $ ( 3,948 ) $ ( 1,700 ) FTRs 583 — ( 605 ) — PPA ( 2,642 ) — ( 1,922 ) — MGE's commodity derivative contracts, FTRs, and PPA are subject to regulatory deferral. These derivatives are marked to fair value and are offset with a corresponding regulatory asset or liability. Realized gains and losses are deferred on the consolidated balance sheets and are recognized in earnings in the delivery month applicable to the instrument. As a result of the treatment described above, there are no unrealized gains or losses that flow through earnings. Certain counterparties extend MGE a credit limit. If MGE exceeds these limits, the counterparties may require collateral to be posted. As of December 31, 2022 and 2021 , no counterparties were in a net liability position. Nonperformance of counterparties to the non-exchange traded derivatives could expose MGE to credit loss. However, MGE enters into transactions only with companies that meet or exceed strict credit guidelines, and it monitors these counterparties on an ongoing basis to mitigate nonperformance risk in its portfolio. As of December 31, 2022 , no counterparties had defaulted. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | 19. Fair Value of Financial Instru ments - MGE Energy and MGE. Fair value is defined as the price that would be received to sell an asset or would be paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The accounting standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability including assumptions about risk. The standard also establishes a three-level fair value hierarchy based upon the observability of the assumptions used and requires the use of observable market data when available. The levels are: Level 1 - Pricing inputs are quoted prices within active markets for identical assets or liabilities. Level 2 - Pricing inputs are quoted prices within active markets for similar assets or liabilities; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations that are correlated with or otherwise verifiable by observable market data. Level 3 - Pricing inputs are unobservable and reflect management's best estimate of what market participants would use in pricing the asset or liability. a. Fair Value of Financial Assets and Liabilities Recorded at the Carrying Amount. The carrying amount of cash, cash equivalents, and outstanding commercial paper approximates fair market value due to the short maturity of those investments and obligations. The estimated fair market value of long-term debt is based on quoted market prices for similar financial instruments. Since long-term debt is not traded in an active market, it is classified as Level 2. The estimated fair market value of financial instruments are as follows: December 31, 2022 December 31, 2021 (In thousands) Carrying Amount Fair Carrying Amount Fair Long-term debt (a) $ 643,560 $ 571,374 $ 623,449 $ 729,914 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.0 million and $ 4.3 million as of December 31, 2022 and 2021 , respectively. b. Recurring Fair Value Measurements. The following table presents the balances of assets and liabilities measured at fair value on a recurring basis. Fair Value as of December 31, 2022 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 3,069 $ 1,353 $ — $ 1,716 Exchange-traded investments 1,516 1,516 — — Total Assets $ 4,585 $ 2,869 $ — $ 1,716 Liabilities: Derivatives, net (b) $ 8,163 $ 5,581 $ — $ 2,582 Deferred compensation 4,743 — 4,743 — Total Liabilities $ 12,906 $ 5,581 $ 4,743 $ 2,582 MGE Assets: Derivatives, net (b) $ 3,069 $ 1,353 $ — $ 1,716 Exchange-traded investments 115 115 — — Total Assets $ 3,184 $ 1,468 $ — $ 1,716 Liabilities: Derivatives, net (b) $ 8,163 $ 5,581 $ — $ 2,582 Deferred compensation 4,743 — 4,743 — Total Liabilities $ 12,906 $ 5,581 $ 4,743 $ 2,582 Fair Value as of December 31, 2021 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (c) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 1,296 1,296 — — Total Assets $ 4,902 $ 2,466 $ — $ 2,436 Liabilities: Derivatives, net (c) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 MGE Assets: Derivatives, net (c) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 230 230 — — Total Assets $ 3,836 $ 1,400 $ — $ 2,436 Liabilities: Derivatives, net (c) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 (b) As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. (c) As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. Investments include exchange-traded investment securities valued using quoted prices on active exchanges and are therefore classified as Level 1. The deferred compensation plan allows participants to defer certain cash compensation into a notional investment account. These amounts are included within other deferred liabilities in the consolidated balance sheets. The notional investments earn interest based upon the semiannual rate of U.S. Treasury Bills having a 26 -week maturity increased by 1 % compounded monthly with a minimum annual rate of 7 %, compounded monthly. The notional investments are based upon observable market data, however, since the deferred compensation obligations themselves are not exchanged in an active market, they are classified as Level 2. Derivatives include exchange-traded derivative contracts, over-the-counter transactions, a purchased power agreement, and FTRs. Most exchange-traded derivative contracts are valued based on unadjusted quoted prices in active markets and are therefore classified as Level 1. A small number of exchange-traded derivative contracts are valued using quoted market pricing in markets with insufficient volumes and are therefore considered unobservable and classified as Level 3. Transactions done with an over-the-counter party are on inactive markets and are therefore classified as Level 3. These transactions are valued based on quoted prices from markets with similar exchange-traded transactions. FTRs are priced based upon monthly auction results for identical or similar instruments in a closed market with limited data available and are therefore classified as Level 3. The purchased power agreement, with a term ended May 2022, (see Footnote 18 ) was valued using an internal pricing model and therefore was classified as Level 3. The model projected future market energy prices and compared those prices to the projected power costs to be incurred under the contract. Inputs to the model required significant management judgment and estimation. Future energy prices were based on a forward power pricing curve using exchange-traded contracts in the electric futures market. A basis adjustment was applied to the market energy price to reflect the price differential between the market price delivery point and the counterparty delivery point. The historical relationship between the delivery points was reviewed and a discount (below 100%) or premium (above 100%) was derived. This comparison was done for both peak times when demand was high and off peak times when demand was low. If the basis adjustment was lowered, the fair value measurement would decrease, and if the basis adjustment was increased, the fair value measurement would increase. The projected power costs anticipated to be incurred under the purchased power agreement were determined using many factors, including historical generating costs, future prices, and expected fuel mix of the counterparty. An increase in the projected fuel costs resulted in a decrease in the fair value measurement of the purchased power agreement. A significant input that MGE estimated was the counterparty's fuel mix in determining the projected power cost. MGE also considered the assumptions that market participants would use in valuing the asset or liability. This consideration included assumptions about market risk such as liquidity, volatility, and contract duration. The fair value model used a discount rate that incorporated discounting, credit, and model risks. The following table presents the significant unobservable inputs used in the pricing model. Significant Unobservable Inputs 2021 Basis adjustment: On peak 94.1 % Off peak 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % Internal generation - weighted average 56.6 % Purchased power - range 59 %- 34 % Purchased power - weighted average 43.4 % The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis. (In thousands) 2022 2021 2020 Balance as of January 1, $ 178 $ ( 14,055 ) $ ( 26,456 ) Realized and unrealized gains (losses): Included in regulatory assets ( 1,044 ) — 12,402 Included in regulatory liability — 14,234 — Included in other comprehensive income — — — Included in earnings 14,140 5,521 ( 6,439 ) Included in current assets 118 237 ( 87 ) Purchases 11,997 26,287 22,232 Sales — — — Issuances — — — Settlements ( 26,255 ) ( 32,046 ) ( 15,707 ) Balance as of December 31, $ ( 866 ) $ 178 $ ( 14,055 ) Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities held as of December 31, (d) $ — $ — $ — The following table presents total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis (d). (In thousands) Year Ended December 31, 2022 2021 2020 Purchased power expense $ 14,497 $ 6,192 $ ( 5,888 ) Cost of gas sold expense ( 357 ) ( 671 ) ( 551 ) Total $ 14,140 $ 5,521 $ ( 6,439 ) (d) MGE's exchange-traded derivative contracts, over-the-counter party transactions, purchased power agreement, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 20. Revenue - MGE En ergy and MGE. Revenues disaggregated by revenue source were as follows for the years ended December 31: (In thousands) Electric revenues 2022 2021 2020 Residential $ 161,300 $ 151,646 $ 146,431 Commercial 232,057 210,475 198,043 Industrial 13,303 12,529 11,514 Other-retail/municipal 37,323 35,169 32,915 Total retail 443,983 409,819 388,903 Sales to the market 19,385 9,499 4,015 Other revenues 1,799 968 774 Total electric revenues 465,167 420,286 393,692 Gas revenues Residential 143,544 110,442 88,765 Commercial/Industrial 99,165 68,895 49,682 Total retail 242,709 179,337 138,447 Gas transportation 5,780 6,185 5,713 Other revenues 183 98 101 Total gas revenues 248,672 185,620 144,261 Non-regulated energy revenues 680 678 680 Total Operating Revenue $ 714,519 $ 606,584 $ 538,633 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of contracts have a single performance obligation. Retail Revenue (Residential, Commercial, Industrial, and Other Retail/Municipal) Providing electric and gas utility service to retail customers represents MGE's core business activity. Tariffs are approved by the PSCW through a rate order and provide MGE's customers with the standard terms and conditions, including pricing terms. The performance obligation to deliver electricity or gas is satisfied over time as the customer simultaneously receives and consumes the commodities provided by MGE. MGE recognizes revenues as the commodity is delivered to customers. Meters are read on a systematic basis throughout the month based on established meter-reading schedules and customers are subsequently billed for services received. At the end of the month, MGE accrues an estimate for unbilled commodities delivered to customers. The unbilled revenue estimate is based on daily system demand volumes, weather factors, estimated line losses, estimated customer usage by class, and applicable customer rates. Utility Cost Recovery Mechanisms MGE's tariff rates include a provision for fuel cost recovery. Over-collection of fuel-related costs that are outside the approved range will be recognized as a reduction of revenue. Under-collection of these costs will be recognized in "Purchased power" expense in the consolidated statements of income. The cumulative effects of these deferred amounts will be recorded in "Regulatory assets" or "Regulatory liabilities" on the consolidated balance sheets until they are reflected in future billings to customers. See Footnote 9.b. for further information. MGE also has other cost recovery mechanisms. For example, any over-collection of the difference between actual costs incurred and the amount of costs collected from customers is recorded as a reduction of revenue in the period incurred. Sales to the Market Sales to the market include energy charges, capacity or demand charges, and ancillary charges represented by wholesale sales of electricity made to third parties who are not ultimate users of the electricity. Most of these sales are spot market transactions on the markets operated by MISO. Each transaction is considered a performance obligation and revenue is recognized in the period in which energy charges, capacity or demand charges, and ancillary services are sold into MISO. MGE reports, on a net basis, transactions on the MISO markets in which it buys and sells power within the same hour to meet electric energy delivery requirements. Transportation of Gas MGE has contracts under which it provides gas transportation services to customers who have elected to purchase gas from a third party. MGE delivers this gas via pipelines within its service territory. Revenue is recognized as service is rendered or gas is delivered to customers. Tariffs are approved by the PSCW through a rate order and provide gas transportation customers with standard terms and conditions, including pricing terms. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2022 | |
MGE [Member] | |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest Disclosure [Text Block] | 21. Noncontr olling Interest - MGE. The noncontrolling interest on MGE's consolidated balance sheets was as follows: As of December 31, (In thousands) 2022 2021 MGE Power Elm Road (a) $ 103,333 $ 101,507 MGE Power West Campus (a) 44,830 47,080 Total Noncontrolling Interest $ 148,163 $ 148,587 The net income attributable to noncontrolling interest, net of tax, was as follows for the years ended December 31: (In thousands) 2022 2021 2020 MGE Power Elm Road (a) $ 14,326 $ 15,151 $ 15,184 MGE Power West Campus (a) 7,250 7,240 7,209 Net Income Attributable to Noncontrolling Interest, Net of Tax $ 21,576 $ 22,391 $ 22,393 (a) MGE Power Elm Road and MGE Power West Campus are not subsidiaries of MGE; however, they have been consolidated in the consolidated financial statements of MGE (see Footnote 3 ). MGE Power Elm Road and MGE Power West Campus are 100 % owned by MGE Power, and MGE Power is 100 % owned by MGE Energy. MGE Energy's proportionate share of the equity and net income (through its wholly owned subsidiary MGE Power) of MGE Power Elm Road and MGE Power West Campus is classified within the MGE consolidated financial statements as noncontrolling interest. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 22. Segment Inform ation - MGE Energy and MGE. The electric utility business purchases, generates and distributes electricity, and contracts for transmission service. The gas utility business purchases and distributes natural gas and contracts for the transportation of natural gas. Both the electric and gas segments operate through MGE Energy's principal subsidiary, MGE. The nonregulated energy operations are conducted through MGE Energy's subsidiaries: MGE Power, MGE Power Elm Road, and MGE Power West Campus. These subsidiaries own electric generating capacity that they lease to MGE to assist MGE. MGE Power Elm Road has an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin, which are leased to MGE, and MGE Power West Campus owns a controlling interest in the electric generation plant of a natural gas-fired cogeneration facility on the UW campus. MGE Power West Campus's portion is also leased to MGE. The transmission investment segment invests in ATC, a company that provides electric transmission services primarily in Wisconsin, and ATC Holdco, a company formed to pursue electric transmission development and investments outside of Wisconsin. These investments are held in MGE Transco and MGEE Transco, respectively. See Footnote 7 for further discussion. The "All Others" segment includes: corporate, CWDC, MAGAEL, MGE State Energy Services, MGE Services, and North Mendota. These entities' operations consist of investing in companies and property which relate to the regulated operations, financing the regulated operations. General corporate expenses include the cost of executive management, corporate accounting and finance, information technology, risk management, human resources and legal functions, and employee benefits that are allocated to electric and gas segments based on formulas prescribed by the PSCW. Identifiable assets are those used in MGE's operations in each segment. Sales between our electric and gas segments are based on PSCW approved tariffed rates. Additionally, intersegment operations related to the leasing arrangement between our electric segment and MGE Power Elm Road/MGE Power West Campus are based on terms previously approved by the PSCW. Consistent with internal reporting, management has presented the direct financing capital leases between MGE and MGE Power Elm Road/MGE Power West Campus based on actual lease payments included in rates. Lease payments made by MGE to MGE Power Elm Road and MGE Power West Campus are shown as operating expenses. The lease payments received by MGE Power Elm Road and MGE Power West Campus from MGE are shown as lease income in interdepartmental revenues. The depreciation expense associated with the Elm Road Units and WCCF is reflected in the nonregulated energy segment. The following table shows segment information for MGE Energy's and MGE's operations: (In thousands) Electric Gas Non-Regulated Energy Transmission Investment All Others Consolidation/ Consolidated Total Year Ended December 31, 2022 Operating revenues $ 465,167 $ 248,672 $ 680 $ — $ — $ — $ 714,519 Interdepartmental revenues ( 44 ) 34,073 41,555 — — ( 75,584 ) — Total operating revenues 465,123 282,745 42,235 — — ( 75,584 ) 714,519 Depreciation and amortization ( 62,897 ) ( 15,261 ) ( 7,391 ) — — — ( 85,549 ) Operating income (loss) 77,672 26,261 34,683 — ( 873 ) — 137,743 Interest (expense) income, net ( 17,578 ) ( 4,787 ) ( 4,322 ) — 40 — ( 26,647 ) Income tax (provision) benefit ( 7,299 ) ( 8,492 ) ( 8,272 ) ( 2,490 ) 329 — ( 26,224 ) Equity in earnings of investments — — — 9,136 — — 9,136 Net income (loss) 65,187 18,215 22,090 6,647 ( 1,187 ) — 110,952 Year Ended December 31, 2021 Operating revenues $ 420,286 $ 185,620 $ 678 $ — $ — $ — $ 606,584 Interdepartmental revenues 556 22,728 40,866 — — ( 64,150 ) — Total operating revenues 420,842 208,348 41,544 — — ( 64,150 ) 606,584 Depreciation and amortization ( 56,672 ) ( 12,852 ) ( 7,459 ) — — — ( 76,983 ) Operating income (loss) 58,993 25,133 33,936 — ( 768 ) — 117,294 Interest (expense) income, net ( 15,261 ) ( 4,315 ) ( 4,577 ) — 41 — ( 24,112 ) Income tax (provision) benefit 10,672 ( 4,922 ) ( 7,998 ) ( 2,486 ) 619 — ( 4,115 ) Equity in earnings of investments — — — 9,339 ( 69 ) — 9,270 Net income (loss) 63,910 15,511 21,361 6,852 ( 1,873 ) — 105,761 Year Ended December 31, 2020 Operating revenues $ 393,692 $ 144,261 $ 680 $ — $ — $ — $ 538,633 Interdepartmental revenues 765 12,157 40,402 — — ( 53,324 ) — Total operating revenues 394,457 156,418 41,082 — — ( 53,324 ) 538,633 Depreciation and amortization ( 54,658 ) ( 12,049 ) ( 7,481 ) — — — ( 74,188 ) Operating income (loss) 57,847 19,674 33,460 ( 1 ) ( 983 ) — 109,997 Interest (expense) income, net ( 14,446 ) ( 4,370 ) ( 4,826 ) — 121 — ( 23,521 ) Income tax (provision) benefit ( 4,230 ) ( 4,805 ) ( 7,800 ) ( 2,786 ) 198 — ( 19,423 ) Equity in earnings of investments — — — 10,221 — — 10,221 Net income (loss) 50,522 14,167 20,834 7,434 ( 539 ) — 92,418 (In thousands) Electric Gas Non-Regulated Energy Consolidation/ Elimination Entries Consolidated Total Year Ended December 31, 2022 Operating revenues $ 465,167 $ 248,672 $ 680 $ — $ 714,519 Interdepartmental revenues ( 44 ) 34,073 41,555 ( 75,584 ) — Total operating revenues 465,123 282,745 42,235 ( 75,584 ) 714,519 Depreciation and amortization ( 62,897 ) ( 15,261 ) ( 7,391 ) — ( 85,549 ) Operating income 77,672 26,261 34,683 — 138,616 Interest expense, net ( 17,578 ) ( 4,787 ) ( 4,322 ) — ( 26,687 ) Income tax provision ( 7,299 ) ( 8,492 ) ( 8,272 ) — ( 24,063 ) Net income attributable to MGE 65,187 18,215 22,090 ( 21,576 ) 83,916 Year Ended December 31, 2021 Operating revenues $ 420,286 $ 185,620 $ 678 $ — $ 606,584 Interdepartmental revenues 556 22,728 40,866 ( 64,150 ) — Total operating revenues 420,842 208,348 41,544 ( 64,150 ) 606,584 Depreciation and amortization ( 56,672 ) ( 12,852 ) ( 7,459 ) — ( 76,983 ) Operating income 58,993 25,133 33,936 — 118,062 Interest expense, net ( 15,261 ) ( 4,315 ) ( 4,577 ) — ( 24,153 ) Income tax (provision) benefit 10,672 ( 4,922 ) ( 7,998 ) — ( 2,248 ) Net income attributable to MGE 63,910 15,511 21,361 ( 22,391 ) 78,391 Year Ended December 31, 2020 Operating revenues $ 393,692 $ 144,261 $ 680 $ — $ 538,633 Interdepartmental revenues 765 12,157 40,402 ( 53,324 ) — Total operating revenues 394,457 156,418 41,082 ( 53,324 ) 538,633 Depreciation and amortization ( 54,658 ) ( 12,049 ) ( 7,481 ) — ( 74,188 ) Operating income 57,847 19,674 33,460 — 110,981 Interest expense, net ( 14,446 ) ( 4,370 ) ( 4,826 ) — ( 23,642 ) Income tax provision ( 4,230 ) ( 4,805 ) ( 7,800 ) — ( 16,835 ) Net income attributable to MGE 50,522 14,167 20,834 ( 22,393 ) 63,130 The following table shows segment information for MGE Energy's and MGE's assets and capital expenditures: Utility Consolidated (In thousands) MGE Energy Electric Gas Non-regulated Energy Transmission Investment (a) All Others Consolidation/ Elimination Entries Total Assets: December 31, 2022 $ 1,626,373 $ 530,733 $ 247,841 $ 80,642 $ 467,112 $ ( 435,101 ) $ 2,517,600 December 31, 2021 1,525,163 485,345 252,584 75,990 467,954 ( 435,130 ) 2,371,906 December 31, 2020 1,421,302 444,702 254,298 74,480 495,483 ( 436,614 ) 2,253,651 Capital Expenditures: Year ended Dec. 31, 2022 $ 141,273 $ 27,656 $ 6,101 $ — $ — $ — $ 175,030 Year ended Dec. 31, 2021 115,234 34,071 3,864 — — — 153,169 Year ended Dec. 31, 2020 162,210 36,906 4,023 — — — 203,139 Utility Consolidated (In thousands) Electric Gas Non-regulated Energy Consolidation/ Elimination Entries Total Assets: December 31, 2022 $ 1,626,373 $ 530,733 $ 247,791 $ ( 258 ) $ 2,404,639 December 31, 2021 1,525,163 485,345 252,534 ( 267 ) 2,262,775 December 31, 2020 1,421,302 444,702 254,248 ( 281 ) 2,119,971 Capital Expenditures: Year ended Dec. 31, 2022 $ 141,273 $ 27,656 $ 6,101 $ — $ 175,030 Year ended Dec. 31, 2021 115,234 34,071 3,864 — 153,169 Year ended Dec. 31, 2020 162,210 36,906 4,023 — 203,139 (a) The Transmission Investment segment represents MGE Energy's investment in equity method investees. |
Condensed Parent Company Financ
Condensed Parent Company Financial Statements | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | Schedule I Condensed Parent Company Financial Statements MGE Energy, Inc. Statements of Income (Parent Company Only) (In thousands) For the Years Ended December 31, 2022 2021 2020 Operating Expenses: Other operations and maintenance $ 746 $ 711 $ 882 Total Operating Expenses 746 711 882 Operating Loss ( 746 ) ( 711 ) ( 882 ) Equity in earnings of investments 112,180 107,883 92,922 Other income (loss), net ( 855 ) ( 2,163 ) 94 Interest income, net 2 5 78 Income before income taxes 110,581 105,014 92,212 Income tax provision 371 747 206 Net Income $ 110,952 $ 105,761 $ 92,418 The accompanying notes are an integral part of the above consolidated financial statements. MGE Energy, Inc. Statements of Cash Flows (Parent Company Only) (In thousands) For the Years Ended December 31, 2022 2021 2020 Net Cash Flows Provided by Operating Activities $ 58,253 $ 27,535 $ 27,631 Investing Activities: Contributions to affiliates ( 2,693 ) — ( 32,157 ) Contributions to other investments ( 2,357 ) ( 4,006 ) ( 3,809 ) Other 861 843 622 Cash Used for Investing Activities ( 4,189 ) ( 3,163 ) ( 35,344 ) Financing Activities: Issuance of common stock, net — — 79,635 Cash dividends paid on common stock ( 57,500 ) ( 54,788 ) ( 51,729 ) Other ( 187 ) — — Cash Provided by (Used for) Financing Activities ( 57,687 ) ( 54,788 ) 27,906 Change in cash, cash equivalents, and restricted cash ( 3,623 ) ( 30,416 ) 20,193 Cash, cash equivalents, and restricted cash at beginning of period 6,959 37,375 17,182 Cash, cash equivalents, and restricted cash at end of period $ 3,336 $ 6,959 $ 37,375 The accompanying notes are an integral part of the above consolidated financial statements. Schedule I Condensed Parent Company Financial Statements (continued) MGE Energy, Inc. Balance Sheets (Parent Company Only) (In thousands) As of December 31, ASSETS 2022 2021 Current Assets: Cash and cash equivalents $ 3,336 $ 6,959 Other current assets 1,978 1,681 Total Current Assets 5,314 8,640 Other deferred assets and other 294 244 Investments: Investments in affiliates 1,091,103 1,036,347 Other investments 21,193 18,927 Total Investments 1,112,296 1,055,274 Total Assets $ 1,117,904 $ 1,064,158 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable to affiliates $ 530 $ 548 Other current liabilities 2,017 2,516 Total Current Liabilities 2,547 3,064 Other Credits: Deferred income taxes 32,624 32,014 Accounts payable to affiliates 1,059 1,589 Other deferred liabilities — 23 Total Other Credits 33,683 33,626 Shareholders' Equity: Common shareholders' equity 431,820 431,066 Retained earnings 649,854 596,402 Total Shareholders' Equity 1,081,674 1,027,468 Commitments and contingencies (see Footnote 3) Total Liabilities and Shareholders' Equity $ 1,117,904 $ 1,064,158 The accompanying notes are an integral part of the above consolidated financial statements. Schedule I Condensed Parent Company Financial Statements (continued) Notes to Condensed Financial Statements (Parent Company Only) 1. Basis of Presentation. MGE Energy is a holding company and conducts substantially all of its business operations through its subsidiaries. For Parent Company only presentation, investment in subsidiaries are accounted for using the equity method. These condensed Parent Company financial statements and related notes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the financial statements and the notes in Item 8. Financial Statements and Supplementary Data of the Annual Report on Form 10-K for the year ended December 31, 2022. 2. Credit Agreements. As of December 31, 2022 , MGE Energy had access to an unsecured, committed credit facility with aggregate bank commitments of $ 50.0 million. As of December 31, 2022 , no borrowings were outstanding under this facility. See Footnote 13 of the Notes to Consolidated Financial Statements in this Report for further information regarding MGE Energy's credit agreement. 3. Commitments and Contingencies. See Footnote 16 of the Notes to Consolidated Financial Statements in this Report for information regarding commitments and contingencies. 4. Dividends from Affiliates. Dividends from Affiliates (In thousands) 2022 2021 2020 MGE $ 33,500 $ 5,000 $ — MGE Power Elm Road 12,500 10,500 15,500 MGE Power West Campus 9,500 4,500 6,000 MGE Transco 4,621 5,464 5,864 MGEE Transco — — 350 Total $ 60,121 $ 25,464 $ 27,714 Dividend Restrictions Dividend payments by MGE to MGE Energy are subject to restrictions arising under a PSCW rate order and, to a lesser degree, MGE's first mortgage bonds. The PSCW order restricts any dividends that MGE may pay MGE Energy if its common equity ratio, calculated in the manner used in the rate proceeding, is less than 55 %. MGE's thirteen month rolling average common equity ratio as of December 31, 2022, is 60.5 % as determined under the calculation used in the rate proceeding. This restriction did not impact MGE's payment of dividends in 2022. Cash dividends of $ 33.5 million and $ 5.0 million were paid by MGE to MGE Energy in 2022 and 2021, respectively. The rate proceeding calculation includes as indebtedness imputed amounts for MGE's outstanding purchase power capacity payments and other PSCW adjustments, but does not include the indebtedness associated with MGE Power Elm Road or MGE Power West Campus, which are consolidated into MGE's financial statements but are not direct obligations of MGE. MGE has covenanted with the holders of its first mortgage bonds not to declare or pay any dividend or make any other distribution on or purchase any shares of its common stock unless, after giving effect thereto, the aggregate amount of all such dividends and distributions and all amounts applied to such purchases, after December 31, 1945, shall not exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2022, approximately $ 650.1 million was available for the payment of dividends under this covenant. See Footnotes 13 and 14 of the Notes to Consolidated Financial Statements in this Report for more information on dividend restrictions appearing in credit agreements and long-term debt, respectively. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II MGE Energy, Inc. and Madison Gas and Electric Company Valuation and Qualifying Accounts Additions Balance at Charged to (b) Charged to Net (a) Balance at Year ended 2020: Accumulated provision for uncollectibles $ 3,258,269 5,164,943 26,400 ( 1,373,047 ) $ 7,076,565 Year ended 2021: Accumulated provision for uncollectibles $ 7,076,565 3,402,468 32,400 ( 2,207,732 ) $ 8,303,701 Year ended 2022: Accumulated provision for uncollectibles $ 8,303,701 3,814,311 40,800 ( 3,785,972 ) $ 8,372,840 (a) Net of recovery of amounts previously written off. (b) For the years ended December 31, 2022, 2021, and 2020, MGE deferred $ 2.1 million, $ 1.8 million, and $ 3.8 million, respectively, of bad debt expense as a regulatory asset. See Footnote 8 of the Notes to Consolidated Financial Statements in this Report for further information. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a. Basis of Presentation - MGE Energy and MGE. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which give recognition to the rate making accounting policies for regulated operations prescribed by the regulatory authorities having jurisdiction, principally the PSCW and FERC. MGE's accounting records conform to the FERC uniform system of accounts. |
Principles of Consolidation | b. Principles of Consolidation - MGE Energy and MGE. MGE, a wholly owned subsidiary of MGE Energy, is a regulated electric and gas utility headquartered in Madison, Wisconsin. MGE Energy and MGE consolidate all majority owned subsidiaries in which they have a controlling influence. Additional wholly owned subsidiaries of MGE Energy include CWDC, MAGAEL, MGE Power, MGE State Energy Services, MGE Services, MGE Transco, and MGEE Transco. CWDC owns 100 % of North Mendota, a subsidiary created to serve as a development entity for property. MGE Power owns 100 % of MGE Power Elm Road and MGE Power West Campus. MGE Power and its subsidiaries are part of MGE Energy's nonregulated energy operations, which were formed to own and lease electric generation projects to assist MGE. MGE Transco and MGEE Transco are nonregulated entities formed to own the investments in ATC and ATC Holdco, respectively. MGE did not own any subsidiaries as of December 31, 2022. MGE Energy and MGE consolidate variable interest entities (VIEs) for which it is the primary beneficiary. Variable interest entities are legal entities that possess any of the following characteristics: equity investors who have an insufficient amount of equity at risk to finance their activities, equity owners who do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownership interest), or equity holders who do not receive expected losses or returns significant to the VIE. If MGE Energy or MGE is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, all relevant facts and circumstances are considered, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. Ongoing reassessments of all VIEs are performed to determine if the primary beneficiary status has changed. MGE has consolidated MGE Power Elm Road and MGE Power West Campus. Both entities are VIEs. MGE is considered the primary beneficiary of these entities as a result of contractual agreements. See Footnote 3 for more discussion of these entities. The consolidated financial statements reflect the application of certain accounting policies described in this note. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | c. Use of Estimates - MGE Energy and MGE. In order to prepare consolidated financial statements in conformity with GAAP, management must make estimates and assumptions. These estimates could affect reported amounts of assets, liabilities, and disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from management's estimates. |
Cash Equivalents | Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. |
Restricted Cash | Restricted Cash MGE has certain cash accounts that are restricted to uses other than current operations and designated for a specific purpose. MGE's restricted cash accounts include cash held by trustees for certain employee benefits and cash deposits held by third parties. These are included in "Other current assets" on the consolidated balance sheets. |
Receivable Margin Account | Receivable – Margin Account Cash amounts held by counterparties as margin collateral for certain financial transactions are recorded as Receivable – margin account in "Other current assets" on the consolidated balance sheets. The costs being hedged are fuel for electric generation, purchased power, and cost of gas sold. |
Trade Receivables, Allowance for Doubtful Accounts, and Concentration Risk | e. Trade Receivables, Allowance for Doubtful Accounts, and Concentration Risk - MGE Energy and MGE. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. A 1 % late payment charge is recorded on all receivables unpaid after the due date. The allowance for credit losses associated with these receivables represents MGE's best estimate of the amount of probable credit losses for existing accounts receivable. MGE manages concentration of credit risk through its credit and collection policies, which are consistent with state regulatory requirements. The allowance for credit losses is estimated based on historical write-off experience, regional economic data, review of the accounts receivable aging, and reasonable and supportable forecasts that affect the collectability of the reported amount. As of December 31, 2022 and 2021, MGE had a reserve balance of $ 8.4 million and $ 8.3 million, respectively, against accounts receivable. For the years ended December 31, 2022 and 2021, MGE recorded $ 3.8 million and $ 2.2 million, respectively, in write-offs. For the years ended December 31, 2022 and 2021, MGE recorded $ 3.9 million and $ 3.4 million, respectively, of additional reserves. The current accounting treatment for bad debt expense allows MGE to defer any differential between bad debt expense reflected in rates and actual costs incurred in its next rate case filing. See Footnote 8 for further details of deferred bad debt expense. |
Inventories | f. Inventories - MGE Energy and MGE. Inventories consist of natural gas in storage, fuel for electric generation, materials and supplies, and renewable energy credits (RECs). MGE values natural gas in storage, fuel for electric generation, and materials and supplies using average cost. REC allowances are included in "Materials and supplies" on the consolidated balance sheets and are recorded based on specific identification. These allowances are charged to purchase power expense as they are used in operations. MGE's REC allowance balance as of December 31, 2022 and 2021, was $ 0.2 million and $ 1.0 million, respectively. |
Derivative and Hedging Instruments | g. D erivative and Hedging Instruments - MGE Energy and MGE. As part of regular operations, MGE enters into contracts, including options, swaps, futures, forwards, and other contractual commitments, to manage its exposure to commodity prices. MGE recognizes derivatives, excluding those that qualify for the normal purchases or normal sales exclusion, in the consolidated balance sheets at fair value, with changes in the fair value of derivative instruments to be recorded in current earnings or deferred in accumulated other comprehensive income (loss), depending on whether a derivative is designated as, and is effective as, a hedge and on the type of hedge transaction. Derivative activities are in accordance with the company's risk management policy. If the derivative qualifies for regulatory deferral, the derivatives are marked to fair value and are offset with a corresponding regulatory asset or liability depending on whether the derivative is in a net loss or net gain position, respectively. Cash flows from such derivative instruments are classified on a basis consistent with the nature of the underlying hedged item. |
Regulatory Assets and Liabilities | h. Regulatory Assets and Liabilities - MGE Energy and MGE. Regulatory assets and regulatory liabilities are recorded consistent with regulatory treatment. Regulatory assets represent costs which are deferred due to the probable future recovery from customers through regulated rates. Regulatory liabilities represent the excess recovery of costs or accrued credits which were deferred because MGE believes it is probable such amounts will be returned to customers through future regulated rates. Regulatory assets and liabilities are amortized in the consolidated statements of income consistent with the recovery or refund included in customer rates. MGE believes it is probable that its recorded regulatory assets and liabilities will be recovered and refunded, respectively, in future rates. See Footnote 8 for further information. |
Debt Issuance Costs | i. Debt Issuance Costs - MGE Energy and MGE. Premiums, discounts, and expenses incurred with the issuance of outstanding long-term debt are amortized over the life of the debt issue. Any call premiums or unamortized expenses associated with refinancing higher-cost debt obligations used to finance utility-regulated assets and operations are amortized consistent with regulatory treatment of those items. These costs are included as a direct reduction to the related debt liability on the consolidated balance sheets. |
Property, Plant, and Equipment | j. Property, Plant, and Equipment - MGE Energy and MGE. Property, plant, and equipment is recorded at original cost. Cost includes indirect costs consisting of payroll taxes, pensions, postretirement benefits, other fringe benefits, and administrative and general costs. Also, included in the cost is AFUDC for utility property and capitalized interest for nonregulated property. Additions for significant replacements of property are charged to property, plant, and equipment at cost; and minor items are charged to maintenance expense. Depreciation rates on utility property are approved by the PSCW, based on the estimated economic lives of property, and include estimates for salvage value and removal costs. Removal costs of utility property, less any salvage value, are adjusted through regulatory liabilities. Depreciation rates on nonregulated property are based on the estimated economic lives of the property. See Footnote 4 for further information. Provisions at composite straight-line depreciation rates approximate the following percentages for the cost of depreciable property: 2022 2021 2020 Electric 3.2 % 3.2 % 3.5 % Gas 2.1 % 2.2 % 2.2 % Nonregulated 2.3 % 2.4 % 2.3 % |
Asset Retirement Obligations | k. Asset Retirement Obligations - MGE Energy and MGE. A liability is recorded for the fair value of an asset retirement obligation (ARO) to be recognized in the period in which it is incurred if it can be reasonably estimated. The offsetting associated asset retirement costs are capitalized as a long-lived asset and depreciated over the asset's useful life. The expected present value technique used to calculate the fair value of ARO liabilities includes assumptions about costs, probabilities, settlement dates, interest accretion, and inflation. Revisions to the assumptions, including the timing or amount of expected asset retirement costs, could result in increases or decreases to the AROs. All asset retirement obligations are recorded as "Other long-term liabilities" on the consolidated balance sheets. MGE has regulatory treatment and recognizes regulatory assets or liabilities for the timing differences between when it recovers legal AROs in rates and when it would recognize these costs. See Footnote 17 for further information. |
Repairs and Maintenance Expense | l. Repairs and Maintenance Expense - MGE Energy and MGE. MGE utilizes the direct expensing method for planned major maintenance projects. Under this method, MGE expenses all costs associated with major planned maintenance activities as incurred. |
Purchased Gas Adjustment Clause | m. Purchased Gas Adjustment Clause - MGE Energy and MGE. MGE's natural gas rates are subject to a fuel adjustment clause designed to recover or refund the difference between the actual cost of purchased gas and the amount included in rates. Differences between the amounts billed to customers and the actual costs recoverable are deferred and recovered or refunded in future periods by means of prospective monthly adjustments to rates. As of December 31, 2022 and 2021, MGE had over collected $ 4.9 million and $ 1.4 million, respectively. These amounts are included in "Regulatory liabilities – current" on the consolidated balance sheets. |
Revenue Recognition | n. Revenue Recognition - MGE Energy and MGE. Operating revenues are recorded as service is rendered or energy is delivered to customers. Meters are read on a systematic basis throughout the month based on established meter-reading schedules. At the end of the month, MGE accrues an estimate for the unbilled amount of energy delivered to customers. The unbilled revenue estimate is based on daily system demand volumes, weather factors, estimated line losses, estimated customer usage by class, and applicable customer rates. See Footnote 20 for further information. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of contracts have a single performance obligation. Retail Revenue (Residential, Commercial, Industrial, and Other Retail/Municipal) Providing electric and gas utility service to retail customers represents MGE's core business activity. Tariffs are approved by the PSCW through a rate order and provide MGE's customers with the standard terms and conditions, including pricing terms. The performance obligation to deliver electricity or gas is satisfied over time as the customer simultaneously receives and consumes the commodities provided by MGE. MGE recognizes revenues as the commodity is delivered to customers. Meters are read on a systematic basis throughout the month based on established meter-reading schedules and customers are subsequently billed for services received. At the end of the month, MGE accrues an estimate for unbilled commodities delivered to customers. The unbilled revenue estimate is based on daily system demand volumes, weather factors, estimated line losses, estimated customer usage by class, and applicable customer rates. Utility Cost Recovery Mechanisms MGE's tariff rates include a provision for fuel cost recovery. Over-collection of fuel-related costs that are outside the approved range will be recognized as a reduction of revenue. Under-collection of these costs will be recognized in "Purchased power" expense in the consolidated statements of income. The cumulative effects of these deferred amounts will be recorded in "Regulatory assets" or "Regulatory liabilities" on the consolidated balance sheets until they are reflected in future billings to customers. See Footnote 9.b. for further information. MGE also has other cost recovery mechanisms. For example, any over-collection of the difference between actual costs incurred and the amount of costs collected from customers is recorded as a reduction of revenue in the period incurred. Sales to the Market Sales to the market include energy charges, capacity or demand charges, and ancillary charges represented by wholesale sales of electricity made to third parties who are not ultimate users of the electricity. Most of these sales are spot market transactions on the markets operated by MISO. Each transaction is considered a performance obligation and revenue is recognized in the period in which energy charges, capacity or demand charges, and ancillary services are sold into MISO. MGE reports, on a net basis, transactions on the MISO markets in which it buys and sells power within the same hour to meet electric energy delivery requirements. Transportation of Gas MGE has contracts under which it provides gas transportation services to customers who have elected to purchase gas from a third party. MGE delivers this gas via pipelines within its service territory. Revenue is recognized as service is rendered or gas is delivered to customers. Tariffs are approved by the PSCW through a rate order and provide gas transportation customers with standard terms and conditions, including pricing terms. |
Utility Cost Recovery | o. Utility Cost Recovery - MGE Energy and MGE. MGE's tariff rates include a provision for fuel cost recovery. The PSCW allows Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. Over-collection of fuel-related costs that are outside the approved range will be recognized as a reduction of revenue. Under-collection of these costs will be recognized in "Purchased power" expense in the consolidated statements of income. The cumulative effects of these deferred amounts will be recorded as a regulatory asset or regulatory liability until they are reflected in future billings to customers. See Footnote 9.b. for further information. |
Regional Transmission Organizations | p. Regional Transmission Organizations - MGE Energy and MGE. MGE reports on a net basis transactions on the MISO markets in which it buys and sells power within the same hour to meet electric energy delivery requirements. |
Allowance for Funds Used During Construction | q. Allowance for Funds Used During Construction - MGE Energy and MGE. Allowance for funds used during construction is included in utility plant accounts and represents the cost of borrowed funds used during plant construction and a return on shareholder's capital used for construction purposes. In the consolidated income statements, the cost of borrowed funds (AFUDC-debt) is presented as an offset to "Interest expense" and the return on shareholder's capital (AFUDC-equity funds) is shown as an item within "Other income." For 2022, 2021, and 2020 , as approved by the PSCW, MGE capitalized AFUDC-debt and equity on 50 % of applicable average construction work in progress as shown in the following table: 2022 2021 2020 Approved AFUDC retail rates 7.11 % 6.89 % 7.03 % MGE received specific approval to recover 100 % AFUDC on certain costs for Saratoga, Two Creeks, Badger Hollow I and II, Paris, its customer information and billing project, and on certain environmental costs for Columbia. These amounts are recovered under the ratemaking process over the service lives of the related properties. For the years ended 2022, 2021, and 2020, MGE recorded AFUDC-debt and AFUDC-equity as shown in the following table: (In millions) 2022 2021 2020 AFUDC-debt $ 1.1 $ 1.7 $ 2.1 AFUDC-equity $ 3.0 $ 5.0 $ 5.9 |
Investments | r. Investments - MGE Energy and MGE. Investments in limited liability companies that have specific ownership accounts in which MGE Energy or MGE's ownership interest is more than minor and are considered to have significant influence are accounted for using the equity method. For equity security investments without readily determinable fair values and for which MGE Energy and MGE do not have significant influence, MGE Energy and MGE have elected to use the practicability exception to measure these investments, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment. Changes in measurement are reported in earnings. Equity security investments with readily determinable fair values are carried at fair value. Realized and unrealized gains and losses are included in earnings. See Footnote 7 for further information on investments and Footnote 19 for further information on fair value of investments. |
Capitalized Software Costs | s. Capitalized Software Costs - MGE Energy and MGE. The net book value of capitalized costs of internal use software included in property, plant, and equipment was $ 76.2 million and $ 85.8 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, accumulated amortization was $ 53.4 million and $ 42.6 million, respectively. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 10.8 , million, $ 5.7 million and $ 5.1 million, respectively, of amortization expense. MGE implemented a new customer information system which went live in September 2021. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the assets. The useful lives range from fou r to fifteen years. |
Capitalized Software Assets Hosting Arrangements | t. Capitalized Software Assets – Hosting Arrangements – MGE Energy and MGE. The net book value of capitalized costs of internal use software incurred in a hosting arrangement was $ 12.9 million and $ 15.6 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, accumulated amortization was $ 8.5 million and $ 5.4 million, respectively. Capitalized software assets for hosted arrangements and the related accumulated amortization expense are recorded in "Other deferred assets and other" on the consolidated balance sheets. For the years ended December 31, 2022, 2021, and 2020, MGE recorded $ 3.1 million, $ 2.2 million, and $ 1.8 million, respectively, of amortization expense related to software assets for hosted arrangements. These costs are recognized in "Other operations and maintenance" expense in the consolidated statements of income and are amortized on a straight-line basis over the term of the hosted contract, which includes renewable option periods. Software assets for hosted arrangements have terms ranging from three to ten years. |
Impairment of Long-Lived Assets | u. Impairment of Long-Lived Assets - MGE Energy and MGE. MGE reviews plant and equipment and other property for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. MGE's policy for determining when long-lived assets are impaired is to recognize an impairment loss if the sum of the expected future cash flows (undiscounted and without interest charges) from an asset are less than the carrying amount of that asset. If an impairment loss is recognized, the amount that will be recorded will be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When it becomes probable that a generating unit will be retired before the end of its useful life, MGE assesses whether the generating unit meets the criteria for probability of abandonment. If a generating unit meets the applicable criteria to be considered probable of abandonment, MGE assesses the likelihood of recovery of the remaining net book value of that generating unit at the end of each reporting period. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded for the difference of the remaining net book value of the generating unit that is greater than the present value of the amount expected to be recovered from ratepayers. There was no significant impairment of long-lived assets during 2022, 2021, and 2020. |
Income Taxes and Excise Taxes | v. Income Taxes and Excise Taxes - MGE Energy and MGE. Income taxes Under the liability method, income taxes are deferred for all temporary differences between pretax financial and taxable income and between the book and tax basis of assets and liabilities using the tax rates scheduled by law to be in effect when the temporary differences reverse. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. A valuation allowance is recorded for those benefits that do not meet this criterion. Accounting for uncertainty in income taxes applies to all tax positions and requires a recognition threshold and measurement standard for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in an income tax return. The threshold is defined for recognizing tax return positions in the financial statements as "more likely than not" that the position is sustainable, based on its merits. Subsequent recognition, derecognition, and measurement is based on management's best judgment given the facts, circumstances, and information available at the reporting date. Regulatory and accounting principles have resulted in a regulatory liability related to income taxes. Excess deferred income taxes result from past taxes provided in customer rates higher than current rates. The income tax regulatory liability and deferred investment tax credit reflect the revenue requirement associated with the return of these tax benefits to customers. Investment tax credits from regulated operations are amortized over related property service lives. Excise taxes MGE Energy, through its utility operations, pays a state license fee tax in lieu of property taxes on property used in utility operations. License fee tax is calculated as a percentage of adjusted operating revenues of the prior year. The electric tax rate is 3.19 % for retail sales and 1.59 % for sales of electricity for resale by the purchaser. The tax rate on sales of natural gas is 0.97 %. The tax is required to be estimated and prepaid in the year prior to its computation and expensing. License fee tax expense, included in "Other general taxes," was $ 14.7 million, $ 13.5 million, and $ 14.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Operating income taxes, including tax credits and license fee tax, are included in rates for utility related items. |
Share-based Compensation | w. Share-Based Compensation - MGE Energy and MGE. Eligible employees and non-employee directors may receive awards of restricted stock, restricted stock units, performance units, and dividend equivalents, or any combination of the foregoing. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Awards classified as equity awards are measured based on their grant-date fair value. Awards classified as liability awards are recorded at fair value each reporting period. Forfeitures are recognized as they occur, rather than estimating potential future forfeitures and recording them over the vesting period. See Footnote 12 for additional information on MGE's share-based compensation plans. |
Adoption of Accounting Principles and Recently Issued Accounting Pronouncements | |
New Accounting Pronouncements | MGE Energy and MGE reviewed FASB authoritative guidance recently issued, none of which are expected to have a material impact on the consolidated results of operations, financial condition, or cash flows. |
Leases [Abstract] | |
Leases | As part of its regular operations, MGE enters into various contracts related to IT equipment, substations, cell towers, land, wind easements, and other property in use for operations. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Determination as to whether an arrangement is or contains a lease is completed at inception. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; lease expense for these leases are recognized on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as operating or financing leases on the consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. For leases that do not provide an implicit rate, a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, is used in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net lease costs are recorded and when costs are recognized. As of December 31, 2022 , MGE had no significant leases not yet commenced that would create significant future rights and obligations. |
Income Taxes | |
Accounting for Uncertainty in Income Taxes | The difference between the tax benefit amount taken on prior year tax returns, or expected to be taken on a current year tax return, and the tax benefit amount recognized in the financial statements is accounted for as an unrecognized tax benefit. Unrecognized tax benefits are classified with "Other deferred liabilities" on the consolidated balance sheets. The interest component recoverable in rates is offset by a regulatory asset. As of December 31, 2022, 2021, and 2020, MGE Energy and MGE have an unrecognized tax benefit primarily related to temporary tax differences associated with the change in income tax method of accounting for electric generation and electric and gas distribution repairs. As of December 31, 2022, 2021, and 2020 , there were no unrecognized tax benefits relating to permanent differences and tax credits. The unrecognized tax benefits as of December 31, 2022 , are not expected to significantly increase or decrease within the next twelve months. In addition, statutes of limitations will expire for MGE Energy and MGE tax returns. The impact of the statutes of limitations expiring is not anticipated to be material. |
Pension Plans and Other Postretirement Benefits | |
Fair Value of Pension and Other Postretirement Benefit Plan Assets | Pension and other postretirement benefit plan investments are recorded at fair value. See Footnote 19 for more information regarding the fair value hierarchy. The following descriptions are the categories of underlying plan assets held within the pension and other postretirement benefit plans as of December 31, 2022: Cash and Cash Equivalents – This category includes highly liquid investments with maturities of less than three months which are traded in active markets. Equity Securities – These securities consist of U.S. and international stock funds. The U.S. stock funds are primarily invested in domestic equities. Securities in these funds are typically priced using the closing price from the applicable exchange, NYSE, Nasdaq, etc. The international funds are composed of international equities. Securities are priced using the closing price from the appropriate local stock exchange. Fixed Income Securities – These securities consist of U.S. bond funds and short-term funds. U.S. bond funds are priced by a pricing agent using inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. The short-term funds are valued initially at cost and adjusted for amortization of any discount or premium. Real Estate – Real estate funds are funds with a direct investment in pools of real estate properties. These funds are valued by investment managers on a periodic basis using pricing models that use independent appraisals. The fair value of real estate investments is determined using net asset value. Insurance Continuance Fund (ICF) – The ICF is a supplemental retirement plan that includes assets that have been segregated and restricted to pay retiree term life insurance premiums. Fixed Rate Fund – The Fixed Rate fund is supported by an underlying portfolio of fixed income securities, including public bonds, commercial mortgages, and private placement bonds. Public market data and GAAP reported market values are used when available to determine fair value. All of the fair values of MGE's plan assets are measured using net asset value, except for cash and cash equivalents which are considered level 1 investments. |
Common Equity | |
Common Stock | MGE Energy sells shares of its common stock through its Direct Stock Purchase and Dividend Reinvestment Plan (the Stock Plan). Those shares may be newly issued shares or shares that are purchased in the open market by an independent agent for participants in the Stock Plan. Sales of newly issued shares under the Stock Plan are covered by a shelf registration statement that MGE Energy filed with the SEC. |
Derivative and Hedging Instruments | |
Derivative Hedging | As part of its regular operations, MGE enters into contracts, including options, swaps, futures, forwards, and other contractual commitments, to manage its exposure to commodity prices. To the extent that these contracts are derivatives, MGE assesses whether or not the normal purchases or normal sales exclusion applies. For contracts to which this exclusion cannot be applied, the derivatives are recognized in the consolidated balance sheets at fair value. MGE's financial commodity derivative activities are conducted in accordance with its electric and gas risk management program, which is approved by the PSCW and limits the volume MGE can hedge with specific risk management strategies. The maximum length of time over which cash flows related to energy commodities can be hedged is four years. If the derivative qualifies for regulatory deferral, the derivatives are marked to fair value and are offset with a corresponding regulatory asset or liability depending on whether the derivative is in a net loss or net gain position, respectively. The deferred gain or loss is recognized in earnings in the delivery month applicable to the instrument. Gains and losses related to hedges qualifying for regulatory treatment are recoverable in gas rates through the PGA or in electric rates as a component of the fuel rules mechanism. |
Derivative Netting | All derivative instruments in this table are presented on a gross basis and are calculated prior to the netting of instruments with the same counterparty under a master netting agreement as well as the netting of collateral. For financial statement purposes, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral. |
Fair Value of Financial Instruments | |
Recurring Fair Value Measurements | Fair value is defined as the price that would be received to sell an asset or would be paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The accounting standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability including assumptions about risk. The standard also establishes a three-level fair value hierarchy based upon the observability of the assumptions used and requires the use of observable market data when available. The levels are: Level 1 - Pricing inputs are quoted prices within active markets for identical assets or liabilities. Level 2 - Pricing inputs are quoted prices within active markets for similar assets or liabilities; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations that are correlated with or otherwise verifiable by observable market data. Level 3 - Pricing inputs are unobservable and reflect management's best estimate of what market participants would use in pricing the asset or liability. The carrying amount of cash, cash equivalents, and outstanding commercial paper approximates fair market value due to the short maturity of those investments and obligations. The estimated fair market value of long-term debt is based on quoted market prices for similar financial instruments. Since long-term debt is not traded in an active market, it is classified as Level 2. Investments include exchange-traded investment securities valued using quoted prices on active exchanges and are therefore classified as Level 1. The deferred compensation plan allows participants to defer certain cash compensation into a notional investment account. These amounts are included within other deferred liabilities in the consolidated balance sheets. The notional investments earn interest based upon the semiannual rate of U.S. Treasury Bills having a 26 -week maturity increased by 1 % compounded monthly with a minimum annual rate of 7 %, compounded monthly. The notional investments are based upon observable market data, however, since the deferred compensation obligations themselves are not exchanged in an active market, they are classified as Level 2. Derivatives include exchange-traded derivative contracts, over-the-counter transactions, a purchased power agreement, and FTRs. Most exchange-traded derivative contracts are valued based on unadjusted quoted prices in active markets and are therefore classified as Level 1. A small number of exchange-traded derivative contracts are valued using quoted market pricing in markets with insufficient volumes and are therefore considered unobservable and classified as Level 3. Transactions done with an over-the-counter party are on inactive markets and are therefore classified as Level 3. These transactions are valued based on quoted prices from markets with similar exchange-traded transactions. FTRs are priced based upon monthly auction results for identical or similar instruments in a closed market with limited data available and are therefore classified as Level 3. The purchased power agreement, with a term ended May 2022, (see Footnote 18 ) was valued using an internal pricing model and therefore was classified as Level 3. The model projected future market energy prices and compared those prices to the projected power costs to be incurred under the contract. Inputs to the model required significant management judgment and estimation. Future energy prices were based on a forward power pricing curve using exchange-traded contracts in the electric futures market. A basis adjustment was applied to the market energy price to reflect the price differential between the market price delivery point and the counterparty delivery point. The historical relationship between the delivery points was reviewed and a discount (below 100%) or premium (above 100%) was derived. This comparison was done for both peak times when demand was high and off peak times when demand was low. If the basis adjustment was lowered, the fair value measurement would decrease, and if the basis adjustment was increased, the fair value measurement would increase. The projected power costs anticipated to be incurred under the purchased power agreement were determined using many factors, including historical generating costs, future prices, and expected fuel mix of the counterparty. An increase in the projected fuel costs resulted in a decrease in the fair value measurement of the purchased power agreement. A significant input that MGE estimated was the counterparty's fuel mix in determining the projected power cost. MGE also considered the assumptions that market participants would use in valuing the asset or liability. This consideration included assumptions about market risk such as liquidity, volatility, and contract duration. The fair value model used a discount rate that incorporated discounting, credit, and model risks. The following table presents the significant unobservable inputs used in the pricing model. Significant Unobservable Inputs 2021 Basis adjustment: On peak 94.1 % Off peak 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % Internal generation - weighted average 56.6 % Purchased power - range 59 %- 34 % Purchased power - weighted average 43.4 % |
Segment Information | |
Segment Information | The electric utility business purchases, generates and distributes electricity, and contracts for transmission service. The gas utility business purchases and distributes natural gas and contracts for the transportation of natural gas. Both the electric and gas segments operate through MGE Energy's principal subsidiary, MGE. The nonregulated energy operations are conducted through MGE Energy's subsidiaries: MGE Power, MGE Power Elm Road, and MGE Power West Campus. These subsidiaries own electric generating capacity that they lease to MGE to assist MGE. MGE Power Elm Road has an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin, which are leased to MGE, and MGE Power West Campus owns a controlling interest in the electric generation plant of a natural gas-fired cogeneration facility on the UW campus. MGE Power West Campus's portion is also leased to MGE. The transmission investment segment invests in ATC, a company that provides electric transmission services primarily in Wisconsin, and ATC Holdco, a company formed to pursue electric transmission development and investments outside of Wisconsin. These investments are held in MGE Transco and MGEE Transco, respectively. See Footnote 7 for further discussion. The "All Others" segment includes: corporate, CWDC, MAGAEL, MGE State Energy Services, MGE Services, and North Mendota. These entities' operations consist of investing in companies and property which relate to the regulated operations, financing the regulated operations. General corporate expenses include the cost of executive management, corporate accounting and finance, information technology, risk management, human resources and legal functions, and employee benefits that are allocated to electric and gas segments based on formulas prescribed by the PSCW. Identifiable assets are those used in MGE's operations in each segment. Sales between our electric and gas segments are based on PSCW approved tariffed rates. Additionally, intersegment operations related to the leasing arrangement between our electric segment and MGE Power Elm Road/MGE Power West Campus are based on terms previously approved by the PSCW. Consistent with internal reporting, management has presented the direct financing capital leases between MGE and MGE Power Elm Road/MGE Power West Campus based on actual lease payments included in rates. Lease payments made by MGE to MGE Power Elm Road and MGE Power West Campus are shown as operating expenses. The lease payments received by MGE Power Elm Road and MGE Power West Campus from MGE are shown as lease income in interdepartmental revenues. The depreciation expense associated with the Elm Road Units and WCCF is reflected in the nonregulated energy segment. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | The following table presents the components of total cash, cash equivalents, and restricted cash on the consolidated balance sheets. (In thousands) MGE Energy MGE As of December 31, 2022 2021 2022 2021 Cash and cash equivalents $ 11,604 $ 17,438 $ 4,136 $ 6,401 Restricted cash 867 847 867 847 Receivable - margin account 5,497 550 5,497 550 Cash, cash equivalents, and restricted cash $ 17,968 $ 18,835 $ 10,500 $ 7,798 |
Straight-Line Depreciation Rates | Provisions at composite straight-line depreciation rates approximate the following percentages for the cost of depreciable property: 2022 2021 2020 Electric 3.2 % 3.2 % 3.5 % Gas 2.1 % 2.2 % 2.2 % Nonregulated 2.3 % 2.4 % 2.3 % |
Approved AFUDC retail rates by rate case | For 2022, 2021, and 2020 , as approved by the PSCW, MGE capitalized AFUDC-debt and equity on 50 % of applicable average construction work in progress as shown in the following table: 2022 2021 2020 Approved AFUDC retail rates 7.11 % 6.89 % 7.03 % |
Approved AFUDC-debt and equity capitalized amounts | For the years ended 2022, 2021, and 2020, MGE recorded AFUDC-debt and AFUDC-equity as shown in the following table: (In millions) 2022 2021 2020 AFUDC-debt $ 1.1 $ 1.7 $ 2.1 AFUDC-equity $ 3.0 $ 5.0 $ 5.9 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |
Variable interest entities significant balance sheet accounts | MGE has included the following significant accounts on its consolidated balance sheets related to its interest in these VIEs as of December 31: MGE Power Elm Road MGE Power West Campus (In thousands) 2022 2021 2022 2021 Property, plant, and equipment, net $ 161,167 $ 163,325 $ 77,280 $ 79,183 Construction work in progress 3,410 898 809 493 Affiliate receivables — — 1,668 2,211 Accrued interest and accrued (prepaid) taxes 51 37 ( 8 ) ( 75 ) Deferred income taxes 30,770 30,696 14,986 14,726 Long-term debt (a) 46,343 48,968 33,354 35,563 Noncontrolling interest 103,333 101,507 44,830 47,080 (a) MGE Power Elm Road's long-term debt includes debt issuance costs of $ 0.3 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power Elm Road for use of the Elm Road Units pursuant to the related long-term leases. MGE Power West Campus's long-term debt includes debt issuance costs of $ 0.1 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power West Campus for use of the cogeneration facility pursuant to the long-term lease. See Footnote 14 for further information on the long-term debt securities. |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment | Property, plant, and equipment consisted of the following as of December 31: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Utility: Electric $ 1,585,847 $ 1,516,533 $ 1,585,864 $ 1,516,550 Plant anticipated to be retired early (a) 147,659 158,983 147,659 158,983 Gas 566,551 546,390 566,562 546,401 Utility property, plant, and equipment, gross 2,300,057 2,221,906 2,300,085 2,221,934 Less: Accumulated depreciation and amortization 673,669 636,804 673,669 636,804 Utility property, plant, and equipment, net 1,626,388 1,585,102 1,626,416 1,585,130 Nonregulated: Nonregulated 318,443 317,881 318,443 317,881 Less: Accumulated depreciation and amortization 79,479 74,812 79,479 74,812 Nonregulated property, plant, and equipment, net 238,964 243,069 238,964 243,069 Construction work in progress: Utility construction work in progress (b) 101,529 49,211 101,529 49,211 Nonregulated construction work in progress 4,219 1,392 4,219 1,392 Total property, plant, and equipment $ 1,971,100 $ 1,878,774 $ 1,971,128 $ 1,878,802 (a) An asset that will be retired in the near future and substantially in advance of its previously expected retirement date is subject to abandonment accounting. In the second quarter of 2021, the operator of Columbia received approval from MISO to retire Columbia Units 1 and 2. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022, early retirement of Columbia was probable. "Plant anticipated to be retired early" in table above is the net book value of these generating units. Assets for Columbia Unit 1 and Unit 2 are currently included in rate base, and MGE continues to depreciate them on a straight-line basis using the composite depreciation rates approved by the PSCW that included retirement dates of 2029 for Unit 1. The PSCW approved in its 2023 electric rate case limited reopener to revise the depreciation schedule for Columbia Unit 2 to 2029 to align with Unit 1. See Footnote 9 for further details on MGE's rate proceedings. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded to the extent that the remaining net book value of the generating unit exceeds the present value of the amount expected to be recovered from ratepayers. No impairment was recorded as of December 31, 2022. (b) Includes Badger Hollow II and Paris solar projects. See Footnote 6 for further information on renewable projects. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease Cost | The following table shows lease expense for the years ended December 31: (In thousands) 2022 2021 Income Statement Location Finance lease expense: Amortization of leased assets $ 1,633 $ 1,609 Depreciation and amortization Interest on lease liabilities 752 771 Interest expense, net Operating lease expense 541 506 Other operations and maintenance Total lease expense $ 2,926 $ 2,886 |
Lease Balance Sheet | The following table shows the lease assets and liabilities on the consolidated balance sheets as of December 31: (In thousands) 2022 2021 Balance Sheet Location Lease assets: Finance lease assets $ 14,756 $ 15,545 Property, plant, and equipment, net Operating lease assets 7,786 7,961 Other deferred assets and other Total lease assets $ 22,542 $ 23,506 Lease liabilities: Finance lease liabilities - current $ 1,039 $ 1,050 Other current liabilities Finance lease liabilities - long-term 17,108 17,322 Finance lease liabilities Operating lease liabilities - current 136 161 Other current liabilities Operating lease liabilities - long-term 7,915 7,965 Other deferred liabilities and other Total lease liabilities $ 26,198 $ 26,498 |
Other Financial Information | The following table shows other lease information for the years ended December 31: (In thousands) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Finance leases - Financing cash flows $ 1,304 $ 1,495 Finance leases - Operating cash flows 752 771 Operating leases - Operating cash flows 442 362 Lease assets obtained in exchange for lease liabilities: Finance leases 1,094 1,026 Operating leases 126 2,178 |
Weighted Average And Discount Rate | The following table shows the weighted average remaining lease terms and discounts as of December 31: Weighted-average remaining lease terms (in years): 2022 2021 Finance leases 38 38 Operating leases 34 35 Weighted-average discount rates: Finance leases 4.34 % 4.30 % Operating leases 3.07 % 3.07 % |
Lessee Operating Lease Liability Maturity | The following table shows maturities of lease liabilities as of December 31, 2022: (In thousands) Finance Operating 2023 $ 1,782 $ 372 2024 1,463 347 2025 1,203 294 2026 969 299 2027 884 304 Thereafter 38,913 11,830 Subtotal 45,214 13,446 Less: Present value discount ( 27,067 ) ( 5,395 ) Lease liability 18,147 8,051 Less: current portion ( 1,039 ) ( 136 ) Noncurrent lease liability $ 17,108 $ 7,915 |
Lessee Finance Lease Liability Maturity | The following table shows maturities of lease liabilities as of December 31, 2022: (In thousands) Finance Operating 2023 $ 1,782 $ 372 2024 1,463 347 2025 1,203 294 2026 969 299 2027 884 304 Thereafter 38,913 11,830 Subtotal 45,214 13,446 Less: Present value discount ( 27,067 ) ( 5,395 ) Lease liability 18,147 8,051 Less: current portion ( 1,039 ) ( 136 ) Noncurrent lease liability $ 17,108 $ 7,915 |
Joint Plant Ownership (Tables)
Joint Plant Ownership (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Regulated Operations [Abstract] | |
Schedule of Joint Plant Ownership | The following table shows MGE's interest in utility plant in service, and the related accumulated depreciation reserves and other information related to MGE's jointly owned facilities: (In thousands, except for Columbia (a) Elm Road (b) West Campus (c) Forward Wind (d) Two Creeks (e) Badger Hollow (f) Ownership interest 19 % 8.33 % 55 % 12.8 % 33 % 33 % Share of generation (MW) 211 MW 106 MW 157 MW 18 MW 50 MW 100 MW For the year ended December 31, Operating expense - 2022 $ 26,141 $ 18,613 $ (g) $ 662 $ 1,032 $ 787 Operating expense - 2021 33,284 18,478 (g) 669 953 140 Operating expense - 2020 27,127 17,259 (g) 664 118 — As of December 31, 2022 Utility plant $ — $ 202,118 $ 115,137 $ 34,117 $ 67,890 $ 74,941 Accumulated depreciation — ( 40,951 ) ( 37,857 ) ( 15,952 ) ( 5,145 ) ( 2,566 ) Plant anticipated to be 147,659 — — — — — Construction work in progress 4,805 3,410 809 68 — 52,187 As of December 31, 2021 Utility plant $ — $ 202,604 $ 114,090 $ 34,084 $ 67,814 $ 69,178 Accumulated depreciation — ( 39,279 ) ( 34,907 ) ( 14,945 ) ( 2,932 ) ( 227 ) Plant anticipated to be 158,983 — — — — — Construction work in progress 2,388 898 493 21 — 19,748 (a) MGE and the other co-owners announced plans to retire Columbia, a two unit coal-fired generation facility located in Portage, Wisconsin. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022 and 2021, early retirement of Columbia was probable. See Footnote 4 for further information. (b) Two coal-fired generating units in Oak Creek, Wisconsin. In November 2021, MGE announced plans to end the use of coal as a primary fuel at the Elm Road Units and transition the plant to natural gas. By the end of 2030, MGE expects coal to be used only as a backup fuel at the Elm Road Units. This transition will help MGE meet its 2030 carbon reduction goals. By 2035, MGE expects that the Elm Road Units will be fully transitioned away from coal, which will eliminate coal as an internal generation source for MGE. (c) MGE Power West Campus and the UW jointly own the West Campus Cogeneration Facility (WCCF) located on the UW campus in Madison, Wisconsin. The UW owns a controlling interest in the chilled-water and steam plants, which are used to meet the needs for air-conditioning and steam-heat capacity for the UW campus. MGE Power West Campus owns a controlling interest in the electric generation plant, which is leased and operated by MGE. (d) The Forward Wind Energy Center (Forward Wind) consists of 86 wind turbines located near Brownsville, Wisconsin. (e) The Two Creeks solar generation array is located in the Town of Two Creeks and the City of Two Rivers in Manitowoc and Kewaunee Counties, Wisconsin. Date of commercial operation of the solar array was November 2020. (f) The Badger Hollow I and II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. Date of commercial operation of Badger Hollow I was November 2021. Construction of Badger Hollow II is expected to be completed in the second half of 2023. (g) Operating charges are allocated to the UW based on formulas contained in the operating agreement. Under the provisions of this arrangement, the UW is required to reimburse MGE for their allocated portion of fuel and operating expenses. For the years ended December 31, 2022, 2021, and 2020, the UW's allocated share of fuel and operating costs was $ 8.7 million, $ 6.2 million, and $ 5.2 million, respectively. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments Disclosure [Abstract] | |
Equity Method and Other Investments | a. Equity Securities, Equity Method Investments, and Other Investments. MGE Energy MGE (In thousands) 2022 2021 2022 2021 Equity securities $ 22,960 $ 20,529 $ 115 $ 230 Equity method investments: ATC and ATC Holdco 80,586 75,862 — — Other 39 39 — — Total equity method investments 80,625 75,901 — — Other investments 2,298 2,324 — — Total $ 105,883 $ 98,754 $ 115 $ 230 For the years ended December 31, 2022, 2021, and 2020 , there were no liquidated investments for MGE. For the years ended December 31, 2022, 2021, and 2020, certain investments were liquidated for MGE Energy. As a result of these liquidations, the following was received: (In thousands) 2022 2021 2020 Cash proceeds $ 924 $ 1,684 $ 622 Gain on sale 1,382 1,543 379 |
Equity Method Investments Summarized Financial Data | Equity earnings from investments are recorded as "Other income" on the consolidated statements of income of MGE Energy. For the years ended December 31, MGE Transco recorded the following: (In thousands) 2022 2021 2020 Equity earnings from investment in ATC $ 9,025 $ 9,774 $ 10,167 Dividends received from ATC 7,090 7,832 8,633 Capital contributions to ATC 2,678 — 1,249 In January 2023, MGE Transco made a $ 0.4 million capital contribution to ATC. (In thousands) Income statement data for the year ended December 31, 2022 2021 2020 Operating revenues $ 751,158 $ 754,838 $ 758,117 Operating expenses ( 381,528 ) ( 376,153 ) ( 372,463 ) Other income 1,171 1,144 1,922 Interest expense, net ( 124,091 ) ( 115,089 ) ( 112,818 ) Earnings before members' income taxes $ 246,710 $ 264,740 $ 274,758 Balance sheet data as of December 31, 2022 2021 Current assets $ 89,606 $ 89,747 Noncurrent assets 5,997,780 5,628,127 Total assets $ 6,087,386 $ 5,717,874 Current liabilities $ 511,945 $ 436,918 Long-term debt 2,612,980 2,513,009 Other noncurrent liabilities 485,795 421,997 Members' equity 2,476,666 2,345,950 Total members' equity and liabilities $ 6,087,386 $ 5,717,874 |
Regulatory Assets and Liabili_2
Regulatory Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | The following regulatory assets and liabilities are reflected in MGE's consolidated balance sheets as of December 31: (In thousands) 2022 2021 Regulatory Assets Asset retirement obligation $ 14,721 $ 13,081 Deferred fuel costs 12,067 3,292 Deferred bad debt expense 7,650 5,600 Debt related costs 7,580 8,173 Deferred pension and other postretirement costs — 1,017 Derivatives 5,094 — Leases 3,656 2,992 Tax recovery related to AFUDC equity 10,851 10,347 Unfunded pension and other postretirement liability 50,072 63,728 Other 1,750 782 Total Regulatory Assets $ 113,441 $ 109,012 Regulatory Liabilities Deferred pension and other postretirement costs $ 5,454 $ 8,112 Elm Road 1,092 — Income taxes 109,112 110,817 Non-ARO removal costs 31,664 29,694 Pension and other postretirement non-service costs 16,160 11,451 Purchased gas adjustment 4,857 1,448 Other 574 2,141 Total Regulatory Liabilities $ 168,913 $ 163,663 |
Rate Matters (Tables)
Rate Matters (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Regulated Operations [Abstract] | |
Rate Proceedings | Rate increase Return on Common Equity Common Equity Component of Regulatory Capital Structure Effective Date Approved 2021 settlement (a) Electric — % 9.8 % 55.8 % 1/1/2021 Gas 4.00 % 9.8 % 55.8 % 1/1/2021 Approved 2022/2023 settlement (b) Electric 8.81 % 9.8 % 55.6 % 1/1/2022 Gas 2.15 % 9.8 % 55.6 % 1/1/2022 Gas 0.96 % 9.8 % 55.6 % 1/1/2023 Approved limited 2023 reopener (c) Electric 9.01 % 9.8 % 55.6 % 1/1/2023 (a) The electric rate settlement included an increase in rate base but the associated rate increase was primarily offset by lower fuel and purchased power costs and a one-time $ 18.2 million return to customers of the portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. The gas rate increase covered infrastructure costs and technology improvements. The settlement agreement also included escrow accounting treatment for pension and other postretirement benefit costs, bad debt expense, and customer credit card fees. Escrow accounting treatment allows MGE to defer any difference between estimated costs in rates and actual costs incurred until a future rate filing. Any difference would be recorded as a regulatory asset or regulatory liability. (b) The electric and gas rate increases were driven by an increase in rate base including our investments in Badger Hollow I and a new customer information system. Also driving the requested electric increase were higher fuel and purchased power costs as well as the completion in 2021 of the one-time return of the electric excess deferred tax credit related to the 2017 Tax Act not restricted by IRS normalization rules. Included in the electric residential rate is a reduction in the customer charge. (c) The electric rate increase is driven by generation assets including our investments in Badger Hollow II (solar), Paris (solar and battery), Red Barn (wind), and West Riverside (natural gas). In addition, the reopener request includes an increase in fuel costs and the recovery of deferred 2021 fuel costs. The reopener also revises the depreciation schedule for Columbia Unit 2 and shared equipment to 2029 to align with the depreciation schedule for Columbia Unit 1. |
Deferred Fuel Rules | The following table summarized deferred electric fuel-related savings and costs: Fuel Costs ( in millions ) Refund or Recovery Period 2019 deferred fuel savings $( 1.5 ) (a) January 2021 through December 2021 2020 deferred fuel savings $( 3.2 ) (a) October 2021 2021 deferred fuel costs $ 3.3 (a) January 2023 through December 2023 (b) 2022 deferred fuel costs $ 8.8 (c) (a) There was no change to the recovery (refund) in the fuel rules proceedings from the amount MGE deferred. (b) In August 2022, the PSCW issued a final decision in the 2021 fuel rules proceedings for MGE to include the recovery of these costs as part of the 2023 electric limited reopener, and the recovery of such costs was included in the reopener. (c) These costs will be subject to the PSCW's annual review of 2022 fuel costs, expected to be completed in 2023. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | On a consolidated and separate company basis, the income tax provision consists of the following provision (benefit) components for the years ended December 31: MGE Energy MGE (In thousands) 2022 2021 2020 2022 2021 2020 Current payable: Federal $ 2,102 $ ( 2,589 ) $ 4,179 $ 934 $ ( 3,434 ) $ 3,716 State 2,385 3,002 5,095 2,060 3,163 4,790 Net-deferred: Federal 14,770 ( 1,473 ) 6,181 14,397 ( 1,951 ) 4,756 State 8,665 6,310 4,182 8,370 5,605 3,787 Amortized investment tax credits ( 1,698 ) ( 1,135 ) ( 214 ) ( 1,698 ) ( 1,135 ) ( 214 ) Total income tax provision $ 26,224 $ 4,115 $ 19,423 $ 24,063 $ 2,248 $ 16,835 |
Effective Tax Rate Reconciliation | The consolidated income tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes, as follows: MGE Energy MGE 2022 2021 2020 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 6.2 6.2 6.3 6.2 6.2 6.3 Amortized investment tax credits ( 0.7 ) ( 1.5 ) ( 0.2 ) ( 0.7 ) ( 1.5 ) ( 0.2 ) Credit for electricity from wind energy ( 5.4 ) ( 6.0 ) ( 6.2 ) ( 5.7 ) ( 6.4 ) ( 6.8 ) AFUDC equity, net ( 0.3 ) ( 0.9 ) ( 1.2 ) ( 0.3 ) ( 1.0 ) ( 1.4 ) Amortization of utility excess deferred tax (a) ( 2.0 ) ( 14.8 ) ( 2.0 ) ( 2.1 ) ( 15.8 ) ( 2.2 ) Other, net, individually insignificant 0.3 ( 0.3 ) ( 0.3 ) 0.2 ( 0.3 ) ( 0.3 ) Effective income tax rate 19.1 % 3.7 % 17.4 % 18.6 % 2.2 % 16.4 % (a) Included are impacts of the 2017 Tax Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting in recognition of IRS rules that restrict the rate at which the excess deferred taxes may be returned to utility customers. For the years ended December 31, 2022, 2021, and 2020, MGE recognized $ 4.1 million, $ 2.6 million, and $ 2.2 million, respectively. Included in the 2021 rate settlement was a one-time return to customers of the electric portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2021, MGE recognized $ 13.2 million. Included in the 2022 and 2023 rate settlement was a net collection from customers of the gas portion of deficient deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2022, MGE recognized $ 1.3 million. |
Deferred Tax Liabilities (Assets) | The significant components of deferred tax assets and liabilities that appear on the consolidated balance sheets as of December 31 are as follows: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Deferred tax assets Investment in ATC $ 20,098 $ 20,868 $ — $ — Federal tax credits 46,282 39,161 46,282 39,161 Accrued expenses 10,642 11,053 10,644 11,047 Pension and other postretirement benefits 20,687 24,888 20,687 24,888 Deferred tax regulatory account 42,999 42,401 42,999 42,401 Derivatives 1,416 241 1,416 241 Leases 7,137 7,218 7,137 7,218 Other 17,438 17,390 17,490 17,442 Gross deferred income tax assets 166,699 163,220 146,655 142,398 Less valuation allowance — — — — Net deferred income tax assets $ 166,699 $ 163,220 $ 146,655 $ 142,398 Deferred tax liabilities Property-related $ 295,872 $ 274,613 $ 295,872 $ 274,613 Investment in ATC 52,840 52,731 — — Bond transactions 472 534 472 534 Pension and other postretirement benefits 35,590 34,781 35,590 34,781 Derivatives 1,416 241 1,416 241 Tax deductible prepayments 10,308 10,222 10,308 10,210 Leases 7,137 7,218 7,137 7,218 Other 15,254 14,029 15,118 13,686 Gross deferred income tax liabilities 418,889 394,369 365,913 341,283 Deferred income taxes, net $ 252,190 $ 231,149 $ 219,258 $ 198,885 |
Summary of Tax Credit Carryforwards | The components of federal and state tax benefit carryovers as of December 31, are as follows: MGE Energy MGE (In thousands) 2022 2021 2022 2021 Federal tax credits $ 46,282 $ 39,161 $ 46,282 $ 39,161 State net operating losses 3 3 3 3 Valuation allowances for state net operating losses ( 3 ) ( 3 ) ( 3 ) ( 3 ) |
Unrecognized Tax Benefits and Interest | A tabular reconciliation of unrecognized tax benefits and interest is as follows: (In thousands) Unrecognized Tax Benefits: 2022 2021 2020 Unrecognized tax benefits, January 1, $ 2,353 $ 2,281 $ 2,093 Additions based on tax positions related to the current year 731 714 796 Additions based on tax positions related to the prior years — — — Reductions based on tax positions related to the prior years ( 599 ) ( 642 ) ( 608 ) Unrecognized tax benefits, December 31, $ 2,485 $ 2,353 $ 2,281 (In thousands) Interest on Unrecognized Tax Benefits: 2022 2021 2020 Accrued interest on unrecognized tax benefits, January 1, $ 150 $ 154 $ 176 Reduction in interest expense on uncertain tax positions ( 95 ) ( 98 ) ( 124 ) Interest expense on uncertain tax positions 134 94 102 Accrued interest on unrecognized tax benefits, December 31, $ 189 $ 150 $ 154 |
Tax Years that Remain Subject to Examination | The following table shows tax years that remain subject to examination by major jurisdiction: Taxpayer Open Years MGE Energy and consolidated subsidiaries in federal return 2019 through 2022 MGE Energy Wisconsin combined reporting corporation return 2018 through 2022 |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Benefit Obligations and Change in Plan Assets | a. Benefit Obligations and Plan Assets. (In thousands) Pension Benefits Other Postretirement Benefits Change in Benefit Obligations: 2022 2021 2022 2021 Net benefit obligation as of January 1, $ 460,666 $ 461,215 $ 84,526 $ 86,360 Service cost 5,064 5,730 1,293 1,448 Interest cost 11,161 9,109 1,940 1,549 Plan participants' contributions — — 986 992 Actuarial loss (gain) (a) ( 120,166 ) 3,871 ( 19,484 ) ( 685 ) Gross benefits paid ( 21,437 ) ( 19,259 ) ( 5,725 ) ( 5,405 ) Less: federal subsidy on benefits paid (b) — — 292 267 Benefit obligation as of December 31, $ 335,288 $ 460,666 $ 63,828 $ 84,526 Change in Plan Assets: Fair value of plan assets as of January 1, $ 473,953 $ 429,538 $ 54,844 $ 51,735 Actual return on plan assets ( 84,562 ) 61,487 ( 8,958 ) 6,814 Employer contributions 2,217 2,187 720 708 Plan participants' contributions — — 986 992 Gross benefits paid ( 21,437 ) ( 19,259 ) ( 5,725 ) ( 5,405 ) Fair value of plan assets at end of year 370,171 473,953 41,867 54,844 Funded Status as of December 31, $ 34,883 $ 13,287 $ ( 21,961 ) $ ( 29,682 ) (a) In 2022, higher discount rates were the primary driver of the actuarial gain. (b) In 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law authorizing Medicare to provide prescription drug benefits to retirees. For both the years ended December 31, 2022 and 2021, the subsidy due to MGE was $ 0.3 million. |
Schedule of Amounts Recognized in the Consolidated Balance Sheet | The amounts recognized in the consolidated balance sheets to reflect the funded status of the plans as of December 31 are as follows: Pension Benefits Other Postretirement Benefits (In thousands) 2022 2021 2022 2021 Long-term asset $ 68,872 $ 58,757 $ — $ — Current liability ( 2,408 ) ( 2,342 ) — — Long-term liability ( 31,581 ) ( 43,128 ) ( 21,961 ) ( 29,682 ) Net asset (liability) $ 34,883 $ 13,287 $ ( 21,961 ) $ ( 29,682 ) |
Amounts Recognized in Regulatory Asset | The following table shows the amounts that have not yet been recognized in our net periodic benefit cost as of December 31 and are recorded as regulatory assets in the consolidated balance sheets: Pension Benefits Other Postretirement Benefits (In thousands) 2022 2021 2022 2021 Net actuarial loss (gain) $ 51,148 $ 57,777 $ ( 1,085 ) $ 6,256 Prior service benefit — ( 20 ) — ( 297 ) Transition obligation — — 9 12 Total $ 51,148 $ 57,757 $ ( 1,076 ) $ 5,971 |
Schedule of Projected Benefit Obligations in Excess of Plan Assets | The projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets as of December 31 are as follows : (In thousands) Pension Benefits Projected Benefit Obligation in Excess of Plan Assets 2022 2021 Projected benefit obligation, end of year $ 33,989 $ 45,470 Fair value of plan assets, end of year — — |
Schedule of Accumulated Benefit Obligations in Excess of Plan Assets | The accumulated benefit obligation and fair value of plan assets with an accumulated benefit obligation in excess of plan assets as of December 31 are as follows: (In thousands) Pension Benefits Other Postretirement Benefits Accumulated Benefit Obligation in Excess of Plan Assets 2022 2021 2022 2021 Accumulated benefit obligation, end of year $ 33,211 $ 43,831 $ 63,828 $ 84,526 Fair value of plan assets, end of year — — 41,867 54,844 |
Net Periodic Benefit Costs | (In thousands) Pension Benefits Other Postretirement Benefits Components of Net Periodic Benefit Cost: 2022 (a) 2021 (a) 2020 (a) 2022 (a) 2021 (a) 2020 (a) Service cost $ 5,064 $ 5,730 $ 5,296 $ 1,293 $ 1,448 $ 1,264 Interest cost 11,161 9,109 12,210 1,940 1,549 2,278 Expected return on assets ( 31,391 ) ( 29,487 ) ( 27,229 ) ( 3,365 ) ( 3,277 ) ( 3,154 ) Amortization of: Transition obligation — — — 3 3 3 Prior service (credit) cost ( 20 ) ( 124 ) ( 114 ) ( 297 ) ( 1,518 ) ( 2,669 ) Actuarial loss 2,416 6,646 5,357 145 493 217 Net periodic benefit cost (credit) $ ( 12,770 ) $ ( 8,126 ) $ ( 4,480 ) $ ( 281 ) $ ( 1,302 ) $ ( 2,061 ) (a) As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. For the years ended December 31, 2022, 2021, and 2020 MGE recovered approximately $ 1.0 million, $ 4.3 million, and $ 0.9 million, respectively, of pension and other postretirement costs. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above. See Footnote 8 for further information. For the years ended December 31, 2022 and 2021 , MGE deferred and recorded as a regulatory liability $ 1.5 million and $ 8.1 million, respectively, of savings from employee benefit plan costs. For the year ended December 31, 2022 , MGE refunded in rates $ 4.2 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above. See Footnote 8 for additional information. |
Plan Assumptions | c. Plan Assumptions. The weighted-average assumptions used to determine the benefit obligations were as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2022 2021 2022 2021 Discount rate 5.47 % 2.94 % 5.45 % 2.85 % Rate of compensation increase 3.21 % 3.19 % N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for next year N/A N/A 7.00 % 5.75 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) N/A N/A 4.75 % 4.75 % Year that the rate reaches the ultimate trend rate N/A N/A 2032 2027 MGE uses individual spot rates, instead of a weighted average of the yield curve spot rates, for measuring the service cost and interest cost components of net periodic benefit cost. The weighted-average assumptions used to determine the net periodic cost were as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2022 2021 2020 2022 2021 2020 Discount rate 2.94 % 2.70 % 3.42 % 2.85 % 2.52 % 3.30 % Expected rate of return on plan assets 6.75 % 7.00 % 7.20 % 6.40 % 6.61 % 6.75 % Rate of compensation increase 3.24 % 3.23 % 3.26 % N/A N/A N/A |
Fair Value of Plan Assets by Asset Category | The asset allocation for MGE's pension plans as of December 31, 2022 and 2021, and the target allocation for 2023, by asset category, follows: Target Percentage of Plan Allocation 2022 2021 Equity securities (a) 63.0 % 65.0 % 65.0 % Fixed income securities 30.0 % 26.0 % 29.0 % Real estate 7.0 % 9.0 % 6.0 % Total 100.0 % 100.0 % 100.0 % (a) Target allocations for equity securities are broken out as follows: 45.5 % United States equity and 17.5 % non-United States equity. The fair values of MGE's plan assets by asset category as of December 31 are as follows: (In thousands) 2022 2021 Cash and Cash Equivalents $ 1,715 $ 1,428 Equity Securities: U.S. Large Cap 121,884 162,060 U.S. Mid Cap 28,392 38,755 U.S. Small Cap 35,372 47,657 International Blend 75,843 87,781 Fixed Income Securities: Short-Term Fund 3,807 5,222 High Yield Bond 17,895 25,190 Long Duration Bond 85,767 119,867 Real Estate 38,418 37,170 Insurance Continuance Fund 1,613 1,599 Fixed Rate Fund 1,332 2,068 Total $ 412,038 $ 528,797 |
Benefit Payments, Fiscal Year Maturity | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: Pension Other Postretirement Benefits (In thousands) Pension Benefits Gross Postretirement Benefits Expected Medicare Part D Subsidy Net Postretirement Benefits 2023 $ 20,715 $ 5,051 $ ( 332 ) $ 4,719 2024 21,304 5,363 ( 365 ) 4,998 2025 21,864 5,637 ( 400 ) 5,237 2026 22,305 5,544 ( 447 ) 5,097 2027 22,789 5,560 ( 483 ) 5,077 2028 - 2032 117,798 27,199 ( 2,833 ) 24,366 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Performance Shares [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Performance Unit Graded Vesting Schedule | The following activity occurred : 2022 2021 Nonvested awards January 1, 13,870 7,003 Granted 10,395 10,187 Vested ( 6,064 ) — Undistributed vested awards (c) ( 1,687 ) ( 3,320 ) Nonvested awards December 31, 16,514 13,870 Weighted average fair Value of each nonvested award $ 76.87 $ 104.76 Weighted average estimated payout % based on performance criteria 109.2 % 127.4 % (c) Represents performance units that vested but were not distributed to retirement-eligible employees. |
Restricted Stock Units Equity Awards [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Performance Unit Graded Vesting Schedule | The following activity occurred: 2022 2021 Units Weighted Average Grant Date Fair Value (per share) Units Weighted Average Grant Date Fair Value (per share) Nonvested awards January 1, 13,126 $ 65.83 — N/A Granted 15,931 $ 72.46 16,267 $ 65.83 Vested — — Undistributed vested awards (a) ( 1,687 ) $ 72.46 ( 3,141 ) $ 65.83 Nonvested awards December 31, 27,370 $ 69.28 13,126 $ 65.83 (a) Represents restricted stock units that vested but were not distributed to retirement-eligible employees. |
Restricted Stock Units Liability Awards [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Performance Unit Graded Vesting Schedule | The following activity occurred: 2022 2021 Nonvested awards January 1, 6,064 7,003 Granted — — Vested ( 6,064 ) — Undistributed vested awards (b) — ( 939 ) Nonvested awards December 31, — 6,064 (b) Represents restricted stock units that vested but were not distributed to retirement-eligible employees. |
2006 Performance Unit Plan and 2013 Director Incentive Plan [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Performance Unit Graded Vesting Schedule | The following activity occurred: 2022 2021 Director Performance Director Performance Nonvested awards January 1, 1,472 5,760 4,286 17,420 Granted — — — — Vested ( 1,472 ) ( 3,756 ) ( 2,814 ) ( 11,660 ) Nonvested awards December 31, — 2,004 1,472 5,760 |
Notes Payable to Banks, Comme_2
Notes Payable to Banks, Commercial Paper, and Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Borrowings | Information regarding lines of credit and short-term borrowings is shown below: (In thousands) MGE Energy (a) MGE As of December 31, 2022 2021 2022 2021 Lines of credit (b) $ 150,000 $ 150,000 $ 100,000 $ 100,000 Available capacity under line of credit $ 78,815 $ 143,815 $ 28,815 $ 93,815 Short-term debt outstanding $ 70,500 $ 5,500 $ 70,500 $ 5,500 Letters of credit issued inside credit facilities $ 685 $ 685 $ 685 $ 685 Required ratio of consolidated debt to 65.00 % (c) 65.00 % (c) 65.00 % (d) 65.00 % (d) Weighted-average interest rate 4.32 % 0.15 % 4.32 % 0.15 % Year Ended December 31, Maximum short-term borrowings $ 70,500 $ 64,000 $ 70,500 $ 64,000 Average short-term borrowings $ 20,177 $ 28,583 $ 20,177 $ 28,583 Weighted-average interest rate 3.46 % 0.15 % 3.46 % 0.15 % (a) MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper. (b) In November 2022, MGE Energy and MGE amended and restated their existing credit agreements, which extended their maturity dates to November 8, 2027. In January 2023, MGE amended one of its existing credit agreements to increase the available credit by an additional $ 30 million. As of December 31, 2022, MGE Energy and MGE had no borrowings outstanding under these credit facilities and were in compliance with the covenant requirements of the credit agreements. (c) A change in control constitutes a default under the agreement. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. (d) The ratio calculation excludes assets, liabilities, revenues, and expenses included in MGE's financial statements as the result of the consolidation of VIEs, such as MGE Power West Campus and MGE Power Elm Road. A change in control constitutes a default under the agreements. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | December 31, (In thousands) 2022 2021 First Mortgage Bonds: (a) 7.70 %, 2028 Series $ 1,200 $ 1,200 Tax Exempt Debt: 2.05 %, 2023 Series, Industrial Development Revenue Bonds 19,300 19,300 Medium-Term Notes: (c) 6.12 %, due 2028 20,000 20,000 7.12 %, due 2032 25,000 25,000 6.247 %, due 2037 25,000 25,000 Total Medium-Term Notes 70,000 70,000 Other Long-Term Debt: (d) 3.09 %, due 2023 (e) 30,000 30,000 3.29 %, due 2026 (e) 15,000 15,000 3.11 %, due 2027 (e) 30,000 30,000 2.94 %, due 2029 (e) 50,000 50,000 2.48 %, due 2031 (e) 60,000 60,000 5.43 %, due 2032 (b)(e) 25,000 — 5.68 %, due 2033 (f) 20,184 21,510 5.19 %, due 2033 (f) 13,237 14,133 2.63 %, due 2033 (e) 40,000 40,000 5.26 %, due 2040 (e) 15,000 15,000 5.04 %, due 2040 (g) 28,472 30,139 4.74 %, due 2041 (g) 18,167 19,167 4.38 %, due 2042 (e) 28,000 28,000 4.42 %, due 2043 (e) 20,000 20,000 4.47 %, due 2048 (e) 20,000 20,000 3.76 %, due 2052 (e) 40,000 40,000 4.19 %, due 2048 (e) 60,000 60,000 4.24 %, due 2053 (e) 20,000 20,000 4.34 %, due 2058 (e) 20,000 20,000 Total Other Long-Term Debt 553,060 532,949 Long-term debt due within one year ( 54,314 ) ( 4,889 ) Unamortized discount and debt issuance costs ( 4,000 ) ( 4,349 ) Total Long-Term Debt $ 585,246 $ 614,211 (a) MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust, under which its first mortgage bonds are issued. The Mortgage Indenture provides that dividends or any other distribution or purchase of MGE shares may not be made if the aggregate amount thereof since December 31, 1945, would exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2022, approximately $ 650.1 million was available for the payment of dividends under this covenant. (b) In November 2022, MGE entered into a private placement Note Purchase Agreement in which it committed to issue $ 25 million of new long-term debt (Series A), $ 15 million of new long-term debt (Series B), carrying an interest rate of 5.43 % per annum over its 10-year life, and $ 35 million of new long-term debt (Series C), carrying an interest rate of 5.53 % per annum over its 12-year life. Funding occurred on December 1, 2022, for Series A and will occur on February 28, 2023, for Series B and Series C. The proceeds of the debt financing will be used to assist with capital expenditures and other corporate obligations. (c) The indenture under which MGE's Medium-Term notes are issued provides that those notes will be entitled to be equally and ratably secured in the event that MGE issues any additional first mortgage bonds. (d) Unsecured notes issued pursuant to various Note Purchase Agreements with one or more purchasers. The notes are not issued under, or governed by, MGE's Indenture dated as of September 1, 1998, which governs MGE's Medium-Term Notes. (e) Issued by MGE. Under that Note Purchase Agreement: (i) note holders have the right to require MGE to repurchase their notes at par in the event of an acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy, (ii) MGE must maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65 %, and (iii) MGE cannot issue "Priority Debt" in an amount exceeding 20 % of its consolidated assets. Priority Debt is defined as any indebtedness of MGE secured by liens other than specified liens permitted by the Note Purchase Agreement and certain unsecured indebtedness of certain subsidiaries. As of December 31, 2022 , MGE was in compliance with the covenant requirements. (f) Issued by MGE Power West Campus. The Note Purchase Agreements require MGE Power West Campus to maintain a projected debt service coverage ratio of not less than 1.25 to 1.00, and debt to total capitalization ratio of not more than 0.65 to 1.00. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power West Campus for use of the WCCF pursuant to a long-term lease. As of December 31, 2022 , MGE Power West Campus was in compliance with the covenant requirements. (g) Issued by MGE Power Elm Road. The Note Purchase Agreement requires MGE Power Elm Road to maintain a projected and actual debt service coverage ratio at the end of any calendar quarter of not less than 1.25 to 1.00 for the trailing 12-month period. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power Elm Road for use of the Elm Road Units pursuant to long-term leases. As of December 31, 2022 , MGE Power Elm Road was in compliance with the covenant requirements. |
Schedule of Long-Term Debt Maturities | Below is MGE Energy's and MGE's aggregate maturities for all long-term debt for years following December 31, 2022. (In thousands) 2023 2024 2025 2026 2027 Thereafter Long-term debt maturities $ 54,314 $ 5,146 $ 5,285 $ 20,433 $ 35,588 $ 522,794 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | As of December 31, 2022, the future minimum commitments related to these purchase contracts were as follows: (In thousands) 2023 2024 2025 2026 2027 Thereafter Coal (a) $ 23,886 $ 17,104 $ 7,782 $ 2,868 $ — $ — Natural gas Transportation and storage (b) 25,446 25,446 25,446 14,736 1,892 10,549 Supply (c) 30,778 — — — — — Purchase power (d) 5,513 5,623 5,735 5,850 5,967 266 Renewable energy (e) 25,024 2,025 2,040 2,056 2,072 26,592 Other 6,105 2,224 350 359 108 689 $ 116,752 $ 52,422 $ 41,353 $ 25,869 $ 10,039 $ 38,096 (a) Total coal commitments for MGE's share of the Columbia and Elm Road Units, including transportation. Fuel procurement for MGE's jointly owned Columbia and Elm Road Units is handled by WPL and WEPCO, respectively, who are the operators of those facilities. (b) MGE's natural gas transportation and storage contracts require fixed monthly payments for firm supply pipeline transportation and storage capacity. The pricing components of the fixed monthly payments for the transportation and storage contracts are approved by FERC but may be subject to change. (c) These commitments include market-based pricing. (d) MGE has a purchase power agreement to help meet future electric supply requirements. (e) Operational commitments for solar and wind facilities. |
Other Commitments | MGE has several other commitments related to various projects. Payments for these commitments are expected to be as follows: (In thousands) 2023 2024 2025 2026 2027 Thereafter Other commitments $ 333 $ 333 $ 333 $ 333 $ 333 $ 2,332 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Change in Asset Retirement Obligations | The following table summarizes the change in AROs. Amounts include conditional AROs . (In thousands) 2022 2021 Balance as of January 1, $ 46,580 $ 31,196 Liabilities incurred (a) 1,947 8,589 Accretion expense 1,909 1,526 Liabilities settled ( 317 ) ( 354 ) Revisions in estimated cash flows (b) 141 5,623 Balance as of December 31, $ 50,260 $ 46,580 (a) In 2021, MGE recorded an obligation of $ 4.9 million and $ 3.4 million, respectively, for the fair value of its legal liability for AROs associated with Badger Hollow I and other completed renewable projects. See Footnote 6 for additional information on Badger Hollow I . (b) In 2021, MGE revised the AROs associated with certain Columbia assets. |
Derivative and Hedging Instru_2
Derivative and Hedging Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gross Notional Volume of Open Derivatives | The gross notional volume of open derivatives is as follows: December 31, 2022 December 31, 2021 Commodity derivative contracts 353,600 MWh 278,000 MWh Commodity derivative contracts 8,070,000 Dth 5,735,000 Dth FTRs 1,945 MW 2,127 MW PPA — MW 250 MW |
Fair Value of Derivative Instruments on the Balance Sheet | The following table summarizes the fair value of the derivative instruments on the consolidated balance sheets. All derivative instruments in this table are presented on a gross basis and are calculated prior to the netting of instruments with the same counterparty under a master netting agreement as well as the netting of collateral. For financial statement purposes, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral. (In thousands) Derivative Derivative Balance Sheet Location December 31, 2022 Commodity derivative contracts (a) $ 2,164 $ 7,687 Other current liabilities Commodity derivative contracts (a) 802 476 Other deferred liabilities and other FTRs 103 — Other current assets December 31, 2021 Commodity derivative contracts (b) $ 2,959 $ 811 Other current assets Commodity derivative contracts (b) 420 38 Other deferred charges FTRs 227 — Other current assets PPA N/A 2,140 Other current liabilities (a) As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. (b) As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. |
Offsetting Assets | The following tables show the effect of netting arrangements for recognized derivative assets and liabilities that are subject to a master netting arrangement or similar arrangement on the consolidated balance sheets. Offsetting of Derivative Assets (In thousands) Gross Gross Amounts Collateral Posted Net Amount December 31, 2022 Commodity derivative contracts $ 2,966 $ ( 2,966 ) $ — $ — FTRs 103 — — $ 103 December 31, 2021 Commodity derivative contracts $ 3,379 $ ( 849 ) $ ( 1,254 ) $ 1,276 FTRs 227 — — 227 |
Offsetting Liabilities | Offsetting of Derivative Liabilities (In thousands) Gross Gross Amounts Collateral Posted Net Amount December 31, 2022 Commodity derivative contracts $ 8,163 $ ( 2,966 ) $ ( 5,197 ) $ — December 31, 2021 Commodity derivative contracts $ 849 $ ( 849 ) $ — $ — PPA 2,140 — — 2,140 |
Derivative Gains and Losses in Balance Sheet | The following tables summarize the unrealized and realized gains/losses related to the derivative instruments on the consolidated balance sheets and the consolidated statements of income. 2022 2021 Current and Other Current and Other (In thousands) Balance as of January 1, $ ( 617 ) $ 770 $ 13,989 $ 1,162 Unrealized gain ( 9,527 ) — ( 23,173 ) — Realized gain (loss) reclassified to a deferred account 1,472 ( 1,472 ) 2,563 ( 2,563 ) Realized gain reclassified to income statement 13,766 3,449 6,004 2,171 Balance as of December 31, $ 5,094 $ 2,747 $ ( 617 ) $ 770 |
Derivative Gains and Losses in Income Statement | Realized Losses (Gains) 2022 2021 (In thousands) Fuel for Electric Generation/ Purchased Power Cost of Gas Sold Fuel for Electric Generation/ Purchased Power Cost of Gas Sold Year Ended December 31: Commodity derivative contracts $ ( 14,806 ) $ ( 350 ) $ ( 3,948 ) $ ( 1,700 ) FTRs 583 — ( 605 ) — PPA ( 2,642 ) — ( 1,922 ) — |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Market Value of Financial Instruments | The estimated fair market value of financial instruments are as follows: December 31, 2022 December 31, 2021 (In thousands) Carrying Amount Fair Carrying Amount Fair Long-term debt (a) $ 643,560 $ 571,374 $ 623,449 $ 729,914 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.0 million and $ 4.3 million as of December 31, 2022 and 2021 , respectively. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the balances of assets and liabilities measured at fair value on a recurring basis. Fair Value as of December 31, 2022 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 3,069 $ 1,353 $ — $ 1,716 Exchange-traded investments 1,516 1,516 — — Total Assets $ 4,585 $ 2,869 $ — $ 1,716 Liabilities: Derivatives, net (b) $ 8,163 $ 5,581 $ — $ 2,582 Deferred compensation 4,743 — 4,743 — Total Liabilities $ 12,906 $ 5,581 $ 4,743 $ 2,582 MGE Assets: Derivatives, net (b) $ 3,069 $ 1,353 $ — $ 1,716 Exchange-traded investments 115 115 — — Total Assets $ 3,184 $ 1,468 $ — $ 1,716 Liabilities: Derivatives, net (b) $ 8,163 $ 5,581 $ — $ 2,582 Deferred compensation 4,743 — 4,743 — Total Liabilities $ 12,906 $ 5,581 $ 4,743 $ 2,582 Fair Value as of December 31, 2021 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (c) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 1,296 1,296 — — Total Assets $ 4,902 $ 2,466 $ — $ 2,436 Liabilities: Derivatives, net (c) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 MGE Assets: Derivatives, net (c) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 230 230 — — Total Assets $ 3,836 $ 1,400 $ — $ 2,436 Liabilities: Derivatives, net (c) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 (b) As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. (c) As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. |
Significant Unobservable Inputs | The following table presents the significant unobservable inputs used in the pricing model. Significant Unobservable Inputs 2021 Basis adjustment: On peak 94.1 % Off peak 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % Internal generation - weighted average 56.6 % Purchased power - range 59 %- 34 % Purchased power - weighted average 43.4 % |
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis. (In thousands) 2022 2021 2020 Balance as of January 1, $ 178 $ ( 14,055 ) $ ( 26,456 ) Realized and unrealized gains (losses): Included in regulatory assets ( 1,044 ) — 12,402 Included in regulatory liability — 14,234 — Included in other comprehensive income — — — Included in earnings 14,140 5,521 ( 6,439 ) Included in current assets 118 237 ( 87 ) Purchases 11,997 26,287 22,232 Sales — — — Issuances — — — Settlements ( 26,255 ) ( 32,046 ) ( 15,707 ) Balance as of December 31, $ ( 866 ) $ 178 $ ( 14,055 ) Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities held as of December 31, (d) $ — $ — $ — |
Gains and Losses Included in Income for Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis (d). (In thousands) Year Ended December 31, 2022 2021 2020 Purchased power expense $ 14,497 $ 6,192 $ ( 5,888 ) Cost of gas sold expense ( 357 ) ( 671 ) ( 551 ) Total $ 14,140 $ 5,521 $ ( 6,439 ) (d) MGE's exchange-traded derivative contracts, over-the-counter party transactions, purchased power agreement, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues disaggregated by revenue source were as follows for the years ended December 31: (In thousands) Electric revenues 2022 2021 2020 Residential $ 161,300 $ 151,646 $ 146,431 Commercial 232,057 210,475 198,043 Industrial 13,303 12,529 11,514 Other-retail/municipal 37,323 35,169 32,915 Total retail 443,983 409,819 388,903 Sales to the market 19,385 9,499 4,015 Other revenues 1,799 968 774 Total electric revenues 465,167 420,286 393,692 Gas revenues Residential 143,544 110,442 88,765 Commercial/Industrial 99,165 68,895 49,682 Total retail 242,709 179,337 138,447 Gas transportation 5,780 6,185 5,713 Other revenues 183 98 101 Total gas revenues 248,672 185,620 144,261 Non-regulated energy revenues 680 678 680 Total Operating Revenue $ 714,519 $ 606,584 $ 538,633 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) - MGE [Member] | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest in Balance Sheet | The noncontrolling interest on MGE's consolidated balance sheets was as follows: As of December 31, (In thousands) 2022 2021 MGE Power Elm Road (a) $ 103,333 $ 101,507 MGE Power West Campus (a) 44,830 47,080 Total Noncontrolling Interest $ 148,163 $ 148,587 |
Net Income Attributable to Noncontrolling Interest, Net of Tax | The net income attributable to noncontrolling interest, net of tax, was as follows for the years ended December 31: (In thousands) 2022 2021 2020 MGE Power Elm Road (a) $ 14,326 $ 15,151 $ 15,184 MGE Power West Campus (a) 7,250 7,240 7,209 Net Income Attributable to Noncontrolling Interest, Net of Tax $ 21,576 $ 22,391 $ 22,393 (a) MGE Power Elm Road and MGE Power West Campus are not subsidiaries of MGE; however, they have been consolidated in the consolidated financial statements of MGE (see Footnote 3 ). MGE Power Elm Road and MGE Power West Campus are 100 % owned by MGE Power, and MGE Power is 100 % owned by MGE Energy. MGE Energy's proportionate share of the equity and net income (through its wholly owned subsidiary MGE Power) of MGE Power Elm Road and MGE Power West Campus is classified within the MGE consolidated financial statements as noncontrolling interest. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | The following table shows segment information for MGE Energy's and MGE's operations: (In thousands) Electric Gas Non-Regulated Energy Transmission Investment All Others Consolidation/ Consolidated Total Year Ended December 31, 2022 Operating revenues $ 465,167 $ 248,672 $ 680 $ — $ — $ — $ 714,519 Interdepartmental revenues ( 44 ) 34,073 41,555 — — ( 75,584 ) — Total operating revenues 465,123 282,745 42,235 — — ( 75,584 ) 714,519 Depreciation and amortization ( 62,897 ) ( 15,261 ) ( 7,391 ) — — — ( 85,549 ) Operating income (loss) 77,672 26,261 34,683 — ( 873 ) — 137,743 Interest (expense) income, net ( 17,578 ) ( 4,787 ) ( 4,322 ) — 40 — ( 26,647 ) Income tax (provision) benefit ( 7,299 ) ( 8,492 ) ( 8,272 ) ( 2,490 ) 329 — ( 26,224 ) Equity in earnings of investments — — — 9,136 — — 9,136 Net income (loss) 65,187 18,215 22,090 6,647 ( 1,187 ) — 110,952 Year Ended December 31, 2021 Operating revenues $ 420,286 $ 185,620 $ 678 $ — $ — $ — $ 606,584 Interdepartmental revenues 556 22,728 40,866 — — ( 64,150 ) — Total operating revenues 420,842 208,348 41,544 — — ( 64,150 ) 606,584 Depreciation and amortization ( 56,672 ) ( 12,852 ) ( 7,459 ) — — — ( 76,983 ) Operating income (loss) 58,993 25,133 33,936 — ( 768 ) — 117,294 Interest (expense) income, net ( 15,261 ) ( 4,315 ) ( 4,577 ) — 41 — ( 24,112 ) Income tax (provision) benefit 10,672 ( 4,922 ) ( 7,998 ) ( 2,486 ) 619 — ( 4,115 ) Equity in earnings of investments — — — 9,339 ( 69 ) — 9,270 Net income (loss) 63,910 15,511 21,361 6,852 ( 1,873 ) — 105,761 Year Ended December 31, 2020 Operating revenues $ 393,692 $ 144,261 $ 680 $ — $ — $ — $ 538,633 Interdepartmental revenues 765 12,157 40,402 — — ( 53,324 ) — Total operating revenues 394,457 156,418 41,082 — — ( 53,324 ) 538,633 Depreciation and amortization ( 54,658 ) ( 12,049 ) ( 7,481 ) — — — ( 74,188 ) Operating income (loss) 57,847 19,674 33,460 ( 1 ) ( 983 ) — 109,997 Interest (expense) income, net ( 14,446 ) ( 4,370 ) ( 4,826 ) — 121 — ( 23,521 ) Income tax (provision) benefit ( 4,230 ) ( 4,805 ) ( 7,800 ) ( 2,786 ) 198 — ( 19,423 ) Equity in earnings of investments — — — 10,221 — — 10,221 Net income (loss) 50,522 14,167 20,834 7,434 ( 539 ) — 92,418 (In thousands) Electric Gas Non-Regulated Energy Consolidation/ Elimination Entries Consolidated Total Year Ended December 31, 2022 Operating revenues $ 465,167 $ 248,672 $ 680 $ — $ 714,519 Interdepartmental revenues ( 44 ) 34,073 41,555 ( 75,584 ) — Total operating revenues 465,123 282,745 42,235 ( 75,584 ) 714,519 Depreciation and amortization ( 62,897 ) ( 15,261 ) ( 7,391 ) — ( 85,549 ) Operating income 77,672 26,261 34,683 — 138,616 Interest expense, net ( 17,578 ) ( 4,787 ) ( 4,322 ) — ( 26,687 ) Income tax provision ( 7,299 ) ( 8,492 ) ( 8,272 ) — ( 24,063 ) Net income attributable to MGE 65,187 18,215 22,090 ( 21,576 ) 83,916 Year Ended December 31, 2021 Operating revenues $ 420,286 $ 185,620 $ 678 $ — $ 606,584 Interdepartmental revenues 556 22,728 40,866 ( 64,150 ) — Total operating revenues 420,842 208,348 41,544 ( 64,150 ) 606,584 Depreciation and amortization ( 56,672 ) ( 12,852 ) ( 7,459 ) — ( 76,983 ) Operating income 58,993 25,133 33,936 — 118,062 Interest expense, net ( 15,261 ) ( 4,315 ) ( 4,577 ) — ( 24,153 ) Income tax (provision) benefit 10,672 ( 4,922 ) ( 7,998 ) — ( 2,248 ) Net income attributable to MGE 63,910 15,511 21,361 ( 22,391 ) 78,391 Year Ended December 31, 2020 Operating revenues $ 393,692 $ 144,261 $ 680 $ — $ 538,633 Interdepartmental revenues 765 12,157 40,402 ( 53,324 ) — Total operating revenues 394,457 156,418 41,082 ( 53,324 ) 538,633 Depreciation and amortization ( 54,658 ) ( 12,049 ) ( 7,481 ) — ( 74,188 ) Operating income 57,847 19,674 33,460 — 110,981 Interest expense, net ( 14,446 ) ( 4,370 ) ( 4,826 ) — ( 23,642 ) Income tax provision ( 4,230 ) ( 4,805 ) ( 7,800 ) — ( 16,835 ) Net income attributable to MGE 50,522 14,167 20,834 ( 22,393 ) 63,130 The following table shows segment information for MGE Energy's and MGE's assets and capital expenditures: Utility Consolidated (In thousands) MGE Energy Electric Gas Non-regulated Energy Transmission Investment (a) All Others Consolidation/ Elimination Entries Total Assets: December 31, 2022 $ 1,626,373 $ 530,733 $ 247,841 $ 80,642 $ 467,112 $ ( 435,101 ) $ 2,517,600 December 31, 2021 1,525,163 485,345 252,584 75,990 467,954 ( 435,130 ) 2,371,906 December 31, 2020 1,421,302 444,702 254,298 74,480 495,483 ( 436,614 ) 2,253,651 Capital Expenditures: Year ended Dec. 31, 2022 $ 141,273 $ 27,656 $ 6,101 $ — $ — $ — $ 175,030 Year ended Dec. 31, 2021 115,234 34,071 3,864 — — — 153,169 Year ended Dec. 31, 2020 162,210 36,906 4,023 — — — 203,139 Utility Consolidated (In thousands) Electric Gas Non-regulated Energy Consolidation/ Elimination Entries Total Assets: December 31, 2022 $ 1,626,373 $ 530,733 $ 247,791 $ ( 258 ) $ 2,404,639 December 31, 2021 1,525,163 485,345 252,534 ( 267 ) 2,262,775 December 31, 2020 1,421,302 444,702 254,248 ( 281 ) 2,119,971 Capital Expenditures: Year ended Dec. 31, 2022 $ 141,273 $ 27,656 $ 6,101 $ — $ 175,030 Year ended Dec. 31, 2021 115,234 34,071 3,864 — 153,169 Year ended Dec. 31, 2020 162,210 36,906 4,023 — 203,139 (a) The Transmission Investment segment represents MGE Energy's investment in equity method investees. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details-1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Trade Receivables, Allowance for Doubtful Accounts, and Concentration Risk | |||
Late payment charge on upaid receivables | 1% | ||
Accounts receivable, allowance for credit loss, writeoff | $ 3.8 | $ 2.2 | |
Accounts receivable, allowance for credit loss, period increase | 3.9 | 3.4 | |
Accounts receivable, allowance for credit loss | 8.4 | 8.3 | |
Inventories | |||
Renewable energy credit allowance included in inventory | 0.2 | 1 | |
Purchased Gas Adjustment Clause | |||
Purchased gas adjustment, over (under) collected | 4.9 | 1.4 | |
Allowance for Funds Used During Construction | |||
AFUDC - borrowed funds | 1.1 | 1.7 | $ 2.1 |
AFUDC - equity funds | 3 | 5 | 5.9 |
Capitalized Software Costs | |||
Capitalized software | 76.2 | 85.8 | |
Capitalized software - accumulated amortization | 53.4 | 42.6 | |
Capitalized software - amortization | 10.8 | 5.7 | 5.1 |
Capitalized Software Hosting Agreement Costs | |||
Capitalized software hosting agreement | 12.9 | 15.6 | |
Capitalized software hosting agreement - accumulated amortization | 8.5 | 5.4 | |
Capitalized software hosting agreement - amortization expense | $ 3.1 | 2.2 | 1.8 |
Excise taxes | |||
License fee tax rate, electric, retail sales | 3.19% | ||
License fee tax rate, electric, resale by purchaser | 1.59% | ||
License fee tax rate, natural gas | 0.97% | ||
License fee tax expense | $ 14.7 | $ 13.5 | $ 14.1 |
Minimum [Member] | |||
Capitalized Software Hosting Agreement Costs | |||
Capitalized software hosting agreement, useful life | 3 years | ||
Minimum [Member] | Capitalized Software [Member] | |||
Property, Plant, and Equiptment | |||
Property, plant, and equipment, useful life | 4 years | ||
Maximum [Member] | |||
Capitalized Software Hosting Agreement Costs | |||
Capitalized software hosting agreement, useful life | 10 years | ||
Maximum [Member] | Capitalized Software [Member] | |||
Property, Plant, and Equiptment | |||
Property, plant, and equipment, useful life | 15 years | ||
PSCW [Member] | |||
Allowance for Funds Used During Construction | |||
Authorized AFUDC rate | 50% | 50% | 50% |
Rate at which AFUDC was capitalized | 7.11% | 6.89% | 7.03% |
Authorized AFUDC rate - Signficiant projects (100%) | 100% | 100% | 100% |
Electric [Member] | |||
Property, Plant, and Equiptment | |||
Composite straight-line depreciation rates | 3.20% | 3.20% | 3.50% |
Gas [Member] | |||
Property, Plant, and Equiptment | |||
Composite straight-line depreciation rates | 2.10% | 2.20% | 2.20% |
Non Regulated Energy [Member] | |||
Property, Plant, and Equiptment | |||
Composite straight-line depreciation rates | 2.30% | 2.40% | 2.30% |
MGE Power Elm Road [Member] | |||
Principles of Consolidation | |||
Ownership percentage by parent | 100% | ||
MGE Power West Campus [Member] | |||
Principles of Consolidation | |||
Ownership percentage by parent | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details-2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 11,604 | $ 17,438 | ||
Restricted cash | 867 | 847 | ||
Receivable - margin account | 5,497 | 550 | ||
Cash, cash equivalents, and restricted cash | 17,968 | 18,835 | $ 47,039 | $ 25,814 |
MGE [Member] | ||||
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 4,136 | 6,401 | ||
Restricted cash | 867 | 847 | ||
Receivable - margin account | 5,497 | 550 | ||
Cash, cash equivalents, and restricted cash | $ 10,500 | $ 7,798 | $ 6,404 | $ 5,529 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
In-service utility plant, net | $ 1,865,352 | $ 1,828,171 | |
Construction work in progress | 105,748 | 50,603 | |
Accrued interest and accrued (prepaid) taxes | 7,868 | 10,385 | |
Deferred income taxes | 252,190 | 231,149 | |
Unamortized discount and debt issuance costs | 4,000 | 4,349 | |
MGE Power Elm Road [Member] | |||
Variable Interest Entity [Line Items] | |||
In-service utility plant, net | 161,167 | 163,325 | |
Construction work in progress | 3,410 | 898 | |
Affiliate receivables | 0 | 0 | |
Accrued interest and accrued (prepaid) taxes | 51 | 37 | |
Deferred income taxes | 30,770 | 30,696 | |
Long-term debt | [1] | 46,343 | 48,968 |
Noncontrolling interest | 103,333 | 101,507 | |
Unamortized discount and debt issuance costs | 300 | 300 | |
MGE Power West Campus [Member] | |||
Variable Interest Entity [Line Items] | |||
In-service utility plant, net | 77,280 | 79,183 | |
Construction work in progress | 809 | 493 | |
Affiliate receivables | 1,668 | 2,211 | |
Accrued interest and accrued (prepaid) taxes | (8) | (75) | |
Deferred income taxes | 14,986 | 14,726 | |
Long-term debt | [1] | 33,354 | 35,563 |
Noncontrolling interest | 44,830 | 47,080 | |
Unamortized discount and debt issuance costs | $ 100 | $ 100 | |
[1] MGE Power Elm Road's long-term debt includes debt issuance costs of $ 0.3 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power Elm Road for use of the Elm Road Units pursuant to the related long-term leases. MGE Power West Campus's long-term debt includes debt issuance costs of $ 0.1 million as of December 31, 2022 and 2021. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power West Campus for use of the cogeneration facility pursuant to the long-term lease. See Footnote 14 for further information on the long-term debt securities. |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Property, Plant and Equipment [Line Items] | |||
Plant anticipated to be retired early | [1] | $ 147,659 | $ 158,983 |
In-service utility plant, net | 1,865,352 | 1,828,171 | |
Construction work in progress | 105,748 | 50,603 | |
Total property, plant, and equipment | 1,971,100 | 1,878,774 | |
Columbia Units [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Plant anticipated to be retired early | [2] | 147,659 | 158,983 |
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | 0 | ||
Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 2,300,057 | 2,221,906 | |
Less: Accumulated depreciation and amortization | 673,669 | 636,804 | |
In-service utility plant, net | 1,626,388 | 1,585,102 | |
Construction work in progress | [3] | 101,529 | 49,211 |
Electric [Member] | Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 1,585,847 | 1,516,533 | |
Gas [Member] | Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 566,551 | 546,390 | |
Non Regulated Energy [Member] | Unregulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 318,443 | 317,881 | |
Less: Accumulated depreciation and amortization | 79,479 | 74,812 | |
In-service utility plant, net | 238,964 | 243,069 | |
Construction work in progress | 4,219 | 1,392 | |
MGE [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Plant anticipated to be retired early | [1] | 147,659 | 158,983 |
In-service utility plant, net | 1,865,380 | 1,828,199 | |
Construction work in progress | 105,748 | 50,603 | |
Total property, plant, and equipment | 1,971,128 | 1,878,802 | |
MGE [Member] | Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 2,300,085 | 2,221,934 | |
Less: Accumulated depreciation and amortization | 673,669 | 636,804 | |
In-service utility plant, net | 1,626,416 | 1,585,130 | |
Construction work in progress | [3] | 101,529 | 49,211 |
MGE [Member] | Electric [Member] | Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 1,585,864 | 1,516,550 | |
MGE [Member] | Gas [Member] | Regulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 566,562 | 546,401 | |
MGE [Member] | Non Regulated Energy [Member] | Unregulated Operation [Member] | |||
Property, Plant and Equipment [Line Items] | |||
In-service utility plant, gross | 318,443 | 317,881 | |
Less: Accumulated depreciation and amortization | 79,479 | 74,812 | |
In-service utility plant, net | 238,964 | 243,069 | |
Construction work in progress | $ 4,219 | $ 1,392 | |
[1] An asset that will be retired in the near future and substantially in advance of its previously expected retirement date is subject to abandonment accounting. In the second quarter of 2021, the operator of Columbia received approval from MISO to retire Columbia Units 1 and 2. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022, early retirement of Columbia was probable. "Plant anticipated to be retired early" in table above is the net book value of these generating units. Assets for Columbia Unit 1 and Unit 2 are currently included in rate base, and MGE continues to depreciate them on a straight-line basis using the composite depreciation rates approved by the PSCW that included retirement dates of 2029 for Unit 1. The PSCW approved in its 2023 electric rate case limited reopener to revise the depreciation schedule for Columbia Unit 2 to 2029 to align with Unit 1. See Footnote 9 for further details on MGE's rate proceedings. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded to the extent that the remaining net book value of the generating unit exceeds the present value of the amount expected to be recovered from ratepayers. No impairment was recorded as of December 31, 2022. MGE and the other co-owners announced plans to retire Columbia, a two unit coal-fired generation facility located in Portage, Wisconsin. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022 and 2021, early retirement of Columbia was probable. See Footnote 4 for further information. Includes Badger Hollow II and Paris solar projects. See Footnote 6 for further information on renewable projects. |
Leases (Details-1)
Leases (Details-1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease, Cost [Abstract] | ||
Amortization of leased assets, Depreciation and amortization | $ 1,633 | $ 1,609 |
Interest on lease liabilities, Interest expense, net | 752 | 771 |
Operating lease expense, Other operations and maintenance | 541 | 506 |
Total lease expense | $ 2,926 | $ 2,886 |
Leases (Details-2)
Leases (Details-2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee Disclosure [Line Items] | ||
Finance lease assets, net | $ 14,756 | $ 15,545 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Operating lease assets | $ 7,786 | $ 7,961 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Total lease assets | $ 22,542 | $ 23,506 |
Finance lease liabilities - current | $ 1,039 | $ 1,050 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current |
Finance lease liabilities - long-term | $ 17,108 | $ 17,322 |
Operating lease liabilities - current | $ 136 | $ 161 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current |
Operating lease liabilities - long-term | $ 7,915 | $ 7,965 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total lease liabilities | $ 26,198 | $ 26,498 |
Leases (Details-3)
Leases (Details-3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee Disclosure [Abstract] | ||
Finance leases - financing cash flows | $ 1,304 | $ 1,495 |
Finance leases - operating cash flows | 752 | 771 |
Operating leases - operating cash flows | 442 | 362 |
Lease assets obtained in exchange for lease liabilities - finance leases | 1,094 | 1,026 |
Lease assets obtained in exchange for lease liabilities - operating leases | $ 126 | $ 2,178 |
Leases (Details-4)
Leases (Details-4) | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee Disclosure [Abstract] | ||
Weighted average remaining lease term (years) finance leases | 38 years | 38 years |
Weighted average remaining lease term (years) operating leases | 34 years | 35 years |
Weighted average discount rate finance leases | 4.34% | 4.30% |
Weighted average discount rate operating leases | 3.07% | 3.07% |
Leases (Details-5)
Leases (Details-5) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finance Lease, Liability, to be Paid [Abstract] | ||
2023 | $ 1,782 | |
2024 | 1,463 | |
2025 | 1,203 | |
2026 | 969 | |
2027 | 884 | |
Thereafter | 38,913 | |
Undiscounted finance lease liability | 45,214 | |
Less: present value discount | (27,067) | |
Finance lease liability | 18,147 | |
Less: current portion | (1,039) | $ (1,050) |
Finance lease liabilities | 17,108 | 17,322 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | ||
2023 | 372 | |
2024 | 347 | |
2025 | 294 | |
2026 | 299 | |
2027 | 304 | |
Thereafter | 11,830 | |
Undiscounted operating lease liability | 13,446 | |
Less: present value discount | (5,395) | |
Operating lease liability | 8,051 | |
Less: current portion | (136) | (161) |
Operating lease liabilities - long-term | $ 7,915 | $ 7,965 |
Joint Plant Ownership (Details)
Joint Plant Ownership (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) MW | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant anticipated to be retired early | [1] | $ 147,659,000 | $ 158,983,000 | |
MGE [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant anticipated to be retired early | [1] | 147,659,000 | 158,983,000 | |
Columbia Units [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [2] | 0 | 0 | |
Accumulated depreciation | [2] | 0 | 0 | |
Plant anticipated to be retired early | [2] | 147,659,000 | 158,983,000 | |
Construction work in progress | [2] | $ 4,805,000 | 2,388,000 | |
Columbia Units [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [2] | 211 | ||
Jointly owned utility plant, ownership interest | [2] | 19% | ||
Jointly owned utility plant, fuel, operating, and maintenance expense | [2] | $ 26,141,000 | 33,284,000 | $ 27,127,000 |
Elm Road Units [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, fuel, operating, and maintenance expense | [3] | $ 18,613,000 | 18,478,000 | 17,259,000 |
Elm Road Units [Member] | MGE Power Elm Road [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [3] | 106 | ||
Jointly owned utility plant, ownership interest | [3] | 8.33% | ||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [3] | $ 202,118,000 | 202,604,000 | |
Accumulated depreciation | [3] | (40,951,000) | (39,279,000) | |
Plant anticipated to be retired early | [3] | 0 | 0 | |
Construction work in progress | [3] | 3,410,000 | 898,000 | |
Forward Wind [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [4] | 34,117,000 | 34,084,000 | |
Accumulated depreciation | [4] | (15,952,000) | (14,945,000) | |
Plant anticipated to be retired early | [4] | 0 | 0 | |
Construction work in progress | [4] | $ 68,000 | 21,000 | |
Forward Wind [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [4] | 18 | ||
Jointly owned utility plant, ownership interest | [4] | 12.80% | ||
Jointly owned utility plant, fuel, operating, and maintenance expense | [4] | $ 662,000 | 669,000 | 664,000 |
West Campus [Member] | UW [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, fuel, operating, and maintenance expense | [5] | $ 8,700,000 | 6,200,000 | 5,200,000 |
West Campus [Member] | MGE Power West Campus [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [6] | 157 | ||
Jointly owned utility plant, ownership interest | [6] | 55% | ||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [6] | $ 115,137,000 | 114,090,000 | |
Accumulated depreciation | [6] | (37,857,000) | (34,907,000) | |
Plant anticipated to be retired early | [6] | 0 | 0 | |
Construction work in progress | [6] | 809,000 | 493,000 | |
Two Creeks [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [7] | 67,890,000 | 67,814,000 | |
Accumulated depreciation | [7] | (5,145,000) | (2,932,000) | |
Plant anticipated to be retired early | [7] | 0 | 0 | |
Construction work in progress | [7] | $ 0 | 0 | |
Two Creeks [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [7] | 50 | ||
Jointly owned utility plant, ownership interest | [7] | 33% | ||
Jointly owned utility plant, fuel, operating, and maintenance expense | [7] | $ 1,032,000 | 953,000 | 118,000 |
Badger Hollow I and II [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Plant | [8] | 74,941,000 | 69,178,000 | |
Accumulated depreciation | [8] | (2,566,000) | (227,000) | |
Plant anticipated to be retired early | [8] | 0 | 0 | |
Construction work in progress | [8] | $ 52,187,000 | 19,748,000 | |
Badger Hollow I and II [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | [8] | 100 | ||
Jointly owned utility plant, ownership interest | [8] | 33% | ||
Jointly owned utility plant, fuel, operating, and maintenance expense | [8] | $ 787,000 | $ 140,000 | $ 0 |
Paris Units [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Construction work in progress | $ 23,400,000 | |||
Paris Units [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | 31 | |||
Jointly owned utility plant, ownership interest | 10% | |||
Red Barn Units [Member] | ||||
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | ||||
Construction work in progress | $ 400 | |||
Red Barn Units [Member] | MGE [Member] | ||||
Jointly Owned Utility Plant Interests [Line Items] | ||||
Jointly owned utility plant, plant capacity (in MW) | MW | 9.16 | |||
Jointly owned utility plant, ownership interest | 10% | |||
[1] An asset that will be retired in the near future and substantially in advance of its previously expected retirement date is subject to abandonment accounting. In the second quarter of 2021, the operator of Columbia received approval from MISO to retire Columbia Units 1 and 2. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022, early retirement of Columbia was probable. "Plant anticipated to be retired early" in table above is the net book value of these generating units. Assets for Columbia Unit 1 and Unit 2 are currently included in rate base, and MGE continues to depreciate them on a straight-line basis using the composite depreciation rates approved by the PSCW that included retirement dates of 2029 for Unit 1. The PSCW approved in its 2023 electric rate case limited reopener to revise the depreciation schedule for Columbia Unit 2 to 2029 to align with Unit 1. See Footnote 9 for further details on MGE's rate proceedings. If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded to the extent that the remaining net book value of the generating unit exceeds the present value of the amount expected to be recovered from ratepayers. No impairment was recorded as of December 31, 2022. MGE and the other co-owners announced plans to retire Columbia, a two unit coal-fired generation facility located in Portage, Wisconsin. The co-owners intend to retire Unit 1 and Unit 2 by June 2026. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of December 31, 2022 and 2021, early retirement of Columbia was probable. See Footnote 4 for further information. Two coal-fired generating units in Oak Creek, Wisconsin. In November 2021, MGE announced plans to end the use of coal as a primary fuel at the Elm Road Units and transition the plant to natural gas. By the end of 2030, MGE expects coal to be used only as a backup fuel at the Elm Road Units. This transition will help MGE meet its 2030 carbon reduction goals. By 2035, MGE expects that the Elm Road Units will be fully transitioned away from coal, which will eliminate coal as an internal generation source for MGE. The Forward Wind Energy Center (Forward Wind) consists of 86 wind turbines located near Brownsville, Wisconsin. Operating charges are allocated to the UW based on formulas contained in the operating agreement. Under the provisions of this arrangement, the UW is required to reimburse MGE for their allocated portion of fuel and operating expenses. For the years ended December 31, 2022, 2021, and 2020, the UW's allocated share of fuel and operating costs was $ 8.7 million, $ 6.2 million, and $ 5.2 million, respectively. MGE Power West Campus and the UW jointly own the West Campus Cogeneration Facility (WCCF) located on the UW campus in Madison, Wisconsin. The UW owns a controlling interest in the chilled-water and steam plants, which are used to meet the needs for air-conditioning and steam-heat capacity for the UW campus. MGE Power West Campus owns a controlling interest in the electric generation plant, which is leased and operated by MGE. The Two Creeks solar generation array is located in the Town of Two Creeks and the City of Two Rivers in Manitowoc and Kewaunee Counties, Wisconsin. Date of commercial operation of the solar array was November 2020. The Badger Hollow I and II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. Date of commercial operation of Badger Hollow I was November 2021. Construction of Badger Hollow II is expected to be completed in the second half of 2023. |
Investments (Details-1)
Investments (Details-1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity Securities [Abstract] | |||
Equity securities | $ 22,960 | $ 20,529 | |
Equity method investments: [Abstract] | |||
Equity method investments | 80,625 | 75,901 | |
Other investments | 2,298 | 2,324 | |
Total investments | 105,883 | 98,754 | |
Proceeds from Sale, Maturity and Collection of Investments [Abstract] | |||
Proceeds from sale of investments | 924 | 1,684 | $ 622 |
Gain (loss) on sale of investments | 1,382 | 1,543 | 379 |
ATC and ATC Holdco [Member] | |||
Equity method investments: [Abstract] | |||
Equity method investments | 80,586 | 75,862 | |
Other Equity Method Investments [Member] | |||
Equity method investments: [Abstract] | |||
Equity method investments | 39 | 39 | |
MGE [Member] | |||
Equity Securities [Abstract] | |||
Equity securities | 115 | 230 | |
Equity method investments: [Abstract] | |||
Equity method investments | 0 | 0 | |
Other investments | 0 | 0 | |
Total investments | 115 | 230 | |
Proceeds from Sale, Maturity and Collection of Investments [Abstract] | |||
Proceeds from sale of investments | 0 | 0 | 0 |
Gain (loss) on sale of investments | 0 | 0 | $ 0 |
MGE [Member] | ATC and ATC Holdco [Member] | |||
Equity method investments: [Abstract] | |||
Equity method investments | 0 | 0 | |
MGE [Member] | Other Equity Method Investments [Member] | |||
Equity method investments: [Abstract] | |||
Equity method investments | $ 0 | $ 0 |
Investments (Details-2)
Investments (Details-2) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity earnings of investments | $ 9,136 | $ 9,270 | $ 10,221 | |
Dividends from investments | 7,090 | 7,832 | 8,998 | |
Capital contributions to investments | 5,185 | 4,027 | 5,601 | |
MGE Energy [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity earnings of investments | 112,180 | 107,883 | 92,922 | |
MGE Transco [Member] | ATC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity earnings of investments | 9,025 | 9,774 | 10,167 | |
Dividends from investments | 7,090 | 7,832 | 8,633 | |
Capital contributions to investments | $ 2,678 | $ 0 | 1,249 | |
Ownership interest in equity-method investee | 3.60% | 3.60% | ||
MGE Transco [Member] | ATC [Member] | Subsequent Event [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Capital contributions to investments | $ 400 | |||
MGEE Transco [Member] | ATC Holdco [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Capital contributions to investments | $ 0 | $ 0 | $ 300 | |
Ownership interest in equity-method investee | 4.40% | 4.40% |
Investments (Details-3)
Investments (Details-3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity method investment summarized assets [Abstract] | |||
Total Current Assets | $ 243,480 | $ 199,371 | |
Total Assets | 2,517,600 | 2,371,906 | $ 2,253,651 |
Equity method investment summarized liabilities and equity [Abstract] | |||
Total Current Liabilities | 225,062 | 117,847 | |
Total Other Credits | 625,618 | 612,380 | |
Total Liabilities and Capitalization | 2,517,600 | 2,371,906 | |
ATC [Member] | |||
Equity method investment summarized income statement [Abstract] | |||
Operating revenues | 751,158 | 754,838 | 758,117 |
Operating expenses | (381,528) | (376,153) | (372,463) |
Other income, net | 1,171 | 1,144 | 1,922 |
Interest expense, net | (124,091) | (115,089) | (112,818) |
Earnings before members' income taxes | 246,710 | 264,740 | $ 274,758 |
Equity method investment summarized assets [Abstract] | |||
Total Current Assets | 89,606 | 89,747 | |
Total Noncurrent Assets | 5,997,780 | 5,628,127 | |
Total Assets | 6,087,386 | 5,717,874 | |
Equity method investment summarized liabilities and equity [Abstract] | |||
Total Current Liabilities | 511,945 | 436,918 | |
Long-term debt | 2,612,980 | 2,513,009 | |
Total Other Credits | 485,795 | 421,997 | |
Total Equity | 2,476,666 | 2,345,950 | |
Total Liabilities and Capitalization | $ 6,087,386 | $ 5,717,874 |
Investments (Details-4)
Investments (Details-4) - ATC [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Related party expenses | $ 31.4 | $ 32 | $ 30.7 |
Due from related parties | $ 4.8 | $ 7 |
Regulatory Assets and Liabili_3
Regulatory Assets and Liabilities - Regulatory Assets (Details-1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Regulatory Asset [Line Items] | ||
Regulatory Asset | $ 113,441 | $ 109,012 |
Asset Retirement Obligation [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 14,721 | 13,081 |
Deferred Fuel Costs [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 12,067 | 3,292 |
Deferred Bad Debt Expense [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 7,650 | 5,600 |
Debt Related Costs [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 7,580 | 8,173 |
Deferred Pension And Other Postretirement Costs [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 0 | 1,017 |
Derivatives [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 5,094 | 0 |
Leases [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 3,656 | 2,992 |
Tax Recovery Related to AFUDC Equity [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 10,851 | 10,347 |
Unfunded Pension and Other Postretirement Plans Costs [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | 50,072 | 63,728 |
Other Regulatory Asset [Member] | ||
Regulatory Asset [Line Items] | ||
Regulatory Asset | $ 1,750 | $ 782 |
Regulatory Assets and Liabili_4
Regulatory Assets and Liabilities - Regulatory Liabilities (Details-2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Regulatory Liability [Line Items] | ||
Regulatory Liability | $ 168,913 | $ 163,663 |
Deferred Pension And Other Postretirement Costs [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 5,454 | 8,112 |
Elm Road [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 1,092 | 0 |
Income Taxes | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 109,112 | 110,817 |
Non Asset Retirement Obligation Removal Cost [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 31,664 | 29,694 |
Pension and Other Postretirement Plans Costs [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 16,160 | 11,451 |
Purchased Gas Adjustment [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | 4,857 | 1,448 |
Other Regulatory Liability [Member] | ||
Regulatory Liability [Line Items] | ||
Regulatory Liability | $ 574 | $ 2,141 |
Rate Matters (Details)
Rate Matters (Details) - USD ($) $ in Millions | 12 Months Ended | |||||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Fuel Rules [Abstract] | ||||||||
Return of electric fuel credit, total | [1] | $ (3.2) | $ (1.5) | |||||
Deferred fuel rules monitored costs | $ 8.8 | [2] | $ 3.3 | [1],[3] | ||||
Electric Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | ||||||||
Rate Proceedings [Abstract] | ||||||||
Authorized rate increase (decrease), percentage | 8.81% | [4] | 0% | [5] | ||||
Authorized return on equity, percentage | 9.80% | 9.80% | ||||||
Approved equity capital structure, percentage | 55.60% | 55.80% | ||||||
Fuel Rules [Abstract] | ||||||||
Fuel rules, bandwidth | 1% | |||||||
Effects Of The Tax Cuts And Jobs Act [Abstract] | ||||||||
Return of unprotected excess deferred taxes | $ 18.2 | |||||||
Electric Rate Proceeding [Member] | PSCW [Member] | Rate Matters For Future Periods [Member] | MGE [Member] | ||||||||
Rate Proceedings [Abstract] | ||||||||
Authorized rate increase (decrease), percentage | [6] | 9.01% | ||||||
Authorized return on equity, percentage | 9.80% | |||||||
Approved equity capital structure, percentage | 55.60% | |||||||
Fuel Rules [Abstract] | ||||||||
Fuel rules, bandwidth | 2% | |||||||
Gas Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | ||||||||
Rate Proceedings [Abstract] | ||||||||
Authorized rate increase (decrease), percentage | 2.15% | [4] | 4% | [5] | ||||
Authorized return on equity, percentage | 9.80% | 9.80% | ||||||
Approved equity capital structure, percentage | 55.60% | 55.80% | ||||||
Gas Rate Proceeding [Member] | PSCW [Member] | Rate Matters For Future Periods [Member] | MGE [Member] | ||||||||
Rate Proceedings [Abstract] | ||||||||
Authorized rate increase (decrease), percentage | [4] | 0.96% | ||||||
Authorized return on equity, percentage | 9.80% | |||||||
Approved equity capital structure, percentage | 55.60% | |||||||
[1] There was no change to the recovery (refund) in the fuel rules proceedings from the amount MGE deferred. These costs will be subject to the PSCW's annual review of 2022 fuel costs, expected to be completed in 2023. In August 2022, the PSCW issued a final decision in the 2021 fuel rules proceedings for MGE to include the recovery of these costs as part of the 2023 electric limited reopener, and the recovery of such costs was included in the reopener. The electric and gas rate increases were driven by an increase in rate base including our investments in Badger Hollow I and a new customer information system. Also driving the requested electric increase were higher fuel and purchased power costs as well as the completion in 2021 of the one-time return of the electric excess deferred tax credit related to the 2017 Tax Act not restricted by IRS normalization rules. Included in the electric residential rate is a reduction in the customer charge. The electric rate settlement included an increase in rate base but the associated rate increase was primarily offset by lower fuel and purchased power costs and a one-time $ 18.2 million return to customers of the portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. The gas rate increase covered infrastructure costs and technology improvements. The settlement agreement also included escrow accounting treatment for pension and other postretirement benefit costs, bad debt expense, and customer credit card fees. Escrow accounting treatment allows MGE to defer any difference between estimated costs in rates and actual costs incurred until a future rate filing. Any difference would be recorded as a regulatory asset or regulatory liability. The electric rate increase is driven by generation assets including our investments in Badger Hollow II (solar), Paris (solar and battery), Red Barn (wind), and West Riverside (natural gas). In addition, the reopener request includes an increase in fuel costs and the recovery of deferred 2021 fuel costs. The reopener also revises the depreciation schedule for Columbia Unit 2 and shared equipment to 2029 to align with the depreciation schedule for Columbia Unit 1. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Income tax provision components [Abstract] | ||||
Current payable: Federal | $ 2,102 | $ (2,589) | $ 4,179 | |
Current payable: State | 2,385 | 3,002 | 5,095 | |
Net-deferred: Federal | 14,770 | (1,473) | 6,181 | |
Net-deferred: State | 8,665 | 6,310 | 4,182 | |
Amortized investment tax credits | (1,698) | (1,135) | (214) | |
Total income tax provision | $ 26,224 | $ 4,115 | $ 19,423 | |
Reconciliation of tax provision to statutory federal income tax rate [Abstract] | ||||
Statutory federal income tax rate | 21% | 21% | 21% | |
State income taxes, net of federal benefit | 6.20% | 6.20% | 6.30% | |
Amortized investment tax credits | (0.70%) | (1.50%) | (0.20%) | |
Credit for electricity from wind energy | (5.40%) | (6.00%) | (6.20%) | |
AFUDC equity, net | (0.30%) | (0.90%) | (1.20%) | |
Amortization of utility excess deferred tax | [1] | (2.00%) | (14.80%) | (2.00%) |
Other, net, individually significant | 0.30% | (0.30%) | (0.30%) | |
Effective income tax rate | 19.10% | 3.70% | 17.40% | |
Components of Deferred Tax Assets [Abstract] | ||||
Investment in ATC | $ 20,098 | $ 20,868 | ||
Federal tax credits | 46,282 | 39,161 | ||
Accrued expenses | 10,642 | 11,053 | ||
Pension and other postretirement benefits | 20,687 | 24,888 | ||
Deferred tax regulatory account | 42,999 | 42,401 | ||
Derivatives | 1,416 | 241 | ||
Leases | 7,137 | 7,218 | ||
Other deferred tax assets | 17,438 | 17,390 | ||
Gross deferred income tax assets | 166,699 | 163,220 | ||
Less valuation allowance | 0 | 0 | ||
Net deferred income tax assets | 166,699 | 163,220 | ||
Components of Deferred Tax Liabilities [Abstract] | ||||
Property-related | 295,872 | 274,613 | ||
Investment in ATC | 52,840 | 52,731 | ||
Bond transactions | 472 | 534 | ||
Pension and other postretirement benefits | 35,590 | 34,781 | ||
Derivatives | 1,416 | 241 | ||
Tax deductible prepayments | 10,308 | 10,222 | ||
Leases | 7,137 | 7,218 | ||
Other deferred tax liabilities | 15,254 | 14,029 | ||
Gross deferred income tax liabilities | 418,889 | 394,369 | ||
Deferred income taxes, net | 252,190 | 231,149 | ||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
Federal tax credits | 46,282 | 39,161 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||
Unrecognized tax benefits, beginning balance | 2,353 | 2,281 | $ 2,093 | |
Additions based on tax positions related to current year | 731 | 714 | 796 | |
Additions based on tax positions related to prior year | 0 | 0 | 0 | |
Reductions based on tax positions related to prior years | (599) | (642) | (608) | |
Unrecognized tax benefits, ending balance | 2,485 | 2,353 | 2,281 | |
Interest on unrecognized tax benefits [Roll Forward] | ||||
Accrued interest on unrecognized tax benefits, beginning balance | 150 | 154 | 176 | |
Reduction in interest expense on uncertain tax positions | (95) | (98) | (124) | |
Interest expense on uncertain tax positions | 134 | 94 | 102 | |
Accrued interest on unrecognized tax benefits, ending balance | 189 | 150 | 154 | |
Unrecognized Tax Benefits | ||||
Unrecognized tax benefits permanent differences | 0 | 0 | 0 | |
State | ||||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
State net operating losses | 3 | 3 | ||
Valuation allowances for state net operating losses | (3) | (3) | ||
Federal | ||||
Components of Deferred Tax Assets [Abstract] | ||||
Federal tax credits | 46,282 | 39,161 | ||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
Federal tax credits | 46,282 | 39,161 | ||
Excess Deferred Taxes, Tax Cuts And Jobs Act [Member] | ||||
Effects Of The Tax Cuts And Jobs Act [Abstract] | ||||
Excess deferred tax - Income statement effect | 4,100 | 2,600 | 2,200 | |
Return of unprotected excess deferred taxes | 13,200 | |||
Deficient Deferred Taxes, Tax Cuts And Jobs Act [Member] | ||||
Effects Of The Tax Cuts And Jobs Act [Abstract] | ||||
Collection of unprotected of deficient deferred taxes. | 1,300 | |||
MGE [Member] | ||||
Income tax provision components [Abstract] | ||||
Current payable: Federal | 934 | (3,434) | 3,716 | |
Current payable: State | 2,060 | 3,163 | 4,790 | |
Net-deferred: Federal | 14,397 | (1,951) | 4,756 | |
Net-deferred: State | 8,370 | 5,605 | 3,787 | |
Amortized investment tax credits | (1,698) | (1,135) | (214) | |
Total income tax provision | $ 24,063 | $ 2,248 | $ 16,835 | |
Reconciliation of tax provision to statutory federal income tax rate [Abstract] | ||||
Statutory federal income tax rate | 21% | 21% | 21% | |
State income taxes, net of federal benefit | 6.20% | 6.20% | 6.30% | |
Amortized investment tax credits | (0.70%) | (1.50%) | (0.20%) | |
Credit for electricity from wind energy | (5.70%) | (6.40%) | (6.80%) | |
AFUDC equity, net | (0.30%) | (1.00%) | (1.40%) | |
Amortization of utility excess deferred tax | [1] | (2.10%) | (15.80%) | (2.20%) |
Other, net, individually significant | 0.20% | (0.30%) | (0.30%) | |
Effective income tax rate | 18.60% | 2.20% | 16.40% | |
Components of Deferred Tax Assets [Abstract] | ||||
Investment in ATC | $ 0 | $ 0 | ||
Federal tax credits | 46,282 | 39,161 | ||
Accrued expenses | 10,644 | 11,047 | ||
Pension and other postretirement benefits | 20,687 | 24,888 | ||
Deferred tax regulatory account | 42,999 | 42,401 | ||
Derivatives | 1,416 | 241 | ||
Leases | 7,137 | 7,218 | ||
Other deferred tax assets | 17,490 | 17,442 | ||
Gross deferred income tax assets | 146,655 | 142,398 | ||
Less valuation allowance | 0 | 0 | ||
Net deferred income tax assets | 146,655 | 142,398 | ||
Components of Deferred Tax Liabilities [Abstract] | ||||
Property-related | 295,872 | 274,613 | ||
Investment in ATC | 0 | 0 | ||
Bond transactions | 472 | 534 | ||
Pension and other postretirement benefits | 35,590 | 34,781 | ||
Derivatives | 1,416 | 241 | ||
Tax deductible prepayments | 10,308 | 10,210 | ||
Leases | 7,137 | 7,218 | ||
Other deferred tax liabilities | 15,118 | 13,686 | ||
Gross deferred income tax liabilities | 365,913 | 341,283 | ||
Deferred income taxes, net | 219,258 | 198,885 | ||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
Federal tax credits | 46,282 | 39,161 | ||
MGE [Member] | State | ||||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
State net operating losses | 3 | 3 | ||
Valuation allowances for state net operating losses | (3) | (3) | ||
MGE [Member] | Federal | ||||
Components of Deferred Tax Assets [Abstract] | ||||
Federal tax credits | 46,282 | 39,161 | ||
Operating loss deductions and tax credit carryforwards [Abstract] | ||||
Federal tax credits | $ 46,282 | $ 39,161 | ||
[1] Included are impacts of the 2017 Tax Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting in recognition of IRS rules that restrict the rate at which the excess deferred taxes may be returned to utility customers. For the years ended December 31, 2022, 2021, and 2020, MGE recognized $ 4.1 million, $ 2.6 million, and $ 2.2 million, respectively. Included in the 2021 rate settlement was a one-time return to customers of the electric portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2021, MGE recognized $ 13.2 million. Included in the 2022 and 2023 rate settlement was a net collection from customers of the gas portion of deficient deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2022, MGE recognized $ 1.3 million. |
Pension Plans and Other Postr_3
Pension Plans and Other Postretirement Benefits (Details-1) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Defined Benefit Plan, Deferred Pension and Other Postretirement Benefit Plan Costs Recovered [Abstract] | ||||
Defined Contribution Plan, Cost | $ 5,400 | $ 5,100 | $ 4,700 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets as of January 1 | 528,797 | |||
Fair value of plan assets as of December 31 | 412,038 | 528,797 | ||
Amounts recognized in the consolidated balance sheets to reflect funded status of plans [Abstract] | ||||
Long-term asset | 68,872 | 58,757 | ||
Long-term liability | (53,607) | (73,085) | ||
Pension Benefits [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Net benefit obligation as of January 1 | 460,666 | 461,215 | ||
Service cost | [1] | 5,064 | 5,730 | 5,296 |
Interest cost | [1] | 11,161 | 9,109 | 12,210 |
Plan participants' contributions | 0 | 0 | ||
Actuarial loss (gain) | [2] | (120,166) | 3,871 | |
Gross benefits paid | (21,437) | (19,259) | ||
Less: federal subsidy on benefits paid | [3] | 0 | 0 | |
Benefit obligation as of December 31 | 335,288 | 460,666 | 461,215 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets as of January 1 | 473,953 | 429,538 | ||
Actual return in plan assets | (84,562) | 61,487 | ||
Employer contributions | 2,217 | 2,187 | ||
Plan participants' contributions | 0 | 0 | ||
Gross benefits paid | (21,437) | (19,259) | ||
Fair value of plan assets as of December 31 | 370,171 | 473,953 | 429,538 | |
Funded Status as of December 31 | 34,883 | 13,287 | ||
Accumulated benefit obligation | 319,600 | 431,300 | ||
Amounts recognized in the consolidated balance sheets to reflect funded status of plans [Abstract] | ||||
Long-term asset | 68,872 | 58,757 | ||
Current liability | (2,408) | (2,342) | ||
Long-term liability | (31,581) | (43,128) | ||
Net asset (liability) | 34,883 | 13,287 | ||
Amounts recognized in the consolidated balance sheets as regulatory asset [Abstract] | ||||
Net actuarial loss (gain) | 51,148 | 57,777 | ||
Prior service (credit) cost | 0 | (20) | ||
Transition obligation | 0 | 0 | ||
Total | 51,148 | 57,757 | ||
Projected benefit obligation in excess of plan assets [Abstract] | ||||
Projected benefit obligation with projected benefit obligation in excess of plan assets, end of year | 33,989 | 45,470 | ||
Fair value of plan assets with projected benefit obligation in excess of plan assets, end of year | 0 | 0 | ||
Accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Accumulated benefit obligation with accumulated benefit obligation in excess of plan assets, end of year | 33,211 | 43,831 | ||
Fair value of plan assets with accumulated benefit obligation in excess of plan assets, end of year | 0 | 0 | ||
Other Postretirement Benefits Plan [Member] | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Net benefit obligation as of January 1 | 84,526 | 86,360 | ||
Service cost | [1] | 1,293 | 1,448 | 1,264 |
Interest cost | [1] | 1,940 | 1,549 | 2,278 |
Plan participants' contributions | 986 | 992 | ||
Actuarial loss (gain) | [2] | (19,484) | (685) | |
Gross benefits paid | (5,725) | (5,405) | ||
Less: federal subsidy on benefits paid | [3] | 292 | 267 | |
Benefit obligation as of December 31 | 63,828 | 84,526 | 86,360 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||||
Fair value of plan assets as of January 1 | 54,844 | 51,735 | ||
Actual return in plan assets | (8,958) | 6,814 | ||
Employer contributions | 720 | 708 | ||
Plan participants' contributions | 986 | 992 | ||
Gross benefits paid | (5,725) | (5,405) | ||
Fair value of plan assets as of December 31 | 41,867 | 54,844 | $ 51,735 | |
Funded Status as of December 31 | (21,961) | (29,682) | ||
Medicare subsidy due to MGE | 300 | 300 | ||
Amounts recognized in the consolidated balance sheets to reflect funded status of plans [Abstract] | ||||
Long-term asset | 0 | 0 | ||
Current liability | 0 | 0 | ||
Long-term liability | (21,961) | (29,682) | ||
Net asset (liability) | (21,961) | (29,682) | ||
Amounts recognized in the consolidated balance sheets as regulatory asset [Abstract] | ||||
Net actuarial loss (gain) | (1,085) | 6,256 | ||
Prior service (credit) cost | 0 | (297) | ||
Transition obligation | 9 | 12 | ||
Total | (1,076) | 5,971 | ||
Accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Accumulated benefit obligation with accumulated benefit obligation in excess of plan assets, end of year | 63,828 | 84,526 | ||
Fair value of plan assets with accumulated benefit obligation in excess of plan assets, end of year | $ 41,867 | $ 54,844 | ||
[1] As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. For the years ended December 31, 2022, 2021, and 2020 MGE recovered approximately $ 1.0 million, $ 4.3 million, and $ 0.9 million, respectively, of pension and other postretirement costs. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above. See Footnote 8 for further information. For the years ended December 31, 2022 and 2021 , MGE deferred and recorded as a regulatory liability $ 1.5 million and $ 8.1 million, respectively, of savings from employee benefit plan costs. For the year ended December 31, 2022 , MGE refunded in rates $ 4.2 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above. See Footnote 8 for additional information. In 2022, higher discount rates were the primary driver of the actuarial gain. In 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law authorizing Medicare to provide prescription drug benefits to retirees. For both the years ended December 31, 2022 and 2021, the subsidy due to MGE was $ 0.3 million. |
Pension Plans and Other Postr_4
Pension Plans and Other Postretirement Benefits (Details-2) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Amortization of: | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Transition Asset (Obligation), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Defined Benefit Plan, Deferred Pension and Other Postretirement Benefit Plan Costs Recovered [Abstract] | ||||
Deferred (recognized) pension and OPEB costs | $ (1,000) | $ (4,300) | $ (900) | |
Deferred savings from current year employee benefit costs | 1,500 | 8,100 | ||
Return savings from prior year employee benefit costs | 4,200 | |||
Pension Benefits [Member] | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||
Service cost | [1] | 5,064 | 5,730 | 5,296 |
Interest cost | [1] | 11,161 | 9,109 | 12,210 |
Expected return on assets | [1] | (31,391) | (29,487) | (27,229) |
Amortization of: | ||||
Transition obligation | [1] | 0 | 0 | 0 |
Prior service (credit) cost | [1] | (20) | (124) | (114) |
Actuarial loss | [1] | 2,416 | 6,646 | 5,357 |
Net periodic benefit cost (credit) | [1] | (12,770) | (8,126) | (4,480) |
Postretirement Benefits [Member] | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||
Service cost | [1] | 1,293 | 1,448 | 1,264 |
Interest cost | [1] | 1,940 | 1,549 | 2,278 |
Expected return on assets | [1] | (3,365) | (3,277) | (3,154) |
Amortization of: | ||||
Transition obligation | [1] | 3 | 3 | 3 |
Prior service (credit) cost | [1] | (297) | (1,518) | (2,669) |
Actuarial loss | [1] | 145 | 493 | 217 |
Net periodic benefit cost (credit) | [1] | $ (281) | $ (1,302) | $ (2,061) |
[1] As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. For the years ended December 31, 2022, 2021, and 2020 MGE recovered approximately $ 1.0 million, $ 4.3 million, and $ 0.9 million, respectively, of pension and other postretirement costs. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above. See Footnote 8 for further information. For the years ended December 31, 2022 and 2021 , MGE deferred and recorded as a regulatory liability $ 1.5 million and $ 8.1 million, respectively, of savings from employee benefit plan costs. For the year ended December 31, 2022 , MGE refunded in rates $ 4.2 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above. See Footnote 8 for additional information. |
Pension Plans and Other Postr_5
Pension Plans and Other Postretirement Benefits (Details-3) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension Benefits [Member] | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 5.47% | 2.94% | |
Rate of compensation increase | 3.21% | 3.19% | |
Weighted-average assumptions used to determine periodic cost: | |||
Discount rate | 2.94% | 2.70% | 3.42% |
Long-term rate of return | 6.75% | 7% | 7.20% |
Rate of compensation increase | 3.24% | 3.23% | 3.26% |
Other Postretirement Benefits Plan [Member] | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 5.45% | 2.85% | |
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 7% | 5.75% | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.75% | 4.75% | |
Year that the rate reaches the ultimate trend rate | 2032 | 2027 | |
Weighted-average assumptions used to determine periodic cost: | |||
Discount rate | 2.85% | 2.52% | 3.30% |
Long-term rate of return | 6.40% | 6.61% | 6.75% |
Pension Plans and Other Postr_6
Pension Plans and Other Postretirement Benefits (Details-4) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Concentration | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||
Other postretirement benefits [Abstract] | ||||
Fair value of plan assets | $ 412,038 | $ 528,797 | ||
Pension Benefits [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | 100% | |||
Actual Plan Asset Allocation | 100% | 100% | ||
Other postretirement benefits [Abstract] | ||||
Fair value of plan assets | $ 370,171 | $ 473,953 | $ 429,538 | |
Pension Benefits [Member] | Plan Assets [Member] | Product Concentration Risk [Member] | ||||
Concentration of Credit Risk [Abstract] | ||||
Concentration Risk, Percentage | 10% | |||
Concentration risk, number of significant concentrations | Concentration | 0 | |||
Pension Benefits [Member] | Equity Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | [1] | 63% | ||
Actual Plan Asset Allocation | [1] | 65% | 65% | |
Pension Benefits [Member] | United States Equity Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | 45.50% | |||
Pension Benefits [Member] | Non-United States Equity Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | 17.50% | |||
Pension Benefits [Member] | Fixed Income Securities [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | 30% | |||
Actual Plan Asset Allocation | 26% | 29% | ||
Pension Benefits [Member] | Real Estate [Member] | ||||
Defined Benefit Plan, Information about Plan Assets [Abstract] | ||||
Target Plan Asset Allocation | 7% | |||
Actual Plan Asset Allocation | 9% | 6% | ||
Postretirement Benefits [Member] | ||||
Other postretirement benefits [Abstract] | ||||
Fair value of plan assets | $ 41,867 | $ 54,844 | $ 51,735 | |
Master Pension Trust [Member] | ||||
Other postretirement benefits [Abstract] | ||||
Fair value of plan assets | $ 36,300 | $ 48,700 | ||
[1] Target allocations for equity securities are broken out as follows: 45.5 % United States equity and 17.5 % non-United States equity. |
Pension Plans and Other Postr_7
Pension Plans and Other Postretirement Benefits (Details-5) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 412,038 | $ 528,797 |
Cash and Cash Equivalents [Member] | Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,715 | 1,428 |
Equity Securities [Member] | U.S. Large Cap [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 121,884 | 162,060 |
Equity Securities [Member] | U.S. Mid Cap [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 28,392 | 38,755 |
Equity Securities [Member] | U.S. Small Cap [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 35,372 | 47,657 |
Equity Securities [Member] | International Blend [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 75,843 | 87,781 |
Fixed Income Securities [Member] | Short-Term Fund [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 3,807 | 5,222 |
Fixed Income Securities [Member] | High Yield Bond [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 17,895 | 25,190 |
Fixed Income Securities [Member] | Long Duration Bond [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 85,767 | 119,867 |
Real Estate [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 38,418 | 37,170 |
Insurance Continuance Fund [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,613 | 1,599 |
Fixed Rate Fund [Member] | Fair Value Measured At Net Asset Value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 1,332 | $ 2,068 |
Pension Plans and Other Postr_8
Pension Plans and Other Postretirement Benefits (Details-6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan, Expected Future Employer Contributions [Abstract] | |||
Expected employer contributions, 2023 | $ 0 | ||
Cash contributions to pension and other postretirement plans | (7,308) | $ (6,935) | $ (6,296) |
Pension Benefits [Member] | |||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |||
Defined benefit plan expected future benefit payments, 2023 | 20,715 | ||
Defined benefit plan expected future benefit payments, 2024 | 21,304 | ||
Defined benefit plan expected future benefit payments, 2025 | 21,864 | ||
Defined benefit plan expected future benefit payments, 2026 | 22,305 | ||
Defined benefit plan expected future benefit payments, 2027 | 22,789 | ||
Defined benefit plan expected future benefit payments, 2028-2032 | 117,798 | ||
Other Postretirement Benefits Plan [Member] | |||
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |||
Defined benefit plan expected future benefit payments, 2023 | 5,051 | ||
Defined benefit plan expected future benefit payments, 2024 | 5,363 | ||
Defined benefit plan expected future benefit payments, 2025 | 5,637 | ||
Defined benefit plan expected future benefit payments, 2026 | 5,544 | ||
Defined benefit plan expected future benefit payments, 2027 | 5,560 | ||
Defined benefit plan expected future benefit payments, 2028-2032 | 27,199 | ||
Medicare Part D Subsidies | |||
Expected Medicare Part D Subsidies, 2023 | (332) | ||
Expected Medicare Part D Subsidies, 2024 | (365) | ||
Expected Medicare Part D Subsidies, 2025 | (400) | ||
Expected Medicare Part D Subsidies, 2026 | (447) | ||
Expected Medicare Part D Subsidies, 2027 | (483) | ||
Expected Medicare Part D Subsidies, 2028-2032 | (2,833) | ||
Defined benefit plan expected net future benefit payments, 2023 | 4,719 | ||
Defined benefit plan expected net future benefit payments, 2024 | 4,998 | ||
Defined benefit plan expected net future benefit payments, 2025 | 5,237 | ||
Defined benefit plan expected net future benefit payments, 2026 | 5,097 | ||
Defined benefit plan expected net future benefit payments, 2027 | 5,077 | ||
Defined benefit plan expected net future benefit payments, 2028-2032 | $ 24,366 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Compensation expense | $ 1.3 | $ 2.9 | $ 1.3 | ||
Restricted Stock Units Equity Awards [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested awards January 1, | 13,126 | 13,126 | 0 | ||
Granted | 15,931 | 16,267 | |||
Vested | 0 | 0 | |||
Undistributed vested awards | [1] | (1,687) | (3,141) | ||
Nonvested awards December 31, | 27,370 | 13,126 | 0 | ||
Unvested, weighted average grant date fair value per share, beginning balance | $ 65.83 | $ 65.83 | |||
Granted, weighted average grant date fair value | 72.46 | $ 65.83 | |||
Undistributed vested awards, weighted average grant date fair value per share | [1] | 72.46 | 65.83 | ||
Unvested, weighted average grant date fair value per share, ending balance | $ 69.28 | $ 65.83 | |||
Restricted Stock Units Liability Awards [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested awards January 1, | 6,064 | 6,064 | 7,003 | ||
Granted | 0 | 0 | |||
Vested | (6,064) | 0 | |||
Undistributed vested awards | [2] | 0 | (939) | ||
Nonvested awards December 31, | 0 | 6,064 | 7,003 | ||
Performance Units Liability Awards [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested awards January 1, | 13,870 | 13,870 | 7,003 | ||
Granted | 10,395 | 10,187 | |||
Vested | (6,064) | 0 | |||
Undistributed vested awards | [3] | (1,687) | (3,320) | ||
Nonvested awards December 31, | 16,514 | 13,870 | 7,003 | ||
Weighted average fair Value of each nonvested award | $ 76.87 | $ 104.76 | |||
Weighted average estimated payout percent based on performance criteria | 109.20% | 127.40% | |||
Performance Units Liability Awards [Member] | Maximum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Awards to be granted as percentage of target units | 200% | ||||
Performance Units Liability Awards [Member] | Minimum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Awards to be granted as percentage of target units | 0% | ||||
2006 Performance Unit Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock to be issued with plan | 0 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested awards January 1, | 5,760 | 5,760 | 17,420 | ||
Granted | 0 | 0 | |||
Vested | (3,756) | (11,660) | |||
Nonvested awards December 31, | 2,004 | 5,760 | 17,420 | ||
2006 Performance Unit Plan [Member] | Performance Shares [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
2013 Director Incentive Agreement [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock to be issued with plan | 0 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested awards January 1, | 1,472 | 1,472 | 4,286 | ||
Granted | 0 | 0 | |||
Vested | (1,472) | (2,814) | |||
Nonvested awards December 31, | 0 | 1,472 | 4,286 | ||
2013 Director Incentive Agreement [Member] | Performance Shares [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
2006 Performance Unit Plan and 2013 Director Incentive Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Cash payments distributed related to awards previously granted and now payable | $ 1.8 | ||||
2021 Long Term Incentive Plan [Member] | Maximum [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Common stock to be issued with plan | 500,000 | ||||
[1] Represents restricted stock units that vested but were not distributed to retirement-eligible employees. Represents restricted stock units that vested but were not distributed to retirement-eligible employees. Represents performance units that vested but were not distributed to retirement-eligible employees. |
Notes Payable to Banks, Comme_3
Notes Payable to Banks, Commercial Paper, and Lines of Credit (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 30, 2023 USD ($) | ||
Short-Term Debt [Line Items] | ||||
Long-Term Line of Credit | $ 0 | |||
Short-term debt outstanding | [1] | 70,500 | $ 5,500 | |
Letters of credit issued inside credit facilities | [1] | $ 685 | $ 685 | |
Weighted-average interest rate | [1] | 4.32% | 0.15% | |
Maximum short-term borrowings | [1] | $ 70,500 | $ 64,000 | |
Average short-term borrowings | [1] | $ 20,177 | $ 28,583 | |
Weighted-average interest rate during the year | [1] | 3.46% | 0.15% | |
MGE Energy unsecured committed revolving line of credit totaling $50 million [Member] | MGE Energy [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit | $ 50,000 | |||
Long-Term Line of Credit | 0 | |||
Line of Credit [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit | [1],[2] | 150,000 | $ 150,000 | |
Available capacity under line of credit | [1] | $ 78,815 | $ 143,815 | |
Debt covenant, required parent company ownership of MGE | 100% | |||
Line of Credit [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | |||
Line of Credit [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt to total capitalization ratio | [1],[3] | 0.6500 | 0.6500 | |
Subsequent Event [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit | $ 30,000 | |||
MGE [Member] | ||||
Short-Term Debt [Line Items] | ||||
Long-Term Line of Credit | $ 0 | |||
Short-term debt outstanding | 70,500 | $ 5,500 | ||
Letters of credit issued inside credit facilities | $ 685 | $ 685 | ||
Weighted-average interest rate | 4.32% | 0.15% | ||
Maximum short-term borrowings | $ 70,500 | $ 64,000 | ||
Average short-term borrowings | $ 20,177 | $ 28,583 | ||
Weighted-average interest rate during the year | 3.46% | 0.15% | ||
MGE [Member] | Line of Credit [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit | [2] | $ 100,000 | $ 100,000 | |
Available capacity under line of credit | $ 28,815 | $ 93,815 | ||
Debt covenant, required parent company ownership of MGE | 100% | |||
MGE [Member] | Line of Credit [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | |||
MGE [Member] | Line of Credit [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt to total capitalization ratio | [4] | 0.6500 | 0.6500 | |
[1] MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper. In November 2022, MGE Energy and MGE amended and restated their existing credit agreements, which extended their maturity dates to November 8, 2027. In January 2023, MGE amended one of its existing credit agreements to increase the available credit by an additional $ 30 million. As of December 31, 2022, MGE Energy and MGE had no borrowings outstanding under these credit facilities and were in compliance with the covenant requirements of the credit agreements. A change in control constitutes a default under the agreement. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. The ratio calculation excludes assets, liabilities, revenues, and expenses included in MGE's financial statements as the result of the consolidation of VIEs, such as MGE Power West Campus and MGE Power Elm Road. A change in control constitutes a default under the agreements. Change in control events are defined as (i) a failure by MGE Energy to hold 100 % of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy by one person or two or more persons acting in concert. |
Long-Term Debt (Details-1)
Long-Term Debt (Details-1) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Feb. 28, 2023 USD ($) | Dec. 31, 2021 USD ($) | |||
Debt Instrument [Line Items] | |||||
Long-term debt due within one year | $ (54,314) | $ (4,889) | |||
Unamortized discount and debt issuance costs | (4,000) | (4,349) | |||
Total Long-Term Debt | 585,246 | 614,211 | |||
First Mortgage Bonds [Member] | 7.70%, 2028 Series [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [1] | $ 1,200 | $ 1,200 | ||
Interest rate | 7.70% | 7.70% | |||
Debt covenant, allowable amount available for payment of dividends | $ 650,100 | ||||
Nontaxable Municipal Bonds [Member] | 2.05%, 2023 Series, Industrial Development Revenue Bonds | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 19,300 | $ 19,300 | |||
Interest rate | 2.05% | 2.05% | |||
Medium-term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 70,000 | $ 70,000 | |||
Medium-term Notes [Member] | 6.12%, due 2028 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [2] | $ 20,000 | $ 20,000 | ||
Interest rate | 6.12% | 6.12% | |||
Medium-term Notes [Member] | 7.12%, due 2032 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [2] | $ 25,000 | $ 25,000 | ||
Interest rate | 7.12% | 7.12% | |||
Medium-term Notes [Member] | 6.247%, due 2037 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [2] | $ 25,000 | $ 25,000 | ||
Interest rate | 6.247% | 6.247% | |||
Other Long-Term Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 553,060 | $ 532,949 | |||
Other Long-Term Debt [Member] | 3.09%, due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 30,000 | $ 30,000 | ||
Interest rate | 3.09% | 3.09% | |||
Other Long-Term Debt [Member] | 3.09%, due 2023 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 3.09%, due 2023 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 3.29%, due 2026 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 15,000 | $ 15,000 | ||
Interest rate | 3.29% | 3.29% | |||
Other Long-Term Debt [Member] | 3.29%, due 2026 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 3.29%, due 2026 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 3.11% due 2027 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 30,000 | $ 30,000 | ||
Interest rate | 3.11% | 3.11% | |||
Other Long-Term Debt [Member] | 3.11% due 2027 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 3.11% due 2027 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 2.94% due 2029 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 50,000 | $ 50,000 | ||
Interest rate | 2.94% | 2.94% | |||
Other Long-Term Debt [Member] | 2.94% due 2029 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 2.94% due 2029 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 2.48%, due 2031 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 60,000 | $ 60,000 | ||
Interest rate | 2.48% | 2.48% | |||
Other Long-Term Debt [Member] | 2.48%, due 2031 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 2.48%, due 2031 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 5.43% due 2032 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 25,000 | [3],[4],[5] | $ 0 | ||
Interest rate | 5.43% | ||||
Other Long-Term Debt [Member] | 5.68%, due 2033 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [4],[6] | $ 20,184 | $ 21,510 | ||
Interest rate | 5.68% | 5.68% | |||
Other Long-Term Debt [Member] | 5.19%, due 2033 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [4],[6] | $ 13,237 | $ 14,133 | ||
Interest rate | 5.19% | 5.19% | |||
Other Long-Term Debt [Member] | 2.63%, due 2033 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 40,000 | $ 40,000 | ||
Interest rate | 2.63% | 2.63% | |||
Other Long-Term Debt [Member] | 2.63%, due 2033 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 2.63%, due 2033 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 5.26%, due 2040 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 15,000 | $ 15,000 | ||
Interest rate | 5.26% | 5.26% | |||
Other Long-Term Debt [Member] | 5.26%, due 2040 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 5.26%, due 2040 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 5.04%, due 2040 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [4],[7] | $ 28,472 | $ 30,139 | ||
Interest rate | 5.04% | 5.04% | |||
Other Long-Term Debt [Member] | 4.74%, due 2041 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [4],[7] | $ 18,167 | $ 19,167 | ||
Interest rate | 4.74% | 4.74% | |||
Other Long-Term Debt [Member] | 4.38%, due 2042 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 28,000 | $ 28,000 | ||
Interest rate | 4.38% | 4.38% | |||
Other Long-Term Debt [Member] | 4.38%, due 2042 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.38%, due 2042 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 4.42%, due 2043 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 20,000 | $ 20,000 | ||
Interest rate | 4.42% | 4.42% | |||
Other Long-Term Debt [Member] | 4.42%, due 2043 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.42%, due 2043 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 4.47%, due 2048 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 20,000 | $ 20,000 | ||
Interest rate | 4.47% | 4.47% | |||
Other Long-Term Debt [Member] | 4.47%, due 2048 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.47%, due 2048 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 3.76% due 2052 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 40,000 | $ 40,000 | ||
Interest rate | 3.76% | 3.76% | |||
Other Long-Term Debt [Member] | 3.76% due 2052 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 3.76% due 2052 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 4.19% due 2048 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 60,000 | $ 60,000 | ||
Interest rate | 4.19% | 4.19% | |||
Other Long-Term Debt [Member] | 4.19% due 2048 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.19% due 2048 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 4.24% due 2053 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 20,000 | $ 20,000 | ||
Interest rate | 4.24% | 4.24% | |||
Other Long-Term Debt [Member] | 4.24% due 2053 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.24% due 2053 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long-Term Debt [Member] | 4.34% due 2058 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | [3],[4] | $ 20,000 | $ 20,000 | ||
Interest rate | 4.34% | 4.34% | |||
Other Long-Term Debt [Member] | 4.34% due 2058 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30% | ||||
Other Long-Term Debt [Member] | 4.34% due 2058 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
Priority debt to assets ratio | 0.20 | ||||
Other Long Term Debt Expected In Future Periods [Member] | 5.43% due 2033 | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 15,000 | ||||
Interest rate | 5.43% | ||||
Other Long Term Debt Expected In Future Periods [Member] | 5.53% due 2035 | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 35,000 | ||||
Interest rate | 5.53% | ||||
MGE Power Elm Road [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized discount and debt issuance costs | $ (300) | $ (300) | |||
MGE Power Elm Road [Member] | Other Long-Term Debt [Member] | 5.04%, due 2040 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt service coverage ratio | 1.25 | ||||
MGE Power Elm Road [Member] | Other Long-Term Debt [Member] | 4.74%, due 2041 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt service coverage ratio | 1.25 | ||||
MGE Power West Campus [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized discount and debt issuance costs | $ (100) | $ (100) | |||
MGE Power West Campus [Member] | Other Long-Term Debt [Member] | 5.68%, due 2033 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt service coverage ratio | 1.25 | ||||
MGE Power West Campus [Member] | Other Long-Term Debt [Member] | 5.68%, due 2033 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
MGE Power West Campus [Member] | Other Long-Term Debt [Member] | 5.19%, due 2033 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt service coverage ratio | 1.25 | ||||
MGE Power West Campus [Member] | Other Long-Term Debt [Member] | 5.19%, due 2033 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt to total capitalization ratio | 0.65 | ||||
[1] MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust, under which its first mortgage bonds are issued. The Mortgage Indenture provides that dividends or any other distribution or purchase of MGE shares may not be made if the aggregate amount thereof since December 31, 1945, would exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2022, approximately $ 650.1 million was available for the payment of dividends under this covenant. The indenture under which MGE's Medium-Term notes are issued provides that those notes will be entitled to be equally and ratably secured in the event that MGE issues any additional first mortgage bonds. Issued by MGE. Under that Note Purchase Agreement: (i) note holders have the right to require MGE to repurchase their notes at par in the event of an acquisition of beneficial ownership of 30 % or more of the outstanding voting stock of MGE Energy, (ii) MGE must maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65 %, and (iii) MGE cannot issue "Priority Debt" in an amount exceeding 20 % of its consolidated assets. Priority Debt is defined as any indebtedness of MGE secured by liens other than specified liens permitted by the Note Purchase Agreement and certain unsecured indebtedness of certain subsidiaries. As of December 31, 2022 , MGE was in compliance with the covenant requirements. Unsecured notes issued pursuant to various Note Purchase Agreements with one or more purchasers. The notes are not issued under, or governed by, MGE's Indenture dated as of September 1, 1998, which governs MGE's Medium-Term Notes. In November 2022, MGE entered into a private placement Note Purchase Agreement in which it committed to issue $ 25 million of new long-term debt (Series A), $ 15 million of new long-term debt (Series B), carrying an interest rate of 5.43 % per annum over its 10-year life, and $ 35 million of new long-term debt (Series C), carrying an interest rate of 5.53 % per annum over its 12-year life. Funding occurred on December 1, 2022, for Series A and will occur on February 28, 2023, for Series B and Series C. The proceeds of the debt financing will be used to assist with capital expenditures and other corporate obligations. Issued by MGE Power West Campus. The Note Purchase Agreements require MGE Power West Campus to maintain a projected debt service coverage ratio of not less than 1.25 to 1.00, and debt to total capitalization ratio of not more than 0.65 to 1.00. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power West Campus for use of the WCCF pursuant to a long-term lease. As of December 31, 2022 , MGE Power West Campus was in compliance with the covenant requirements. Issued by MGE Power Elm Road. The Note Purchase Agreement requires MGE Power Elm Road to maintain a projected and actual debt service coverage ratio at the end of any calendar quarter of not less than 1.25 to 1.00 for the trailing 12-month period. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power Elm Road for use of the Elm Road Units pursuant to long-term leases. As of December 31, 2022 , MGE Power Elm Road was in compliance with the covenant requirements. |
Long-Term Debt (Details-2)
Long-Term Debt (Details-2) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities of Long-Term Debt [Abstract] | |
Long term debt maturities in 2023 | $ 54,314 |
Long term debt maturities in 2024 | 5,146 |
Long term debt maturities in 2025 | 5,285 |
Long term debt maturities in 2026 | 20,433 |
Long term debt maturities in 2027 | 35,588 |
Long term debt maturities in future years | $ 522,794 |
Common Equity (Details)
Common Equity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | |
Class of Stock [Line Items] | |||
Common stock dividends declared | $ | $ 57,500 | $ 54,788 | $ 51,729 |
Common stock dividends declared (in dollars per share) | $ / shares | $ 1.59 | $ 1.52 | $ 1.45 |
Common stock issued during period under the stock plan | shares | 0 | 0 | |
Dilutive securities | shares | 10,949 | ||
MGE [Member] | |||
Class of Stock [Line Items] | |||
Cash dividends paid to parent by MGE | $ | $ 33,500 | $ 5,000 | |
MGE [Member] | Minimum [Member] | |||
Class of Stock [Line Items] | |||
Dividend restrictions, common equity ratio | 0.55 |
Commitments and Contingencies_2
Commitments and Contingencies (Details-1) $ in Millions | Dec. 31, 2022 USD ($) |
Columbia Units [Member] | |
Public Utilities, General Disclosures [Line Items] | |
Projected costs for enviornmental regulations | $ 4 |
Elm Road Units [Member] | |
Public Utilities, General Disclosures [Line Items] | |
Projected costs for enviornmental regulations | $ 4 |
Commitments and Contingencies_3
Commitments and Contingencies (Details-2) $ in Thousands | Dec. 31, 2022 USD ($) | |
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | $ 116,752 | |
Purchase obligation due in second year | 52,422 | |
Purchase obligation due in third year | 41,353 | |
Purchase obligation due in fourth year | 25,869 | |
Purchase obligation due in fifth year | 10,039 | |
Purchase obligation due thereafter | 38,096 | |
Coal [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 23,886 | [1] |
Purchase obligation due in second year | 17,104 | [1] |
Purchase obligation due in third year | 7,782 | [1] |
Purchase obligation due in fourth year | 2,868 | [1] |
Purchase obligation due in fifth year | 0 | [1] |
Purchase obligation due thereafter | 0 | [1] |
Natural Gas, Transportation and Storage [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 25,446 | [2] |
Purchase obligation due in second year | 25,446 | [2] |
Purchase obligation due in third year | 25,446 | [2] |
Purchase obligation due in fourth year | 14,736 | [2] |
Purchase obligation due in fifth year | 1,892 | [2] |
Purchase obligation due thereafter | 10,549 | [2] |
Natural Gas, Supply [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 30,778 | [3] |
Purchase obligation due in second year | 0 | [3] |
Purchase obligation due in third year | 0 | [3] |
Purchase obligation due in fourth year | 0 | [3] |
Purchase obligation due in fifth year | 0 | [3] |
Purchase obligation due thereafter | 0 | [3] |
Purchased Power [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 5,513 | [4] |
Purchase obligation due in second year | 5,623 | [4] |
Purchase obligation due in third year | 5,735 | [4] |
Purchase obligation due in fourth year | 5,850 | [4] |
Purchase obligation due in fifth year | 5,967 | [4] |
Purchase obligation due thereafter | 266 | [4] |
Renewable energy [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 25,024 | [5] |
Purchase obligation due in second year | 2,025 | [5] |
Purchase obligation due in third year | 2,040 | [5] |
Purchase obligation due in fourth year | 2,056 | [5] |
Purchase obligation due in fifth year | 2,072 | [5] |
Purchase obligation due thereafter | 26,592 | [5] |
Other [Member] | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Purchase obligation due in next twelve months | 6,105 | |
Purchase obligation due in second year | 2,224 | |
Purchase obligation due in third year | 350 | |
Purchase obligation due in fourth year | 359 | |
Purchase obligation due in fifth year | 108 | |
Purchase obligation due thereafter | $ 689 | |
[1] Total coal commitments for MGE's share of the Columbia and Elm Road Units, including transportation. Fuel procurement for MGE's jointly owned Columbia and Elm Road Units is handled by WPL and WEPCO, respectively, who are the operators of those facilities. MGE's natural gas transportation and storage contracts require fixed monthly payments for firm supply pipeline transportation and storage capacity. The pricing components of the fixed monthly payments for the transportation and storage contracts are approved by FERC but may be subject to change. These commitments include market-based pricing. MGE has a purchase power agreement to help meet future electric supply requirements. Operational commitments for solar and wind facilities. |
Commitments and Contingencies_4
Commitments and Contingencies (Details-3) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Other Commitments [Line Items] | |
2023 | $ 333 |
2024 | 333 |
2025 | 333 |
2026 | 333 |
2027 | 333 |
Thereafter | 2,332 |
Investments in Non Public Entities, Capital Infusions [Member] | |
Other Commitments [Line Items] | |
Other commitment, initial agreed upon commitment total | $ 8,000 |
Venture Debt Fund [Member] | |
Other Commitments [Line Items] | |
Other commitment, contract term, expiring in 2025 | 3 years |
Other commitment, initial agreed upon commitment total | $ 1,500 |
Other commitments, total as of balance sheet date | $ 900 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligation, beginning balance | $ 46,580 | $ 31,196 | |
Liabilities incurred | [1] | 1,947 | 8,589 |
Accretion expense | 1,909 | 1,526 | |
Liabilities settled | (317) | (354) | |
Revisions in estimated cash flows | [2] | 141 | 5,623 |
Asset retirement obligation, ending balance | $ 50,260 | 46,580 | |
Badger Hollow [Member] | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Liabilities incurred | 4,900 | ||
Other completed renewable projects | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Liabilities incurred | $ 3,400 | ||
[1] In 2021, MGE recorded an obligation of $ 4.9 million and $ 3.4 million, respectively, for the fair value of its legal liability for AROs associated with Badger Hollow I and other completed renewable projects. See Footnote 6 for additional information on Badger Hollow I . In 2021, MGE revised the AROs associated with certain Columbia assets. |
Derivative and Hedging Instru_3
Derivative and Hedging Instruments (Details-1) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Dth1 MWh MW | Dec. 31, 2021 USD ($) Dth1 MWh MW | Dec. 31, 2020 USD ($) | ||
Derivative Fair Values [Abstract] | ||||
Collateral posted against derivative positions | $ 1,300 | |||
Other Current Assets [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Derivative fair value, net | $ 2,747 | 770 | $ 1,162 | |
Commodity Contracts And Financial Transimission Rights [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Derivative fair value, net | $ (5,100) | $ 2,800 | ||
Commodity Contract [Member] | ||||
Notional Disclosures [Abstract] | ||||
Notional amount, energy measure (in MWh) | MWh | 353,600 | 278,000 | ||
Notional amount, decatherm measure (in Dth) | Dth1 | 8,070,000 | 5,735,000 | ||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | $ 2,966 | $ 3,379 | ||
Liability Derivatives, fair value, gross basis | 8,163 | 849 | ||
Collateral posted against derivative positions | 0 | 1,254 | ||
Commodity Contract [Member] | Other Current Assets [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | [1] | 2,959 | ||
Liability Derivatives, fair value, gross basis | [1] | 811 | ||
Commodity Contract [Member] | Other Deferred Charges [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | [1] | 420 | ||
Liability Derivatives, fair value, gross basis | [1] | 38 | ||
Commodity Contract [Member] | Other Current Liabilities [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | [2] | 2,164 | ||
Liability Derivatives, fair value, gross basis | [2] | 7,687 | ||
Commodity Contract [Member] | Other Deferred Liabilities and Other [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | [2] | 802 | ||
Liability Derivatives, fair value, gross basis | [2] | 476 | ||
Commodity Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Derivative, right to reclaim collateral (receivable) | $ 5,200 | |||
Collateral posted against derivative positions | $ 1,300 | |||
Financial Transmission Rights [Member] | ||||
Notional Disclosures [Abstract] | ||||
Notional amount, power measure (in MW) | MW | 1,945 | 2,127 | ||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | $ 103 | $ 227 | ||
Collateral posted against derivative positions | 0 | 0 | ||
Financial Transmission Rights [Member] | Other Current Assets [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Asset Derivatives, fair value, gross basis | 103 | 227 | ||
Liability Derivatives, fair value, gross basis | $ 0 | $ 0 | ||
Energy Related Commodity Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Maximum term of derivative hedging contract | 4 years | |||
PPA [Member] | ||||
Notional Disclosures [Abstract] | ||||
Notional amount, power measure (in MW) | MW | 0 | 250 | ||
Derivative Fair Values [Abstract] | ||||
Liability Derivatives, fair value, gross basis | $ 2,140 | |||
PPA [Member] | Other Current Liabilities [Member] | ||||
Derivative Fair Values [Abstract] | ||||
Liability Derivatives, fair value, gross basis | $ 2,140 | |||
[1] As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. |
Derivative and Hedging Instru_4
Derivative and Hedging Instruments (Details-2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Offsetting Assets [Line Items] | |||
Collateral posted against derivative positions | $ (1,300) | ||
Commodity Derivative Contracts [Member] | |||
Offsetting Assets [Line Items] | |||
Gross amounts | $ 2,966 | 3,379 | |
Gross amounts offset in balance sheet | (2,966) | (849) | |
Collateral posted against derivative positions | 0 | (1,254) | |
Net amount presented in balance sheet | 0 | 1,276 | |
Commodity Derivative Contracts [Member] | Other Current Assets [Member] | |||
Offsetting Assets [Line Items] | |||
Gross amounts | [1] | $ 2,959 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | ||
Commodity Derivative Contracts [Member] | Other Noncurrent Assets [Member] | |||
Offsetting Assets [Line Items] | |||
Gross amounts | [1] | $ 420 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | ||
Financial Transmission Rights [Member] | |||
Offsetting Assets [Line Items] | |||
Gross amounts | 103 | $ 227 | |
Gross amounts offset in balance sheet | 0 | 0 | |
Collateral posted against derivative positions | 0 | 0 | |
Net amount presented in balance sheet | $ 103 | $ 227 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets | |
Financial Transmission Rights [Member] | Other Current Assets [Member] | |||
Offsetting Assets [Line Items] | |||
Gross amounts | $ 103 | $ 227 | |
[1] As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. |
Derivative and Hedging Instru_5
Derivative and Hedging Instruments (Details-3) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Offsetting Liabilities [Line Items] | |||
Collateral posted against derivative positions | $ (5,200) | ||
Commodity Contract [Member] | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts | 8,163 | $ 849 | |
Gross amounts offset in balance sheet | (2,966) | (849) | |
Collateral posted against derivative positions | (5,197) | 0 | |
Net amount presented in the balance sheet | 0 | 0 | |
Commodity Contract [Member] | Other Current Liabilities [Member] | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts | [1] | $ 7,687 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | ||
Commodity Contract [Member] | Other Noncurrent Liabilities [Member] | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts | [1] | $ 476 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | ||
Purchased Power Agreement [Member] | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts | 2,140 | ||
Gross amounts offset in balance sheet | 0 | ||
Collateral posted against derivative positions | 0 | ||
Net amount presented in the balance sheet | $ 2,140 | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | ||
Purchased Power Agreement [Member] | Other Current Liabilities [Member] | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts | $ 2,140 | ||
[1] As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. |
Derivative and Hedging Instru_6
Derivative and Hedging Instruments (Details-4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current and Long-Term Regulatory Asset [Member] | ||
Change In Derivative Fair Value [Roll Forward] | ||
Beginning balance | $ (617) | $ 13,989 |
Unrealized gain | (9,527) | (23,173) |
Realized (loss) gain reclassified to a deferred account | 1,472 | 2,563 |
Realized (loss) gain reclassified to income statement | 13,766 | 6,004 |
Ending balance | 5,094 | (617) |
Other Current Assets [Member] | ||
Change In Derivative Fair Value [Roll Forward] | ||
Beginning balance | 770 | 1,162 |
Unrealized gain | 0 | 0 |
Realized (loss) gain reclassified to a deferred account | (1,472) | (2,563) |
Realized (loss) gain reclassified to income statement | 3,449 | 2,171 |
Ending balance | $ 2,747 | $ 770 |
Derivative and Hedging Instru_7
Derivative and Hedging Instruments (Details-5) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) Counterparty | Dec. 31, 2021 USD ($) | |
Counterparties in net liability position or default [Abstract] | ||
Derivative, net liability position of counterparties | $ 0 | $ 0 |
Number of counterparties in default | Counterparty | 0 | |
Commodity Contract [Member] | Fuel For Electric Generation Purchased Power [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ (14,806) | $ (3,948) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power |
Commodity Contract [Member] | Cost Of Gas Sold Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ (350) | $ (1,700) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Cost of Gas Sold | Utilities Operating Expense, Cost of Gas Sold |
Financial Transmission Rights [Member] | Fuel For Electric Generation Purchased Power [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ 583 | $ (605) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power |
Financial Transmission Rights [Member] | Cost Of Gas Sold Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ 0 | $ 0 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Cost of Gas Sold | Utilities Operating Expense, Cost of Gas Sold |
Purchased Power Agreement [Member] | Fuel For Electric Generation Purchased Power [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ (2,642) | $ (1,922) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power | Utilities Operating Expense, Fuel Used, Utilities Operating Expense, Purchased Power |
Purchased Power Agreement [Member] | Cost Of Gas Sold Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized losses (gains) on income statement | $ 0 | $ 0 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Cost of Gas Sold | Utilities Operating Expense, Cost of Gas Sold |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details-1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Liabilities: | |||
Unamortized discount and debt issuance costs | $ 4,000 | $ 4,349 | |
Carrying Value [Member] | |||
Liabilities: | |||
Long-term debt | [1] | 643,560 | 623,449 |
Fair Value [Member] | |||
Liabilities: | |||
Long-term debt | [1] | $ 571,374 | $ 729,914 |
[1] Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.0 million and $ 4.3 million as of December 31, 2022 and 2021 , respectively. |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details-2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | ||
Assets: | ||||
Derivative asset, collateral offset | $ 1,300 | |||
Liabilities: | ||||
Derivative, right to reclaim collateral | $ 5,200 | |||
Recurring [Member] | ||||
Assets: | ||||
Derivative assets, net | 3,069 | [1] | 3,606 | [2] |
Exchange-traded investments | 1,516 | 1,296 | ||
Total Assets | 4,585 | 4,902 | ||
Liabilities: | ||||
Derivative liabilities, net | 8,163 | [1] | 2,989 | [2] |
Deferred compensation | 4,743 | 3,653 | ||
Total Liabilities | 12,906 | 6,642 | ||
Recurring [Member] | Level 1 [Member] | ||||
Assets: | ||||
Derivative assets, net | 1,353 | [1] | 1,170 | [2] |
Exchange-traded investments | 1,516 | 1,296 | ||
Total Assets | 2,869 | 2,466 | ||
Liabilities: | ||||
Derivative liabilities, net | 5,581 | [1] | 731 | [2] |
Deferred compensation | 0 | 0 | ||
Total Liabilities | 5,581 | 731 | ||
Recurring [Member] | Level 2 [Member] | ||||
Assets: | ||||
Derivative assets, net | 0 | [1] | 0 | [2] |
Exchange-traded investments | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Derivative liabilities, net | 0 | [1] | 0 | [2] |
Deferred compensation | 4,743 | 3,653 | ||
Total Liabilities | 4,743 | 3,653 | ||
Recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Derivative assets, net | 1,716 | [1] | 2,436 | [2] |
Exchange-traded investments | 0 | 0 | ||
Total Assets | 1,716 | 2,436 | ||
Liabilities: | ||||
Derivative liabilities, net | 2,582 | [1] | 2,258 | [2] |
Deferred compensation | 0 | 0 | ||
Total Liabilities | 2,582 | 2,258 | ||
MGE [Member] | Recurring [Member] | ||||
Assets: | ||||
Derivative assets, net | 3,069 | [1] | 3,606 | [2] |
Exchange-traded investments | 115 | 230 | ||
Total Assets | 3,184 | 3,836 | ||
Liabilities: | ||||
Derivative liabilities, net | 8,163 | [1] | 2,989 | [2] |
Deferred compensation | 4,743 | 3,653 | ||
Total Liabilities | 12,906 | 6,642 | ||
MGE [Member] | Recurring [Member] | Level 1 [Member] | ||||
Assets: | ||||
Derivative assets, net | 1,353 | [1] | 1,170 | [2] |
Exchange-traded investments | 115 | 230 | ||
Total Assets | 1,468 | 1,400 | ||
Liabilities: | ||||
Derivative liabilities, net | 5,581 | [1] | 731 | [2] |
Deferred compensation | 0 | 0 | ||
Total Liabilities | 5,581 | 731 | ||
MGE [Member] | Recurring [Member] | Level 2 [Member] | ||||
Assets: | ||||
Derivative assets, net | 0 | [1] | 0 | [2] |
Exchange-traded investments | 0 | |||
Total Assets | 0 | 0 | ||
Liabilities: | ||||
Derivative liabilities, net | 0 | [1] | 0 | [2] |
Deferred compensation | 4,743 | 3,653 | ||
Total Liabilities | 4,743 | 3,653 | ||
MGE [Member] | Recurring [Member] | Level 3 [Member] | ||||
Assets: | ||||
Derivative assets, net | 1,716 | [1] | 2,436 | [2] |
Exchange-traded investments | 0 | 0 | ||
Total Assets | 1,716 | 2,436 | ||
Liabilities: | ||||
Derivative liabilities, net | 2,582 | [1] | 2,258 | [2] |
Deferred compensation | 0 | 0 | ||
Total Liabilities | $ 2,582 | $ 2,258 | ||
[1] As of December 31, 2022, collateral of $ 5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted. As of December 31, 2021, MGE received collateral of $ 1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Details-3) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Basis adjustment: | ||
Basis adjustment - on peak | 94.10% | |
Basis adjustment - off peak | 92.40% | |
US Treasury Bill Securities [Member] | ||
Deferred compensation plan [Abstract] | ||
Investment interest calculation, investment maturity period (26 weeks) | 182 days | |
Investment interest calculation, monthly compounding rate | 1% | |
Investment interest calculation, minimum annual rate compounded monthly | 7% | |
Minimum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 41% | |
Purchased power | 34% | |
Maximum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 66% | |
Purchased power | 59% | |
Weighted Average [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 56.60% | |
Purchased power | 43.40% |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments (Details-4) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Beginning balance | $ 178 | $ (14,055) | $ (26,456) | |
Realized and unrealized gains (losses): | ||||
Included in regulatory assets | (1,044) | 0 | 12,402 | |
Included in regulatory liability | 0 | 14,234 | 0 | |
Included in other comprehensive income | 0 | 0 | 0 | |
Included in earnings | [1] | 14,140 | 5,521 | (6,439) |
Included in current assets | 118 | 237 | (87) | |
Purchases | 11,997 | 26,287 | 22,232 | |
Sales | 0 | 0 | 0 | |
Issuances | 0 | 0 | 0 | |
Settlements | (26,255) | (32,046) | (15,707) | |
Ending balance | $ (866) | $ 178 | $ (14,055) | |
[1] MGE's exchange-traded derivative contracts, over-the-counter party transactions, purchased power agreement, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability. |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments (Details-5) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Fair Value Disclosures [Abstract] | ||||
Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities | [1] | $ 0 | $ 0 | $ 0 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Included in earnings | [1] | 14,140 | 5,521 | (6,439) |
Purchased Power Expense [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Included in earnings | $ 14,497 | $ 6,192 | $ (5,888) | |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Purchased Power | Utilities Operating Expense, Purchased Power | Utilities Operating Expense, Purchased Power | |
Cost Of Gas Sold Expense [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Included in earnings | $ (357) | $ (671) | $ (551) | |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Utilities Operating Expense, Cost of Gas Sold | Utilities Operating Expense, Cost of Gas Sold | Utilities Operating Expense, Cost of Gas Sold | |
[1] MGE's exchange-traded derivative contracts, over-the-counter party transactions, purchased power agreement, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability. |
Revenue (Details-1)
Revenue (Details-1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total Operating Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | $ 714,519 | $ 606,584 | $ 538,633 |
Electric [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 465,167 | 420,286 | 393,692 |
Electric [Member] | Residential [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 161,300 | 151,646 | 146,431 |
Electric [Member] | Commercial [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 232,057 | 210,475 | 198,043 |
Electric [Member] | Industrial [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 13,303 | 12,529 | 11,514 |
Electric [Member] | Other-retail/municipal [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 37,323 | 35,169 | 32,915 |
Electric [Member] | Total Retail [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 443,983 | 409,819 | 388,903 |
Electric [Member] | Sales To The Market [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 19,385 | 9,499 | 4,015 |
Electric [Member] | Other Revenues [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 1,799 | 968 | 774 |
Gas [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 248,672 | 185,620 | 144,261 |
Gas [Member] | Residential [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 143,544 | 110,442 | 88,765 |
Gas [Member] | Commercial/Industrial [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 99,165 | 68,895 | 49,682 |
Gas [Member] | Total Retail [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 242,709 | 179,337 | 138,447 |
Gas [Member] | Gas Transportation [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 5,780 | 6,185 | 5,713 |
Gas [Member] | Other Revenues [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | 183 | 98 | 101 |
Non Regulated Energy [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues recognized from contracts with customers | $ 680 | $ 678 | $ 680 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
MGE Power [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage by parent | 100% | |||
MGE [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interest on balance sheet | $ 148,163 | $ 148,587 | ||
Net income attributable to noncontrolling interest, net of tax | $ 21,576 | 22,391 | $ 22,393 | |
MGE Power Elm Road [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage by parent | 100% | |||
Noncontrolling interest on balance sheet | [1] | $ 103,333 | 101,507 | |
Net income attributable to noncontrolling interest, net of tax | [1] | $ 14,326 | 15,151 | 15,184 |
MGE Power West Campus [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage by parent | 100% | |||
Noncontrolling interest on balance sheet | [1] | $ 44,830 | 47,080 | |
Net income attributable to noncontrolling interest, net of tax | [1] | $ 7,250 | $ 7,240 | $ 7,209 |
[1] MGE Power Elm Road and MGE Power West Campus are not subsidiaries of MGE; however, they have been consolidated in the consolidated financial statements of MGE (see Footnote 3 ). MGE Power Elm Road and MGE Power West Campus are 100 % owned by MGE Power, and MGE Power is 100 % owned by MGE Energy. MGE Energy's proportionate share of the equity and net income (through its wholly owned subsidiary MGE Power) of MGE Power Elm Road and MGE Power West Campus is classified within the MGE consolidated financial statements as noncontrolling interest. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Segment Reporting Information [Line Items] | ||||
Operating revenues | $ 714,519 | $ 606,584 | $ 538,633 | |
Depreciation and amortization | (85,549) | (76,983) | (74,188) | |
Operating Income (Loss) | 137,743 | 117,294 | 109,997 | |
Interest (expense) income, net | (26,647) | (24,112) | (23,521) | |
Income tax (provision) benefit | (26,224) | (4,115) | (19,423) | |
Equity earnings of investments | 9,136 | 9,270 | 10,221 | |
Net Income | 110,952 | 105,761 | 92,418 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 2,517,600 | 2,371,906 | 2,253,651 | |
Capital expenditure | 175,030 | 153,169 | 203,139 | |
Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 465,167 | 420,286 | 393,692 | |
Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 248,672 | 185,620 | 144,261 | |
Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 680 | 678 | 680 | |
Transmission Investment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
All Others [Members] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 714,519 | 606,584 | 538,633 | |
Depreciation and amortization | (85,549) | (76,983) | (74,188) | |
Operating Income (Loss) | 137,743 | 117,294 | 109,997 | |
Interest (expense) income, net | (26,647) | (24,112) | (23,521) | |
Income tax (provision) benefit | (26,224) | (4,115) | (19,423) | |
Equity earnings of investments | 9,136 | 9,270 | 10,221 | |
Net Income | 110,952 | 105,761 | 92,418 | |
Operating Segments [Member] | Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 465,123 | 420,842 | 394,457 | |
Depreciation and amortization | (62,897) | (56,672) | (54,658) | |
Operating Income (Loss) | 77,672 | 58,993 | 57,847 | |
Interest (expense) income, net | (17,578) | (15,261) | (14,446) | |
Income tax (provision) benefit | (7,299) | 10,672 | (4,230) | |
Equity earnings of investments | 0 | 0 | 0 | |
Net Income | 65,187 | 63,910 | 50,522 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 1,626,373 | 1,525,163 | 1,421,302 | |
Capital expenditure | 141,273 | 115,234 | 162,210 | |
Operating Segments [Member] | Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 282,745 | 208,348 | 156,418 | |
Depreciation and amortization | (15,261) | (12,852) | (12,049) | |
Operating Income (Loss) | 26,261 | 25,133 | 19,674 | |
Interest (expense) income, net | (4,787) | (4,315) | (4,370) | |
Income tax (provision) benefit | (8,492) | (4,922) | (4,805) | |
Equity earnings of investments | 0 | 0 | 0 | |
Net Income | 18,215 | 15,511 | 14,167 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 530,733 | 485,345 | 444,702 | |
Capital expenditure | 27,656 | 34,071 | 36,906 | |
Operating Segments [Member] | Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 42,235 | 41,544 | 41,082 | |
Depreciation and amortization | (7,391) | (7,459) | (7,481) | |
Operating Income (Loss) | 34,683 | 33,936 | 33,460 | |
Interest (expense) income, net | (4,322) | (4,577) | (4,826) | |
Income tax (provision) benefit | (8,272) | (7,998) | (7,800) | |
Equity earnings of investments | 0 | 0 | 0 | |
Net Income | 22,090 | 21,361 | 20,834 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 247,841 | 252,584 | 254,298 | |
Capital expenditure | 6,101 | 3,864 | 4,023 | |
Operating Segments [Member] | Transmission Investment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | |
Operating Income (Loss) | 0 | 0 | (1) | |
Interest (expense) income, net | 0 | 0 | 0 | |
Income tax (provision) benefit | (2,490) | (2,486) | (2,786) | |
Equity earnings of investments | 9,136 | 9,339 | 10,221 | |
Net Income | 6,647 | 6,852 | 7,434 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | [1] | 80,642 | 75,990 | 74,480 |
Capital expenditure | 0 | 0 | 0 | |
Operating Segments [Member] | All Others [Members] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | |
Operating Income (Loss) | (873) | (768) | (983) | |
Interest (expense) income, net | 40 | 41 | 121 | |
Income tax (provision) benefit | 329 | 619 | 198 | |
Equity earnings of investments | 0 | (69) | 0 | |
Net Income | (1,187) | (1,873) | (539) | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 467,112 | 467,954 | 495,483 | |
Capital expenditure | 0 | 0 | 0 | |
Consolidation Elimination Entries [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | (75,584) | (64,150) | (53,324) | |
Depreciation and amortization | 0 | 0 | 0 | |
Operating Income (Loss) | 0 | 0 | 0 | |
Interest (expense) income, net | 0 | 0 | 0 | |
Income tax (provision) benefit | 0 | 0 | 0 | |
Equity earnings of investments | 0 | 0 | 0 | |
Net Income | 0 | 0 | 0 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | (435,101) | (435,130) | (436,614) | |
Capital expenditure | 0 | 0 | 0 | |
Consolidation Elimination Entries [Member] | Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | (44) | 556 | 765 | |
Consolidation Elimination Entries [Member] | Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 34,073 | 22,728 | 12,157 | |
Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 41,555 | 40,866 | 40,402 | |
Consolidation Elimination Entries [Member] | Transmission Investment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
Consolidation Elimination Entries [Member] | All Others [Members] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 0 | 0 | 0 | |
MGE [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 714,519 | 606,584 | 538,633 | |
Depreciation and amortization | (85,549) | (76,983) | (74,188) | |
Operating Income (Loss) | 138,616 | 118,062 | 110,981 | |
Interest (expense) income, net | (26,687) | (24,153) | (23,642) | |
Income tax (provision) benefit | (24,063) | (2,248) | (16,835) | |
Net Income | 83,916 | 78,391 | 63,130 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 2,404,639 | 2,262,775 | 2,119,971 | |
Capital expenditure | 175,030 | 153,169 | 203,139 | |
MGE [Member] | Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 465,167 | 420,286 | 393,692 | |
MGE [Member] | Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 248,672 | 185,620 | 144,261 | |
MGE [Member] | Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 680 | 678 | 680 | |
MGE [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 714,519 | 606,584 | 538,633 | |
Depreciation and amortization | (85,549) | (76,983) | (74,188) | |
Operating Income (Loss) | 138,616 | 118,062 | 110,981 | |
Interest (expense) income, net | (26,687) | (24,153) | (23,642) | |
Income tax (provision) benefit | (24,063) | (2,248) | (16,835) | |
Net Income | 83,916 | 78,391 | 63,130 | |
MGE [Member] | Operating Segments [Member] | Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 465,123 | 420,842 | 394,457 | |
Depreciation and amortization | (62,897) | (56,672) | (54,658) | |
Operating Income (Loss) | 77,672 | 58,993 | 57,847 | |
Interest (expense) income, net | (17,578) | (15,261) | (14,446) | |
Income tax (provision) benefit | (7,299) | 10,672 | (4,230) | |
Net Income | 65,187 | 63,910 | 50,522 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 1,626,373 | 1,525,163 | 1,421,302 | |
Capital expenditure | 141,273 | 115,234 | 162,210 | |
MGE [Member] | Operating Segments [Member] | Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 282,745 | 208,348 | 156,418 | |
Depreciation and amortization | (15,261) | (12,852) | (12,049) | |
Operating Income (Loss) | 26,261 | 25,133 | 19,674 | |
Interest (expense) income, net | (4,787) | (4,315) | (4,370) | |
Income tax (provision) benefit | (8,492) | (4,922) | (4,805) | |
Net Income | 18,215 | 15,511 | 14,167 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 530,733 | 485,345 | 444,702 | |
Capital expenditure | 27,656 | 34,071 | 36,906 | |
MGE [Member] | Operating Segments [Member] | Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 42,235 | 41,544 | 41,082 | |
Depreciation and amortization | (7,391) | (7,459) | (7,481) | |
Operating Income (Loss) | 34,683 | 33,936 | 33,460 | |
Interest (expense) income, net | (4,322) | (4,577) | (4,826) | |
Income tax (provision) benefit | (8,272) | (7,998) | (7,800) | |
Net Income | 22,090 | 21,361 | 20,834 | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | 247,791 | 252,534 | 254,248 | |
Capital expenditure | 6,101 | 3,864 | 4,023 | |
MGE [Member] | Consolidation Elimination Entries [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | (75,584) | (64,150) | (53,324) | |
Depreciation and amortization | 0 | 0 | 0 | |
Operating Income (Loss) | 0 | 0 | 0 | |
Interest (expense) income, net | 0 | 0 | 0 | |
Income tax (provision) benefit | 0 | 0 | 0 | |
Net Income | (21,576) | (22,391) | (22,393) | |
Segment Reporting Information Assets And Capital Expenditures [Abstract] | ||||
Assets | (258) | (267) | (281) | |
Capital expenditure | 0 | 0 | 0 | |
MGE [Member] | Consolidation Elimination Entries [Member] | Electric [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | (44) | 556 | 765 | |
MGE [Member] | Consolidation Elimination Entries [Member] | Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 34,073 | 22,728 | 12,157 | |
MGE [Member] | Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | $ 41,555 | $ 40,866 | $ 40,402 | |
[1] The Transmission Investment segment represents MGE Energy's investment in equity method investees. |
Schedule I - Condensed Parent C
Schedule I - Condensed Parent Company Finanical Statements (Details-Comprehensive Income Statement) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Utilities Operating Expense [Abstract] | |||
Other operations and maintenance | $ 209,875 | $ 199,316 | $ 186,430 |
Total Operating Expenses | 576,776 | 489,290 | 428,636 |
Operating Income | 137,743 | 117,294 | 109,997 |
Equity earnings of investments | 9,136 | 9,270 | 10,221 |
Income before income taxes | 137,176 | 109,876 | 111,841 |
Income tax provision | (26,224) | (4,115) | (19,423) |
Net Income | 110,952 | 105,761 | 92,418 |
MGE Energy [Member] | |||
Utilities Operating Expense [Abstract] | |||
Other operations and maintenance | 746 | 711 | 882 |
Total Operating Expenses | 746 | 711 | 882 |
Operating Income | (746) | (711) | (882) |
Equity earnings of investments | 112,180 | 107,883 | 92,922 |
Other income/(loss), net | (855) | (2,163) | 94 |
Interest income, net | 2 | 5 | 78 |
Income before income taxes | 110,581 | 105,014 | 92,212 |
Income tax provision | 371 | 747 | 206 |
Net Income | $ 110,952 | $ 105,761 | $ 92,418 |
Schedule I - Condensed Parent_2
Schedule I - Condensed Parent Company Finanical Statements (Details-Cash Flow Statement) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Cash provided by operating activities | $ 153,735 | $ 137,527 | $ 172,443 |
Investing Activities: | |||
Other | 70 | 221 | (1,672) |
Cash used for investing activities | (180,145) | (156,975) | (210,412) |
Financing Activities: | |||
Proceeds from Issuance of Common Stock | 0 | 0 | 79,635 |
Cash dividends paid on common stock | (57,500) | (54,788) | (51,729) |
Other | (2,068) | (2,197) | (1,553) |
Cash Provided by (Used for) Financing Activities | 25,543 | (8,756) | 59,194 |
Change in cash, cash equivalents, and restricted cash: | (867) | (28,204) | 21,225 |
Cash, cash equivalents, and restricted cash at beginning of period | 18,835 | 47,039 | 25,814 |
Cash, cash equivalents, and restricted cash at end of period | 17,968 | 18,835 | 47,039 |
MGE Energy [Member] | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Cash provided by operating activities | 58,253 | 27,535 | 27,631 |
Investing Activities: | |||
Contributions to affiliates | (2,693) | 0 | (32,157) |
Contributions to other Investments | (2,357) | (4,006) | (3,809) |
Other | 861 | 843 | 622 |
Cash used for investing activities | (4,189) | (3,163) | (35,344) |
Financing Activities: | |||
Proceeds from Issuance of Common Stock | 0 | 0 | 79,635 |
Cash dividends paid on common stock | (57,500) | (54,788) | (51,729) |
Other | (187) | 0 | 0 |
Cash Provided by (Used for) Financing Activities | (57,687) | (54,788) | (27,906) |
Change in cash, cash equivalents, and restricted cash: | (3,623) | (30,416) | (20,193) |
Cash, cash equivalents, and restricted cash at beginning of period | 6,959 | 37,375 | 17,182 |
Cash, cash equivalents, and restricted cash at end of period | $ 3,336 | $ 6,959 | $ 37,375 |
Schedule I - Condensed Parent_3
Schedule I - Condensed Parent Company Finanical Statements (Details-Balance Sheet) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets, Current [Abstract] | ||||
Cash and cash equivalents | $ 11,604 | $ 17,438 | ||
Other current assets | 19,017 | 11,183 | ||
Total Current Assets | 243,480 | 199,371 | ||
Other deferred assets and other | ||||
Other deferred assets and other | 23,809 | 27,548 | ||
Investments: | ||||
Other investments | 2,298 | 2,324 | ||
Total investments | 105,883 | 98,754 | ||
Total Assets | 2,517,600 | 2,371,906 | $ 2,253,651 | |
Current Liabilities: | ||||
Other current liabilities | 8,057 | 10,608 | ||
Total Current Liabilities | 225,062 | 117,847 | ||
Other Credits: | ||||
Deferred income taxes | 252,190 | 231,149 | ||
Other deferred liabilities and other | 96,990 | 91,690 | ||
Total Other Credits | 625,618 | 612,380 | ||
Shareholders' Equity: | ||||
Retained earnings | 649,854 | 596,402 | ||
Total Common Shareholders' Equity | 1,081,674 | 1,027,468 | $ 976,000 | $ 855,676 |
Commitments and contingencies (see Footnote 3) | ||||
Total Liabilities and Capitalization | 2,517,600 | 2,371,906 | ||
MGE Energy [Member] | ||||
Assets, Current [Abstract] | ||||
Cash and cash equivalents | 3,336 | 6,959 | ||
Other current assets | 1,978 | 1,681 | ||
Total Current Assets | 5,314 | 8,640 | ||
Other deferred assets and other | ||||
Other deferred assets and other | 294 | 244 | ||
Investments: | ||||
Investments in affiliates | 1,091,103 | 1,036,347 | ||
Other investments | 21,193 | 18,927 | ||
Total investments | 1,112,296 | 1,055,274 | ||
Total Assets | 1,117,904 | 1,064,158 | ||
Current Liabilities: | ||||
Accounts payable to affiliates | 530 | 548 | ||
Other current liabilities | 2,017 | 2,516 | ||
Total Current Liabilities | 2,547 | 3,064 | ||
Other Credits: | ||||
Deferred income taxes | 32,624 | 32,014 | ||
Accounts payable to affiliates | 1,059 | 1,589 | ||
Other deferred liabilities and other | 0 | 23 | ||
Total Other Credits | 33,683 | 33,626 | ||
Shareholders' Equity: | ||||
Common shareholders' equity | 431,820 | 431,066 | ||
Retained earnings | 649,854 | 596,402 | ||
Total Common Shareholders' Equity | 1,081,674 | 1,027,468 | ||
Commitments and contingencies (see Footnote 3) | ||||
Total Liabilities and Capitalization | $ 1,117,904 | $ 1,064,158 |
Schedule I - Condensed Parent_4
Schedule I - Condensed Parent Company Finanical Statements (Details-Notes 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||
Line of credit, borrowings outstanding | $ 0 | ||
MGE Energy unsecured committed revolving line of credit totaling $50 million [Member] | MGE Energy [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of credit | 50,000 | ||
Line of credit, borrowings outstanding | 0 | ||
Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Available capacity under line of credit | [1] | 78,815 | $ 143,815 |
Line of credit | [1],[2] | $ 150,000 | $ 150,000 |
[1] MGE Energy short-term borrowings include MGE Energy and MGE lines of credit and MGE commercial paper. In November 2022, MGE Energy and MGE amended and restated their existing credit agreements, which extended their maturity dates to November 8, 2027. In January 2023, MGE amended one of its existing credit agreements to increase the available credit by an additional $ 30 million. As of December 31, 2022, MGE Energy and MGE had no borrowings outstanding under these credit facilities and were in compliance with the covenant requirements of the credit agreements. |
Schedule I - Condensed Parent_5
Schedule I - Condensed Parent Company Finanical Statements (Details-Notes 2) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
MGE Energy [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | $ 60,121 | $ 25,464 | $ 27,714 |
First Mortgage Bonds [Member] | 7.70%, 2028 Series [Member] | |||
Dividend Restrictions | |||
Debt covenant, allowable amount available for payment of dividends | 650,100 | ||
MGE [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | $ 33,500 | 5,000 | 0 |
Dividend Restrictions | |||
Common equity ratio | 0.605 | ||
MGE [Member] | Minimum [Member] | |||
Dividend Restrictions | |||
Dividend restrictions, common equity ratio | 0.55 | ||
MGE Power Elm Road [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | $ 12,500 | 10,500 | 15,500 |
MGE Power West Campus [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | 9,500 | 4,500 | 6,000 |
MGE Transco [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | 4,621 | 5,464 | 5,864 |
MGEE Transco [Member] | |||
Dividends from Affiliates [Line Items] | |||
Cash dividends paid to parent by MGE | $ 0 | $ 0 | $ 350 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 8,303,701 | $ 7,076,565 | $ 3,258,269 | |
Charged to costs and expenses | 3,814,311 | 3,402,468 | 5,164,943 | |
Charged to other accounts | 40,800 | 32,400 | 26,400 | |
Net accounts written off | [1] | (3,785,972) | (2,207,732) | (1,373,047) |
Balance at end of period | 8,372,840 | 8,303,701 | 7,076,565 | |
Deferred Bad Debt Expense [Member] | ||||
Regulatory Asset [Line Items] | ||||
Regulatory assets | $ 2,100,000 | $ 1,800,000 | $ 3,800,000 | |
[1] Net of recovery of amounts previously written off. |