Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Document And Entity Information [Line Items] | ||
Entity Registrant Name | MGE Energy, Inc. | |
Entity Central Index Key | 0001161728 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Amendment Flag | false | |
Trading Symbol | MGEE | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,163,370 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Security Exchange Name | NASDAQ | |
Security 12(b) Title | Common Stock, $1 Par Value Per Share | |
Entity Tax Identification Number | 39-2040501 | |
Entity File Number | 000-49965 | |
Entity Incorporation, State or Country Code | WI | |
Entity Address, Address Line One | 133 South Blair Street | |
Entity Address, City or Town | Madison | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53788 | |
City Area Code | 608 | |
Local Phone Number | 252-7000 | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
MGE [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Registrant Name | Madison Gas and Electric Company | |
Entity Central Index Key | 0000061339 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,347,894 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Tax Identification Number | 39-0444025 | |
Entity File Number | 000-1125 | |
Entity Incorporation, State or Country Code | WI | |
Entity Address, Address Line One | 133 South Blair Street | |
Entity Address, City or Town | Madison | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53788 | |
City Area Code | 608 | |
Local Phone Number | 252-7000 | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Revenues: | ||
Electric revenues | $ 110,127 | $ 100,645 |
Gas revenue | 98,811 | 67,270 |
Total Operating Revenues | 208,938 | 167,915 |
Operating Expenses: | ||
Fuel for electric generation | 13,485 | 13,171 |
Purchased power | 12,543 | 9,355 |
Cost of gas sold | 64,802 | 37,444 |
Other operations and maintenance | 49,994 | 45,682 |
Depreciation and amortization | 21,046 | 18,382 |
Other general taxes | 5,205 | 4,827 |
Total Operating Expenses | 167,075 | 128,861 |
Operating Income | 41,863 | 39,054 |
Other (expense) income, net | 6,972 | 2,078 |
Interest expense, net | (6,571) | (5,740) |
Income before income taxes | 42,264 | 35,392 |
Income tax (provision) benefit | (7,844) | (459) |
Net Income Including Noncontrolling Interest | 34,420 | 34,933 |
Net Income | $ 34,420 | $ 34,933 |
Earnings per share of Common Stock - Basic | $ 0.95 | $ 0.97 |
Earnings per share of Common Stock - Diluted | 0.95 | 0.97 |
Dividends per share of common stock | $ 0.388 | $ 0.370 |
Weighted Average Number of Shares Outstanding, Basic | 36,163 | 36,163 |
Weighted Average Shares Outstanding - Diluted | 36,171 | 36,165 |
MGE [Member] | ||
Operating Revenues: | ||
Electric revenues | $ 110,127 | $ 100,645 |
Gas revenue | 98,811 | 67,270 |
Total Operating Revenues | 208,938 | 167,915 |
Operating Expenses: | ||
Fuel for electric generation | 13,485 | 13,171 |
Purchased power | 12,543 | 9,355 |
Cost of gas sold | 64,802 | 37,444 |
Other operations and maintenance | 49,746 | 45,538 |
Depreciation and amortization | 21,046 | 18,382 |
Other general taxes | 5,205 | 4,827 |
Total Operating Expenses | 166,827 | 128,717 |
Operating Income | 42,111 | 39,198 |
Other (expense) income, net | 3,519 | (104) |
Interest expense, net | (6,577) | (5,753) |
Income before income taxes | 39,053 | 33,341 |
Income tax (provision) benefit | (7,000) | 433 |
Net Income Including Noncontrolling Interest | 32,053 | 33,774 |
Less Net Income Attributable to Noncontrolling Interest, net of tax | (4,756) | (5,501) |
Net Income | $ 27,297 | $ 28,273 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net Income | $ 34,420 | $ 34,933 |
Items not affecting cash: | ||
Depreciation and amortization | 21,046 | 18,382 |
Deferred income taxes | 5,606 | (796) |
Provision for doubtful receivables | 441 | 388 |
Employee benefit plan cost (credit) | (1,678) | 1,461 |
Equity earnings in investments | (2,504) | (2,444) |
Other items | (486) | (277) |
Changes in working capital items: | ||
Decrease (increase) in current assets | 12,332 | (2,851) |
Decrease in current liabilities | (7,115) | (4,213) |
Dividends from investment | 2,001 | 1,967 |
Cash contributions to pension and other postretirement plans | (1,660) | (1,552) |
Other noncurrent items, net | (304) | (1,115) |
Cash Provided by Operating Activities | 62,099 | 43,883 |
Investing Activities: | ||
Capital expenditures | (30,778) | (34,746) |
Capital contributions to investments | (1,546) | (670) |
Other | 155 | (419) |
Cash Used for Investing Activities | (32,169) | (35,835) |
Financing Activities: | ||
Cash dividends paid on common stock | (14,013) | (13,380) |
Repayments of long-term debt | (1,211) | (1,182) |
(Repayments of) proceeds from short-term debt | (5,500) | 1,500 |
Other | (492) | (523) |
Cash Used for Financing Activities | (21,216) | (13,585) |
Change in cash, cash equivalents, and restricted cash | 8,714 | (5,537) |
Cash, cash equivalents, and restricted cash at beginning of period | 18,835 | 47,039 |
Cash, cash equivalents, and restricted cash at end of period | 27,549 | 41,502 |
Significant noncash investing activities: | ||
Accrued capital expenditures | 6,735 | 8,843 |
MGE [Member] | ||
Operating Activities: | ||
Net Income | 32,053 | 33,774 |
Items not affecting cash: | ||
Depreciation and amortization | 21,046 | 18,382 |
Deferred income taxes | 5,230 | (1,766) |
Provision for doubtful receivables | 441 | 388 |
Employee benefit plan cost (credit) | (1,678) | 1,461 |
Other items | 587 | (252) |
Changes in working capital items: | ||
Decrease (increase) in current assets | 11,810 | (3,037) |
Decrease in current liabilities | (4,648) | (4,037) |
Cash contributions to pension and other postretirement plans | (1,660) | (1,552) |
Other noncurrent items, net | (500) | (1,380) |
Cash Provided by Operating Activities | 62,681 | 41,981 |
Investing Activities: | ||
Capital expenditures | (30,778) | (34,746) |
Other | (164) | (462) |
Cash Used for Investing Activities | (30,942) | (35,208) |
Financing Activities: | ||
Cash dividends paid to parent by MGE | (5,000) | 0 |
Distributions to parent from noncontrolling interest | (9,000) | (5,000) |
Repayments of long-term debt | (1,211) | (1,182) |
(Repayments of) proceeds from short-term debt | (5,500) | 1,500 |
Other | (492) | (523) |
Cash Used for Financing Activities | (21,203) | (5,205) |
Change in cash, cash equivalents, and restricted cash | 10,536 | 1,568 |
Cash, cash equivalents, and restricted cash at beginning of period | 7,798 | 6,404 |
Cash, cash equivalents, and restricted cash at end of period | 18,334 | 7,972 |
Significant noncash investing activities: | ||
Accrued capital expenditures | $ 6,735 | $ 8,843 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 26,374 | $ 17,438 |
Accounts receivable, less reserves | 50,167 | 46,205 |
Other accounts receivables, less reserves | 15,244 | 16,094 |
Unbilled revenues | 30,839 | 34,812 |
Materials and supplies, at average cost | 30,951 | 29,863 |
Fuel for electric generation, at average cost | 6,331 | 6,429 |
Stored natural gas, at average cost | 5,580 | 15,668 |
Prepaid taxes | 15,487 | 20,214 |
Regulatory assets - current | 2,205 | 1,465 |
Other current assets | 11,255 | 11,183 |
Total Current Assets | 194,433 | 199,371 |
Other long-term receivables | 691 | 1,155 |
Regulatory assets | 108,271 | 107,547 |
Pension benefit asset | 62,806 | 58,757 |
Other deferred assets and other | 26,697 | 27,548 |
Property, Plant, and Equipment: | ||
Property, plant, and equipment, net | 1,843,122 | 1,828,171 |
Construction work in progress | 40,156 | 50,603 |
Total Property, Plant, and Equipment | 1,883,278 | 1,878,774 |
Investments | 101,365 | 98,754 |
Total Assets | 2,377,541 | 2,371,906 |
Current Liabilities: | ||
Long-term debt due within one year | 4,920 | 4,889 |
Short-term debt | 0 | 5,500 |
Accounts payable | 44,690 | 64,149 |
Accrued interest and taxes | 9,265 | 10,385 |
Accrued payroll related items | 9,296 | 12,951 |
Regulatory liabilities - current | 24,557 | 9,365 |
Derivative liabilities | 130 | 2,140 |
Other current liabilities | 5,246 | 8,468 |
Total Current Liabilities | 98,104 | 117,847 |
Other Credits: | ||
Deferred income taxes | 233,146 | 231,149 |
Investment tax credit - deferred | 48,773 | 44,836 |
Regulatory liabilities | 155,096 | 154,298 |
Accrued pension and other postretirement benefits | 72,881 | 73,085 |
Finance lease liabilities | 16,920 | 17,322 |
Other deferred liabilities and other | 91,363 | 91,690 |
Total Other Credits | 618,179 | 612,380 |
Capitalization: | ||
Common shareholders equity | 1,048,153 | 1,027,468 |
Long-term debt | 613,105 | 614,211 |
Total Capitalization | 1,661,258 | 1,641,679 |
Commitments and contingencies (see Footnote 8) | ||
Total Liabilities and Capitalization | 2,377,541 | 2,371,906 |
MGE [Member] | ||
Current Assets: | ||
Cash and cash equivalents | 17,159 | 6,401 |
Accounts receivable, less reserves | 50,167 | 46,205 |
Affiliate receivables | 530 | 558 |
Other accounts receivables, less reserves | 15,242 | 16,092 |
Unbilled revenues | 30,839 | 34,812 |
Materials and supplies, at average cost | 30,951 | 29,863 |
Fuel for electric generation, at average cost | 6,331 | 6,429 |
Stored natural gas, at average cost | 5,580 | 15,668 |
Prepaid taxes | 15,193 | 19,379 |
Regulatory assets - current | 2,205 | 1,465 |
Other current assets | 11,152 | 11,071 |
Total Current Assets | 185,349 | 187,943 |
Affiliate receivable long-term | 1,456 | 1,589 |
Regulatory assets | 108,271 | 107,547 |
Pension benefit asset | 62,806 | 58,757 |
Other deferred assets and other | 26,806 | 27,907 |
Property, Plant, and Equipment: | ||
Property, plant, and equipment, net | 1,843,150 | 1,828,199 |
Construction work in progress | 40,156 | 50,603 |
Total Property, Plant, and Equipment | 1,883,306 | 1,878,802 |
Investments | 177 | 230 |
Total Assets | 2,268,171 | 2,262,775 |
Current Liabilities: | ||
Long-term debt due within one year | 4,920 | 4,889 |
Short-term debt | 0 | 5,500 |
Accounts payable | 44,672 | 64,130 |
Accrued interest and taxes | 9,417 | 10,649 |
Accrued payroll related items | 9,296 | 12,951 |
Regulatory liabilities - current | 24,557 | 9,365 |
Derivative liabilities | 130 | 2,140 |
Other current liabilities | 5,324 | 5,968 |
Total Current Liabilities | 98,316 | 115,592 |
Other Credits: | ||
Deferred income taxes | 200,507 | 198,885 |
Investment tax credit - deferred | 48,773 | 44,836 |
Regulatory liabilities | 155,096 | 154,298 |
Accrued pension and other postretirement benefits | 72,881 | 73,085 |
Finance lease liabilities | 16,920 | 17,322 |
Other deferred liabilities and other | 92,126 | 92,152 |
Total Other Credits | 586,303 | 580,578 |
Capitalization: | ||
Common shareholders equity | 826,104 | 803,807 |
Noncontrolling interest | 144,343 | 148,587 |
Total Equity | 970,447 | 952,394 |
Long-term debt | 613,105 | 614,211 |
Total Capitalization | 1,583,552 | 1,566,605 |
Commitments and contingencies (see Footnote 8) | ||
Total Liabilities and Capitalization | $ 2,268,171 | $ 2,262,775 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables, Net | ||
Reserve for uncollectible accounts receivable | $ 8,952 | $ 6,940 |
Reserve for uncollectible other accounts receivable | 1,213 | 1,364 |
MGE [Member] | ||
Receivables, Net | ||
Reserve for uncollectible accounts receivable | 8,952 | 6,940 |
Reserve for uncollectible other accounts receivable | $ 1,213 | $ 1,364 |
MGE Energy Inc Consolidated Sta
MGE Energy Inc Consolidated Statements of Common Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Beginning balance, shares at Dec. 31, 2020 | 36,163 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 976,000 | $ 36,163 | $ 394,408 | $ 545,429 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 34,933 | 34,933 | |||
Common stock dividends declared | (13,380) | (13,380) | |||
Equity-based compensation plans and other | 158 | 158 | |||
Ending balance, shares at Mar. 31, 2021 | 36,163 | ||||
Ending balance, value at Mar. 31, 2021 | 997,711 | $ 36,163 | 394,566 | 566,982 | 0 |
Beginning balance, shares at Dec. 31, 2021 | 36,163 | ||||
Beginning 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 | 34,420 | 34,420 | |||
Common stock dividends declared | (14,013) | (14,013) | |||
Equity-based compensation plans and other | 278 | 278 | |||
Ending balance, shares at Mar. 31, 2022 | 36,163 | ||||
Ending balance, value at Mar. 31, 2022 | $ 1,048,153 | $ 36,163 | $ 395,181 | $ 616,809 | $ 0 |
Consolidated Statements of Comm
Consolidated Statements of Common Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividends per share of common stock | $ 0.388 | $ 0.370 |
Madison Gas and Electric Compan
Madison Gas and Electric Company Consolidated Statements of Common Equity (Unaudited) - USD ($) shares in Thousands, $ 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 Income/(Loss) [Member]MGE [Member] | Noncontrolling Interest [Member]MGE [Member] |
Beginning balance, shares at Dec. 31, 2020 | 36,163 | 17,348 | ||||||
Beginning 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 | $ 34,933 | 33,774 | 28,273 | 5,501 | ||||
Cash dividends paid to parent by MGE | 0 | |||||||
Distributions to parent from noncontrolling interest | (5,000) | (5,000) | ||||||
Ending balance, shares at Mar. 31, 2021 | 36,163 | 17,348 | ||||||
Ending balance, value at Mar. 31, 2021 | 900,386 | $ 17,348 | 252,917 | 488,424 | 0 | 141,697 | ||
Beginning balance, shares at Dec. 31, 2021 | 36,163 | 17,348 | ||||||
Beginning 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 | $ 34,420 | 32,053 | 27,297 | 4,756 | ||||
Cash dividends paid to parent by MGE | (5,000) | (5,000) | ||||||
Distributions to parent from noncontrolling interest | (9,000) | (9,000) | ||||||
Ending balance, shares at Mar. 31, 2022 | 36,163 | 17,348 | ||||||
Ending balance, value at Mar. 31, 2022 | $ 970,447 | $ 17,348 | $ 252,917 | $ 555,839 | $ 0 | $ 144,343 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Principles | 1. Summary of Significa nt Accounting Policies – MGE Energy and MGE. a. Basis of Presentation. This report is a combined report of MGE Energy and MGE. References in this report to "MGE Energy" are to MGE Energy, Inc. and its subsidiaries. References in this report to "MGE" are to Madison Gas and Electric Company. MGE Power Elm Road and MGE Power West Campus own electric generating assets and lease those assets to MGE. Both entities are variable interest entities under applicable authoritative accounting guidance. MGE is considered the primary beneficiary of these entities as a result of contractual agreements. As a result, MGE has consolidated MGE Power Elm Road and MGE Power West Campus. See Footnote 3 of Notes to Consolidated Financial Statements under Item 8, Financial Statements and Supplementary Data, of MGE Energy's and MGE's 2021 Annual Report on Form 10-K (the 2021 Annual Report on Form 10-K). The accompanying consolidated financial statements as of March 31, 2022, and during the three months ended March 31, 2022, are unaudited but include all adjustments that MGE Energy and MGE management consider necessary for a fair statement of their respective financial statements. All adjustments are of a normal, recurring nature except as otherwise disclosed. The year-end consolidated balance sheet information was derived from the audited balance sheet appearing in the 2021 Annual Report on Form 10-K but does not include all disclosures required by accounting principles generally accepted in the United States of America. These notes should be read in conjunction with the financial statements and the notes on pages 61 through 115 of the 2021 Annual Report on Form 10-K. b. 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. MGE Energy MGE March 31, December 31, March 31, December 31, (In thousands) 2022 2021 2022 2021 Cash and cash equivalents $ 26,374 $ 17,438 $ 17,159 $ 6,401 Restricted cash 641 847 641 847 Receivable - margin account 534 550 534 550 Cash, cash equivalents, and restricted cash $ 27,549 $ 18,835 $ 18,334 $ 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. c. Property, Plant, and Equipment. Columbia. 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 by the end of 2023 and Unit 2 by the end of 2024. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. As of March 31, 2022, early retirement of Columbia was probable. The net book value of our ownership share of this generating unit was $ 156.7 million as of March 31, 2022. This amount was classified as plant to be retired within "Property, plant, and equipment, net" on the consolidated balance sheets. 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 and 2038 for Unit 2. MGE is currently seeking approval from the PSCW in its 2023 electric 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 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. No impairment was recorded as of March 31, 2022 . |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | 2. New Ac counti ng 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 their consolidated results of operations, financial condition, or cash flows. |
Investment in ATC and ATC Holdc
Investment in ATC and ATC Holdco | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in ATC and ATC Holdco | 3. Investme nt in ATC and ATC Holdco - MGE Energy and MGE. 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. MGE Transco and MGEE Transco have accounted for their investments 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. MGE Transco recorded the following amounts related to its investment in ATC: Three Months Ended March 31, (In thousands) 2022 2021 Equity earnings from investment in ATC $ 2,478 $ 2,420 Dividends received from ATC 2,001 1,967 Capital contributions to ATC 1,243 — ATC Holdco was formed in December 2016. ATC Holdco's transmission development activities have been suspended for the near term. In April 2022, MGE Transco made a $ 0.5 million capital contribution to ATC. ATC's summarized financial data is as follows: Three Months Ended March 31, (In thousands) 2022 2021 Operating revenues $ 190,999 $ 188,694 Operating expenses ( 95,491 ) ( 95,104 ) Other income, net 404 378 Interest expense, net ( 28,440 ) ( 28,871 ) Earnings before members' income taxes $ 67,472 $ 65,097 MGE receives transmission and other related services from ATC. During the three months ended March 31, 2022 and 2021, MGE recorded $ 7.9 million and $ 8.0 million, respectively, for transmission services. MGE also provides a variety of operational, maintenance, and project management work for ATC, which is reimbursed by ATC. As of March 31, 2022, and December 31, 2021, MGE had a receivable due from ATC of $ 8.1 million and $ 7.0 million, respectively. The receivable is primarily related to Badger Hollow I and II. MGE is reimbursed for these costs after the new generation assets are placed into service. |
Taxes
Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Taxes | 4. Taxes - MGE E nergy and MGE. Effective Tax Rate. 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 Three Months Ended March 31, 2022 2021 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 6.3 6.3 6.3 6.3 Amortized investment tax credits ( 0.7 ) ( 1.6 ) ( 0.8 ) ( 1.8 ) Credit for electricity from wind energy ( 5.4 ) ( 7.1 ) ( 6.0 ) ( 7.8 ) AFUDC equity, net ( 0.5 ) ( 0.6 ) ( 0.5 ) ( 0.6 ) Amortization of utility excess deferred tax - tax reform (a) ( 1.9 ) ( 16.7 ) ( 1.8 ) ( 18.3 ) Other, net, individually insignificant ( 0.2 ) — ( 0.3 ) ( 0.1 ) Effective income tax rate 18.6 % 1.3 % 17.9 % ( 1.3 ) % (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 three months ended March 31, 2022 and 2021, MGE recognized $ 1.0 million and $ 0.7 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 three months ended March 31, 2021, MGE recognized $ 3.3 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 three months ended March 31, 2022, MGE recognized $ 0.3 million. |
Pension and Other Postretiremen
Pension and Other Postretirement Plans | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Plans | 5. Pensi on and Other Postretirement Plans - 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. 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. The following table presents the components of net periodic benefit costs recognized. Three Months Ended March 31, (In thousands) 2022 2021 Pension Benefits Components of net periodic benefit cost: Service cost $ 1,337 $ 1,422 Interest cost 2,796 2,272 Expected return on assets ( 7,851 ) ( 7,375 ) Amortization of: Prior service credit ( 5 ) ( 31 ) Actuarial loss 724 1,580 Net periodic benefit (credit) cost $ ( 2,999 ) $ ( 2,132 ) Postretirement Benefits Components of net periodic benefit cost: Service cost $ 333 $ 351 Interest cost 491 384 Expected return on assets ( 843 ) ( 817 ) Amortization of: Transition obligation 1 1 Prior service credit ( 74 ) ( 380 ) Actuarial loss 48 109 Net periodic benefit (credit) cost $ ( 44 ) $ ( 352 ) 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. During the three months ended March 31, 2022 and 2021, MGE recovered $ 0.3 million and $ 3.4 million of pension and other postretirement costs, respectively. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above. During the three months ended March 31, 2022, MGE returned $ 1.0 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above. |
Equity and Financing Arrangemen
Equity and Financing Arrangements | 3 Months Ended |
Mar. 31, 2022 | |
Equity and Financing Arrangements Disclosure [Abstract] | |
Equity and Financing Arrangements | 6. Equity and Fi nancing Arrangements. a. Common Stock - MGE Energy. 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. All sales under the Stock Plan are covered by a shelf registration statement that MGE Energy filed with the SEC. During the three months ended March 31, 2022 and 2021 , MGE Energy issued no new shares of common stock under the Stock Plan. b. Dilutive Shares Calculation - MGE Energy. As of March 31, 2022, 7,492 shares were included in the calculation of diluted earnings per share related to nonvested equity awards. See Footnote 7 for additional information on share-based compensation awards. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | 7. Share-Based C ompensation - MGE Energy and MGE. During the three months ended March 31, 2022 and 2021, MGE recorded $ 0.4 million and $ 0.7 million, respectively, in compensation expense 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 Long-Term Incentive Plan (2021 Plan). In January 2022, cash payments of $ 1.8 million were distributed related to awards that were granted in 2019, for the 2013 Director Incentive Plan, and in 2017, for the 2006 Performance Unit Plan. In February 2022, MGE issued 10,395 performance units and 15,931 restricted stock units under the 2021 Plan to eligible employees and non-employee directors. MGE recognizes stock-based compensation expense 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. The performance units can be paid out in either cash, shares of common stock or a combination of cash and stock and are classified as a liability award. The restricted stock units will be paid out in shares of common stock, and therefore are classified as equity awards. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitmen ts and Contingencies. a. Environmental - MGE Energy and MGE. 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 by the end of 2023 and Unit 2 by the end of 2024. Final timing and retirement dates are subject to change depending on operational, regulatory, and other factors. Effects of environmental compliance requirements discussed below will depend upon the final retirement dates approved and compliance requirement dates. MGE Energy and MGE are subject to frequently changing local, state, and federal regulations concerning air quality, water quality, land use, threatened and endangered species, hazardous materials handling, and solid waste disposal. These regulations affect the manner in which operations are conducted, the costs of operations, as well as capital and operating expenditures. Several of these environmental rules are subject to legal challenges, reconsideration and/or other uncertainties. Regulatory initiatives, proposed rules, and court challenges to adopted rules could have a material effect on capital expenditures and operating costs. Management believes compliance costs will be recovered in future rates based on previous treatment of environmental compliance projects. These initiatives, proposed rules, and court challenges include: • The EPA's 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 estimated costs to comply with the rule is estimated to be approximately $ 4 million. Construction began in March 2022. • The EPA's cooling water intake rules require cooling water intake structures at electric power plants to meet best technology available (BTA) standards to reduce the mortality from entrainment (drawing aquatic life into a plant's cooling system) and impingement (trapping aquatic life on screens). 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 by the end of 2022 and effective in 2023. Management believes that the BTA determination at Blount will not be material for MGE. Columbia's river intakes are subject to this rule. BTA improvements may not be required given that the owners are planning to retire both units by the end of 2024. MGE will continue to work with Columbia's operator to evaluate all regulatory requirements applicable to the planned retirements. MGE does not expect this rule to have a material effect on its existing plants. • Greenhouse Gas (GHG) reduction guidelines and approval criteria established under the Clean Air Act for states to use in developing plans to control GHG emissions from fossil fuel-fired electric generating units (EGUs), including existing and proposed regulations governing existing, new or modified fossil-fuel generating units. In October 2021, as part of the Biden administration's Unified Agenda, the EPA announced their intention to introduce a new set of emission guidelines for states to follow in submitting state plans to establish and implement standards of performance for greenhouse gas emissions from existing fossil fuel-fired EGUs. In late 2021, the US Supreme Court agreed to hear arguments regarding the extent of EPA ' s authority to regulate greenhouse gases from electric generation units under the Clean Air Act. MGE will continue to evaluate greenhouse gas rule developments, including any further Supreme Court decisions on the EPA ' s authority to regulate greenhouse gases. • The EPA's rule to regulate ambient levels of ozone through the 2015 Ozone National Ambient Air Quality Standards (NAAQS). The Elm Road Units are located in Milwaukee County, Wisconsin, a nonattainment area. The Wisconsin Department of Natural Resources (WDNR) must develop a State Implementation Plan (SIP) for the area, which will likely result in more stringent requirements for both constructing new development and modifying or expanding existing plants in the area. 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, MGE does not expect that the 2015 Ozone NAAQS will have a material effect on its existing plants based on final designations. • Rules regulating nitrogen oxide (NO x ) and sulfur dioxide (SO 2 ) emissions, including the Cross State Air Pollution Rule (CSAPR) and Clean Air Visibility Rule. The EPA's CSAPR and its progeny are a suite of interstate air pollution transport rules designed to reduce ozone and fine particulate (PM2.5) 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 generally 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 State Implementation Plan (SIP) to meet its obligations or accept the EPA's proposed FIP. MGE is currently evaluating the proposed rule to determine potential impacts to our business. 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. MGE has met its current CSAPR obligations through a combination of reduced emissions through pollution control (e.g., SCR installation at Columbia), and owned, received, and purchased allowances. MGE expects to meet ongoing CSAPR obligations for the foreseeable future. • The EPA's Coal Combustion Residuals Rule (CCR), which 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. Columbia requested an extension to initiate closure by October 2022. The EPA has not formally approved the extension. The Columbia owners anticipate that the EPA will approve the extension request. However, we will not know the outcome of the extension request with any certainty until the EPA makes a final decision on this request. In the interim, the EPA determined that the extension demonstration is complete and confirmed that the deadline to cease placement of CCR and non-CCR wastewaters in the primary pond is tolled pending a final decision. Review of the Elm Road Units has indicated that the costs to comply with the CCR rule are not expected to be significant. 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. Pending the EPA’s final approval of closure plans at Columbia, MGE's share of the estimated costs of the project will be approximately $ 4 million. Construction is expected to be completed by the end of 2022. 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 accrues for 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 filed petitions against the PSCW regarding MGE's two most recent rate settlements. 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. The following table shows future commitments related to purchase contracts as of March 31, 2022: (In thousands) 2022 2023 2024 2025 2026 Thereafter Coal (a) $ 17,825 $ 14,023 $ 8,299 $ 2,862 $ — $ — (a) Total coal commitments for 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. |
Rate Matters
Rate Matters | 3 Months Ended |
Mar. 31, 2022 | |
Regulated Operations [Abstract] | |
Rate Matters | 9. Rate Mat ters - MGE Energy and MGE. a. Rate Proceedings. In April 2022, MGE filed with the PSCW a proposed electric limited 2023 rate case reopener. The limited reopener proposes a 4.38 % increase for electric rates in 2023. 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 a reduction in fuel costs, which MGE has partially offset with 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. PSCW approval of the 2023 limited reopener is pending. A final order is expected before the end of the year. In December 2021, the PSCW approved a settlement agreement for MGE's 2022 rate case. The settlement agreement provides for an 8.81 % increase for electric rates and a 2.15 % increase for gas rates in 2022. 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. As part of the settlement agreement, for 2023, the PSCW approved a 0.96 % increase in gas rates and to address a potential electric rate change through a limited rate case reopener. The return on common stock equity for 2022 and 2023 is 9.8 % based on a capital structure consisting of 55.6 % common equity. In December 2020, the PSCW approved a settlement agreement for MGE's 2021 rate case. The settlement agreement provided for a zero percent increase for electric rates and an approximately 4 % increase for gas rates in 2021. 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. As part of the settlement, the fuel rules bandwidth was set at plus or minus 1 % for 2021. When compared to the 2020 rate case, the settlement included lower forecasted electric sales for 2021 to reflect changes to customer usage during the COVID-19 pandemic. 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 return on common stock equity for 2021 was 9.8 % based on a capital structure of 55.8 % common equity in 2021. Sierra Club and Vote Solar have filed petitions with the Dane County Circuit Court seeking review of the PSCW decision approving MGE's two most recent rate settlements (2021 and 2022/2023). The PSCW is named as the responding party; MGE is not named as a party. The petitions challenge the process the PSCW used to approve the portion of the settlements relating to electric rates and the electric customer fixed charge that does not vary with usage. The requested relief is unclear. The revenue requirement approved by the PSCW in the settlements have not been challenged. The PSCW is expected to vigorously defend its approval of the rate case settlements. MGE has intervened in the proceedings to further defend the PSCW's decision. 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 % . Under fuel rules, MGE defers costs, less any excess revenues, if its actual electric fuel costs exceed 101 % of the electric fuel costs allowed in its latest rate order. 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. Conversely, MGE is required to defer the benefit of lower costs if actual electric fuel costs were less than 99 % of the electric fuel costs allowed in that order. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral. The PSCW issued a final decision in the 2019 fuel rules proceedings regarding $ 1.5 million of deferred savings giving MGE the option either to use the $ 1.5 million as part of the settlement to MGE's 2021 rate case or to refund the balance to customers in October 2020. MGE elected to include the savings as part of the 2021 rate change settlement as described above, reducing electric retail rates as opposed to a one-time credit back to retail customers. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. In September 2021, the PSCW issued a final decision in the 2020 fuel rules proceedings for MGE to refund $ 3.2 million of additional fuel savings realized during 2020 plus accrued interest to its retail electric customers over a one-month period in October 2021. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. MGE has under recovered fuel costs in 2021. As of December 31, 2021 , MGE had deferred $ 3.3 million of 2021 fuel costs. These costs will be subject to the PSCW's annual review of 2021 fuel costs, expected to be completed in 2022. MGE has proposed to include these costs as part of the 2023 electric limited reopener. As of March 31, 2022 , MGE had no deferred 2022 fuel savings or costs. |
Derivative and Hedging Instrume
Derivative and Hedging Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Instruments | 10. Derivati ve 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: March 31, 2022 December 31, 2021 Commodity derivative contracts 369,960 MWh 278,000 MWh Commodity derivative contracts 3,260,000 Dth 5,735,000 Dth FTRs 858 MW 2,127 MW PPA 100 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 March 31, 2022, and December 31, 2021, the fair value of exchange traded derivatives and FTRs exceeded their cost basis by $ 9.8 million and $ 2.8 million, respectively. MGE is a party to a purchased power agreement that provides MGE with firm capacity and energy during a base term from June 1, 2012, through May 31, 2022. The agreement is accounted for as a derivative contract and is recognized at its fair value on the consolidated balance sheets. However, the derivative qualifies for regulatory deferral and is recognized with a corresponding regulatory asset or liability depending on whether the fair value is in a loss or gain position. The fair value of the contract as of March 31, 2022, and December 31, 2021, reflected a loss position of $ 0.1 million and $ 2.1 million, respectively. The actual cost will be 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. Derivative Derivative (In thousands) Assets Liabilities Balance Sheet Location March 31, 2022 Commodity derivative contracts (a) $ 9,518 $ 325 Other current assets Commodity derivative contracts (a) 626 32 Other deferred charges FTRs (a) — 16 Derivative liability (current) PPA N/A 130 Derivative liability (current) December 31, 2021 Commodity derivative contracts (a) $ 2,959 $ 811 Other current assets Commodity derivative contracts (a) 420 38 Other deferred charges FTRs 227 — Other current assets PPA N/A 2,140 Derivative liability (current) (a) As of March 31, 2022 and December 31, 2021, MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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 Amounts Gross Amounts Offset in Balance Sheets Collateral Posted Against Derivative Positions Net Amount Presented in Balance Sheets March 31, 2022 Commodity derivative contracts $ 10,144 $ ( 357 ) $ ( 6,911 ) $ 2,876 December 31, 2021 Commodity derivative contracts $ 3,379 $ ( 849 ) $ ( 1,254 ) $ 1,276 FTRs 227 — — 227 Offsetting of Derivative Liabilities (In thousands) Gross Amounts Gross Amounts Offset in Balance Sheets Collateral Posted Against Derivative Positions Net Amount Presented in Balance Sheets March 31, 2022 Commodity derivative contracts $ 357 $ ( 357 ) $ — $ — FTRs 16 — ( 16 ) — PPA 130 — — 130 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 (In thousands) Current and Long-Term Regulatory Asset (Liability) Other Current Assets Current and Long-Term Regulatory Asset (Liability) Other Current Assets Three Months Ended March 31: Balance as of January 1, $ ( 617 ) $ 770 $ 13,989 $ 1,162 Unrealized gain ( 11,333 ) — ( 3,588 ) — Realized gain (loss) reclassified to a deferred account 1,279 ( 1,279 ) ( 50 ) 50 Realized gain (loss) reclassified to income statement 1,030 776 708 ( 1,039 ) Balance as of March 31, $ ( 9,641 ) $ 267 $ 11,059 $ 173 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 Three Months Ended March 31: Commodity derivative contracts $ ( 312 ) $ ( 881 ) $ ( 195 ) $ 1,022 FTRs 3 — ( 256 ) — PPA ( 616 ) — ( 240 ) — 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. The PPA has a provision that may require MGE to post collateral if MGE's debt rating falls below investment grade (i.e., below BBB-). The amount of collateral that it may be required to post varies from $ 20.0 million to $ 40.0 million, depending on MGE's nominated capacity amount. As of March 31, 2022 , no collateral was required to be, or had been, posted. Certain counterparties extend MGE a credit limit. If MGE exceeds these limits, the counterparties may require collateral to be posted. As of March 31, 2022 and December 31, 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 March 31, 2022 , no counterparties had defaulted. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 11. Fair Value of Fin ancial Instruments - 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: March 31, 2022 December 31, 2021 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt (a) 622,238 643,259 623,449 729,914 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.2 million and $ 4.3 million as of March 31, 2022, and December 31, 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 March 31, 2022 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 10,144 $ 3,183 $ — $ 6,961 Exchange-traded investments 1,443 1,443 — — Total Assets $ 11,587 $ 4,626 $ — $ 6,961 Liabilities: Derivatives, net (b) $ 503 $ 321 $ — $ 182 Deferred compensation 3,613 — 3,613 — Total Liabilities $ 4,116 $ 321 $ 3,613 $ 182 MGE Assets: Derivatives, net (b) $ 10,144 $ 3,183 $ — $ 6,961 Exchange-traded investments 177 177 — — Total Assets $ 10,321 $ 3,360 $ — $ 6,961 Liabilities: Derivatives, net (b) $ 503 $ 321 $ — $ 182 Deferred compensation 3,613 — 3,613 — Total Liabilities $ 4,116 $ 321 $ 3,613 $ 182 Fair Value as of December 31, 2021 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 1,296 1,296 — — Total Assets $ 4,902 $ 2,466 $ — $ 2,436 Liabilities: Derivatives, net (b) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 MGE Assets: Derivatives, net (b) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 230 230 — — Total Assets $ 3,836 $ 1,400 $ — $ 2,436 Liabilities: Derivatives, net (b) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 (b) As of March 31, 2022 and December 31, 2021 MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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 (see Footnote 10) was valued using an internal pricing model and therefore is classified as Level 3. The model projects future market energy prices and compares those prices to the projected power costs to be incurred under the contract. Inputs to the model require significant management judgment and estimation. Future energy prices are based on a forward power pricing curve using exchange-traded contracts in the electric futures market. A basis adjustment is 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 is reviewed and a discount (below 100%) or premium (above 100%) is derived. This comparison is done for both peak times when demand is high and off-peak times when demand is low. If the basis adjustment is lowered, the fair value measurement will decrease, and if the basis adjustment is increased, the fair value measurement will increase. The projected power costs anticipated to be incurred under the purchased power agreement are determined using many factors, including historical generating costs, future prices, and expected fuel mix of the counterparty. An increase in the projected fuel costs would result in a decrease in the fair value measurement of the purchased power agreement. A significant input that MGE estimates is the counterparty's fuel mix in determining the projected power cost. MGE also considers the assumptions that market participants would use in valuing the asset or liability. This consideration includes assumptions about market risk such as liquidity, volatility, and contract duration. The fair value model uses a discount rate that incorporates discounting, credit, and model risks. The following table presents the significant unobservable inputs used in the pricing model. Model Input March 31, December 31, Significant Unobservable Inputs 2022 2021 Basis adjustment: On peak 92.1 % 94.1 % Off peak 90.0 % 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % 41 %- 66 % Internal generation - weighted average 49.5 % 56.6 % Purchased power - range 59 %- 34 % 59 %- 34 % Purchased power - weighted average 50.5 % 43.4 % The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis. Three Months Ended March 31, (In thousands) 2022 2021 Beginning balance $ 178 $ ( 14,055 ) Realized and unrealized gains (losses): Included in regulatory assets — 2,688 Included in regulatory liability 6,600 — Included in other comprehensive income — — Included in earnings 855 307 Included in current assets 73 355 Purchases 7,026 5,884 Sales — — Issuances — — Settlements ( 7,953 ) ( 6,546 ) Balance as of March 31, $ 6,779 $ ( 11,367 ) Total gains (losses) included in earnings attributed to (c) $ — $ — 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 (c) . Three Months Ended March 31, (In thousands) 2022 2021 Purchased power expense $ 973 $ 702 Cost of gas sold expense ( 118 ) ( 395 ) Total $ 855 $ 307 (c) 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. |
Joint Plant Ownership
Joint Plant Ownership | 3 Months Ended |
Mar. 31, 2022 | |
Public Utilities, Property, Plant and Equipment [Abstract] | |
Jointly Owned Electric Utility Plant | 12. Joint Plant Constr uction Project Ownership - MGE Energy and MGE MGE currently has ongoing jointly-owned solar generation construction projects, as shown in the following table. Incurred costs are reflected in "Construction work in progress" on the consolidated balance sheets. Ownership Share of Share of Costs incurred Estimated Date of Project Interest Generation Estimated Costs (a) 2022 (a) Operation Red Barn (b) 10 % 9.16 MW $ 18 million $ 0.6 million December 2022 Badger Hollow II (c) 33 % 50 MW $ 65 million $ 23.8 million (d) First Half of 2023 (a) Excluding AFUDC. (b) The Red Barn Wind Farm is located in the Towns of Wingville and Clifton in Grant County, Wisconsin. (c) The Badger Hollow II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. (d) Includes an allocation of common facilities at Badger Hollow placed in service in November 2021. MGE received specific approval to recover 100 % AFUDC on Badger Hollow II. During the three months ended March 31, 2022 and 2021, MGE recognized $ 0.4 million and $ 0.1 million, respectively, after tax, in AFUDC for Badger Hollow II. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 13. Reven ue - MGE Energy and MGE. Revenues disaggregated by revenue source were as follows: Three Months Ended (In thousands) March 31, Electric revenues 2022 2021 Residential $ 40,474 $ 36,694 Commercial 54,449 47,883 Industrial 3,147 3,001 Other-retail/municipal 8,829 8,170 Total retail 106,899 95,748 Sales to the market 2,882 4,639 Other 308 222 Total electric revenues 110,089 100,609 Gas revenues Residential 56,683 39,758 Commercial/Industrial 40,251 25,507 Total retail 96,934 65,265 Gas transportation 1,876 2,002 Other 1 3 Total gas revenues 98,811 67,270 Non-regulated energy revenues 38 36 Total Operating Revenue $ 208,938 $ 167,915 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. The PSCW allows Wisconsin utilities to defer electric fuel-related costs, less excess revenues, that fall outside a symmetrical cost tolerance band. Any over- or under-recovery of the actual costs in a given year 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 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. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 14. Segment Infor mation - MGE Energy and MGE. MGE Energy operates in the following business segments: electric utility, gas utility, nonregulated energy, transmission investment, and all other. See the 2021 Annual Report on Form 10-K for additional discussion of each of these segments. (In thousands) Electric Gas Non-Regulated Energy Transmission Investment All Others Consolidation/ Consolidated Total Three Months Ended March 31, 2022 Operating revenues $ 110,089 $ 98,811 $ 38 $ — $ — $ — $ 208,938 Interdepartmental revenues 118 6,121 10,315 — — ( 16,554 ) — Total operating revenues 110,207 104,932 10,353 — — ( 16,554 ) 208,938 Equity in earnings of investments — — — 2,504 — — 2,504 Net income 14,617 12,084 5,352 1,822 545 — 34,420 Three Months Ended March 31, 2021 Operating revenues $ 100,609 $ 67,270 $ 36 $ — $ — $ — $ 167,915 Interdepartmental revenues 273 4,811 10,173 — — ( 15,257 ) — Total operating revenues 100,882 72,081 10,209 — — ( 15,257 ) 167,915 Equity in earnings of investments — — — 2,444 — — 2,444 Net income (loss) 18,024 10,556 5,194 1,778 ( 619 ) — 34,933 (In thousands) Electric Gas Non-Regulated Energy Consolidation/ Consolidated Total Three Months Ended March 31, 2022 Operating revenues $ 110,089 $ 98,811 $ 38 $ — $ 208,938 Interdepartmental revenues 118 6,121 10,315 ( 16,554 ) — Total operating revenues 110,207 104,932 10,353 ( 16,554 ) 208,938 Net income attributable to MGE 14,617 12,084 5,352 ( 4,756 ) 27,297 Three Months Ended March 31, 2021 Operating revenues $ 100,609 $ 67,270 $ 36 $ — $ 167,915 Interdepartmental revenues 273 4,811 10,173 ( 15,257 ) — Total operating revenues 100,882 72,081 10,209 ( 15,257 ) 167,915 Net income attributable to MGE 18,024 10,556 5,194 ( 5,501 ) 28,273 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Variable Interest Entities | MGE Power Elm Road and MGE Power West Campus own electric generating assets and lease those assets to MGE. Both entities are variable interest entities under applicable authoritative accounting guidance. MGE is considered the primary beneficiary of these entities as a result of contractual agreements. As a result, MGE has consolidated MGE Power Elm Road and MGE Power West Campus. |
Cash and 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. |
New Accounting Pronouncement Disclosure | MGE Energy and MGE reviewed FASB authoritative guidance recently issued, none of which are expected to have a material impact on their consolidated results of operations, financial condition, or cash flows. |
Investments - ATC and ATC Holdco | MGE Transco and MGEE Transco have accounted for their investments in ATC and ATC Holdco, respectively, under the equity method of accounting. |
Pension and Other Postretirement Benefit Plan Assets | 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. 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. |
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. All sales under the Stock Plan are covered by a shelf registration statement that MGE Energy filed with the SEC. |
Wisconsin 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 % . Under fuel rules, MGE defers costs, less any excess revenues, if its actual electric fuel costs exceed 101 % of the electric fuel costs allowed in its latest rate order. 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. Conversely, MGE is required to defer the benefit of lower costs if actual electric fuel costs were less than 99 % of the electric fuel costs allowed in that order. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral. |
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. |
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. 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. 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 (see Footnote 10) was valued using an internal pricing model and therefore is classified as Level 3. The model projects future market energy prices and compares those prices to the projected power costs to be incurred under the contract. Inputs to the model require significant management judgment and estimation. Future energy prices are based on a forward power pricing curve using exchange-traded contracts in the electric futures market. A basis adjustment is 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 is reviewed and a discount (below 100%) or premium (above 100%) is derived. This comparison is done for both peak times when demand is high and off-peak times when demand is low. If the basis adjustment is lowered, the fair value measurement will decrease, and if the basis adjustment is increased, the fair value measurement will increase. The projected power costs anticipated to be incurred under the purchased power agreement are determined using many factors, including historical generating costs, future prices, and expected fuel mix of the counterparty. An increase in the projected fuel costs would result in a decrease in the fair value measurement of the purchased power agreement. A significant input that MGE estimates is the counterparty's fuel mix in determining the projected power cost. MGE also considers the assumptions that market participants would use in valuing the asset or liability. This consideration includes assumptions about market risk such as liquidity, volatility, and contract duration. The fair value model uses a discount rate that incorporates discounting, credit, and model risks. The following table presents the significant unobservable inputs used in the pricing model. Model Input March 31, December 31, Significant Unobservable Inputs 2022 2021 Basis adjustment: On peak 92.1 % 94.1 % Off peak 90.0 % 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % 41 %- 66 % Internal generation - weighted average 49.5 % 56.6 % Purchased power - range 59 %- 34 % 59 %- 34 % Purchased power - weighted average 50.5 % 43.4 % |
Revenue Recognition | 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. The PSCW allows Wisconsin utilities to defer electric fuel-related costs, less excess revenues, that fall outside a symmetrical cost tolerance band. Any over- or under-recovery of the actual costs in a given year 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 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Cash, Cash Equivalents, And Restricted Cash [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. MGE Energy MGE March 31, December 31, March 31, December 31, (In thousands) 2022 2021 2022 2021 Cash and cash equivalents $ 26,374 $ 17,438 $ 17,159 $ 6,401 Restricted cash 641 847 641 847 Receivable - margin account 534 550 534 550 Cash, cash equivalents, and restricted cash $ 27,549 $ 18,835 $ 18,334 $ 7,798 |
Investment in ATC and ATC Hol_2
Investment in ATC and ATC Holdco (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments Financial Data | MGE Transco and MGEE Transco have accounted for their investments 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. MGE Transco recorded the following amounts related to its investment in ATC: Three Months Ended March 31, (In thousands) 2022 2021 Equity earnings from investment in ATC $ 2,478 $ 2,420 Dividends received from ATC 2,001 1,967 Capital contributions to ATC 1,243 — ATC's summarized financial data is as follows: Three Months Ended March 31, (In thousands) 2022 2021 Operating revenues $ 190,999 $ 188,694 Operating expenses ( 95,491 ) ( 95,104 ) Other income, net 404 378 Interest expense, net ( 28,440 ) ( 28,871 ) Earnings before members' income taxes $ 67,472 $ 65,097 |
Taxes (Tables)
Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
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 Three Months Ended March 31, 2022 2021 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 6.3 6.3 6.3 6.3 Amortized investment tax credits ( 0.7 ) ( 1.6 ) ( 0.8 ) ( 1.8 ) Credit for electricity from wind energy ( 5.4 ) ( 7.1 ) ( 6.0 ) ( 7.8 ) AFUDC equity, net ( 0.5 ) ( 0.6 ) ( 0.5 ) ( 0.6 ) Amortization of utility excess deferred tax - tax reform (a) ( 1.9 ) ( 16.7 ) ( 1.8 ) ( 18.3 ) Other, net, individually insignificant ( 0.2 ) — ( 0.3 ) ( 0.1 ) Effective income tax rate 18.6 % 1.3 % 17.9 % ( 1.3 ) % (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 three months ended March 31, 2022 and 2021, MGE recognized $ 1.0 million and $ 0.7 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 three months ended March 31, 2021, MGE recognized $ 3.3 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 three months ended March 31, 2022, MGE recognized $ 0.3 million. |
Pension and Other Postretirem_2
Pension and Other Postretirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Costs | The following table presents the components of net periodic benefit costs recognized. Three Months Ended March 31, (In thousands) 2022 2021 Pension Benefits Components of net periodic benefit cost: Service cost $ 1,337 $ 1,422 Interest cost 2,796 2,272 Expected return on assets ( 7,851 ) ( 7,375 ) Amortization of: Prior service credit ( 5 ) ( 31 ) Actuarial loss 724 1,580 Net periodic benefit (credit) cost $ ( 2,999 ) $ ( 2,132 ) Postretirement Benefits Components of net periodic benefit cost: Service cost $ 333 $ 351 Interest cost 491 384 Expected return on assets ( 843 ) ( 817 ) Amortization of: Transition obligation 1 1 Prior service credit ( 74 ) ( 380 ) Actuarial loss 48 109 Net periodic benefit (credit) cost $ ( 44 ) $ ( 352 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | The following table shows future commitments related to purchase contracts as of March 31, 2022: (In thousands) 2022 2023 2024 2025 2026 Thereafter Coal (a) $ 17,825 $ 14,023 $ 8,299 $ 2,862 $ — $ — (a) Total coal commitments for 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. |
Derivative and Hedging Instru_2
Derivative and Hedging Instruments (Tables) | 3 Months Ended |
Mar. 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: March 31, 2022 December 31, 2021 Commodity derivative contracts 369,960 MWh 278,000 MWh Commodity derivative contracts 3,260,000 Dth 5,735,000 Dth FTRs 858 MW 2,127 MW PPA 100 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. Derivative Derivative (In thousands) Assets Liabilities Balance Sheet Location March 31, 2022 Commodity derivative contracts (a) $ 9,518 $ 325 Other current assets Commodity derivative contracts (a) 626 32 Other deferred charges FTRs (a) — 16 Derivative liability (current) PPA N/A 130 Derivative liability (current) December 31, 2021 Commodity derivative contracts (a) $ 2,959 $ 811 Other current assets Commodity derivative contracts (a) 420 38 Other deferred charges FTRs 227 — Other current assets PPA N/A 2,140 Derivative liability (current) (a) As of March 31, 2022 and December 31, 2021, MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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 Amounts Gross Amounts Offset in Balance Sheets Collateral Posted Against Derivative Positions Net Amount Presented in Balance Sheets March 31, 2022 Commodity derivative contracts $ 10,144 $ ( 357 ) $ ( 6,911 ) $ 2,876 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 Amounts Gross Amounts Offset in Balance Sheets Collateral Posted Against Derivative Positions Net Amount Presented in Balance Sheets March 31, 2022 Commodity derivative contracts $ 357 $ ( 357 ) $ — $ — FTRs 16 — ( 16 ) — PPA 130 — — 130 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 (In thousands) Current and Long-Term Regulatory Asset (Liability) Other Current Assets Current and Long-Term Regulatory Asset (Liability) Other Current Assets Three Months Ended March 31: Balance as of January 1, $ ( 617 ) $ 770 $ 13,989 $ 1,162 Unrealized gain ( 11,333 ) — ( 3,588 ) — Realized gain (loss) reclassified to a deferred account 1,279 ( 1,279 ) ( 50 ) 50 Realized gain (loss) reclassified to income statement 1,030 776 708 ( 1,039 ) Balance as of March 31, $ ( 9,641 ) $ 267 $ 11,059 $ 173 |
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 Three Months Ended March 31: Commodity derivative contracts $ ( 312 ) $ ( 881 ) $ ( 195 ) $ 1,022 FTRs 3 — ( 256 ) — PPA ( 616 ) — ( 240 ) — |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Market Value of Financial Instruments | The estimated fair market value of financial instruments are as follows: March 31, 2022 December 31, 2021 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt (a) 622,238 643,259 623,449 729,914 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.2 million and $ 4.3 million as of March 31, 2022, and December 31, 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 March 31, 2022 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 10,144 $ 3,183 $ — $ 6,961 Exchange-traded investments 1,443 1,443 — — Total Assets $ 11,587 $ 4,626 $ — $ 6,961 Liabilities: Derivatives, net (b) $ 503 $ 321 $ — $ 182 Deferred compensation 3,613 — 3,613 — Total Liabilities $ 4,116 $ 321 $ 3,613 $ 182 MGE Assets: Derivatives, net (b) $ 10,144 $ 3,183 $ — $ 6,961 Exchange-traded investments 177 177 — — Total Assets $ 10,321 $ 3,360 $ — $ 6,961 Liabilities: Derivatives, net (b) $ 503 $ 321 $ — $ 182 Deferred compensation 3,613 — 3,613 — Total Liabilities $ 4,116 $ 321 $ 3,613 $ 182 Fair Value as of December 31, 2021 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net (b) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 1,296 1,296 — — Total Assets $ 4,902 $ 2,466 $ — $ 2,436 Liabilities: Derivatives, net (b) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 MGE Assets: Derivatives, net (b) $ 3,606 $ 1,170 $ — $ 2,436 Exchange-traded investments 230 230 — — Total Assets $ 3,836 $ 1,400 $ — $ 2,436 Liabilities: Derivatives, net (b) $ 2,989 $ 731 $ — $ 2,258 Deferred compensation 3,653 — 3,653 — Total Liabilities $ 6,642 $ 731 $ 3,653 $ 2,258 (b) As of March 31, 2022 and December 31, 2021 MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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. Model Input March 31, December 31, Significant Unobservable Inputs 2022 2021 Basis adjustment: On peak 92.1 % 94.1 % Off peak 90.0 % 92.4 % Counterparty fuel mix: Internal generation - range 41 %- 66 % 41 %- 66 % Internal generation - weighted average 49.5 % 56.6 % Purchased power - range 59 %- 34 % 59 %- 34 % Purchased power - weighted average 50.5 % 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. Three Months Ended March 31, (In thousands) 2022 2021 Beginning balance $ 178 $ ( 14,055 ) Realized and unrealized gains (losses): Included in regulatory assets — 2,688 Included in regulatory liability 6,600 — Included in other comprehensive income — — Included in earnings 855 307 Included in current assets 73 355 Purchases 7,026 5,884 Sales — — Issuances — — Settlements ( 7,953 ) ( 6,546 ) Balance as of March 31, $ 6,779 $ ( 11,367 ) Total gains (losses) included in earnings attributed to (c) $ — $ — (c) 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. |
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 (c) . Three Months Ended March 31, (In thousands) 2022 2021 Purchased power expense $ 973 $ 702 Cost of gas sold expense ( 118 ) ( 395 ) Total $ 855 $ 307 (c) 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. |
Joint Plant (Tables)
Joint Plant (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Public Utilities, Property, Plant and Equipment [Abstract] | |
Schedule of Jointly Owned Utility Plants | MGE currently has ongoing jointly-owned solar generation construction projects, as shown in the following table. Incurred costs are reflected in "Construction work in progress" on the consolidated balance sheets. Ownership Share of Share of Costs incurred Estimated Date of Project Interest Generation Estimated Costs (a) 2022 (a) Operation Red Barn (b) 10 % 9.16 MW $ 18 million $ 0.6 million December 2022 Badger Hollow II (c) 33 % 50 MW $ 65 million $ 23.8 million (d) First Half of 2023 (a) Excluding AFUDC. (b) The Red Barn Wind Farm is located in the Towns of Wingville and Clifton in Grant County, Wisconsin. (c) The Badger Hollow II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. (d) Includes an allocation of common facilities at Badger Hollow placed in service in November 2021. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues disaggregated by revenue source were as follows: Three Months Ended (In thousands) March 31, Electric revenues 2022 2021 Residential $ 40,474 $ 36,694 Commercial 54,449 47,883 Industrial 3,147 3,001 Other-retail/municipal 8,829 8,170 Total retail 106,899 95,748 Sales to the market 2,882 4,639 Other 308 222 Total electric revenues 110,089 100,609 Gas revenues Residential 56,683 39,758 Commercial/Industrial 40,251 25,507 Total retail 96,934 65,265 Gas transportation 1,876 2,002 Other 1 3 Total gas revenues 98,811 67,270 Non-regulated energy revenues 38 36 Total Operating Revenue $ 208,938 $ 167,915 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | (In thousands) Electric Gas Non-Regulated Energy Transmission Investment All Others Consolidation/ Consolidated Total Three Months Ended March 31, 2022 Operating revenues $ 110,089 $ 98,811 $ 38 $ — $ — $ — $ 208,938 Interdepartmental revenues 118 6,121 10,315 — — ( 16,554 ) — Total operating revenues 110,207 104,932 10,353 — — ( 16,554 ) 208,938 Equity in earnings of investments — — — 2,504 — — 2,504 Net income 14,617 12,084 5,352 1,822 545 — 34,420 Three Months Ended March 31, 2021 Operating revenues $ 100,609 $ 67,270 $ 36 $ — $ — $ — $ 167,915 Interdepartmental revenues 273 4,811 10,173 — — ( 15,257 ) — Total operating revenues 100,882 72,081 10,209 — — ( 15,257 ) 167,915 Equity in earnings of investments — — — 2,444 — — 2,444 Net income (loss) 18,024 10,556 5,194 1,778 ( 619 ) — 34,933 (In thousands) Electric Gas Non-Regulated Energy Consolidation/ Consolidated Total Three Months Ended March 31, 2022 Operating revenues $ 110,089 $ 98,811 $ 38 $ — $ 208,938 Interdepartmental revenues 118 6,121 10,315 ( 16,554 ) — Total operating revenues 110,207 104,932 10,353 ( 16,554 ) 208,938 Net income attributable to MGE 14,617 12,084 5,352 ( 4,756 ) 27,297 Three Months Ended March 31, 2021 Operating revenues $ 100,609 $ 67,270 $ 36 $ — $ 167,915 Interdepartmental revenues 273 4,811 10,173 ( 15,257 ) — Total operating revenues 100,882 72,081 10,209 ( 15,257 ) 167,915 Net income attributable to MGE 18,024 10,556 5,194 ( 5,501 ) 28,273 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Details-1) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 26,374 | $ 17,438 | ||
Restricted cash | 641 | 847 | ||
Receivable - margin account | 534 | 550 | ||
Cash, cash equivalents, and restricted cash | 27,549 | 18,835 | $ 41,502 | $ 47,039 |
MGE [Member] | ||||
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 17,159 | 6,401 | ||
Restricted cash | 641 | 847 | ||
Receivable - margin account | 534 | 550 | ||
Cash, cash equivalents, and restricted cash | $ 18,334 | $ 7,798 | $ 7,972 | $ 6,404 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details-2) - Columbia Units [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Jointly Owned Utility Plant Interests [Line Items] | |
Net book value of property, plant, and equipment | $ 156.7 |
Impairment of Long-Lived Assets | |
Impairment of long-lived assets | $ 0 |
Investment in ATC and ATC Hol_3
Investment in ATC and ATC Holdco (Details-1) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity earnings from investment | $ 2,504 | $ 2,444 | |
Dividends from investment | 2,001 | 1,967 | |
Capital contributions to investments | 1,546 | 670 | |
MGE Transco [Member] | ATC [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity earnings from investment | 2,478 | 2,420 | |
Dividends from investment | 2,001 | 1,967 | |
Capital contributions to investments | $ 1,243 | $ 0 | |
MGE Transco [Member] | ATC [Member] | Subsequent Event [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Capital contributions to investments | $ 500 |
Investment in ATC and ATC Hol_4
Investment in ATC and ATC Holdco (Details-2) - ATC [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||
Operating revenues | $ 190,999 | $ 188,694 |
Operating expenses | (95,491) | (95,104) |
Other income, net | 404 | 378 |
Interest expense, net | (28,440) | (28,871) |
Earnings before members' income taxes | $ 67,472 | $ 65,097 |
Investment in ATC and ATC Hol_5
Investment in ATC and ATC Holdco (Details-3) - ATC [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Related party expenses | $ 7.9 | $ 8 | |
Due from related parties | $ 8.1 | $ 7 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | |
State income taxes, net of federal benefit | 6.30% | 6.30% | |
Amortized investment tax credits | (0.70%) | (1.60%) | |
Credit for electricity from wind energy | (5.40%) | (7.10%) | |
AFUDC equity, net | (0.50%) | (0.60%) | |
Amortization of utility excess deferred tax - tax reform | [1] | (1.90%) | (16.70%) |
Other, net, individually significant | (0.20%) | 0.00% | |
Effective income tax rate | 18.60% | 1.30% | |
Excess Deferred Taxes, Tax Cuts And Jobs Act [Member] | |||
Effects Of The Tax Cuts And Jobs Act [Abstract] | |||
Excess deferred tax - Income statement effect | $ 1 | $ 0.7 | |
Return of unprotected excess deferred taxes | $ 3.3 | ||
Deficient Deferred Taxes, Tax Cuts And Jobs Act [Member] | |||
Effects Of The Tax Cuts And Jobs Act [Abstract] | |||
Collection of unprotected deficient deferred taxes | $ 0.3 | ||
MGE [Member] | |||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | |
State income taxes, net of federal benefit | 6.30% | 6.30% | |
Amortized investment tax credits | (0.80%) | (1.80%) | |
Credit for electricity from wind energy | (6.00%) | (7.80%) | |
AFUDC equity, net | (0.50%) | (0.60%) | |
Amortization of utility excess deferred tax - tax reform | [1] | (1.80%) | (18.30%) |
Other, net, individually significant | (0.30%) | (0.10%) | |
Effective income tax rate | 17.90% | (1.30%) | |
[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 three months ended March 31, 2022 and 2021, MGE recognized $ 1.0 million and $ 0.7 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 three months ended March 31, 2021, MGE recognized $ 3.3 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 three months ended March 31, 2022, MGE recognized $ 0.3 million. |
Pension and Other Postretirem_3
Pension and Other Postretirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Deferred Pension And Other Postretirement Benefit Plan Costs Recovered [Abstract] | ||
Deferred (recognized) pension and OPEB costs | $ (300) | $ (3,400) |
Returned Savings From Prior Year Employee Benefit Costs | 1,000 | |
Pension Benefits [Member] | ||
Components of net periodic benefit cost: | ||
Service cost | 1,337 | 1,422 |
Interest cost | 2,796 | 2,272 |
Expected return on assets | (7,851) | (7,375) |
Amortization of: | ||
Prior service credit | (5) | (31) |
Actuarial loss | 724 | 1,580 |
Net periodic benefit (credit) cost | (2,999) | (2,132) |
Postretirement Benefits [Member] | ||
Components of net periodic benefit cost: | ||
Service cost | 333 | 351 |
Interest cost | 491 | 384 |
Expected return on assets | (843) | (817) |
Amortization of: | ||
Transition obligation | 1 | 1 |
Prior service credit | (74) | (380) |
Actuarial loss | 48 | 109 |
Net periodic benefit (credit) cost | $ (44) | $ (352) |
Equity and Financing Arrangem_2
Equity and Financing Arrangements (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Common Stock [Abstract] | ||
Common stock issued during period under the stock plan | 0 | 0 |
Dilutive Shares Calculation [Abstract] | ||
Shares included in diluted earnings per share | 7,492 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ in Millions | Feb. 18, 2022 | Jan. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | $ 0.4 | $ 0.7 | ||
2021 Long Term Incentive Plan [Member] | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,395 | |||
2021 Long Term Incentive Plan [Member] | Restricted Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 15,931 | |||
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 |
Commitments and Contingencies_2
Commitments and Contingencies (Details-1) $ in Millions | Mar. 31, 2022USD ($) |
Columbia Units [Member] | |
Public Utilities, General Disclosures [Line Items] | |
Projected Costs For Environmental Regulation | $ 4 |
Elm Road Units [Member] | |
Public Utilities, General Disclosures [Line Items] | |
Projected Costs For Environmental Regulation | $ 4 |
Commitments and Contingencies_3
Commitments and Contingencies (Details-2) - Coal [Member] $ in Thousands | Mar. 31, 2022USD ($) | [1] |
Operating expense purchase contracts [Abstract] | ||
Purchase obligation, 2022 | $ 17,825 | |
Purchase obligation, 2023 | 14,023 | |
Purchase obligation, 2024 | 8,299 | |
Purchase obligation, 2025 | 2,862 | |
Purchase obligation, 2026 | 0 | |
Purchase obligation, Thereafter | $ 0 | |
[1] | Total coal commitments for 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. |
Rate Matters (Details)
Rate Matters (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2019 | |
Fuel Rules [Abstract] | |||||
Deferred fuel rules monitored costs | $ 0 | $ (3,300) | $ 1,500 | ||
PSCW [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Authorized return on equity, percentage | 9.80% | 9.80% | |||
Approved equity capital structure, percentage | 55.60% | 55.80% | |||
Fuel Rules [Abstract] | |||||
Fuel rules, bandwidth | 1.00% | 1.00% | |||
Fuel rules, electric fuel deferred costs upper threshold | 101.00% | ||||
Fuel rules, electric fuel deferred costs lower threshold | 99.00% | ||||
PSCW [Member] | MGE [Member] | Fuel Rules Refund, 2020 [Member] | |||||
Fuel Rules [Abstract] | |||||
Return of electric fuel credit, total | $ 3,200 | ||||
PSCW [Member] | Rate Matters For Future Periods [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Authorized return on equity, percentage | 9.80% | ||||
Approved equity capital structure, percentage | 55.60% | ||||
Electric Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Authorized rate increase (decrease), percentage | 8.81% | 0.00% | |||
Effects Of The Tax Cuts And Jobs Act [Abstract] | |||||
Return of unprotected excess deferred taxes | $ 18,200 | ||||
Electric Rate Proceeding [Member] | PSCW [Member] | Rate Matters For Future Periods [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Proposed rate increase (decrease), percentage | 4.38% | ||||
Gas Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Authorized rate increase (decrease), percentage | 2.15% | 4.00% | |||
Gas Rate Proceeding [Member] | PSCW [Member] | Rate Matters For Future Periods [Member] | MGE [Member] | |||||
Rate Proceedings [Abstract] | |||||
Authorized rate increase (decrease), percentage | 0.96% |
Derivative and Hedging Instru_3
Derivative and Hedging Instruments (Details-1) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022USD ($)Dth1MWhMW | Dec. 31, 2021USD ($)Dth1MWhMW | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | ||
Derivative fair values [Abstract] | |||||
Collateral posted against derivative positions | $ 6,900 | $ 1,300 | |||
Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative, Fair Value, Net | 267 | 770 | $ 173 | $ 1,162 | |
Commodity Contracts And Financial Transimission Rights [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative, Fair Value, Net | $ 9,800 | $ 2,800 | |||
Commodity Contract [Member] | |||||
Gross Notional Volume of Open Derivatives [Abstract] | |||||
Notional amount, energy measures (in MWh) | MWh | 369,960 | 278,000 | |||
Notional amount, decatherm measure (in Dth) | Dth1 | 3,260,000 | 5,735,000 | |||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | $ 10,144 | $ 3,379 | |||
Derivative Liability, Fair Value, Gross Liability | 357 | 849 | |||
Collateral posted against derivative positions | 6,911 | 1,254 | |||
Commodity Contract [Member] | Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | [1] | 9,518 | 2,959 | ||
Derivative Liability, Fair Value, Gross Liability | [1] | 325 | 811 | ||
Commodity Contract [Member] | Other Deferred Charges [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | [1] | 626 | 420 | ||
Derivative Liability, Fair Value, Gross Liability | [1] | 32 | 38 | ||
Commodity Contract [Member] | Cash Flow Hedging [Member] | |||||
Derivative fair values [Abstract] | |||||
Collateral posted against derivative positions | $ 6,900 | $ 1,300 | |||
Energy Related Commodity Contract [Member] | Cash Flow Hedging [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Maximum term of derivative hedging contract | 4 years | ||||
Financial Transmission Rights [Member] | |||||
Gross Notional Volume of Open Derivatives [Abstract] | |||||
Notional amount, power measure (in MW) | MW | 858 | 2,127 | |||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | $ 227 | ||||
Derivative Liability, Fair Value, Gross Liability | $ 16 | ||||
Collateral posted against derivative positions | 0 | ||||
Financial Transmission Rights [Member] | Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | 227 | ||||
Derivative Liability, Fair Value, Gross Liability | $ 0 | ||||
Financial Transmission Rights [Member] | Derivative Liability (Current) [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative Asset, Fair Value, Gross Asset | [1] | 0 | |||
Derivative Liability, Fair Value, Gross Liability | [1] | $ 16 | |||
PPA [Member] | |||||
Gross Notional Volume of Open Derivatives [Abstract] | |||||
Notional amount, power measure (in MW) | MW | 100 | 250 | |||
Derivative fair values [Abstract] | |||||
Derivative, Fair Value, Net | $ (100) | $ (2,100) | |||
Derivative Liability, Fair Value, Gross Liability | 130 | 2,140 | |||
PPA [Member] | Derivative Liability (Current) [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative Liability, Fair Value, Gross Liability | $ 130 | $ 2,140 | |||
[1] | As of March 31, 2022 and December 31, 2021, MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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_4
Derivative and Hedging Instruments (Details-2) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Offsetting Assets [Line Items] | ||
Collateral posted against derivative positions | $ (6,900) | $ (1,300) |
Commodity Contract [Member] | ||
Offsetting Assets [Line Items] | ||
Gross amounts | 10,144 | 3,379 |
Gross amounts offset in balance sheet | (357) | (849) |
Collateral posted against derivative positions | (6,911) | (1,254) |
Net amount presented in balance sheet | $ 2,876 | 1,276 |
Financial Transmission Rights [Member] | ||
Offsetting Assets [Line Items] | ||
Gross amounts | 227 | |
Gross amounts offset in balance sheet | 0 | |
Collateral posted against derivative positions | 0 | |
Net amount presented in balance sheet | $ 227 |
Derivative and Hedging Instru_5
Derivative and Hedging Instruments (Details-3) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Commodity Contract [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts | $ 357 | $ 849 |
Gross amounts offset in balance sheet | (357) | (849) |
Collateral posted against derivative positions | 0 | 0 |
Net amount presented in balance sheet | 0 | 0 |
Financial Transmission Rights [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts | 16 | |
Gross amounts offset in balance sheet | 0 | |
Collateral posted against derivative positions | (16) | |
Net amount presented in balance sheet | 0 | |
Purchased Power Agreement [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts | 130 | 2,140 |
Gross amounts offset in balance sheet | 0 | 0 |
Collateral posted against derivative positions | 0 | 0 |
Net amount presented in balance sheet | $ 130 | $ 2,140 |
Derivative and Hedging Instru_6
Derivative and Hedging Instruments (Details-4) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Current and Long-Term Regulatory Asset (Liability) [Member] | ||
Change In Derivative Fair Value [Roll Forward] | ||
Beginning balance, | $ (617) | $ 13,989 |
Unrealized gain | (11,333) | (3,588) |
Realized (loss) gain reclassified to a deferred account | 1,279 | (50) |
Realized (loss) gain reclassified to income statement | 1,030 | 708 |
Ending balance, | (9,641) | 11,059 |
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 | (1,279) | 50 |
Realized (loss) gain reclassified to income statement | 776 | (1,039) |
Ending balance, | $ 267 | $ 173 |
Derivative and Hedging Instru_7
Derivative and Hedging Instruments (Details-5) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)Counterparty | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
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 | $ (312) | $ (195) | |
Commodity Contract [Member] | Cost Of Gas Sold Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized losses (gains) on income statement | (881) | 1,022 | |
Financial Transmission Rights [Member] | Fuel For Electric Generation Purchased Power [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized losses (gains) on income statement | 3 | (256) | |
Financial Transmission Rights [Member] | Cost Of Gas Sold Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized losses (gains) on income statement | 0 | 0 | |
Purchased Power Agreement [Member] | |||
Derivative collateral required to be posted for PPA [Abstract] | |||
Minimum collateral that may be required to be posted | 20,000 | ||
Maximum collateral that may be required to be posted | 40,000 | ||
Collateral Already Posted, Aggregate Fair Value | 0 | ||
Purchased Power Agreement [Member] | Fuel For Electric Generation Purchased Power [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized losses (gains) on income statement | (616) | (240) | |
Purchased Power Agreement [Member] | Cost Of Gas Sold Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Realized losses (gains) on income statement | $ 0 | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details-1) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Liabilities: | |||
Unamortized discount and debt issuance costs, net | $ 4,200 | $ 4,300 | |
Carrying Amount [Member] | |||
Liabilities: | |||
Long-term debt | [1] | 622,238 | 623,449 |
Fair Value [Member] | |||
Liabilities: | |||
Long-term debt | [1] | $ 643,259 | $ 729,914 |
[1] | Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.2 million and $ 4.3 million as of March 31, 2022, and December 31, 2021 , respectively. |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details-2) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets: | |||
Collateral posted against derivative positions | $ 6,900 | $ 1,300 | |
Recurring [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 10,144 | 3,606 |
Exchange-traded investments | 1,443 | 1,296 | |
Total Assets | 11,587 | 4,902 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 503 | 2,989 |
Deferred compensation | 3,613 | 3,653 | |
Total liabilities | 4,116 | 6,642 | |
Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 3,183 | 1,170 |
Exchange-traded investments | 1,443 | 1,296 | |
Total Assets | 4,626 | 2,466 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 321 | 731 |
Deferred compensation | 0 | 0 | |
Total liabilities | 321 | 731 | |
Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 0 | 0 |
Exchange-traded investments | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 0 | 0 |
Deferred compensation | 3,613 | 3,653 | |
Total liabilities | 3,613 | 3,653 | |
Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 6,961 | 2,436 |
Exchange-traded investments | 0 | 0 | |
Total Assets | 6,961 | 2,436 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 182 | 2,258 |
Deferred compensation | 0 | 0 | |
Total liabilities | 182 | 2,258 | |
MGE [Member] | Recurring [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 10,144 | 3,606 |
Exchange-traded investments | 177 | 230 | |
Total Assets | 10,321 | 3,836 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 503 | 2,989 |
Deferred compensation | 3,613 | 3,653 | |
Total liabilities | 4,116 | 6,642 | |
MGE [Member] | Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 3,183 | 1,170 |
Exchange-traded investments | 177 | 230 | |
Total Assets | 3,360 | 1,400 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 321 | 731 |
Deferred compensation | 0 | 0 | |
Total liabilities | 321 | 731 | |
MGE [Member] | Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 0 | 0 |
Exchange-traded investments | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 0 | 0 |
Deferred compensation | 3,613 | 3,653 | |
Total liabilities | 3,613 | 3,653 | |
MGE [Member] | Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Derivative assets, net | [1] | 6,961 | 2,436 |
Exchange-traded investments | 0 | 0 | |
Total Assets | 6,961 | 2,436 | |
Liabilities: | |||
Derivative liabilities, net | [1] | 182 | 2,258 |
Deferred compensation | 0 | 0 | |
Total liabilities | $ 182 | $ 2,258 | |
[1] | As of March 31, 2022 and December 31, 2021 MGE received collateral of $ 6.9 million and $ 1.3 million, respectively, 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) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Basis adjustment: | ||
Basis adjustment - on peak | 92.10% | 94.10% |
Basis adjustment - off peak | 90.00% | 92.40% |
US Treasury Bills [Member] | ||
Deferred compensation plan [Abstract] | ||
Investment interest calculation, investment maturity period (26 weeks) | 182 days | |
Investment interest calculation, monthly compounding rate | 1.00% | |
Investment interest calculation, minimum annual rate compounded monthly | 7.00% | |
Minimum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 41.00% | 41.00% |
Purchased power | 34.00% | 34.00% |
Maximum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 66.00% | 66.00% |
Purchased power | 59.00% | 59.00% |
Weighted Average [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 49.50% | 56.60% |
Purchased power | 50.50% | 43.40% |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments (Details-4) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Beginning balance, | $ 178 | $ (14,055) | |
Realized and unrealized gains (losses): | |||
Included in regulatory assets | 0 | 2,688 | |
Included in regulatory liability | 6,600 | 0 | |
Included in other comprehensive income | 0 | 0 | |
Included in earnings | [1] | 855 | 307 |
Included in current assets | 73 | 355 | |
Purchases | 7,026 | 5,884 | |
Sales | 0 | 0 | |
Issuances | 0 | 0 | |
Settlements | (7,953) | (6,546) | |
Ending balance, | $ 6,779 | $ (11,367) | |
[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 | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
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 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | [1] | 855 | 307 |
Purchased Power Expense [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | 973 | 702 | |
Cost Of Gas Sold Expense [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | $ (118) | $ (395) | |
[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. |
Joint Plant Ownership (Details)
Joint Plant Ownership (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)MW | Mar. 31, 2021USD ($) | ||
Red Barn Units [Member] | |||
Jointly Owned Utility Plant Interests [Line Items] | |||
Projected Solar Farm Project Costs | [1],[2] | $ 18 | |
Public Utilities, Property, Plant and Equipment, Construction Work in Progress | [1],[2] | $ 0.6 | |
Red Barn Units [Member] | MGE [Member] | |||
Jointly Owned Utility Plant Interests [Line Items] | |||
Jointly owned utility plant, ownership interest | [2] | 10.00% | |
Jointly owned utility plant, plant capacity (in MW) | MW | [2] | 9.16 | |
Badger Hollow II Units [Member] | |||
Jointly Owned Utility Plant Interests [Line Items] | |||
Projected Solar Farm Project Costs | [1],[3] | $ 65 | |
Public Utilities, Property, Plant and Equipment, Construction Work in Progress | [1],[3],[4] | 23.8 | |
Allowance for Funds Used During Construction | |||
AFUDC | $ 0.4 | $ 0.1 | |
Badger Hollow II Units [Member] | Public Service Commission of Wisconsin [Member] | |||
Allowance for Funds Used During Construction | |||
Authorized AFUDC rate - Signficiant projects (100%) | 100.00% | ||
Badger Hollow II Units [Member] | MGE [Member] | |||
Jointly Owned Utility Plant Interests [Line Items] | |||
Jointly owned utility plant, ownership interest | [3] | 33.00% | |
Jointly owned utility plant, plant capacity (in MW) | MW | [3] | 50 | |
[1] | Excluding AFUDC. | ||
[2] | The Red Barn Wind Farm is located in the Towns of Wingville and Clifton in Grant County, Wisconsin. | ||
[3] | The Badger Hollow II solar farm is located in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. | ||
[4] | Includes an allocation of common facilities at Badger Hollow placed in service in November 2021. |
Revenue (Details-1)
Revenue (Details-1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Total Operating Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | $ 208,938 | $ 167,915 |
Electric [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 110,089 | 100,609 |
Electric [Member] | Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 40,474 | 36,694 |
Electric [Member] | Commercial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 54,449 | 47,883 |
Electric [Member] | Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 3,147 | 3,001 |
Electric [Member] | Other-retail/municipal | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 8,829 | 8,170 |
Electric [Member] | Total Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 106,899 | 95,748 |
Electric [Member] | Sales To The Market [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 2,882 | 4,639 |
Electric [Member] | Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 308 | 222 |
Gas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 98,811 | 67,270 |
Gas [Member] | Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 56,683 | 39,758 |
Gas [Member] | Commercial/Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 40,251 | 25,507 |
Gas [Member] | Total Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 96,934 | 65,265 |
Gas [Member] | Gas Transportation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 1,876 | 2,002 |
Gas [Member] | Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 1 | 3 |
Non Regulated Energy [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | $ 38 | $ 36 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Operating revenues | $ 208,938 | $ 167,915 |
Equity in earnings of investment | 2,504 | 2,444 |
Net Income | 34,420 | 34,933 |
Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 110,089 | 100,609 |
Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 98,811 | 67,270 |
Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 38 | 36 |
Transmission Investment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
All Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 208,938 | 167,915 |
Equity in earnings of investment | 2,504 | 2,444 |
Operating Segments [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 110,207 | 100,882 |
Equity in earnings of investment | 0 | 0 |
Net Income | 14,617 | 18,024 |
Operating Segments [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 104,932 | 72,081 |
Equity in earnings of investment | 0 | 0 |
Net Income | 12,084 | 10,556 |
Operating Segments [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,353 | 10,209 |
Equity in earnings of investment | 0 | 0 |
Net Income | 5,352 | 5,194 |
Operating Segments [Member] | Transmission Investment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Equity in earnings of investment | 2,504 | 2,444 |
Net Income | 1,822 | 1,778 |
Operating Segments [Member] | All Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Equity in earnings of investment | 0 | 0 |
Net Income | 545 | (619) |
Consolidation Elimination Entries [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | (16,554) | (15,257) |
Equity in earnings of investment | 0 | 0 |
Net Income | 0 | 0 |
Consolidation Elimination Entries [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 118 | 273 |
Consolidation Elimination Entries [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 6,121 | 4,811 |
Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,315 | 10,173 |
Consolidation Elimination Entries [Member] | Transmission Investment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Consolidation Elimination Entries [Member] | All Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
MGE [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 208,938 | 167,915 |
Net Income | 27,297 | 28,273 |
MGE [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 110,089 | 100,609 |
MGE [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 98,811 | 67,270 |
MGE [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 38 | 36 |
MGE [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 208,938 | 167,915 |
Net Income | 27,297 | 28,273 |
MGE [Member] | Operating Segments [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 110,207 | 100,882 |
Net Income | 14,617 | 18,024 |
MGE [Member] | Operating Segments [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 104,932 | 72,081 |
Net Income | 12,084 | 10,556 |
MGE [Member] | Operating Segments [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,353 | 10,209 |
Net Income | 5,352 | 5,194 |
MGE [Member] | Consolidation Elimination Entries [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | (16,554) | (15,257) |
Net Income | (4,756) | (5,501) |
MGE [Member] | Consolidation Elimination Entries [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 118 | 273 |
MGE [Member] | Consolidation Elimination Entries [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 6,121 | 4,811 |
MGE [Member] | Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | $ 10,315 | $ 10,173 |