Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
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, 2020 | |
Amendment Flag | false | |
Trading Symbol | MGEE | |
Document Fiscal Year Focus | 2020 | |
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 | 34,668,370 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Security Exchange Name | NASDAQ | |
Security 12(b) Title | Common Stock, $1 Par Value Per Share | |
Entity Tax Identification Number | 39-2040501 | |
Entity File Number | 000-49965 | |
Entity Incorporation State Country Code | WI | |
Entity Address Address Line 1 | 133 South Blair Street | |
EntityAddressCityOrTown | Madison | |
Entity Address State Or Province | WI | |
Entity Address Postal Zip Code | 53788 | |
City Area Code | 608 | |
Local Phone Number | 252-7000 | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
MGE [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Registrant Name | Madison Gas and Electric Company | |
Entity Central Index Key | 0000061339 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock Shares Outstanding | 17,347,894 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Tax Identification Number | 39-0444025 | |
Entity File Number | 000-1125 | |
Entity Incorporation State Country Code | WI | |
Entity Address Address Line 1 | 133 South Blair Street | |
EntityAddressCityOrTown | Madison | |
Entity Address State Or Province | WI | |
Entity Address Postal Zip Code | 53788 | |
City Area Code | 608 | |
Local Phone Number | 252-7000 | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Revenues: | ||
Electric revenues | $ 93,028 | $ 97,469 |
Gas revenue | 56,845 | 70,100 |
Total Operating Revenues | 149,873 | 167,569 |
Operating Expenses: | ||
Fuel for electric generation | 9,706 | 13,917 |
Purchased power | 10,486 | 10,851 |
Cost of gas sold | 30,798 | 43,253 |
Other operations and maintenance | 44,369 | 46,934 |
Depreciation and amortization | 18,167 | 17,139 |
Other general taxes | 4,907 | 4,963 |
Total Operating Expenses | 118,433 | 137,057 |
Operating Income | 31,440 | 30,512 |
Other income, net | 5,671 | 4,851 |
Interest expense, net | (6,061) | (5,647) |
Income before income taxes | 31,050 | 29,716 |
Income tax provision | (5,013) | (5,709) |
Net Income Including Noncontrolling Interest | 26,037 | 24,007 |
Net Income | $ 26,037 | $ 24,007 |
Earnings Per Share of Common Stock (basic and diluted) | $ 0.75 | $ 0.69 |
Dividends per share of common stock | $ 0.353 | $ 0.338 |
Weighted Average Shares Outstanding (basic and diluted) | 34,668 | 34,668 |
MGE [Member] | ||
Operating Revenues: | ||
Electric revenues | $ 93,028 | $ 97,469 |
Gas revenue | 56,845 | 70,100 |
Total Operating Revenues | 149,873 | 167,569 |
Operating Expenses: | ||
Fuel for electric generation | 9,706 | 13,917 |
Purchased power | 10,486 | 10,851 |
Cost of gas sold | 30,798 | 43,253 |
Other operations and maintenance | 44,150 | 46,662 |
Depreciation and amortization | 18,167 | 17,139 |
Other general taxes | 4,907 | 4,963 |
Total Operating Expenses | 118,214 | 136,785 |
Operating Income | 31,659 | 30,784 |
Other income, net | 3,380 | 2,207 |
Interest expense, net | (6,111) | (5,995) |
Income before income taxes | 28,928 | 26,996 |
Income tax provision | (4,371) | (4,926) |
Net Income Including Noncontrolling Interest | 24,557 | 22,070 |
Less Net Income Attributable to Noncontrolling Interest, net of tax | (5,493) | (5,490) |
Net Income | $ 19,064 | $ 16,580 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Activities: | ||
Net Income | $ 26,037 | $ 24,007 |
Items not affecting cash: | ||
Depreciation and amortization | 18,167 | 17,139 |
Deferred income taxes | 1,433 | (1,359) |
Provision for doubtful receivables | 734 | 634 |
Employee benefit plan (credit) cost | (940) | 474 |
Equity earnings in ATC | (2,266) | (2,218) |
Other items | (1,974) | 32 |
Changes in working capital items: | ||
Decrease in current assets | 14,089 | 13,665 |
(Decrease) increase in current liabilities | (2,738) | 3,182 |
Dividends from ATC | 2,700 | 2,012 |
Cash contributions to pension and other postretirement plans | (1,470) | (957) |
Other noncurrent items, net | 47 | (3,416) |
Cash Provided by Operating Activities | 53,819 | 53,195 |
Investing Activities: | ||
Capital expenditures | (46,758) | (31,933) |
Capital contributions to investments | (1,643) | (740) |
Other | (398) | (206) |
Cash Used for Investing Activities | (48,799) | (32,879) |
Financing Activities: | ||
Cash dividends paid on common stock | (12,221) | (11,701) |
Repayment of long-term debt | (1,155) | (1,129) |
Net proceeds from (repayments of) short-term debt | 3,000 | (7,000) |
Other | (664) | (999) |
Cash Used for Financing Activities | (11,040) | (20,829) |
Change in cash, cash equivalents, and restricted cash | (6,020) | (513) |
Cash, cash equivalents, and restricted cash at beginning of period | 25,814 | 84,929 |
Cash, cash equivalents, and restricted cash at end of period | 19,794 | 84,416 |
Significant noncash investing activities: | ||
Accrued capital expenditures | 8,129 | 3,428 |
MGE [Member] | ||
Operating Activities: | ||
Net Income | 24,557 | 22,070 |
Items not affecting cash: | ||
Depreciation and amortization | 18,167 | 17,139 |
Deferred income taxes | 976 | (2,002) |
Provision for doubtful receivables | 734 | 634 |
Employee benefit plan (credit) cost | (940) | 474 |
Other items | (1,721) | 604 |
Changes in working capital items: | ||
Decrease in current assets | 12,953 | 13,737 |
(Decrease) increase in current liabilities | 290 | 5,532 |
Cash contributions to pension and other postretirement plans | (1,470) | (957) |
Other noncurrent items, net | (428) | (3,629) |
Cash Provided by Operating Activities | 53,118 | 53,602 |
Investing Activities: | ||
Capital expenditures | (46,758) | (31,933) |
Other | (406) | (228) |
Cash Used for Investing Activities | (47,164) | (32,161) |
Financing Activities: | ||
Distributions to parent from noncontrolling interest | (7,000) | (7,500) |
Repayment of long-term debt | (1,155) | (1,129) |
Net proceeds from (repayments of) short-term debt | 3,000 | (7,000) |
Other | (664) | (844) |
Cash Used for Financing Activities | (5,819) | (16,473) |
Change in cash, cash equivalents, and restricted cash | 135 | 4,968 |
Cash, cash equivalents, and restricted cash at beginning of period | 5,529 | 6,670 |
Cash, cash equivalents, and restricted cash at end of period | 5,664 | 11,638 |
Significant noncash investing activities: | ||
Accrued capital expenditures | $ 8,129 | $ 3,428 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | |||
Cash and cash equivalents | $ 17,451 | $ 23,481 | |
Accounts receivable, less reserves | 39,352 | 40,482 | |
Other accounts receivables, less reserves | 8,722 | 7,940 | |
Unbilled revenues | 22,633 | 25,899 | |
Materials and supplies, at average cost | 27,647 | 26,287 | |
Fuel for electric generation, at average cost | 8,354 | 8,358 | |
Stored natural gas, at average cost | 4,723 | 10,637 | |
Prepaid taxes | 11,888 | 16,892 | |
Regulatory assets - current | 12,182 | 11,432 | |
Other current assets | 9,241 | 10,233 | |
Total Current Assets | 162,193 | 181,641 | |
Other long-term receivables | 1,754 | 1,811 | |
Regulatory assets | 131,319 | 134,314 | |
Pension benefit asset | 16,480 | 13,630 | |
Other deferred assets and other | 18,518 | 19,093 | |
Property, Plant, and Equipment: | |||
Property, plant, and equipment, net | 1,524,782 | 1,530,199 | |
Construction work in progress | 128,321 | 112,484 | |
Total Property, Plant, and Equipment | 1,653,103 | 1,642,683 | |
Investments | 89,330 | 88,492 | |
Total Assets | 2,072,697 | 2,081,664 | |
Current Liabilities: | |||
Long-term debt due within one year | 19,686 | 19,659 | |
Short-term debt | 3,000 | 0 | |
Accounts payable | 39,188 | 55,161 | |
Accrued interest and taxes | 7,568 | 7,244 | |
Accrued payroll related items | 9,243 | 12,752 | |
Regulatory liabilities - current | 11,369 | 9,228 | |
Derivative liabilities | 10,740 | 10,100 | |
Other current liabilities | 10,212 | 14,676 | |
Total Current Liabilities | 111,006 | 128,820 | |
Other Credits: | |||
Deferred income taxes | 246,028 | 243,302 | |
Investment tax credit - deferred | 742 | 763 | |
Regulatory liabilities | 163,399 | 164,965 | |
Accrued pension and other postretirement benefits | 68,647 | 68,665 | |
Derivative liabilities | 12,870 | 15,340 | |
Finance lease liabilities | 17,581 | 17,379 | |
Other deferred liabilities and other | 60,318 | 63,013 | |
Total Other Credits | 569,585 | 573,427 | |
Capitalization: | |||
Common shareholders equity | 869,492 | 855,676 | $ 816,644 |
Long-term debt | 522,614 | 523,741 | |
Total Capitalization | 1,392,106 | 1,379,417 | |
Commitments and contingencies (see Footnote 8) | |||
Total Liabilities and Capitalization | 2,072,697 | 2,081,664 | |
MGE [Member] | |||
Current Assets: | |||
Cash and cash equivalents | 3,321 | 3,196 | |
Accounts receivable, less reserves | 39,352 | 40,482 | |
Affiliate receivables | 645 | 530 | |
Other accounts receivables, less reserves | 8,718 | 7,936 | |
Unbilled revenues | 22,633 | 25,899 | |
Materials and supplies, at average cost | 27,647 | 26,287 | |
Fuel for electric generation, at average cost | 8,354 | 8,358 | |
Stored natural gas, at average cost | 4,723 | 10,637 | |
Prepaid taxes | 11,786 | 15,463 | |
Regulatory assets - current | 12,182 | 11,432 | |
Other current assets | 8,767 | 10,065 | |
Total Current Assets | 148,128 | 160,285 | |
Affiliate receivable long-term | 2,515 | 2,648 | |
Regulatory assets | 131,319 | 134,314 | |
Pension benefit asset | 16,480 | 13,630 | |
Other deferred assets and other | 19,048 | 19,680 | |
Property, Plant, and Equipment: | |||
Property, plant, and equipment, net | 1,524,810 | 1,530,227 | |
Construction work in progress | 128,321 | 112,484 | |
Total Property, Plant, and Equipment | 1,653,131 | 1,642,711 | |
Investments | 227 | 209 | |
Total Assets | 1,970,848 | 1,973,477 | |
Current Liabilities: | |||
Long-term debt due within one year | 19,686 | 19,659 | |
Short-term debt | 3,000 | 0 | |
Accounts payable | 38,897 | 54,845 | |
Accrued interest and taxes | 10,088 | 8,754 | |
Accrued payroll related items | 9,243 | 12,752 | |
Regulatory liabilities - current | 11,369 | 9,228 | |
Derivative liabilities | 10,740 | 10,100 | |
Other current liabilities | 10,212 | 12,683 | |
Total Current Liabilities | 113,235 | 128,021 | |
Other Credits: | |||
Deferred income taxes | 216,310 | 214,041 | |
Investment tax credit - deferred | 742 | 763 | |
Regulatory liabilities | 163,399 | 164,965 | |
Accrued pension and other postretirement benefits | 68,647 | 68,665 | |
Derivative liabilities | 12,870 | 15,340 | |
Finance lease liabilities | 17,581 | 17,379 | |
Other deferred liabilities and other | 60,304 | 62,973 | |
Total Other Credits | 539,853 | 544,126 | |
Capitalization: | |||
Common shareholders equity | 656,350 | 637,286 | |
Noncontrolling interest | 138,796 | 140,303 | |
Total Equity | 795,146 | 777,589 | 689,810 |
Long-term debt | 522,614 | 523,741 | |
Total Capitalization | 1,317,760 | 1,301,330 | |
Commitments and contingencies (see Footnote 8) | |||
Total Liabilities and Capitalization | $ 1,970,848 | $ 1,973,477 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables, Net | ||
Reserve for uncollectible accounts receivable | $ 3,282 | $ 2,820 |
Reserve for uncollectible other accounts receivable | 370 | 438 |
MGE [Member] | ||
Receivables, Net | ||
Reserve for uncollectible accounts receivable | 3,282 | 2,820 |
Reserve for uncollectible other accounts receivable | $ 370 | $ 438 |
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] | Accumulated Other Comprehensive Income/(Loss) [Member] |
Beginning balance, shares at Dec. 31, 2018 | 34,668 | ||||
Beginning balance, value at Dec. 31, 2018 | $ 816,644 | $ 34,668 | $ 316,268 | $ 465,708 | $ 0 |
Increase (Decrease) In Stockholders' Equity [Roll Forward] | |||||
Net Income | 24,007 | 24,007 | |||
Common stock dividends declared | (11,701) | (11,701) | |||
Ending balance, shares at Mar. 31, 2019 | 34,668 | ||||
Ending balance, value at Mar. 31, 2019 | 828,950 | $ 34,668 | 316,268 | 478,014 | 0 |
Beginning balance, shares at Dec. 31, 2019 | 34,668 | ||||
Beginning balance, value at Dec. 31, 2019 | 855,676 | $ 34,668 | 316,268 | 504,740 | 0 |
Increase (Decrease) In Stockholders' Equity [Roll Forward] | |||||
Net Income | 26,037 | 26,037 | |||
Common stock dividends declared | (12,221) | (12,221) | |||
Ending balance, shares at Mar. 31, 2020 | 34,668 | ||||
Ending balance, value at Mar. 31, 2020 | $ 869,492 | $ 34,668 | $ 316,268 | $ 518,556 | $ 0 |
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, 2018 | 34,668 | 17,348 | ||||||
Beginning balance, value at Dec. 31, 2018 | $ 689,810 | $ 17,348 | $ 192,417 | $ 338,591 | $ 0 | $ 141,454 | ||
Increase (Decrease) In Stockholders' Equity [Roll Forward] | ||||||||
Net Income | $ 24,007 | 22,070 | 16,580 | 5,490 | ||||
Distributions to parent from noncontrolling interest | (7,500) | (7,500) | ||||||
Ending balance, shares at Mar. 31, 2019 | 34,668 | 17,348 | ||||||
Ending balance, value at Mar. 31, 2019 | 704,380 | $ 17,348 | 192,417 | 355,171 | 0 | 139,444 | ||
Beginning balance, shares at Dec. 31, 2019 | 34,668 | 17,348 | ||||||
Beginning balance, value at Dec. 31, 2019 | 777,589 | $ 17,348 | 222,917 | 397,021 | 0 | 140,303 | ||
Increase (Decrease) In Stockholders' Equity [Roll Forward] | ||||||||
Net Income | $ 26,037 | 24,557 | 19,064 | 5,493 | ||||
Distributions to parent from noncontrolling interest | (7,000) | (7,000) | ||||||
Ending balance, shares at Mar. 31, 2020 | 34,668 | 17,348 | ||||||
Ending balance, value at Mar. 31, 2020 | $ 795,146 | $ 17,348 | $ 222,917 | $ 416,085 | $ 0 | $ 138,796 |
Consolidated Statements of Comm
Consolidated Statements of Common Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Consolidated Statements of Common Equity | ||
Dividends per share of common stock | $ 0.353 | $ 0.338 |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant 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 2019 Annual Report on Form 10-K (the 2019 Annual Report on Form 10-K). The accompanying consolidated financial statements as of March 31, 2020, and for the three months ended, 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 2019 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 54 through 107 of the 2019 Annual Report on Form 10-K. b. COVID-19. With the global outbreak of the Coronavirus Disease 2019 (COVID-19) and the declaration of a pandemic by the World Health Organization on March 11, 2020, U.S. governmental authorities have deemed electric and gas utilities critical infrastructure. MGE Energy therefore has an obligation to keep operating and maintaining its critical electric and gas infrastructure. On March 24, 2020, Wisconsin governor Tony Evers issued the "Safer at Home" order in an effort to limit business activities to essential services and encourage individuals to remain at home. On April 20, 2020, Evers released the "Badger Bounce Back" plan to reopen the Wisconsin economy in phases. MGE Energy and MGE's consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. MGE Energy and MGE considered the impact of COVID-19 developments on the assumptions and estimates used in the preparation of these financial statements and determined that there were no material adverse impacts on the results of operations for the first quarter 2020. c. 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) 2020 2019 2020 2019 Cash and cash equivalents $ 17,451 $ 23,481 $ 3,321 $ 3,196 Restricted cash 473 619 473 619 Receivable - margin account 1,870 1,714 1,870 1,714 Cash, cash equivalents, and restricted cash $ 19,794 $ 25,814 $ 5,664 $ 5,529 Cash Equivalents MGE Energy and MGE consider all highly liquid investments purchased with an original maturity of three months or less 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. d. Trade Receivables, Allowance for Credit Losses, and Concentration Risk. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. A 1% late payment charge is recorded on all receivables unpaid after the due date. However, the 1% late payment charge was temporarily suspended in late March 2020 in response to the PSCW's COVID-19 order. MGE has also suspended disconnection or refusal of services to any customer, with limited exceptions, in response to the order. See Footnote 9.c. for further information. The allowance for credit losses associated with these receivables represents our best estimate of the amount of probable credit losses in our existing accounts receivable. MGE manages concentration of credit risk through its credit and collection policies, which are consistent with state regulatory requirements. The allowance for credit losses is estimated based on historical write-off experience, regional economic data, review of the accounts receivable aging, and reasonable and supportable forecasts that affect the collectability of the reported amount. MGE has considered the effects of COVID-19 developments, including suspension of disconnections for non-payment, in its estimate of allowance for credit losses by applying data from historical recessions and other significant economic downturns. There was no material increase in the allowance for credit losses as of March 31, 2020, as a result of these developments. However, if adverse conditions continue for extended periods, they may result in a material increase in the allowance for credit losses in future periods. This potential increase cannot be reasonably estimated at this time. The PSCW issued a deferral accounting order for deferral of incremental COVID-19-related costs. Recovery of these costs will be addressed in future rate proceedings. See Footnote 9.c. for further information. For the three months ended March 31, 2020, MGE recorded $ 0.9 million of reserves and $ 0.5 million in write-offs. As of March 31, 2020, MGE had a reserve balance of $ 3.7 million against accounts receivable. |
Adoption of Accounting Principl
Adoption of Accounting Principles and Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Standards - MGE Energy and MGE. Recently Adopted Credit Losses. In June 2016, the Financial Accounting Standards Board issued authoritative guidance within the codification's Credit Losses topic, which introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The authoritative guidance became effective January 1, 2020. MGE adopted the standard on the effective date. The adoption of this standard did not have a material impact on MGE Energy's and MGE's financial statements. New disclosures are required under the new standard. See Footnote 1.d. for allowance for credit loss disclosures. |
Investment in ATC and ATC Holdc
Investment in ATC and ATC Holdco | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in ATC and ATC Holdco | Investment 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, which, as of December 1, 2016, is owned by 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) 2020 2019 Equity earnings from investment in ATC $ 2,266 $ 2,218 Dividends from ATC 2,391 2,012 Capital contributions to ATC 178 178 ATC Holdco was formed in December 2016. In the near term, it is expected that ATC Holdco will be pursuing transmission development opportunities that typically have long development and investment lead times before becoming operational. In April 2020, MGE Transco made a $ 0.4 million capital contribution to ATC. ATC ' s summarized financial data is as follows: Three Months Ended March 31, (In thousands) 2020 2019 Operating revenues $ 186,801 $ 177,715 Operating expenses ( 95,211) ( 90,387) Other income, net 375 260 Interest expense, net ( 28,888) ( 29,118) Earnings before members' income taxes $ 63,077 $ 58,470 MGE receives transmission and other related services from ATC. During the three months ended March 31, 2020 and 2019, MGE recorded $ 7.7 million and $ 7.6 million, respectively, for transmission services received from ATC. MGE also provides a variety of operational, maintenance, and project management services for ATC, which is reimbursed by ATC. As of March 31, 2020, and December 31, 2019, MGE had a receivable due from ATC of $ 1.3 and $ 1.6 million, respectively. The receivable includes expenditures to fund transmission infrastructure upgrades at Badger Hollow I and Two Creeks. MGE will be reimbursed for these costs after the new generation assets have been placed into service. |
Taxes
Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes - MGE Energy 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, 2020 2019 2020 2019 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 6.2 Amortized investment tax credits ( 0.1) ( 0.1) ( 0.1) ( 0.1) Credit for electricity from wind energy ( 6.9) ( 5.9) ( 7.5) ( 6.5) AFUDC equity, net ( 1.6) ( 0.2) ( 1.7) ( 0.2) Amortization of utility excess deferred tax - tax reform (a) ( 2.6) ( 2.4) ( 2.8) ( 2.6) Other, net, individually insignificant - 0.5 ( 0.1) 0.5 Effective income tax rate 16.1 % 19.2 % 15.1 % 18.3 % (a) Included are impacts of the Tax Cuts and Jobs Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting. For the three months ended March 31, 2020 and 2019, MGE recognized $ 0.7 million and $ 0.6 million, respectively. The amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, which will be determined by the PSCW. |
Pension and Other Postretiremen
Pension and Other Postretirement Plans | 3 Months Ended |
Mar. 31, 2020 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Plans | Pension 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) 2020 2019 Pension Benefits Components of net periodic benefit cost: Service cost $ 1,316 $ 1,141 Interest cost 3,023 3,452 Expected return on assets ( 6,811) ( 5,547) Amortization of: Prior service credit ( 31) ( 28) Actuarial loss 1,286 1,729 Net periodic benefit (credit) cost $ ( 1,217) $ 747 Postretirement Benefits Components of net periodic benefit cost: Service cost $ 311 $ 219 Interest cost 573 577 Expected return on assets ( 790) ( 681) Amortization of: Transition obligation 1 1 Prior service credit ( 667) ( 667) Actuarial loss 70 106 Net periodic benefit (credit) cost $ ( 502) $ ( 445) As a result of lower investment returns in the fourth quarter of 2018, pension and postretirement benefit costs increased in 2019. In August 2019, the PSCW approved MGE's request to defer the difference between estimated pension and other postretirement costs included in the 2019 and 2020 rate settlement and actual costs incurred. MGE expects that the deferred cost for employee benefit plans will be factored into future rate proceedings starting in 2021. During 2019, MGE deferred approximately $ 6.2 million of pension and other postretirement costs. MGE expects to over-collect benefit costs in 2020 rates, which will reduce the regulatory asset that we expect to be factored into future rate proceedings starting in 2021. For the three months ended March 31, 2020, MGE over-collected approximately $ 0.4 million of pension and other postretirement costs, which reduced the amount deferred in 2019. No costs were deferred for the three months ended March 31, 2019. The impact of this deferral has not been reflected in the table above. |
Equity and Financing Arrangemen
Equity and Financing Arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Equity and Financing Arrangements Disclosure [Abstract] | |
Equity and Financing Arrangements | Equity and Financing 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, 2020 and 2019, MGE Energy issued no new shares of common stock under the Stock Plan. b. Dilutive Shares Calculation - MGE Energy. MGE Energy has no dilutive securities issued. c. Long-term Debt - MGE Energy and MGE. In April 2020, MGE borrowed $ 19.3 million from the City of Madison, Wisconsin's issuance of Industrial Development Revenue Refunding Bonds (Madison Gas and Electric Company Project), Series 2020A. The bonds carry an interest rate of 2.05% per annum with interest payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2020. The bonds require the holder to tender on April 30, 2023, at which time the bonds will either be repriced and remarketed or redeemed and retired. MGE used the proceeds to redeem $ 19.3 million of existing Industrial Development Revenue Refunding Bonds (Madison Gas and Electric Company Project), Series 2002B due October 1, 2027. The funds for the loan were provided by a purchaser of the bonds pursuant to a Bond Purchase Agreement between that purchaser and MGE. The Bond Purchase and Covenants Agreement requires MGE to maintain a ratio of consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65%. Both consolidated indebtedness and consolidated total capitalization are to be determined in accordance with GAAP, except that amounts included within MGE's indebtedness and capitalization from "variable interest entities" are excluded. A change of control constitutes a default under the Bond Purchase Agreement. Change in control events are defined as (i) a failure by MGEE to hold 100% of the outstanding voting equity interest in MGE or (ii) the acquisition of beneficial ownership of 30% or more of the outstanding voting stock of MGEE by one person or two or more persons acting in concert. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation - MGE Energy and MGE. a. 2013 Director Incentive Plan and 2006 Performance Unit Plan Under MGE Energy ' s 2013 Director Incentive Plan (the 2013 Plan) and its 2006 Performance Unit Plan (the 2006 Plan), non-employee directors and eligible employees, respectively, may receive performance units that entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend equivalent payments thereon, at the end of the performance period set in the award. In accordance with the plans' provisions, these awards are subject to prescribed vesting schedules and must be settled in cash. Accordingly, no shares of common stock will be issued in connection with the plans. In 2020, 5,048 units were granted under the 2013 Plan and are subject to a three No units were granted under the 2006 Plan in 2020 in view of the adoption of the 2020 Performance Unit Plan described below. On the grant date, the cost of the director or employee services received in exchange for a performance unit award is measured based on the current market value of MGE Energy common stock. The fair value of the awards is remeasured quarterly, including as of March 31, 2020, as required by applicable accounting standards. Changes in fair value as well as the original grant are recognized as compensation cost. Since this amount is remeasured throughout the vesting period, the compensation cost is subject to variability. For nonretirement-eligible employees under the 2006 Plan, stock-based compensation costs are accrued and recognized using the graded vesting method. Compensation cost for retirement-eligible employees or employees that will become retirement eligible during the vesting schedule are recognized on an abridged horizon as retirement eligibility accelerates vesting. During the three months ended March 31, 2020 and 2019, MGE recorded $ 0.6 million in compensation benefit and $ 1.2 million in compensation expense, respectively, as a result of awards under the 2013 Plan and 2006 Plan. In January 2020, cash payments of $ 2.0 million were distributed relating to awards that were granted under the Plans in 2017, for the 2013 Plan, and in 2014, for the 2006 Plan. No forfeitures of units occurred during the three months ended March 31, 2020 and 2019. As of March 31, 2020, $ 3.4 million of outstanding awards were vested. Of this amount, no cash settlements have occurred as cash payments are only made at the end of the period covered by the awards. b. 2020 Performance Unit Plan The 2020 Performance Unit Plan (the 2020 Plan) was adopted in February 2020 for eligible employees. Plan participants may receive awards of performance units, restricted units, or both. Performance units entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend-equivalent payments thereon, based upon achievement of specified performance goals during a performance period set by the Compensation Committee of the Board of Directors. Restricted units entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend-equivalent payments thereon, at the end of a defined time period. Awards are subject to vesting provisions providing for 100% vesting at the end of the performance period in the case of performance units and at the end of the time period in the case of restricted units. The performance units and restricted units will be paid out in cash and are accounted for as a liability award. No shares of common stock will be issued in connection with the 2020 Plan. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies. a. Environmental - MGE Energy and MGE. 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 published water effluent limitations guidelines 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. MGE is currently evaluating proposed rule modifications for applicability to the Columbia and Elm Road Units. Until the modifications are finalized, MGE will not know with certainty how operations will be impacted. • The EPA's cooling water intake rules, which require cooling water intake structures at electric power plants to meet best available technology (BAT) standards so that mortality from entrainment (drawing aquatic life into a plant's cooling system) and impingement (trapping aquatic life on screens) are reduced. MGE will need to conduct studies at its Blount plant by the end of 2021 to determine BAT. Columbia's operators will also need to determine BAT. Future BAT requirements at Blount and Columbia will be based on the results of these intake studies and will be specified in the next permits expected to be issued in 2023 or later. MGE expects that this rule will not 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 existing fossil fuel-fired electric generating units (EGUs). In 2019, the EPA published a final rule creating the Affordable Clean Energy (ACE) rule to reduce greenhouse gas emissions from existing coal-fired EGUs. The ACE rule directs states to submit plans to the EPA for approval that implement standards of performance (called Best System of Emissions Reductions, or BSER) for individual coal-fired EGUs over 25 MW. The ACE rule defines BSER as on-site "inside the fenceline," heat-rate efficiency improvements. Under the ACE rule, states have the primary role in developing standards of performance that result from the application of BSER. States have three years to develop and submit compliance plans to the EPA. The EPA will have a year to review and approve those plans. States are then given 24 months from the approval date to implement the plan and can extend the compliance schedule for units that meet progress milestones. The ACE rule will apply to Columbia and the Elm Road Units. MGE is currently evaluating how this rule may impact operations and monitoring state activity on BSER development. Until the State of Wisconsin develops a plan that is accepted by the EPA, MGE will not be able to determine the final impact of the rule. Additionally, the ACE rule and repeal of the Clean Power Plan are subject to a legal challenge pending in the United States District Court of the District of Columbia. MGE will continue to evaluate the plan development within the state and monitor ongoing and potential legal proceedings associated with the ACE rule. • The EPA's rule to regulate ambient levels of ozone through the 2015 Ozone National Ambient Air Quality Standards (NAAQS). In May 2018, the EPA issued a final rule that designated the northeast portion of Milwaukee County as being in nonattainment with this NAAQS. The Elm Road Units are located in Milwaukee County, outside the designated nonattainment area. In August 2018, several environmental groups, the City of Chicago, and the State of Illinois filed federal lawsuits challenging several of the EPA's attainment designation decisions, including the partial Milwaukee County designation as being too narrow and not sufficiently protective. MGE is monitoring the outcome of this lawsuit and how it may affect our Elm Road Units in Milwaukee County. At this time, MGE expects that the 2015 Ozone NAAQS will not have a material effect on its existing plants based on final designations. • Rules regulating nitrogen oxide (NO x 2 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. In September 2019, the U.S. Court of Appeals upheld the legal argument that the EPA cannot provide a partial remedy to the Clean Air Act's "Good Neighbor Provision," which addresses interstate transport of pollutants from upwind states to downwind states. Wisconsin is considered an upwind state under CSAPR and is potentially impacted by rules that the EPA will develop to address this remand. MGE has met its current CSAPR obligations through a combination of reduced emissions through pollution control (e.g., SCR installation at Columbia), as well as owned, received, and purchased allowances. While uncertainty remains around CSAPR due to legal challenges, MGE expects that it will meet ongoing CSAPR obligations for the foreseeable future. MGE will continue to monitor developments in EPA revisions after the remand and any ongoing litigation over this rule. Columbia is subject to the best available retrofit technology (BART) regulations, a subsection of the EPA's CAVR, which may require pollution control retrofits. Columbia's existing pollution control upgrades, and the EPA's stance that compliance with the CSAPR equals compliance with BART, should mean that Columbia will not need to do additional work to meet BART requirements. At this time, however, the BART regulatory obligations, compliance strategies, and costs remain uncertain in Wisconsin due to the continued legal challenges surrounding CSAPR and CAVR. MGE will continue to monitor developments to this rule. • The EPA's Coal Combustion Residuals Rule (CCR), which regulates coal ash from burning coal for the purpose of generating electricity as a solid waste, 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. Review of the Elm Road Units has indicated that the costs to comply with this rule are not expected to be significant. Columbia's operator has completed a review of their system and has developed a compliance plan. Columbia's operator is also exploring alternative compliance options to meet the rule requirements by the rule's deadline. MGE will continue to monitor the operator's plans for compliance to assess potential impacts on operations. In December 2019, the EPA introduced a proposed rule to revise some of the closure standards that are in the 2015 CCR Rule. If the proposed rule is finalized MGE does not anticipate that it will have a material impact on our operations. 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. |
Rate Matters
Rate Matters | 3 Months Ended |
Mar. 31, 2020 | |
Regulated Operations [Abstract] | |
Rate Matters | Rate Matters - MGE Energy and MGE. a. Rate Proceedings. In December 2018, the PSCW approved a settlement agreement between MGE and intervening parties in the then-pending rate case. The settlement decreased electric rates by 2.24%, or $ 9.2 million, in 2019. MGE maintained this rate level for 2020, with the exception that MGE's electric rates were adjusted by the 2020 Fuel Cost Plan. The decrease in electric rates reflects the ongoing tax impacts of the Tax Act. Lower fuel costs and an increase in rate base from renewable generation assets further impacted the rate change. In 2020, electric rates decreased 0.84%, or $ 3.4 million, as approved by the PSCW in December 2019 in the 2020 Fuel Cost Plan. The settlement agreement increased gas rates by 1.06%, or $ 1.7 million, in 2019 and 1.46%, or $ 2.4 million, in 2020. The gas increase covers infrastructure costs. It also reflects the impacts of the Tax Act. The return on common stock equity for 2019 and 2020 is 9.8% based on a capital structure consisting of 56.6% common equity in 2019 and 56.1% common equity in 2020 . b. Fuel Rules. Fuel rules require the PSCW and 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 currently set at plus or minus 2%. Under fuel rules, MGE would defer costs, less any excess revenues, if its actual electric fuel costs exceeded 102% 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 98% 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 2018 fuel rules proceedings for MGE to refund additional fuel savings incurred to its retail electric customers over a one-month period. MGE returned $ 9.5 million of electric fuel-related savings in October 2019. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. As of March 31, 2020, MGE had no 2020 fuel savings deferred. As of December 31, 2019, MGE had deferred $ 1.5 million of 2019 fuel savings. These costs will be subject to the PSCW's annual review of 2019 fuel costs, which is expected to be completed in 2020 . c. COVID-19. On March 24, 2020, the PSCW issued an order temporarily altering the tariff provisions of all public utilities in Wisconsin. Under the order, MGE: may not disconnect or refuse service to any customer, with limited exceptions; must offer deferred payment agreements for customers unable to pay a bill regardless of customer class; may not charge for late payments; and may not require a cash deposit or other guarantee as a condition of any new service. This order is expected to result in increased expenditures and foregone revenue. However, on March 24, 2020, the PSCW issued an order authorizing deferral of expenditures, late payment charges, and cash deposits necessary to ensure the provision of safe, reliable and affordable access to utility services during the COVID-19 pandemic. As of March 31, 2020, MGE had deferred $ 0.2 million. Recovery of costs will be addressed in future rate proceedings . |
Derivative and Hedging Instrume
Derivative and Hedging Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Instruments | Derivative and Hedging Instruments - MGE Energy and MGE. a. Purpose. As part of its regular operations, MGE enters into contracts, including options, swaps, futures, forwards, and other contractual commitments, to manage its exposure to commodity prices. To the extent that these contracts are derivatives, MGE assesses whether or not the normal purchases or normal sales exclusion applies. For contracts to which this exclusion cannot be applied, the derivatives are recognized in the consolidated balance sheets at fair value. MGE's financial commodity derivative activities are conducted in accordance with its electric and gas risk management program, which is approved by the PSCW and limits the volume MGE can hedge with specific risk management strategies. The maximum length of time over which cash flows related to energy commodities can be hedged is four 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, 2020 December 31, 2019 Commodity derivative contracts 498,960 MWh 417,840 MWh Commodity derivative contracts 4,650,000 Dth 6,605,000 Dth FTRs 1,108 MW 2,750 MW PPA 1,300 MW 1,450 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, 2020, and December 31, 2019, the cost basis of exchange traded derivatives and FTRs exceeded their fair value by $ 1.7 million and $ 1.4 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 also allows MGE an option to extend the contract after the base term. 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, 2020, and December 31, 2019, reflected a loss position of $ 23.6 million and $ 25.4 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, 2020 Commodity derivative contracts (a) $ 599 $ 2,159 Derivative liability (current) (b) Commodity derivative contracts (a) 74 240 Derivative liability (long-term) FTRs 9 - Other current assets PPA N/A 10,740 Derivative liability (current) PPA N/A 12,870 Derivative liability (long-term) December 31, 2019 Commodity derivative contracts (a) $ 157 $ 1,521 Derivative liability (current) (b) Commodity derivative contracts (a) 73 217 Derivative liability (long-term) FTRs 73 - Other current assets PPA N/A 10,100 Derivative liability (current) PPA N/A 15,340 Derivative liability (long-term) (a) As of March 31, 2020, and December 31, 2019, collateral of $ 1.7 million and $ 1.5 million, respectively, was posted against and netted with derivative liability positions on the consolidated balance sheets. (b) As of March 31, 2020, and December 31, 2019, MGE posted $ 0.3 million and $ 0.1 million, respectively, as other current assets on the consolidated balance sheets. 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, 2020 Commodity derivative contracts $ 673 $ ( 652) $ - $ 21 FTRs 9 - - 9 December 31, 2019 Commodity derivative contracts $ 230 $ ( 192) $ - $ 38 FTRs 73 - - 73 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, 2020 Commodity derivative contracts $ 2,399 $ ( 652) $ ( 1,747) $ - PPA 23,610 - - 23,610 December 31, 2019 Commodity derivative contracts $ 1,738 $ ( 192) $ ( 1,546) $ - PPA 25,440 - - 25,440 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. 2020 2019 (In thousands) Current and Long-Term Regulatory Asset Other Current Assets Current and Long-Term Regulatory Asset Other Current Assets Three Months Ended March 31: Balance at January 1, $ 26,875 $ 1,100 $ 31,830 $ 377 Unrealized (gain) loss ( 689) - ( 922) - Realized (loss) gain reclassified to a deferred account ( 1,063) 1,063 ( 260) 260 Realized gain (loss) reclassified to income statement 204 ( 1,733) 375 ( 378) Balance at March 31, $ 25,327 $ 430 $ 31,023 $ 259 Realized losses (gains) 2020 2019 (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 $ 680 $ 1,607 $ 270 $ 277 FTRs ( 65) - ( 135) - PPA ( 693) - ( 409) - 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 above described treatment, 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, 2020, 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, 2020, and December 31, 2019, no 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, 2020, no counterparties had defaulted. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial 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, 2020 December 31, 2019 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value MGE Energy Assets: Cash and cash equivalents $ 17,451 $ 17,451 $ 23,481 $ 23,481 Liabilities: Short-term debt - commercial paper 3,000 3,000 - - Long-term debt (a) 546,724 604,568 547,879 611,909 MGE Assets: Cash and cash equivalents $ 3,321 $ 3,321 $ 3,196 $ 3,196 Liabilities: Short-term debt - commercial paper 3,000 3,000 - - Long-term debt (a) 546,724 604,568 547,879 611,909 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.4 million and $ 4.5 million as of March 31, 2020, and December 31, 2019, 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, 2020 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net $ 682 $ 634 $ - $ 48 Exchange-traded investments 1,382 1,382 - - Total Assets $ 2,064 $ 2,016 $ - $ 48 Liabilities: Derivatives, net (b) $ 26,009 $ 314 $ - $ 25,695 Deferred compensation 3,195 - 3,195 - Total Liabilities $ 29,204 $ 314 $ 3,195 $ 25,695 MGE Assets: Derivatives, net $ 682 $ 634 $ - $ 48 Exchange-traded investments 227 227 - - Total Assets $ 909 $ 861 $ - $ 48 Liabilities: Derivatives, net (b) $ 26,009 $ 314 $ - $ 25,695 Deferred compensation 3,195 - 3,195 - Total Liabilities $ 29,204 $ 314 $ 3,195 $ 25,695 Fair Value as of December 31, 2019 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net $ 303 $ 189 $ - $ 114 Exchange-traded investments 1,271 1,271 - - Total Assets $ 1,574 $ 1,460 $ - $ 114 Liabilities: Derivatives, net (b) $ 27,178 $ 608 $ - $ 26,570 Deferred compensation 3,157 - 3,157 - Total Liabilities $ 30,335 $ 608 $ 3,157 $ 26,570 MGE Assets: Derivatives, net $ 303 $ 189 $ - $ 114 Exchange-traded investments 209 209 - - Total Assets $ 512 $ 398 $ - $ 114 Liabilities: Derivatives, net (b) $ 27,178 $ 608 $ - $ 26,570 Deferred compensation 3,157 - 3,157 - Total Liabilities $ 30,335 $ 608 $ 3,157 $ 26,570 (b) These amounts are shown gross and exclude $ million and $ 1.5 million of collateral that was posted against derivative positions with counterparties as of March 31, 2020 and December 31, 2019, respectively. 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 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 Significant Unobservable Inputs March 31, 2020 December 31, 2019 Basis adjustment: On peak 92.8 % 92.1 % Off peak 93.5 % 92.7 % Counterparty fuel mix: Internal generation - range 46.0% - 65.0 % 40.0% - 60.0 % Internal generation - weighted average 55.9 % 52.2 % Purchased power - range 54.0% - 35.0 % 60.0% - 40.0 % Purchased power - weighted average 44.1 % 47.8 % 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) 2020 2019 Beginning balance $ ( 26,456) $ ( 32,002) Realized and unrealized gains (losses): Included in regulatory assets 810 719 Included in other comprehensive income - - Included in earnings ( 1,453) ( 644) Included in current assets 247 173 Purchases 5,015 5,765 Sales - - Issuances - - Settlements ( 3,810) ( 5,294) Balance as of March 31, $ ( 25,647) $ ( 31,283) Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities held at March 31, (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) 2020 2019 Purchased power expense $ ( 1,184) $ ( 556) Cost of gas sold expense ( 269) ( 88) Total $ ( 1,453) $ ( 644) (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, 2020 | |
Regulated Operations [Abstract] | |
Joint Plant Ownership | Joint Plant Ownership - MGE Energy and MGE. a. Two Creeks. In May 2019, MGE acquired a 33% ownership interest in a 150 MW solar generation array to be constructed in the Town of Two Creeks and the City of Two Rivers in Manitowoc and Kewaunee Counties, Wisconsin. MGE's sole principal asset will be the 33% undivided ownership interest in the solar generation facility that is being constructed. The estimated share of capital costs for MGE's ownership interest is approximately $ 65 million (excluding AFUDC). As of March 31, 2020, $ 44.2 million (excluding AFUDC) related to this project was reflected in "Construction work in progress" on the consolidated balance sheets. The project is anticipated to be completed by the end of 2020. MGE received specific approval to recover 100% AFUDC on the project. After tax, MGE has recognized $ 0.8 million in AFUDC equity related to this project for the three months ended March 31, 2020. MGE did not recognize any AFUDC equity related to this project for the three months ended March 31, 2019. b. Badger Hollow I. In July 2019, MGE acquired a 33% ownership interest in a 150 MW solar generation array to be constructed in southwestern Wisconsin in Iowa County, near the villages of Montfort and Cobb. MGE's sole principal asset will be the 33% undivided ownership interest in the solar generation facility that is being constructed. The estimated share of capital costs for MGE's ownership interest is approximately $ 65 million (excluding AFUDC). As of March 31, 2020, $ 22.3 million (excluding AFUDC) related to this project was reflected in "Construction work in progress" on the consolidated balance sheets. The project is anticipated to be completed in April 2021. MGE received specific approval to recover 100% AFUDC on the project. After tax, MGE has recognized $ 0.4 million in AFUDC equity related to this project for the three months ended March 31, 2020. MGE did not recognize any AFUDC equity related to this project for the three months ended March 31, 2019. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue - MGE Energy and MGE. Revenues disaggregated by revenue source were as follows: Three Months Ended (In thousands) March 31, Electric revenues 2020 2019 Residential $ 33,428 $ 34,581 Commercial 47,634 49,253 Industrial 2,800 2,931 Other-retail/municipal 8,204 8,239 Total retail 92,066 95,004 Sales to the market 482 1,961 Other revenues 442 451 Total electric revenues $ 92,990 $ 97,416 Gas revenues Residential 33,487 40,317 Commercial/Industrial 21,471 28,125 Total retail 54,958 68,442 Gas transportation 1,794 1,536 Other revenues 93 122 Total gas revenues $ 56,845 $ 70,100 Nonregulated energy revenues 38 53 Total Operating Revenue $ 149,873 $ 167,569 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 MGE Energy's and MGE's 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 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 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, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information - 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 2019 Annual Report on Form 10-K for additional discussion of each of these segments. The following tables show segment information for MGE Energy's operations for the indicated periods: (In thousands) MGE Energy Electric Gas Nonregulated Energy Transmission Investment All Others Consolidation/ Elimination Consolidated Total Three Months Ended March 31, 2020 Operating revenues from external customers $ 92,990 $ 56,845 $ 38 $ - $ - $ - $ 149,873 Interdepartmental revenues 191 3,451 10,056 - - ( 13,698) - Total operating revenues 93,181 60,296 10,094 - - ( 13,698) 149,873 Equity in earnings of investments - - - 2,286 - - 2,286 Net income 11,463 8,034 5,060 1,663 ( 183) - 26,037 Three Months Ended March 31, 2019 Operating revenues from external customers $ 97,416 $ 70,100 $ 53 $ - $ - $ - $ 167,569 Interdepartmental revenues 199 4,962 9,973 - - ( 15,134) - Total operating revenues 97,615 75,062 10,026 - - ( 15,134) 167,569 Equity in earnings of investments - - - 2,168 - - 2,168 Net income 9,349 7,760 4,961 1,577 360 - 24,007 The following tables show segment information for MGE's operations for the indicated periods: (In thousands) MGE Electric Gas Nonregulated Energy Consolidation/ Elimination Consolidated Total Three Months Ended March 31, 2020 Operating revenues from external customers $ 92,990 $ 56,845 $ 38 $ - $ 149,873 Interdepartmental revenues 191 3,451 10,056 ( 13,698) - Total operating revenues 93,181 60,296 10,094 ( 13,698) 149,873 Net income attributable to MGE 11,463 8,034 5,060 ( 5,493) 19,064 Three Months Ended March 31, 2019 Operating revenues from external customers $ 97,416 $ 70,100 $ 53 $ - $ 167,569 Interdepartmental revenues 199 4,962 9,973 ( 15,134) - Total operating revenues 97,615 75,062 10,026 ( 15,134) 167,569 Net income attributable to MGE 9,349 7,760 4,961 ( 5,490) 16,580 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 MGE Energy and MGE consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash MGE has certain cash accounts that are restricted to uses other than current operations and designated for a specific purpose. MGE's restricted cash accounts include cash held by trustees for certain employee benefits and cash deposits held by third parties. These are included in "Other current assets" on the consolidated balance sheets. |
Receivable Margin Account | Receivable – Margin Account Cash amounts held by counterparties as margin collateral for certain financial transactions are recorded as Receivable – margin account in "Other current assets" on the consolidated balance sheets. The costs being hedged are fuel for electric generation, purchased power, and cost of gas sold. |
Trade Receivables, Allowance for Credit Losses, and Concentration Risk | Trade accounts receivable are recorded at the invoiced amount and do not bear interest. A 1% late payment charge is recorded on all receivables unpaid after the due date. However, the 1% late payment charge was temporarily suspended in late March 2020 in response to the PSCW's COVID-19 order. MGE has also suspended disconnection or refusal of services to any customer, with limited exceptions, in response to the order. See Footnote 9.c. for further information. The allowance for credit losses associated with these receivables represents our best estimate of the amount of probable credit losses in our existing accounts receivable. MGE manages concentration of credit risk through its credit and collection policies, which are consistent with state regulatory requirements. The allowance for credit losses is estimated based on historical write-off experience, regional economic data, review of the accounts receivable aging, and reasonable and supportable forecasts that affect the collectability of the reported amount. MGE has considered the effects of COVID-19 developments, including suspension of disconnections for non-payment, in its estimate of allowance for credit losses by applying data from historical recessions and other significant economic downturns. There was no material increase in the allowance for credit losses as of March 31, 2020, as a result of these developments. However, if adverse conditions continue for extended periods, they may result in a material increase in the allowance for credit losses in future periods. This potential increase cannot be reasonably estimated at this time. The PSCW issued a deferral accounting order for deferral of incremental COVID-19-related costs. Recovery of these costs will be addressed in future rate proceedings. See Footnote 9.c. for further information. |
New Accounting Pronouncements Disclosure | New Accounting Standards - MGE Energy and MGE. Recently Adopted Credit Losses. In June 2016, the Financial Accounting Standards Board issued authoritative guidance within the codification's Credit Losses topic, which introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The authoritative guidance became effective January 1, 2020. MGE adopted the standard on the effective date. The adoption of this standard did not have a material impact on MGE Energy's and MGE's financial statements. New disclosures are required under the new standard. See Footnote 1.d. for allowance for credit loss disclosures. |
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. |
Share-based Compensation | 2013 Director Incentive Plan and 2006 Performance Unit Plan Under MGE Energy ' s 2013 Director Incentive Plan (the 2013 Plan) and its 2006 Performance Unit Plan (the 2006 Plan), non-employee directors and eligible employees, respectively, may receive performance units that entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend equivalent payments thereon, at the end of the performance period set in the award. In accordance with the plans' provisions, these awards are subject to prescribed vesting schedules and must be settled in cash. Accordingly, no shares of common stock will be issued in connection with the plans. In 2020, 5,048 units were granted under the 2013 Plan and are subject to a three No units were granted under the 2006 Plan in 2020 in view of the adoption of the 2020 Performance Unit Plan described below. On the grant date, the cost of the director or employee services received in exchange for a performance unit award is measured based on the current market value of MGE Energy common stock. The fair value of the awards is remeasured quarterly, including as of March 31, 2020, as required by applicable accounting standards. Changes in fair value as well as the original grant are recognized as compensation cost. Since this amount is remeasured throughout the vesting period, the compensation cost is subject to variability. For nonretirement-eligible employees under the 2006 Plan, stock-based compensation costs are accrued and recognized using the graded vesting method. Compensation cost for retirement-eligible employees or employees that will become retirement eligible during the vesting schedule are recognized on an abridged horizon as retirement eligibility accelerates vesting. 2020 Performance Unit Plan The 2020 Performance Unit Plan (the 2020 Plan) was adopted in February 2020 for eligible employees. Plan participants may receive awards of performance units, restricted units, or both. Performance units entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend-equivalent payments thereon, based upon achievement of specified performance goals during a performance period set by the Compensation Committee of the Board of Directors. Restricted units entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend-equivalent payments thereon, at the end of a defined time period. Awards are subject to vesting provisions providing for 100% vesting at the end of the performance period in the case of performance units and at the end of the time period in the case of restricted units. The performance units and restricted units will be paid out in cash and are accounted for as a liability award. No shares of common stock will be issued in connection with the 2020 Plan. |
Wisconsin Fuel Rules | Fuel rules require the PSCW and 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 currently set at plus or minus 2%. Under fuel rules, MGE would defer costs, less any excess revenues, if its actual electric fuel costs exceeded 102% 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 98% 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 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. 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 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 Significant Unobservable Inputs March 31, 2020 December 31, 2019 Basis adjustment: On peak 92.8 % 92.1 % Off peak 93.5 % 92.7 % Counterparty fuel mix: Internal generation - range 46.0% - 65.0 % 40.0% - 60.0 % Internal generation - weighted average 55.9 % 52.2 % Purchased power - range 54.0% - 35.0 % 60.0% - 40.0 % Purchased power - weighted average 44.1 % 47.8 % |
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 MGE Energy's and MGE's 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 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 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, 2020 | |
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) 2020 2019 2020 2019 Cash and cash equivalents $ 17,451 $ 23,481 $ 3,321 $ 3,196 Restricted cash 473 619 473 619 Receivable - margin account 1,870 1,714 1,870 1,714 Cash, cash equivalents, and restricted cash $ 19,794 $ 25,814 $ 5,664 $ 5,529 |
Investment in ATC and ATC Hol_2
Investment in ATC and ATC Holdco (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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) 2020 2019 Equity earnings from investment in ATC $ 2,266 $ 2,218 Dividends from ATC 2,391 2,012 Capital contributions to ATC 178 178 ATC ' s summarized financial data is as follows: Three Months Ended March 31, (In thousands) 2020 2019 Operating revenues $ 186,801 $ 177,715 Operating expenses ( 95,211) ( 90,387) Other income, net 375 260 Interest expense, net ( 28,888) ( 29,118) Earnings before members' income taxes $ 63,077 $ 58,470 |
Taxes (Tables)
Taxes (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 2019 2020 2019 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 6.2 Amortized investment tax credits ( 0.1) ( 0.1) ( 0.1) ( 0.1) Credit for electricity from wind energy ( 6.9) ( 5.9) ( 7.5) ( 6.5) AFUDC equity, net ( 1.6) ( 0.2) ( 1.7) ( 0.2) Amortization of utility excess deferred tax - tax reform (a) ( 2.6) ( 2.4) ( 2.8) ( 2.6) Other, net, individually insignificant - 0.5 ( 0.1) 0.5 Effective income tax rate 16.1 % 19.2 % 15.1 % 18.3 % (a) Included are impacts of the Tax Cuts and Jobs Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting. For the three months ended March 31, 2020 and 2019, MGE recognized $ 0.7 million and $ 0.6 million, respectively. The amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, which will be determined by the PSCW. |
Pension and Other Postretirem_2
Pension and Other Postretirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Compensation and Retirement Disclosure [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) 2020 2019 Pension Benefits Components of net periodic benefit cost: Service cost $ 1,316 $ 1,141 Interest cost 3,023 3,452 Expected return on assets ( 6,811) ( 5,547) Amortization of: Prior service credit ( 31) ( 28) Actuarial loss 1,286 1,729 Net periodic benefit (credit) cost $ ( 1,217) $ 747 Postretirement Benefits Components of net periodic benefit cost: Service cost $ 311 $ 219 Interest cost 573 577 Expected return on assets ( 790) ( 681) Amortization of: Transition obligation 1 1 Prior service credit ( 667) ( 667) Actuarial loss 70 106 Net periodic benefit (credit) cost $ ( 502) $ ( 445) |
Derivative and Hedging Instru_2
Derivative and Hedging Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 December 31, 2019 Commodity derivative contracts 498,960 MWh 417,840 MWh Commodity derivative contracts 4,650,000 Dth 6,605,000 Dth FTRs 1,108 MW 2,750 MW PPA 1,300 MW 1,450 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, 2020 Commodity derivative contracts (a) $ 599 $ 2,159 Derivative liability (current) (b) Commodity derivative contracts (a) 74 240 Derivative liability (long-term) FTRs 9 - Other current assets PPA N/A 10,740 Derivative liability (current) PPA N/A 12,870 Derivative liability (long-term) December 31, 2019 Commodity derivative contracts (a) $ 157 $ 1,521 Derivative liability (current) (b) Commodity derivative contracts (a) 73 217 Derivative liability (long-term) FTRs 73 - Other current assets PPA N/A 10,100 Derivative liability (current) PPA N/A 15,340 Derivative liability (long-term) (a) As of March 31, 2020, and December 31, 2019, collateral of $ 1.7 million and $ 1.5 million, respectively, was posted against and netted with derivative liability positions on the consolidated balance sheets. (b) As of March 31, 2020, and December 31, 2019, MGE posted $ 0.3 million and $ 0.1 million, respectively, as other current assets on the consolidated balance sheets. |
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, 2020 Commodity derivative contracts $ 673 $ ( 652) $ - $ 21 FTRs 9 - - 9 December 31, 2019 Commodity derivative contracts $ 230 $ ( 192) $ - $ 38 FTRs 73 - - 73 |
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, 2020 Commodity derivative contracts $ 2,399 $ ( 652) $ ( 1,747) $ - PPA 23,610 - - 23,610 December 31, 2019 Commodity derivative contracts $ 1,738 $ ( 192) $ ( 1,546) $ - PPA 25,440 - - 25,440 |
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. 2020 2019 (In thousands) Current and Long-Term Regulatory Asset Other Current Assets Current and Long-Term Regulatory Asset Other Current Assets Three Months Ended March 31: Balance at January 1, $ 26,875 $ 1,100 $ 31,830 $ 377 Unrealized (gain) loss ( 689) - ( 922) - Realized (loss) gain reclassified to a deferred account ( 1,063) 1,063 ( 260) 260 Realized gain (loss) reclassified to income statement 204 ( 1,733) 375 ( 378) Balance at March 31, $ 25,327 $ 430 $ 31,023 $ 259 |
Derivative Gains and Losses in Income Statement | Realized losses (gains) 2020 2019 (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 $ 680 $ 1,607 $ 270 $ 277 FTRs ( 65) - ( 135) - PPA ( 693) - ( 409) - |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Market Value of Financial Instruments | The estimated fair market value of financial instruments are as follows: March 31, 2020 December 31, 2019 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value MGE Energy Assets: Cash and cash equivalents $ 17,451 $ 17,451 $ 23,481 $ 23,481 Liabilities: Short-term debt - commercial paper 3,000 3,000 - - Long-term debt (a) 546,724 604,568 547,879 611,909 MGE Assets: Cash and cash equivalents $ 3,321 $ 3,321 $ 3,196 $ 3,196 Liabilities: Short-term debt - commercial paper 3,000 3,000 - - Long-term debt (a) 546,724 604,568 547,879 611,909 (a) Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.4 million and $ 4.5 million as of March 31, 2020, and December 31, 2019, 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, 2020 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net $ 682 $ 634 $ - $ 48 Exchange-traded investments 1,382 1,382 - - Total Assets $ 2,064 $ 2,016 $ - $ 48 Liabilities: Derivatives, net (b) $ 26,009 $ 314 $ - $ 25,695 Deferred compensation 3,195 - 3,195 - Total Liabilities $ 29,204 $ 314 $ 3,195 $ 25,695 MGE Assets: Derivatives, net $ 682 $ 634 $ - $ 48 Exchange-traded investments 227 227 - - Total Assets $ 909 $ 861 $ - $ 48 Liabilities: Derivatives, net (b) $ 26,009 $ 314 $ - $ 25,695 Deferred compensation 3,195 - 3,195 - Total Liabilities $ 29,204 $ 314 $ 3,195 $ 25,695 Fair Value as of December 31, 2019 (In thousands) Total Level 1 Level 2 Level 3 MGE Energy Assets: Derivatives, net $ 303 $ 189 $ - $ 114 Exchange-traded investments 1,271 1,271 - - Total Assets $ 1,574 $ 1,460 $ - $ 114 Liabilities: Derivatives, net (b) $ 27,178 $ 608 $ - $ 26,570 Deferred compensation 3,157 - 3,157 - Total Liabilities $ 30,335 $ 608 $ 3,157 $ 26,570 MGE Assets: Derivatives, net $ 303 $ 189 $ - $ 114 Exchange-traded investments 209 209 - - Total Assets $ 512 $ 398 $ - $ 114 Liabilities: Derivatives, net (b) $ 27,178 $ 608 $ - $ 26,570 Deferred compensation 3,157 - 3,157 - Total Liabilities $ 30,335 $ 608 $ 3,157 $ 26,570 (b) These amounts are shown gross and exclude $ million and $ 1.5 million of collateral that was posted against derivative positions with counterparties as of March 31, 2020 and December 31, 2019, respectively. |
Significant Unobservable Inputs | The following table presents the significant unobservable inputs used in the pricing model. Model Input Significant Unobservable Inputs March 31, 2020 December 31, 2019 Basis adjustment: On peak 92.8 % 92.1 % Off peak 93.5 % 92.7 % Counterparty fuel mix: Internal generation - range 46.0% - 65.0 % 40.0% - 60.0 % Internal generation - weighted average 55.9 % 52.2 % Purchased power - range 54.0% - 35.0 % 60.0% - 40.0 % Purchased power - weighted average 44.1 % 47.8 % |
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) 2020 2019 Beginning balance $ ( 26,456) $ ( 32,002) Realized and unrealized gains (losses): Included in regulatory assets 810 719 Included in other comprehensive income - - Included in earnings ( 1,453) ( 644) Included in current assets 247 173 Purchases 5,015 5,765 Sales - - Issuances - - Settlements ( 3,810) ( 5,294) Balance as of March 31, $ ( 25,647) $ ( 31,283) Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities held at March 31, (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) 2020 2019 Purchased power expense $ ( 1,184) $ ( 556) Cost of gas sold expense ( 269) ( 88) Total $ ( 1,453) $ ( 644) (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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 2020 2019 Residential $ 33,428 $ 34,581 Commercial 47,634 49,253 Industrial 2,800 2,931 Other-retail/municipal 8,204 8,239 Total retail 92,066 95,004 Sales to the market 482 1,961 Other revenues 442 451 Total electric revenues $ 92,990 $ 97,416 Gas revenues Residential 33,487 40,317 Commercial/Industrial 21,471 28,125 Total retail 54,958 68,442 Gas transportation 1,794 1,536 Other revenues 93 122 Total gas revenues $ 56,845 $ 70,100 Nonregulated energy revenues 38 53 Total Operating Revenue $ 149,873 $ 167,569 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | The following tables show segment information for MGE Energy's operations for the indicated periods: (In thousands) MGE Energy Electric Gas Nonregulated Energy Transmission Investment All Others Consolidation/ Elimination Consolidated Total Three Months Ended March 31, 2020 Operating revenues from external customers $ 92,990 $ 56,845 $ 38 $ - $ - $ - $ 149,873 Interdepartmental revenues 191 3,451 10,056 - - ( 13,698) - Total operating revenues 93,181 60,296 10,094 - - ( 13,698) 149,873 Equity in earnings of investments - - - 2,286 - - 2,286 Net income 11,463 8,034 5,060 1,663 ( 183) - 26,037 Three Months Ended March 31, 2019 Operating revenues from external customers $ 97,416 $ 70,100 $ 53 $ - $ - $ - $ 167,569 Interdepartmental revenues 199 4,962 9,973 - - ( 15,134) - Total operating revenues 97,615 75,062 10,026 - - ( 15,134) 167,569 Equity in earnings of investments - - - 2,168 - - 2,168 Net income 9,349 7,760 4,961 1,577 360 - 24,007 The following tables show segment information for MGE's operations for the indicated periods: (In thousands) MGE Electric Gas Nonregulated Energy Consolidation/ Elimination Consolidated Total Three Months Ended March 31, 2020 Operating revenues from external customers $ 92,990 $ 56,845 $ 38 $ - $ 149,873 Interdepartmental revenues 191 3,451 10,056 ( 13,698) - Total operating revenues 93,181 60,296 10,094 ( 13,698) 149,873 Net income attributable to MGE 11,463 8,034 5,060 ( 5,493) 19,064 Three Months Ended March 31, 2019 Operating revenues from external customers $ 97,416 $ 70,100 $ 53 $ - $ 167,569 Interdepartmental revenues 199 4,962 9,973 ( 15,134) - Total operating revenues 97,615 75,062 10,026 ( 15,134) 167,569 Net income attributable to MGE 9,349 7,760 4,961 ( 5,490) 16,580 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Details-1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 17,451 | $ 23,481 | ||
Restricted cash | 473 | 619 | ||
Receivable - margin account | 1,870 | 1,714 | ||
Cash, cash equivalents, and restricted cash | 19,794 | 25,814 | $ 84,416 | $ 84,929 |
MGE [Member] | ||||
Cash Cash Equivalents And Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 3,321 | 3,196 | ||
Restricted cash | 473 | 619 | ||
Receivable - margin account | 1,870 | 1,714 | ||
Cash, cash equivalents, and restricted cash | $ 5,664 | $ 5,529 | $ 11,638 | $ 6,670 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details-2) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Trade Receivables, Allowance for Doubtful Accounts, and Concentration Risk | |
Late payment charge on upaid receivables | 1.00% |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Accounts receivable, allowance for credit loss, writeoff | $ 0.5 |
Accounts receivable, allowance for credit loss, period increase | 0.9 |
Accounts receivable, allowance for credit loss | $ 3.7 |
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, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule Of Equity Method Investments [Line Items] | |||
Equity earnings from investment in ATC | $ 2,266 | $ 2,218 | |
Dividends from ATC | 2,700 | 2,012 | |
Capital contributions to investments | 1,643 | 740 | |
MGE Transco [Member] | ATC [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Equity earnings from investment in ATC | 2,266 | 2,218 | |
Dividends from ATC | 2,391 | 2,012 | |
Capital contributions to investments | $ 178 | $ 178 | |
MGE Transco [Member] | ATC [Member] | Subsequent Event [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Capital contributions to investments | $ 400 |
Investment in ATC and ATC Hol_4
Investment in ATC and ATC Holdco (Details-2) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
ATC [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Operating revenues | $ 186,801 | $ 177,715 | |
Operating expenses | (95,211) | (90,387) | |
Other income, net | 375 | 260 | |
Interest expense, net | (28,888) | (29,118) | |
Earnings before members' income taxes | 63,077 | 58,470 | |
ATC [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 7,700 | $ 7,600 | |
Due from related parties | $ 1,300 | $ 1,600 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Reconciliation of tax provision to statutory federal income tax rate [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 | (0.10%) | (0.10%) | |
Credit for electricity from wind energy | (6.90%) | (5.90%) | |
AFUDC equity, net | (1.60%) | (0.20%) | |
Amortization of utility excess deferred tax - tax reform | [1] | (2.60%) | (2.40%) |
Other, net, individually significant | 0.00% | 0.50% | |
Effective income tax rate | 16.10% | 19.20% | |
Excess Deferred Taxes, Tax Cuts And Jobs Act [Member] | |||
Effects Of The Tax Cuts And Jobs Act [Abstract] | |||
Excess deferred tax - Income statement effect | $ 0.7 | $ 0.6 | |
MGE [Member] | |||
Reconciliation of tax provision to statutory federal income tax rate [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | |
State income taxes, net of federal benefit | 6.30% | 6.20% | |
Amortized investment tax credits | (0.10%) | (0.10%) | |
Credit for electricity from wind energy | (7.50%) | (6.50%) | |
AFUDC equity, net | (1.70%) | (0.20%) | |
Amortization of utility excess deferred tax - tax reform | [1] | (2.80%) | (2.60%) |
Other, net, individually significant | (0.10%) | 0.50% | |
Effective income tax rate | 15.10% | 18.30% | |
[1] | Included are impacts of the Tax Cuts and Jobs Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting. For the three months ended March 31, 2020 and 2019, MGE recognized $ 0.7 million and $ 0.6 million, respectively. The amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, which will be determined by the PSCW. |
Pension and Other Postretirem_3
Pension and Other Postretirement Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Defined Benefit Plan Deferred Pension And Other Postretirement Benefit Plan Costs Recovered [Abstract] | |||
Deferred (recognized) pension and OPEB costs | $ (400,000) | $ 0 | $ 6,200,000 |
Pension Benefits [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | 1,316,000 | 1,141,000 | |
Interest cost | 3,023,000 | 3,452,000 | |
Expected return on assets | (6,811,000) | (5,547,000) | |
Amortization of: | |||
Prior service credit | (31,000) | (28,000) | |
Actuarial loss | 1,286,000 | 1,729,000 | |
Net periodic benefit (credit) cost | (1,217,000) | 747,000 | |
Postretirement Benefits [Member] | |||
Components of net periodic benefit cost: | |||
Service cost | 311,000 | 219,000 | |
Interest cost | 573,000 | 577,000 | |
Expected return on assets | (790,000) | (681,000) | |
Amortization of: | |||
Transition obligation | 1,000 | 1,000 | |
Prior service credit | (667,000) | (667,000) | |
Actuarial loss | 70,000 | 106,000 | |
Net periodic benefit (credit) cost | $ (502,000) | $ (445,000) |
Equity and Financing Arrangem_2
Equity and Financing Arrangements (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Apr. 20, 2020 | |
Common Stock [Abstract] | |||
Common stock issued during period | 0 | 0 | |
Dilutive Shares Calculation [Abstract] | |||
Dilutive securities | $ 0 | ||
Future Debt Issuance, 2.05%, 2027 Series, Industrial Development Revenue Bonds | Subsequent Event [Member] | |||
Debt Instrument [Line Items] | |||
Face amount | $ 19,300,000 | ||
Interest rate | 2.05% | ||
Debt covenant, MGEE's outstanding voting equity interest in MGE | 100.00% | ||
Future Debt Issuance, 2.05%, 2027 Series, Industrial Development Revenue Bonds | Subsequent Event [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt covenant, ownership interest by outside party resulting in repurchase of notes at par value | 30.00% | ||
Future Debt Issuance, 2.05%, 2027 Series, Industrial Development Revenue Bonds | Subsequent Event [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt to total capitalization ratio | 0.65 | ||
3.45%, 2027 Series, Industrial Development Revenue Bonds | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 19,300,000 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2020 | Jan. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense (benefit) | $ (600,000) | $ 1,200,000 | ||
Cash payments distributed related to awards previously granted and now payable | $ 2,000,000 | |||
Outstanding awards vested during period | 3,400,000 | |||
Performance Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards forfeited during period, value | $ 0 | $ 0 | ||
Awards forfeited during period, units | 0 | 0 | ||
Director Incentive Agreement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted during period (in units) | 5,048 | |||
Award vesting period | 3 years | |||
2006 Performance Unit Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted during period (in units) | 0 | |||
2006 Performance Unit Plan [Member] | Performance Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock to be issued with plan | 0 | |||
2020 Performance Unit Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock to be issued with plan | 0 | |||
2020 Performance Unit Plan [Member] | Performance Units [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted during period (in units) | 9,822 | |||
2020 Performance Unit Plan [Member] | Performance Units [Member] | Maximum [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards to be granted as percentage of target units | 200.00% | |||
2020 Performance Unit Plan [Member] | Performance Units [Member] | Minimum [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards to be granted as percentage of target units | 0.00% | |||
2020 Performance Unit Plan [Member] | Restricted Units [Member] | Subsequent Event [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted during period (in units) | 9,822 | |||
Award vesting period | 3 years |
Commitments and Contingencies (
Commitments and Contingencies (Details-1) | Mar. 31, 2020MW |
Minimum [Member] | |
EPA Greenhouse Gas Reduction Guidelines | |
Standard of Performance Plan For EGUs Over Threshold | 25 |
Rate Matters (Details)
Rate Matters (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | |
COVID-19 [Member] | |||
Regulatory Assets And Liabilities Disclosure [Abstract] | |||
Regulatory Assets | $ 200,000 | ||
PSCW [Member] | MGE [Member] | |||
Rate Proceedings [Abstract] | |||
Authorized return on equity, percentage | 9.80% | 9.80% | |
Approved equity capital structure, percentage | 56.10% | 56.60% | |
Fuel Rules [Abstract] | |||
Fuel rules, bandwidth | 2.00% | ||
Fuel rules, electric fuel deferred costs upper threshold | 102.00% | ||
Fuel rules, electric fuel deferred costs lower threshold | 98.00% | ||
Deferred fuel rules monitored costs | $ 0 | $ 1,500,000 | |
PSCW [Member] | MGE [Member] | Fuel Rules Refund, 2018 [Member] | |||
Fuel Rules [Abstract] | |||
Electric fuel credit ($) | $ 9,500,000 | ||
Electric Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | |||
Rate Proceedings [Abstract] | |||
Authorized rate increase (decrease), percentage | (0.84%) | (2.24%) | |
Authorized rate increase (decrease), amount | $ (3,400,000) | $ (9,200,000) | |
Gas Rate Proceeding [Member] | PSCW [Member] | MGE [Member] | |||
Rate Proceedings [Abstract] | |||
Authorized rate increase (decrease), percentage | 1.46% | 1.06% | |
Authorized rate increase (decrease), amount | $ 2,400,000 | $ 1,700,000 |
Derivative and Hedging Instru_3
Derivative and Hedging Instruments (Details-1) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($)DthMWhMW | Dec. 31, 2019USD ($)DthMWhMW | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | ||
Derivative fair values [Abstract] | |||||
Collateral posted against derivative positions | $ 1,700 | $ 1,500 | |||
Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative fair value, net | 430 | 1,100 | $ 259 | $ 377 | |
Commodity Contracts And Financial Transimission Rights [Member] | |||||
Derivative fair values [Abstract] | |||||
Derivative fair value, net | $ (1,700) | $ (1,400) | |||
Commodity Derivative Contracts [Member] | |||||
Gross Notional Volume of Open Derivatives | |||||
Notional amount, energy measure (in MWh) | MWh | 498,960 | 417,840 | |||
Notional amount, decatherm measure (in Dth) | Dth | 4,650,000 | 6,605,000 | |||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | $ 673 | $ 230 | |||
Liability Derivatives, fair value, gross basis | 2,399 | 1,738 | |||
Collateral posted against derivative positions | 1,747 | 1,546 | |||
Commodity Derivative Contracts [Member] | Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | 300 | 100 | |||
Commodity Derivative Contracts [Member] | Derivative Liability (Current) [Member] | |||||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | [1] | 599 | 157 | ||
Liability Derivatives, fair value, gross basis | [1],[2] | 2,159 | 1,521 | ||
Commodity Derivative Contracts [Member] | Derivative Liability (Long-term) [Member] | |||||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | [1] | 74 | 73 | ||
Liability Derivatives, fair value, gross basis | [1] | 240 | 217 | ||
Commodity Derivative Contracts [Member] | Cash Flow Hedging [Member] | |||||
Derivative fair values [Abstract] | |||||
Collateral posted against derivative positions | $ 1,700 | $ 1,500 | |||
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 | |||||
Notional amount, power measure (in MW) | MW | 1,108 | 2,750 | |||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | $ 9 | $ 73 | |||
Financial Transmission Rights [Member] | Other Current Assets [Member] | |||||
Derivative fair values [Abstract] | |||||
Asset Derivatives, fair value, gross basis | 9 | 73 | |||
Liability Derivatives, fair value, gross basis | $ 0 | $ 0 | |||
PPA [Member] | |||||
Gross Notional Volume of Open Derivatives | |||||
Notional amount, power measure (in MW) | MW | 1,300 | 1,450 | |||
Derivative fair values [Abstract] | |||||
Derivative fair value, net | $ (23,600) | $ (25,400) | |||
Liability Derivatives, fair value, gross basis | 23,610 | 25,440 | |||
Collateral posted against derivative positions | 0 | 0 | |||
PPA [Member] | Derivative Liability (Current) [Member] | |||||
Derivative fair values [Abstract] | |||||
Liability Derivatives, fair value, gross basis | 10,740 | 10,100 | |||
PPA [Member] | Derivative Liability (Long-term) [Member] | |||||
Derivative fair values [Abstract] | |||||
Liability Derivatives, fair value, gross basis | $ 12,870 | $ 15,340 | |||
[1] | As of March 31, 2020, and December 31, 2019, collateral of $ 1.7 million and $ 1.5 million, respectively, was posted against and netted with derivative liability positions on the consolidated balance sheets. | ||||
[2] | As of March 31, 2020, and December 31, 2019, MGE posted $ 0.3 million and $ 0.1 million, respectively, as other current assets on the consolidated balance sheets. |
Derivative and Hedging Instru_4
Derivative and Hedging Instruments (Details-2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Commodity Derivative Contracts [Member] | ||
Offsetting Assets [Line Items] | ||
Gross amounts | $ 673 | $ 230 |
Gross amounts offset in balance sheet | (652) | (192) |
Collateral posted against derivative positions | 0 | 0 |
Net amount presented in balance sheet | 21 | 38 |
Financial Transmission Rights [Member] | ||
Offsetting Assets [Line Items] | ||
Gross amounts | 9 | 73 |
Gross amounts offset in balance sheet | 0 | 0 |
Collateral posted against derivative positions | 0 | 0 |
Net amount presented in balance sheet | $ 9 | $ 73 |
Derivative and Hedging Instru_5
Derivative and Hedging Instruments (Details-3) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Offsetting Liabilities [Line Items] | ||
Collateral posted against derivative positions | $ (1,700) | $ (1,500) |
Commodity Derivative Contracts [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts | 2,399 | 1,738 |
Gross amounts offset in balance sheet | (652) | (192) |
Collateral posted against derivative positions | (1,747) | (1,546) |
Net amount presented in balance sheet | 0 | 0 |
Purchased Power Agreement [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross amounts | 23,610 | 25,440 |
Gross amounts offset in balance sheet | 0 | 0 |
Collateral posted against derivative positions | 0 | 0 |
Net amount presented in balance sheet | $ 23,610 | $ 25,440 |
Derivative and Hedging Instru_6
Derivative and Hedging Instruments (Details-4) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Current and Long-Term Regulatory Asset [Member] | ||
Change In Derivative Fair Value [Roll Forward] | ||
Beginning balance, | $ 26,875 | $ 31,830 |
Unrealized (gain) loss | (689) | (922) |
Realized (loss) gain reclassified to a deferred account | (1,063) | (260) |
Realized gain (loss) reclassified to income statement | 204 | 375 |
Ending balance, | 25,327 | 31,023 |
Other Current Assets [Member] | ||
Change In Derivative Fair Value [Roll Forward] | ||
Beginning balance, | 1,100 | 377 |
Unrealized (gain) loss | 0 | 0 |
Realized (loss) gain reclassified to a deferred account | 1,063 | 260 |
Realized gain (loss) reclassified to income statement | (1,733) | (378) |
Ending balance, | $ 430 | $ 259 |
Derivative and Hedging Instru_7
Derivative and Hedging Instruments (Details-5) | 3 Months Ended | ||
Mar. 31, 2020USD ($)counterparty | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Counterparties in net liability position or default [Abstract] | |||
Derivative, net liability position of counterparties | $ 0 | $ 0 | |
Number of counterparties in default | counterparty | 0 | ||
Commodity Derivative Contracts [Member] | Fuel For Electric Generation Purchased Power [Member] | |||
Realized losses (gains) on income statement [Line Items] | |||
Realized losses (gains) on income statement | $ 680,000 | $ 270,000 | |
Commodity Derivative Contracts [Member] | Cost Of Gas Sold Expense [Member] | |||
Realized losses (gains) on income statement [Line Items] | |||
Realized losses (gains) on income statement | 1,607,000 | 277,000 | |
Financial Transmission Rights [Member] | Fuel For Electric Generation Purchased Power [Member] | |||
Realized losses (gains) on income statement [Line Items] | |||
Realized losses (gains) on income statement | (65,000) | (135,000) | |
Financial Transmission Rights [Member] | Cost Of Gas Sold Expense [Member] | |||
Realized losses (gains) on income statement [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 | 20,000,000 | ||
Maximum collateral that may be required to be posted | 40,000,000 | ||
Collateral posted | 0 | ||
Purchased Power Agreement [Member] | Fuel For Electric Generation Purchased Power [Member] | |||
Realized losses (gains) on income statement [Line Items] | |||
Realized losses (gains) on income statement | (693,000) | (409,000) | |
Purchased Power Agreement [Member] | Cost Of Gas Sold Expense [Member] | |||
Realized losses (gains) on income statement [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, 2020 | Dec. 31, 2019 | |
Fair Value Measurement [Domain] | |||
Liabilities: | |||
Unamortized discount and debt issuance costs, net | $ 4,400 | $ 4,500 | |
Carrying Amount [Member] | |||
Assets: | |||
Cash and cash equivalents | 17,451 | 23,481 | |
Liabilities: | |||
Short-term debt - commercial paper | 3,000 | 0 | |
Long-term debt | [1] | 546,724 | 547,879 |
Fair Value [Member] | |||
Assets: | |||
Cash and cash equivalents | 17,451 | 23,481 | |
Liabilities: | |||
Short-term debt - commercial paper | 3,000 | 0 | |
Long-term debt | [1] | 604,568 | 611,909 |
MGE [Member] | Fair Value Measurement [Domain] | |||
Liabilities: | |||
Unamortized discount and debt issuance costs, net | 4,400 | 4,500 | |
MGE [Member] | Carrying Amount [Member] | |||
Assets: | |||
Cash and cash equivalents | 3,321 | 3,196 | |
Liabilities: | |||
Short-term debt - commercial paper | 3,000 | 0 | |
Long-term debt | [1] | 546,724 | 547,879 |
MGE [Member] | Fair Value [Member] | |||
Assets: | |||
Cash and cash equivalents | 3,321 | 3,196 | |
Liabilities: | |||
Short-term debt - commercial paper | 3,000 | 0 | |
Long-term debt | [1] | $ 604,568 | $ 611,909 |
[1] | Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $ 4.4 million and $ 4.5 million as of March 31, 2020, and December 31, 2019, respectively. |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details-2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Liabilities: | |||
Collateral posted against derivative positions | $ 1,700 | $ 1,500 | |
Recurring [Member] | |||
Assets: | |||
Derivatives | [1] | 682 | 303 |
Total Assets | 2,064 | 1,574 | |
Liabilities: | |||
Derivatives | 26,009 | 27,178 | |
Deferred compensation | 3,195 | 3,157 | |
Total liabilities | 29,204 | 30,335 | |
Recurring [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 1,382 | 1,271 | |
Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Derivatives | [1] | 634 | 189 |
Total Assets | 2,016 | 1,460 | |
Liabilities: | |||
Derivatives | 314 | 608 | |
Deferred compensation | 0 | 0 | |
Total liabilities | 314 | 608 | |
Recurring [Member] | Level 1 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 1,382 | 1,271 | |
Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Derivatives | [1] | 0 | 0 |
Total Assets | 0 | 0 | |
Liabilities: | |||
Derivatives | 0 | 0 | |
Deferred compensation | 3,195 | 3,157 | |
Total liabilities | 3,195 | 3,157 | |
Recurring [Member] | Level 2 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 0 | 0 | |
Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Derivatives | [1] | 48 | 114 |
Total Assets | 48 | 114 | |
Liabilities: | |||
Derivatives | 25,695 | 26,570 | |
Deferred compensation | 0 | 0 | |
Total liabilities | 25,695 | 26,570 | |
Recurring [Member] | Level 3 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 0 | 0 | |
MGE [Member] | |||
Liabilities: | |||
Collateral posted against derivative positions | 1,700 | ||
MGE [Member] | Recurring [Member] | |||
Assets: | |||
Derivatives | [1] | 682 | 303 |
Total Assets | 909 | 512 | |
Liabilities: | |||
Derivatives | 26,009 | 27,178 | |
Deferred compensation | 3,195 | 3,157 | |
Total liabilities | 29,204 | 30,335 | |
MGE [Member] | Recurring [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 227 | 209 | |
MGE [Member] | Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Derivatives | [1] | 634 | 189 |
Total Assets | 861 | 398 | |
Liabilities: | |||
Derivatives | 314 | 608 | |
Deferred compensation | 0 | 0 | |
Total liabilities | 314 | 608 | |
MGE [Member] | Recurring [Member] | Level 1 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 227 | 209 | |
MGE [Member] | Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Derivatives | [1] | 0 | 0 |
Total Assets | 0 | 0 | |
Liabilities: | |||
Derivatives | 0 | 0 | |
Deferred compensation | 3,195 | 3,157 | |
Total liabilities | 3,195 | 3,157 | |
MGE [Member] | Recurring [Member] | Level 2 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | 0 | 0 | |
MGE [Member] | Recurring [Member] | Level 3 [Member] | |||
Assets: | |||
Derivatives | [1] | 48 | 114 |
Total Assets | 48 | 114 | |
Liabilities: | |||
Derivatives | 25,695 | 26,570 | |
Deferred compensation | 0 | 0 | |
Total liabilities | 25,695 | 26,570 | |
MGE [Member] | Recurring [Member] | Level 3 [Member] | Exchange Traded [Member] | |||
Assets: | |||
Available-for-sale securities | $ 0 | $ 0 | |
[1] | These amounts are shown gross and exclude $ million and $ 1.5 million of collateral that was posted against derivative positions with counterparties as of March 31, 2020 and December 31, 2019, respectively. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Details-3) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Basis adjustment: | ||
Basis adjustment - on peak | 92.80% | 92.10% |
Basis adjustment - off peak | 93.50% | 92.70% |
US Treasury Bill Securities [Member] | ||
Deferred compensation plan [Abstract] | ||
Investment interest calculation, investment maturity period (26 weeks) | 182 days | |
Investment interest calculation, monthly compounding rate | 1.00% | |
Investment interest calculation, minimum annual rate compounded monthly | 7.00% | |
Minimum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 46.00% | 40.00% |
Purchased power | 35.00% | 40.00% |
Maximum [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 65.00% | 60.00% |
Purchased power | 54.00% | 60.00% |
Weighted Average [Member] | ||
Counterparty fuel mix: | ||
Internal generation | 55.90% | 52.20% |
Purchased power | 44.10% | 47.80% |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments (Details-4) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Beginning balance, | $ (26,456) | $ (32,002) | |
Realized and unrealized gains (losses): | |||
Included in regulatory assets | 810 | 719 | |
Included in other comprehensive income | 0 | 0 | |
Included in earnings | [1] | (1,453) | (644) |
Included in current assets | 247 | 173 | |
Purchases | 5,015 | 5,765 | |
Sales | 0 | 0 | |
Issuances | 0 | 0 | |
Settlements | (3,810) | (5,294) | |
Ending balance, | $ (25,647) | $ (31,283) | |
[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, 2020 | Mar. 31, 2019 | ||
Fair Value Disclosures [Abstract] | |||
Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities | $ 0 | $ 0 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | [1] | (1,453) | (644) |
Purchased Power Expense [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | [1] | (1,184) | (556) |
Cost Of Gas Sold Expense [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Included in earnings | [1] | $ (269) | $ (88) |
[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, 2020USD ($)MW | |
Two Creeks Units [Member] | |
Jointly Owned Utility Plant Interests [Line Items] | |
Projected Solar Farm Project Costs | $ 65 |
Public Utilities Property Plant And Equipment Construction Work In Progress | 44.2 |
Allowance for Funds Used During Construction | |
AFUDC - equity funds | $ 0.8 |
Two Creeks Units [Member] | MGE [Member] | |
Jointly Owned Utility Plant Interests [Line Items] | |
Jointly owned utility plant, ownership interest | 33.00% |
Jointly owned utility plant, plant capacity (in MW) | MW | 150 |
Two Creeks Units [Member] | MGE [Member] | Public Service Commission of Wisconsin [Member] | |
Allowance for Funds Used During Construction | |
Authorized AFUDC rate - Signficiant projects (100%) | 100.00% |
Badger Hollow Units [Member] | |
Jointly Owned Utility Plant Interests [Line Items] | |
Projected Solar Farm Project Costs | $ 65 |
Public Utilities Property Plant And Equipment Construction Work In Progress | 22.3 |
Allowance for Funds Used During Construction | |
AFUDC - equity funds | $ 0.4 |
Badger Hollow Units [Member] | MGE [Member] | |
Jointly Owned Utility Plant Interests [Line Items] | |
Jointly owned utility plant, ownership interest | 33.00% |
Jointly owned utility plant, plant capacity (in MW) | MW | 150 |
Badger Hollow Units [Member] | MGE [Member] | Public Service Commission of Wisconsin [Member] | |
Allowance for Funds Used During Construction | |
Authorized AFUDC rate - Signficiant projects (100%) | 100.00% |
Revenue (Details-1)
Revenue (Details-1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total Operating Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | $ 149,873 | $ 167,569 |
Electric [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 92,990 | 97,416 |
Electric [Member] | Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 33,428 | 34,581 |
Electric [Member] | Commercial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 47,634 | 49,253 |
Electric [Member] | Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 2,800 | 2,931 |
Electric [Member] | Other-retail/municipal | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 8,204 | 8,239 |
Electric [Member] | Total Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 92,066 | 95,004 |
Electric [Member] | Sales To The Market [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 482 | 1,961 |
Electric [Member] | Other Revenues [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 442 | 451 |
Gas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 56,845 | 70,100 |
Gas [Member] | Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 33,487 | 40,317 |
Gas [Member] | Commercial/Industrial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 21,471 | 28,125 |
Gas [Member] | Total Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 54,958 | 68,442 |
Gas [Member] | Gas Transportation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 1,794 | 1,536 |
Gas [Member] | Other Revenues [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | 93 | 122 |
Non Regulated Energy [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues recognized from contracts with customers | $ 38 | $ 53 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Operating revenues | $ 149,873 | $ 167,569 |
Equity in earnings of investment | 2,266 | 2,218 |
Net Income Including Noncontrolling Interest | 26,037 | 24,007 |
Net Income | 26,037 | 24,007 |
Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 92,990 | 97,416 |
Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 56,845 | 70,100 |
Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 38 | 53 |
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 | 149,873 | 167,569 |
Equity in earnings of investment | 2,286 | 2,168 |
Operating Segments [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 93,181 | 97,615 |
Equity in earnings of investment | 0 | 0 |
Net Income | 11,463 | 9,349 |
Operating Segments [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 60,296 | 75,062 |
Equity in earnings of investment | 0 | 0 |
Net Income | 8,034 | 7,760 |
Operating Segments [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,094 | 10,026 |
Equity in earnings of investment | 0 | 0 |
Net Income | 5,060 | 4,961 |
Operating Segments [Member] | Transmission Investment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Equity in earnings of investment | 2,286 | 2,168 |
Net Income | 1,663 | 1,577 |
Operating Segments [Member] | All Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 0 | 0 |
Equity in earnings of investment | 0 | 0 |
Net Income | (183) | 360 |
Consolidation Elimination Entries [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | (13,698) | (15,134) |
Equity in earnings of investment | 0 | 0 |
Net Income | 0 | 0 |
Consolidation Elimination Entries [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 191 | 199 |
Consolidation Elimination Entries [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 3,451 | 4,962 |
Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,056 | 9,973 |
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 | 149,873 | 167,569 |
Net Income Including Noncontrolling Interest | 24,557 | 22,070 |
Less Net Income Attributable to Noncontrolling Interest, net of tax | (5,493) | (5,490) |
Net Income | 19,064 | 16,580 |
MGE [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 92,990 | 97,416 |
MGE [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 56,845 | 70,100 |
MGE [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 38 | 53 |
MGE [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 149,873 | 167,569 |
Net Income | 19,064 | 16,580 |
MGE [Member] | Operating Segments [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 93,181 | 97,615 |
Net Income | 11,463 | 9,349 |
MGE [Member] | Operating Segments [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 60,296 | 75,062 |
Net Income | 8,034 | 7,760 |
MGE [Member] | Operating Segments [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 10,094 | 10,026 |
Net Income | 5,060 | 4,961 |
MGE [Member] | Consolidation Elimination Entries [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | (13,698) | (15,134) |
Net Income | (5,493) | (5,490) |
MGE [Member] | Consolidation Elimination Entries [Member] | Electric [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 191 | 199 |
MGE [Member] | Consolidation Elimination Entries [Member] | Gas [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | 3,451 | 4,962 |
MGE [Member] | Consolidation Elimination Entries [Member] | Non Regulated Energy [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating revenues | $ 10,056 | $ 9,973 |