Derivative and Hedging Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	September 30, 2021			December 31, 2020
Commodity derivative contracts		290,520	MWh		259,080	MWh
Commodity derivative contracts		9,050,000	Dth		6,030,000	Dth
FTRs		3,280	MW		2,869	MW
PPA		400	MW		850	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
September 30, 2021
Commodity derivative contracts(a)	$	13,426	$	375	Other current assets
Commodity derivative contracts(a)		559		—	Other deferred charges
FTRs		225		—	Other current assets
PPA	N/A			160	Derivative liability (current)
PPA	N/A			—	Derivative liability (long-term)
December 31, 2020
Commodity derivative contracts(b)	$	617	$	593	Other current assets
Commodity derivative contracts(b)		189		39	Other deferred charges
FTRs		—		23	Other current liabilities
PPA	N/A			10,160	Derivative liability (current)
PPA	N/A			3,980	Derivative liability (long-term)

(a)As of September 30, 2021, MGE received collateral of $9.2 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received.

(b)No collateral was posted against derivative positions as of December 31, 2020.

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
September 30, 2021
Commodity derivative contracts	$	13,985	$	(375	)	$	(9,235	)	$	4,375
FTRs		225		—			—		$	225
December 31, 2020
Commodity derivative contracts	$	806	$	(632	)	$	—		$	174

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
September 30, 2021
Commodity derivative contracts	$	375	$	(375	)	$	—	$	—
PPA		160		—			—		160
December 31, 2020
Commodity derivative contracts	$	632	$	(632	)	$	—	$	—
FTRs		23		—			—		23
PPA		14,140		—			—		14,140

Derivative Gains and Losses in Balance Sheet

The following tables summarize the unrealized and realized gains/losses related to the derivative instruments on the consolidated balance sheets and the consolidated statements of income.

	2021						2020
(In thousands)	Current and Long-Term Regulatory Asset (Liability)			Other Current Assets			Current and Long-Term Regulatory Asset (Liability)			Other Current Assets
Three Months Ended September 30:
Balance as of July 1,	$	2,581		$	520		$	20,400		$	940
Unrealized gain		(18,677	)		—			(4,695	)		—
Realized gain (loss) reclassified to a deferred    account		65			(65	)		(207	)		207
Realized gain (loss) reclassified to income statement		2,356			311			(1,481	)		(164	)
Balance as of September 30,	$	(13,675	)	$	766		$	14,017		$	983
Nine Months Ended September 30:
Balance as of January 1,	$	13,989		$	1,162		$	26,875		$	1,100
Unrealized gain		(30,314	)		—			(8,032	)		—
Realized (loss) gain reclassified to a deferred    account		(351	)		351			(1,999	)		1,999
Realized gain (loss) reclassified to income statement		3,001			(747	)		(2,827	)		(2,116	)
Balance as of September 30,	$	(13,675	)	$	766		$	14,017		$	983

Derivative Gains and Losses in Income Statement

	Realized Losses (Gains)
	2021					2020
(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 September 30:
Commodity derivative contracts	$	(1,586	)	$	—	$	680	$	28
FTRs		(132	)		—		184		—
PPA		(949	)		—		753		—
Nine Months Ended September 30:
Commodity derivative contracts	$	(2,107	)	$	1,055	$	2,303	$	1,682
FTRs		(443	)		—		78		—
PPA		(759	)		—		880		—