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Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Estimated Fair Market Value of Financial Instruments The estimated fair market value of financial instruments are as follows:

 

 

 

December 31, 2023

 

 

December 31, 2022

 

(In thousands)

 

Carrying Amount

 

 

Fair
Value

 

 

Carrying Amount

 

 

Fair
Value

 

Long-term debt(a)

 

$

728,546

 

 

$

675,922

 

 

$

643,560

 

 

$

571,374

 

 

 

(a)
Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $4.6 million and $4.0 million as of December 31, 2023 and 2022, respectively.
Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis.

 

 

 

Fair Value as of December 31, 2023

 

(In thousands)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

MGE Energy

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

598

 

 

$

352

 

 

$

—

 

 

$

246

 

Exchange-traded investments

 

 

2,034

 

 

 

2,034

 

 

 

—

 

 

 

—

 

Total Assets

 

$

2,632

 

 

$

2,386

 

 

$

—

 

 

$

246

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

5,824

 

 

$

2,974

 

 

$

—

 

 

$

2,850

 

Deferred compensation

 

 

5,246

 

 

 

—

 

 

 

5,246

 

 

 

—

 

Total Liabilities

 

$

11,070

 

 

$

2,974

 

 

$

5,246

 

 

$

2,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MGE

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

598

 

 

$

352

 

 

$

—

 

 

$

246

 

Exchange-traded investments

 

 

60

 

 

 

60

 

 

 

—

 

 

 

—

 

Total Assets

 

$

658

 

 

$

412

 

 

$

—

 

 

$

246

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

5,824

 

 

$

2,974

 

 

$

—

 

 

$

2,850

 

Deferred compensation

 

 

5,246

 

 

 

—

 

 

 

5,246

 

 

 

—

 

Total Liabilities

 

$

11,070

 

 

$

2,974

 

 

$

5,246

 

 

$

2,850

 

 

 

 

Fair Value as of December 31, 2022

 

(In thousands)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

MGE Energy

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

3,069

 

 

$

1,353

 

 

$

—

 

 

$

1,716

 

Exchange-traded investments

 

 

1,516

 

 

 

1,516

 

 

 

—

 

 

 

—

 

Total Assets

 

$

4,585

 

 

$

2,869

 

 

$

—

 

 

$

1,716

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

8,163

 

 

$

5,581

 

 

$

—

 

 

$

2,582

 

Deferred compensation

 

 

4,743

 

 

 

—

 

 

 

4,743

 

 

 

—

 

Total Liabilities

 

$

12,906

 

 

$

5,581

 

 

$

4,743

 

 

$

2,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MGE

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

3,069

 

 

$

1,353

 

 

$

—

 

 

$

1,716

 

Exchange-traded investments

 

 

115

 

 

 

115

 

 

 

—

 

 

 

—

 

Total Assets

 

$

3,184

 

 

$

1,468

 

 

$

—

 

 

$

1,716

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives, net(b)

 

$

8,163

 

 

$

5,581

 

 

$

—

 

 

$

2,582

 

Deferred compensation

 

 

4,743

 

 

 

—

 

 

 

4,743

 

 

 

—

 

Total Liabilities

 

$

12,906

 

 

$

5,581

 

 

$

4,743

 

 

$

2,582

 
(b)
As of December 31, 2023, and December 31, 2022, collateral of $5.4 million and $5.2 million, respectively, was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted.
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis.

 

(In thousands)

 

2023

 

 

2022

 

 

2021

 

Balance as of January 1,

 

$

(866

)

 

$

178

 

 

$

(14,055

)

Realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

Included in regulatory assets

 

 

(1,738

)

 

 

(1,044

)

 

 

—

 

Included in regulatory liability

 

 

—

 

 

 

—

 

 

 

14,234

 

Included in other comprehensive income

 

 

—

 

 

 

—

 

 

 

—

 

Included in earnings

 

 

(9,211

)

 

 

14,140

 

 

 

5,521

 

Included in current assets

 

 

—

 

 

 

118

 

 

 

237

 

Purchases

 

 

—

 

 

 

11,997

 

 

 

26,287

 

Sales

 

 

—

 

 

 

—

 

 

 

—

 

Issuances

 

 

—

 

 

 

—

 

 

 

—

 

Settlements

 

 

9,211

 

 

 

(26,255

)

 

 

(32,046

)

Balance as of December 31,

 

$

(2,604

)

 

$

(866

)

 

$

178

 

Total gains (losses) included in earnings attributed to the change in unrealized gains (losses) related to assets and liabilities held as of December 31,(c)

 

$

—

 

 

$

—

 

 

$

—

 
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).

 

(In thousands)

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

2023

 

 

2022

 

 

2021

 

Purchased power expense

 

$

(9,211

)

 

$

14,497

 

 

$

6,192

 

Cost of gas sold expense

 

 

—

 

 

 

(357

)

 

 

(671

)

Total

 

$

(9,211

)

 

$

14,140

 

 

$

5,521

 

 

(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.