Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Estimated Fair Market Value of Financial Instruments

The estimated fair market value of financial instruments are as follows:

	September 30, 2024				December 31, 2023
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt(a)	$	724,699	$	682,359	$	728,546	$	675,922

(a)Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $4.2 million and $4.6 million as of September 30, 2024, and December 31, 2023, 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 September 30, 2024
(In thousands)	Total		Level 1		Level 2		Level 3
MGE Energy
Assets:
Derivatives, net(b)	$	975	$	920	$	—	$	55
Exchange-traded investments		—		—		—		—
Total Assets	$	975	$	920	$	—	$	55
Liabilities:
Derivatives, net(b)	$	2,477	$	1,290	$	—	$	1,187
Deferred compensation		6,108		—		6,108		—
Total Liabilities	$	8,585	$	1,290	$	6,108	$	1,187
MGE
Assets:
Derivatives, net(b)	$	975	$	920	$	—	$	55
Exchange-traded investments		—		—		—		—
Total Assets	$	975	$	920	$	—	$	55
Liabilities:
Derivatives, net(b)	$	2,477	$	1,290	$	—	$	1,187
Deferred compensation		6,108		—		6,108		—
Total Liabilities	$	8,585	$	1,290	$	6,108	$	1,187

	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

(b)As of September 30, 2024, and December 31, 2023, collateral of $1.5 million and $5.4 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.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2024		2023		2024		2023
Beginning balance	$	(1,432)	$	(2,892)	$	(2,604)	$	(866)
Realized and unrealized gains (losses):
Included in regulatory assets		300		1,768		1,472		(258)
Included in earnings		(1,572)		(2,016)		(5,174)		(7,590)
Settlements		1,572		2,016		5,174		7,590
Balance as of September 30,	$	(1,132)	$	(1,124)	$	(1,132)	$	(1,124)

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				Nine Months Ended
	September 30,				September 30,
(In thousands)	2024		2023		2024		2023
Purchased power expense	$	(1,572)	$	(2,016)	$	(5,174)	$	(7,590)

(c)MGE's exchange-traded derivative contracts, over-the-counter party transactions, 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.