XML 53 R35.htm IDEA: XBRL DOCUMENT

Derivative and Hedging Instruments (Tables)

9 Months Ended

Sep. 30, 2018

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, 2018	December 31, 2017
Commodity derivative contracts	482,450 MWh	552,310 MWh
Commodity derivative contracts	8,557,000 Dth	5,460,000 Dth
FTRs	3,681 MW	2,226 MW
PPA	2,200 MW	2,650 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. As of September 30, 2018, and December 31, 2017, the receivable margin account balance of $0.8 million and $2.5 million, respectively, is shown net of any collateral posted against derivative positions.

		Derivative		Derivative
(In thousands)		Assets		Liabilities	Balance Sheet Location
September 30, 2018
Commodity derivative contracts^(a)	$	1,363	$	232	Other current assets
Commodity derivative contracts^(a)		86		55	Other deferred charges
FTRs		478		-	Other current assets
PPA		N/A		9,350	Derivative liability (current)
PPA		N/A		26,920	Derivative liability (long-term)

December 31, 2017
Commodity derivative contracts^(a)	$	566	$	603	Derivative liability (current)^(b)
Commodity derivative contracts^(a)		110		190	Derivative liability (long-term)
FTRs		329		-	Other current assets
PPA		N/A		8,180	Derivative liability (current)
PPA		N/A		33,990	Derivative liability (long-term)

(a) As of December 31, 2017, collateral of $0.1 million was posted against and netted with derivative liability positions on the consolidated balance sheets. No collateral was posted against derivative positions as of September 30, 2018.

(b) As of December 31, 2017, MGE presented $0.1 million 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
September 30, 2018
Commodity derivative contracts	$	1,449	$	(287)	$	-	$	1,162
FTRs		478		-		-		478

December 31, 2017
Commodity derivative contracts	$	676	$	(654)	$	-	$	22
FTRs		329		-		-		329

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, 2018
Commodity derivative contracts	$	287	$	(287)	$	-	$	-
PPA		36,270		-		-		36,270

December 31, 2017
Commodity derivative contracts	$	793	$	(654)	$	(139)	$	-
PPA		42,170		-		-		42,170

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 as of September 30, 2018 and 2017, and the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017.

		2018				2017
(In thousands)		Current and Long-Term Regulatory Asset		Other Current Assets		Current and Long-Term Regulatory Asset		Other Current Assets
Three Months Ended September 30:
Balance at July 1,	$	36,924	$	640	$	45,316	$	618
Unrealized gain		(2,007)		-		(1,277)		-
Realized (loss) gain reclassified to a deferred account		(316)		316		(313)		313
Realized gain (loss) reclassified to income statement		29		(62)		(1,450)		(57)
Balance at September 30,	$	34,630	$	894	$	42,276	$	874

Nine Months Ended September 30:
Balance at January 1,	$	41,958	$	806	$	49,281	$	230
Unrealized gain		(5,906)		-		(3,698)		-
Realized (loss) gain reclassified to a deferred account		(837)		837		(935)		935
Realized loss reclassified to income statement		(585)		(749)		(2,372)		(291)
Balance at September 30,	$	34,630	$	894	$	42,276	$	874

Derivative Gains and Losses in Income Statement

		Realized Losses (Gains)
		2018				2017
(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	$	(145)	$	-	$	362	$	18
FTRs		(150)		-		(224)		-
PPA		328		-		1,351		-

Nine Months Ended September 30:
Commodity derivative contracts	$	39	$	637	$	764	$	227
FTRs		(625)		-		(1,349)		-
PPA		1,283		-		3,021		-