Derivative and Hedging Instruments (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015	December 31, 2014
Commodity derivative contracts	408,920 MWh	448,000 MWh
Commodity derivative contracts	2,785,000 Dth	4,405,000 Dth
FTRs	691 MW	1,854 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 sheet. 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, MGE Energy and MGE have netted instruments with the same counterparty under a master netting agreement as well as the netting of collateral. At March 31,2015, MGE Energy and MGE had the right to reclaim collateral (a receivable) of $0.6 million.

	Asset Derivatives			Liability Derivatives
(In thousands)	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
March 31, 2015
Commodity derivative contracts	Other current assets	$	336	Derivative liability (current)	$	821
Commodity derivative contracts	Other deferred charges		7	Derivative liability (long-term)		116
FTRs	Other current assets		38	Derivative liability (current)		-
Ten-year PPA	N/A		N/A	Derivative liability (current)		7,090
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		46,320
December 31, 2014
Commodity derivative contracts	Other current assets	$	130	Derivative liability (current)	$	2,262
Commodity derivative contracts	Other deferred charges		93	Derivative liability (long-term)		171
FTRs	Other current assets		642	Derivative liability (current)		-
Ten-year PPA	N/A		N/A	Derivative liability (current)		6,870
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		46,560

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 sheet.

Offsetting of Derivative Assets
(In thousands)		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
March 31, 2015
Commodity derivative contracts	$	343	$	(343)	$	-	$	-
FTRs		38		-		-		38
December 31, 2014
Commodity derivative contracts	$	223	$	(223)	$	-	$	-
FTRs		642		-		-		642

Offsetting Liabilities

Offsetting of Derivative Liabilities
(In thousands)		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
March 31, 2015
Commodity derivative contracts	$	937	$	(343)	$	(565)	$	29
Ten-year PPA		53,410		-		-		53,410
December 31, 2014
Commodity derivative contracts	$	2,433	$	(223)	$	(2,179)	$	31
Ten-year PPA		53,430		-		-		53,430

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 sheet at March 31,2015 and 2014, and the consolidated income statement for the three months endedMarch 31,2015 and 2014.

		2015				2014
(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,	$	54,998	$	1,001	$	63,893	$	411
Change in unrealized (loss) gain		1,318		-		(13,601)		-
Realized (loss) gain reclassified to a deferred account		(1,061)		1,061		1,535		(1,535)
Realized gain (loss) reclassified to income
statement		(1,289)		(1,794)		6,386		1,475
Balance at March 31,	$	53,966	$	268	$	58,213	$	351

Derivative Gains and Losses in Income Statement

		Realized losses (gains)
		2015				2014
(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	$	420	$	1,761	$	(4,795)	$	(1,220)
FTRs		(119)		-		(636)		-
Ten-year PPA		1,021		-		(1,210)		-