Variable Interest Entities

12 Months Ended

Dec. 31, 2025

Variable Interest Entities Disclosure [Abstract]

Variable Interest Entities - MGE Energy and MGE.

MGE Power Elm Road and MGE Power West Campus are not subsidiaries of MGE, but they have been consolidated in the financial statements of MGE. MGE Power Elm Road and MGE Power West Campus were created for the purpose of owning new generating assets and leasing those assets to MGE. MGE Power Elm Road's sole principal asset is an undivided ownership interest in two coal-fired generating plants (the Elm Road Units) located in Oak Creek, Wisconsin, which it leases to MGE pursuant to long-term leases. MGE Power West Campus's sole principal asset is an ownership interest in WCCF, which it leases to MGE pursuant to a long-term lease. Based on the nature and terms of the contractual agreements, MGE is expected to absorb a majority of the expected losses or residual value associated with the ownership of the generation assets by MGE Power Elm Road and MGE Power West Campus and therefore MGE holds a variable interest despite the absence of an equity interest.

In accordance with applicable accounting guidance, MGE Energy and MGE consolidate VIEs of which they are the primary beneficiary. MGE has the power to direct the activities that most significantly impact both the Elm Road Units' and the WCCF's economic performance and is also the party most closely associated with MGE Power Elm Road and MGE Power West Campus. As a result, MGE is the primary beneficiary.

MGE has included the following significant accounts on its consolidated balance sheets related to its interest in these VIEs as of December 31:


	MGE Power Elm Road						MGE Power West Campus
(In thousands)	2025			2024			2025			2024
Property, plant, and equipment, net	$	157,652		$	159,576		$	78,970		$	76,378
Construction work in progress		485			514			4,174			3,052
Affiliate receivables		—			—			861			911
Accrued interest and accrued (prepaid) taxes		(129	)		(184	)		(46	)		(78	)
Deferred income taxes		31,153			30,902			15,601			15,435
Long-term debt(a)		38,447			41,082			25,941			28,550
Noncontrolling interest		104,479			104,304			52,309			46,082

(a)

MGE Power Elm Road's long-term debt includes debt issuance costs of $0.2 million as of December 31, 2025 and 2024. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power Elm Road for use of the Elm Road Units pursuant to the related long-term leases. MGE Power West Campus's long-term debt includes debt issuance costs of $0.1 million as of December 31, 2025 and 2024. The debt is secured by a collateral assignment of lease payments that MGE makes to MGE Power West Campus for use of the cogeneration facility pursuant to the long-term lease. See Footnote 14 for further information on the long-term debt securities.

MGE is permitted by PSCW order to recover lease payments made to MGE Power Elm Road and MGE Power West Campus in customer rates.