Taxes (Tables)

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Effective Tax Rate Reconciliation

The consolidated income tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes, as follows:

	MGE Energy					MGE
Three Months Ended September 30,	2021		2020		2021			2020
Statutory federal income tax rate	21.0	%	21.0	%	21.0		%	21.0	%
State income taxes, net of federal benefit	6.2		6.3		6.2			6.2
Amortized investment tax credits	(1.2)		(0.1)		(1.3)			(0.1)
Credit for electricity from wind energy	(4.8)		(5.0)		(5.2)			(5.4)
AFUDC equity, net	(1.1)		(1.1)		(1.2)			(1.2)
Amortization of utility excess deferred tax - tax reform(a)	(12.4)		(2.0)		(13.5)			(2.2)
Other, net, individually insignificant	(0.4)		(0.4)		(0.3)			(0.4)
Effective income tax rate	7.3	%	18.7	%	5.7		%	17.9	%

	MGE Energy					MGE
Nine Months Ended September 30,	2021		2020		2021			2020
Statutory federal income tax rate	21.0	%	21.0	%	21.0		%	21.0	%
State income taxes, net of federal benefit	6.2		6.3		6.2			6.2
Amortized investment tax credits	(1.4)		(0.1)		(1.5)			(0.1)
Credit for electricity from wind energy	(6.0)		(6.1)		(6.6)			(6.6)
AFUDC equity, net	(1.0)		(1.3)		(1.1)			(1.4)
Amortization of utility excess deferred tax - tax reform(a)	(14.5)		(2.4)		(15.9)			(2.6)
Other, net, individually insignificant	(0.1)		(0.1)		-			-
Effective income tax rate	4.2	%	17.3	%	2.1		%	16.5	%

(a)Included are impacts of the 2017 Tax Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting in recognition of IRS rules that restrict the rate at which the excess deferred taxes may be returned to utility customers. For the three months ended September 30, 2021 and 2020, MGE recognized $0.7 million. For the nine months ended September 30, 2021 and 2020, MGE recognized $2.0 million. Included in the 2021 rate settlement was a one-time return to customers of the electric portion of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the three and nine months ended September 30, 2021, MGE recognized $3.3 million and $9.9 million, respectively.