Common Equity

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Common Equity

15.Common Equity.

a.Common Stock - MGE Energy and MGE.

MGE Energy sells shares of its common stock through its Direct Stock Purchase and Dividend Reinvestment Plan (the Stock Plan). Those shares may be newly issued shares or shares that are purchased in the open market by an independent agent for participants in the Stock Plan. The volume and timing of share repurchases in the open market depends upon the level of dividend reinvestment and optional share purchases made by plan participants. As a result, there is no specific maximum number of shares to be repurchased and no specified termination date for the repurchases. All sales under the Stock Plan are covered by a shelf registration statement that MGE Energy filed with the SEC. For the years ended December 31, 2021 and 2020, MGE Energy issued no new shares of common stock under the Stock Plan.

In May 2020, MGE Energy issued 1.5 million shares of its common stock in an underwritten offering. MGE Energy received proceeds, net of underwriter fees and issuance costs, of $79.6 million from the issuance and sale of those shares. The net proceeds were used for general corporate purposes, including funding capital expenditures made by MGE.

During the years ended December 31, 2021 and 2020, MGE Energy paid $54.8 million (or $1.52 per share) and $51.7 million (or $1.45 per share), respectively, in cash dividends on its common stock. Dividend payments by MGE to MGE Energy are subject to restrictions arising under a PSCW rate order and, to a lesser degree, MGE's first mortgage bonds. The PSCW order restricts any dividends, above the PSCW authorized amount that MGE may pay MGE Energy if MGE's common equity ratio, calculated in the manner used in the rate proceeding, is less than 55%. This restriction did not restrict MGE's payment of dividends in 2021. See Footnote 14 for further discussion of the mortgage indenture covenants regarding the payment of dividends. During the year ended December 31, 2021, MGE paid $5.0 million in cash dividends to MGE Energy. During the year ended December 31, 2020, MGE paid no dividends to MGE Energy.

b.Dilutive Shares Calculation - MGE Energy.

As of December 31, 2021, 3,668 shares were included in the calculation of diluted earnings per share related to nonvested equity awards. See Footnote 12 for additional information on shared-based compensation awards.