Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Taxes

4.Taxes - MGE Energy and MGE.

Effective Tax Rate.

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 June 30,	2022				2021				2022				2021
Statutory federal income tax rate		21.0		%		21.0		%		21.0		%		21.0		%
State income taxes, net of federal benefit		6.2				6.2				6.2				6.2
Amortized investment tax credits		(0.7	)			(1.3	)			(0.7	)			(1.5	)
Credit for electricity from wind energy		(5.7	)			(6.3	)			(6.2	)			(6.8	)
AFUDC equity, net		(0.4	)			(1.5	)			(0.4	)			(1.7	)
Amortization of utility excess deferred tax - tax reform(a)		(1.9	)			(14.5	)			(2.6	)			(15.9	)
Other, net, individually insignificant		—				0.1				—				0.1
Effective income tax rate		18.5		%		3.7		%		17.3		%		1.4		%

	MGE Energy								MGE
Six Months Ended June 30,	2022				2021				2022				2021
Statutory federal income tax rate		21.0		%		21.0		%		21.0		%		21.0		%
State income taxes, net of federal benefit		6.2				6.2				6.2				6.2
Amortized investment tax credits		(0.7	)			(1.5	)			(0.8	)			(1.6	)
Credit for electricity from wind energy		(5.6	)			(6.8	)			(6.1	)			(7.4	)
AFUDC equity, net		(0.4	)			(0.9	)			(0.5	)			(1.1	)
Amortization of utility excess deferred tax - tax reform(a)		(1.9	)			(15.8	)			(2.0	)			(17.4	)
Other, net, individually insignificant		(0.1	)			0.1				(0.1	)			—
Effective income tax rate		18.5		%		2.3		%		17.7		%		(0.3	)	%

(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 June 30, 2022 and 2021, MGE recognized $0.9 million and $0.7 million, respectively. For the six months ended June 30, 2022 and 2021, MGE recognized $1.9 million and $1.3 million, respectively. 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 six months ended June 30, 2021, MGE recognized $3.3 million and $6.6 million, respectively. Included in the 2022 and 2023 rate settlement was a net collection from customers of the gas portion of deficient deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the three and six months ended June 30, 2022, MGE recognized $0.4 million and $0.7 million, respectively.