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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2022
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligation Disclosure [Text Block]
17.
Asset Retirement Obligations - MGE Energy and MGE.

 

MGE recorded an obligation for the fair value of its legal liability for asset retirement obligations (AROs) associated with removal of the West Campus Cogeneration Facility and the Elm Road Units, electric substations, combustion turbine generating units, wind generating facilities, and solar generating facilities, all of which are located on property not owned and would need to be removed upon the ultimate end of the associated leases. The significant conditional AROs identified by MGE included the costs of abandoning in place gas services and mains, the abatement and disposal of equipment and buildings contaminated with asbestos and PCBs, and the proper disposal and removal of tanks, batteries, and underground cable. Changes in management's assumptions regarding settlement dates, settlement methods, or assigned probabilities could have a material effect on the liabilities and the associated regulatory asset recorded as of December 31, 2022.

 

MGE also may have AROs relating to the removal of various assets, such as certain electric and gas distribution facilities. These facilities are generally located on property owned by third parties, on which MGE is permitted to operate by lease, permit, easement, license, or service agreement. The asset

retirement obligations associated with these facilities cannot be reasonably determined due to the indeterminate life of the related agreements.

 

The following table summarizes the change in AROs. Amounts include conditional AROs.

 

(In thousands)

 

2022

 

 

2021

 

Balance as of January 1,

 

$

46,580

 

 

$

31,196

 

Liabilities incurred(a)

 

 

1,947

 

 

 

8,589

 

Accretion expense

 

 

1,909

 

 

 

1,526

 

Liabilities settled

 

 

(317

)

 

 

(354

)

Revisions in estimated cash flows(b)

 

 

141

 

 

 

5,623

 

Balance as of December 31,

 

$

50,260

 

 

$

46,580

 

 

(a)
In 2021, MGE recorded an obligation of $4.9 million and $3.4 million, respectively, for the fair value of its legal liability for AROs associated with Badger Hollow I and other completed renewable projects. See Footnote 6 for additional information on Badger Hollow I.
(b)
In 2021, MGE revised the AROs associated with certain Columbia assets.