Derivative and Hedging Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	December 31, 2022			December 31, 2021
Commodity derivative contracts		353,600	MWh		278,000	MWh
Commodity derivative contracts		8,070,000	Dth		5,735,000	Dth
FTRs		1,945	MW		2,127	MW
PPA		—	MW		250	MW

Fair Value of Derivative Instruments on the Balance Sheet

The following table summarizes the fair value of the derivative instruments on the consolidated balance sheets. All derivative instruments in this table are presented on a gross basis and are calculated prior to the netting of instruments with the same counterparty under a master netting agreement as well as the netting of collateral. For financial statement purposes, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral.

(In thousands)	Derivative Assets		Derivative Liabilities		Balance Sheet Location
December 31, 2022
Commodity derivative contracts(a)	$	2,164	$	7,687	Other current liabilities
Commodity derivative contracts(a)		802		476	Other deferred liabilities and other
FTRs		103		—	Other current assets
December 31, 2021
Commodity derivative contracts(b)	$	2,959	$	811	Other current assets
Commodity derivative contracts(b)		420		38	Other deferred charges
FTRs		227		—	Other current assets
PPA	N/A			2,140	Other current liabilities

(a)As of December 31, 2022, collateral of $5.2 million was posted against and netted with derivative liability positions on the consolidated balance sheets. The fair value of the derivative liability disclosed in this table has not been reduced for the collateral posted.

(b)As of December 31, 2021, MGE received collateral of $1.3 million from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received.

Offsetting Assets

The following tables show the effect of netting arrangements for recognized derivative assets and liabilities that are subject to a master netting arrangement or similar arrangement on the consolidated balance sheets.

Offsetting of Derivative Assets

(In thousands)	Gross Amounts		Gross Amounts Offset in Balance Sheets			Collateral Posted Against Derivative Positions			Net Amount Presented in Balance Sheets
December 31, 2022
Commodity derivative contracts	$	2,966	$	(2,966	)	$	—		$	—
FTRs		103		—			—		$	103
December 31, 2021
Commodity derivative contracts	$	3,379	$	(849	)	$	(1,254	)	$	1,276
FTRs		227		—			—			227

Offsetting Liabilities

Offsetting of Derivative Liabilities

(In thousands)	Gross Amounts		Gross Amounts Offset in Balance Sheets			Collateral Posted Against Derivative Positions			Net Amount Presented in Balance Sheets
December 31, 2022
Commodity derivative contracts	$	8,163	$	(2,966	)	$	(5,197	)	$	—
December 31, 2021
Commodity derivative contracts	$	849	$	(849	)	$	—		$	—
PPA		2,140		—			—			2,140

Derivative Gains and Losses in Balance Sheet

The following tables summarize the unrealized and realized gains/losses related to the derivative instruments on the consolidated balance sheets and the consolidated statements of income.

	2022						2021
	Current and Long-Term Regulatory Asset (Liability)			Other Current Assets			Current and Long-Term Regulatory Asset (Liability)			Other Current Assets
(In thousands)
Balance as of January 1,	$	(617	)	$	770		$	13,989		$	1,162
Unrealized gain		(9,527	)		—			(23,173	)		—
Realized gain (loss) reclassified to a deferred account		1,472			(1,472	)		2,563			(2,563	)
Realized gain reclassified to income statement		13,766			3,449			6,004			2,171
Balance as of December 31,	$	5,094		$	2,747		$	(617	)	$	770

Derivative Gains and Losses in Income Statement

	Realized Losses (Gains)
	2022						2021
(In thousands)	Fuel for Electric Generation/ Purchased Power			Cost of Gas Sold			Fuel for Electric Generation/ Purchased Power			Cost of Gas Sold
Year Ended December 31:
Commodity derivative contracts	$	(14,806	)	$	(350	)	$	(3,948	)	$	(1,700	)
FTRs		583			—			(605	)		—
PPA		(2,642	)		—			(1,922	)		—