Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Estimated Fair Market Value of Financial Instruments

The estimated fair market value of financial instruments are as follows:

	March 31, 2024				December 31, 2023
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt(a)	$	727,272	$	662,122	$	728,546	$	675,922

(a)Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $4.4 million and $4.6 million as of March 31, 2024, and December 31, 2023, respectively.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis.

	Fair Value as of March 31, 2024
(In thousands)	Total		Level 1		Level 2		Level 3
MGE Energy
Assets:
Derivatives, net(b)	$	502	$	373	$	—	$	129
Exchange-traded investments		2,087		2,087		—		—
Total Assets	$	2,589	$	2,460	$	—	$	129
Liabilities:
Derivatives, net(b)	$	3,511	$	1,656	$	—	$	1,855
Deferred compensation		5,629		—		5,629		—
Total Liabilities	$	9,140	$	1,656	$	5,629	$	1,855
MGE
Assets:
Derivatives, net(b)	$	502	$	373	$	—	$	129
Exchange-traded investments		59		59		—		—
Total Assets	$	561	$	432	$	—	$	129
Liabilities:
Derivatives, net(b)	$	3,511	$	1,656	$	—	$	1,855
Deferred compensation		5,629		—		5,629		—
Total Liabilities	$	9,140	$	1,656	$	5,629	$	1,855

	Fair Value as of December 31, 2023
(In thousands)	Total		Level 1		Level 2		Level 3
MGE Energy
Assets:
Derivatives, net(b)	$	598	$	352	$	—	$	246
Exchange-traded investments		2,034		2,034		—		—
Total Assets	$	2,632	$	2,386	$	—	$	246
Liabilities:
Derivatives, net(b)	$	5,824	$	2,974	$	—	$	2,850
Deferred compensation		5,246		—		5,246		—
Total Liabilities	$	11,070	$	2,974	$	5,246	$	2,850
MGE
Assets:
Derivatives, net(b)	$	598	$	352	$	—	$	246
Exchange-traded investments		60		60		—		—
Total Assets	$	658	$	412	$	—	$	246
Liabilities:
Derivatives, net(b)	$	5,824	$	2,974	$	—	$	2,850
Deferred compensation		5,246		—		5,246		—
Total Liabilities	$	11,070	$	2,974	$	5,246	$	2,850

(b)As of March 31, 2024, and December 31, 2023, collateral of $3.0 million and $5.4 million, respectively, 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.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis.

	Three Months Ended
	March 31,
(In thousands)	2024		2023
Balance as of January 1,	$	(2,604)	$	(866)
Realized and unrealized gains (losses):
Included in regulatory assets		878		(2,874)
Included in earnings		(2,204)		(4,671)
Settlements		2,204		4,671
Balance as of March 31,	$	(1,726)	$	(3,740)

Gains and Losses Included in Income for Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis(c).

	Three Months Ended
	March 31,
(In thousands)	2024		2023
Purchased power expense	$	(2,204)	$	(4,671)

(c)MGE's exchange-traded derivative contracts, over-the-counter party transactions, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability.