Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments (Tables) [Abstract]

Estimated Fair Market Value of Financial Instruments

		June 30, 2012				December 31, 2011
		Carrying		Fair		Carrying		Fair
(In thousands)		Amount		Value		Amount		Value
MGE Energy
Assets:
Cash and cash equivalents	$	41,288	$	41,288	$	41,169	$	41,169
Liabilities:
Long-term debt*		363,139		429,115		364,473		432,515

MGE
Assets:
Cash and cash equivalents		8,665		8,665		13,898		13,898
Liabilities:
Long-term debt*		363,139		429,115		364,473		432,515

*Includes long-term debt due within one year.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Fair Value as of June 30, 2012
(In thousands)		Total		Level 1		Level 2		Level 3
MGE Energy
Assets:
Exchange-traded investments	$	422	$	422	$	0	$	0
Total Assets	$	422	$	422	$	0	$	0
Liabilities:
Derivatives, net^(a)	$	79,362	$	(218)	$	0	$	79,580
Deferred compensation		1,856		0		1,856		0
Total Liabilities	$	81,218	$	(218)	$	1,856	$	79,580

MGE
Assets:
Exchange-traded investments	$	150	$	150	$	0	$	0
Total Assets	$	150	$	150	$	0	$	0
Liabilities:
Derivatives, net^(a)	$	79,362	$	(218)	$	0	$	79,580
Deferred compensation		1,856		0		1,856		0
Total Liabilities	$	81,218	$	(218)	$	1,856	$	79,580

(a) These amounts are shown gross and exclude $0.7 million of collateral that was posted
against derivative positions with counterparties.

No transfers were made in or out of Level 1 or Level 2 for the six months ended June 30, 2012.

	Fair Value as of December 31, 2011
(In thousands)		Total		Level 1		Level 2		Level 3
MGE Energy
Assets:
Exchange-traded investments	$	350	$	350	$	0	$	0
Total Assets	$	350	$	350	$	0	$	0
Liabilities:
Derivatives, net^(b)	$	42,356	$	1,695	$	0	$	40,661
Deferred compensation^(c)		1,725		0		1,725		0
Total Liabilities	$	44,081	$	1,695	$	1,725	$	40,661

MGE
Assets:
Exchange-traded investments	$	188	$	188	$	0	$	0
Total Assets	$	188	$	188	$	0	$	0
Liabilities:
Derivatives, net^(b)	$	42,356	$	1,695	$	0	$	40,661
Deferred compensation^(c)		1,725		0		1,725		0
Total Liabilities	$	44,081	$	1,695	$	1,725	$	40,661

(b) These amounts are shown gross and exclude $3.0 million of collateral that was posted
against derivative positions with counterparties.

(c) The deferred compensation liability at December 31, 2011, was transferred from Level 1
to Level 2.

Significant Unobservable Inputs

	Significant Unobservable Inputs		Model Input
	Basis adjustment
	On peak		95.5%
	Off peak		94.1%
	Counterparty fuel mix:
	Internal generation		49 % - 65 %
	Purchased power		51 % - 35 %

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

		Three Months Ended				Six Months Ended
(In thousands)		June 30,				June 30,
		2012		2011		2012		2011
Beginning balance,	$	(71,188)	$	(22,148)	$	(40,661)	$	(19,216)
Realized and unrealized gains (losses):
Included in regulatory liabilities (assets)		(8,392)		(835)		(38,919)		(3,767)
Included in other comprehensive income		0		0		0		0
Included in earnings		(1,726)		579		(3,228)		564
Included in current assets		(94)		(229)		(145)		(229)
Purchases		1,917		334		1,967		334
Sales		32		0		64		71
Issuances		0		0		0		0
Settlements		(129)		(684)		1,342		(740)
Transfers in and/or out of Level 3		0		0		0		0
Balance as of June 30,	$	(79,580)	$	(22,983)	$	(79,580)	$	(22,983)
Total gains (losses) included in earnings attributed to
the change in unrealized gains (losses) related to
assets and liabilities held at June 30,^(d)	$	0	$	0	$	0	$	0

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

		Three Months Ended				Six Months Ended
(In thousands)		June 30,				June 30,
		2012		2011		2012		2011
Purchased Power Expense	$	(1,726)	$	579	$	(3,228)	$	564
Cost of Gas Sold Expense		0		0		0		0
Regulated Gas Revenues		0		0		0		0
Total	$	(1,726)	$	579	$	(3,228)	$	564

- Definition

Tabular disclosure of the total amount of gains or losses for the period which are included in earnings or resulted in a change to net assets which gains or losses have arisen from the use of significant unobservable inputs (Level 3) to measure the fair value of assets and liabilities. Such gains or losses are attributable to the change in unrealized gains or losses relating to those assets and liabilities so valued which are still held at the reporting date and which change are also considered for disclosure; it may be expected that a description of where those unrealized gains or losses are reported in the statement of income or the statement of financial position would also be disclosed.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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