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Derivative and Hedging Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	September 30, 2013	December 31, 2012
Commodity derivative contracts	300,195 MWh	444,650 MWh
Commodity derivative contracts	5,970,000 Dth	1,980,000 Dth
FTRs	3,099 MW	2,670 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 sheet. 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, MGE Energy and MGE have netted instruments with the same counterparty under a master netting agreement as well as the netting of collateral.

	Asset Derivatives			Liability Derivatives
(In thousands)	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
September 30, 2013
Commodity derivative contracts	Other current assets	$	608	Derivative liability (current)	$	213
Commodity derivative contracts	Other deferred charges		32	Derivative liability (long-term)		18
FTRs	Other current assets		528	Derivative liability (current)		0
Ten-year PPA	N/A		N/A	Derivative liability (current)		9,310
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		59,710

December 31, 2012
Commodity derivative contracts	Other current assets	$	365	Derivative liability (current)	$	394
Commodity derivative contracts	Other deferred charges		95	Derivative liability (long-term)		11
FTRs	Other current assets		206	Derivative liability (current)		0
Ten-year PPA	N/A		N/A	Derivative liability (current)		9,270
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		63,320

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 balance sheet.

Offsetting of Derivative Assets

				Gross amounts		Collateral		Net amount
				offset in		posted against		presented in
(In thousands)		Gross amounts		balance sheet		derivative positions		balance sheet
September 30, 2013
Commodity derivative contracts	$	640	$	(231)	$	-	$	409
FTRs		528		-		-		528

December 31, 2012
Commodity derivative contracts	$	460	$	(405)	$	-	$	55
FTRs		206		-		-		206

Offsetting Liabilities

Offsetting of Derivative Liabilities

				Gross amounts		Collateral		Net amount
				offset in		posted against		presented in
(In thousands)		Gross amounts		balance sheet		derivative positions		balance sheet
September 30, 2013
Commodity derivative contracts	$	231	$	(231)	$	-	$	-
Ten-year PPA		69,020		-		-		69,020

December 31, 2012
Commodity derivative contracts	$	405	$	(405)	$	-	$	-
Ten-year PPA		72,590		-		-		72,590

Derivative Gains and Losses in Balance Sheet

The following tables summarize the unrealized and realized gains and losses related to the derivative instruments on the consolidated balance sheet at September 30, 2013 and 2012, and the consolidated income statement for the three and nine months ended September 30, 2013 and 2012.

		2013				2012
(In thousands)		Current and long-term regulatory asset		Other current assets		Current and long-term regulatory asset		Other current assets
Three Months Ended September 30:
Balance at July 1,	$	66,649	$	658	$	79,362	$	718
Change in unrealized loss (gain)		2,330		0		(468)		0
Realized loss reclassified to a deferred account		(275)		275		(223)		223
Realized loss reclassified to income
statement		(621)		(111)		(3,414)		(161)
Balance at September 30,	$	68,083	$	822	$	75,257	$	780

Nine Months Ended September 30:
Balance at January 1,	$	72,329	$	574	$	42,356	$	1,604
Change in unrealized loss (gain)		(1,330)		0		42,633		0
Realized loss reclassified to a deferred account		(953)		953		(3,103)		3,103
Realized loss reclassified to income
statement		(1,963)		(705)		(6,629)		(3,927)
Balance at September 30,	$	68,083	$	822	$	75,257	$	780

Derivative Gains and Losses in Income Statement

		Realized losses (gains)
				Fuel for electric
		Regulated		generation/		Cost of
(In thousands)		gas revenues		purchased power		gas sold
Three Months Ended September 30, 2013:
Commodity derivative contracts	$	0	$	(7)	$	0
FTRs		0		(387)		0
Ten-year PPA		0		1,126		0

Three Months Ended September 30, 2012:
Commodity derivative contracts	$	0	$	176	$	0
FTRs		0		(256)		0
Ten-year PPA		0		3,655		0

Nine Months Ended September 30, 2013:
Commodity derivative contracts	$	0	$	(523)	$	608
FTRs		0		(896)		0
Ten-year PPA		0		3,479		0

Nine Months Ended September 30, 2012:
Commodity derivative contracts	$	0	$	2,685	$	3,090
FTRs		0		(93)		0
Ten-year PPA		0		4,874		0

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References+ Details

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details