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Columbia Environmental Project Construction
 12 Months Ended
Dec. 31, 2013
Jointly Owned Utility Plant Interests [Line Items]  
Columbia Environmental Project Construction

Joint Plant Ownership - MGE Energy and MGE.

 

a.       Columbia.

 

MGE and two other utilities jointly own Columbia, a coal-fired generating facility located in Portage, Wisconsin, which accounts for 31% (245 MW) of MGE's net summer rated capacity. Power from this facility is shared in proportion to each company's ownership interest. MGE has a 22% ownership interest in Columbia. The other owners are WPL, which operates Columbia, and WPSC. MGE's share of fuel, operating, and maintenance expenses for Columbia were $37.5 million, $36.3 million, and $37.1 million for the years ended December 31, 2013, 2012, and 2011, respectively. See Footnote 18 for discussion of MGE's future capital commitments in respect to the environmental projects at Columbia as a result of this ownership interest.

 

Each owner provides its own financing and reflects its respective portion of facilities and operating costs in its financial statements. MGE's interest in Columbia, included in its gross utility plant in service, and the related accumulated depreciation reserves at December 31 were as follows:

 (In thousands) 2013 2012 
 Utility plant$123,097$119,544 
 Accumulated depreciation (78,880) (78,016) 
 Property, plant, and equipment, net$44,217$41,528 
 Construction work in progress 120,858 59,917 
 Total property, plant, and equipment$165,075$101,445 

b.       Elm Road.

 

MGE Power Elm Road owns an 8.33% ownership interest in each of two 615 MW coal-fired generating units in Oak Creek, Wisconsin, which accounts for 14% (106 MW) of MGE's net summer rated capacity. Unit 1 entered commercial operation on February 2, 2010. Unit 2 entered commercial operation on January 12, 2011. MGE Power Elm Road's sole principal asset is that ownership interest in those generating units. MGE Power Elm Road's interest in the Elm Road Units is leased to MGE pursuant to long-term leases.

 

The remainder of the ownership interest in the Elm Road Units is held by two other entities, one of which is also responsible for the Units' operation. Each owner provides its own financing and reflects its respective portion of the facility and costs in its financial statements. MGE's share of fuel, operating, and maintenance expenses for the Elm Road Units were $13.4 million, $13.2 million, and $18.0 million for the years ended December 31, 2013, 2012, and 2011, respectively. MGE Power Elm Road's interest in the portion of the Elm Road Units in-service and the related accumulated depreciation reserves at December 31 were as follows:

 

 (In thousands) 2013 2012 
 Nonregulated plant$198,198$196,146 
 Accumulated depreciation (15,541) (11,126) 
 Property, plant, and equipment, net$182,657$185,020 
 Construction work in progress 1,115 1,440 
 Total property, plant, and equipment$183,772$186,460 

c.       WCCF.

 

MGE Power West Campus and the UW jointly own the West Campus Cogeneration Facility located on the UW campus in Madison, Wisconsin. MGE Power West Campus owns 55% of the facility and the UW owns 45% of the facility. The UW owns a controlling interest in the chilled-water and steam plants, which are used to meet the growing needs for air-conditioning and steam-heat capacity for the UW campus. MGE Power West Campus owns a controlling interest in the electric generation plant, which is leased and operated by MGE.

 

Each owner provides its own financing and reflects its respective portion of the facility and operating costs in its financial statements. MGE Power West Campus' interest in WCCF and the related accumulated depreciation reserves at December 31 were as follows:

 (In thousands) 2013 2012 
 Nonregulated plant$111,268$110,266 
 Accumulated depreciation (21,704) (19,927) 
 Property, plant, and equipment, net$89,564$90,339 

Operating charges are allocated to the UW based on formulas contained in the operating agreement. Under the provisions of this arrangement, the UW is required to reimburse MGE for their allocated portion of fuel and operating expenses. For the years ended December 31, 2013 and 2012, the UW allocated share of fuel and operating costs was $4.9 million. For the year ended December 31, 2011, the UW allocated share of fuel and operating costs was $5.0 million.
Columbia Environmental Project [Member]
  
Jointly Owned Utility Plant Interests [Line Items]  
Columbia Environmental Project Construction

Columbia Environmental Project Construction - MGE Energy and MGE.

 

MGE and two other utilities jointly own Columbia, a coal-fired generating facility. WPL is the plant operator and permit holder, and owns 46.2% of Columbia. WPSC owns a 31.8% interest and MGE owns a 22% interest in Columbia. In early 2011, the PSCW issued a Certificate and Order authorizing the construction of scrubbers and bag houses and associated equipment on Columbia Units 1 and 2 to reduce SO2 and mercury emissions. The scrubbers and bag houses are expected to support compliance obligations for current and anticipated air quality regulations, including CAIR, CAIR's eventual replacement, MATS and the Wisconsin Mercury Rule. The operator's current estimate shows that MGE's share of the capital expenditures required for this project is approximately $135 million. As of December 31, 2013, MGE had accumulated $120.9 million (excluding carrying costs) related to its share of the project, which is reflected in the Construction Work in Progress balance on MGE Energy's and MGE's consolidated balance sheets. MGE expects to incur capital expenditures of $14 million in 2014. This amount may change as a result of modifications to the project estimate or timing differences. MGE has recognized $2.7 million and $1.4 million (after tax) in AFUDC equity related to this project for the years ended December 31, 2013 and 2012, respectively.

 

MGE expects that the costs pertaining to this project will be fully recoverable through rates. For 2012, the PSCW authorized MGE 100% AFUDC on this project during construction. Beginning in 2013, similar to MGE's other utility construction projects, the PSCW authorized MGE a 50% current return (included in customer rates) and the remaining 50% as AFUDC. For 2014, the PSCW authorized MGE 100% AFUDC on this project during construction.