Derivative and Hedging Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	June 30, 2014	December 31, 2013
Commodity derivative contracts	431,510 MWh	458,660 MWh
Commodity derivative contracts	4,382,500 Dth	3,750,000 Dth
FTRs	4,597 MW	1,984 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
June 30, 2014
Commodity derivative contracts	Other current assets	$	1,970	Derivative liability (current)	$	225
Commodity derivative contracts	Other deferred charges		101	Derivative liability (long-term)		49
FTRs	Other current assets		1,139	Derivative liability (current)		-
Ten-year PPA	N/A		N/A	Derivative liability (current)		6,300
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		45,490
December 31, 2013
Commodity derivative contracts	Other current assets	$	1,356	Derivative liability (current)	$	51
Commodity derivative contracts	Other deferred charges		167	Derivative liability (long-term)		48
FTRs	Other current assets		363	Derivative liability (current)		-
Ten-year PPA	N/A		N/A	Derivative liability (current)		7,750
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		57,930

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
(In thousands)		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
June 30, 2014
Commodity derivative contracts	$	2,071	$	(274)	$	(292)	$	1,505
FTRs		1,139		-		-		1,139
December 31, 2013
Commodity derivative contracts	$	1,523	$	(99)	$	(175)	$	1,249
FTRs		363		-		-		363

Offsetting Liabilities

Offsetting of Derivative Liabilities
(In thousands)		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
June 30, 2014
Commodity derivative contracts	$	274	$	(274)	$	-	$	-
Ten-year PPA		51,790		-		-		51,790
December 31, 2013
Commodity derivative contracts	$	99	$	(99)	$	-	$	-
Ten-year PPA		65,680		-		-		65,680

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 sheet at June 30,2014 and 2013, and the consolidated income statement for the three and six months endedJune 30,2014 and 2013.

		2014				2013
(In thousands)		Current and long-term regulatory asset		Other current assets		Current and long-term regulatory asset		Other current assets
Three Months Ended June 30:
Balance at April 1,	$	58,213	$	351	$	69,197	$	259
Change in unrealized gain		(9,817)		-		(1,963)		-
Realized gain (loss) reclassified to a deferred
account		(101)		101		(388)		388
Realized gain (loss) reclassified to income
statement		559		224		(197)		11
Balance at June 30,	$	48,854	$	676	$	66,649	$	658
Six Months Ended June 30:
Balance at January 1,	$	63,893	$	411	$	72,329	$	574
Change in unrealized gain		(23,418)		-		(3,660)		-
Realized gain (loss) reclassified to a deferred
account		1,434		(1,434)		(678)		678
Realized gain (loss) reclassified to income
statement		6,945		1,699		(1,342)		(594)
Balance at June 30,	$	48,854	$	676	$	66,649	$	658

Derivative Gains and Losses in Income Statement

	Realized losses (gains)
(In thousands)		Fuel for electric generation/ purchased power		Cost of gas sold
Three Months Ended June 30, 2014:
Commodity derivative contracts	$	(1,061)	$	(128)
FTRs		(196)		-
Ten-year PPA		602		-
Three Months Ended June 30, 2013:
Commodity derivative contracts	$	(538)	$	-
FTRs		(351)		-
Ten-year PPA		1,075		-
Six Months Ended June 30, 2014:
Commodity derivative contracts	$	(5,856)	$	(1,349)
FTRs		(832)		-
Ten-year PPA		(607)		-
Six Months Ended June 30, 2013:
Commodity derivative contracts	$	(516)	$	608
FTRs		(509)		-
Ten-year PPA		2,353		-