Long-Term Debt

12 Months Ended

Dec. 31, 2014

Long-Term Debt - MGE Energy and MGE.

a. Long-Term Debt.

		2014				2013
(In thousands)		MGE Energy		MGE		MGE Energy		MGE
First Mortgage Bonds:^(a)
7.70%, 2028 Series	$	1,200	$	1,200	$	1,200	$	1,200
Tax Exempt Debt:
3.45%, 2027 Series,
Industrial Development Revenue Bonds		19,300		19,300		19,300		19,300
Medium-Term Notes:^(b)
5.25%, due 2017		30,000		30,000		30,000		30,000
6.12%, due 2028		20,000		20,000		20,000		20,000
7.12%, due 2032		25,000		25,000		25,000		25,000
6.247%, due 2037		25,000		25,000		25,000		25,000
Total Medium-Term Notes		100,000		100,000		100,000		100,000
Other Long-Term Debt:^(c)
5.59%, due 2018^(d)		20,000		20,000		20,000		20,000
3.38%, due 2020^(d)		15,000		15,000		15,000		15,000
3.09%, due 2023^(d)		30,000		30,000		30,000		30,000
3.29%, due 2026^(d)		15,000		15,000		15,000		15,000
5.68%, due 2033^(e)		28,954		28,954		29,797		29,797
5.19%, due 2033^(e)		19,264		19,264		19,857		19,857
5.26%, due 2040^(d)		15,000		15,000		15,000		15,000
5.04%, due 2040^(f)		41,805		41,805		43,472		43,472
4.74%, due 2041^(f)		26,167		26,167		27,167		27,167
4.38%, due 2042^(d)		28,000		28,000		28,000		28,000
4.42%, due 2043^(d)		20,000		20,000		20,000		20,000
4.47%, due 2048^(d)		20,000		20,000		20,000		20,000
Total Other Long-Term Debt		279,190		279,190		283,293		283,293
Long-term debt due within one year		(4,182)		(4,182)		(4,102)		(4,102)
Unamortized discount		(252)		(252)		(277)		(277)
Total Long-Term Debt	$	395,256	$	395,256	$	399,414	$	399,414

(a) MGE's utility plant is subject to the lien of its Indenture of Mortgage and Deed of Trust, under which its first mortgage bonds are issued. The Mortgage Indenture provides that dividends or any other distribution or purchase of shares may not be made if the aggregate amount thereof since December 31, 1945 would exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2014, approximately $334.8 million was available for the payment of dividends under this covenant.

(b) The indenture under which MGE's Medium-Term notes are issued provides that those notes will be entitled to be equally and ratably secured in the event that MGE issues any additional first mortgage bonds.

(c) Unsecured notes issued pursuant to various Note Purchase Agreements with one or more purchasers. The notes are not issued under, or governed by, MGE’s Indenture dated as of September 1, 1998, which governs MGE’s Medium-Term Notes.

(d) Issued by MGE. Under that Note Purchase Agreement: (i) note holders have the right to require MGE to repurchase their notes at par in the event of an acquisition of beneficial ownership of 30% or more of the outstanding voting stock of MGE Energy, (ii) MGE must maintain a ratio of its consolidated indebtedness to consolidated total capitalization not to exceed a maximum of 65%, and (iii) MGE cannot issue "Priority Debt" in an amount exceeding 20% of its consolidated assets. Priority Debt is defined as any indebtedness of MGE secured by liens other than specified liens permitted by the Note Purchase Agreement and certain unsecured indebtedness of certain subsidiaries. As of December 31, 2014, MGE is in compliance with the covenant requirements.

(e) Issued by MGE Power West Campus. The Note Purchase Agreements require it to maintain a projected debt service coverage ratio of not less than 1.25 to 1.00, and debt to total capitalization ratio of not more than 0.65 to 1.00. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power West Campus for use of its ownership interest in the West Campus Cogeneration Facility pursuant to a long-term lease. As of December 31, 2014, MGE Power West Campus is in compliance with the covenant requirements.

(f) Issued by MGE Power Elm Road. The Note Purchase Agreement requires MGE Power Elm Road to maintain a projected and actual debt service coverage ratio at the end of any calendar quarter of not less than 1.25 to 1.00 for the trailing 12-month period. The notes are secured by a collateral assignment of lease payments that MGE is making to MGE Power Elm Road for use of its ownership interest in the Elm Road Units pursuant to long-term leases. As of December 31, 2014, MGE Power Elm Road is in compliance with the covenant requirements.

b. Long-Term Debt Maturities.

Below is MGE Energy's and MGE's aggregate maturities for all long-term debt for years following the December 31, 2014, consolidated balance sheets.

		MGE
(In thousands)		Energy		MGE *
2015	$	4,182	$	4,182
2016		4,268		4,268
2017		34,358		34,358
2018		24,452		24,452
2019		4,553		4,553
Future years		327,877		327,877
Total	$	399,690	$	399,690

*Includes $48.2 million for MGE Power West Campus and $68.0 million for MGE Power Elm Road, all of which are consolidated with MGE's debt (see Footnote 2 for further information).