Share-Based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation - MGE Energy and MGE.

Under MGE Energy’s Performance Unit Plan, eligible employees may receive performance units that entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy's common stock, plus dividend equivalent payments thereon, at the end of the set performance period. In accordance with the plan’s provisions, these awards are subject to a prescribed vesting schedule and must be settled in cash. Accordingly, no shares of common stock will be issued in connection with the plan.

On the grant date, MGE Energy and MGE measure the cost of the employee services received in exchange for a performance unit award based on the current market value of MGE Energy common stock. The fair value of the awards is re-measured quarterly, including at December 31, 2014, as required by applicable accounting standards. Changes in fair value as well as the original grant are recognized as compensation cost. Since this amount is re-measured throughout the vesting period, the compensation cost is subject to variability. These units are subject to a five year graded vesting schedule.

	Grant Date		MGE Energy Units Granted
	February 20, 2015		18,948
	February 21, 2014		21,991
	February 15, 2013		22,884
	February 17, 2012		25,040
	January 21, 2011		23,483

For nonretirement eligible employees, stock based compensation costs are accrued and recognized using the graded vesting method. Compensation cost for retirement eligible employees or employees that will become retirement eligible during the vesting schedule are recognized on an abridged horizon.

In December 2013, a Director Incentive Plan was approved for the non-employee members of the Board of Directors. This plan is similar to MGE Energy’s Performance Unit Plan for eligible employees described above. Under the plan, a non-employee director can receive performance units that entitle the holder to receive a cash payment equal to the value of a designated number of shares of MGE Energy’s common stock, plus dividend payments, at the end of the set performance period. The units are subject to a three year graded vesting schedule.

	Grant Date		MGE Energy Units Granted
	January 16, 2015		3,794
	January 17, 2014		4,683

During the years ended December 31, 2014, 2013, and 2012, MGE recorded $2.0 million, $1.5 million, and $1.4 million, respectively, in compensation expense as a result of awards under the plans. In January 2014, cash payments of $1.2 million were distributed relating to awards that were granted in 2009. No forfeitures occurred during the years ended December 31, 2014, 2013, and 2012. At December 31, 2014, $5.2 million of outstanding awards are vested, and of this amount no cash settlements have occurred.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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