Derivative and Hedging Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	December 31, 2014	December 31, 2013
Commodity derivative contracts	448,000 MWh	458,660 MWh
Commodity derivative contracts	4,405,000 Dth	3,750,000 Dth
FTRs	1,854 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. At December 31,2014, MGE Energy and MGE had the right to reclaim collateral (a receivable) of $2.2 million.

	Asset Derivatives			Liability Derivatives
(In thousands)	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
December 31, 2014
Commodity derivative contracts	Other current assets	$	130	Derivative liability (current)	$	2,262
Commodity derivative contracts	Other deferred charges		93	Derivative liability (long-term)		171
FTRs	Other current assets		642	Derivative liability (current)		-
Ten-year PPA	N/A		N/A	Derivative liability (current)		6,870
Ten-year PPA	N/A		N/A	Derivative liability (long-term)		46,560
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
		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
(In thousands)
December 31, 2014
Commodity derivative contracts	$	223	$	(223)	$	-	$	-
FTRs		642		-		-		642
December 31, 2013
Commodity derivative contracts	$	1,523	$	(99)	$	(175)	$	1,249
FTRs		363		-		-		363

Offsetting Liabilities

Offsetting of Derivative Liabilities
		Gross amounts		Gross amounts offset in balance sheet		Collateral posted against derivative positions		Net amount presented in balance sheet
(In thousands)
December 31, 2014
Commodity derivative contracts	$	2,433	$	(223)	$	(2,179)	$	31
Ten-year PPA		53,430		-		-		53,430
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 December 31,2014 and 2013, and the consolidated income statement for the year ended December 31,2014 and 2013.

		2014				2013
(In thousands)		Current and Long-Term Regulatory Asset		Other Current Assets		Current and Long-Term Regulatory Asset		Other Current Assets
Year Ended December 31:
Balance at January 1,	$	63,893	$	411	$	72,329	$	574
Change in unrealized loss		(14,518)		-		(5,069)		-
Realized gain (loss) reclassified to a deferred account		595		(595)		(823)		823
Realized gain (loss) reclassified to income statement		5,028		1,185		(2,544)		(986)
Balance at December 31,	$	54,998	$	1,001	$	63,893	$	411

Derivative Gains and Losses in Income Statement

		Realized losses (gains)
		2014				2013
		Fuel for electric generation/ purchased power		Cost of gas sold		Fuel for electric generation/ purchased power		Cost of gas sold
(In thousands)
Year Ended December 31:
Commodity derivative contracts	$	(5,515)	$	(1,103)	$	(564)	$	868
FTRs		(1,110)		-		(983)		-
Ten-year PPA		1,515		-		4,209		-