Derivative and Hedging Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	March 31, 2016	December 31, 2015
Commodity derivative contracts	468,590 MWh	355,580 MWh
Commodity derivative contracts	2,317,500 Dth	5,037,500 Dth
FTRs	770 MW	2,000 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 sheets. 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 March 31,2016, MGE Energy and MGE had the right to reclaim collateral (a receivable) of $1.0 million.

	Asset Derivatives			Liability Derivatives
(In thousands)	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
March 31, 2016
Commodity derivative contracts	Other current assets	$	441	Derivative liability (current)	$	1,303
Commodity derivative contracts	Other deferred charges		53	Derivative liability (long-term)		184
FTRs	Other current assets		19	Derivative liability (current)		-
PPA	N/A		N/A	Derivative liability (current)		9,370
PPA	N/A		N/A	Derivative liability (long-term)		46,540
December 31, 2015
Commodity derivative contracts	Other current assets	$	146	Derivative liability (current)	$	1,266
Commodity derivative contracts	Other deferred charges		144	Derivative liability (long-term)		70
FTRs	Other current assets		234	Derivative liability (current)		-
PPA	N/A		N/A	Derivative liability (current)		8,340
PPA	N/A		N/A	Derivative liability (long-term)		44,930

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 consolidated balance sheets.

Offsetting of Derivative Assets
(In thousands)		Gross Amounts		Gross Amounts Offset in Balance Sheets		Collateral Posted Against Derivative Positions		Net Amount Presented in Balance Sheet
March 31, 2016
Commodity derivative contracts	$	494	$	(494)	$	-	$	-
FTRs		19		-		-		19
December 31, 2015
Commodity derivative contracts	$	290	$	(290)	$	-	$	-
FTRs		234		-		-		234

Offsetting Liabilities

Offsetting of Derivative Liabilities
(In thousands)		Gross Amounts		Gross Amounts Offset in Balance Sheets		Collateral Posted Against Derivative Positions		Net Amount Presented in Balance Sheets
March 31, 2016
Commodity derivative contracts	$	1,487	$	(494)	$	(989)	$	4
PPA		55,910		-		-		55,910
December 31, 2015
Commodity derivative contracts	$	1,336	$	(290)	$	(1,038)	$	8
PPA		53,270		-		-		53,270

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 sheets at March 31,2016 and 2015, and the consolidated income statements for the three months endedMarch 31,2016 and 2015.

		2016				2015
(In thousands)		Current and Long-Term Regulatory Asset		Other Current Assets		Current and Long-Term Regulatory Asset		Other Current Assets
Three Months Ended March 31:
Balance at January 1,	$	54,083	$	1,208	$	54,998	$	1,001
Unrealized loss		6,370		-		1,318		-
Realized (loss) gain reclassified to a deferred account		(1,451)		1,451		(1,061)		1,061
Realized loss reclassified to income
statement		(2,118)		(2,004)		(1,289)		(1,794)
Balance at March 31,	$	56,884	$	655	$	53,966	$	268

Derivative Gains and Losses in Income Statement

		Realized losses (gains)
		2016				2015
(In thousands)		Fuel for Electric Generation/ Purchased Power		Cost of Gas Sold		Fuel for Electric Generation/ Purchased Power		Cost of Gas Sold
Three Months Ended March 31:
Commodity derivative contracts	$	1,007	$	1,814	$	420	$	1,761
FTRs		(68)		-		(119)		-
PPA		1,369		-		1,021		-