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Investment in ATC
 6 Months Ended
Jun. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]  
Investment in ATC

Investment in ATC - MGE Energy and MGE.

ATC owns and operates electric transmission facilities primarily in Wisconsin. MGE received an interest in ATC when it, like other Wisconsin electric utilities, contributed its electric transmission facilities to ATC as required by Wisconsin law. That interest is presently held by MGE Transco, which is jointly owned by MGE Energy and MGE.

MGE Transco has accounted for its investment in ATC under the equity method of accounting. For the three and six months ended June 30, 2016 and 2015, MGE Transco recorded the following:

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2016201520162015
Equity in earnings from investment in ATC$1,767$2,289$4,000$4,170
Dividends received from ATC1,8631,4712,7282,891
Capital contributions to ATC177177710355

MGE Transco's investment in ATC as of June 30, 2016, and December 31, 2015, was $71.4 million and $69.5 million, respectively.

At June 30, 2016, MGE is the majority owner (51%), and MGE Energy, the holding company, is the minority owner (49%) of MGE Transco. MGE Energy's proportionate share of the equity and net income of MGE Transco is classified within the MGE financial statements as noncontrolling interest. MGE's ownership interest declined below a majority in July 2016 as a result of continued funding of ATC capital contributions by MGE Energy. As a result of the change in majority ownership in MGE Transco in July 2016, MGE will deconsolidate the noncontrolling interest within MGE's financial statements for MGE Energy's proportionate share of the equity in MGE Transco. As of June 30, 2016, the noncontrolling interest attributable to MGE Transco on MGE's consolidated balance sheet was $24.9 million. No gain or loss was recognized in July 2016 due to MGE ceasing to have a controlling financial interest.

In June 2016, the PSCW accepted a staff recommendation to have MGE transfer its interest in ATC to MGE Energy. As a result, MGE's ownership interest in MGE Transco will be completely eliminated in favor of MGE Energy when the transfers are complete, which is anticipated to occur in 2016. The recommendation arose in the context of requests for regulatory approvals by several owners of ATC in connection with a reorganization of ATC designed to separate its existing Wisconsin-based transmission operations from its non-Wisconsin transmission development activities. The change will have no effect on MGE Energy's consolidated financial statements.

ATC's summarized financial data for the three and six months ended June 30, 2016 and 2015, is as follows:

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2016201520162015
Operating revenues$154,225$165,171$318,465$317,528
Operating expenses(81,698)(80,326)(160,763)(160,277)
Other income (expense), net1,308(81)1,435(19)
Interest expense, net(24,882)(24,172)(49,090)(48,655)
Earnings before members' income taxes$48,953$60,592$110,047$108,577

MGE receives transmission and other related services from ATC. During the three and six months ended June 30, 2016, MGE recorded $7.4 million and $14.7 million, respectively, for transmission services received compared to $7.0 million and $14.1 million for the comparable periods in 2015. MGE also provides a variety of operational, maintenance, and project management services for ATC, which is reimbursed by ATC. As of June 30, 2016 and December 31, 2015, MGE had a receivable due from ATC of $0.2 million.