Derivative and Hedging Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

	June 30, 2016	December 31, 2015
Commodity derivative contracts	479,725 MWh	355,580 MWh
Commodity derivative contracts	1,887,500 Dth	5,037,500 Dth
FTRs	5,653 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.

	Asset Derivatives			Liability Derivatives
(In thousands)	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
June 30, 2016
Commodity derivative contracts	Other current assets	$	1,814	Derivative liability (current)	$	212
Commodity derivative contracts	Other deferred charges		143	Derivative liability (long-term)		60
FTRs	Other current assets		34	Derivative liability (current)		-
PPA	N/A		N/A	Derivative liability (current)		8,650
PPA	N/A		N/A	Derivative liability (long-term)		43,590
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 Sheets
June 30, 2016
Commodity derivative contracts	$	1,957	$	(272)	$	-	$	1,685
FTRs		34		-		-		34
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
June 30, 2016
Commodity derivative contracts	$	272	$	(272)	$	-	$	-
PPA		52,240		-		-		52,240
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 June 30,2016 and 2015, and the consolidated income statements for the three and six months endedJune 30,2016 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 June 30:
Balance at April 1,	$	56,884	$	655	$	53,966	$	268
Unrealized (gain) loss		(4,580)		-		3,160		-
Realized gain (loss) reclassified to a deferred account		17		(17)		(231)		231
Realized (loss) gain reclassified to income statement		(1,800)		21		(847)		(44)
Balance at June 30,	$	50,521	$	659	$	56,048	$	455
Six Months Ended June 30:
Balance at January 1,	$	54,082	$	1,208	$	54,998	$	1,001
Unrealized loss		1,791		-		4,478		-
Realized (loss) gain reclassified to a deferred account		(1,434)		1,434		(1,292)		1,292
Realized (loss) gain reclassified to income statement		(3,918)		(1,983)		(2,136)		(1,838)
Balance at June 30,	$	50,521	$	659	$	56,048	$	455

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 June 30:
Commodity derivative contracts	$	417	$	-	$	578	$	(2)
FTRs		136		-		(255)		-
PPA		1,226		-		570		-
Six Months Ended June 30:
Commodity derivative contracts	$	1,424	$	1,814	$	998	$	1,759
FTRs		68		-		(374)		-
PPA		2,595		-		1,591		-