Derivative and Hedging Instruments (Tables)

3 Months Ended

Mar. 31, 2020

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, 2020		December 31, 2019
Commodity derivative contracts	498,960	MWh	417,840	MWh
Commodity derivative contracts	4,650,000	Dth	6,605,000	Dth
FTRs	1,108	MW	2,750	MW
PPA	1,300	MW	1,450	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, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral.

		Derivative		Derivative
(In thousands)		Assets		Liabilities	Balance Sheet Location
March 31, 2020
Commodity derivative contracts(a)	$	599	$	2,159	Derivative liability (current)(b)
Commodity derivative contracts(a)		74		240	Derivative liability (long-term)
FTRs		9		-	Other current assets
PPA		N/A		10,740	Derivative liability (current)
PPA		N/A		12,870	Derivative liability (long-term)
December 31, 2019
Commodity derivative contracts(a)	$	157	$	1,521	Derivative liability (current)(b)
Commodity derivative contracts(a)		73		217	Derivative liability (long-term)
FTRs		73		-	Other current assets
PPA		N/A		10,100	Derivative liability (current)
PPA		N/A		15,340	Derivative liability (long-term)

(a) As of March 31, 2020, and December 31, 2019, collateral of $1.7 million and $1.5 million, respectively, was posted against and netted with derivative liability positions on the consolidated balance sheets.

(b) As of March 31, 2020, and December 31, 2019, MGE posted $0.3 million and $0.1 million, respectively, as other current assets on the consolidated balance sheets.

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
March 31, 2020
Commodity derivative contracts	$	673	$	(652)	$	-	$	21
FTRs		9		-		-		9
December 31, 2019
Commodity derivative contracts	$	230	$	(192)	$	-	$	38
FTRs		73		-		-		73

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, 2020
Commodity derivative contracts	$	2,399	$	(652)	$	(1,747)	$	-
PPA		23,610		-		-		23,610
December 31, 2019
Commodity derivative contracts	$	1,738	$	(192)	$	(1,546)	$	-
PPA		25,440		-		-		25,440

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 and the consolidated statements of income.

		2020				2019
(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,	$	26,875	$	1,100	$	31,830	$	377
Unrealized (gain) loss		(689)		-		(922)		-
Realized (loss) gain reclassified to a deferred account		(1,063)		1,063		(260)		260
Realized gain (loss) reclassified to income statement		204		(1,733)		375		(378)
Balance at March 31,	$	25,327	$	430	$	31,023	$	259

Derivative Gains and Losses in Income Statement

		Realized losses (gains)
		2020				2019
(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	$	680	$	1,607	$	270	$	277
FTRs		(65)		-		(135)		-
PPA		(693)		-		(409)		-