Rate Matters	6 Months Ended
Jun. 30, 2020
Regulated Operations [Abstract]
Rate Matters	Rate Matters - MGE Energy and MGE. a.Rate Proceedings. In June 2020, MGE filed with the PSCW a letter of intent to negotiate and enter into a settlement agreement for the pending 2021 rate case. As currently discussed, the proposed settlement would include a zero percent increase for electric rates and increase gas rates by approximately 4% for 2021. The gas increase covers infrastructure costs and technology improvements. The proposal also seeks escrow accounting treatment for pension and other postretirement benefit costs, bad debt expense, and credit customer payment card fees. Escrow accounting treatment would allow MGE to defer any difference between estimated costs in rates and actual costs incurred in its next rate filing. Any difference, if allowed, would be recorded as a regulatory asset or regulatory liability. MGE currently expects no change in the 2020 authorized return on common equity and capital structure for 2021. In December 2018, the PSCW approved a settlement agreement between MGE and intervening parties in the then-pending rate case. The settlement decreased electric rates by 2.24%, or $9.2 million, in 2019. MGE maintained this rate level for 2020, with the exception that MGE's electric rates were adjusted by the 2020 Fuel Cost Plan. The decrease in electric rates reflects the ongoing tax impacts of the Tax Act. Lower fuel costs and an increase in rate base from renewable generation assets further impacted the rate change. In 2020, electric rates decreased 0.84%, or $3.4 million, as approved by the PSCW in December 2019 in the 2020 Fuel Cost Plan. The settlement agreement increased gas rates by 1.06%, or $1.7 million, in 2019 and 1.46%, or $2.4 million, in 2020. The gas increase covers infrastructure costs. It also reflects the impacts of the Tax Act. The return on common stock equity for 2019 and 2020 is 9.8% based on a capital structure consisting of 56.6% common equity in 2019 and 56.1% common equity in 2020. b.Fuel Rules. Fuel rules require the PSCW and Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. The fuel rules bandwidth is currently set at plus or minus 2%. Under fuel rules, MGE would defer costs, less any excess revenues, if its actual electric fuel costs exceeded 102% of the electric fuel costs allowed in its latest rate order. Excess revenues are defined as revenues in the year in question that provide MGE with a greater return on common equity than authorized by the PSCW in MGE's latest rate order. Conversely, MGE is required to defer the benefit of lower costs if actual electric fuel costs were less than 98% of the electric fuel costs allowed in that order. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral. The PSCW issued a final decision in the 2018 fuel rules proceedings for MGE to refund additional fuel savings incurred to its retail electric customers over a one-month period. MGE returned $9.5 million of electric fuel-related savings in October 2019. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. The PSCW issued a final decision in the 2019 fuel rules proceedings for MGE to have the opportunity to either use the $1.5 million deferred as part of the settlement to MGE's pending 2021 rate case or to refund the balance to customers in October 2020. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. The 2019 fuel credit is currently included in the proposed settlement to MGE's pending 2021 rate case. As of June 30, 2020, MGE had deferred $0.3 million of 2020 fuel savings. These costs will be subject to the PSCW's annual review of 2020 fuel costs, which is expected to be completed in 2021. c.COVID-19. On March 24, 2020, the PSCW ordered changes to the tariff provisions of all public utilities in Wisconsin in response to the COVID-19 pandemic, including prohibitions on service disconnections or refusals, restrictions on customer credit terms (no cash deposits and requirements to offer deferred payment agreements), and no late payment charges. The order resulted in increased bad debt expense and foregone revenue. This Order as it pertains to the prohibitions on service disconnections for residential customers remains in effect until September 1, 2020. All other restrictions were lifted in July 2020. As permitted by regulatory action, MGE notified the PSCW on July 16, 2020 of its election to continue to waive late fees for all customer classes and seek recovery in a future period. The end date for this waiver period has not yet been determined but is expected to be no later than December 31, 2020. On March 24, 2020, the PSCW issued a further order authorizing deferral of expenditures incurred to ensure the provision of safe, reliable, and affordable access to utility services during the COVID-19 pandemic and late payment charges. Expenditures may include items such as bad debt expense and personal protective equipment. Foregone revenue from late payment charges and the potential delay in payments from customers is expected to impact the timing of cash inflows. Subject to PSCW approval of recovery, foregone late payment charges are expected to be recognized as revenue when it is collected from customers, and deferred expenditures are expected to be recognized as a regulatory asset as costs are incurred (meaning that those expenditures will affect cash flows when paid but will not affect income until recovery is permitted by the PSCW). Recovery of expenditures and late payment charges is expected to be addressed in future rate proceedings. While management believes that cost recovery is probable, the timing of collection from customers cannot be estimated at this time. Management will continue to assess the probability of recovery of deferred costs as the COVID-19 pandemic progresses. As of June 30, 2020, MGE had deferred $1.8 million.

Rate Matters

6 Months Ended

Jun. 30, 2020

Rate Matters - MGE Energy and MGE.

a.Rate Proceedings.

In June 2020, MGE filed with the PSCW a letter of intent to negotiate and enter into a settlement agreement for the pending 2021 rate case. As currently discussed, the proposed settlement would include a zero percent increase for electric rates and increase gas rates by approximately 4% for 2021. The gas increase covers infrastructure costs and technology improvements. The proposal also seeks escrow accounting treatment for pension and other postretirement benefit costs, bad debt expense, and credit customer payment card fees. Escrow accounting treatment would allow MGE to defer any difference between estimated costs in rates and actual costs incurred in its next rate filing. Any difference, if allowed, would be recorded as a regulatory asset or regulatory liability. MGE currently expects no change in the 2020 authorized return on common equity and capital structure for 2021.

In December 2018, the PSCW approved a settlement agreement between MGE and intervening parties in the then-pending rate case. The settlement decreased electric rates by 2.24%, or $9.2 million, in 2019. MGE maintained this rate level for 2020, with the exception that MGE's electric rates were adjusted by the 2020 Fuel Cost Plan. The decrease in electric rates reflects the ongoing tax impacts of the Tax Act. Lower fuel costs and an increase in rate base from renewable generation assets further impacted the rate change. In 2020, electric rates decreased 0.84%, or $3.4 million, as approved by the PSCW in December 2019 in the 2020 Fuel Cost Plan. The settlement agreement increased gas rates by 1.06%, or $1.7 million, in 2019 and 1.46%, or $2.4 million, in 2020. The gas increase covers infrastructure costs. It also reflects the impacts of the Tax Act. The return on common stock equity for 2019 and 2020 is 9.8% based on a capital structure consisting of 56.6% common equity in 2019 and 56.1% common equity in 2020.

b.Fuel Rules.

Fuel rules require the PSCW and Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. The fuel rules bandwidth is currently set at plus or minus 2%. Under fuel rules, MGE would defer costs, less any excess revenues, if its actual electric fuel costs exceeded 102% of the electric fuel costs allowed in its latest rate order. Excess revenues are defined as revenues in the year in question that provide MGE with a greater return on common equity than authorized by the PSCW in MGE's latest rate order. Conversely, MGE is required to defer the benefit of lower costs if actual electric fuel costs were less than 98% of the electric fuel costs allowed in that order. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral.

The PSCW issued a final decision in the 2018 fuel rules proceedings for MGE to refund additional fuel savings incurred to its retail electric customers over a one-month period. MGE returned $9.5 million of electric fuel-related savings in October 2019. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year.

The PSCW issued a final decision in the 2019 fuel rules proceedings for MGE to have the opportunity to either use the $1.5 million deferred as part of the settlement to MGE's pending 2021 rate case or to refund the balance to customers in October 2020. There was no change to the refund in the fuel rules proceedings from the amount MGE deferred in the previous year. The 2019 fuel credit is currently included in the proposed settlement to MGE's pending 2021 rate case.

As of June 30, 2020, MGE had deferred $0.3 million of 2020 fuel savings. These costs will be subject to the PSCW's annual review of 2020 fuel costs, which is expected to be completed in 2021.

c.COVID-19.

On March 24, 2020, the PSCW ordered changes to the tariff provisions of all public utilities in Wisconsin in response to the COVID-19 pandemic, including prohibitions on service disconnections or refusals, restrictions on customer credit terms (no cash deposits and requirements to offer deferred payment agreements), and no late payment charges. The order resulted in increased bad debt expense and foregone revenue. This Order as it pertains to the prohibitions on service disconnections for residential customers remains in effect until September 1, 2020. All other restrictions were lifted in July 2020. As permitted by regulatory action, MGE notified the PSCW on July 16, 2020 of its election to continue to waive late fees for all customer classes and seek recovery in a future period. The end date for this waiver period has not yet been determined but is expected to be no later than December 31, 2020.

On March 24, 2020, the PSCW issued a further order authorizing deferral of expenditures incurred to ensure the provision of safe, reliable, and affordable access to utility services during the COVID-19 pandemic and late payment charges. Expenditures may include items such as bad debt expense and personal protective equipment. Foregone revenue from late payment charges and the potential delay in payments from customers is expected to impact the timing of cash inflows. Subject to PSCW approval of recovery, foregone late payment charges are expected to be recognized as revenue when it is collected from customers, and deferred expenditures are expected to be recognized as a regulatory asset as costs are incurred (meaning that those expenditures will affect cash flows when paid but will not affect income until recovery is permitted by the PSCW). Recovery of expenditures and late payment charges is expected to be addressed in future rate proceedings. While management believes that cost recovery is probable, the timing of collection from customers cannot be estimated at this time. Management will continue to assess the probability of recovery of deferred costs as the COVID-19 pandemic progresses. As of June 30, 2020, MGE had deferred $1.8 million.