MGE ENERGY INC

Previous wording

The ownership/leasing structure for our nonregulated energy operations was adopted under applicable state regulatory guidelines for MGE's participation in these generation facilities, consisting principally of a stable return on the equity investment in the new generation facilities over the term of the related leases. The nonregulated energy operations include an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin and a partial ownership of a cogeneration project on the UW-Madison campus. A third party operates the units in Oak Creek, and MGE operates the cogeneration project. Due to the nature of MGE's participation in these facilities, the results of MGE Energy's nonregulated operations are also consolidated into MGE's consolidated financial position and results of operations under applicable accounting standards.

Current wording

The ownership/leasing structure for our nonregulated energy operations was adopted under applicable state regulatory guidelines for MGE's participation in these generation facilities, consisting principally of a stable return on the equity investment in the new generation facilities over the term of the related leases. The nonregulated energy operations include an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin and a partial ownership of a cogeneration project on the University of Wisconsin-Madison campus. A third party operates the units in Oak Creek, and MGE operates the cogeneration project. Due to the nature of MGE's participation in these facilities, the results of MGE Energy's nonregulated operations are also consolidated into MGE's consolidated financial position and results of operations under applicable accounting standards.

Previous wording

During the three months ended March 31, 2024, MGE Energy's earnings were $33.8 million or $0.93 per share compared to $31.1 million or $0.86 per share during the same period in the prior year. MGE's earnings during the three months ended March 31, 2024, were $26.6 million compared to $24.1 million during the same period in the prior year.

Current wording

During the three months ended June 30, 2024, MGE Energy's earnings were $23.8 million or $0.66 per share compared to $28.7 million or $0.79 per share during the same period in the prior year. MGE's earnings during the three months ended June 30, 2024, were $16.0 million compared to $22.2 million during the same period in the prior year.

Previous wording

Our net income during the three months ended March 31, 2024, compared to the same periods in the prior year primarily reflects the effects of the following factors:

Current wording

Our net income during the three and six months ended June 30, 2024, compared to the same periods in the prior year primarily reflects the effects of the following factors:

Previous wording

Lower gas retail sales resulting from warmer than normal weather in the first quarter of 2024 contributed to lower gas earnings for the three months ended March 31, 2024. Gas retail sales decreased approximately 7%. Heating degree days (a measure for determining the impact of weather during the heating season) decreased by approximately 7% in the first three months of 2024 compared to the same period in the prior year.

Current wording

Lower gas retail sales resulting from warmer than normal weather in the first quarter of 2024 contributed to lower gas earnings for the six months ended June 30, 2024. Gas retail sales decreased approximately 8%. Heating degree days (a measure for determining the impact of weather during the heating season) decreased by approximately 9% in the first six months of 2024 compared to the same period in the prior year.

Previous wording

The following events affected the first three months of 2024:

Current wording

The following events affected the first six months of 2024:

Previous wording

2024/2025 Rate Proceeding: In December 2023, the PSCW approved a 1.54% increase to electric rates and 2.44% increase to gas rates for 2024. The PSCW also approved a 4.17% increase to electric rates and 1.32% increase to gas rates in 2025. See "Other Matters" below for additional information on the 2024/2025 rate proceeding.

Current wording

2024/2025 Rate Proceeding: In December 2023, the PSCW approved a 1.54% increase to electric rates and 2.44% increase to gas rates for 2024. The PSCW also approved a 4.17% increase to electric rates and 1.32% increase to gas rates in 2025. MGE filed a 2025 Fuel Cost Plan with the PSCW in June 2024. The plan would lower the 2025 increase in electric rates to 2.47%, reflecting lower expected fuel costs. MGE expects a final decision from the PSCW on the Fuel Cost Plan by the end of 2024. See "Other Matters" below for additional information on the 2024/2025 rate proceeding.

Previous wording

In accordance with the 2024/2025 rate order from the PSCW, MGE will have an earnings sharing mechanism, under which, if MGE earns above the 9.7% authorized ROE: (i) the utility will retain 100% of earnings for the first 15 basis points above the authorized ROE; (ii) 50% of the next 60 basis points will be required to be refunded to customers; and (iii) 100% of any remaining excess earnings will be required to be refunded to customers. The earnings calculation excludes fuel rules adjustments.

Current wording

In accordance with the 2024/2025 rate order from the PSCW, MGE will have an earnings sharing mechanism, under which, if MGE earns above the 9.7% ROE authorized in the rate order: (i) the utility will retain 100% of earnings for the first 15 basis points above the authorized ROE; (ii) 50% of the next 60 basis points will be required to be deferred and returned to customers; and (iii) 100% of any remaining excess earnings will be required to be refunded to customers. The earnings calculation excludes fuel rules adjustments.

Previous wording

Utility Solar: Large solar generation projects under construction, are shown in the following table. Incurred costs are reflected in "Construction work in progress" for projects under construction on the consolidated balance sheets.

Current wording

Large Scale Utility Projects: Large scale generation projects under construction, are shown in the following table. Incurred costs are reflected in "Construction work in progress" for projects under construction on the consolidated balance sheets.

Previous wording

MGE received specific approval to recover 100% AFUDC. After tax, MGE recognized $2.7 million and $1.1 million of AFUDC equity through March 31, 2024, on Paris and Darien, respectively, during construction. AFUDC has been excluded from the costs incurred in the table above.

Current wording

MGE received specific approval to recover 100% AFUDC. After tax, MGE recognized $3.3 million and $1.4 million of AFUDC equity through June 30, 2024, on Paris and Darien, respectively, during construction. AFUDC has been excluded from the costs incurred in the table above.

Previous wording

Pending approval by the PSCW. Battery storage has been proposed as part of this project and has not been included in the

Current wording

Pending approval by the PSCW. Battery storage has been proposed as part of this project and has not been included in the 2024-2028 forecast. MGE will continue to evaluate timing, cost, and feasibility of the installation of batteries.

Previous wording

2023 Annual Fuel Proceeding: MGE had fuel savings in 2023. As of December 31, 2023, MGE had deferred $7.2 million of 2023 fuel savings. These costs will be subject to the PSCW's annual review of 2023 fuel costs, expected to be completed during 2024. MGE has proposed to return these savings over a 3-month period from October 2024 through December 2024.

Current wording

2023 Annual Fuel Proceeding: MGE had fuel savings in 2023. As of December 31, 2023, MGE had deferred $7.2 million of 2023 fuel savings. The PSCW has completed the annual review of 2023 fuel costs and approved for MGE to return these savings over a 3-month period from October 2024 through December 2024. There was no change to the costs to be refunded in the fuel rule proceedings from the amount MGE deferred in the previous year.

Previous wording

ATC Return on Equity: As discussed in "Other Matters" below, ATC's authorized ROE, which is used in calculating its rates and revenues, is the subject of a challenge before FERC. A decrease in ATC's ROE could result in lower equity earnings and distributions from ATC in the future. We derived approximately 5.7% and 5.9% of our net income during the three months ended March 31, 2024 and 2023, respectively, from our investment in ATC.

Current wording

ATC ROE: As discussed in "Other Matters" below, ATC's authorized ROE, which is used in calculating its rates and revenues, is the subject of a challenge before Federal Energy Regulatory Commission (FERC). A decrease in ATC's ROE could result in lower equity earnings and distributions from ATC in the future. We derived approximately 6.7% and 6.2% of our net income during the six months ended June 30, 2024 and 2023, respectively, from our investment in ATC.

Previous wording

Environmental Initiatives: There are proposed legislative rules and initiatives involving matters related to air emissions, water effluent, hazardous materials, and greenhouse gases, all of which affect generation plant capital expenditures and operating costs as well as future operational planning. Legislation and rulemaking addressing climate change and related matters could significantly affect the costs of owning and operating fossil-fueled generating plants. We would expect to seek and receive recovery of any such costs in rates. However, it is difficult to estimate the amount of such costs due to the uncertainty as to the timing and form of any legislation or rules, and the scope and time of the recovery of costs in rates, which may occur after those costs have been incurred and paid.

Current wording

Environmental Initiatives: There are proposed legislative rules and initiatives involving matters related to air emissions, water effluent, hazardous materials, and greenhouse gases, all of which affect generation plant capital expenditures and operating costs as well as future operational planning. Legislation and rulemaking addressing climate change and related matters could significantly affect the costs of owning and operating fossil-fueled generating plants. We would expect to seek and receive recovery of any such costs in rates. However, it is difficult to estimate the amount of such costs due to the uncertainty as to the timing and form of any legislation or rules, the timing and effects of any judicial review, and the scope and time of the recovery of costs in rates, which may occur after those costs have been incurred and paid.

Previous wording

Growing renewable generation. MGE is seeking to acquire a joint interest in several renewable generation projects. The forecasted capital expenditures include announced projects such as Paris (Solar and Battery; 20 MW/11 MW), Darien (Solar; 25 MW), Koshkonong (Solar; 30 MW), High Noon (Solar, 30 MW) and other projects expected to be announced in the future. See the 2024-2028 capital expenditures forecast disclosed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K.

Current wording

Growing renewable generation. MGE is seeking to acquire a joint interest in several renewable generation projects. The forecasted capital expenditures include announced projects such as Paris (Solar and Battery; 20 MW/11 MW), Darien (Solar; 25 MW), Koshkonong (Solar; 30 MW), High Noon (Solar; 30 MW), Sunnyside (Solar and Battery; 20 MW/40 MW), and other projects expected to be announced in the future. See the

Previous wording

Natural gas as a fuel source. West Riverside: MGE received PSCW approval to purchase an additional 25 MW of capacity of West Riverside, expected to close in 2024. MGE currently owns 25 MW of capacity of West Riverside. West Riverside is a natural gas-fired generating plant.

Current wording

Natural gas as a fuel source. West Riverside: In June 2024, MGE purchased an additional 25 MW of capacity of West Riverside for approximately $25 million. After purchase, MGE owns 50 MW of capacity of West Riverside. West Riverside is a natural gas-fired generating plant.

Previous wording

Environmental Initiatives – Natural gas distribution: Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve net-zero methane emissions from its natural gas distribution system by 2035. If MGE can accelerate plans to achieve net-zero methane emissions from its natural gas system—through the evolution of new technologies, such as renewable natural gas—it will. MGE is working to reduce overall emissions from its natural gas distribution system cost-effectively as quickly as possible. For customers who want to reduce their footprint further, MGE is introducing a renewable natural gas program. MGE purchases renewable thermal credits on behalf of customers who voluntarily elect in the program to offset the emissions associated with the customer's monthly natural gas usage.

Current wording

Environmental Initiatives – Natural gas distribution: Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve net-zero methane emissions from its natural gas distribution system by 2035. If MGE can accelerate plans to achieve net-zero methane emissions from its natural gas system—through the evolution of new technologies, such as renewable natural gas—it will. MGE is working to reduce overall emissions from its natural gas distribution system cost-effectively. For customers who want to reduce their footprint further, MGE introduced a renewable natural gas program which was made effective starting May 2024 after approval by the PSCW. MGE purchases renewable thermal credits on behalf of customers who voluntarily elect in the program to offset the emissions associated with the customer's monthly natural gas usage.

Previous wording

Solar Procurement Disruptions: MGE is monitoring import regulations under the Uyghur Forced Labor Protection Act and the U.S. Department of Commerce investigation on whether to impose new solar tariffs. These disruptions have a potential to impact current and future solar projects which may result in an increase in costs or delays in construction timelines. In the event that such disruptions cause costs to exceed the levels approved for specific projects, we have filed, and expect to continue to file, notifications with the PSCW and expect to request recovery of any increases in MGE's future rate proceedings. See "Other Matters" below for additional information on the solar procurement disruptions.

Current wording

Solar Procurement Disruptions: MGE is monitoring import regulations under the Uyghur Forced Labor Protection Act and the U.S. Department of Commerce new solar tariffs. These disruptions have a potential to impact current and future solar projects which may result in an increase in costs or delays in construction timelines. In the event that such disruptions cause costs to exceed the levels approved for specific projects, we have filed, and expect to continue to file, notifications with the PSCW and expect to request recovery of any increases in MGE's future rate proceedings. See "Other Matters" below for additional information on the solar procurement disruptions.

Previous wording

Volume. During the three months ended March 31, 2024, residential sales decreased by approximately 3% compared to the same period in the prior year. This decrease was driven by warmer than normal weather in the first quarter of 2024.

Current wording

Volume. During the three months ended June 30, 2024, residential sales decreased by approximately 4% compared to the same period in the prior year. This decrease was driven by weather conditions during the heating months. This change was a result of a warmer April 2023 compared to 2024 which impacted residential sales.

Previous wording

Rate changes. In December 2023, the PSCW authorized MGE to increase 2024 rates for retail electric customers by approximately 1.54%. Rates charged to retail customers during the three months ended March 31, 2024, were $2.0 million higher than those charged during the same period in the prior year. See Footnote 9 of the Notes to Consolidated Financial Statements in this Report for further information on the rate increase. Any increase in rates associated with fuel or purchase power costs are generally offset in fuel and purchased power costs and do not have a significant impact on net income.

Current wording

Rate changes. In December 2023, the PSCW authorized MGE to increase 2024 rates for retail electric customers by approximately 1.54%. Rates charged to retail customers during the three months ended June 30, 2024, were $1.2 million higher than those charged during the same period in the prior year. See Footnote 9 of the Notes to Consolidated Financial Statements in this Report for further information on the rate increase. Any increase in rates associated with fuel or purchase power costs are generally offset in fuel and purchased power costs and do not have a significant impact on net income.

Previous wording

Cost of gas sold decreased $26.0 million during the three months ended March 31, 2024, compared to the same period in the prior year. Therms delivered decreased approximately 7% and cost per therm decreased approximately 34%. MGE recovers the cost of natural gas in its gas segment through the PGA as described under gas deliveries and revenues above.

Current wording

Cost of gas sold decreased $1.0 million during the three months ended June 30, 2024, compared to the same period in the prior year. Therms delivered decreased approximately 9% and average cost per therm decreased approximately 5%. MGE recovers the cost of natural gas in its gas segment through the PGA as described under gas deliveries and revenue above.

Previous wording

During the three months ended March 31, 2024, operations and maintenance expenses increased $4.0 million, compared to the same period in the prior year. The following contributed to the net change:

Current wording

During the three months ended June 30, 2024, operations and maintenance expenses increased $4.7 million, compared to the same period in the prior year. The following contributed to the net change:

Previous wording

Increase transmission costs are primarily higher as a result of an increase in transmission rate and collection of deferred costs from prior years. Transmission costs represent ATC and MISO network transmission expenses authorized to collect in rates. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual costs included in rates and to be recovered or refunded in a future rate proceeding. Transmission cost is generally offset by electric revenue and does not have a significant impact on net income.

Current wording

Increased transmission costs are primarily a result of an increase in transmission rate and collection of deferred costs from prior years. Transmission costs represent ATC and MISO network transmission expenses authorized to collect in rates. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual costs included in rates and to be recovered or refunded in a future rate proceeding. Transmission cost is generally offset by electric revenue and does not have a significant impact on net income.

Previous wording

Riverside in March 2023 and Badger Hollow II was placed in service in December 2023. The timing of the in-service dates contributed to the increase in electric depreciation expense.

Current wording

Electric depreciation expense increased $1.5 million and gas depreciation expense increased $0.3 million during the three months ended June 30, 2024, compared to the same period in the prior year. Badger Hollow II was placed in service in December 2023. The timing of the in-service dates contributed to the increase in electric depreciation expense.

Previous wording

Electric other income decreased $0.7 million and gas other income decreased $1.1 million during the three months ended March 31, 2024, compared to the same period in the prior year, primarily related to pension and other postretirement other than service costs.

Current wording

Electric other income decreased $0.6 million and gas other income decreased $1.6 million during the three months ended June 30, 2024, compared to the same period in the prior year, primarily related to pension and other postretirement excluding service costs.

Previous wording

The nonregulated energy operations are conducted through MGE Energy's subsidiaries: MGE Power Elm Road (the Elm Road Units) and MGE Power West Campus (WCCF), which have been formed to own and lease electric generating capacity to assist MGE. During the three months ended March 31, 2024 and 2023, net income at the nonregulated energy operations segment was $5.8 million and $5.6 million, respectively.

Current wording

The nonregulated energy operations are conducted through MGE Energy's subsidiaries: MGE Power Elm Road (the Elm Road Units) and MGE Power West Campus (WCCF), which have been formed to own and lease electric generating capacity to assist MGE. During the three months ended June 30, 2024 and 2023, net income at the nonregulated energy operations segment was $6.0 million and $5.5 million, respectively.

Previous wording

The transmission investment segment holds our interest in ATC and ATC Holdco, and its income reflects our equity in the earnings of those investments. ATC Holdco was formed in December 2016 to pursue transmission development opportunities that typically have long development and investment lead times before becoming operational. During the three months ended March 31, 2024 and 2023, other income at the transmission investment segment primarily reflects ATC's operations and was $2.7 million and $2.6 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements in this Report for summarized financial information regarding ATC and "Other Matters" below for additional information concerning ATC.

Current wording

The transmission investment segment holds our interest in ATC and ATC Holdco, and its income reflects our equity in the earnings of those investments. ATC Holdco was formed in December 2016 to pursue transmission development opportunities that typically have long development and investment lead times before becoming operational. During the three months ended June 30, 2024 and 2023, other income at the transmission investment segment primarily reflects ATC's operations and was $2.8 million and $2.6 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements in this Report for summarized financial information regarding ATC and "Other Matters" below for additional information concerning ATC.

Previous wording

Sales to the market. Sales to the market typically occur when MGE has more generation and purchases in the MISO market than are needed for its customer demand. The excess electricity is then sold to other utilities or power marketers in the MISO market. During the three months ended March 31, 2024, market volumes increased compared to the same period in the prior year, reflecting an increase in sales. Additionally, the cost of capacity sold decreased offsetting the revenue generated from increased sales to the market from excess generation and purchases. The revenue generated from these sales is included in fuel rules costs. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements.

Current wording

Sales to the market. Sales to the market typically occur when MGE has more generation and purchases in the MISO market than are needed for its customer demand. The excess electricity is then sold to other utilities or power marketers in the MISO market. During the six months ended June 30, 2024, market volumes increased compared to the same period in the prior year, reflecting an increase in sales. However, the cost of capacity sold decreased offsetting the revenue generated from increased sales to the market from excess generation and purchases. The revenue generated from these sales is included in fuel rules costs. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements.

Previous wording

Customer fixed and demand charges. During the three months ended March 31, 2024, fixed and demand charges increased $1.0 million primarily attributable to the increase in demand charges for commercial customers.

Current wording

Customer fixed and demand charges. During the six months ended June 30, 2024, fixed and demand charges increased $1.7 million primarily attributable to the increase in demand charges for commercial customers.

Previous wording

The $1.1 million decrease in fuel for electric generation was due to an approximately 29% decrease in the average cost partially offset by an approximately 29% increase in internal generation. Columbia generation was higher during the three months ended March 31, 2024, compared to the same period in the prior year as a result of market prices.

Current wording

The $3.5 million decrease in fuel for electric generation was due to an approximately 21% decrease in the average cost partially offset by an approximately 11% increase in internal generation. Renewable generation increased approximately 29% driven by new generation sources including Badger Hollow II. Columbia generation was higher during the six months ended June 30, 2024, compared to the same period in the prior year as a result of market prices.

Previous wording

Excluding deferred fuel costs, purchase power decreased $7.2 million. The decrease in purchased power was due to an approximately 45% decrease in market purchases as a result of lower customer sales and increased internal generation. An approximately 7% decrease in average cost also contributed to the decrease in purchase power costs. Deferred fuel cost recovered during the three months ended March 31, 2024, is $2.1 million compared to $0.8 million in the same period of the prior year.

Current wording

Excluding deferred fuel costs, purchased power decreased $5.4 million. The decrease in purchased power was due to an approximately 30% decrease in market purchases as a result of lower customer sales and increased internal generation. This decrease was partially offset by an approximately 3% increase in average cost. Deferred fuel cost recovered during the six months ended June 30, 2024, was $4.1 million compared to $1.6 million in the same period of the prior year.

Previous wording

MGE recovers the cost of natural gas in its gas segment through the purchased gas adjustment clause (PGA). Under the PGA, MGE is able to pass through to its gas customers the cost of gas. Changes in PGA recoveries affect revenues but do not change net income in view of the pass-through treatment of the costs. Payments for natural gas decreased driving lower rates during the three months ended March 31, 2024.

Current wording

MGE recovers the cost of natural gas in its gas segment through the purchased gas adjustment clause (PGA). Under the PGA, MGE is able to pass through to its gas customers the cost of gas. Changes in PGA recoveries affect revenues but do not change net income in view of the pass-through treatment of the costs. Payments for natural gas decreased driving lower rates during the six months ended June 30, 2024.

Previous wording

The average retail rate per therm excluding customer fixed charges for the three months ended March 31, 2024, decreased approximately 19% compared to the same period in the prior year, reflecting a decrease in natural gas commodity costs (recovered through the PGA).

Current wording

The average retail rate per therm excluding customer fixed charges for the six months ended June 30, 2024, decreased approximately 14% compared to the same period in the prior year, reflecting a decrease in natural gas commodity costs (recovered through the PGA).

Previous wording

Volume. For the three months ended March 31, 2024, retail gas deliveries decreased approximately 7% compared to the same period in the prior year primarily attributable to warmer than normal weather in the first quarter of 2024.

Current wording

Volume. For the six months ended June 30, 2024, retail gas deliveries decreased approximately 8% compared to the same period in the prior year primarily attributable to unfavorable weather conditions in the first half of 2024.

Previous wording

Electric depreciation expense increased $1.7 million and gas depreciation expense increased $0.3 million during the three months ended March 31, 2024, compared to the same period in the prior year. MGE purchased West

Current wording

Electric depreciation expense increased $3.2 million and gas depreciation expense increased $0.6 million during the six months ended June 30, 2024, compared to the same period in the prior year. MGE purchased West Riverside in March 2023 and Badger Hollow II was placed in service in December 2023. The timing of the in-service dates contributed to the increase in electric depreciation expense.

Previous wording

There were no material changes, other than from the normal course of business, to MGE Energy's and MGE's contractual obligations (representing cash obligations that are considered to be firm commitments) and commercial commitments (representing commitments triggered by future events) during the three months ended March 31, 2024. Further discussion of the contractual obligations and commercial commitments is included in Footnote 16 of the Notes to Consolidated Financial Statements and "Contractual Obligations and Commercial Commitments for MGE Energy and MGE" under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Annual Report on Form 10-K.

Current wording

There were no material changes, other than from the normal course of business, to MGE Energy's and MGE's contractual obligations (representing cash obligations that are considered to be firm commitments) and commercial commitments (representing commitments triggered by future events) during the six months ended June 30, 2024, except as noted below. Further discussion of the contractual obligations and commercial commitments is included in Footnote 16 of the Notes to Consolidated Financial Statements and "Contractual Obligations and Commercial Commitments for MGE Energy and MGE" under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Annual Report on Form 10-K.

Previous wording

MGE Energy and MGE expect to have adequate liquidity to support future operations and capital expenditures over the next twelve months. Available resources include cash and cash equivalents, operating cash flows, liquid assets, borrowing working capacity under revolving credit facilities, and access to equity and debt capital markets. MGE Energy expects to generate funds from operations and both long-term and short-term debt financing. See "Credit Facilities" under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources in the 2023 Annual Report on Form 10-K for information regarding MGE Energy's and MGE's credit facilities.

Current wording

MGE Energy and MGE expect to have adequate liquidity to support future operations and capital expenditures over the next twelve months. Available resources include cash and cash equivalents, operating cash flows, liquid assets, borrowing working capacity under revolving credit facilities, and access to equity and debt capital markets. MGE Energy expects to begin issuing new shares of common stock to participants in our Direct Stock Purchase and Dividend Reinvestment Plan starting in the second half of 2024. MGE Energy also expects to generate funds from operations and both long-term and short-term debt financing. See "Credit Facilities" under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources in the 2023 Annual Report on Form 10-K for information regarding MGE Energy's and MGE's credit facilities.

Previous wording

The following summarizes cash flows for MGE Energy and MGE during the three months ended March 31, 2024 and 2023:

Current wording

The following summarizes cash flows for MGE Energy and MGE during the six months ended June 30, 2024 and 2023:

Previous wording

The principal increases (decreases) in cash flows from operating activities during the three months ended March 31, 2024, compared to the same period in 2023, were as follows:

Current wording

The principal increases (decreases) in cash flows from operating activities during the six months ended June 30, 2024, compared to the same period in 2023, were as follows:

Previous wording

MGE Energy's cash used for investing activities decreased $3.1 million during the three months ended March 31, 2024, when compared to the same period in the prior year.

Current wording

MGE Energy's cash used for investing activities increased $1.8 million during the six months ended June 30, 2024, when compared to the same period in the prior year.

Previous wording

Capital expenditures during the three months ended March 31, 2024, were $44.8 million. This amount represents a decrease of $2.8 million from the expenditures made in the same period in the prior year. This decrease primarily reflects lower expenditures from the purchase of West Riverside in 2023 offset by an increase of renewable generation facilities and other electric utility expenditures.

Current wording

Capital expenditures during the six months ended June 30, 2024, were $111.6 million. This amount represents an increase of $3.9 million from the expenditures made in the same period in the prior year. This increase primarily reflects an increase in gas utility expenditures.