MGE ENERGY INC
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
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4. Taxes
nergy and MGE.
Effective Tax Rate.
The consolidated income tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes, as follows:
| MGE Energy · MGE | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2025 · 2024 · 2025 · 2024 | ||||||||
| Statutory federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % |
| State income taxes, net of federal benefit | 6.2 | 6.2 | 6.2 | 6.2 | ||||
| Amortized investment tax credits | (1.4) | (2.2) | (1.5) | (2.4) | ||||
| Credit for electricity from renewable energy | (9.6) | (10.2) | (10.5) | (11.2) | ||||
| AFUDC equity, net | (0.6) | (0.6) | (0.7) | (0.7) | ||||
| Amortization of utility excess deferred tax - tax reform(a) | (2.6) | (6.2) | (2.8) | (6.7) | ||||
| Other, net, individually insignificant | 0.1 | (0.3) | 0.1 | (0.4) | ||||
| Effective income tax rate | 13.1 | % | 7.7 | % | 11.8 | % | 5.8 | % |
(a)
Included are impacts of the Tax Cut and Jobs Act of 2017 for the regulated utility for excess deferred taxes recognized using a normalization method of accounting in recognition of IRS rules that restrict the rate at which the excess deferred taxes may be returned to utility customers. For both thethree months ended March 31, 2025 and 2024, MGE recognized $0.9 million. For the three months ended March 31, 2024, MGE recognized $1.0 million of deferred taxes not restricted by IRS normalization rules.
The Inflation Reduction Act of 2022 allows the transfer of certain tax credits to third parties in exchange for cash. In 2024, MGE sold transfer eligible tax credits generated in 2023 and 2024. MGE elects to account for the transferred tax credits under the scope of ASC 740. The sale of tax credits is presented in the operating activities section of the consolidated statements of cash flows consistent with the presentation of cash taxes paid. MGE includes any expected proceeds from the transfer of tax credits in the evaluation of realizability of deferred tax assets related to tax credits and records a valuation allowance for the difference between the tax value of the credits and the expected proceeds. The PSCW approved the deferral by MGE of any differential between tax credit transfer proceeds and the tax value of credits reflected in rates to its next rate case filing.
Pensi
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