MADISON GAS & ELECTRIC CO
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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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.
Jun 30, 2026 · Filed Aug 5, 2026
MGEE$80.26+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001193125-26-205678
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsOther MattersCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001193125-26-333969
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsOther MattersThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 185 current paragraphs.
99 unchanged; 40 reworded; 26 added; 3 removed; 1 previous and 20 current paragraphs rearranged.
Tables are not compared: 15 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
During the six months ended June 30, 2026, MGE Energy's earnings were $81.8 million, or $2.21 per diluted share, compared to $68.1 million, or $1.86 per diluted share, during the same period in the prior year. MGE's earnings during the six months ended June 30, 2026, were $62.6 million compared to $53.0 million during the same period in the prior year.
Current report
All Other
Current report
Investment gains from venture capital funds resulted in higher earnings for the three and six months ended June 30, 2026, compared to the same period in the prior year. These venture capital investments support early-stage companies working to advance smart technologies, the customer experience, distributed energy resources, electrification, cybersecurity and other priorities for utility companies, such as greater sustainability.
Current report
The following discussion is based on the business segments as discussed in Footnote 14 of the Notes to Consolidated Financial Statements in this Report.
Current report
Electric revenue increased $2.1 million during the three months ended June 30, 2026, compared to the same period in the prior year, due to the following:
Current report
The $3.4 million decrease in fuel for electric generation was due to an approximately 23% decrease in internal generation driven by a decrease in sales, partially offset by a 2% increase in the average cost, each compared to the same period in the prior year.
Current report
Gas revenue decreased $0.3 million during the three months ended June 30, 2026, compared to the same period in the prior year, due to the following:
Current report
Electric production expenses increased primarily due to higher operating and maintenance costs at the Columbia generating station, including boiler plant maintenance and other generation-related expenses, along with increased costs associated with renewable generating facilities.
Current report
Results of Operations
Current report
Six Months Ended June 30, 2026 and 2025
Current report
Electric sales and revenues
Current report
Electric revenue increased $8.0 million during the six months ended June 30, 2026, compared to the same period in the prior year, due to the following:
Current report
Customer fixed and demand charges. During the six months ended June 30, 2026, fixed and demand charges increased $1.1 million, primarily attributable to the increase in demand charges for commercial customers.
Current report
Electric fuel and purchased power
Current report
Gas deliveries and revenues
Current report
Gas revenue increased $17.5 million during the six months ended June 30, 2026, compared to the same period in the prior year, due to the following:
Current report
Cost of gas sold
Current report
Consolidated operations and maintenance expenses
Current report
Electric production expenses increased primarily due to higher operating and maintenance costs at the Columbia generating station, including boiler plant maintenance and other generation-related expenses, along with increased costs associated with renewable generating facilities.
Current report
Consolidated depreciation expense
Current report
Electric depreciation expense decreased $0.4 million and gas depreciation expense increased $1.3 million during the six months ended June 30, 2026, compared to the same period in the prior year. In December 2025, the PSCW approved new depreciation rates, which were implemented and became effective as of January 1, 2026. These new rates were the primary driver for the change in depreciation expense.
Current report
Electric and gas other income
Current report
Transmission Investment Operations - MGE Energy
Current report
All Other Operations - MGE Energy
Current report
Other income
Current report
The UFLPA Entity List continues to expand, including entities participating in solar and solar supply chain activities. MGE continues to monitor developments related to the UFLPA, evaluate supplier compliance, and assess potential impacts to current and future projects.
Removed paragraphs (3)
Previous report
Electric revenue increased $5.9 million during the three months ended March 31, 2026, compared to the same period in the prior year, due to the following:
Previous report
Gas revenue increased $17.8 million during the three months ended March 31, 2026, compared to the same period in the prior year, due to the following:
Previous report
In January 2025, several more Chinese companies, including five solar supply chain providers, were banned under the UFLPA. MGE continues to ensure its compliance with the UFLPA.
Reworded paragraphs (40)
Previous wording
Nonregulated energy operations, conducted through MGE Power and its subsidiaries, which owns interests in electric generating capacity that is leased to MGE,
Current wording
Nonregulated energy operations, conducted through MGE Power and its subsidiaries, which own interests in electric generating capacity that is leased to MGE,
Previous wording
During the three months ended March 31, 2026, MGE Energy's earnings were $48.5 million, or $1.32 per share, compared to $41.6 million, or $1.14 per share, during the same period in the prior year. MGE's earnings during the three months ended March 31, 2026, were $40.1 million compared to $34.2 million during the same period in the prior year.
Current wording
During the three months ended June 30, 2026, MGE Energy's earnings were $33.4 million, or $0.89 per diluted share, compared to $26.5 million, or $0.72 per diluted share, during the same period in the prior year. MGE's earnings during the three months ended June 30, 2026, were $22.5 million compared to $18.8 million during the same period in the prior year.
Previous wording
Our net income during the three months ended March 31, 2026, 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, 2026, compared to the same periods in the prior year, primarily reflects the effects of the following factors:
Previous wording
Earnings for the three months ended March 31, 2026, increased year-over-year, primarily driven by a rise in the rate base due to increased electric investments approved in the 2026/2027 rate case.
Current wording
Earnings for the three and six months ended June 30, 2026, increased year-over-year, primarily driven by a rise in the rate base due to increased electric investments approved in the 2026/2027 rate case.
Previous wording
The following events affected the first three months of 2026:
Current wording
The following events affected the first six months of 2026:
Previous wording
2026/2027 Rate Settlement Agreement: In December 2025, the PSCW approved a unanimous settlement agreement that MGE reached with intervening parties in its 2026/2027 rate case. As part of the settlement agreement, the PSCW approved a 0.15% increase for electric rates and a 2.77% increase to gas rates for 2026 and a 3.63% increase for electric rates and a 2.04% increase to gas rates for 2027. See "Other Matters" below for additional information on the 2026/2027 rate case settlement.
Current wording
2026/2027 Rate Settlement Agreement: In December 2025, the PSCW approved a unanimous settlement agreement that MGE reached with intervening parties in its 2026/2027 rate case. As part of the settlement agreement, the PSCW approved a 0.15% increase for electric rates and a 2.77% increase to gas rates for 2026 and a 3.63% increase for electric rates and a 2.04% increase to gas rates for 2027. MGE filed a 2027 Fuel Cost Plan with the PSCW in June 2026. MGE expects a final decision from the PSCW on the Fuel Cost Plan by the end of 2026. See "Other Matters" below for additional information on the 2026/2027 rate case settlement.
Previous wording
2026 Deferred Fuel Savings: MGE had deferred fuel savings through the three months ended March 31, 2026. As of March 31, 2026, MGE deferred $4.4 million of 2026 fuel savings. These costs will be subject to the PSCW's annual review of 2026 fuel costs, expected to be completed during 2027. See Footnote 9 of the Notes to the Consolidated Financial Statements in this Report for further information regarding fuel cost proceedings.
Current wording
2026 Deferred Fuel Savings: MGE had deferred fuel savings through the six months ended June 30, 2026. As of June 30, 2026, MGE deferred $6.7 million of 2026 fuel savings. These costs will be subject to the PSCW's annual review of 2026 fuel costs, expected to be completed during 2027. See Footnote 9 of the Notes to the Consolidated Financial Statements in this Report for further information regarding fuel cost proceedings.
Previous wording
MGE received specific approval to recover 100% AFUDC. After tax, MGE recognized $3.2 million, $2.3 million, $1.0 million, $0.7 million of AFUDC equity earnings through March 31, 2026, on Koshkonong, High Noon, Sunnyside, and other projects, 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 $4.4 million, $3.3 million, $1.9 million, and $2.0 million of AFUDC equity earnings through June 30, 2026, on Koshkonong, High Noon, Sunnyside, and other projects, respectively, during construction. AFUDC has been excluded from the costs incurred in the table above.
Previous wording
In February 2026, MGE executed an asset purchase agreement to acquire 33.4% ownership interest in the RockGen Energy Center, an existing natural gas-fired generating plant near Cambridge, Wisconsin. MGE's estimated cost is approximately $203 million. If approved, the transaction is expected to close in late 2027.
Current wording
In February 2026, MGE executed an asset purchase agreement to acquire a 33.4% ownership interest in the RockGen Energy Center, an existing natural gas-fired generating plant near Cambridge, Wisconsin. MGE's estimated cost is approximately $203 million. If approved, the transaction is expected to close in late 2027.
Previous wording
2025 Annual Fuel Proceeding: MGE had fuel savings in 2025. As of December 31, 2025, MGE deferred $7.1 million of 2025 fuel savings. These costs will be subject to the PSCW's annual review of 2025 fuel costs, expected to be completed during 2026. MGE has proposed to return these savings in October 2026.
Current wording
2025 Annual Fuel Proceeding: MGE had fuel savings in 2025. As of December 31, 2025, MGE deferred $7.1 million of 2025 fuel savings. The PSCW has completed the annual review of 2025 fuel costs and gave approval for MGE to return these savings in October 2026. 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
Growing renewable generation and storage. MGE is seeking to acquire, or has acquired, joint interests in several renewable generation and storage projects. The forecasted capital expenditures include approximately 252 MW of solar, 18 MW of wind, and 125 MW of storage, which include projects approved or pending PSCW approval. See the 2026-2030 capital expenditures forecast disclosed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K.
Current wording
Growing renewable generation and storage. MGE is seeking to acquire, or has acquired, joint interests in several renewable generation and storage projects. The forecasted capital expenditures include approximately 252 MW of solar, 18 MW of wind, and 104 MW of storage, which include projects approved or pending PSCW approval. See the 2026-2030 capital expenditures forecast disclosed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K.
Previous wording
Financing and Equity Issuance Plans: As of March 31, 2026, MGE has $140 million of remaining regulatory authority from the PSCW to issue long-term debt to finance authorized utility capital expenditures. MGE expects to use a portion of the remaining authority during 2026 to finance authorized utility capital expenditures. MGE Energy has equity programs available to issue new shares of common stock, including its at-the-market offering program and its Direct Stock Purchase and Dividend Reinvestment Plan. See Footnote 6 of the Notes to Consolidated Financial Statements in this Report for additional information on these programs.
Current wording
Financing and Equity Issuance Plans: As of June 30, 2026, MGE has $140 million of remaining regulatory authority from the PSCW to issue long-term debt to finance authorized utility capital expenditures. MGE expects to use a portion of the remaining authority during 2026 to finance authorized utility capital expenditures. MGE Energy has equity programs available to issue new shares of common stock, including its at-the-market offering program, forward equity sale agreements, and its Direct Stock Purchase and Dividend Reinvestment Plan. See Footnote 6 of the Notes to Consolidated Financial Statements in this Report for additional information on these programs.
Previous wording
Rate changes. In December 2025, the PSCW authorized MGE to increase 2026 rates for retail electric customers by approximately 0.15%. Rates charged to retail customers during the three months ended March 31, 2026, 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 by fuel and purchased power costs and do not have a significant impact on net income.
Current wording
Rate changes. In December 2025, the PSCW authorized MGE to increase 2026 rates for retail electric customers by approximately 0.15%. Rates charged to retail customers during the three months ended June 30, 2026, 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 increases in rates associated with fuel or purchase power costs are generally offset by fuel and purchased power costs and do not have a significant impact on net income.
Previous wording
During the three months ended March 31, 2026, operations and maintenance expenses increased $5.0 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, 2026, operations and maintenance expenses increased $7.5 million, compared to the same period in the prior year. The following contributed to the net change:
Previous wording
Increased administrative and general costs are primarily related to increased pension and other postretirement costs. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost are generally offset by electric revenue and does not have a significant impact on net income.
Current wording
Increased administrative and general costs are primarily related to increased pension and other postretirement costs. The PSCW has authorized MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost are generally offset by electric revenue and does not have a significant impact on net income.
Previous wording
Increased transmission costs are primarily a result of an increase in transmission rate. 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. Transmission costs represent ATC and MISO network transmission expenses authorized to collect in rates. The PSCW has authorized 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
Electric depreciation expense decreased $0.3 million and gas depreciation expense increased $0.6 million during the three months ended March 31, 2026, compared to the same period in the prior year.
Current wording
Electric depreciation expense decreased $0.1 million and gas depreciation expense increased $0.7 million during the three months ended June 30, 2026, compared to the same period in the prior year. In December 2025, the PSCW approved new depreciation rates, which were implemented and became effective as of January 1, 2026. These new rates were the primary driver for the change in depreciation expense.
Previous wording
Electric other income increased $6.0 million and gas other income increased $1.0 million during the three months ended March 31, 2026, compared to the same period in the prior year, driven by a $4.2 million positive impact from non-service costs components of pension and other postretirement costs. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost is generally offset by electric and gas revenue and does not have a significant impact on net income. Higher AFUDC-Equity due to continued capital investment further contributed to an increase in electric other income.
Current wording
Electric other income increased $4.9 million and gas other income increased $2.0 million during the three months ended June 30, 2026, compared to the same period in the prior year, driven by a $2.3 million positive impact from non-service costs components of pension and other postretirement costs. The PSCW has authorized MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost is generally offset by electric and gas revenue and does not have a significant impact on net income. Higher AFUDC-Equity due to continued capital investment further contributed to an increase in electric other income.
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, 2026 and 2025, net income at the nonregulated energy operations segment was $6.3 million and $6.0 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, 2026 and 2025, net income at the nonregulated energy operations segment was $6.5 million and $6.2 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, 2026 and 2025, other income at the transmission investment segment primarily reflects ATC's operations and was $3.5 million and $3.2 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements in this Report for summarized financial information regarding 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, 2026 and 2025, other income at the transmission investment segment primarily reflects ATC's operations and was $3.8 million and $3.1 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements in this Report for summarized financial information regarding ATC.
Previous wording
The increase of $1.0 million in other income from all other operations during the three months ended March 31, 2026, primarily reflects results from investment gains recognized in the current year, from venture capital funds. These venture capital investments support early-stage companies working to advance smart technologies, the customer experience, distributed energy resources, electrification, cybersecurity and other priorities for utility companies, such as greater sustainability.
Current wording
The increase of $2.9 million in other income from all other operations during the three months ended June 30, 2026, primarily reflects results from investment gains recognized in the current year, from venture capital funds. These venture capital investments support early-stage companies working to advance smart technologies, the customer experience, distributed energy resources, electrification, cybersecurity and other priorities for utility companies, such as greater sustainability.
Previous wording
Sales to the market. Sales to the market typically occur when MGE has more generation 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, 2026, sales were made at higher market prices and partially offset by decreased market volume compared to the same period in the prior year. The revenue generated from these sales is largely offset by fuel rules costs, and do not have a significant impact on net income. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements in this Report.
Current wording
Sales to the market. Sales to the market typically occur when MGE has more generation in the MISO market than is 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, 2026, sales were made at higher market prices and partially offset by decreased market volume compared to the same period in the prior year. The revenue generated from these sales is largely offset by fuel rules costs, and does not have a significant impact on net income. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements in this Report.
Previous wording
The $2.7 million increase in fuel for electric generation in the first three months of 2026 was due to an approximately 18% increase in the average cost, partially offset by a 2% decrease in internal generation, each compared to the same period in the prior year.
Current wording
The $0.7 million decrease in fuel for electric generation in the first six months of 2026 was due to an approximately 5.4% decrease in internal generation, partially offset by a 3.8% increase in the average cost, each compared to the same period in the prior year.
Previous wording
Excluding deferred fuel costs, purchased power decreased $1.9 million in the first three months of 2026, compared to the same period in the prior year. The decrease in purchased power was due to an approximately 53% decrease in average cost. This decrease was partially offset by an approximately 21% increase in market purchases as a result of decreased internal generation. There were no deferred fuel costs recovered during the three months ended March 31, 2026 and 2025.
Current wording
Excluding deferred fuel costs, purchased power decreased $1.7 million in the first six months of 2026, compared to the same period in the prior year. The decrease in purchased power was due to an approximately 42% decrease in average cost. This decrease was partially offset by an approximately 43% increase in market purchases as a result of decreased internal generation. There were no deferred fuel costs recovered during the six months ended June 30, 2026 and 2025.
Previous wording
MGE recovers the cost of natural gas in its gas segment through the 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 increased, driving higher rates during the three months ended March 31, 2026.
Current wording
MGE recovers the cost of natural gas in its gas segment through the 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 increased, driving higher rates during the six months ended June 30, 2026.
Previous wording
The average retail rate per therm excluding customer fixed charges for the three months ended March 31, 2026, increased approximately 23% compared to the same period in the prior year, reflecting an increase 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, 2026, increased approximately 18% compared to the same period in the prior year, reflecting an increase in natural gas commodity costs (recovered through the PGA).
Previous wording
Volume. For the three months ended March 31, 2026, retail gas deliveries decreased approximately 3% compared to the same period in the prior year. The decrease was primarily attributable to lower residential use per customer. Unfavorable weather conditions during the first three months of 2026 further contributed to the reduction in volumes.
Current wording
Volume. For the six months ended June 30, 2026, retail gas deliveries decreased approximately 3% compared to the same period in the prior year. The decrease was primarily attributable to lower residential use per customer. Unfavorable weather conditions during the first six months of 2026 further contributed to the reduction in volumes.
Previous wording
Cost of gas sold increased $16.9 million during the three months ended March 31, 2026, compared to the same period in the prior year. Cost per therm increased approximately 36%, partially offset by a decrease in therms delivered of approximately 3%. 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 increased $14.8 million during the six months ended June 30, 2026, compared to the same period in the prior year. Cost per therm increased approximately 27%, partially offset by a decrease in therms delivered of approximately 4%. MGE recovers the cost of natural gas in its gas segment through the PGA as described under gas deliveries and revenues above.
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, 2026, except as noted below. Further discussion of the contractual obligations and commercial commitments is included in Footnote 16 of the Notes to Consolidated Financial
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, 2026, 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 2025 Annual Report on Form 10-K.
Previous wording
See Footnote 8.c. of Notes to Consolidated Financial Statements in this Report for a description of commitments as of March 31, 2026, that MGE Energy and MGE have entered with respect to various commodity supply and transportation contracts to meet their obligations to deliver electricity and natural gas to customers.
Current wording
See Footnote 8.c. of Notes to Consolidated Financial Statements in this Report for a description of commitments as of June 30, 2026, that MGE Energy and MGE have entered into with respect to various commodity supply and transportation contracts to meet their obligations to deliver electricity and natural gas to customers.
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, including our at-the-market program. The amount and timing of any financings will be primarily driven by capital investments and cash requirements and will depend upon market conditions, regulatory approvals, and other factors. MGE plans to maintain a capital structure consistent with authorized levels approved by its regulator. 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 2025 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, including our at-the-market program. In May 2026, MGE Energy also completed a public offering of common stock, including forward sale agreements that will provide an additional source of liquidity and financial flexibility to support future capital investment needs upon settlement of the shares of common stock sold under the agreements, as described in Footnote 6.c. of the Notes to Consolidated Financial Statements in this Report. The amount and timing of any financings will be primarily driven by capital investments and cash requirements and will depend upon market conditions, regulatory approvals, and other factors. MGE plans to maintain a capital structure consistent with authorized levels approved by its regulator. 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 2025 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, 2026 and 2025:
Current wording
The following summarizes cash flows for MGE Energy and MGE during the six months ended June 30, 2026 and 2025:
Previous wording
The principal increases (decreases) in cash flows from operating activities during the three months ended March 31, 2026, compared to the same period in 2025, were as follows:
Current wording
The principal increases (decreases) in cash flows from operating activities during the six months ended June 30, 2026, compared to the same period in 2025, were as follows:
Previous wording
The principal increases (decreases) in cash flows from investing activities during the three months ended March 31, 2026, compared to the same period in 2025, were as follows:
Current wording
The principal increases (decreases) in cash flows from investing activities during the six months ended June 30, 2026, compared to the same period in 2025, were as follows:
Previous wording
The principal increases (decreases) in cash flows from financing activities during the three months ended March 31, 2026, compared to the same period in 2025, were as follows:
Current wording
The principal increases (decreases) in cash flows from financing activities during the six months ended June 30, 2026, compared to the same period in 2025, were as follows:
Previous wording
In December 2025, the PSCW approved a settlement agreement for MGE's 2026/2027 rate case. As part of that settlement agreement, the PSCW approved a 0.15% increase for electric rates and a 2.77% increase to gas rates for 2026 and a 3.63% increase for electric rates and a 2.04% increase to gas rates for 2027.
Current wording
In December 2025, the PSCW approved a settlement agreement for MGE's 2026/2027 rate case. As part of that settlement agreement, the PSCW approved a 0.15% increase for electric rates and a 2.77% increase to gas rates for 2026 and a 3.63% increase for electric rates and a 2.04% increase to gas rates for 2027. MGE filed a 2027 Fuel Cost Plan with the PSCW in June 2026. MGE expects a final decision from the PSCW on the Fuel Cost Plan by the end of 2026.
Previous wording
50% of the forecasted 13-month average CWIP for the test periods earns an AFUDC return. Projects eligible to earn 100% AFUDC are excluded from this balance and discussed further in the Management Discussion and Analysis of Financial Condition and Results of Operations - Significant Events section.
Current wording
50% of the forecasted 13-month average CWIP for the test periods earns an AFUDC return. Projects eligible to earn 100% AFUDC are excluded from this balance and discussed further in the Management's Discussion and Analysis of Financial Condition and Results of Operations - Significant Events section.
Previous wording
In June 2024, following AD/CVD investigations by the DOC and the USITC determining that Chinese manufacturers were circumventing tariffs on solar panels by shipping them through Cambodia, Malaysia, Thailand, and Vietnam, the DOC began applying tariffs to the importation of solar cells from those countries. In Q2 2025, the DOC and USITC issued final determinations affirming and increasing the tariffs. Later that year, the U.S. Court of International Trade ruled that the prior two-year moratorium was unlawful, permitting retroactive collection, though the ruling has been stayed pending appeal to the Federal Circuit.
Current wording
In June 2024, following AD/CVD investigations by the DOC and the USITC determining that Chinese manufacturers were circumventing tariffs on solar panels by shipping them through Cambodia, Malaysia, Thailand, and Vietnam, the DOC began applying tariffs to the importation of solar cells from those countries. In the second quarter of 2025, the DOC and USITC issued final determinations affirming and increasing the tariffs. Later that year, the U.S. Court of International Trade ruled that the prior two-year moratorium was unlawful, permitting retroactive collection, though the ruling has been stayed pending appeal to the Federal Circuit.
Previous wording
In late 2025, the DOC initiated new AD/CVD investigations into solar imports from India, Indonesia, and Laos. A preliminary affirmative determination for the CVD investigation was announced in early 2026, which resulted in increased tariffs. Preliminary determinations in the AD investigation remain ongoing. Additionally, a new 'Section 232' national security investigation into the global polysilicon supply chain was launched in late 2025, which could result in broad, global tariffs on solar components regardless of their country of origin.
Current wording
In late 2025, the DOC initiated new AD/CVD investigations into solar imports from India, Indonesia, and Laos. In February and April 2026, the DOC issued preliminary affirmative determinations in the CVD and AD investigations, respectively, resulting in increased preliminary tariff rates. The investigations remain ongoing, and final determinations are expected later in 2026. Additionally, a new 'Section 232' national security investigation into the global polysilicon supply chain was launched in late 2025, which could result in broad, global tariffs on solar components regardless of their country of origin.
Previous wording
In July 2025, the OBBBA was signed into law, introducing significant changes to tax credits and compliance requirements. The OBBBA accelerates the termination of the Clean Electricity PTC and ITC for wind and solar projects placed in service after 2027, unless construction begins by July 4, 2026. The phase out of PTCs and ITCs does not apply to energy storage, hydroelectric facilities, nuclear, or any other zero emission technology. The OBBBA imposes restrictions on credit eligibility, disallowing credits, and foreign entity material assistance. The Treasury Department issued new beginning-of-construction guidance in August 2025. Interim guidance has also been released on domestic content requirements. MGE has evaluated the impact of the OBBBA and will continue monitoring Treasury Department updates and engaging with industry groups to ensure compliance.
Current wording
In July 2025, the OBBBA was signed into law, introducing significant changes to tax credits and compliance requirements. The OBBBA accelerates the termination of the Clean Electricity PTC and ITC for wind and solar projects placed in service after 2027. Pursuant to the OBBBA, the July 4, 2026 commencement-of-construction deadline for wind and solar projects has passed, and projects that did not begin construction by that date generally must be placed in service by December 31, 2027 to remain eligible for these credits. The phase out of PTCs and ITCs does not apply to energy storage, hydroelectric facilities, nuclear, or any other zero emission technology. The OBBBA imposes restrictions on credit eligibility, disallowing credits, and foreign entity material assistance. The Treasury Department issued new beginning-of-construction guidance in August 2025. However, a federal court vacated the guidance in June 2026, reinstating the prior physical work and 5% safe harbor framework, subject to further developments. Interim guidance has also been released on domestic content requirements. MGE has evaluated the impact of the OBBBA and will continue monitoring Treasury Department updates and engaging with industry groups to ensure compliance.
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Current report — wording carried from elsewhere
Sales to the market. Sales to the market typically occur when MGE has more generation in the MISO market than is 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 June 30, 2026, market volumes decreased compared to the same period in the prior year, reflecting a decrease in sales. This decrease was partially offset by an increase in the cost of capacity sold. The revenue generated from these sales is largely offset by fuel rules costs, and does not have a significant impact on net income. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements in this Report.
Current report — wording carried from elsewhere
Excluding deferred fuel costs, purchased power increased $0.3 million. The increase in purchased power was due to an approximately 59% increase in market purchases as a result of decreased internal generation. This increase was partially offset by an approximately 34% decrease in average cost. There were no deferred fuel costs recovered during the three months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Cost of gas sold decreased $2.0 million during the three months ended June 30, 2026, compared to the same period in the prior year. Cost per therm decreased approximately 14% and there was a decrease in therms delivered of approximately 5%. MGE recovers the cost of natural gas in its gas segment through the PGA as described under gas deliveries and revenues above.
Current report — wording carried from elsewhere
See Footnote 4 of the Notes to Consolidated Financial Statements in this Report for the effective tax rate reconciliation.
Current report — wording carried from elsewhere
Noncontrolling interest, net of tax, reflects the accounting required for MGE Energy's interest in MGE Power Elm Road (the Elm Road Units) and MGE Power West Campus (WCCF). MGE Energy owns 100% of MGE Power Elm Road and MGE Power West Campus. They are not owned by MGE. Due to the contractual agreements for these projects with MGE, the entities are considered VIEs with respect to MGE and their results are consolidated with those of MGE, the primary beneficiary of the VIEs. The following table shows MGE Energy's noncontrolling interest, net of tax, reflected on MGE's consolidated statement of income:
Current report — wording carried from elsewhere
The following table compares MGE's electric revenues and electric kWh sales by customer class for each of the periods indicated:
Current report — wording carried from elsewhere
Rate changes. In December 2025, the PSCW authorized MGE to increase 2026 rates for retail electric customers by approximately 0.15%. Rates charged to retail customers during the six months ended June 30, 2026, were $4.0 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 increases in rates associated with fuel or purchase power costs are generally offset by fuel and purchased power costs and do not have a significant impact on net income.
Current report — wording carried from elsewhere
Fuel and purchased power costs are generally offset by electric revenue and do not have a significant impact on net income. MGE expects to seek and receive recovery of fuel and purchased power costs that exceed the fuel rules bandwidth in customer rates. See Footnote 9 of the Notes to Consolidated Financial Statements in this Report for further information on the fuel rules bandwidth.
Current report — wording carried from elsewhere
The following table compares MGE's gas revenues and gas therms delivered by customer class for each of the periods indicated:
Current report — wording carried from elsewhere
Other. For the six months ended June 30, 2026, other gas revenue increased primarily due to customer growth and higher residential customer fixed rate.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, operations and maintenance expenses increased $12.5 million, compared to the same period in the prior year. The following contributed to the net change:
Current report — wording carried from elsewhere
Increased administrative and general costs are primarily related to increased pension and other postretirement costs. The PSCW has authorized MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost are generally offset by electric revenue and does not have a significant impact on net income.
Current report — wording carried from elsewhere
Increased transmission costs are primarily a result of an increase in transmission rate. Transmission costs represent ATC and MISO network transmission expenses authorized to collect in rates. The PSCW has authorized 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 report — wording carried from elsewhere
Electric other income increased $10.9 million and gas other income increased $3.0 million during the six months ended June 30, 2026, compared to the same period in the prior year, driven by a $6.5 million positive impact from non-service costs components of pension and other postretirement costs. The PSCW has authorized MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost is generally offset by electric and gas revenue and does not have a significant impact on net income. Higher AFUDC-Equity due to continued capital investment further contributed to an increase in electric other income.
Current report — wording carried from elsewhere
Nonregulated Energy Operations - MGE Energy and MGE
Current report — wording carried from elsewhere
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 six months ended June 30, 2026 and 2025, net income at the nonregulated energy operations segment was $12.8 million and $12.2 million, respectively.
Current report — wording carried from elsewhere
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 six months ended June 30, 2026 and 2025, other income at the transmission investment segment primarily reflects ATC's operations and was $7.3 million and $6.2 million, respectively. See Footnote 3 of the Notes to Consolidated Financial Statements in this Report for summarized financial information regarding ATC.
Current report — wording carried from elsewhere
The increase of $3.9 million in other income from all other operations during the six months ended June 30, 2026, primarily reflects results from investment gains recognized in the current year, from venture capital funds. These venture capital investments support early-stage companies working to advance smart technologies, the customer experience, distributed energy resources, electrification, cybersecurity and other priorities for utility companies, such as greater sustainability.
Current report — wording carried from elsewhere
Consolidated Income Taxes - MGE Energy and MGE
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Noncontrolling Interest, Net of Tax - MGE
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Previous report — wording carried elsewhere
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 2025 Annual Report on Form 10-K.