Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2026

Estimated Fair Market Value of Financial Instruments

The estimated fair market value of financial instruments are as follows:


	March 31, 2026				December 31, 2025
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt(a)	$	905,571	$	850,444	$	818,115	$	768,889

(a)

Includes long-term debt due within one year. Excludes debt issuance costs and unamortized discount of $4.8 million and $4.3 million as of March 31, 2026, and December 31, 2025, respectively.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis for both MGE and MGE Energy.


	Fair Value as of March 31, 2026
(In thousands)	Total		Level 1		Level 2		Level 3
Assets:
Derivatives, net(a)	$	1,362	$	1,007	$	—	$	355
Liabilities:
Derivatives, net(a)	$	1,287	$	1,007	$	—	$	280
Deferred compensation		7,426		—		7,426		—
Total Liabilities	$	8,713	$	1,007	$	7,426	$	280


	Fair Value as of December 31, 2025
(In thousands)	Total		Level 1		Level 2		Level 3
Assets:
Derivatives, net(a)	$	1,151	$	568	$	—	$	583
Liabilities:
Derivatives, net(a)	$	2,565	$	1,331	$	—	$	1,234
Deferred compensation		7,172		—		7,172		—
Total Liabilities	$	9,737	$	1,331	$	7,172	$	1,234

(a)

As of March 31, 2026, and December 31, 2025, collateral of less than $0.1 million and $1.8 million, respectively, was posted against and netted with derivative liability positions. The fair value of the derivatives disclosed in this table has not been adjusted for the collateral posted.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the changes in Level 3 commodity derivative assets and liabilities measured at fair value on a recurring basis.


	Three Months Ended
	March 31,
(In thousands)	2026		2025
Realized and unrealized gains (losses):
Included in regulatory liability	$	726	$	960
Included in earnings		1,382		(553)
Settlements		(1,382)		555

Gains and Losses Included in Income for Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis(b).

(b)

MGE's exchange-traded derivative contracts, over-the-counter party transactions, purchased power agreement, and FTRs are subject to regulatory deferral. These derivatives are therefore marked to fair value and are offset in the financial statements with a corresponding regulatory asset or liability.

Three Months Ended

(In thousands)

Purchased power expense