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Regulatory Assets and Liabilities | 12 Months Ended
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Dec. 31, 2013
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities - MGE Energy and MGE. The following regulatory assets and liab ilities are reflected in MGE's c onsolidated b alance s heet as of December 31:
| (In thousands) |  |  | 2013 |  |  | 2012 |
| Regulatory Assets |  |  |  |  |  |  |
| Asset retirement obligation |  | $ | 4,863 |  | $ | 4,608 |
| Debt related costs |  |  | 11,786 |  |  | 5,468 |
| Derivatives |  |  | 63,893 |  |  | 72,328 |
| Elm Road |  |  | 0 |  |  | 2,614 |
| Environmental costs |  |  | 920 |  |  | 1,154 |
| Pension and OPRB costs |  |  | 0 |  |  | 1,234 |
| Tax recovery related to AFUDC equity |  |  | 6,956 |  |  | 5,241 |
| Unfunded pension and other postretirement liability |  |  | 24,591 |  |  | 134,839 |
| Other |  |  | 534 |  |  | 1,694 |
| Total regulatory assets |  | $ | 113,543 |  | $ | 229,180 |
| Regulatory Liabilities |  |  |  |  |  |  |
| Conservation costs |  | $ | 455 |  | $ | 455 |
| Deferred fuel savings |  |  | 13,386 |  |  | 6,163 |
| Elm Road |  |  | 607 |  |  | 0 |
| Income taxes |  |  | 2,082 |  |  | 2,346 |
| Non-ARO removal cost |  |  | 15,182 |  |  | 13,957 |
| Renewable energy credits |  |  | 574 |  |  | 480 |
| Other |  |  | 1,044 |  |  | 1,137 |
| Total regulatory liabilities |  | $ | 33,330 |  | $ | 24,538 |
MGE expects to recover its regulatory assets and return its regulatory liabilities through rates charged to customers based on PSCW decisions made during the ratemaking process or based on PSCW long-standing policies and guidelines. The adjustments to rates for these regulatory assets and liabilities will occur over the periods either specified by the PSCW or over the corresponding period related to the asset or liability. We believe it is probable that MGE will continue to recover from customers the regulatory assets described above based on prior and current ratemaking treatment for such costs. All regulatory assets for which a cash outflow had been made are earning a return, except for amounts expended for environmental costs. Asset Retirement Obligation See Footnote 19 for further discussion. Debt Related Costs This balance includes debt issuance costs of extinguished debt and other debt related expenses. The PSCW has allowed rate recovery on unamortized issuance costs for extinguished debt facilities. When the facility replacing the old facility is deemed by the PSCW to be more favorable for the ratepayers, the PSCW will allow rate recovery of any unamortized issuance costs related to the old facility. These amounts are recovered over the term of the new facility. In 2013, MGE issued long-term debt and used the net proceeds to redeem Medium-Term Notes and partially redeem Senior Notes. Included in the redemption prices were make-whole premiums totalling $6.8 million. The make-whole premiums are treated as a regulatory asset and will be amortized over the life of the long-term debt issued. Derivatives MGE has physical and financial contracts that are defined as derivatives. The amounts recorded for the net mark-to-market value of the commodity based contracts is offset with a corresponding regulatory asset or liability because these transactions are part of the PGA or fuel rules clause authorized by the PSCW. A significant portion of the r ecorded amount is related to a ten-year purchased power agreement that provides MGE with firm capacity and energy during a base term from June 1, 2012 through May 31, 2022. This agreement is accounted for as a derivative contract. Elm Road Costs associated with Elm Road are estimated in MGE's rates utilizing escrow accounting and include costs for lease payments, management fees, community impact mitigation, and operating costs. Also, MGE has deferred payments made to MGE Power Elm Road for carrying costs during construction of the facility. MGE is collecting carrying costs in rates over a six year period that began in 2010. All other costs are collected in rates over a one to two year period. Environmental Costs MGE has been allowed to defer actual costs on certain environmental matters, including clean up of two landfill sites and legal expenditures pertaining to the response to the EPA Clean Air Act enforcement matter at Columbia. For further discussion of the Columbia Clean Air Act litigation, see Footnote 18.d. Pension and OPRB Costs The PSCW has allowed MGE to defer the 2009 incremental pension and OPRB costs above the amounts recovered in rates. Recovery of the costs began in 2010. The costs are being recovered in rates over a four year period for electric portion and a two year period for gas portion. Tax Recovery Related to AFUDC Equity AFUDC equity represents the after-tax equity cost associated with utility plant construction and results in a temporary difference between the book and tax basis of such plant. It is probable under PSCW regulation that MGE will recover in future rates the future increase in taxes payable represented by the deferred income tax liability. The amounts will be recovered in rates over the depreciable life of the asset for which AFUDC was applied. Tax recovery related to AFUDC equity represents the revenue requirement related to recovery of these future taxes payable, calculated at current statutory tax rates. Unfunded Pension and Other Postretirement Liability MGE is required to recognize the unfunded status of defined benefit pension and other postretirement pension plans as a net liability or asset on the balance sheet with an offset to other comprehensive income. The amount normally charged to other comprehensive income for the unfunded status represents future expenses that are expected to be recovered in rates. Conservation Costs MGE has received regulatory treatment for certain conservation expenditures. The expenditures are used for demand-side management programs to promote energy efficiency on the customer's premises. Costs for demand-side management programs are estimated in MGE's rates utilizing escrow accounting. The escrow accounting allows the utility to true-up its actual costs incurred and reflect the amount of the true-up in its next rate case filing and amortize the amount over the rate case period. The customer service - conservation escrow was discontinued as of J anuary 1, 2013. These costs are expected to be trued up in MGE's next full base rate case. Deferred Fuel Savings The PSCW approved new fuel rules that became effective January 1, 2011. The new rules require the PSCW and Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band. Any over/under recovery of the actual costs is determined on an annual basis and will be adjusted in future billings to electric retail customers. Under the electric fuel rules, MGE is required to defer the benefit of lower costs if the actual fuel rules costs fall outside the lower end of the range and would defer costs, less any excess revenues, if the actual fuel rules costs exceeded the upper end of the range. 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. See Footnote 17.b. for further discussion. Income Taxes Excess deferred income taxes result from past taxes provided at rates higher than current rates. The regulatory liability and deferred investment tax credit reflects the revenue requirement associated with the return of these tax benefits to customers. Non-ARO Removal Costs In connection with accounting for asset retirement obligations, companies are required to reclassify cumulative collections for non-ARO removal costs as a regulatory liability, with an offsetting entry to accumulated depreciation. Under the current rate structure, these removal costs are being recovered as a component of depreciation expense. Renewable Energy Credits MGE receives renewable energy credits from certain purchase power agreements. The value of the credits are recorded as inventory and expensed when the credit is redeemed or expired. A regulatory liability has been established for the value of the renewable energy credits included in inventory. In Wisconsin, renewable energy credits expire four years after the year of acqui sition.

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- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
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