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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Tax Provision | On a consolidated and separate company basis, the income tax provision consists of the following provision (benefit) components for the years ended December 31:
|  | MGE Energy |  | MGE
(In thousands) |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
Current payable: |  |  |  |  |  |  |  |  |  |  |  |
Federal | $ | 8,017 | $ | 18,622 | $ | 21,125 | $ | 7,616 | $ | 19,926 | $ | 21,512
State |  | 4,647 |  | 5,163 |  | 5,129 |  | 4,608 |  | 5,704 |  | 5,316
Net-deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | 3,510 |  | 120 |  | (8,346) |  | 2,242 |  | (2,563) |  | (11,195)
State |  | 3,702 |  | 3,629 |  | 4,264 |  | 3,044 |  | 2,494 |  | 3,435
Amortized investment tax credits |  | (92) |  | (100) |  | (78) |  | (92) |  | (100) |  | (78)
Total income tax provision | $ | 19,784 | $ | 27,434 | $ | 22,094 | $ | 17,418 | $ | 25,461 | $ | 18,990
Effective Tax Rate Reconciliation | 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 |
|  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |
| Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | % |  | 21.0 | % |  | 21.0 | % |  | 35.0 | % |
| State income taxes, net of federal benefit | 6.2 |  |  | 6.3 |  |  | 5.1 |  |  | 6.1 |  |  | 6.2 |  |  | 5.1 |  |
| Amortized investment tax credits | (0.1) |  |  | (0.1) |  |  | - |  |  | (0.1) |  |  | (0.1) |  |  | - |  |
| Credit for electricity from wind energy(a) | (5.7) |  |  | (0.3) |  |  | (1.6) |  |  | (6.2) |  |  | (0.4) |  |  | (1.7) |  |
| Domestic manufacturing deduction | - |  |  | - |  |  | (1.4) |  |  | - |  |  | - |  |  | (1.5) |  |
| AFUDC equity, net | (0.3) |  |  | (0.6) |  |  | (0.2) |  |  | (0.3) |  |  | (0.5) |  |  | (0.2) |  |
| Federal income tax rate reduction | - |  |  | - |  |  | (18.1) |  |  | - |  |  | - |  |  | (19.3) |  |
| Amortization of utility excess deferred tax(b) | (2.4) |  |  | (1.8) |  |  | - |  |  | (2.7) |  |  | (2.0) |  |  | - |  |
| Other, net, individually insignificant | (0.1) |  |  | 0.1 |  |  | (0.3) |  |  | (0.1) |  |  | 0.2 |  |  | (0.4) |  |
| Effective income tax rate | 18.6 | % |  | 24.6 | % |  | 18.5 | % |  | 17.7 | % |  | 24.4 | % |  | 17.0 | % |
(a)Saratoga became operational in February 2019. (b)Included are impacts of the Tax Cuts and Jobs Act for the regulated utility for excess deferred taxes recognized using a normalization method of accounting. For the years ended December 31, 2019 and 2018, MGE recognized $2.6 million and $2.1 million, respectively. The amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, as determined by the PSCW.
Deferred Tax Liabilities (Assets) | The significant components of deferred tax liabilities (assets) that appear on the consolidated balance sheets as of December 31 are as follows:
|  |  | MGE Energy |  | MGE |
| (In thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
| Deferred tax assets |  |  |  |  |  |  |  |  |
| Investment in ATC | $ | 22,576 | $ | 23,638 | $ | - | $ | - |
| Accrued expenses |  | 15,901 |  | 15,385 |  | 15,890 |  | 15,385 |
| Pension and other postretirement benefits |  | 30,968 |  | 34,914 |  | 30,968 |  | 34,914 |
| Deferred tax regulatory account |  | 35,493 |  | 37,121 |  | 35,493 |  | 37,121 |
| Derivatives |  | 7,351 |  | 8,861 |  | 7,351 |  | 8,861 |
| Leases |  | 5,167 |  | - |  | 5,167 |  | - |
| Other |  | 12,540 |  | 15,137 |  | 12,593 |  | 15,185 |
| Gross deferred income tax assets |  | 129,996 |  | 135,056 |  | 107,462 |  | 111,466 |
| Less valuation allowance |  | (86) |  | (86) |  | (86) |  | (86) |
| Net deferred income tax assets | $ | 129,910 | $ | 134,970 | $ | 107,376 | $ | 111,380 |
| Deferred tax liabilities |  |  |  |  |  |  |  |  |
| Property-related | $ | 245,083 | $ | 244,114 | $ | 245,083 | $ | 244,114 |
| Investment in ATC |  | 51,569 |  | 50,771 |  | - |  | - |
| Bond transactions |  | 657 |  | 765 |  | 657 |  | 765 |
| Pension and other postretirement benefits |  | 45,683 |  | 47,644 |  | 45,683 |  | 47,644 |
| Derivatives |  | 7,351 |  | 8,861 |  | 7,351 |  | 8,861 |
| Tax deductible prepayments |  | 9,078 |  | 6,014 |  | 9,051 |  | 6,014 |
| Leases |  | 5,167 |  | - |  | 5,167 |  | - |
| Other |  | 8,624 |  | 8,753 |  | 8,425 |  | 8,598 |
| Gross deferred income tax liabilities |  | 373,212 |  | 366,922 |  | 321,417 |  | 315,996 |
| Deferred income taxes | $ | 243,302 | $ | 231,952 | $ | 214,041 | $ | 204,616 |
Unrecognized Tax Benefits and Interest | A tabular reconciliation of unrecognized tax benefits and is as follows:
| (In thousands) |  |  |  |  |  |  |
| Unrecognized Tax Benefits: |  | 2019 |  | 2018 |  | 2017 |
| Unrecognized tax benefits, January 1, | $ | 1,949 | $ | 1,924 | $ | 2,487 |
| Additions based on tax positions related to the current year |  | 741 |  | 425 |  | 552 |
| Additions based on tax positions related to the prior years |  | 84 |  | 272 |  | 19 |
| Reductions based on tax positions related to the prior years |  | (681) |  | (672) |  | (1,134) |
| Unrecognized tax benefits, December 31, | $ | 2,093 | $ | 1,949 | $ | 1,924 |
| (In thousands) |  |  |  |  |  |  |
| Interest on Unrecognized Tax Benefits: |  | 2019 |  | 2018 |  | 2017 |
| Accrued interest on unrecognized tax benefits, January 1, | $ | 191 | $ | 165 | $ | 388 |
| Reduction in interest expense on uncertain tax positions |  | (137) |  | (136) |  | (312) |
| Interest expense on uncertain tax positions |  | 122 |  | 162 |  | 89 |
| Accrued interest on unrecognized tax benefits, December 31, | $ | 176 | $ | 191 | $ | 165 |
Tax Years that Remain Subject to Examination | The following table shows tax years that remain subject to examination by major jurisdiction:
| Taxpayer | Open Years |
| MGE Energy and consolidated subsidiaries in federal return | 2016 through 2019 |
| MGE Energy Wisconsin combined reporting corporation return | 2017 through 2019 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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