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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Ta xes. a. MGE Energy and MGE Income Taxes. MGE Energy files a consolidated federal income tax return that includes the operations of all subsidiary companies. The subsidiaries calculate their respective federal income tax provisions as if they were separate taxable entities. 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) |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Current payable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 5,887 |  |  | $ | 4,811 |  |  | $ | 1,864 |  |  | $ | 4,190 |  |  | $ | 3,206 |  |  | $ | 1,329 |
State |  |  | 9,093 |  |  |  | 6,875 |  |  |  | 4,637 |  |  |  | 8,538 |  |  |  | 6,309 |  |  |  | 4,560 |
Net-deferred: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 4,335 |  |  |  | (2,695 | ) |  |  | 16,317 |  |  |  | 3,567 |  |  |  | (3,342 | ) |  |  | 15,345 |
State |  |  | 3,287 |  |  |  | 3,303 |  |  |  | 6,683 |  |  |  | 2,891 |  |  |  | 2,909 |  |  |  | 6,191 |
Amortized investment tax credits |  |  | (1,838 | ) |  |  | (1,698 | ) |  |  | (1,698 | ) |  |  | (1,838 | ) |  |  | (1,698 | ) |  |  | (1,698 | )
Total income tax provision |  | $ | 20,765 |  |  | $ | 10,596 |  |  | $ | 27,803 |  |  | $ | 17,348 |  |  | $ | 7,384 |  |  | $ | 25,727 |
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
|  | 2025 |  | 2024 |  | 2023
(In thousands) |  | Amount |  | Percent |  |  |  | Amount |  | Percent |  |  |  | Amount |  | Percent |  |
Statutory federal income tax rate |  | $ | 32,897 |  |  | 21.0 |  | % |  | $ | 27,544 |  |  | 21.0 |  | % |  | $ | 30,555 |  |  | 21.0 |  | %
State income taxes, net of federal benefit(a) |  |  | 9,843 |  |  | 6.3 |  |  |  |  | 8,239 |  |  | 6.3 |  |  |  |  | 9,078 |  |  | 6.2 |  |
Tax credits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized investment tax credits(b) |  |  | (1,697 | ) |  | (1.1 | ) |  |  |  | (2,775 | ) |  | (2.1 | ) |  |  |  | (952 | ) |  | (0.7 | ) |
Production tax credits |  |  | (15,142 | ) |  | (9.7 | ) |  |  |  | (13,798 | ) |  | (10.5 | ) |  |  |  | (7,763 | ) |  | (5.3 | ) |
Nontaxable or Nondeductible Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AFUDC equity, net(c) |  |  | (1,033 | ) |  | (0.6 | ) |  |  |  | (946 | ) |  | (0.7 | ) |  |  |  | (938 | ) |  | (0.6 | ) |
Other, net, individually insignificant |  |  | 135 |  |  | 0.1 |  |  |  |  | 90 |  |  | 0.1 |  |  |  |  | 6 |  |  | — |  |
Other Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of utility excess deferred tax(d) |  |  | (4,238 | ) |  | (2.7 | ) |  |  |  | (7,758 | ) |  | (5.9 | ) |  |  |  | (2,183 | ) |  | (1.5 | ) |
Effective income tax rate |  | $ | 20,765 |  | 13.3 |  | % |  | $ | 10,596 |  | 8.2 |  | % |  | $ | 27,803 |  | 19.1 |  | %
|  | MGE
|  | 2025 |  | 2024 |  | 2023
(In thousands) |  | Amount |  | Percent |  |  |  | Amount |  | Percent |  |  |  | Amount |  | Percent |  |
Statutory federal income tax rate |  | $ | 30,270 |  |  | 21.0 |  | % |  | $ | 25,133 |  |  | 21.0 |  | % |  | $ | 29,000 |  |  | 21.0 |  | %
State income taxes, net of federal benefit(a) |  |  | 9,004 |  |  | 6.2 |  |  |  |  | 7,477 |  |  | 6.2 |  |  |  |  | 8,627 |  |  | 6.2 |  |
Tax credits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized investment tax credits(b) |  |  | (1,698 | ) |  | (1.2 | ) |  |  |  | (2,775 | ) |  | (2.3 | ) |  |  |  | (952 | ) |  | (0.7 | ) |
Production tax credits |  |  | (15,142 | ) |  | (10.5 | ) |  |  |  | (13,798 | ) |  | (11.5 | ) |  |  |  | (7,763 | ) |  | (5.6 | ) |
Nontaxable or Nondeductible Items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AFUDC equity, net(c) |  |  | (1,033 | ) |  | (0.7 | ) |  |  |  | (946 | ) |  | (0.8 | ) |  |  |  | (938 | ) |  | (0.7 | ) |
Other, net, individually insignificant |  |  | 185 |  |  | 0.1 |  |  |  |  | 51 |  |  | — |  |  |  |  | (64 | ) |  | — |  |
Other Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of utility excess deferred tax(d) |  |  | (4,238 | ) |  | (2.9 | ) |  |  |  | (7,758 | ) |  | (6.5 | ) |  |  |  | (2,183 | ) |  | (1.6 | ) |
Effective income tax rate |  | $ | 17,348 |  |  | 12.0 |  | % |  | $ | 7,384 |  |  | 6.1 |  | % |  | $ | 25,727 |  |  | 18.6 |  | %
(a) State taxes in Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category. (b) MGE accounts for investment tax credits using the deferral method. Under this method, the credits are initially recorded as a liability and amortized as an income tax benefit over the useful life of the related property. In addition, amortization for the year ended December 31, 2025, also reflects additional investment tax credit amortization on transferred credits included in the rate settlement for the period. (c) The impact of non-taxable income related to equity portion of the AFUDC, net of depreciation. (d) Included are impacts of the 2017 Tax Act 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 the years ended December 31, 2025, 2024, and 2023, MGE recognized $4.2 million, $3.5 million, and $3.5 million, respectively. Included in the 2024 rate settlement was a one-time return to customers of excess deferred taxes related to the 2017 Tax Act not restricted by IRS normalization rules. For the year ended December 31, 2024, MGE recognized $4.1 million of deferred taxes not restricted by IRS normalization rules, compared to a net collection from customers of $1.3 million for the year ended December 31, 2023. The significant components of deferred tax assets and liabilities that appear on the consolidated balance sheets as of December 31 are as follows:
|  | MGE Energy |  |  | MGE |
(In thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |
Investment in ATC |  | $ | 17,657 |  |  | $ | 18,467 |  |  | $ | — |  |  | $ | — |
Federal tax credits |  |  | 13,003 |  |  |  | 21,252 |  |  |  | 13,003 |  |  |  | 21,252 |
Accrued expenses |  |  | 12,695 |  |  |  | 11,614 |  |  |  | 12,662 |  |  |  | 11,566 |
Pension and other postretirement benefits |  |  | 1,319 |  |  |  | 6,878 |  |  |  | 1,319 |  |  |  | 6,878 |
Deferred tax regulatory account |  |  | 38,021 |  |  |  | 37,892 |  |  |  | 38,021 |  |  |  | 37,892 |
Derivatives |  |  | 477 |  |  |  | 13 |  |  |  | 477 |  |  |  | 13 |
Leases |  |  | 7,455 |  |  |  | 7,521 |  |  |  | 7,455 |  |  |  | 7,521 |
Other |  |  | 32,342 |  |  |  | 29,290 |  |  |  | 32,202 |  |  |  | 29,048 |
Gross deferred income tax assets |  |  | 122,969 |  |  |  | 132,927 |  |  |  | 105,139 |  |  |  | 114,170 |
Less: valuation allowance |  |  | (863 | ) |  |  | — |  |  |  | (863 | ) |  |  | — |
Net deferred income tax assets |  | $ | 122,106 |  |  | $ | 132,927 |  |  | $ | 104,276 |  |  | $ | 114,170 |
|  | MGE Energy |  |  | MGE |
(In thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Property-related |  | $ | 346,043 |  |  | $ | 334,728 |  |  | $ | 346,043 |  |  | $ | 334,728 |
Investment in ATC |  |  | 54,359 |  |  |  | 54,262 |  |  |  | — |  |  |  | — |
Bond transactions |  |  | 288 |  |  |  | 349 |  |  |  | 288 |  |  |  | 349 |
Pension and other postretirement benefits |  |  | 22,671 |  |  |  | 26,801 |  |  |  | 22,671 |  |  |  | 26,801 |
Derivatives |  |  | 477 |  |  |  | 13 |  |  |  | 477 |  |  |  | 13 |
Tax deductible prepayments |  |  | 10,280 |  |  |  | 9,677 |  |  |  | 10,269 |  |  |  | 9,666 |
Leases |  |  | 7,455 |  |  |  | 7,521 |  |  |  | 7,455 |  |  |  | 7,521 |
Other |  |  | 18,331 |  |  |  | 15,973 |  |  |  | 18,271 |  |  |  | 16,053 |
Gross deferred income tax liabilities |  |  | 459,904 |  |  |  | 449,324 |  |  |  | 405,474 |  |  |  | 395,131 |
Deferred income taxes, net |  | $ | 337,798 |  |  | $ | 316,397 |  |  | $ | 301,198 |  |  | $ | 280,961 |
The components of federal and state tax benefit carryovers as of December 31, are as follows:
|  | MGE Energy |  |  | MGE |
(In thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Federal tax credits |  | $ | 13,003 |  |  | $ | 21,252 |  |  | $ | 13,003 |  |  | $ | 21,252 |
Federal tax credit carryovers begin to expire in 2042. Federal tax credits represent the deferred tax asset. See Footnote 1 for tax payments (receipts) made. b. Accounting for Uncertainty in Income Taxes - MGE Energy and MGE. The difference between the tax benefit amount taken on prior year tax returns, or expected to be taken on a current year tax return, and the tax benefit amount recognized in the financial statements is accounted for as an unrecognized tax benefit. A tabular reconciliation of unrecognized tax benefits and interest is as follows:
(In thousands) |  |  |  |  |  |  |  |  |
Unrecognized Tax Benefits: |  | 2025 |  |  | 2024 |  |  | 2023 |
Unrecognized tax benefits, January 1, |  | $ | 1,546 |  |  | $ | 1,615 |  |  | $ | 2,485 |
Additions based on tax positions related to the current year |  |  | 461 |  |  |  | 415 |  |  |  | 455 |
Additions based on tax positions related to the prior years |  |  | — |  |  |  | — |  |  |  | — |
Reductions based on tax positions related to the prior years |  |  | (444 | ) |  |  | (484 | ) |  |  | (1,325 | )
Unrecognized tax benefits, December 31, |  | $ | 1,562 |  |  | $ | 1,546 |  |  | $ | 1,615 |
(In thousands) |  |  |  |  |  |  |  |  |
Interest on Unrecognized Tax Benefits: |  | 2025 |  |  | 2024 |  |  | 2023 |
Accrued interest on unrecognized tax benefits, January 1, |  | $ | 117 |  |  | $ | 130 |  |  | $ | 189 |
Reduction in interest expense on uncertain tax positions |  |  | (65 | ) |  |  | (77 | ) |  |  | (149 | )
Interest expense on uncertain tax positions |  |  | 44 |  |  |  | 64 |  |  |  | 90 |
Accrued interest on unrecognized tax benefits, December 31, |  | $ | 96 |  |  | $ | 117 |  |  | $ | 130 |
Unrecognized tax benefits are classified with "Other deferred liabilities" on the consolidated balance sheets. The interest component recoverable in rates is offset by a regulatory asset. As of December 31, 2025, 2024, and 2023, MGE Energy and MGE have an unrecognized tax benefit primarily related to temporary tax differences associated with the change in income tax method of accounting for electric generation and electric distribution repairs. In addition, statutes of limitations will expire for MGE Energy and MGE tax returns. The impact of the statutes of limitations expiring is not anticipated to be material. 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 | 2022 through 2025 |
| MGE Energy Wisconsin combined reporting corporation return | 2021 through 2025 |

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