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[Form 8-K Current Report](index=1&type=section&id=Form%208-K) This current report details MGE Energy, Inc.'s fourth quarter and full-year 2023 financial results and related exhibits [Item 2.02. Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition.) MGE Energy, Inc. announced its fourth quarter and full-year 2023 financial results via a press release furnished as Exhibit 99.1 - MGE Energy, Inc. issued a press release on **February 21, 2024**, announcing its financial results for the fourth quarter and full year of 2023[6](index=6&type=chunk) - The earnings press release is attached as **Exhibit 99.1** to this report[6](index=6&type=chunk) - This Form 8-K represents a combined filing for MGE Energy, Inc. and its subsidiary, Madison Gas and Electric Company, with each entity responsible for its own information[7](index=7&type=chunk) [Item 9.01. Financial Statements and Exhibits](index=2&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits.) This section details the exhibits filed with the Form 8-K, including the 2023 financial results press release and interactive data file Exhibits Filed | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press release of MGE Energy, Inc., issued on February 21, 2024 | | 104 | Cover Page Interactive Data File (XBRL tags) | [Signatures](index=3&type=section&id=SIGNATURES) The report was signed and authorized on February 21, 2024, by Tamara J. Johnson for both MGE Energy, Inc. and Madison Gas and Electric Company - The report was signed on **February 21, 2024**, by **Tamara J. Johnson**, Vice President - Chief Accounting Officer and Controller[12](index=12&type=chunk)

PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) MGE Energy operates as a regulated electric and gas utility, strategically transitioning from coal to renewables and natural gas to achieve carbon reduction goals [Business Segments](index=7&type=section&id=Business%20Segments) MGE Energy operates through five main business segments, with regulated utility operations forming the core of its business - MGE Energy operates through five main business segments, with **regulated utility operations** forming the majority of its assets and operations[20](index=20&type=chunk)[23](index=23&type=chunk) [Electric Utility Operations](index=7&type=section&id=Electric%20Utility%20Operations) The electric utility focuses on decarbonization by transitioning from coal to renewables and natural gas to meet future energy demands Electric Sales, Customers, and Revenues (2023) | Customer Class | Sales (MWh) | Customers | Revenues (Thousands) | | :--- | :--- | :--- | :--- | | Residential | 871,558 | 146,000 | $171,137 | | Commercial | 1,772,483 | 17,000 | $252,268 | | Industrial | 151,283 | 100 | $13,759 | | Other | 363,643 | N/A | $40,815 | - The company is committed to achieving **net-zero carbon electricity by 2050**, with an interim goal of at least an **80% carbon reduction by 2030** from 2005 levels. This strategy involves transitioning away from coal by retiring the Columbia plant by June 2026 and converting the Elm Road Units to natural gas by 2032, while significantly increasing renewable generation capacity[31](index=31&type=chunk)[33](index=33&type=chunk) Planned Renewable Energy Projects | Project | Source | MGE Share | Commercial Operation | | :--- | :--- | :--- | :--- | | Tyto Solar | Solar | 6 MW | 2024 | | Paris | Solar/Battery | 20 MW / 11 MW | 2024 / 2025 | | Darien | Solar | 25 MW | 2024 | | Strix Solar | Solar | 6 MW | 2024 | | Koshkonong | Solar | 30 MW | 2026 | | High Noon (proposed) | Solar | 30 MW | 2026 | [Gas Utility Operations](index=11&type=section&id=Gas%20Utility%20Operations) The gas utility aims for net-zero methane emissions by 2035, ensuring supply reliability through pipeline interconnections and storage Gas Sales, Customers, and Revenues (2023) | Customer Class | Sales (Therms) | Customers | Revenues (Thousands) | | :--- | :--- | :--- | :--- | | Residential | 97,326 | 161,000 | $116,640 | | Commercial/Industrial | 96,053 | 15,000 | $75,410 | | Transportation | 72,181 | 100 | $7,399 | - MGE has set a goal to achieve **net-zero methane emissions from its natural gas distribution system by 2035**, aiming to accelerate this timeline if new technologies, such as renewable natural gas, become viable[49](index=49&type=chunk) - The company secures its gas supply through interconnections with two major pipelines, ANR and NNG, and utilizes storage fields to manage seasonal price fluctuations and ensure supply reliability during high-demand winter months[50](index=50&type=chunk)[52](index=52&type=chunk) [Environmental](index=12&type=section&id=Environmental) The company is subject to extensive environmental regulations, actively pursuing net-zero carbon and methane emissions targets - The company is subject to extensive environmental regulations concerning water quality, air quality, and solid waste, which impact capital expenditures and operating costs. The planned retirement of the Columbia coal-fired plant by June 2026 is a key part of its compliance and carbon reduction strategy[57](index=57&type=chunk)[58](index=58&type=chunk) - MGE is actively addressing climate change with a target of **net-zero carbon electricity by 2050** and an **80% reduction by 2030** (from 2005 levels). This involves transitioning from coal, increasing renewable energy to 30% of retail sales by 2030, and aiming for **net-zero methane emissions from its gas distribution system by 2035**[71](index=71&type=chunk)[72](index=72&type=chunk) - The EPA's proposed Greenhouse Gas Reduction Guidelines under the Clean Air Act 111(d) rule are expected to impact MGE's larger, long-term fossil fuel units like West Riverside and Elm Road, potentially requiring new technology to meet proposed emission reductions[73](index=73&type=chunk) [Human Capital](index=16&type=section&id=Human%20Capital) The company manages human capital through union agreements and diversity initiatives, with significant board representation for women and ethnic minorities Employee Union Representation (as of Dec 31, 2023) | Union | Employees Represented | Agreement Expiration | | :--- | :--- | :--- | | IBEW Local 2304 | 227 | April 30, 2028 | | OPEIU Local 39 | 85 | May 31, 2028 | | USW Local 2006, Unit 6 | 5 | October 31, 2028 | - As of December 31, 2023, women and ethnic minorities represented **27%** and **11%** of the total workforce, respectively. Following board changes in March 2024, the continuing Board of Directors will be comprised of **40%** women and **20%** ethnic minorities[88](index=88&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant regulatory, operating, and financial risks, including evolving environmental laws, supply chain disruptions, and commodity price volatility [Regulatory Risk](index=19&type=section&id=Regulatory%20Risk) Regulatory risks include cost recovery uncertainties, changing environmental laws, and potential impacts from federal income tax policy changes - The business is subject to extensive state (PSCW) and federal (FERC) regulation affecting rates, operations, financing, and cost recovery. There is **no guarantee** that regulators will deem all incurred costs as reasonable or that approved rates will provide a full recovery and a fair return[96](index=96&type=chunk)[100](index=100&type=chunk) - Changing environmental laws, particularly those related to climate change and greenhouse gas emissions, may significantly increase capital expenditures and operating costs for fossil-fueled generation and natural gas transportation[104](index=104&type=chunk)[105](index=105&type=chunk) - Changes in federal income tax policy or the inability to fully utilize tax credits could **adversely affect financial results**. The amount of production tax credits (PTC) and investment tax credits (ITC) earned from renewable facilities depends on various operating and economic factors[111](index=111&type=chunk)[113](index=113&type=chunk) [Operating Risk](index=22&type=section&id=Operating%20Risk) Operating risks involve technological shifts, supply chain disruptions, cybersecurity threats, and uncertainties in achieving long-term decarbonization goals - Advancements in customer self-supply technologies like solar generation and battery storage, along with energy efficiency improvements, could **reduce customer electricity purchases**, affecting revenue and the timing of cost recovery[116](index=116&type=chunk) - Operations are impacted by supply chain disruptions delaying materials for critical projects, including renewables, and by inflation **increase the costs** of equipment, materials, and labor[120](index=120&type=chunk)[121](index=121&type=chunk) - Information technology systems and physical infrastructure are vulnerable to cyber-attacks, which could disrupt service, compromise confidential data, and lead to costs that may **not be recoverable in rates or covered by insurance**[126](index=126&type=chunk)[129](index=129&type=chunk) - Achieving long-term goals like net-zero carbon electricity by 2050 depends on assumptions about technology, customer participation, project execution, and regulatory cost recovery, which **may not be realized**[135](index=135&type=chunk) [Financial Risk](index=25&type=section&id=Financial%20Risk) Financial risks include commodity price volatility, interest rate impacts on benefit plans, and reliance on subsidiary cash flows for dividend payments - The company is exposed to commodity price risk for natural gas, electricity, coal, and oil. While regulatory mechanisms mitigate some risk, volatility can still **impact costs**[137](index=137&type=chunk) - Changes in interest rates and capital market performance affect the costs and funding requirements for defined benefit pension and postretirement plans. A decline in plan asset values could **increase future funding contributions**[138](index=138&type=chunk)[139](index=139&type=chunk) - As a holding company, MGE Energy's ability to pay dividends depends on the earnings and cash flows from its operating subsidiaries, which are **subject to their own financial obligations and regulatory restrictions**[142](index=142&type=chunk) [Item 1C. Cybersecurity](index=27&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risk using the NIST Framework, with Board oversight and no material incidents reported - MGE's cybersecurity strategy is based on the NIST Cybersecurity Framework's core functions: identify, protect, detect, respond, and recover[148](index=148&type=chunk) - The Board of Directors provides oversight for cybersecurity risk, receiving semi-annual updates via the Audit Committee and an annual presentation on the overall cybersecurity strategy[151](index=151&type=chunk) - The company has had **no material cybersecurity incidents** that have affected its business strategy, results of operations, or financial condition[154](index=154&type=chunk) [Item 2. Properties](index=29&type=section&id=Item%202.%20Properties) The company's properties include electric generation facilities with a net summer rated capacity of 919 MW, transitioning from coal to renewables and natural gas Net Summer Rated Capacity by Fuel Source (as of Dec 31, 2023) | Fuel Source | Net Summer Rated Capacity (MW) | | :--- | :--- | | Coal Facilities | 321 | | Natural Gas Facilities | 357 | | Distributed Generators | 54 | | Wind Facilities | 28 | | Solar Facilities | 129 | | **Total** | **919** | - The co-owners of the Columbia coal-fired generating facility intend to **retire both units by June 2026**, subject to operational and regulatory factors[161](index=161&type=chunk) - The company plans to transition the Elm Road Generating Station away from coal as a primary fuel source. By the end of 2030, coal is expected to be used only as a backup fuel, and by the end of 2032, the units are expected to be **fully transitioned to natural gas, eliminating coal as an owned generation source for MGE**[163](index=163&type=chunk) [Item 3. Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, with specific environmental matters referenced elsewhere - MGE Energy and its subsidiaries are involved in various legal proceedings that are handled and defended in the **ordinary course of business**[169](index=169&type=chunk) PART II [Item 5. Market for Registrants' Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrants%27%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) MGE Energy's common stock trades on Nasdaq, with a five-year performance graph showing its total return relative to market indices Cumulative Five-Year Total Return Comparison | Investment | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 | 12/31/2022 | 12/31/2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | MGEE | $1,000 | $1,341 | $1,216 | $1,458 | $1,275 | $1,340 | | Russell 2000 | $1,000 | $1,255 | $1,506 | $1,729 | $1,376 | $1,608 | | EEI Index | $1,000 | $1,258 | $1,243 | $1,456 | $1,473 | $1,344 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income increased in 2023 driven by electric utility investments, offset by gas utility declines, with significant forecasted capital expenditures for decarbonization [Executive Overview](index=33&type=section&id=Executive%20Overview) Net income increased in 2023 due to electric utility investments, partially offset by lower gas utility earnings from warmer weather MGE Energy Net Income by Business Segment (In millions) | Business Segment | 2023 | 2022 | | :--- | :--- | :--- | | Electric Utility | $75.9 | $65.2 | | Gas Utility | $14.1 | $18.2 | | Nonregulated Energy | $22.4 | $22.1 | | Transmission Investments | $7.7 | $6.7 | | All Other | $(2.4) | $(1.2) | | **Net Income** | **$117.7** | **$111.0** | - The **increase in 2023 net income** was primarily driven by higher earnings from the Electric Utility segment due to new investments. This was partially offset by lower Gas Utility earnings caused by a **15% decrease in heating degree days** and a **13% drop in retail sales**[186](index=186&type=chunk)[187](index=187&type=chunk) - The PSCW approved a **1.54% increase in electric rates** and a **2.44% increase in gas rates for 2024**, followed by further increases of **4.17% (electric)** and **1.32% (gas) for 2025**[198](index=198&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Electric revenue increased due to rate adjustments, while gas revenue decreased from lower commodity costs and reduced sales volume - Electric revenue increased by **$24.6 million (5.3%)** in 2023, primarily due to a **9.01% rate increase**, which offset a **1.0% decrease in retail sales volume**[207](index=207&type=chunk)[208](index=208&type=chunk) - Gas revenue decreased by **$48.7 million (19.6%)** in 2023, driven by a **10% drop in the average rate per therm** (due to lower natural gas commodity costs passed through the PGA) and a **12.5% decrease in retail delivery volume** from warmer weather[213](index=213&type=chunk)[215](index=215&type=chunk) - Consolidated operations and maintenance expenses rose by **$6.1 million** in 2023, mainly due to increased administrative and general costs, including employee payroll and incentive plan expenses[217](index=217&type=chunk)[222](index=222&type=chunk) - Consolidated depreciation expense increased by **$14.8 million**, largely due to an accelerated depreciation schedule for the Columbia Unit 2 coal plant, aligning its retirement timeline with Unit 1[218](index=218&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Cash from operating activities increased, supporting significant capital expenditures primarily for electric renewables to meet decarbonization goals Summary of Cash Flows (MGE Energy, In thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Cash from Operating Activities | $237,561 | $153,735 | | Cash used for Investing Activities | $(230,020) | $(180,145) | | Cash (used for) from Financing Activities | $(10,483) | $25,543 | Capital Expenditures (Actual and Forecasted, In thousands) | Year | Electric | Gas | Nonregulated | Total | | :--- | :--- | :--- | :--- | :--- | | **2023 (Actual)** | **$180,743** | **$36,402** | **$4,926** | **$222,071** | | 2024 (Forecast) | $177,000 | $28,000 | $9,000 | $214,000 | | 2025 (Forecast) | $186,000 | $29,000 | $10,000 | $225,000 | | 2026 (Forecast) | $193,000 | $32,000 | $7,000 | $232,000 | | 2027 (Forecast) | $222,000 | $29,000 | $6,000 | $257,000 | | 2028 (Forecast) | $207,000 | $28,000 | $8,000 | $243,000 | - Forecasted capital expenditures from 2024-2028 total **over $1.1 billion**, with a significant portion allocated to electric renewables (solar, wind, and battery storage) to support the company's decarbonization goals and replace generation from the retiring Columbia plant[237](index=237&type=chunk)[239](index=239&type=chunk) MGE Energy Capitalization Ratios | Component | 2023 | 2022 | | :--- | :--- | :--- | | Common shareholders' equity | 59.9% | 60.4% | | Long-term debt | 38.1% | 35.7% | | Short-term debt | 2.0% | 3.9% | [Other Matters](index=47&type=section&id=Other%20Matters) Key ongoing matters include approved rate increases, a challenge to ATC's authorized ROE, and potential solar supply chain disruptions Approved Rate Case Details (2024-2025) | Test Period | Segment | Authorized ROE | Common Equity Component | | :--- | :--- | :--- | :--- | | 2024 | Electric | 9.7% | 56.13% | | 2024 | Gas | 9.7% | 56.13% | | 2025 | Electric | 9.7% | 56.06% | | 2025 | Gas | 9.7% | 56.06% | - The company's investment in ATC is subject to an ongoing challenge at FERC regarding the authorized base Return on Equity (ROE). A 2022 court ruling remanded the issue to FERC for further proceedings. **A reduction in ATC's ROE could lower future equity earnings and distributions**[275](index=275&type=chunk)[278](index=278&type=chunk) - Solar procurement faces potential disruptions from the Uyghur Forced Labor Protection Act (UFLPA) and a U.S. Department of Commerce tariff investigation, which could **increase costs or delay construction timelines** for solar projects[280](index=280&type=chunk)[281](index=281&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) Management identifies critical accounting estimates for regulatory assets/liabilities, unbilled revenues, pension plans, and income tax provision, requiring significant judgment - Management identifies four critical accounting estimates: Regulatory Assets/Liabilities, Unbilled Revenues, Pension and Other Postretirement Benefit Plans, and Income Tax Provision. These estimates require significant judgment and are based on assumptions about future events[283](index=283&type=chunk) - Pension and postretirement benefit costs are sensitive to key assumptions. A 1% reduction in the expected rate of return on plan assets would increase annual costs by approximately **$4.0 million**, while a 0.5% decrease in the discount rate would increase annual costs by about **$1.2 million**[294](index=294&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from commodity prices, interest rates, and equity returns on pension assets, largely mitigated by regulatory mechanisms - Commodity price risk for natural gas and electricity is substantially mitigated by regulatory mechanisms, including the PSCW's electric fuel rules (which have a **+/- 2% cost tolerance band for 2023**) and the purchased gas adjustment (PGA) clause for the gas utility[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) - The company is exposed to interest rate risk on its short-term borrowings. A hypothetical 1% change in the average short-term interest rate in 2023 would have changed interest expense and net income by approximately **$0.4 million**[302](index=302&type=chunk)[303](index=303&type=chunk) - Equity price risk affects pension-related assets. A 1% reduction in the expected rate of return on plan assets would increase annual pension and postretirement costs by approximately **$4.0 million** before taxes, though this risk is partly mitigated by recovery in rates[304](index=304&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for MGE Energy and Madison Gas and Electric Company, including detailed notes [Financial Statements](index=59&type=section&id=Financial%20Statements) This section includes the Consolidated Statements of Income, Cash Flows, Balance Sheets, and Common Equity for MGE Energy, Inc MGE Energy, Inc. Consolidated Statements of Income (In thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | **$690,431** | **$714,519** | **$606,584** | | Operating Income | $146,385 | $137,743 | $117,294 | | **Net Income** | **$117,699** | **$110,952** | **$105,761** | | Diluted Earnings Per Share | $3.25 | $3.07 | $2.92 | MGE Energy, Inc. Consolidated Balance Sheets (In thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $238,197 | $243,480 | | Total Property, Plant, and Equipment | $2,128,212 | $1,971,100 | | **Total Assets** | **$2,675,458** | **$2,517,600** | | Total Current Liabilities | $157,156 | $225,062 | | Total Long-term debt | $718,822 | $585,246 | | Total Common Shareholders' Equity | $1,140,073 | $1,081,674 | | **Total Liabilities and Capitalization** | **$2,675,458** | **$2,517,600** | [Notes to Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes provide additional information on accounting policies, segment data, debt, pensions, and regulatory matters Regulatory Assets and Liabilities (In thousands, as of Dec 31) | | 2023 | 2022 | | :--- | :--- | :--- | | **Total Regulatory Assets** | **$102,568** | **$113,441** | | *Key Components:* | | | | Unfunded pension/postretirement liability | $31,374 | $50,072 | | Asset retirement obligation | $17,003 | $14,721 | | **Total Regulatory Liabilities** | **$177,612** | **$168,913** | | *Key Components:* | | | | Income taxes | $107,048 | $109,112 | | Cost of removal | $42,031 | $31,664 | Pension and Other Postretirement Benefits Funded Status (In thousands, as of Dec 31) | | 2023 | 2022 | | :--- | :--- | :--- | | **Pension Benefits** | | | | Benefit Obligation | $346,460 | $335,288 | | Fair Value of Plan Assets | $404,735 | $370,171 | | **Funded Status (Asset)** | **$58,275** | **$34,883** | | **Other Postretirement Benefits** | | | | Benefit Obligation | $64,973 | $63,828 | | Fair Value of Plan Assets | $43,149 | $41,867 | | **Funded Status (Liability)** | **$(21,824)** | **$(21,961)** | Segment Net Income (MGE Energy, In thousands) | Segment | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Electric | $75,946 | $65,187 | $63,910 | | Gas | $14,068 | $18,215 | $15,511 | | Non-Regulated Energy | $22,356 | $22,090 | $21,361 | | Transmission Investment | $7,736 | $6,647 | $6,852 | | All Others | $(2,407) | $(1,187) | $(1,873) | | **Consolidated Total** | **$117,699** | **$110,952** | **$105,761** | PART III [Item 10. Directors, Executive Officers, and Corporate Governance](index=109&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors and corporate governance is incorporated by reference from the 2024 Proxy Statement, with executive officer details in Part I - Information required by this item concerning directors and corporate governance is incorporated by reference from MGE Energy's definitive proxy statement to be filed before April 29, 2024[592](index=592&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides equity compensation plan information, with other details on executive compensation incorporated from the 2024 Proxy Statement Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by shareholders | — | $— | 415,428 | | Not approved by shareholders | N/A | N/A | N/A | | **Total** | **—** | **$—** | **415,428** | PART IV [Item 15. Exhibits and Financial Statement Schedules](index=111&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K, including parent company statements and corporate documents - This section provides an index of all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K filing[602](index=602&type=chunk)[604](index=604&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements%2E) This section provides the unaudited consolidated financial statements for MGE Energy, Inc. and Madison Gas and Electric Company, including income statements, balance sheets, and cash flow statements, along with detailed explanatory notes [MGE Energy, Inc. Financial Statements](index=6&type=section&id=MGE%20Energy%2C%20Inc.%20Financial%20Statements) MGE Energy reported a net income of $97.6 million for the nine months ended September 30, 2023, an 8.6% increase year-over-year, with diluted EPS rising to $2.70 and total assets growing to $2.59 billion MGE Energy, Inc. Consolidated Statements of Income (unaudited) | (In thousands, except per share amounts) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | Total Operating Revenues | $525,779 | $524,686 | | Operating Income | $122,216 | $109,808 | | Net Income | $97,616 | $89,901 | | Diluted Earnings Per Share ($) | $2.70 | $2.49 | MGE Energy, Inc. Consolidated Balance Sheet Highlights (unaudited) | (In thousands) | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $216,411 | $243,480 | | Total Property, Plant, and Equipment | $2,070,536 | $1,971,100 | | Total Assets | $2,590,532 | $2,517,600 | | Total Current Liabilities | $122,838 | $225,062 | | Total Long-term debt | $690,028 | $585,246 | | Common shareholders' equity | $1,135,253 | $1,081,674 | | Total Liabilities and Capitalization | $2,590,532 | $2,517,600 | - Cash provided by operating activities increased to **$194.0 million** for the nine months ended Sep 30, 2023, up from **$144.3 million** in the prior year period, while capital expenditures rose to **$150.3 million** from **$133.4 million**[21](index=21&type=chunk) [Madison Gas and Electric Company Financial Statements](index=10&type=section&id=Madison%20Gas%20and%20Electric%20Company%20Financial%20Statements) Madison Gas and Electric Company reported net income attributable to MGE of $76.8 million for the nine months ended September 30, 2023, driven by higher operating income and an increase in total assets to $2.47 billion MGE Consolidated Statements of Income (unaudited) | (In thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | Total Operating Revenues | $525,779 | $524,686 | | Operating Income | $122,969 | $110,504 | | Net Income | $93,202 | $84,481 | | Net Income Attributable to MGE | $76,820 | $68,534 | MGE Consolidated Balance Sheet Highlights (unaudited) | (In thousands) | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Assets | $2,471,614 | $2,404,639 | | Total Equity | $1,048,338 | $1,002,386 | | Total Liabilities and Capitalization | $2,471,614 | $2,404,639 | [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the basis of financial statement presentation, accounting policies, and specific financial items, providing critical context for understanding the financial statements - MGE Transco's equity earnings from its investment in American Transmission Company (ATC) were **$7.8 million** for the nine months ended Sep 30, 2023, up from **$6.5 million** in the prior year period[49](index=49&type=chunk) - The effective income tax rate for MGE Energy for the nine months ended Sep 30, 2023 was **18.8%**, slightly lower than the **18.9%** in the prior year period, influenced by renewable energy credits and other factors[52](index=52&type=chunk) - In August 2023, MGE entered into a private placement agreement to issue **$70 million** of new long-term debt in two series, with funding for the **$40 million** Series A occurring in September 2023[60](index=60&type=chunk) Future Commitments for Purchase Contracts (as of Sep 30, 2023) | (In thousands) | 2023 (in thousands) | 2024 (in thousands) | 2025 (in thousands) | 2026 (in thousands) | 2027 (in thousands) | Thereafter (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coal | $8,511 | $23,173 | $14,425 | $2,581 | $— | $— | | Natural gas | $20,009 | $41,502 | $25,517 | $14,873 | $2,165 | $11,995 | Joint Plant Construction Projects (as of Sep 30, 2023) | Project | Ownership Interest | Share of Generation | Estimated Costs (in thousands) | Costs Incurred (in thousands) | Commercial Operation | | :--- | :--- | :--- | :--- | :--- | :--- | | Red Barn | 10% | 9.16 MW | $18,000 | $16,500 | April 2023 | | Badger Hollow II | 33% | 50 MW | $86,000 | $58,900 | Late 2023/early 2024 | | Paris | 10% | 20 MW/11 MW | $61,000 | $34,500 | 2024 Solar/2025 Battery | | Darien | 10% | 25 MW | $46,000 | $21,900 | 2024 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Management discusses the financial results for the third quarter and first nine months of 2023, highlighting increased earnings from electric infrastructure investments and rate changes, strategic focus on renewable energy, and potential impacts from regulatory and market factors [Executive Overview and Results of Operations](index=31&type=section&id=Executive%20Overview%20and%20Results%20of%20Operations) MGE Energy's Q3 2023 earnings increased to $37.9 million, with nine-month earnings at $97.6 million, driven by the Electric Utility segment's growth, while the Gas Utility segment saw a decline due to warmer weather MGE Energy Net Income by Business Segment (In millions) | Business Segment | Nine Months Ended Sep 30, 2023 (in millions) | Nine Months Ended Sep 30, 2022 (in millions) | | :--- | :--- | :--- | | Electric Utility | $66.0 | $55.2 | | Gas Utility | $10.5 | $12.8 | | Nonregulated Energy | $16.7 | $16.5 | | Transmission Investments | $5.8 | $4.8 | | All Other | ($1.4) | $0.6 | - Electric utility earnings increased due to new investments and rate changes, with warmer weather in Q3 increasing electric retail sales despite a Q1 decline[125](index=125&type=chunk) - Gas utility earnings decreased for the nine-month period due to a **15%** decrease in heating degree days, leading to an **11%** drop in gas retail sales[126](index=126&type=chunk) - The company is focused on achieving an **80%** carbon reduction by 2030 by transitioning away from coal and growing renewable generation[120](index=120&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company expects adequate liquidity for the next twelve months, with cash from operations increasing to $194.0 million and forecasted capital expenditures averaging over $230 million annually from 2024-2028, primarily for renewable generation Forecasted Capital Expenditures (In thousands) | Category | 2023 (in thousands) | 2024 (in thousands) | 2025 (in thousands) | 2026 (in thousands) | 2027 (in thousands) | 2028 (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Electric | $173,000 | $177,000 | $186,000 | $193,000 | $222,000 | $207,000 | | Gas | $33,000 | $28,000 | $29,000 | $32,000 | $29,000 | $28,000 | | Nonregulated | $6,000 | $9,000 | $10,000 | $7,000 | $6,000 | $8,000 | | **MGE Energy total** | **$212,000** | **$214,000** | **$225,000** | **$232,000** | **$257,000** | **$243,000** | - Forecasted capital expenditures for 2024-2028 show a significant focus on electric renewables, including solar, wind, and battery storage projects[196](index=196&type=chunk) - MGE Energy's common equity ratio was **61.3%** as of September 30, 2023, compared to **60.4%** at the end of 2022[210](index=210&type=chunk) [Other Matters](index=47&type=section&id=Other%20Matters) This section details key external factors affecting the company, including a pending rate case for 2024/2025, the ongoing FERC challenge to ATC's Return on Equity, and potential solar procurement disruptions - MGE filed a rate case for 2024/2025, proposing a **3.75%** electric and **2.56%** gas rate increase for 2024, with further increases proposed for 2025, and a final PSCW order expected by the end of 2023[215](index=215&type=chunk) - The company is exposed to risk from the ongoing challenge to ATC's ROE at FERC, where a reduction could lower MGE Energy's equity earnings, which constituted **5.7%** of its net income in the first nine months of 2023[217](index=217&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - Solar project timelines and costs may be impacted by the UFLPA and a USDOC tariff investigation, with MGE expecting to request recovery for any cost increases in future rate proceedings[222](index=222&type=chunk)[224](index=224&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk%2E) The company states that there were no material changes to the market risks disclosed in its 2022 Annual Report on Form 10-K - There were no material changes to the market risks disclosed in Item 7A of the company's 2022 Annual Report on Form 10-K[226](index=226&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures%2E) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes during the quarter - As of September 30, 2023, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[228](index=228&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter ended September 30, 2023, that materially affected or are reasonably likely to materially affect internal controls[229](index=229&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings%2E) The company and its subsidiaries are involved in various legal proceedings that are being handled and defended in the ordinary course of business and are not expected to have a material adverse effect - MGE Energy and its subsidiaries are involved in various legal proceedings handled in the ordinary course of business, with further details provided in Footnotes 8.a and 8.b[231](index=231&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors%2E) There have been no material changes from the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - There were no material changes from the risk factors disclosed in the company's 2022 Annual Report on Form 10-K[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) Under the Direct Stock Purchase and Dividend Reinvestment Plan, shares can be newly issued or purchased on the open market, and during 2023, all shares purchased under the plan were acquired in the open market - During 2023, shares purchased under the Direct Stock Purchase and Dividend Reinvestment Plan (Stock Plan) have been purchased in the open market, not newly issued by MGE Energy[233](index=233&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information%2E) No director or officer of MGE Energy or Madison Gas and Electric adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the third quarter of 2023 - During the three months ended September 30, 2023, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading arrangement[236](index=236&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits%2E) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act and XBRL data files - The report includes certifications from CEO Jeffrey M. Keebler and CFO Jared J. Bushek for both MGE Energy, Inc. and Madison Gas and Electric Company, as well as XBRL data files[238](index=238&type=chunk)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q June 30, 2023 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ | Commission Name of Registrant, State of Incorporation, Address | IRS Employer | | --- | --- | | File No. of Principal Executive Offices ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ | Commission Name of Registrant, State of Incorporation, Address IRS Employer | | | --- | --- | | File No. of Principal Executive Offices, and Telephone No. Identification No. | | | 000-49965 39-2040501 MGE | Energy, Inc. | | (a Wisconsin Corporation) | | | 133 South Blair Street | ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: December 31, 2022 ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ | Commission Name of Registrant, State of Incorporation, Address | IRS Employer | | --- | --- | | File No. of Principal Executive Offices, an ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: September 30, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | For the transition period from _______________ to _______________ | | | | | --- | --- | --- | --- | | Commission Name of Registrant, State of Incorporation, Address | | | IRS Employer | | File No. ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ | Commission | Name of Registrant, State of Incorporation, Address | | | IRS Employer | | --- | --- | --- | --- | --- | | File No. | of P ...

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: March 31, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | For the transition period from _______________ to _______________ | | | | | | | --- | --- | --- | --- | --- | --- | | Commission Name of Registrant, State of Incorporation, Address | | | | | IRS Emplo ...