MGE Energy(US:MGEE)2025-11-05 16:36Financial Performance - MGE Energy's earnings for the three months ended September 30, 2025, were $44.5 million, or $1.22 per share, representing an increase of 8.8% in earnings compared to $40.9 million, or $1.13 per share, in the same period of the prior year [123]. - For the nine months ended September 30, 2025, MGE Energy's earnings were $112.6 million, or $3.08 per share, up from $98.5 million, or $2.72 per share, in the same period of the prior year, reflecting a year-over-year increase of 14.2% [124]. - Electric revenue increased by $25.7 million (6.7%) to $410.0 million for the nine months ended September 30, 2025, compared to $384.3 million in 2024 [166]. - Other income from all operations increased by $3.2 million in Q3 2025, reflecting investment gains from venture capital funds [163]. - Nonregulated energy operations net income was $18.5 million for the nine months ended September 30, 2025, compared to $18.0 million in 2024 [179]. Sales and Revenue - Gas retail sales increased approximately 14% for the nine months ended September 30, 2025, compared to the prior year period, driven by higher demand due to a 19% increase in heating degree days [129]. - Electric revenue increased by $7.5 million to $155.3 million for the three months ended September 30, 2025, compared to $147.8 million in the same period of 2024, representing a 5.1% increase [148]. - Total retail electric sales volume increased by 1.8% to 2,454,327 kWh [166]. - MGE's residential electric sales increased by 2.7% to $54.3 million, while commercial sales decreased by 2.1% to $72.0 million [147]. - Gas revenue increased by $22.8 million (18.9%) to $143.6 million, driven by a 19.9% increase in total retail gas revenues [172]. Rate Changes - The PSCW approved a 4.17% increase to electric rates and a 1.32% increase to gas rates for 2025, with a subsequent adjustment lowering the electric rate increase to 2.63% due to lower expected fuel costs [131]. - MGE has proposed a 0.04% increase for electric rates and a 2.77% increase for gas rates for 2026, with a final order expected before the end of 2025 [139]. - The PSCW authorized a 2.63% rate increase for retail electric customers effective December 2023 [171]. - In September 2025, MGE agreed to a 0.04% increase for electric rates and a 2.77% increase for gas rates in 2026, with a proposed 3.76% increase for electric rates and a 2.04% increase for gas rates in 2027 [209]. Expenses and Costs - Operations and maintenance expenses increased by $1.2 million to $X million in Q3 2025, driven by higher electric production and transmission costs [158]. - Electric depreciation expense rose by $1.5 million in Q3 2025, attributed to new solar projects coming online [159]. - Operations and maintenance expenses rose by $4.8 million, primarily due to increased transmission costs ($2.5 million) and electric production expenses ($1.6 million) [176]. - Electric depreciation expense increased by $3.5 million, attributed to new solar facilities coming online [177]. Investments and Future Projects - MGE continues to pursue its goal of net-zero carbon electricity by 2050, focusing on solar, wind, and battery storage projects [141]. - MGE Energy's capital expenditures for 2025 are forecasted to be $330 million, with $282 million allocated for electric utility and $38 million for gas utility [192]. - MGE Energy's forecasted total capital expenditures for local solar and battery storage projects from 2025 to 2028 is approximately $90 million [200]. - The Elm Road Gas Fuel Flexibility Project aims to convert existing coal-fired boilers to natural gas, with an estimated cost of $11 million and expected service in 2028 [199]. Regulatory and Compliance Issues - MGE is monitoring potential disruptions in solar procurement due to new tariffs and regulations, which may impact costs and timelines for current and future projects [144]. - MGE is closely monitoring the EPA's regulatory actions regarding greenhouse gas regulations and other environmental matters [206]. - MGE's compliance with the Uyghur Forced Labor Prevention Act is ongoing, with potential impacts on solar panel supply and project costs [213]. - MGE is proactively evaluating the effects of evolving trade policies on operating costs and capital investments, particularly for renewable energy initiatives [217]. Cash Flow and Liquidity - MGE Energy's cash provided by operating activities increased by $18.9 million in 2025 compared to 2024, driven by higher overall collections from customers, which rose by $63.4 million [190]. - MGE Energy's cash flows from investing activities decreased by $94.2 million in 2025 compared to 2024, primarily due to increased capital expenditures related to electric and gas utility projects [191]. - MGE Energy's cash flows from financing activities increased by $61.5 million in 2025 compared to 2024, primarily due to changes in short-term debt borrowings [202]. - MGE Energy's liquidity is expected to remain adequate for future operations, supported by cash flows, liquid assets, and access to capital markets [188]. Employee Benefits - The value of employee benefit plan assets increased by approximately 13% during the nine months ended September 30, 2025 [221].