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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, 2025 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________
Commission File No.	Name of Registrant, State of Incorporation, Address of Principal Executive Offices, and Telephone No.	IRS Employer Identification No.
000-49965	MGE Energy, Inc. (a Wisconsin Corporation) 133 South Blair Street Madison, Wisconsin 53788 (608) 252-7000 \| mgeenergy.com	39-2040501
000-1125	Madison Gas and Electric Company (a Wisconsin Corporation) 133 South Blair Street Madison, Wisconsin 53788 (608) 252-7000 \| mge.com	39-0444025

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days:


MGE Energy, Inc. Yes ☒ No ☐	Madison Gas and Electric Company Yes ☒ No ☐

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files):


MGE Energy, Inc. Yes ☒ No ☐	Madison Gas and Electric Company Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging Growth Company
MGE Energy, Inc.	☒	☐	☐	☐	☐
Madison Gas and Electric Company	☐	☐	☒	☐	☐

If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


MGE Energy, Inc. ☐	Madison Gas and Electric Company ☐

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act):


MGE Energy, Inc. Yes ☐ No ☒	Madison Gas and Electric Company Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $1 Par Value Per Share	MGEE	The NASDAQ Stock Market


Number of Shares Outstanding of Each Class of Common Stock as of April 30, 2025
MGE Energy, Inc.	Common stock, $1.00 par value, 36,539,422 shares outstanding.
Madison Gas and Electric Company	Common stock, $1.00 par value, 17,347,894 shares outstanding (all of which are owned beneficially and of record by MGE Energy, Inc.).

Table of Contents


PART I. FINANCIAL INFORMATION	3
Filing Format	3
Forward-Looking Statements	3
Where to Find More Information	3
Definitions, Abbreviations, and Acronyms Used in the Text and Notes of this Report	4
Item 1. Financial Statements.	6
MGE Energy, Inc.	6
Consolidated Statements of Income (unaudited)	6
Consolidated Statements of Cash Flows (unaudited)	7
Consolidated Balance Sheets (unaudited)	8
Consolidated Statements of Common Equity (unaudited)	9
Madison Gas and Electric Company	10
Consolidated Statements of Income (unaudited)	10
Consolidated Statements of Cash Flows (unaudited)	11
Consolidated Balance Sheets (unaudited)	12
Consolidated Statements of Equity (unaudited)	13
MGE Energy, Inc., and Madison Gas and Electric Company - Notes to Consolidated Financial Statements (unaudited)	14
1. Summary of Significant Accounting Policies.	14
2. New Accounting Standards.	15
3. Investment in ATC and ATC Holdco.	15
4. Taxes.	16
5. Pension and Other Postretirement Plans.	16
6. Equity and Financing Arrangements.	17
7. Share-Based Compensation.	17
8. Commitments and Contingencies.	18
9. Rate Matters.	20
10. Derivative and Hedging Instruments.	21
11. Fair Value of Financial Instruments.	24
12. Joint Plant Construction Project Ownership.	26
13. Revenue.	26
14. Segment Information.	27
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	29
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	39
Item 4. Controls and Procedures.	40
PART II. OTHER INFORMATION.	41
Item 1. Legal Proceedings.	41
Item 1A. Risk Factors.	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	41
Item 3. Defaults Upon Senior Securities.	41
Item 4. Mine Safety Disclosures.	41
Item 5. Other Information.	41
Item 6. Exhibits.	42
Signatures - MGE Energy, Inc.	43
Signatures - Madison Gas and Electric Company	44

PART I. FINANCIAL INFORMATION.

Filing Format

This combined Form 10-Q is being filed separately by MGE Energy, Inc. (MGE Energy) and Madison Gas and Electric Company (MGE). MGE is a wholly owned subsidiary of MGE Energy and represents a majority of its assets, liabilities, revenues, expenses, and operations. Thus, all information contained in this report relates to, and is filed by, MGE Energy. Information that is specifically identified in this report as relating solely to MGE Energy, such as its financial statements and information relating to its nonregulated business, does not relate to, and is not filed by, MGE. MGE makes no representation as to that information. The terms "we" and "our," as used in this report, refer to MGE Energy and its consolidated subsidiaries, unless otherwise indicated.

Forward-Looking Statements

Certain matters discussed in this report include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about our future financial results, goals, plans, commitments, strategies and objectives, particularly related to future load growth, revenues, expenses, capital expenditures and rate recovery, financial resources, regulatory matters, and the scope and expense associated with future environmental regulation. Such statements involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. Words such as "believe," "expect," "anticipate," "estimate," "could," "should," "intend," "will," "commit," "target," "plan," and other similar words, and words relating to goals, targets and projections, generally identify forward-looking statements. Both MGE Energy and MGE caution investors that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected, expressed, or implied.

The factors that could cause actual results to differ materially from the forward-looking statements made by a registrant include (a) those factors discussed in the following sections of the registrants' 2024 Annual Report on Form 10-K: Item 1A. Risk Factors; Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, as updated by Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in this report; and Item 8. Financial Statements and Supplementary Data – Footnote 16, as updated by Part I, Item 1. Financial Statements – Footnote 8 in this report; and (b) other factors discussed herein and in other filings made by that registrant with the Securities and Exchange Commission (SEC).

Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this report. MGE Energy and MGE undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances after the date of this report, whether as a result of new information, future events, changed circumstances or otherwise, except as required by law.

Where to Find More Information

We file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and other information with the SEC. The SEC maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

MGE Energy maintains a website at mgeenergy.com, and MGE maintains a website at mge.com. Copies of the reports and other information that we file with the SEC may be obtained from our websites free of charge. Information contained on MGE Energy's and MGE's websites shall not be deemed incorporated into, or to be a part of, this report.

Definitions, Abbreviations, and Acronyms Used in the Text and Notes of this Report

Abbreviations, acronyms, and definitions used in the text and notes of this report are defined below.


MGE Energy and Subsidiaries:

CWDC	Central Wisconsin Development Corporation
MAGAEL	MAGAEL, LLC
MGE	Madison Gas and Electric Company
MGE Energy	MGE Energy, Inc.
MGE Power	MGE Power, LLC
MGE Power Elm Road	MGE Power Elm Road, LLC
MGE Power West Campus	MGE Power West Campus, LLC
MGE Services	MGE Services, LLC
MGE State Energy Services	MGE State Energy Services, LLC
MGE Transco	MGE Transco Investment, LLC
MGEE Transco	MGEE Transco, LLC
North Mendota	North Mendota Energy & Technology Park, LLC

Other Defined Terms:

2024 Annual Report on Form 10-K	MGE Energy's and MGE's Annual Report on Form 10-K for the year ended December 31, 2024
2021 Incentive Plan	MGE Energy's 2021 Long-Term Incentive Plan
AFUDC	Allowance for Funds Used During Construction
ATC	American Transmission Company LLC
ATC Holdco	ATC Holdco, LLC
Badger Hollow II	Badger Hollow II Solar Farm
Blount	Blount Station
BTA	Best technology available
CA	Certificate of Authority
CBP	U.S. Customs and Border Protection
CCR	Coal Combustion Residual
Codification	Financial Accounting Standards Board Accounting Standards Codification
Columbia	Columbia Energy Center
CSAPR	Cross-State Air Pollution Rule
Darien	Darien Solar Energy Center
Dth	Dekatherms, a quantity measure for natural gas
ELG	Effluent Limitations Guidelines
Elm Road Units	Elm Road Generating Station
EPA	United States Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
FIP Rule	Federal Implementation Plan, an air quality plan developed by the EPA to help states or tribes attain and/or maintain the NAAQS for criteria air pollutants
FTR	Financial Transmission Rights
GHG	Greenhouse gas
Heating degree days (HDD)	Measure of the extent to which the average daily temperature is below 65 degrees Fahrenheit, which is considered an indicator of possible increased demand for energy to provide heating
High Noon	High Noon Solar Project
IRS	Internal Revenue Service
Koshkonong	Koshkonkong Solar Energy Center
kWh	Kilowatt-hour, a measure of electric energy produced
MISO	Midcontinent Independent System Operator (a regional transmission organization)
MW	Megawatt, a measure of electric energy generating capacity
MWh	Megawatt-hour, a measure of electric energy produced
NAAQS	National Ambient Air Quality Standards
Nasdaq	The Nasdaq Stock Market
NOx	Nitrogen oxide
Paris	Paris Solar and Battery Park
PGA	Purchased Gas Adjustment clause, a regulatory mechanism used to reconcile natural gas costs recovered in rates to actual costs
PM	Particulate Matter
PSCW	Public Service Commission of Wisconsin


ROE	Return on equity
SEC	Securities and Exchange Commission
SO2	Sulfur dioxide
Stock Plan	Direct Stock Purchase and Dividend Reinvestment Plan of MGE Energy
Sunnyside	Sunnyside Solar and Battery Project
Therm	Measure of quantity of heat used to measure gas supply
UFLPA	Uyghur Forced Labor Protection Act
VIE	Variable Interest Entity
WCCF	West Campus Cogeneration Facility
WDNR	Wisconsin Department of Natural Resources
West Riverside	West Riverside Energy Center in Beloit, Wisconsin
Working capital	Current assets less current liabilities
WPDES	Wisconsin Pollutant Discharge Elimination System
WRO	Withhold Release Order
XBRL	eXtensible Business Reporting Language

Item 1. Financial Statements.

MGE Energy, Inc.

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)


	Three Months Ended
	March 31,
	2025			2024
Operating Revenues:
Electric revenues	$	125,489		$	116,167
Gas revenues		93,481			75,169
Total Operating Revenues		218,970			191,336

Operating Expenses:
Fuel for electric generation		17,569			12,704
Purchased power		4,378			9,442
Cost of gas sold		53,964			41,877
Other operations and maintenance		56,559			53,974
Depreciation and amortization		27,678			26,600
Other general taxes		5,957			5,994
Total Operating Expenses		166,105			150,591
Operating Income		52,865			40,745

Other income, net		2,604			3,881
Interest expense, net		(7,581	)		(8,004	)
Income before income taxes		47,888			36,622
Income tax provision		(6,296	)		(2,808	)
Net Income	$	41,592		$	33,814

Earnings Per Share of Common Stock
Basic	$	1.14		$	0.93
Diluted	$	1.14		$	0.93

Dividends per share of common stock	$	0.450		$	0.428

Weighted Average Shares Outstanding
Basic		36,511			36,171
Diluted		36,539			36,189

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

MGE Energy, Inc.

Consolidated Statements of Cash Flows (unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2025			2024
Operating Activities:
Net income	$	41,592		$	33,814
Items not affecting cash:
Depreciation and amortization		27,678			26,600
Deferred income taxes		1,344			(521	)
Provision for doubtful receivables		2,200			2,200
Employee benefit plan (credit) cost		(1,181	)		77
Equity earnings in investments		(3,181	)		(2,746	)
Other items		832			939
Changes in working capital items:
Current assets		15,343			18,417
Accounts payable		(16,485	)		(13,072	)
Other current liabilities		5,472			(106	)
Dividends from investments		3,287			2,106
Cash contributions to pension and other postretirement plans		(1,914	)		(1,825	)
Other noncurrent items, net		2,875			(68	)
Cash Provided by Operating Activities		77,862			65,815

Investing Activities:
Capital expenditures		(47,653	)		(44,771	)
Capital contributions to investments		(2,540	)		(1,381	)
Other		(399	)		(274	)
Cash Used for Investing Activities		(50,592	)		(46,426	)

Financing Activities:
Issuance of common stock, net		3,279			—
Cash dividends paid on common stock		(16,428	)		(15,460	)
Repayments of long-term debt		(1,308	)		(1,274	)
Proceeds from short-term debt		—			3,000
Other		(650	)		(554	)
Cash Used for Financing Activities		(15,107	)		(14,288	)

Change in cash, cash equivalents, and restricted cash		12,163			5,101
Cash, cash equivalents, and restricted cash at beginning of period		24,496			15,026
Cash, cash equivalents, and restricted cash at end of period	$	36,659		$	20,127

Supplemental disclosures of cash flow information:
Significant noncash investing activities:
Accrued capital expenditures	$	9,802		$	6,514

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

MGE Energy, Inc.

Consolidated Balance Sheets (unaudited)

(In thousands)


	March 31,		December 31,
ASSETS	2025		2024
Current Assets:
Cash and cash equivalents	$	35,307	$	21,302
Accounts receivable, less reserves of $8,416 and $6,905, respectively		53,083		51,277
Other accounts receivable, less reserves of $2,129 and $2,124, respectively		7,024		10,067
Unbilled revenues		30,481		35,833
Materials and supplies, at average cost		36,576		36,187
Fuel for electric generation, at average cost		12,651		11,521
Stored natural gas, at average cost		12,497		19,937
Prepaid taxes		14,128		18,390
Regulatory assets - current		8,030		8,522
Other current assets		12,569		14,229
Total Current Assets		222,346		227,265
Regulatory assets		38,312		36,764
Pension benefit asset		135,224		132,264
Other deferred assets and other		27,136		26,285
Property, Plant, and Equipment:
Property, plant, and equipment, net		2,213,857		2,149,138
Construction work in progress		84,215		138,208
Total Property, Plant, and Equipment		2,298,072		2,287,346
Investments		120,287		118,035
Total Assets	$	2,841,377	$	2,827,959

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Long-term debt due within one year	$	5,321	$	5,285
Accounts payable		48,016		77,466
Accrued interest and taxes		15,537		11,558
Accrued payroll related items		13,169		15,870
Regulatory liabilities - current		18,738		7,966
Other current liabilities		6,736		7,418
Total Current Liabilities		107,517		125,563
Other Credits:
Deferred income taxes		320,048		316,397
Investment tax credit - deferred		44,512		44,988
Regulatory liabilities		161,951		163,336
Accrued pension and other postretirement benefits		50,285		50,155
Asset retirement obligations		71,995		69,132
Other deferred liabilities and other		63,664		64,553
Total Other Credits		712,455		708,561
Capitalization:
Common shareholders' equity		1,258,913		1,230,138
Long-term debt		762,492		763,697
Total Capitalization		2,021,405		1,993,835
Commitments and contingencies (see Footnote 8)
Total Liabilities and Capitalization	$	2,841,377	$	2,827,959

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

MGE Energy, Inc.

Consolidated Statements of Common Equity (unaudited)

(In thousands, except per share amounts)


										Accumulated
					Additional					Other
	Common Stock				Paid-in		Retained			Comprehensive
	Shares		Value		Capital		Earnings			Income/(Loss)		Total
Three Months Ended March 31, 2024
Beginning Balance		36,163	$	36,163	$	396,750	$	707,160		$	—	$	1,140,073
Net income								33,814					33,814
Common stock dividends declared ($0.428 per share)								(15,460	)				(15,460	)
Equity-based compensation plans and other		13		13		343							356
Ending Balance - March 31, 2024		36,176	$	36,176	$	397,093	$	725,514		$	—	$	1,158,783

Three Months Ended March 31, 2025
Beginning Balance		36,490	$	36,490	$	429,515	$	764,133		$	—	$	1,230,138
Net income								41,592					41,592
Common stock dividends declared ($0.450 per share)								(16,428	)				(16,428	)
Direct Stock Purchase and Dividend Reinvestment Plan	36		36			3,243							3,279
Equity-based compensation plans and other	11		11			321							332
Ending Balance - March 31, 2025		36,537	$	36,537	$	433,079	$	789,297		$	—	$	1,258,913

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

Madison Gas and Electric Company

Consolidated Statements of Income (unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2025			2024
Operating Revenues:
Electric revenues	$	125,489		$	116,167
Gas revenues		93,481			75,169
Total Operating Revenues		218,970			191,336

Operating Expenses:
Fuel for electric generation		17,569			12,704
Purchased power		4,378			9,442
Cost of gas sold		53,964			41,877
Other operations and maintenance		56,262			53,560
Depreciation and amortization		27,678			26,600
Other general taxes		5,957			5,994
Total Operating Expenses		165,808			150,177
Operating Income		53,162			41,159

Other income, net		(384	)		1,108
Interest expense, net		(7,635	)		(8,076	)
Income before income taxes		45,143			34,191
Income tax provision		(5,340	)		(1,991	)
Net Income	$	39,803		$	32,200
Less: Net Income Attributable to Noncontrolling Interest, net of tax		(5,599	)		(5,597	)
Net Income Attributable to MGE	$	34,204		$	26,603

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

Madison Gas and Electric Company

Consolidated Statements of Cash Flows (unaudited)

(In thousands)


	Three Months Ended
	March 31,
	2025			2024
Operating Activities:
Net income	$	39,803		$	32,200
Items not affecting cash:
Depreciation and amortization		27,678			26,600
Deferred income taxes		982			(784	)
Provision for doubtful receivables		2,200			2,200
Employee benefit plan (credit) cost		(1,181	)		77
Other items		1,158			1,203
Changes in working capital items:
Current assets		15,369			17,746
Accounts payable		(16,498	)		(13,069	)
Other current liabilities		4,882			1,778
Cash contributions to pension and other postretirement plans		(1,914	)		(1,825	)
Other noncurrent items, net		1,475			(1,092	)
Cash Provided by Operating Activities		73,954			65,034

Investing Activities:
Capital expenditures		(47,653	)		(44,771	)
Other		(396	)		(421	)
Cash Used for Investing Activities		(48,049	)		(45,192	)

Financing Activities:
Cash dividends paid to parent by MGE		(13,500	)		(14,000	)
Distributions to parent from noncontrolling interest		(4,000	)		(4,000	)
Repayments of long-term debt		(1,308	)		(1,274	)
Proceeds from short-term debt		—			3,000
Other		(650	)		(554	)
Cash Used for Financing Activities		(19,458	)		(16,828	)

Change in cash, cash equivalents, and restricted cash		6,447			3,014
Cash, cash equivalents, and restricted cash at beginning of period		20,059			6,705
Cash, cash equivalents, and restricted cash at end of period	$	26,506		$	9,719

Supplemental disclosures of cash flow information:
Significant noncash investing activities:
Accrued capital expenditures	$	9,802		$	6,514

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

Madison Gas and Electric Company

Consolidated Balance Sheets (unaudited)

(In thousands)


	March 31,		December 31,
ASSETS	2025		2024
Current Assets:
Cash and cash equivalents	$	25,154	$	16,865
Accounts receivable, less reserves of $8,416 and $6,905, respectively		53,083		51,277
Other accounts receivable, less reserves of $2,129 and $2,124, respectively		7,019		10,063
Unbilled revenues		30,481		35,833
Materials and supplies, at average cost		36,576		36,187
Fuel for electric generation, at average cost		12,651		11,521
Stored natural gas, at average cost		12,497		19,937
Prepaid taxes		14,100		18,359
Regulatory assets - current		8,030		8,522
Other current assets		13,051		14,740
Total Current Assets		212,642		223,304
Regulatory assets		38,312		36,764
Pension benefit asset		135,224		132,264
Other deferred assets and other		26,560		25,690
Property, Plant, and Equipment:
Property, plant, and equipment, net		2,213,885		2,149,165
Construction work in progress		84,215		138,208
Total Property, Plant, and Equipment		2,298,100		2,287,373

Total Assets	$	2,710,838	$	2,705,395

LIABILITIES AND CAPITALIZATION
Current Liabilities:
Long-term debt due within one year	$	5,321	$	5,285
Accounts payable		47,989		77,453
Accrued interest and taxes		15,255		11,866
Accrued payroll related items		13,169		15,870
Regulatory liabilities - current		18,738		7,966
Other current liabilities		6,735		7,418
Total Current Liabilities		107,207		125,858
Other Credits:
Deferred income taxes		284,252		280,961
Investment tax credit - deferred		44,512		44,988
Regulatory liabilities		161,951		163,336
Accrued pension and other postretirement benefits		50,285		50,155
Asset retirement obligations		71,995		69,132
Other deferred liabilities and other		66,036		67,463
Total Other Credits		679,031		676,035
Capitalization:
Common shareholder's equity		1,010,123		989,419
Noncontrolling interest		151,985		150,386
Total Equity		1,162,108		1,139,805
Long-term debt		762,492		763,697
Total Capitalization		1,924,600		1,903,502
Commitments and contingencies (see Footnote 8)
Total Liabilities and Capitalization	$	2,710,838	$	2,705,395

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

Madison Gas and Electric Company

Consolidated Statements of Equity (unaudited)

(In thousands)


										Accumulated
					Additional					Other		Non-
	Common Stock				Paid-in		Retained			Comprehensive		Controlling
	Shares		Value		Capital		Earnings			Income/(Loss)		Interest			Total
Three Months Ended March 31, 2024
Beginning balance		17,348	$	17,348	$	252,917	$	633,460		$	—	$	149,531		$	1,053,256
Net income								26,603					5,597			32,200
Cash dividends paid to parent by MGE								(14,000	)							(14,000	)
Distributions to parent from noncontrolling interest													(4,000	)		(4,000	)
Ending Balance - March 31, 2024		17,348	$	17,348	$	252,917	$	646,063		$	—	$	151,128		$	1,067,456

Three Months Ended March 31, 2025
Beginning balance		17,348	$	17,348	$	283,667	$	688,404		$	—	$	150,386		$	1,139,805
Net income								34,204					5,599			39,803
Cash dividends paid to parent by MGE								(13,500	)							(13,500	)
Distributions to parent from noncontrolling interest													(4,000	)		(4,000	)
Ending Balance - March 31, 2025		17,348	$	17,348	$	283,667	$	709,108		$	—	$	151,985		$	1,162,108

The accompanying notes are an integral part of the above unaudited consolidated financial statements.

MGE Energy, Inc., and Madison Gas and Electric Company

Notes to Consolidated Financial Statements (unaudited)

March 31, 2025

Summary of Significant Accounting Policies – MGE Energy and MGE.

Basis of Presentation.

This report is a combined report of MGE Energy and MGE. References in this report to "MGE Energy" are to MGE Energy, Inc. and its subsidiaries. References in this report to "MGE" are to Madison Gas and Electric Company.

MGE Power Elm Road and MGE Power West Campus own electric generating assets and lease those assets to MGE. Both entities are variable interest entities (VIE) under applicable authoritative accounting guidance. MGE is considered the primary beneficiary of these entities as a result of contractual agreements. As a result, MGE has consolidated MGE Power Elm Road and MGE Power West Campus in its financial reports. See Footnote 3 of the Notes to the Consolidated Financial Statements under Item 8, Financial Statements and Supplementary Data, of MGE Energy's and MGE's 2024 Annual Report on Form 10-K (the 2024 Annual Report on Form 10-K).

The accompanying consolidated financial statements as of March 31, 2025, and during the three months ended March 31, 2025, as applicable, are unaudited but include all adjustments that MGE Energy and MGE management consider necessary for a fair statement of their respective financial statements. All adjustments are of a normal, recurring nature except as otherwise disclosed. The year-end consolidated balance sheet information was derived from the audited balance sheet appearing in the 2024 Annual Report on Form 10-K but does not include all disclosures required by accounting principles generally accepted in the United States of America. These notes should be read in conjunction with the financial statements and the notes thereto located on pages 53 through 99 of the 2024 Annual Report on Form 10-K.

Cash, Cash Equivalents, and Restricted Cash.

The following table presents the components of total cash, cash equivalents, and restricted cash on the consolidated balance sheets.


	MGE Energy				MGE
	March 31,		December 31,		March 31,		December 31,
(In thousands)	2025		2024		2025		2024
Cash and cash equivalents	$	35,307	$	21,302	$	25,154	$	16,865
Restricted cash		659		1,113		659		1,113
Receivable - margin account		693		2,081		693		2,081
Cash, cash equivalents, and restricted cash	$	36,659	$	24,496	$	26,506	$	20,059

Cash Equivalents

All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents.

Restricted Cash

MGE has certain cash accounts that are restricted to uses other than current operations and designated for a specific purpose. MGE's restricted cash accounts include cash held by trustees for certain employee benefits and cash deposits held by third parties. These are included in "Other current assets" on the consolidated balance sheets.

Receivable – Margin Account

Cash amounts held by counterparties as margin collateral for certain financial transactions are recorded as Receivable – margin account in "Other current assets" on the consolidated balance sheets. The costs being hedged are fuel for electric generation, purchased power, and cost of gas sold.

Property, Plant, and Equipment.

Columbia.

An asset that will be retired in the near future and substantially in advance of its previously expected retirement date is subject to abandonment accounting. In the second quarter of 2021, the operator of Columbia received approval from Midcontinent Independent System Operator (MISO) to retire Columbia Units 1 and 2. The co-owners intend to retire Unit 1 and Unit 2 by the end of 2029. Final timing and retirement dates continue to be evaluated and depend upon operational and regulatory considerations, capacity needs and availability, and other factors impacting one or more of the Columbia co-owners. As of March 31, 2025, early retirement of Columbia Unit 1 and 2 was probable.

Our ownership share of Columbia assets was classified as plant to be retired within "Property, plant, and equipment, net" on the consolidated balance sheets contained in the 2024 Annual Report on Form 10-K. Assets for Columbia Unit 1 and Unit 2 are currently included in rate base, and MGE continues to depreciate them on a straight-line basis using the composite depreciation rates approved by the Public Service Commission of Wisconsin (PSCW) that include retirement dates of 2029 for both Units.

If it becomes probable that regulators will disallow full recovery or a return on the remaining net book value of a generating unit that is either abandoned or probable of being abandoned, an impairment loss would be required. An impairment loss would be recorded to the extent that the remaining net book value of the generating unit exceeds the present value of the amount expected to be recovered from ratepayers. No impairment was recorded as of March 31, 2025.

New Accounting Standards - MGE Energy and MGE.

In December 2023, the Financial Accounting Standards Board issued authoritative guidance within the codification's Income Taxes topic, which expanded the disclosure requirements over effective tax rate reconciliations and income taxes paid. For public business entities, the authoritative guidance is effective for annual disclosures for fiscal years beginning after December 15, 2024. MGE has adopted the standard as of the effective date. The adoption of this standard is not expected to have a material impact on MGE Energy's and MGE's financial statements.

In November 2024, the Financial Accounting Standards Board issued authoritative guidance within the codification's Income Statement - Reporting Comprehensive Income topic, which added disclosure requirements for the disaggregation of certain income statement expenses. The authoritative guidance will become effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. MGE will adopt the standard as of the effective date. The adoption of this standard will not have a material impact on MGE Energy's and MGE's financial statements.

Investment in ATC and ATC Holdco - MGE Energy and MGE.

ATC owns and operates electric transmission facilities primarily in Wisconsin. MGE received an interest in ATC when it, like other Wisconsin electric utilities, contributed its electric transmission facilities to ATC, as required by Wisconsin law. That interest is presently held by MGE Transco, a subsidiary of MGE Energy. ATC Holdco was formed by several members of ATC, including MGE Energy, to pursue electric transmission development and investments outside of Wisconsin. The ownership interest in ATC Holdco is held by MGEE Transco, a subsidiary of MGE Energy.

MGE Transco and MGEE Transco have accounted for their investments in ATC and ATC Holdco, respectively, under the equity method of accounting. Equity earnings from investments are recorded as "Other income" on the consolidated statements of income of MGE Energy. MGE Transco recorded the following amounts related to its investment in ATC:


	Three Months Ended
	March 31,
(In thousands)	2025		2024
Equity earnings from investment in ATC	$	2,990	$	2,722
Dividends received from ATC		3,287		2,106
Capital contributions to ATC		2,492		715

In April 2025, MGE Transco made a $2.7 million capital contribution to ATC.

ATC's summarized financial data is as follows:


	Three Months Ended
	March 31,
(In thousands)	2025			2024
Operating revenues	$	234,929		$	211,928
Operating expenses		(116,745	)		(104,842	)
Other income, net		83			187
Interest expense, net		(39,193	)		(35,418	)
Earnings before members' income taxes	$	79,074		$	71,855

MGE receives transmission and other related services from ATC. During the three months ended March 31, 2025, and 2024, MGE recorded $10.2 million and $9.1 million, respectively, for transmission service. MGE also provides a variety of operational, maintenance, and project management work for ATC, which is reimbursed by ATC. As of March 31, 2025, and December 31, 2024, MGE had a receivable due from ATC of $0.4 million and $2.0 million, respectively. The receivable is primarily related to transmission interconnection activities at Paris and Darien solar generation sites. MGE will be reimbursed for these costs after the new generation assets are placed into service.

Taxes - MGE Energy and MGE.

Effective Tax Rate.

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
Three Months Ended March 31,	2025				2024				2025				2024
Statutory federal income tax rate		21.0		%		21.0		%		21.0		%		21.0		%
State income taxes, net of federal benefit		6.2				6.2				6.2				6.2
Amortized investment tax credits		(1.4	)			(2.2	)			(1.5	)			(2.4	)
Credit for electricity from renewable energy		(9.6	)			(10.2	)			(10.5	)			(11.2	)
AFUDC equity, net		(0.6	)			(0.6	)			(0.7	)			(0.7	)
Amortization of utility excess deferred tax - tax reform(a)		(2.6	)			(6.2	)			(2.8	)			(6.7	)
Other, net, individually insignificant		0.1				(0.3	)			0.1				(0.4	)
Effective income tax rate		13.1		%		7.7		%		11.8		%		5.8		%

(a)

Included are impacts of the Tax Cut and Jobs Act of 2017 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 both the three months ended March 31, 2025 and 2024, MGE recognized $0.9 million. For the three months ended March 31, 2024, MGE recognized $1.0 million of deferred taxes not restricted by IRS normalization rules.

The Inflation Reduction Act of 2022 allows the transfer of certain tax credits to third parties in exchange for cash. In 2024, MGE sold transfer eligible tax credits generated in 2023 and 2024. MGE elects to account for the transferred tax credits under the scope of ASC 740. The sale of tax credits is presented in the operating activities section of the consolidated statements of cash flows consistent with the presentation of cash taxes paid. MGE includes any expected proceeds from the transfer of tax credits in the evaluation of realizability of deferred tax assets related to tax credits and records a valuation allowance for the difference between the tax value of the credits and the expected proceeds. The PSCW approved the deferral by MGE of any differential between tax credit transfer proceeds and the tax value of credits reflected in rates to its next rate case filing.

Pension and Other Postretirement Plans - MGE Energy and MGE.

MGE maintains qualified and nonqualified pension plans, health care, and life insurance benefits and defined contribution 401(k) benefit plans for its employees and retirees.

The components of net periodic benefit cost, other than the service cost component, are recorded in "Other income, net" on the consolidated statements of income. The service cost component is recorded in "Other operations and maintenance" on the consolidated statements of income. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net periodic benefit costs are recovered and when costs are recognized.

The following table presents the components of net periodic benefit costs recognized.


	Three Months Ended
	March 31,
(In thousands)	2025			2024
Pension Benefits
Components of net periodic benefit cost:
Service cost	$	651		$	759
Interest cost		4,256			4,244
Expected return on assets		(7,261	)		(7,151	)
Amortization of:
Actuarial loss		48			116
Net periodic benefit (credit) cost	$	(2,306	)	$	(2,032	)

MGE ENERGY INC 10-Q