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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

~~[X]~~☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended:

December 31, ~~2012~~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.
CommissionFile No.	Exact Name of Registrant as Specified in its Charter, State or Other Jurisdiction of Incorporation or Organization, Addressof Principal Executive Offices, and Telephone No., including Area Code	IRS EmployerIdentification No.
000-49965	MGE Energy, Inc. (a Wisconsin Corporation) 133 South Blair ~~Street Madison~~StreetMadison, Wisconsin ~~53703~~ 53788(608) 252-7000 ~~www.~~\| mgeenergy.com	39-2040501
000-1125	Madison Gas and Electric Company (a Wisconsin Corporation) 133 South Blair ~~Street Madison~~StreetMadison, Wisconsin ~~53703~~ 53788(608) 252-7000 ~~www.~~\| mge.com	39-0444025

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

	Title of Class	~~Name~~Trading ~~of Each Exchange on which Registered~~Symbol	Name of Each Exchange on which Registered
MGE Energy, Inc.	Common Stock, $1 Par Value Per Share	~~The Nasdaq Stock Market~~MGEE	The NASDAQ Stock Market

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:


	Title of Class
Madison Gas and Electric Company	Common Stock, $1 Par Value Per Share

Indicate by ~~checkmark~~check mark if the ~~registrant~~registrants isare a well-known seasoned ~~issuer~~issuers, as defined in Rule 405 of the Securities Act.

MGE Energy, Inc. Yes ~~[X]~~ ☒ No ~~[ ]~~ ☐ Madison Gas and Electric Company Yes ~~[X]~~ ☒ No ~~[ ]~~ ☐

Indicate by ~~checkmark~~check mark if the ~~registrant~~registrants isare not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

MGE Energy, Inc. Yes ~~[ ]~~ ☐ No ~~[X]~~ ☒ Madison Gas and Electric Company Yes [☐ ] No ~~[X]~~ ☒

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.

~~Indicate~~MGE byEnergy, ~~check~~Inc. ~~mark~~Yes ~~whether~~☒ No ☐ Madison ~~the~~Gas 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)~~Electric ~~have~~Company ~~been subject to such filing requirements for the past 90 days.~~ Yes ~~[X]~~ ☒ No ~~[ ]~~ ☐

Indicate by check mark whether the registrants have submitted electronically ~~and posted on their corporate Web sites, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files): ~~Yes [X] No [ ]~~

~~Indicate~~MGE byEnergy, ~~check~~Inc. ~~mark~~Yes if☒ No ☐ Madison ~~disclosure~~Gas ~~of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,~~ and ~~will~~Electric ~~not~~Company beYes ~~contained, to the best of registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]~~☒ No ☐

Indicate by check mark ifwhether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See ~~definition~~the definitions of "large accelerated filer," "accelerated filer," ~~and~~ "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. X☒ ☐ ☐ ☐ ☐ Madison Gas and Electric Company X☐ ☐ ☒ ☐ ☐

~~Indicate~~If an emerging growth company, indicate by checkmark ~~whether~~if the ~~registrant~~registrants ishave aelected ~~shell~~not ~~company~~to ~~(as~~use ~~defined~~the inextended ~~Rule~~transition ~~12b-2~~period for complying with any new or revised financial reporting standards provided pursuant to Section 13(a) of the Exchange Act).

MGE Energy, Inc. ~~Yes [ ] No [X]~~ ☐ Madison Gas and Electric Company ~~Yes [ ] No [X]~~ ☐

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark ofwhether the ~~voting~~registrant has filed a report on and ~~nonvoting~~attestation ~~common~~to ~~equity~~its ~~held~~management’s byassessment ~~nonaffiliates~~of the effectiveness of ~~each~~its ~~registrant~~internal ascontrol over financial reporting under Section 404(b) of ~~June 30,~~the ~~2012,~~Sarbanes-Oxley ~~was~~Act as(15 ~~follows:~~U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

MGE Energy, Inc.	$1,090,221,546
Madison Gas and Electric Company	$0

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

~~The~~If ~~number~~securities are registered pursuant to Section 12(b) of ~~shares~~the ~~outstanding~~Act, indicate by check mark whether the financial statements of ~~each~~the registrant's ~~common~~included ~~stock~~in asthe filing reflect the correction of ~~February 1,~~an ~~2013,~~error ~~were~~to aspreviously ~~follows:~~issued financial statements.

MGE Energy, Inc.	23,113,638
Madison Gas and Electric Company	17,347,894

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

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

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

The aggregate market value of the voting and nonvoting common equity held by nonaffiliates of each registrant as of June 30, 2025 was as follows:


MGE Energy, Inc.	$3,223,355,207
Madison Gas and Electric Company	$0

The number of shares outstanding of each registrant's common stock as of February 20, 2026, were as follows:


MGE Energy, Inc.	36,563,899
Madison Gas and Electric Company	17,347,894

OMISSION OF CERTAIN INFORMATION

Madison Gas and Electric Company meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format allowed under that General Instruction.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of MGE Energy, Inc.'s definitive proxy statement to be filed ~~on or~~ before ~~March 28~~April 30, ~~2013~~2026, relating to its annual meeting of shareholders, are incorporated by reference into Part III of this annual report on Form 10-K.

Madison Gas and Electric Company meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore omitting (i.) the information otherwise required by Item 601 of Regulation S-K relating to a list of subsidiaries of the registrant as permitted by General Instruction (I)(2)(b), (ii.) the information otherwise required by Item 6 relating to Selected Financial Data as permitted by General Instruction (I)(2)(a), (iii.) the information otherwise required by Item 10 relating to Directors and Executive Officers as permitted by General Instruction (I)(2)(c), (iv.) the information otherwise required by Item 11 relating to executive compensation as permitted by General Instruction (I)(2)(c), (v.) the information otherwise required by Item 12 relating to Security Ownership of Certain Beneficial Owners and Management as permitted by General Instruction (I)(2)(c), and (vi.) the information otherwise required by Item 13 relating to Certain Relationships and Related Transactions as permitted by General Instruction (I)(2)(c).

Table of Contents

Filing Format


Filing Format.		4
Forward-Looking Statements.		4
Where to Find More Information.		4
Definitions, Abbreviations, and Acronyms Used in the Text and Notes of this Report.		5
PART I.		8
	Item 1. Business.	8
	Item 1A. Risk Factors.	19
	Item 1B. Unresolved Staff Comments.	26
	Item 1C. Cybersecurity.	26
	Item 2. Properties.	28
	Item 3. Legal Proceedings.	30
	Item 4. Mine Safety Disclosures.	30
PART II.		31
	Item 5. Market for Registrants' Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.	31
	Item 6. [Reserved].	31
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.	32
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk.	50
	Item 8. Financial Statements and Supplementary Data.	52
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	106
	Item 9A. Controls and Procedures.	106
	Item 9B. Other Information.	106
	Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	107
PART III.		108
	Item 10. Directors, Executive Officers, and Corporate Governance.	108
	Item 11. Executive Compensation.	108
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	108
	Item 13. Certain Relationships and Related Transactions, and Director Independence.	109
	Item 14. Principal Accounting Fees and Services.	109
PART IV.		110
	Item 15. Exhibits and Financial Statement Schedules.	110
	Item 16. Form 10-K Summary.	114
	Signatures - MGE Energy, Inc.	119
	Signatures - Madison Gas and Electric Company.	120

Forward-Looking Statements

Where to Find More Information

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

PART I.

Item 1. Business.

Item 1A. Risk Factors.

Item 1B. Unresolved Staff Comments.

Item 2. Properties.

Item 3. Legal Proceedings.

Item 4. Mine Safety Disclosures.

PART II.

Item 5. Market for Registrants' Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. 20

Item 6. Selected Financial Data.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

105

Item 9A. Controls and Procedures.

105

Item 9B. Other Information.

105

PART III.

106

Item 10. Directors, Executive Officers, and Corporate Governance.

106

Item 11. Executive Compensation.

106

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

106

Item 13. Certain Relationships and Related Transactions, and Director Independence.

106

Item 14. Principal Accounting Fees and Services.

107

PART IV.

108

Item 15. Exhibits and Financial Statement Schedules.

108

Signatures - MGE Energy, Inc.

117

Signatures - Madison Gas and Electric Company

118

Filing Format

This combined Form 10-K 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

~~This~~Certain ~~report,~~matters ~~and~~discussed ~~other~~in ~~documents~~this ~~filed~~report byinclude ~~MGE Energy~~"forward-looking ~~and~~statements" ~~MGE~~within ~~with~~the meaning of the Private Securities ~~and~~Litigation ~~Exchange~~Reform ~~Commission~~Act ~~(SEC)~~of ~~from~~1995. ~~time~~All statements that are not statements of historical facts are, or may be deemed to ~~time~~be, ~~contain~~forward-looking statements. Such forward-looking statements ~~that~~are ~~reflect~~based ~~management's~~on ~~current~~historical ~~assumptions~~performance and current expectations, estimates, ~~regarding~~forecasts and projections about our future ~~performance~~financial ~~and~~results, ~~economic~~goals, ~~conditions—especially~~plans, ascommitments, ~~they~~strategies ~~relate~~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. ~~These~~Such ~~forward-looking~~ 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 ~~made~~difficult ~~pursuant~~to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to ~~the~~differ ~~provisions~~materially offrom ~~the~~those ~~Private~~expressed ~~Securities~~in, ~~Litigation~~or ~~Reform~~implied ~~Act~~by, ofthe ~~1995~~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 Item 1A. Risk Factors, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and Item 8. Financial Statements and Supplementary Data, Footnote 16. Commitments and Contingencies, 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 ~~release~~update ~~any~~or ~~revision~~revise toany ~~these~~ forward-looking ~~statements~~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

~~The~~We ~~public~~file ~~may~~annual ~~read and copy any~~ reports oron ~~other~~Form ~~information that MGE Energy and MGE file with the SEC at the SEC's public reference room at 100 F Street~~10-K, ~~NE,~~quarterly ~~Washington,~~reports ~~D.C.~~on ~~20549.~~Form ~~The~~10-Q ~~public~~and ~~may~~current ~~obtain~~reports ~~information~~ on ~~the~~Form ~~operation~~8-K ofand ~~the~~other ~~Public~~information ~~Reference~~with ~~Room by calling~~ the SEC. atThe ~~1-800-~~SEC~~-0330.~~ ~~These~~maintains ~~documents~~an ~~also~~internet ~~are~~site ~~available to the public from commercial document retrieval services, the website maintained by the SEC~~ at ~~http://~~www.sec.gov, ~~MGE Energy's~~that ~~website~~contains ~~at http://www.mgeenergy.com~~reports, proxy and ~~MGE's~~information ~~website~~statements, ~~at http://www.mge.com. Copies may be obtained from our websites free of charge. Information contained on MGE Energy's~~ and ~~MGE's~~other ~~websites~~information ~~shall~~regarding ~~not~~issuers bethat ~~deemed~~file ~~incorporated~~electronically ~~into,~~with orthe ~~to be a part of, this report~~SEC.

4MGE 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~~4

~~Abbreviations~~Definitions, ~~acronyms~~Abbreviations, and ~~definitions~~Acronyms ~~used~~Used in the ~~text~~Text and ~~notes~~Notes of this ~~report are defined below.~~Report

MGE Energy and Subsidiaries:
MAGAEL	MAGAEL, LLC
MGE	Madison Gas and Electric Company
MGE Construct	MGE Construct LLC
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 Transco	MGE Transco Investment LLC
Other Defined Terms:
AFUDC	Allowance for Funds Used During Construction
Alliant	Alliant Energy Corporation
ANR	ANR Pipeline Company
ARO	Asset Retirement Obligation
ASM	Ancillary Services Market
ATC	American Transmission Company LLC
BACT	Best Available Control Technology
BART	Best Available Retrofit Technology
Bechtel	Bechtel Power Corporation
Blount	Blount Station
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAVR	Clean Air Visibility Rule
CO2	Carbon Dioxide
Codification	Financial Accounting Standards Board Accounting Standards Codification
Columbia	Columbia Energy Center
cooling degree days	Measure of the extent to which the average daily temperature is above 65 degrees Fahrenheit, which is considered an indicator of possible increased demand for energy to provide cooling
COSO	Committee of Sponsoring Organizations
CSAPR	Cross-State Air Pollution Rule
CWA	Clean Water Act
CWDC	Central Wisconsin Development Corporation
DNR	Department of Natural Resources
DOE	United States Department of Energy
Dth	Dekatherms
EEI	Edison Electric Institute
EGUs	Electric Generating Units
Elm Road Units	Elm Road Generating Station
EPA	United States Environmental Protection Agency
ERISA	Employee Retirement Income Security Act
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FTR	Financial Transmission Rights
GAAP	Generally Accepted Accounting Principles
GHG	Greenhouse Gas
HAPs	Hazardous Air Pollutants
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
ICF	Insurance Continuance Fund
IRS	Internal Revenue Service
kV	Kilovolt
kVA	Kilovolt Ampere

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:

2017 Tax Act	Tax Cuts and Jobs Act of 2017
2021 Incentive Plan	MGE Energy's 2021 Long-Term Incentive Plan
AFUDC	Allowance for Funds Used During Construction
AI	Artificial Intelligence
ANR	ANR Pipeline
ARO	Asset Retirement Obligation
ATC	American Transmission Company LLC
ATC Holdco	ATC Holdco, LLC
Badger Hollow I	Badger Hollow I Solar Farm
Badger Hollow II	Badger Hollow II Solar Farm
BART	Best Available Retrofit Technology
Blount	Blount Station
BTA	Best Technology Available
CA	Certificate of Authority
CBP	United States Customs and Border Patrol
CCR	Coal Combustion Residual
CO2	Carbon Dioxide
Codification	Financial Accounting Standards Board Accounting Standards Codification
CODM	Chief Operating Decision Maker
Columbia	Columbia Energy Center
Cooling Degree Days (CDD)	Measure of the extent to which the average daily temperature is above 65 degrees Fahrenheit, which is considered an indicator of possible increased demand for energy to provide cooling
COSO	Committee of Sponsoring Organizations
CSAPR	Cross-State Air Pollution Rule
D.C. Circuit	United States Court of Appeals for the District of Columbia Circuit
Darien	Darien Solar Energy Center
Dth	Dekatherms
2024 ELG Rule	Supplemental Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category
Elm Road Units	Elm Road Generating Station
EPA	United States Environmental Protection Agency
ERM	Enterprise Risk Management
EV	Electric vehicles
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
Forward Wind	Forward Wind Energy Center
FTR	Financial Transmission Rights
GAAP	Generally Accepted Accounting Principles

kWh	Kilowatt-hour
LIBOR	London Inter Bank Offer Rate
MACT	Maximum Achievable Control Technology
MATs	Mercury and Air Toxins Standards
MISO	Midwest Independent System Operator (a regional transmission organization)
MW	Megawatt
MWh	Megawatt-hour
NAAQS	National Ambient Air Quality Standards
Nasdaq	The Nasdaq Stock Market
NERC	North American Electric Reliability Corporation
NGCC	Natural Gas Combined Cycle
NNG	Northern Natural Gas Company
NO2	Nitrogen Dioxide
NODA	Notices of Data Availability
NOV	Notice of Violation
NOx	Nitrogen Oxides
NSPS	New Source Performance Standards
NYSE	New York Stock Exchange
OPRB	Other Postretirement Benefits
PCBs	Polychlorinated Biphenyls
PGA	Purchased Gas Adjustment clause
PJM	PJM Interconnection, LLC (a regional transmission organization)
PM	Particulate Matter
PPA	Purchased power agreement
PPACA	Patient Protection and Affordable Care Act
PSCW	Public Service Commission of Wisconsin
PSD	Prevention of Significant Deterioration
REC	Renewable Energy Credit
RICE	Reciprocating Internal Combustion Engine
RTO	Regional Transmission Organization
SEC	Securities and Exchange Commission
SIP	State Implementation Plan
SO2	Sulfur Dioxide
the State	State of Wisconsin
Stock Plan	Direct Stock Purchase and Dividend Reinvestment Plan of MGE Energy
UW	University of Wisconsin at Madison
VIE	Variable Interest Entity
WCCF	West Campus Cogeneration Facility
WDNR	Wisconsin Department of Natural Resources
WEPCO	Wisconsin Electric Power Company
Working capital	Current assets less current liabilities
WPDES	Wisconsin Pollutant Discharge Elimination System
WPL	Wisconsin Power and Light Company
WPSC	Wisconsin Public Service Corporation
WRERA	Worker, Retiree and Employer Recovery Act of 2008


GHG	Greenhouse Gas
Gristmill	Gristmill Solar Project
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
IPCC	Intergovernmental Panel on Climate Change
IRA	Inflation Reduction Act
IRS	Internal Revenue Service
ITC	Investment Tax Credit
Koshkonong	Koshkonong Solar Energy Center
KW	Kilowatt, a measure of electric energy generating capacity
kWh	Kilowatt-hour
MISO	Midcontinent Independent System Operator, Inc. (a regional transmission organization)
MW	Megawatt
MWh	Megawatt-hour
NAAQS	National Ambient Air Quality Standards
Nasdaq	The Nasdaq Stock Market
NERC	North American Electric Reliability Corporation
NNG	Northern Natural Gas Company
NOx	Nitrogen Oxides
NYSE	New York Stock Exchange
OBBBA	One Big Beautiful Bill Act
OSCE	State of Wisconsin's Office of Sustainability and Clean Energy
Paris	Paris Solar and Battery Park
Paris Agreement	Paris Agreement under the United Nations Framework Convention on Climate Change
PCAOB	Public Company Accounting Oversight Board
PCBs	Polychlorinated Biphenyls
PFAS	Polyfluoroalkyl substances
PGA	Purchased Gas Adjustment clause
PM	Particulate Matter
PSCW	Public Service Commission of Wisconsin
PTC	Production Tax Credit
REC	Renewable Energy Credit
Red Barn	Red Barn Wind Farm
RER	Renewable Energy Rider
ROE	Return on Equity
RTO	Regional Transmission Organization
Saratoga	Saratoga Wind Farm
SEC	Securities and Exchange Commission
SIP	State Implementation Plan
SO2	Sulfur Dioxide
SOFR	Secured Overnight Funding Rate
the State	State of Wisconsin
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
Tyto	Tyto Solar Fields
UFLPA	Uyghur Forced Protection Act
UW	University of Wisconsin at Madison
VIE	Variable Interest Entity
WCCF	West Campus Cogeneration Facility
WDNR	Wisconsin Department of Natural Resources
WEC	WEC Energy Group, Inc.
WEPCO	Wisconsin Electric Power Company, a subsidiary of WEC Energy Group, Inc.
West Marinette	West Marinette Power Station
West Riverside	West Riverside Energy Center in Beloit, Wisconsin
Working Capital	Current assets less current liabilities
WPDES	Wisconsin Pollutant Discharge Elimination System
WPL	Wisconsin Power and Light Company, a subsidiary of Alliant Energy Corporation

~~PART I.~~6

Item 1. Business.


WPSC	Wisconsin Public Service Corporation
WRO	Withhold Release Order
WRERA	Worker, Retiree and Employer Recovery Act of 2008
XBRL	eXtensible Business Reporting Language

~~MGE Energy operates in the following business segments:~~7

·PART I.

RegulatedItem electric1. utility operations – generating, purchasing, and distributing electricity through MGEBusiness.

·MGE Energy operates in the following business segments:

•

Regulated ~~gas~~electric utility operations – generating, purchasing, and distributing ~~natural~~electricity ~~gas~~ through MGE.

•

·Regulated gas utility operations – purchasing and distributing natural gas through MGE.

•

Nonregulated energy operations – ~~constructing,~~ owning, and leasing electric generating capacity that assists MGE through MGE Energy's wholly owned subsidiaries MGE Power Elm Road and MGE Power West Campus.

•

·Transmission investments – representing our investment in American Transmission Company LLC, a company engaged in the business of providing electric transmission services primarily in Wisconsin, and our investment in ATC Holdco LLC, a company created to facilitate out-of-state electric transmission development and investments.

•

~~Transmission~~All ~~investments~~other – ~~representing~~investing ~~our~~in ~~investment~~companies inand ~~American~~property ~~Transmission~~that ~~Company~~relate ~~LLC,~~to athe ~~company~~regulated ~~engaged~~operations inand financing the ~~business~~regulated ofoperations, ~~providing~~through ~~electric~~its ~~transmission~~wholly ~~services~~owned ~~primarily~~subsidiaries inCWDC, ~~Wisconsin~~MAGAEL, and North Mendota, and Corporate functions.

·See Footnote 22 to the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report for more information regarding MGE Energy's business segments.

~~All~~MGE's ~~other~~utility –operations ~~investing~~represent ina ~~companies~~majority of the assets, liabilities, revenues, expenses, and ~~property~~operations ~~that~~of ~~relate~~MGE Energy. MGE Energy's nonregulated energy operations currently include an undivided interest in two coal-fired generating units located in Oak Creek, Wisconsin, which we refer to as the ~~regulated~~Elm ~~operations~~Road Units, and ~~financing~~an undivided interest in a cogeneration facility located on the ~~regulated~~Madison ~~operations~~campus of the University of Wisconsin, ~~through~~which ~~its~~we ~~wholly~~refer ~~owned~~to ~~subsidiaries~~as ~~MAGAEL~~the ~~and~~West ~~CWDC,~~Campus ~~and~~Cogeneration ~~Corporate~~Facility ~~functions~~or WCCF.

~~MGE's~~As ~~utility~~a ~~operations~~public ~~represent~~utility, aMGE ~~majority~~is ofsubject ~~the~~to ~~assets,~~regulation ~~liabilities,~~by ~~revenues,~~the ~~expenses,~~PSCW and ~~operations~~the ~~of MGE Energy~~FERC. ~~MGE Energy's~~The ~~nonregulated~~PSCW ~~energy~~has ~~operations~~authority ~~currently~~to ~~include~~regulate anmost ~~undivided~~aspects ~~interest~~of inMGE's ~~two~~business ~~coal-fired~~including ~~generating~~rates, ~~units~~accounts, ~~located~~the inissuance ~~Oak~~of ~~Creek~~securities, ~~Wisconsin,~~and ~~which~~plant wesiting. ~~refer~~The toPSCW asalso ~~the~~has ~~Elm~~authority ~~Road~~over ~~Units,~~certain ~~and~~aspects anof ~~undivided~~MGE ~~interest~~Energy inas a ~~cogeneration~~holding ~~facility~~company ~~located~~of ona ~~the~~public ~~Madison~~utility. ~~campus~~FERC ofhas jurisdiction, under the ~~University~~Federal ofPower ~~Wisconsin~~Act, ~~which~~over wecertain ~~refer~~accounting topractices asand ~~the~~certain ~~West~~other ~~Campus~~aspects ~~Cogeneration~~of ~~Facility~~MGE's ~~or WCCF~~business.

AsMGE aEnergy's ~~public~~subsidiaries ~~utility,~~are ~~MGE~~also is subject to regulation byunder ~~the PSCW and the FERC. The PSCW has authority to regulate most aspects of MGE's business including rates~~local, ~~accounts~~state, ~~issuance of securities,~~ and ~~plant~~federal ~~siting.~~laws ~~The~~regarding ~~PSCW~~air ~~also~~and ~~has~~water ~~authority~~quality ~~over~~and ~~certain~~solid ~~aspects~~waste ofdisposal. ~~MGE Energy~~See as"Environmental aRegulation" ~~holding~~below ~~company~~for ofadditional ainformation ~~public~~regarding ~~utility. FERC has jurisdiction, under~~ the ~~Federal~~environmental ~~Power~~regulations ~~Act,~~to ~~over~~which ~~certain~~MGE ~~accounting~~Energy ~~practices~~ and ~~certain~~its ~~other~~subsidiaries ~~aspects~~are ~~of MGE's business~~subject.

MGE Energy's ~~subsidiaries~~was ~~are~~organized ~~also~~as ~~subject~~a toWisconsin ~~regulation~~corporation ~~under~~in ~~local,~~2001. ~~state,~~MGE ~~and~~was ~~federal~~organized ~~laws~~as ~~regarding~~a ~~air~~Wisconsin ~~and~~corporation ~~water~~in ~~quality~~1896. Our principal offices are located at 133 South Blair Street, Madison, Wisconsin 53788, and ~~solid~~our ~~waste~~telephone ~~disposal.~~number ~~See~~is ~~"Environmental"~~(608) ~~below~~252-7000.

~~MGE Energy~~Electric ~~was~~Utility organized as a Wisconsin corporation in 2001. MGE was organized as a Wisconsin corporation in 1896. Their principal offices are located at 133 South Blair Street, Madison, Wisconsin 53703, and their telephone number is 608-252-7000.Operations

~~Electric~~MGE ~~Utility~~distributes ~~Operations~~electricity in a service area covering a 264 square-mile area of Dane County, Wisconsin. The service area includes the city of Madison, Wisconsin. It owns or leases ownership interests in electric generation facilities located in Wisconsin and Iowa.

~~MGE~~As ~~distributes~~of ~~electricity~~December in31, a2025, ~~service~~MGE ~~area~~supplied ~~covering~~electric aservice ~~316~~to ~~square-mile~~approximately ~~area~~170,000 ~~of Dane County~~customers, ~~Wisconsin.~~with ~~The~~approximately ~~service~~91% ~~area~~located ~~includes~~in the ~~city~~cities of Fitchburg, Madison, ~~Wisconsin.~~Middleton, Itand ~~owns~~Monona, orWisconsin ~~leases~~and ~~ownership~~9% ~~interests~~ in ~~electric~~adjacent ~~generation facilities located in Wisconsin and Iowa~~areas.

At December 31, 2012, MGE supplied electric service to approximately 140,000 customers, with approximately 90% located in the cities of Fitchburg, Madison, Middleton, and Monona and 10% in adjacent areas. Of the total number of customers, approximately 86% were residential and 14% were commercial or industrial. Electric retail revenues for 2012, 2011, and 2010 were comprised of the following:8

	Year Ended December 31,
	2012	2011	2010
Residential	32.9%	32.9%	33.2%
Commercial	52.4%	52.2%	51.8%
Industrial	4.9%	5.1%	5.5%
Public authorities (including the UW)	9.8%	9.8%	9.5%
Total	100.0%	100.0%	100.0%

Electric sales, customers, and revenues for 2025 were comprised of the following:

Electric operations accounted for approximately ~~73.7~~72%, ~~69.5~~74%, and ~~68.5~~71% of MGE's total ~~2012~~2025, ~~2011~~2024, and ~~2010~~2023 regulated revenues, respectively.

7See Part I, Item 2. Properties, of this Report for a description of MGE's electric utility plant.

~~See~~MGE ~~Item~~is 2.registered ~~Properties~~with North American Electric Reliability Corporation (NERC) and one regional entity, ~~for~~the aMidwest ~~description~~Reliability Organization. The essential purposes of ~~MGE's~~these ~~electric~~entities ~~utility~~are ~~plant~~to develop and implement regional and NERC reliability standards and determine compliance with those standards, including enforcement mechanisms.

MGE is registered with two regional entities, The Midwest Reliability Organization and Reliability First Corporation. The essential purposes of these entities are the development and implementation of regional and NERC reliability standards; and determining compliance with those standards, including enforcement mechanisms.Transmission

In 2001, American Transmission Company LLC (ATC) was collectively formed by Wisconsin-based utilities which were required by Wisconsin law to contribute their transmission facilities to an independent system operator. ATC continues to be owned by those utilities and their affiliates. ATC's purpose is to provide reliable, economic transmission service to all customers in a fair and equitable manner. ATC plans, constructs, operates, maintains, and expands transmission facilities that it owns to provide adequate and reliable transmission of power. ATC is regulated by FERC for all rate terms and conditions of service. ATC is also regulated by the PSCW for some aspects of its governance and is a transmission-owning member of the MISO.

~~American~~Regional Transmission ~~Company~~Organizations ~~LLC~~ (~~ATC~~RTO) is owned by the utilities that contributed facilities or capital to it in accordance with Wisconsin law. ATC's purpose is to provide reliable, economic transmission service to all customers in a fair and equitable manner. ATC plans, constructs, operates, maintains, and expands transmission facilities that it owns to provide adequate and reliable transmission of power. ATC is regulated by FERC for all rate terms and conditions of service and is a transmission-owning member of the MISO.

~~Regional Transmission Organizations~~MISO

MGE is a nontransmission owning member of MISO. MISO, a FERC-approved RTO, is responsible for monitoring the electric transmission system that delivers power from generating plants to wholesale power customers. MISO's role is to ensure equal access to the transmission system and to maintain or improve electric system reliability across 15 U.S. states and the Canadian province of Manitoba.

~~MGE~~MISO isoperates a ~~nontransmission~~bid-based ~~owning~~energy ~~member~~market. MGE offers substantially all of its generation to the MISO. ~~MISO,~~market aand ~~FERC~~purchases ~~approved~~its ~~RTO~~electric supply, isor ~~responsible~~load ~~for~~requirement ~~monitoring~~from the ~~electric~~MISO ~~transmission~~market ~~system~~in ~~that~~accordance ~~delivers~~with ~~power~~the ~~from~~MISO ~~generating~~tariff. ~~plants~~MGE toalso ~~wholesale~~participates ~~power~~in ~~transmitters.~~the ancillary services market operated by MISO's, ~~role~~which is toan ~~ensure~~extension ~~equal~~of ~~access~~the toexisting energy market. Through the ~~transmission~~operation ~~system~~of the ancillary services market, MISO provides the reserves for MGE's load, and toMGE ~~maintain~~may oroffer ~~improve~~to ~~electric~~sell ~~system~~reserves ~~reliability~~from inits ~~the~~generating ~~Midwest~~units.

~~MISO~~MGE ~~maintains~~participates ain ~~bid-based~~the ~~energy~~MISO ~~market.~~capacity ~~MGE~~auction, ~~offers~~which ~~substantially~~provides ~~all~~a offorum ~~its~~for ~~generation~~buyers ~~on the MISO market~~ and ~~purchases~~sellers ~~much~~ of ~~its~~planning ~~load~~resource ~~requirement~~credits ~~from~~to ~~the~~interact. ~~MISO~~Load ~~market~~serving inentities ~~accordance~~such ~~with~~as ~~the MISO Tariff.~~ MGE ~~participates~~may participate in the ~~ancillary~~capacity ~~services~~auction ~~market~~to ~~(ASM)~~obtain ~~operated~~the bynecessary ~~MISO.~~aggregate ~~The~~planning ~~ASM~~resource iscredits anneeded ~~extension~~to ofmeet ~~the~~their ~~existing~~planning ~~energy~~reserve ~~market~~margin inrequirement ~~which~~established ~~MISO~~by ~~assumes~~ the ~~responsibility of maintaining sufficient generation reserves~~PSCW. InGenerator ~~the~~owners ~~ASM, MISO provides the reserves for MGE's load, and MGE~~ may ~~offer~~participate to sell ~~reserves~~any ~~from~~excess ~~its~~aggregate ~~generating~~planning ~~units~~resource credits.

~~MGE~~Fuel ~~participates~~supply ~~in the voluntary capacity auction, which provides an optional monthly forum for buyers~~ and sellers of aggregate planning resource credits to interact. Load serving entities may participate in the voluntary capacity auction potentially to obtain the necessary aggregate planning resource credits needed to meet their planning reserve margin requirement. Generator owners may participate to sell any excess aggregate planning resource credits that are not needed by them. generation

~~PJM~~MGE satisfies its customers' electric demand with internal generation and purchased power. MGE's current fuel mix for generation fluctuates from year-to-year due to fuel pricing in the market, generating unit availability, weather, and customer demand. MGE has a responsibility to its customers to dispatch the lowest cost generation available pursuant to regulatory requirements.

MGE is a member of PJM. PJM, an RTO, is a neutral and independent party that coordinates and directs the operation of the transmission grid within its area of coverage, administers a competitive wholesale electricity market, and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. 9

~~Fuel~~MGE's ~~supply~~electric ~~and~~energy ~~generation~~delivery requirements were satisfied from the following fuel sources:

MGE satisfies its customers' electric demand with internal generation and purchased power. During the years ended December 31, 2012, 2011, and 2010, MGE's electric energy delivery requirements were satisfied by the following sources:


(in MWh)	2025		2024		2023
Coal(a)		1,750,273		1,452,156		1,359,691
Natural gas		756,966		654,406		566,972
Renewable sources(b)		913,612		840,060		715,369
Fuel oil		862		489		544
Purchased power - other(c)(d)		305,250		537,445		744,120
Total fuel sources		3,726,963		3,484,556		3,386,696

Adjusted total fuel sources(d)		4,033,161		3,814,229		3,643,267

(a)

	Year Ended December 31,
	2012	2011	2010
Coal	50.1%	54.8%	50.4%
Natural gas	8.7%	4.7%	4.2%
Fuel oil	0.1%	0.1%	0.1%
Renewable sources	2.7%	2.8%	2.6%
Purchased power
Renewable	8.4%	7.9%	7.2%
Other	30.0%	29.7%	35.5%
Total	100.0%	100.0%	100.0%

MGE's coal generation for electric supply may fluctuate from year to year. Generation sources change based on lowest cost generation available. MGE continues to drive its commitment to achieve our emission reduction goals through the continuing addition of renewable generation and its transition plan to eliminate coal as a fuel source.

(b)

~~Sources~~Includes ~~used~~both ~~depend~~internal ongeneration ~~market prices, generating unit availability, weather,~~ and ~~customer~~purchased ~~demand~~power.

(c)

8Includes third-party purchased power and MISO market activity. A significant percentage of MGE's electric supply comes from internal generation sources. MGE supplements this internal generation with long-term purchase power agreements and spot purchases in the MISO market.

(d)

~~Coal~~The MISO market consists of two energy markets, the Day-ahead market and the Real-time market. The table above nets purchases and sales within the same hour in the two MISO markets. For the years ended December 31, 2025, 2024, and 2023, the amount netted between Day-ahead and the Real-time MISO markets was 306,198 MWh, 329,672 MWh, and 256,571 MWh, respectively. These amounts are reflected in "Adjusted total fuel sources."

~~MGE~~Environmental ~~and~~Initiatives ~~two~~– ~~other~~Electricity utilities jointly own Columbia, a coal-fired generating facility, which accounts for 29% (225 MW) of MGE's net summer rated capacity. Power from this facility is shared in proportion to each owner's ownership interest. MGE has a 22% ownership interest in Columbia. The other owners are WPL (a subsidiary of Alliant), which operates Columbia, and WPSC. The Columbia units burn low-sulfur coal obtained (pursuant to contracts from one to five years in length) from the Powder River Basin coal fields located in Wyoming. The coal inventory supply for the Columbia units increased from approximately 31 days on December 31, 2011, to approximately 37 days on December 31, 2012. The co-owners' current goal is to maintain approximately a 35 day inventory.Generation

MGE ~~Power~~continues ~~Elm~~to ~~Road~~advance ~~and~~its ~~two other owners own undivided interests in the coal~~long-~~fired~~term ~~Elm~~strategy ~~Road~~to ~~Units~~achieve ina ~~Oak~~more ~~Creek,~~sustainable ~~Wisconsin,~~future ~~which accounts~~ for ~~14% of MGE's net summer rated capacity. Power from this facility is shared in proportion to each owner's ownership interest. MGE Power Elm Road owns an 8.33% ownership interest in~~ the ~~Elm~~benefit ~~Road~~of ~~Units and~~ its ~~interest~~investors, inemployees, ~~the~~customers ~~Elm Road Units is leased to MGE. The other owners are Wisconsin Energy Corporation (which owns approximately 83% of the Elm Road Units~~ and is the ~~operator~~communities ofit ~~those units) and WPPI Energy, Inc~~services. ~~The~~MGE ~~Elm~~has ~~Road~~set ~~Units~~a ~~burn~~target ~~bituminous coal obtained (pursuant to contracts) from northern West Virginia and southwestern Pennsylvania. MGE's share~~ of ~~the~~providing ~~coal~~net-zero ~~inventory~~carbon ~~supply~~electricity ~~for~~by ~~the Elm Road Units increased from approximately 36 days on December 31, 2011, to approximately 49 days on December 31, 2012~~2050.

~~See~~MGE's ~~discussion~~carbon ~~below~~reduction ~~under~~goals ~~Nonregulated~~are ~~Operations~~generally ~~regarding~~aligned with leading scientific guidance, including recommendations from the Intergovernmental Panel on Climate Change (IPCC) to limit global temperature increases to 1.5 degrees Celsius above pre-industrial levels. In 2020, the University of Wisconsin-Madison's Nelson Institute for Environmental Studies released its analysis of MGE's ~~interest~~net-zero by 2050 goal. The IPCC modeling available suggested that by 2050, emissions from electricity generation in industrialized countries should be 87% to 99% lower than the ~~Elm~~2005 ~~Road~~baseline. ~~Units~~The analysis determined that our 2050 goal is in line with model benchmarks to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

~~Natural~~MGE's ~~gas~~strategy focuses on adopting cost effective technologies as they become commercially available, while maintaining reliability and ~~oil~~affordability. Significant investments in solar, wind, and battery storage support MGE's long term decarbonization goal.

•

~~MGE~~Renewable ~~owns~~generation ~~gas~~and storage -~~fired~~ ~~combustion~~Solar, ~~turbines.~~wind, ~~These~~and ~~turbines~~battery ~~are~~storage ~~primarily~~projects ~~located~~play a critical role in ~~Madison~~MGE's ~~and~~strategy ~~Marinette,~~for ~~Wisconsin,~~reducing ~~and~~carbon ~~have~~emissions ain ~~total~~pursuit of ~~155 MW~~net-zero carbon electricity by 2050. Additionally, MGE plans to reduce its use of ~~net~~fossil ~~summer~~fuels ~~rated~~and ~~capacity~~work to help customers with energy efficiency and electrification, including the electrification of transportation.

Since 2015, MGE ~~also~~has ~~owns~~added ~~the~~253 ~~Blount~~MW ~~Generating~~of ~~Facility~~solar, ~~located~~93 inMW ~~Madison,~~of ~~Wisconsin~~wind generation, ~~which~~and is11 ~~fueled~~MW byof ~~gas~~battery ~~and~~storage ~~other~~to ~~alternative~~its electric renewable ~~sources~~generation portfolio. AsSee ~~planned~~Item 2. Properties below for further information on these facilities. In addition, ~~capacity~~MGE ~~was~~expects ~~reduced~~to atadd ~~Blount~~approximately ~~from~~252 ~~190~~ MW toof ~~100~~ solar, 18 MW asof wind, and 125 MW of ~~December 31~~battery storage, ~~2011~~which include projects approved or pending PSCW approval, by the end of 2030.

~~See~~MGE ~~discussion~~is ~~below~~partnering ~~under~~with ~~Nonregulated~~Columbia's ~~Operations~~co-owners ~~regarding~~to construct a compressed carbon dioxide long-duration energy storage system, known as the Columbia Energy Storage project. MGE's ~~interest~~19% share will be 3 MW. The project was selected for a grant from the U.S Department of Energy. The Columbia Energy Storage project was approved by the PSCW in 2025. This project will be the ~~West~~first ~~Campus~~of ~~Cogeneration~~its ~~Facility~~kind in the United States.

~~Renewable~~MGE is working to achieve a more sustainable energy future by investing in cost-effective renewable generation ~~sources~~and innovative new technologies and services for customers. MGE has emphasized this innovation by developing customer programs to address climate change and encourage our customers to use clean energy. A portion of MGE's renewable generation is dedicated to customer programs such as the Renewable Energy Rider (RER) and Shared Solar Program. The RER and Shared Solar programs reduce MGE's carbon emissions while providing customers the ability to purchase renewable energy to meet their energy needs.

MGE owns 30 MW, consisting of 18 turbines, in a wind-powered electric generating facility in Worth County, Iowa. MGE also owns 11 MW, consisting of 17 turbines, in a wind-powered electric generating facility in Kewaunee County, Wisconsin. 10

~~Purchased~~Renewable ~~power~~Energy Rider (RER) – Under this program, MGE partners with large energy users, primarily governmental entities, to provide customized renewable energy solutions. MGE owns the generation assets and RER customers are billed a PSCW-approved contractual renewable resource rate that covers all costs associated with the construction and ongoing operations of the renewable generation facility. MGE has developed approximately 42 MW of solar generation under the RER program.

~~MGE~~Shared ~~enters~~Solar ~~into~~Program ~~short~~– ~~and~~This ~~long-term~~program ~~purchase~~offers ~~power~~residential ~~commitments~~and ~~with~~small ~~third~~business ~~parties~~customers to meet aup ~~portion~~to half of ~~its~~their ~~anticipated~~annual ~~electric~~energy needs with locally generated solar energy. ~~supply~~The ~~needs~~first solar array associated with this program, owned by MGE, became operational in 2017 for 500 KW capacity. The ~~following~~completion ~~table~~of ~~identifies~~a ~~purchase~~second ~~power~~solar ~~commitments~~facility at(Morey ~~December 31~~Field) added 3.5 MW of capacity to the program, ~~2012~~as well as 2 MW from Strix Solar, ~~with~~which ~~unaffiliated~~was ~~parties~~completed ~~for~~in 2025. In December 2025, the ~~next~~PSCW ~~five~~approved ~~years~~the implementation of a new community solar program, Shared Solar for Business, for large commercial customers.

	(Megawatts)		2013		2014		2015		2016		2017
	Purchase Power Commitments		253.6		153.6		153.6		153.6		153.6

Electrifying Transportation - The electrification of transportation is a key strategy for reducing carbon emissions. MGE has established a network of nearly 60 charging stations, powered by renewable energy, serving the growing number of electric vehicles (EV) in MGE's service area. The EV fast charging hubs feature some of the most powerful EV chargers in the Midwest. MGE has continued to add EVs to its fleet and is targeting 100% all-electric or plug-in hybrid light-duty vehicles by 2030. Additionally, we are working with the City of Madison to further the electrification of its vehicles and buses. MGE continues to provide technical assistance to the city in the development of an all-electric Bus Rapid Transit system.

•

~~Gas~~Transitioning ~~Utility~~away ~~Operations~~from coal

Elm Road Units – In October 2025, MGE, ~~transports~~along with the plant co-owners, filed a joint application with the PSCW to end the use of coal as a primary fuel at the Elm Road Units and ~~distributes~~transition the plant to natural gas. inTransition aplans ~~service~~and ~~area~~costs ~~covering~~will 1be subject to PSCW approval. By the end of 2030,~~631~~ ~~square~~coal ~~miles~~is inexpected ~~seven~~to ~~south-central~~be ~~Wisconsin~~used ~~counties.~~only ~~The~~as ~~service~~a ~~area~~backup ~~includes~~fuel at the ~~city~~Elm Road Units. By the end of ~~Madison~~2032, ~~Wisconsin~~MGE ~~and~~expects ~~surrounding~~that ~~areas~~the Elm Road Units will be fully transitioned away from coal.

AtColumbia ~~December 31~~- Operational, ~~2012~~regulatory, ~~MGE~~and ~~supplied~~environmental ~~natural~~regulation ~~gas~~considerations ~~service~~have toimpacted ~~approximately~~and ~~145,000~~continue ~~customers~~to inimpact ~~the~~Columbia's ~~cities~~generation ofplanning. ~~Elroy~~MGE, ~~Fitchburg,~~as ~~Lodi,~~a ~~Madison,~~minority ~~Middleton~~owner, ~~Monona,~~and ~~Prairie~~Columbia's duother ~~Chien,~~co-owners ~~Verona,~~continue ~~and~~to ~~Viroqua;~~evaluate 24transitioning ~~villages;~~away ~~and~~from ~~all~~coal orand ~~parts~~continue ofto 45evaluate ~~townships.~~replacing Of the ~~total~~generation ~~number~~from ofColumbia ~~customers,~~while ~~approximately~~maintaining ~~89%~~electric ~~were~~service ~~residential~~reliability. MGE and ~~11%~~Columbia's ~~were~~co-owners ~~commercial~~are orexploring ~~industrial~~converting Columbia to natural gas.

•

9Natural gas as a fuel source - As part of MGE's continued energy transition plan, MGE plans to invest in additional natural gas-fired generation and storage facilities. Natural gas plants add needed reliability and balance to the electric system while MGE continues to transition away from coal-fired generation and add more renewable capacity to MGE's generation mix. MGE purchased 50 MW (25 MW in 2023 and 25 MW in 2024) in the West Riverside Energy Center (West Riverside), a highly efficient, state-of-the-art natural gas-fired plant in Beloit, Wisconsin. In February 2026, MGE executed an asset purchase agreement for 168 MW of existing gas-fired generation through an ownership share in the RockGen Energy Center near Cambridge, Wisconsin, subject to PSCW approval. If approved, the transaction is expected to close in late 2027.

~~Gas~~Generation ~~revenues for 2012, 2011, and 2010 were comprised of the following:~~sources

	Year Ended December 31,
	2012	2011	2010
Residential	56.1%	56.5%	56.0%
Commercial	32.9%	34.4%	34.3%
Industrial	8.9%	7.2%	7.9%
Transportation service and other	2.1%	1.9%	1.8%
Total	100.0%	100.0%	100.0%

MGE receives electric generation supply from coal-fired, gas-fired, and renewable energy sources. These sources include owned facilities as well as facilities leased from affiliates and accounted for under our nonregulated energy operations. See Item 2. Properties for more information regarding these generation sources, including location, capacity, ownership or lease arrangement, and fuel source. See "Nonregulated Energy Operations" below for more information regarding generating capacity leased to MGE by MGE Energy's nonregulated subsidiaries.

~~Gas~~Purchased ~~operations accounted for approximately 26.3%, 30.5%, and 31.5% of MGE's total 2012, 2011, and 2010 regulated revenues, respectively.~~power

MGE ~~can~~enters ~~curtail~~into ~~gas~~short- ~~deliveries~~and long-term purchase power commitments with third parties to meet a portion of its ~~interruptible~~anticipated ~~customers~~electric energy supply needs. ~~Approximately~~As ~~20%~~of ~~and~~December ~~14%~~31, 2025, MGE has 30 MW of ~~retail~~a ~~gas~~renewable ~~deliveries~~purchase inpower ~~2012~~commitment ~~and~~for ~~2011,~~each ~~respectively,~~of ~~were~~the tonext ~~interruptible~~two ~~customers~~years.

~~Gas supply~~11

~~MGE~~Gas ~~has~~Utility physical interconnections with ANR and NNG. MGE's primary service territory, which includes Madison and the surrounding area, receives deliveries at one NNG and four ANR gate stations. MGE also receives deliveries at NNG gate stations located in Elroy, Prairie du Chien, Viroqua, and Crawford County. Interconnections with two major pipelines provide competition in interstate pipeline service and a more reliable and economical gas supply mix, which includes gas from Canada and from the mid-continent and Gulf/offshore regions in the United States. Operations

~~During~~MGE ~~the~~transports ~~winter~~and ~~months,~~distributes ~~when~~natural ~~customer~~gas ~~demand~~in isa ~~high,~~service ~~MGE~~area iscovering ~~primarily~~1,722 ~~concerned~~square ~~with~~miles ~~meeting~~in ~~its~~seven ~~obligation~~south-central toWisconsin ~~firm customers~~counties. ~~MGE~~The ~~meets~~service ~~customer~~area ~~demand~~includes ~~by using firm supplies under contracts finalized before~~ the ~~heating~~city ~~season,~~of ~~supplies in storage (injected during the summer)~~Madison, Wisconsin and ~~other~~surrounding ~~firm supplies purchased during the winter period~~areas.

ByAs ~~contract,~~of aDecember ~~total~~31, ~~of 5~~2025,~~399,949~~ ~~Dth~~MGE ofsupplied natural gas ~~can~~service beto ~~injected~~approximately ~~into~~180,000 ~~ANR's~~customers ~~storage fields~~ in ~~Michigan from April 1 through October 31. These gas supplies are then available for withdrawal during~~ the ~~subsequent~~cities ~~heating~~of ~~season~~Elroy, ~~November 1~~Fitchburg, ~~through~~Lodi, ~~March 31.~~Madison, ~~Using~~Middleton, ~~storage~~Monona, ~~allows~~Prairie ~~MGE~~du ~~to buy gas supplies during the summer season~~Chien, ~~when prices are normally lower~~Verona, and ~~withdraw~~Viroqua; ~~these~~25 ~~supplies~~villages; ~~during~~and ~~the~~all ~~winter~~or ~~season,~~parts ~~when~~of ~~prices~~49 ~~are typically higher~~townships. ~~Storage~~Gas ~~also~~sales, ~~gives~~customers, ~~MGE~~and ~~more~~revenues ~~flexibility~~for in2025 ~~meeting~~were ~~daily~~comprised ~~load~~of ~~fluctuations.~~the following:

~~MGE's~~Gas ~~contracts~~operations accounted for ~~firm~~approximately ~~transportation~~28%, ~~service~~26%, and 29% of ~~gas~~MGE's ~~include~~total ~~winter~~2025, ~~maximum~~2024, ~~daily~~and ~~quantities~~2023 ~~of:~~regulated revenues, respectively.

·MGE can curtail gas deliveries to interruptible customers. These are customers who agree to reduce their load in the case of an emergency interruption. In 2025, 2024, and 2023, approximately 2%, 2%, and 3%, respectively, of retail gas deliveries were to interruptible customers.

~~162,150~~Environmental ~~Dth~~Initiatives ~~(including~~- ~~96,078~~Natural ~~Dth~~gas ~~of storage withdrawals) on ANR.~~distribution

·Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve net-zero methane emissions from its natural gas distribution system by 2035. If MGE can accelerate plans to achieve net-zero methane emissions from its natural gas system—through the evolution of new technologies, such as renewable natural gas—it will. MGE is working to reduce overall emissions from its natural gas distribution system in a quick and cost effective manner. MGE offers two voluntary renewable natural gas programs. The initial program, launched in May 2024, enables customers to offset emissions associated with their natural gas consumption through a mechanism in which MGE purchases renewable thermal credits and retires them on behalf of participating customers. The second program, launched in January 2026, enables customers to inject renewable natural gas produced on the customer's premise into MGE's distribution system; customers may sell the natural gas to MGE or another third party and may retain or sell to MGE or another third party the associated environmental attributes.

~~60,108~~Gas ~~Dth on NNG.~~supply

~~Nonregulated~~MGE ~~Energy~~has ~~Operations~~physical interconnections with ANR Pipeline Company (ANR) and Northern Natural Gas Company (NNG). MGE's primary service territory, which includes Madison and the surrounding area, receives deliveries at one NNG and four ANR gate stations. MGE's outlying territory receives deliveries at NNG gate stations located in Elroy, Prairie du Chien, Viroqua, and Crawford County. Interconnections with two major pipelines provide competition in interstate pipeline service and a more reliable and economical gas supply mix, which includes gas from Canada and the mid-continent and Gulf Coast regions of the United States.

~~MGE Energy~~During the winter months, ~~through~~when ~~its~~customer ~~subsidiaries~~demand is typically higher, ~~has~~MGE ~~developed~~is ~~generation~~primarily ~~sources~~concerned ~~that~~with ~~assist~~meeting its obligation to customers. MGE meets customer demand by using firm supplies under contracts finalized before the heating season, supplies in ~~meeting~~storage (injected during the ~~electricity~~summer), ~~needs~~and ofother ~~its~~firm ~~customers.~~supplies purchased during the winter period.

~~Elm~~Annually, ~~Road~~through our contracts with ANR, a total of approximately 6.5 million Dth of gas can be injected into ANR's storage fields in Michigan from April 1 through October 31. These gas supplies are then available for withdrawal during the subsequent heating

MGE Power Elm Road and two other owners own undivided interests in the coal-fired Elm Road Units in Oak Creek, Wisconsin. Unit 1 entered commercial operation in February 2010, and has the capacity to produce 615 MW of electricity. Unit 2 entered commercial operation in January 2011, and has the capacity to produce 615 MW of electricity. Wisconsin Energy Corporation owns approximately 83% of the Elm Road Units and is the operator for those units. MGE Power Elm Road owns an 8.33% ownership interest in both units. Both units are used to provide electricity to MGE's customers.12

~~MGE~~season, ~~leases~~November ~~MGE~~1 ~~Power~~through ~~Elm~~March ~~Road's~~31. ~~ownership~~Using ~~interest~~storage inallows ~~the~~MGE ~~Elm Road Units pursuant~~ to ~~two~~buy ~~separate~~gas ~~facility~~supplies ~~leases.~~during ~~The~~the ~~financial~~summer ~~terms of each facility lease include a capital structure of 55% equity and 45% long-term debt~~season, ~~return~~when onprices ~~equity~~are ofnormally ~~12.7%~~lower, and awithdraw ~~lease~~these ~~term~~supplies ofduring ~~30 years. At~~ the ~~end~~winter ~~of the respective lease terms~~season, ~~MGE~~when ~~may,~~prices atare ~~its~~typically ~~option, renew the facility lease for an additional term, purchase the leased ownership interest at fair market value or allow the lease to end~~higher. ~~The~~Storage ~~Unit 1~~also ~~and~~gives ~~Unit 2~~MGE ~~leases~~more ~~commenced~~flexibility ~~with~~in ~~the~~meeting ~~commercial~~daily ~~operation~~load ~~of each respective unit~~fluctuations.

10MGE's contracts for firm transportation service of gas include winter maximum daily quantities of:

•

~~WCCF~~185,650 Dth (including 116,078 Dth of storage withdrawals) on ANR.

•

~~MGE Power West Campus and the UW jointly own undivided interests in a natural gas-fired cogeneration facility on the UW campus. The facility has the capacity to produce 20~~81,~~000~~453 ~~tons~~Dth of chilled water, 500,000 pounds per hour of steam, and approximately 150 MW of electricity. The UW owns 45% of the facility, which represents its interest in the chilled-water and steam assets. These assets are used to meet the UW's growing need for air-conditioning and steam-heat capacity. MGE Power West Campus owns 55% of the facility, which represents its interest in the electric generating assets. These assets are used to provide electricity to MGE's customers. The UW's share of the plant and portion of the earnings from the WCCF are not reflected in the consolidated financial statements of MGE Energy or MGE. MGE Power West Campus' share of the cost of this project is reflected in property, plant, and equipment on ~~MGE Energy's and MGE's consolidated balance sheets~~NNG.

~~MGE~~Nonregulated ~~leases~~Energy the electric generating assets owned by MGE Power West Campus and is responsible for operating the entire facility. The financial terms of the facility lease include a capital structure of 53% equity and 47% long-term debt, return on equity of 12.1%, and a lease term of 30 years. At the end of the lease term in 2035, MGE may, at its option, renew the facility lease for an additional term, purchase the generating facility at fair market value or allow the lease contract to end.Operations

~~Transmission~~MGE ~~Investments~~Energy, through our subsidiaries, has developed generation sources that assist MGE in meeting the electricity needs of our customers. These sources consist of the Elm Road Units and the WCCF, which are owned by subsidiaries of MGE Energy and leased to MGE. See Item 2. Properties for a description of these facilities, their joint owners, and the related lease arrangements.

~~ATC~~Transmission 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. That interest is presently held by MGE Transco, which is jointly owned by MGE Energy and MGE. At December 31, 2012, MGE Transco held a 3.6% ownership interest in ATC.Investments

~~In April 2011,~~ ATC owns and ~~Duke~~operates ~~Energy~~electric ~~announced~~transmission ~~the~~facilities ~~creation~~primarily ofin aWisconsin. ~~joint~~MGE ~~venture,~~received ~~Duke-American~~an ~~Transmission~~interest ~~Company~~in ~~(DATC)~~ATC when it, ~~that~~in ~~seeks~~coordination towith ~~build,~~other ~~own,~~Wisconsin ~~and~~electric ~~operate~~utilities, ~~new~~contributed its electric transmission ~~infrastructure~~facilities into ~~North~~ATC ~~America~~as torequired ~~address~~by ~~increasing~~Wisconsin ~~demand~~law. ~~for~~That ~~affordable~~interest is presently held by MGE Transco, ~~reliable~~a ~~transmission~~wholly-owned ~~capacity~~subsidiary of MGE Energy. As of December 31, 2025, MGE Transco held a 3.6% ownership interest in ATC.

~~Environmental~~In 2016, ATC Holdco was formed by several of the members of ATC, including MGE Energy, to explore electric transmission development and investments outside of Wisconsin, which typically have long development and investment lead times before becoming operational. MGE Energy's ownership interest in ATC Holdco is held by MGEE Transco, a wholly-owned subsidiary of MGE Energy. As of December 31, 2025, MGEE Transco held a 4.4% ownership interest in ATC Holdco.

~~MGE~~Environmental is subject to frequently changing local, state, and federal regulations concerning air quality, water quality, land use, threatened and endangered species, hazardous materials handling, and solid waste disposal. These regulations affect the manner in which MGE conducts its operations, the costs of those operations, as well as some capital and operating expenditures. They can also affect the siting, timing, and cost of new projects or other significant actions affecting the environment. Some of the most significant are addressed below. MGE is not able to predict with certainty the direction of future regulations or if compliance with any such regulations will involve additional expenditures for pollution control equipment, plant modifications, or curtailment of operations. Such actions could reduce capacity or efficiency at existing plants or delay the construction and operation of future generating facilities. MGE management would expect to seek and receive rate recovery for costs associated with approval and installation of any required pollution controls.Regulation

~~Air~~MGE ~~Quality~~Energy and MGE are subject to frequently changing local, state, and federal regulations concerning air quality, water quality, land use, threatened and endangered species, hazardous materials handling, and solid waste disposal. These regulations affect the manner in which we conduct our operations, the costs of those operations, as well as capital and operating expenditures. Several of these environmental rules are subject to legal challenges, reconsideration and/or other uncertainties. Regulatory initiatives, proposed rules, and court challenges to adopted rules could have the potential to have a material effect on our capital expenditures and operating costs. Management believes compliance costs will be recovered in future rates based on the previous treatment of environmental compliance projects. In addition to the regulations discussed below, MGE continues to track state and federal initiatives such as potential state and federal regulations governing surface water and/or groundwater containing per- and polyfluoroalkyl substances (PFAS), potential changes to regulations governing polychlorinated biphenyl (PCB), potential changes to air and water standards, and potential climate change legislation.

~~Air~~Water quality regulations promulgated by the Environmental Protection Agency (EPA) and Wisconsin Department of Natural Resources (WDNR) in accordance with the Federal Clean Air Act and the Clean Air Act Amendments of 1990 impose restrictions on emission of particulates, sulfur dioxide (SO2), nitrogen oxides (NOx), hazardous air pollutants and other pollutants, and require permits for operation of emission sources. These permits must be renewed periodically. Various newly enacted and/or proposed federal and state initiatives are expected to result in additional operating and capital expenditure costs for fossil-fueled electric generating units. Quality

~~Vacation~~Effluent ofLimitations ~~EPA's~~Guidelines ~~Cross State Air Pollution Rule (CSAPR)~~ and ~~Reinstatement~~Standards offor ~~the~~Steam ~~Clean~~Electric ~~Air~~Power ~~Interstate~~Generating ~~Rule~~Point ~~(CAIR)~~Source Category

The EPA's ~~has~~ promulgated ~~three~~water ~~interstate~~Effluent ~~air~~Limitations ~~pollution~~Guidelines ~~rules~~(ELG) ~~consisting~~and ofstandards ~~the~~for ~~NOx~~steam ~~SIP~~electric ~~Call,~~power ~~the~~plants ~~Clean~~focus ~~Air~~on ~~Interstate~~the ~~Rule~~reduction ~~(CAIR),~~of metals and ~~the~~other ~~Cross-State~~pollutants ~~Air~~in ~~Pollution~~wastewater ~~Rule~~from ~~(CSAPR)~~new and existing power plants. ~~These~~MGE's ~~rules~~Columbia ~~were~~plant ~~each~~and ~~designed~~Elm Road Units are subject to ~~reduce~~this ~~nitrogen~~rule. ~~oxide~~In ~~(NOx)~~May ~~and/or~~2024, ~~sulfur~~the ~~dioxide~~EPA ~~(SO2)~~finalized ~~air~~the ~~emissions~~ELG ~~from~~rule ~~electric~~that ~~generating~~further ~~units~~regulates ~~(EGUs)~~wastewater ~~located~~discharges inassociated ~~Wisconsin~~with ~~and~~coal-fired ~~other~~power ~~states~~plants. ~~NOx~~The ~~and~~rule ~~SO2~~focuses ~~interact~~on inwastewater ~~the~~discharges ~~atmosphere~~from toflue ~~form~~gas ~~ambient~~desulfurization, ~~ozone~~combustion residual leachate, and ~~fine~~bottom ~~particulate~~ash ~~matter~~transport ~~pollution~~water. AsThe ~~explained~~rule ~~below,~~also ~~only~~regulates ~~the~~legacy ~~CAIR~~wastewater ~~currently~~that ~~affects~~is ~~MGE's~~discharged ~~generation~~from ~~assets.~~certain surface impoundments.

InSee ~~2000,~~Footnote ~~the U~~16.Sa. ~~Court~~ of ~~Appeals for~~ the ~~D.C.~~Notes ~~Circuit~~to ~~held~~the ~~that~~Consolidated ~~Wisconsin~~Financial ~~had~~Statements ~~been illegally included~~ in aPart ~~portion of the NOx SIP Call~~II, ~~but~~Item ~~stayed~~8 ~~the~~of ~~remaining~~this ~~legal~~Report ~~challenges~~for tofurther ~~the~~discussion ~~rule pending EPA's development~~ of ~~additional~~environmental ~~interstate~~compliance ~~transport rules~~obligations. AtBased ~~this~~on ~~time,~~previous ~~the~~treatment ~~requirements~~ of ~~the~~environmental ~~NOx~~compliance ~~SIP~~projects, ~~Call~~management ~~and~~believes ~~the~~that ~~costs~~any of compliance ~~remain~~costs ~~uncertain~~will inbe ~~view~~recovered ofin ~~the~~future ~~developments affecting the interstate transport rules~~rates.

11Cooling Water Intake Rules (Section 316(b))

InSection ~~2005,~~316(b) ~~EPA~~of ~~promulgated~~ the ~~CAIR~~Clean ~~imposing~~Water ~~additional~~Act ~~controls~~requires onthat ~~NOx~~cooling ~~and~~water ~~SO2~~intake ~~emissions~~structures ~~from~~at ~~EGUs~~electric ~~located~~power inplants ~~Wisconsin~~meet ~~and~~best ~~other~~available ~~states.~~technology ~~However,~~(BTA) instandards ~~December 2008,~~to ~~the~~reduce ~~U.S.~~mortality ~~Court~~from ofentrainment ~~Appeals~~(drawing ~~for~~aquatic ~~the~~life ~~D.C.~~into ~~Circuit~~a ~~remanded~~plant's ~~the~~cooling ~~CAIR~~system) toand ~~the~~impingement ~~EPA~~(trapping ~~with~~aquatic ~~directions~~life toon ~~revise~~screens orof ~~replace~~cooling ~~the~~water ~~rule~~intake structures). The ~~Court's~~EPA ~~remand~~finalized ~~order~~its ~~directed~~Section ~~that~~316(b) ~~the~~rule ~~CAIR~~for ~~remain~~existing facilities in ~~effect~~2014. ~~until~~Section ~~the~~316(b) ~~EPA~~requirements ~~promulgated~~are aimplemented ~~replacement~~in ~~rule.~~Wisconsin ~~The~~through ~~Court's~~modifications ~~order~~to ~~did~~WPDES ~~not~~permits, ~~include~~which agovern ~~deadline~~plant ~~for~~wastewater ~~the EPA to act~~discharges.

In August 2011, the EPA responded to the remand of the CAIR by promulgating the CSAPR. However, in August, 2012, the U.S. Court of Appeals for the D.C. Circuit vacated CSAPR and instructed the EPA to continue administering the CAIR pending finalizing a valid alternative program to control interstate pollution. In January 2013, the U.S. Court of Appeals for the D.C. Circuit denied EPA's petition for reconsideration decision en banc. At this time, the CAIR remains currently effective.13

~~The~~Blount ~~CAIR~~received ~~generally~~its ~~requires~~most ~~NOx~~recent ~~and~~WPDES ~~SO2~~permit ~~emission reductions~~ from ~~fossil~~the ~~fuel-fired~~Wisconsin ~~EGUs~~Department ~~(25 MW~~of orNatural ~~greater~~Resources (WDNR) in ~~the~~October ~~eastern~~2023. ~~half~~Blount's oflatest ~~the~~WPDES ~~United~~permit ~~States~~assumes inthat ~~two~~the ~~phases~~plant ~~and~~meets ~~includes~~BTA astandards ~~regional~~for ~~cap-and-trade~~entrainment ~~system.~~for ~~The~~the ~~first~~duration ~~phase~~of ~~(currently~~this permit which expires in ~~place)~~2028. ~~requires~~The ~~annual~~WDNR ~~regional~~included ~~emission~~a ~~reductions~~requirement ~~from~~to ~~2003~~conduct ~~levels~~an ofoptimization ~~55%~~study ~~for~~to ~~NOx~~demonstrate ~~and~~compliance ~~40%~~with ~~for~~impingement ~~SO2.~~BTA ~~The~~standards ~~second~~in ~~phase,~~the ~~scheduled~~latest topermit ~~begin~~which inneeds ~~2015,~~to ~~reduces~~be ~~regional~~completed ~~NOx~~by ~~and~~January ~~SO2~~2028. ~~emissions~~Once ~~further~~the ~~from~~WDNR ~~2003~~determines ~~levels~~the toimpingement ~~65%~~requirements ~~and~~at ~~70%~~Blount, ~~respectively.~~ MGE ~~owns~~will orbe ~~has~~able ~~partial~~to ~~ownership~~determine inany ~~several~~compliance ~~generation~~costs ~~units~~of ~~currently~~meeting ~~subject~~Blount's topermit ~~the~~requirements. ~~CAIR:~~Based ~~Blount,~~on ~~Columbia,~~previous ~~Elm~~treatment ~~Road~~of ~~Units~~environmental compliance projects, ~~and~~management ~~its~~believes ~~combustion~~that ~~turbines~~any ~~located~~compliance incosts ~~West~~will ~~Marinette~~be ~~and~~recovered ~~Fitchburg.~~in future rates.

~~Our~~Intakes ~~evaluation~~at ofColumbia ~~the~~are ~~CAIR~~subject ~~demonstrates that MGE is in compliance with the CAIR's Phase I requirements without capital expenditures or modifications~~ to ~~our~~this ~~operations~~rule. WeThe ~~have~~Columbia ~~also~~operator ~~evaluated~~timely ~~our~~submitted ~~potential~~its ~~expenditures~~renewal ifapplication ~~the CAIR remains in place for the Phase II reductions. Based on our Phase II evaluation, MGE will be able~~ to ~~meet Phase II NOx emissions reductions through using our NOx allowances provided through~~ the ~~rule, and we will meet Phase II SO2 emissions reductions through installation of pollution controls~~WDNR. ~~New SO2 controls at~~ Columbia's ~~are~~operator ~~already~~anticipates ~~underway~~that ~~and~~BTA ~~are~~improvements ~~planned~~required ~~to be completed~~ by ~~early 2014 (see~~ the ~~discussion~~future ~~regarding~~renewal ~~the~~permit ~~Columbia~~will ~~Environmental~~be ~~Project~~coordinated ~~below).~~with ~~Once~~ the ~~new~~WDNR ~~environmental~~by ~~control project is completed at Columbia, it is expected that~~ the ~~plant~~end ~~will~~of ~~emit SO2 below anticipated Phase II CAIR allocation levels~~2029. MGE ~~expects~~will ~~that~~continue ~~any costs incurred~~ to ~~meet~~work ~~Phase~~with IIColumbia's ofoperator ~~the~~to ~~CAIR~~evaluate ~~will~~regulatory ~~be fully recoverable through rates~~requirements. MGE ~~will~~does ~~continue~~not ~~monitoring~~expect ~~the~~this ~~EPA's~~rule ~~actions in response~~ to ~~the~~have ~~August 2012~~a ~~CSAPR~~material ~~vacature,~~effect ~~and~~on ~~the stayed NOx SIP Call litigation~~Columbia.

~~Clean~~ Air ~~Visibility Rule (CAVR)~~Quality

Air ~~modeling~~quality ~~indicates~~regulations ~~that~~promulgated ~~SO2~~by ~~and~~the ~~NOx~~EPA ~~emissions (~~and toWDNR ain ~~lesser~~accordance ~~extent~~with ~~particulate~~the ~~matter,~~Federal orClean ~~PM)~~Air ~~from~~Act ~~Columbia~~and ~~may~~the ~~impair~~Clean ~~visibility~~Air atAct ~~certain~~Amendments ~~Class~~of I1990 ~~Scenic~~impose ~~Areas~~restrictions ~~and~~on ~~may~~the ~~therefore~~emission beof ~~subject~~particulates, tosulfur ~~the~~dioxide ~~best~~(SO2), ~~available~~nitrogen ~~retrofit~~oxides ~~technology~~ (~~BART~~NOx) ~~regulations~~, ahazardous ~~subsection~~air ofpollutants ~~the~~and ~~EPA's~~other ~~Clean Air Visibility Rule (CAVR)~~pollutants, ~~which~~and ~~may~~ require ~~pollution~~permits ~~retrofits~~for tothe beoperation ~~installed~~of atemission ~~Columbia~~sources. ~~The~~These ~~EPA~~permits ~~had~~must ~~proposed~~be ~~that~~renewed ~~Columbia's~~periodically. ~~compliance~~Various ~~with~~newly ~~emissions~~enacted ~~limitations~~and/or inproposed ~~the~~federal ~~CAIR~~ and ~~the~~state ~~CSAPR~~initiatives ~~could~~may ~~also~~result ~~serve~~in asadditional ~~compliance~~operating ~~with~~and ~~the~~capital ~~BART~~expenditure ~~regulations~~costs for ~~SO2~~fossil-fueled ~~and~~electric ~~NOx~~generating ~~emissions~~units. ~~However,~~Based ~~this~~on ~~proposal~~previous istreatment ~~now uncertain because~~ of ~~the~~environmental ~~D.C.~~compliance ~~Court of Appeals remanding the CAIR to EPA and vacating the CSAPR. At this time~~projects, ~~the~~management ~~BART~~believes ~~regulatory~~that ~~obligations,~~any compliance ~~strategies~~costs ~~and~~will ~~costs~~be ~~remain~~recovered ~~uncertain~~in future rates.

~~Columbia~~Ozone NAAQS

~~Columbia~~The isElm aRoad ~~coal-fired~~Units ~~generating~~are ~~station~~located ~~operated by WPL~~ in ~~which~~Milwaukee ~~WPL~~County, ~~WPSC~~Wisconsin, ~~and MGE have ownership interests. In December 2009, the EPA sent~~ a ~~Notice~~nonattainment ofarea ~~Violation~~for ~~(NOV) to MGE as one of~~ the ~~co-owners~~2015 ofOzone ~~Columbia~~NAAQS. ~~The~~At ~~NOV~~this ~~alleges that WPL and the Columbia co-owners failed to comply with appropriate pre-construction review and permitting requirements and~~time, ~~as a result, violated~~ the ~~Prevention~~operator of ~~Significant Deterioration program requirements, Title V Operating Permit requirements of~~ the ~~CAA,~~Elm ~~and~~Road ~~the~~Units ~~Wisconsin~~does ~~SIP.~~not Inexpect ~~September 2010,~~that the ~~Sierra~~2015 ~~Club~~Ozone ~~filed~~NAAQS aor ~~civil lawsuit against WPL alleging violations of~~ the ~~CAA~~Milwaukee atCounty ~~Columbia~~nonattainment ~~and~~designation ~~other~~will ~~Wisconsin facilities operated by WPL. See Footnote 18.e for additional information regarding these matters. MGE believes that the parties~~ have ~~reached~~ a ~~tentative~~direct ~~agreement~~material effect on the ~~general~~Elm ~~terms~~Road ~~of a settlement with the EPA and Sierra Club regarding various facilities, including Columbia~~Units. ~~The parties are currently negotiating a consent decree based upon those general terms, which may change during the negotiations.~~

~~Solid~~Fine ~~Waste~~Particulate Matter (PM2.5) NAAQS

~~Proposed~~In ~~Regulation~~March 2024, the EPA published a final rule to lower the average annual PM2.5 NAAQS from 12 ug/m3 to 9 ug/m3, effective May 2024. The new annual PM2.5 NAAQS could impact Milwaukee County, where the Elm Road Units are located, if the county is determined to be in nonattainment. A nonattainment designation would require the State of ~~Coal~~Wisconsin ~~Combustion~~to ~~Byproducts~~develop a plan to get into attainment, which would likely include additional limitations for new and modified plants in the county. With the planned transition of the Elm Road Units to natural gas, there is a low probability for the need of additional emission limitations. However, the final impact of this rule will not be known until the EPA determines the attainment status of Wisconsin counties, and the State of Wisconsin develops an attainment implementation plan. MGE will continue to follow the rule's developments.

~~The~~Rules ~~EPA~~regulating ~~published~~nitrogen aoxide ~~proposed~~(NOx) rule on May 4, 2010, to regulate coal combustion byproducts from the electric generating sector. If adopted, the final regulations may require new or additional monitoring of storage sites, may re-classify ash and ~~other~~sulfur ~~coal~~dioxide ~~combustion~~(SO2) ~~byproducts~~emissions, ~~and~~including ~~may regulate ash storage site structural design. MGE is evaluating~~ the ~~impact~~Cross ofState ~~these~~Air ~~proposed~~Pollution ~~regulations~~Rule's on(CSAPR) ~~our~~Good ~~operations.~~Neighbor ~~The~~Plan ~~EPA~~and ~~has~~Clean ~~indicated~~Air ~~that~~Visibility the final rules will likely not be issued until late 2013 or early 2014. It is not possible for MGE to project the potential costs associated with the implementation of any of these initiatives until the rule is finalized.Rule

12The EPA's CSAPR and its progeny (e.g. the Good Neighbor Plan) are a suite of interstate air pollution transport rules designed to reduce ozone and PM2.5 ambient air levels in areas that the EPA has determined as being significantly impacted by pollution from upwind states. This is accomplished through a reduction in NOx and SO2 from qualifying fossil-fuel fired power plants and industrial boilers in upwind "contributing" states. NOx and SO2 contribute to fine particulate pollution and NOx contributes to ozone formation in downwind areas. Reductions are generally achieved through a cap-and-trade system. Individual plants can meet their caps through reducing emissions and/or buying allowances on the market.

~~Global~~In ~~climate~~2023, ~~change~~the EPA finalized its Federal Implementation Plan to address state obligations under the Clean Air Act "good neighbor" provisions for the 2015 Ozone NAAQS (Good Neighbor Plan). The EPA has temporarily halted the enforcement of the Good Neighbor Plan's requirements for all pollution sources in states affected by the plan, including Wisconsin. This action follows legal challenges to the plan. While the EPA addresses these concerns, interim rules have been implemented. See Footnote 16.a. of the Notes to the Consolidated Financial Statements in this Report for further discussion of the proposed rule.

~~MGE~~Clean isAir aVisibility producer of GHG emissions, primarily from the fossil fuel generating facilities it utilizes to meet customers' energy needs, as well as from its natural gas pipeline system and fleet vehicles. Climate change and the regulatory response to it could significantly affect our operations in a number of ways, including increased operating costs and capital expenditures, restrictions on energy supply options, permitting difficulties, and emission limits. MGE management would expect to seek and receive rate recovery of such compliance costs, if and when required. MGE will continue to monitor proposed climate change legislation and regulation.Rule

~~MGE~~Columbia is ~~already~~subject ~~addressing~~to ~~GHG~~the ~~emissions~~best ~~through~~available ~~voluntary~~retrofit ~~actions.~~technology In(BART) ~~2005~~regulations, ~~MGE~~a ~~announced~~subsection ~~its~~of ~~Energy~~the ~~2015~~Clean ~~Plan~~Air Visibility Rule, which ~~commits~~may torequire ~~ensuring~~pollution acontrol ~~balanced~~retrofits. Columbia's existing pollution control upgrades, ~~economic~~and ~~energy~~the ~~supply~~EPA's stance that compliance with ~~reduced~~the ~~environmental~~CSAPR ~~emissions.~~and ~~The~~its progeny such as the Good Neighbor Plan ~~emphasizes~~satisfy ~~increased~~the ~~renewable~~requirements ~~energy~~of BART, ~~energy~~should ~~efficiency,~~mean ~~and~~that ~~new~~Columbia ~~cleaner~~will ~~generation~~not –need ~~three~~to ~~strategies~~do ~~that~~additional ~~reduce~~work ~~GHG~~to ~~emissions.~~meet ~~Under~~BART ~~MGE~~requirements. Wisconsin's ~~Energy~~2021 ~~2015~~State Implementation Plan ~~and~~(SIP) ~~other~~finds ~~actions,~~that ~~our~~Wisconsin ~~CO2~~will ~~emissions~~meet ~~are~~its ~~currently~~current ~~projected~~regional tohaze ~~decline~~goals ~~from~~based ~~2005~~on toexpected ~~2015~~emissions ~~even~~reductions. ~~though~~MGE ~~total~~will ~~system~~continue ~~energy~~to ismonitor ~~estimated~~legal developments and any future updates to ~~increase.~~this rule.

~~Climate Change Legislation~~14

~~Federal~~Global ~~Actions on~~ Climate Change

~~Currently~~MGE produces greenhouse gas (GHG) emissions, ~~there~~primarily isfrom nothe ~~specific~~fossil ~~federal~~fuel ~~proposal~~generating ~~for~~facilities ~~climate~~it ~~change~~uses ~~legislation~~to inmeet ~~2013~~customers' energy needs, as well as from its natural gas pipeline system and fleet vehicles. ~~Several~~Climate ~~bills~~change ~~related~~and the regulatory response to ~~GHG~~it ~~regulation~~could significantly affect our operations in a number of ways, including ~~bills~~increased tooperating ~~limit~~costs and capital expenditures, ~~prevent~~restrictions oron ~~delay~~energy ~~the~~supply ~~EPA's~~options, ~~regulation~~operational oflimits ~~GHGs~~on ~~under~~fossil ~~the~~fuel ~~current~~fired ~~Clean~~plants, ~~Air~~permitting ~~Act~~difficulties, ~~have~~and ~~been~~emission ~~proposed~~limits. ~~previously~~MGE ~~but~~would ~~none~~expect ~~have~~to ~~become~~seek ~~law~~and receive rate recovery of associated compliance costs, if and when required. MGE continues to ~~date~~monitor proposed climate change legislation and regulation.

~~State~~MGE has taken steps to address GHG emissions and ~~Regional~~is ~~Actions~~targeting net-zero carbon electricity by 2050. As part of this strategy, MGE continues to evaluate the role of coal fired generation in its portfolio, including previously announced plans regarding the Columbia Energy Center and the planned fuel transition at the Elm Road Units. MGE remains focused on ~~Climate~~reducing ~~Change~~reliance on coal over time and expanding ownership of renewable generation to support a cleaner, reliable energy future. Renewable energy continues to play a critical role in MGE's strategy for reducing carbon emissions. See "Electric Utility Operations - Fuel supply and generation" above for further information.

ItBuilding isupon ~~not~~MGE's ~~expected~~long-standing ~~that~~commitment to providing affordable, sustainable energy, MGE has set a goal to achieve net-zero methane emissions from its natural gas distribution system by 2035. If MGE can accelerate plans to achieve net-zero methane emissions from its natural gas system – through the ~~Wisconsin~~evolution ~~Legislature~~of new technologies, such as renewable natural gas – it will. ~~enact~~MGE ~~broad~~is ~~GHG~~working ~~regulation~~to reduce overall emissions from its natural gas distribution system in ~~2013~~a quick and cost-effective manner.

~~DNR's~~Greenhouse ~~Green~~Gas ~~Tier~~Reduction ~~Environmental~~Guidelines ~~Leadership~~under ~~Program~~the Clean Air Act 111(d) Rule

~~MGE~~In isMay 2024, the ~~first~~EPA ~~utility~~published inits ~~Wisconsin~~final toperformance bestandards ~~designated~~and toemission ~~participate~~guidelines inunder ~~the~~section ~~highest level~~ 111(~~Tier 2~~b) of the ~~DNR's~~Clean ~~Green~~Air ~~Tier~~Act ~~environmental~~for ~~leadership~~carbon ~~program.~~dioxide ~~MGE~~emissions isfrom ~~only~~new ~~the~~combustion ~~fifth~~turbines ~~state~~and ~~company~~existing fossil-fuel fired boilers used to ~~achieve~~produce ~~Tier~~electricity. 2The ~~status~~final rule granted some emissions flexibility for existing coal-fired units that retire and/or fuel switch by certain dates. ~~Green~~For ~~Tier~~existing ~~encourages~~natural gas boiler units, the final rule establishes a ~~collaborative~~process ~~approach~~where states must submit plans to ~~environmental~~the ~~performance~~EPA ~~between~~for establishing standards. States will have two years from the ~~DNR~~publication ~~and~~date ~~Wisconsin~~of ~~businesses,~~these ~~local~~rules ~~governments,~~to ~~and~~submit ~~other~~plans ~~organizations~~to the EPA for review and approval. AsPreliminary ~~part~~evaluation of ~~Green~~the ~~Tier,~~final ~~participants~~ruling ~~voluntarily~~showed ~~commit~~that toMGE ~~reducing~~met ~~their~~the ~~environmental~~requirements ~~footprint~~for bythe ~~developing~~gas-fired ~~proactive~~boilers ~~management~~at ~~strategies~~Blount. ~~These~~Evaluations ~~plans~~done ~~act~~by asthe aowners ~~roadmap,~~of ~~helping~~Columbia ~~organizations~~and ~~see~~the ~~opportunities~~Elm toRoad ~~adopt~~Units ~~new~~in ~~technologies~~2024 ~~and~~indicated ~~practices~~that tothey ~~continually~~have ~~improve~~a ~~their~~plan ~~environmental~~for ~~performance~~complying with the May 2024 rule.

~~MGE~~In isJune ~~participating~~2025, in the ~~Green~~EPA ~~Tier~~published ~~program~~a toproposed ~~continue~~rule ~~its~~with ~~voluntary~~two ~~commitment~~potential tooptions: ~~superior~~(1) ~~environmental~~repeal the performance. Instandards ~~cooperation~~and emission guidelines under Section 111 of the Clean Air Act associated with ~~DNR~~GHG emissions from fossil fuel-fired power plants, ~~MGE~~or ~~will~~(2) ~~set~~retain ~~goals~~only tothe ~~make~~efficiency-based ~~significant~~requirements ~~environmental~~for ~~improvements~~new natural gas-fired power plants and repeal all other aspects of the rule.

~~Employees~~In July 2025, the EPA released a new proposed rule titled "Reconsideration of 2009 Endangerment Finding and Greenhouse Gas Vehicle Standards." In February 2026, the EPA finalized the proposed rule which repeals the 2009 Endangerment Finding and Greenhouse Gas Vehicle Standards. The repeal will effectively undo the basis for federal regulation of GHG emissions under the Clean Air Act. Several states have already initiated legal challenges to the repeal, and other stakeholders are expected to do so. The scope and timing of any impacts on federal GHG regulation remain uncertain pending litigation and potential further agency action. MGE will continue to monitor developments.

AsFederal ofAction December 31, 2012, MGE had 688 employees. MGE employs 210 employees who are covered by a collective bargaining agreement with Local Union 2304 of the International Brotherhood of Electrical Workers and 96 employees who are covered by a collective bargaining agreement with Local Union No. 39 of the Office and Professional Employees International Union. Both of these collective bargaining agreements expire on ~~April 30,~~Climate 2015. There are also 5 employees covered by a collective bargaining agreement with Local Union No. 2006, Unit 6 of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union. This collective bargaining agreement expires on October 31, 2015.Change

~~Financial~~In ~~Information~~January ~~About~~2025, ~~Segments~~the Trump Administration issued several executive orders relating to energy and climate policy, including directing the United States' withdrawal from the Paris Agreement. As of January 2026, the U.S. has formally withdrawn. MGE continues to monitor the development of agency recommendations, implementation plans, and other administrative actions resulting from these orders to assess their relevance to MGE's decarbonization strategy, capital investment plans, and environmental compliance obligations, as well as any potential impacts on our operations.

~~See~~State ~~Footnote 23~~and ofRegional ~~the~~Action ~~Notes~~on toClimate ~~Consolidated Financial Statements for financial information relating to MGE Energy's and MGE's business segments.~~Change

13In August 2019, Wisconsin Governor Tony Evers signed an executive order to establish the Office of Sustainability and Clean Energy (OSCE). The order tasks the OSCE with, among other things, ensuring that the actions of the State of Wisconsin are aligned with the goals and recommendations of the Paris Agreement, verifying that electricity consumed by the State of Wisconsin is 100% carbon-free by 2050, and developing a comprehensive multi-sector clean energy plan for the state. In April 2022, the OSCE released Wisconsin's Clean Energy Plan. The plan includes a goal to achieve net zero carbon by 2050. MGE is engaged in this process by participating on a Stakeholder Advisory Team in a voluntary capacity. MGE will continue to evaluate this plan for its applicability to MGE's decarbonization plans and to evaluate potential impact on our operations.

~~Executive Officers of the Registrants~~15

Executive	Title	Effective Date	Service Years as an Officer
Gary J. Wolter(a) Age: 58	Chairman of the Board, President and Chief Executive Officer	02/01/2002	23
Lynn K. Hobbie(b) Age: 54	Senior Vice President	02/01/2000	18
Scott A. Neitzel(b) Age: 52	Senior Vice President Vice President – Energy Supply	01/01/2012 09/01/2006	15
Kristine A. Euclide(b) Age: 60	Vice President and General Counsel	11/15/2001	11
Craig A. Fenrick(b) Age: 53	Vice President – Electric Transmission and Distribution Assistant VP – Electric Transmission and Distribution	01/01/2012 09/01/2006	6
Jeffrey C. Newman(a) Age: 50	Vice President, Chief Financial Officer, Secretary and Treasurer Vice President and Treasurer	01/01/2009 01/01/2001	15
Peter J. Waldron(b) Age: 55	Vice President and Chief Information Officer Vice President and Operations Officer	01/01/2012 09/01/2006	16

Solid Waste

~~Note:~~Coal ~~Ages,~~Combustion ~~years~~Residuals of(CCR) ~~service, and positions as of December 31, 2012.~~Rule

~~(a)~~The ~~Executive~~CCR ~~officer~~Rule regulates the disposal of ~~MGE Energy~~solid waste coal ash and ~~MGE~~defines what ash use activities would be considered generally exempt beneficial reuse of coal ash. The CCR Rule also regulates landfills, ash ponds, and other surface impoundments used for coal combustion residuals by regulating their design, location, monitoring, and operation. The CCR Rule requires owners and operators of coal-fired power plants to stop transporting CCR and non-CCR wastewater to unlined surface impoundments. Columbia's obligations under this portion of the CCR Rule are now complete. Review of the Elm Road Units has indicated that the costs to comply with this rule are not expected to be significant.

~~(b)~~In ~~Executive~~May ~~officer~~2024, the EPA published its final CCR Legacy Rule. The CCR Legacy Rule applies to previously closed disposal sites. Columbia's operator has evaluated the rule and determined that parts of ~~MGE~~the rule apply to Columbia's previously closed site.

~~Item~~In 1AFebruary 2026, the EPA finalized the CCR Management Unit Deadline Extension Rule, which provides a one‑year extension for the submission of Facility Evaluation Reports and extends the deadline for the implementation of groundwater monitoring systems at legacy CCR management units to February 2031. ~~Risk~~Columbia ~~Factors~~is evaluating the impact of this extension on its compliance timeline.

~~MGE Energy~~See ~~and~~Footnote ~~its subsidiaries, including MGE, operate in~~ 16.a. ~~market environment that involves significant risks, many~~ of ~~which~~the ~~are~~Notes ~~beyond~~to ~~their~~the ~~control.~~Consolidated ~~The~~Financial ~~following~~Statements ~~risk~~in ~~factors~~this ~~may~~Report ~~adversely~~for ~~affect~~further ~~their~~discussion ~~results~~ of ~~operations,~~compliance ~~cash~~costs ~~flows and market price~~ for ~~their publicly traded securities~~Columbia. ~~While~~Based ~~MGE Energy~~on ~~and~~previous ~~MGE~~treatment ~~believe~~of ~~they~~environmental ~~have~~compliance ~~identified and discussed below the key risk factors affecting their business~~projects, ~~there~~management ~~may~~believes ~~be additional risks and uncertainties~~ that ~~are~~any ~~not~~compliance ~~presently~~costs ~~known~~will ~~or that are not currently believed to~~ be ~~significant~~recovered ~~that may adversely affect their performance or financial condition~~ in ~~the~~ future rates.

~~Regulatory~~Renewable ~~Risk~~Energy Standards

WeWisconsin ~~are~~law ~~subject~~establishes toa ~~extensive~~minimum ~~government~~amount ~~regulation~~of inenergy ~~our~~MGE ~~business,~~must ~~which~~supply ~~affects~~from ~~our~~renewable ~~costs~~sources. ~~and~~MGE ~~responsiveness~~currently exceeds the applicable minimum requirement of approximately 8%. The costs to ~~changing~~comply ~~events~~with ~~and~~this ~~circumstances~~requirement are being recovered in rates.

~~Our~~Human business is subject to regulation at the State and Federal levels. We are subject to regulation as a holding company by the PSCW. MGE is regulated by the PSCW as to its rates, terms and conditions of service; various business practices and transactions; financing; and transactions between it and its affiliates, including MGE Energy. MGE is also subject to regulation by the FERC, which regulates certain aspects of its business. The regulations adopted by the State and Federal agencies affect the manner in which we do business, our ability to undertake specified actions since pre-approval or authorization may be required, the costs of operations, and the level of rates charged to recover such costs. Our ability to attract capital is also dependent in part, upon our ability to obtain a fair return from the PSCW.Capital

WeMGE ~~face~~Energy ~~risk~~and ~~for~~MGE ~~the~~are ~~recovery~~committed ofto ~~fuel~~attracting, developing, and ~~purchased~~retaining ~~power~~a ~~costs.~~sustainable workforce and aim to foster a diverse, equitable, and inclusive culture.

~~MGE~~As ~~burns natural gas in several~~ of ~~its~~December ~~peak electric generation facilities~~31, ~~and in many cases~~2025, ~~the cost of purchased power is tied to the cost of natural gas. Under the electric fuel rules,~~ MGE ~~would~~Energy ~~defer electric fuel-related costs that fall outside a symmetrical cost tolerance band that is currently plus or minus 2%. Any over/under recovery of the actual costs is determined on an annual basis~~ and ~~will be adjusted in future billings to~~ its ~~electric~~subsidiaries ~~retail~~had ~~customers.~~726 ~~Under the electric fuel rules~~employees, ~~MGE~~318 ~~is required to defer the benefit~~ of ~~lower~~whom ~~costs~~were ifcovered ~~its~~by ~~actual~~collective ~~fuel~~bargaining ~~costs~~agreements ~~fall outside the lower end of the range and would defer costs, less any excess revenues, if its actual fuel costs exceeded the upper end of the range. Excess revenues are defined~~ as ~~revenues~~described in the year in question that provide MGE with a greater return on common equity than authorized by the PSCW in MGE's latest rate order. MGE assumes the risks and benefits of variances that are within the cost tolerance band. below:


Union	Number of Employees Represented	Expiration of Collective Bargaining Agreement
Local Union 2304 of the International Brotherhood of Electrical Workers	234	April 30, 2028
Local Union No. 39 of the Office and Professional Employees International Union	80	May 31, 2028
Local Union No. 2006, Unit 6 of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers International Union	4	October 31, 2028

WeAs ~~are~~of ~~subject~~December to31, ~~changing~~2025, ~~environmental~~women ~~laws~~ and ~~regulations~~ethnic ~~that~~minorities ~~may~~represented ~~affect~~27% ~~our~~and ~~costs~~10% ~~and~~of ~~business~~our ~~plans~~total workforce, respectively.

Our subsidiaries are subject to environmental laws and regulations that affect the manner in which they conduct business, including capital expenditures, operating costs and potential liabilities. Changes and developments in these laws and regulations may alter or limit our business plans, make them more costly, or expose us to liabilities for past or current operations.Governance

~~Numerous~~The ~~environmental~~Human ~~laws~~Resources and ~~regulations~~Compensation ~~govern~~Committee ~~many~~of ~~aspects~~the Board of ~~our~~Directors ~~present~~of ~~and~~MGE ~~future~~Energy ~~operations,~~oversees ~~including~~MGE ~~air~~Energy's ~~emissions,~~human ~~water~~resource ~~quality,~~strategies. ~~wastewater~~It ~~discharges,~~reviews ~~solid~~the ~~waste~~salaries, ~~threatened~~fees and ~~endangered~~other ~~species~~benefits ~~and~~of ~~hazardous~~officers ~~waste. These evolving regulations can introduce uncertainty with respect to capital expenditures~~ and ~~operational~~directors ~~planning,~~ and ~~can~~recommends ~~introduce~~compensation ~~costly~~adjustments ~~delays if previous decisions need~~ to bethe ~~revisited as a result of judicial mandate or regulatory change~~board. ~~These~~The ~~regulations~~committee ~~generally~~determines ~~require~~the usamounts ~~to obtain~~ and ~~comply~~elements ~~with a wide variety~~ of ~~environmental~~compensation ~~permits~~for ~~and~~the ~~approvals,~~company's ~~and~~executive ~~can~~officers ~~result in increased capital, operating,~~ and ~~other~~provides ~~costs~~overall ~~and~~guidance ~~operating~~for ~~restrictions,~~the ~~particularly~~company's ~~with~~executive ~~regard~~compensation topolicies ~~enforcement efforts focused on obligations under existing regulations with respect to power plant emissions~~ and ~~compliance costs associated with regulatory requirements~~programs. ~~These~~Such ~~effects~~policies ~~can~~relate ~~be seen not only with respect~~ to ~~new~~Stock ~~construction~~Ownership ~~but~~Guidelines, ~~could~~the ~~also~~recovery, ~~require~~or the ~~installation~~"clawback" of, ~~additional~~excess ~~control~~compensation ~~equipment~~based oron ~~other~~erroneous ~~compliance~~data, ~~measures~~and ~~such~~succession ~~as altered operating conditions at existing facilities~~planning.

InDevelopment addition, we may be a responsible party for environmental clean-up at current or future sites identified as containing hazardous materials or to which waste was sent that is subsequently determined to be hazardous. It is difficult to predict the costs potentially associated with a site clean-up due to the potential joint and ~~several~~Training ~~liability for all potentially responsible parties, the nature of the clean-up required and the availability of recovery from other potentially responsible parties.~~

~~Additionally,~~The ~~depending~~energy onindustry ~~their~~is ~~form~~ever-changing. ~~and~~MGE ~~phase-in~~believes ~~provisions,~~it ~~GHG~~is ~~emission~~important ~~restrictions~~to ~~could~~continue ~~have~~to engage human capital resources as the ~~potential~~industry ~~for~~evolves. aMGE ~~significant~~is ~~financial~~committed ~~impact~~to onsustainable workforce practices such as career development and training. MGE, ~~including~~offers all employees the ~~cost~~opportunity to ~~install~~learn ~~new~~and ~~emission~~grow—whether ~~control~~it ~~equipment~~is to become more proficient in their job, ~~purchase~~improve ~~allowances~~decision-making skills, or doprepare ~~fuel~~for ~~switching~~a move to another role. MGE works to provide employees with the right tools—learning and content—needed to develop the knowledge and skills necessary to grow and to ensure MGE has a workforce that is knowledgeable, prepared, and high performing to deliver on our goals and objectives. All employees have access to a variety of learning resources to help ensure they are equipped with the knowledge and skills to effectively navigate the evolving utility industry.

~~Operating Risk~~16

WeWorkplace ~~are affected by weather, which affects customer demand and can affect the operation of our facilities.~~Culture

~~The~~MGE ~~demand~~supports ~~for~~an ~~electricity~~inclusive, ~~and~~respectful ~~gas~~work isenvironment ~~affected~~where byindividuals ~~weather. Very warm~~ and ~~very~~groups ~~cold temperatures, especially for prolonged periods,~~ can ~~dramatically~~achieve ~~increase~~their ~~the~~full ~~demand~~potential. ~~for~~MGE ~~electricity~~seeks ~~and~~to ~~gas~~attract ~~for cooling~~ and ~~heating,~~retain ~~respectively,~~the asbest ~~opposed~~people to do the ~~softening~~job. ~~effect~~A ofwide ~~more~~range ~~moderate~~of ~~temperatures.~~backgrounds ~~Our~~and ~~electric~~ideas ~~revenues~~strengthens ~~are~~MGE's ~~sensitive~~work toenvironment. ~~the~~MGE's ~~summer~~goal ~~cooling~~is ~~season and,~~ to create a ~~lesser~~healthy ~~extent,~~and ~~the~~productive ~~winter~~work ~~heating~~environment ~~season.~~that ~~Similarly,~~provides ~~very~~a ~~cold~~sense ~~temperatures~~of ~~can~~belonging ~~dramatically increase the demand~~ for ~~gas~~all ~~for~~MGE ~~heating~~employees. AMGE's ~~significant~~employee-led ~~portion~~steering ofteam ~~our~~on ~~gas~~workplace ~~system~~culture ~~demand~~works isto ~~driven~~engage byemployees ~~heating.~~and ~~Extreme~~identify ~~summer~~opportunities ~~conditions~~for orconnecting ~~storms~~and ~~may~~for ~~stress~~living ~~electric~~our ~~transmission~~values. ~~and~~As ~~distribution~~a ~~systems,~~community ~~resulting~~energy incompany, ~~increased~~this ~~maintenance~~commitment ~~costs~~creates ~~and~~value-added ~~limiting~~partnerships with the ~~ability~~broader ~~to meet peak customer demand~~community.

WeSafe ~~are~~and ~~affected~~Healthy byWorking ~~economic activity within our service area.~~Conditions

~~Higher~~"We ~~levels~~power ofsafety. ~~development~~Work safe. Home safe." That is the commitment at MGE, and ~~business~~it ~~activity~~is ~~generally~~embraced ~~increase~~by employees. MGE's journey to safety excellence is guided by the ~~numbers~~Safety ofSteering ~~customers~~Team. The team meets regularly to examine safety topics and ~~their~~to ~~use~~identify ofand ~~electricity~~to prioritize continuous improvement opportunities. MGE goes beyond applicable occupational health and ~~gas~~safety standards by involving employees from all levels of the organization in the continuous improvement of the company-wide safety culture. ~~Likewise~~MGE's continuous improvement process incorporates safety perception surveys, ~~periods~~improvement projects, and monitoring of ~~recessionary~~leading ~~economic~~indicators. ~~conditions~~Stop ~~generally~~Work ~~adversely~~Authority ~~affect~~is ~~our~~an ~~results~~employee-developed ofprogram ~~operations~~to communicate that all employees have equal authority and responsibility to stop work when a perceived unsafe condition or behavior is reported.

~~Our~~MGE ~~ability~~encourages toemployees ~~manage~~across ~~our~~the ~~purchased~~company ~~power~~to ~~costs~~make ishealth ~~influenced~~and bywellness a ~~number~~priority. ofGood ~~uncontrollable~~health ~~factors~~brings vitality and energy to employees' work lives and home lives. MGE's programs to promote health and wellness include hybrid work schedules, the Healthy Rewards program, and access to occupational therapists for sprain and strain prevention and ergonomic assessments.

WeFinancial ~~are~~Information ~~exposed~~About to additional purchased power costs to the extent that our power needs cannot be fully covered by the supplies available from our existing facilities and contractual arrangements. Those needs, and our costs, could be affected by:Segments

·See Footnote 22 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Report for financial information relating to MGE Energy's and MGE's business segments.

~~Increased demand due to, for example, weather, customer growth, or customer obligations,~~17

·Information About our Executive Officers

The ~~inability~~names, toages, ~~transmit~~and ~~our~~positions ~~contracted~~of ~~power~~MGE ~~from~~Energy ~~its~~and ~~generation~~MGE's ~~source~~executive toofficers ~~our~~are ~~customers~~listed ~~due~~below toalong ~~transmission~~with ~~line~~their ~~constraints,~~business ~~outages,~~experience orduring ~~equipment~~the ~~failures,~~past five years.


Executive	Title	Effective Date	Service Years as an Officer
Jeffrey M. Keebler(a)	Chairman of the Board, President, and Chief Executive Officer	10/01/2018 – present	14
Age: 54

Jared J. Bushek(a)	Vice President – Chief Financial Officer and Treasurer	03/01/2023 – present	10
Age: 45	Vice President – Finance, Chief Information Officer and Treasurer	09/01/2020 – 03/01/2023

Melissa T. Garner(b)	Vice President – People and Community Engagement	03/01/2025 – present	3
Age: 44	Assistant Vice President – Human Resources	03/01/2022 – 03/01/2025
	Director – Talent Management	03/01/2015 – 03/01/2022

Lynn K. Hobbie(b)(c)	Executive Vice President – Marketing and Communications	03/01/2017 – 12/31/2025	31
Age: 67

Jenny L. Lagerwall(a)	Assistant Vice President – Accounting and Controller (Chief Accounting Officer)	07/01/2024 – present	1
Age: 42	Assistant Vice President – Accounting	03/01/2024 – 07/01/2024
	Director – Financial Reporting	10/01/2015 – 03/01/2024

James J. Lorenz(b)	Vice President – Energy Operations	05/01/2021 – present	7
Age: 59	Assistant Vice President – Energy Operations	10/01/2018 – 05/01/2021

Cari Anne Renlund(a)	Vice President, General Counsel and Secretary	09/01/2020 – present	10
Age: 52

Scott R. Smith(b)	Vice President – Business and Regulatory Strategy	05/01/2021 – present	7
Age: 54	Assistant Vice President – Business and Regulatory Strategy	03/01/2018 – 05/01/2021

(a)

~~Reductions~~Executive inofficer ~~the availability~~ of ~~power~~MGE ~~from~~Energy ~~our owned or contracted generation sources due to equipment failures, shortages of fuel or environmental limitations on operations,~~ and MGE.

(b)

15Executive officer of MGE.

(c)

·Retired effective December 31, 2025.

~~Failure to perform on the part of any party from which we purchase capacity or energy, whether due to equipment failures or other causes.~~18

AnItem ~~unexpected~~1A. ~~change~~Risk ~~in demand or the availability of generation or transmission facilities can expose us to increased costs of sourcing electricity in the short-term market where pricing may be more volatile~~Factors.

~~The~~MGE ~~equipment~~Energy and ~~facilities~~our subsidiaries, including MGE, operate in ~~our~~a ~~operational~~regulated ~~system~~market ~~are~~environment ~~subject~~that toinvolves significant risks, many of which are beyond our control. The following risk factors may adversely affect our results of operations, cash flows and financial position and market price for our publicly traded securities. While we believe we have identified and discussed below the key risk factors affecting our business, additional unknown risks and uncertainties may adversely affect our performance or financial condition in the future.

~~Weather~~Regulatory conditions, accidents, and catastrophic events, including terrorism, cyber terrorism, and acts of sabotage or war, can result in damage or failures of equipment or facilities and disrupt or limit our ability to generate, transmit, transport, purchase, or distribute electricity and gas. Efforts to repair or replace equipment and facilities may take prolonged periods or may be unsuccessful, or we may be unable to make the necessary improvements to our operational system, causing service interruptions. The resulting interruption of services would result in lost revenues and additional costs. We are also exposed to the risk of accidents or other incidents that could result in damage to or destruction of our facilities or damage to persons or property. Such issues could adversely affect revenues or increase costs to repair and maintain our systems.Risk

~~Failure~~We toare ~~attract~~subject ~~and~~to ~~retain~~extensive angovernment ~~appropriately~~regulation ~~qualified~~in ~~workforce~~our ~~could~~business, ~~affect~~which affects our ~~operations~~costs and ability to respond to changing events and circumstances.

~~Events~~Our ~~such~~business asis ansubject ~~aging~~to ~~workforce~~regulation ~~and~~at ~~retirement~~the oflocal, ~~key~~state, ~~employees~~and ~~without~~federal ~~appropriate~~levels. ~~replacements~~The ~~may~~regulations ~~lead~~adopted toby ~~operating~~local, ~~challenges~~state, and ~~increased~~federal ~~costs.~~agencies ~~Some~~affect ofhow ~~the~~we ~~challenges~~do ~~include~~business, ~~lack~~our ofability ~~resources,~~to ~~loss~~undertake ofspecified ~~knowledge,~~actions ~~and~~since ~~length~~pre-approval ofor ~~time~~authorization ~~period~~may ~~associated~~be ~~with~~required ~~skill~~for ~~development.~~projects, ~~Failure~~the tocosts ~~identify~~of ~~qualified~~operations, ~~replacement~~and ~~employees~~the ~~could~~rates ~~result~~we inare ~~decreased~~authorized ~~productivity~~to ~~and~~charge ~~increased~~to ~~safety~~recover those costs. IfOur weability ~~are unable~~ to attract ~~and~~capital ~~retain~~also andepends, ~~appropriately~~in ~~qualified workforce~~part, upon our ~~operations~~ability ~~could~~to berecover ~~negatively~~our ~~affected~~costs and obtain a fair return for shareholders.

WeMGE ~~face~~Energy ~~construction~~is ~~risk~~subject into ~~connection~~regulation ~~with~~as a holding company by the ~~completion~~PSCW. The PSCW regulates MGE's rates; terms and conditions of service; various business practices and transactions; financing; the ~~Columbia~~closure ~~environmental~~of ~~project~~generating facilities and related cost recovery; and transactions between it and its affiliates, including MGE Energy. MGE is also subject to regulation by the FERC, which regulates certain aspects of its business, including certain accounting policies.

~~The~~MGE ~~large-scale environmental project at the Columbia generating facility, which~~ is ~~being managed by WPL as plant operator, is~~ subject to ~~various~~oversight ~~risks~~and ~~that~~monitoring ~~could~~by ~~cause~~MISO. ~~costs~~Changes ~~to increase or delays~~ in ~~completion.~~MISO's ~~These~~resource ~~risks~~adequacy ~~include shortages of~~process, ~~the~~including ~~inability~~seasonal toreserve ~~obtain,~~margin ~~the~~requirements ~~cost of,~~ and ~~the~~capacity ~~consistency~~accreditation ofrules, ~~labor,~~impact ~~materials~~how ~~and~~generating ~~equipment;~~facilities, ~~the~~such ~~inability~~as ofMGE's ~~the~~solar ~~general~~projects, ~~contractor~~are orrecognized ~~subcontractors~~for tocapacity. ~~perform~~New ~~under~~methodologies, ~~their~~like ~~contracts;~~ the ~~inability~~direct ~~to agree to terms~~ loss-of-load ~~contracts~~approach, orcould ~~disputes~~require inMGE ~~contract terms; work stoppages; adverse weather conditions; the inability~~ to ~~obtain~~revise ~~necessary~~its ~~permits~~resource inplans, aadd ~~timely~~capacity, ~~manner; changes in applicable laws~~ or ~~regulations;~~purchase ~~adverse~~additional ~~interpretation~~resources, orpotentially ~~enforcement~~leading ofto ~~permit~~costs ~~conditions;~~that ~~governmental actions; legal action; and unforeseen engineering or technology issues. If the construction project is over budget, we~~ may not be ~~able~~recoverable tothrough ~~recover those excess costs~~rates. ~~Inability~~In ~~to recover excess costs~~addition, existing or ~~inability~~new tofacilities ~~complete~~may ~~the~~have ~~project in~~ a ~~timely~~reduction ~~manner,~~accredited ~~could~~capacity ~~adversely~~under ~~impact~~MISO's ~~our~~seasonal ~~financial condition and results of operations~~process.

~~Financial~~ATC, ~~Risk~~in which we have an investment, is subject to regulation by FERC as to, among other things, rates.

WeFailure ~~are exposed~~ to ~~commodity~~comply ~~price~~with ~~risk~~applicable ~~relating~~regulations tomay ~~our~~result ~~purchases~~in ofcustomer ~~natural~~refunds, ~~gas~~penalties, ~~electricity~~and other payments which could materially and adversely affect our financial condition, ~~coal~~results of operations, and ~~oil~~liquidity.

WeOur ~~face~~utility ~~commodity~~revenues ~~price~~are ~~risk~~subject ~~exposure with respect~~ to ~~our~~regulatory ~~purchases~~proceedings ofand/or ~~natural~~negotiated ~~gas~~settlements, ~~electricity,~~which ~~coal~~can ~~and~~affect ~~oil, SO2 allowances and risk through~~ our ~~use~~ability ofto ~~derivatives~~recover, ~~such as futures, forwards~~ and ~~swaps, to manage that commodity price risk. We could experience increased costs as a result of volatility in~~ the ~~market~~timing ~~values~~ of ~~those~~recovery ~~commodities. We could also experience losses on our derivative contracts as a result~~ of ~~that market value volatility or if a counterparty fails to perform under a contract. In the absence of actively quoted market prices and pricing information from external sources~~, ~~the~~costs ~~valuation~~that ofwe ~~these~~incur ~~derivative~~in ~~contracts involves~~ our ~~exercise of judgment and use of estimates~~operations. ~~As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts.~~

WeOur utility customer rates have a material impact on our financial condition, results of operations, and liquidity. Our ability to obtain adjustments to those rates depends upon timely regulatory action under applicable statutes and regulations. These proceedings typically involve multiple parties, including governmental bodies and officials, consumer advocacy groups, and various consumers of energy, who may focus on differing elements of the rate setting process, including environmental matters, addressing affordability concerns. Decisions are ~~exposed~~subject to ~~interest~~judicial review, potentially leading to additional uncertainty associated with the approval proceedings, including with respect to outcome and timing. Rate regulation provides us an opportunity to recover costs that have been reasonably incurred and the ability to earn a reasonable rate ~~risk~~of return on invested capital. However, we have no assurance that our regulators will consider all of our costs to have been reasonably incurred. In addition, our rate proceedings may not always result in rates that fully recover our costs or provide a reasonable return on equity. We estimate the impacts of changes in customer growth and weather as part of our customer rates. Any reduction of sales from these factors may not result in rates that fully recover our costs and may require adjustments to our rates, which we cannot guarantee will be approved.

WeUnder ~~are~~applicable ~~exposed~~accounting tofor ~~interest~~regulated ~~rate~~operations, ~~risk~~certain oncosts ~~our~~and ~~variable~~revenues ~~rate~~are ~~financing.~~deferred ~~Borrowing~~as ~~levels~~regulatory ~~under~~assets ~~commercial~~and ~~paper~~liabilities ~~arrangements~~for ~~vary~~future ~~from~~recovery ~~period~~or refund to ~~period~~customers, ~~depending~~as ~~upon~~authorized ~~capital~~by ~~investments~~our ~~and~~regulators. ~~other~~If ~~factors.~~recovery ~~Such~~of ~~interest~~regulatory ~~rate~~assets ~~risk~~is ~~means~~not ~~that~~approved weor ~~are~~is ~~exposed~~no tolonger ~~increased~~deemed ~~financing~~probable, these costs ~~and~~would ~~associated~~be ~~cash~~recognized ~~payments~~ as a ~~result~~current ofperiod ~~changes~~expense inand ~~the~~could ~~short-term~~materially ~~interest~~and ~~rates.~~adversely impact our operations and financial performance in that period.

16We could be subject to higher costs and potential penalties resulting from mandatory reliability standards.

~~Interest~~MGE ~~rate~~must ~~movements~~adhere ~~and~~in ~~market~~its ~~performance~~electric ~~affects~~distribution ~~our~~system ~~employee~~to ~~benefit~~mandatory ~~plan~~reliability ~~costs~~standards established by NERC. These standards cover areas such as critical infrastructure protection, emergency preparedness, facility design, and transmission operations, among others. The critical infrastructure protection standards focus on physical and access security of cyber assets, as well as incident response and

Prevailing interest rates affect our assessment and determination of discount rates that are a key assumption in the determination of the costs and funding of our defined benefit pension plans and may impact the amount of expense and timing of contributions to those plans. The performance of the capital markets affects the values of the assets that are held in trust to satisfy the future obligations under our pension and postretirement benefit plans. We have significant obligations in these areas and hold significant assets in these trusts. A decline in the market value of those assets may increase our current and longer-term funding requirements for these obligations. Changes in the value of trust fund assets may affect the level of required contributions to these trusts to meet benefit obligations. Reduced benefit plan assets could result in increased benefit costs in future years and may increase the amount and accelerate the timing of required future funding contributions. 19

Werecovery ~~are~~planning. ~~exposed~~Compliance towith ~~credit~~these ~~risk~~standards ~~primarily~~affects ~~through~~ our ~~regulated~~operating ~~energy~~costs ~~business~~and any noncompliance could result in sanctions, including monetary penalties.

~~Credit risk is the loss that may result from counterparty nonperformance.~~ We ~~face~~are ~~credit~~subject ~~risk primarily through MGE's regulated energy business. Failure of contractual counterparties~~ to ~~perform~~changing ~~their~~environmental ~~obligations~~laws ~~under~~and ~~purchase~~regulations ~~power~~that ~~agreements, commodity supply arrangements or other agreements~~ may ~~result~~affect inour ~~increased~~costs ~~expenses~~and ~~for~~business ~~MGE as a result of being forced to cover the shortfall in the spot or short-term market, where prices may be more volatile~~plans.

AsWe aare ~~holding~~subject ~~company,~~to environmental laws and regulations that affect the manner in which we ~~are~~conduct ~~dependent~~business, including capital expenditures, operating costs, and potential liabilities. There is uncertainty regarding whether and how the current and future Presidential administrations will address climate change-related matters, including restrictions on ~~upstream~~greenhouse ~~cash~~gas ~~flows~~emissions, ~~from~~such ~~our~~as ~~subsidiaries~~carbon. ~~for~~While it is difficult to know the ~~payment~~extent of ~~dividends~~possible onlegislation ~~our~~or ~~common~~regulatory ~~stock~~activity, there may be an increase in the number and scope of environmental laws and regulations aimed at carbon sources, including fossil-fueled generation and the transportation of natural gas. These possible changes, as well as evolving consumer sentiment, have affected and may continue to affect our business plans, make them more costly, or expose us to liabilities for past, present, or future operations.

AsNumerous aenvironmental ~~holding~~laws ~~company,~~and weregulations ~~have~~govern nomany ~~operations~~aspects of our ~~own,~~present and ~~our~~future ~~ability~~operations. toThese ~~pay~~include: ~~dividends~~air onemissions ~~our~~limits ~~common~~and ~~stock~~reporting; isambient ~~dependent~~air onquality ~~the~~standards; ~~earnings~~water ~~and~~quality; ~~cash~~water ~~flows~~intake ofand ~~our~~discharges; ~~operating~~wetlands; ~~subsidiaries~~solid and ~~their~~hazardous ~~ability~~waste; tohandling ~~pay~~and ~~upstream~~disposal ~~dividends~~of orhazardous tosubstances; ~~repay~~protection ~~funds~~of toendangered ~~us.~~resources, ~~Prior~~such toas ~~funding~~threatened ~~us,~~and ~~our~~endangered ~~subsidiaries~~species, ~~have~~protection ~~financial~~of ~~obligations~~cultural ~~that~~resources ~~must~~and bearchaeological ~~satisfied,~~sites; ~~including~~remediation ~~among~~and ~~others,~~management ~~debt~~of ~~service~~contaminated sites; and ~~obligations~~control toof ~~trade~~potential ~~creditors,~~pollution from electric and ~~are~~gas ~~subject~~construction tosites. ~~contractual~~These evolving regulations have affected us, and ~~regulatory~~may ~~restrictions~~continue onto ~~the~~affect ~~payment~~us ofby, ~~dividends.~~among other items:

•

~~Disruptions~~Introducing inuncertainty ~~the~~into ~~financial~~our ~~markets~~planning orand ~~changes~~capital toexpenditures ~~our~~processes, ~~credit~~as ~~ratings~~changes in requirements may affect ~~our~~the ~~ability~~timing toand ~~finance~~choice atof acompliance ~~reasonable~~methods ~~cost~~ and inrequire ~~accordance~~costly ~~with~~revisions ~~our~~to ~~planned~~prior ~~schedule~~plans and commitments.

•

~~The~~Imposing ~~credit markets have experienced disruption and uncertainty in recent years. To the extent that such issues affect the ability~~ or ~~willingness~~modifying oflimits ~~credit~~on ~~providers or investors to participate in~~ the ~~credit~~operations ~~markets or particular types~~ of ~~investments, or affect their perception of the risk associated with particular types of investments,~~ our ~~cost~~facilities ofin ~~borrowing~~order ~~could~~to bemeet ~~affected.~~restrictions ~~We also rely~~ on ~~our~~air ~~strong credit ratings to access the credit markets. If our credit ratings are downgraded for any reason~~emissions, ~~borrowing~~water ~~costs~~use ~~could increase, potential investors could decrease,~~ or wewater ~~could be required to provide additional credit assurance, including cash collateral, to contract counterparties~~discharges.

•

~~General~~Requiring ~~economic~~capital ~~conditions~~expenditures ~~may~~and ~~affect~~changes ~~our~~in operating ~~revenues,~~procedures ~~our~~and ~~capital~~ costs ~~and~~as ~~our~~a ~~counterparty~~result ~~risks.~~of the need to install additional pollution controls or more advanced technology or equipment at new or existing facilities.

•

~~Operational~~Mandating increasing purchases of renewable energy, which affects the use of existing generation, and energy efficiency initiatives, which affect revenues.

~~MGE Energy's~~We ~~and~~may ~~MGE's~~be ~~operations~~subject ~~are~~to ~~affected~~future bylaws, ~~local~~regulations, ~~national~~or ~~and~~actions ~~worldwide~~associated ~~economic~~with ~~conditions.~~public ~~The~~concern ~~consequences~~with offossil-fuel ~~a prolonged period of reduced economic activity may include lower demand for energy~~generation, ~~uncertainty~~greenhouse ~~regarding energy prices and the capital and commodity markets~~gases, and ~~increased credit risk. A decline in energy consumption may adversely affect our revenues and future growth. Increased credit risk reflects~~ the ~~risk~~effects ~~that~~of ~~our~~global ~~retail~~climate ~~customers will not pay their bills in a timely manner or at all, which may lead to a reduction in liquidity and an eventual increase in bad debt expense~~change.

~~Liquidity~~Our subsidiaries operate or co-own electric power plants that burn fossil fuels, deliver natural gas, and deliver electricity to customers. These business activities are subject to evolving public concern regarding greenhouse gases (GHG), legislative and regulatory action, and possible litigation in response to that public concern. The primary greenhouse gas associated with our subsidiaries' combustion of fossil fuels, and the largest emission in our system overall, is carbon dioxide (CO2).

~~Long-term~~Our ~~instability~~subsidiaries inhave ~~the~~incurred ~~financial~~and ~~markets,~~may ascontinue ato ~~result~~incur costs from more stringent regulation of ~~recession~~GHG orfrom ~~otherwise~~power plants, ~~also~~natural ~~may~~gas ~~affect~~delivery, ~~the~~GHG ~~cost~~used ofin ~~capital~~power distribution, and ~~our~~efficiencies ~~ability~~lost toduring ~~raise~~power ~~capital~~distribution. ~~Although~~Compliance ~~MGE Energy~~with such regulation may result in increased capital and ~~MGE~~operating ~~believe~~costs, ~~they~~including ~~have~~expenditures ~~sufficient~~for ~~liquidity~~equipment, ~~despite~~technology, and monitoring activities. While it is difficult to know the ~~disruption~~extent of ~~capital~~possible ~~and~~legislation ~~credit~~or ~~markets~~regulatory activity, the ~~costs~~federal government may consider, and could pass, some form of ~~such~~greenhouse ~~funds~~gas legislation or regulations. In addition, litigation targeting GHG emissions from the electric power industry may ~~increase~~also occur if the federal government fails to act on greenhouse gas initiatives.

~~Counterparty~~We ~~creditworthiness~~face risk regarding the recovery of fuel and purchased power costs.

~~Credit~~MGE has price risk ~~also~~exposure ~~includes~~with respect to the ~~risk~~price ~~that~~of ~~trading~~natural ~~counterparties~~gas, ~~that~~electricity, ~~owe~~coal, usemission ~~money~~credits, orand ~~product~~oil. ~~will~~MGE ~~breach~~burns ~~their~~natural ~~obligations~~gas in several of its electric generation facilities. ~~MGE's~~In ~~risk~~many ~~management~~cases, ~~policy~~the iscost toof ~~limit~~purchased ~~transactions~~power is tied to athe ~~group~~cost of ~~high~~natural ~~quality counterparties~~gas. ~~Should~~In the ~~counterparties~~event toof ~~these~~an ~~arrangements~~interruption ~~fail~~in energy supply, whether due to ~~perform~~equipment problems, transmission constraints, or otherwise, we may beincur ~~forced~~additional costs to ~~enter~~obtain ~~into~~ alternative ~~arrangements.~~sources Inof ~~that~~energy ~~event~~supply, in order to meet our ~~financial~~contractual ~~results~~or ~~could~~regulatory obligations to our customers. Electric fuel rules require Wisconsin utilities to defer electric fuel-related costs that fall outside a symmetrical cost tolerance band around the amount approved for a utility in its annual fuel proceedings. Any over- or under-recovery of the actual costs is determined in the following year and is then reflected in future billings to electric retail customers. The electric fuel-related costs are subject to an excess revenue test. Excess revenues are defined as revenues in the year in question that provide MGE with a greater return on common equity than authorized by the PSCW in MGE's latest rate order. The recovery of under-collected electric fuel-related costs would be ~~adversely~~reduced ~~affected~~by the amount that exceeds the excess revenue test. These costs are subject to the PSCW's annual review of fuel costs completed in the year following the deferral. MGE assumes the risks and webenefits ~~could~~of ~~incur~~variances ~~losses~~that are within the cost tolerance band.

1720

~~Item~~Changes ~~1B.~~in ~~Unresolved~~federal ~~Staff~~income ~~Comments~~tax policy, including provisions under the Inflation Reduction Act (IRA) and One Big Beautiful Bill Act (OBBBA), or our inability to use or generate tax credits, may adversely affect our financial condition, results of operations, and cash flows, and credit ratings.

~~MGE Energy~~If corporate tax rates or policies change, we may be required to record material charges against earnings. Increased tax rates could create timing delays before regulated rates allow recovery of those tax increases in revenues. In addition, IRS tax policies such as tax normalization, Treasury Regulations, and ~~MGE~~evolving guidance under the IRA and OBBBA may impact our ability to economically deliver certain types of resources relative to market prices. OBBBA includes provisions for the phase-out of certain tax credits over time, creating uncertainty around long-term project economics and potentially accelerating investment timelines. These changes could require us to modify resource plans, accelerate construction schedules, or seek alternative financing structures, all of which may increase costs and risk. There is uncertainty regarding whether and how the current and future Presidential administrations or U.S. Congress will continue to address tax policy and regulation.

~~None~~We have historically reduced our consolidated federal and state income tax liability through various tax credits. We may not be able to fully use these tax credits if future taxable income is insufficient or if transferability options are limited. Any future disallowance of credits due to legislative changes or adverse determinations could materially affect our tax obligations and financial results. The IRA introduced new labor requirements that are conditions to qualification for renewable tax credits. Failure to meet these requirements on renewable projects that began construction after January 28, 2023, could result in a significant reduction in the amount of renewable tax credits, which could adversely impact our financial condition and results of operations. OBBBA introduces additional eligibility requirements, including compliance with Foreign Entity of Concern (FEOC) rules, which may restrict the use of certain equipment or components in renewable projects. Failure to meet FEOC requirements could disqualify projects from tax credits, significantly increasing costs and reducing expected returns.

~~Item~~Our 2utility business owns and operates renewable energy generating facilities that produce PTC and ITC credits. ~~Properties~~The amount of credits earned depends on facility in-service dates and operating factors, including generation output, transmission constraints, pricing trends, adverse weather conditions, equipment reliability, and the applicable credit rates. These factors, combined with labor requirements under IRA and FEOC compliance risks and credit phase-outs under OBBBA, could reduce credits and increase federal income tax expense. We could also be forced to replace lost generation capacity with additional power purchases from third parties, potentially leading to increased costs. Any of the considerations mentioned above could have an adverse impact on our financial condition and results of operations, which could be material depending upon the cause of the disruption and its duration.

~~Electric~~There ~~Generation~~is also uncertainty as to when or how credit rating agencies, capital markets, the FERC, or state public utility commissions will treat impacts of any future federal or state tax regulation. These impacts could result in credit rating downgrades or negatively affect financial metrics such as funds from operations-to-debt ratios.

~~Net~~Operating ~~summer rated capacity in service at December 31, 2012, was as follows:~~Risk

				Net Summer
		Commercial		Rated
		Operation		Capacity(1)	No. of
Plants	Location	Date	Fuel	(MW)	Units
Steam plants:
Columbia	Portage, WI	1975 & 1978	Low-sulfur coal	225 (2,3)	2
Blount	Madison, WI	1957 & 1961	Gas	100 (7)	2
WCCF	Madison, WI	2005	Gas/oil	126 (4)	2
Elm Road Units	Oak Creek, WI	2010 & 2011	Coal	106 (2,5)	2
Combustion turbines	Madison, WI	1964-2000	Gas/oil	155 (6)	6
	Marinette, WI
Portable generators	Madison, WI	1998-2001	Diesel	50 (7)	54
Wind turbines	Townships of Lincoln
	and Red River, WI	1999	Wind	1 (7, 8)	17
	Township of
	Brookfield, IA	2008	Wind	3 (7,9)	18
Total				766

We are affected by weather, which affects customer demand and can affect the operation of our facilities.

~~(1)~~The demand for electricity and gas is affected by weather. Very warm and very cold temperatures, especially for prolonged periods, can dramatically increase the demand for electricity and gas for cooling and heating, respectively, as opposed to the softening effect of more moderate temperatures. Our electric revenues are sensitive to the summer cooling season and, to a lesser extent, the winter heating season. Similarly, very cold temperatures can dramatically increase the demand for gas for heating. A significant portion of our gas system demand is driven by heating. Extreme summer conditions or storms may stress electric systems, resulting in increased maintenance costs and limiting our ability to meet peak customer demand. As a result, our overall operating results may fluctuate substantially on a seasonal basis.

~~Net~~Demand ~~summer~~for ~~rated~~electricity ~~capacity~~and isgas ~~determined~~associated bywith ~~annual~~existing ~~testing~~data centers, and ~~may~~data ~~vary~~centers ~~from~~developed ~~year~~in tothe ~~year due to~~future, ~~among~~could ~~other~~have ~~things,~~a ~~the~~material ~~operating~~impact ~~and~~on ~~physical~~our ~~conditions of the units~~operations.

We serve a variety of industries, including customers with large load requirements, such as data centers and other facilities. At this time, our service area does not include any large-scale data centers. The recent and ongoing expansion of data centers associated with increasing demand for artificial intelligence (2AI) and other cloud‑based services is a national trend. This trend could lead to a significant increase in demand for electricity and gas if data centers expand or are developed within our service area over the next several years, which could require a rapid and significant increase in generation capacity and the development of related infrastructure. Alternatively, demand for electricity and gas could be lower than currently expected if the expansion of data centers and the associated increase in demand does not develop as anticipated.

~~Baseload~~We ~~generation.~~continue to evaluate the potential impacts of the development, construction, and operation of new data centers in our service area and will continue to evaluate potential mitigants to these risks, which could materially impact our operations, financial

~~(3)~~21

~~MGE's~~condition ~~22%~~and ~~share~~results of ~~two~~operations. ~~512-MW~~However, ~~units~~we cannot predict whether the data centers under consideration will ever commence operations in our service area or the size of the load obligations of data centers that do become operational. ~~The~~Furthermore, ~~other~~the ~~owners~~City ~~are~~of ~~WPL~~Madison (has enacted a ~~subsidiary~~temporary moratorium on the development of ~~Alliant)~~new large-scale data centers to evaluate their impact on local infrastructure and resources, which ~~operates~~may ~~Columbia~~delay or prevent the commencement of operations for planned projects within the City of Madison. Other pending or future legislative or regulatory actions may also impact the development, construction and ~~WPSC~~operation of new data centers in our service area.

~~(4)~~We could be adversely affected by changes in the development, and utilization by our customers, of power generation, storage, and use technologies, as well as emerging technologies such as AI.

~~Facility~~Our isrevenues ~~jointly~~and ~~owned.~~the ~~MGE~~timing ~~Power~~of ~~West~~cost ~~Campus~~recovery ~~owns~~could abe ~~controlling~~adversely ~~interest~~impacted inby ~~the~~improvements ~~electric~~in power generation, ~~plant~~storage, and ~~the~~use UWof ~~owns~~technology ato ~~controlling~~minimize ~~interest~~energy ~~in the chilled-water and steam plants~~use. ~~MGE~~Advancements ~~leases~~in ~~the~~distributed ~~electric~~generation, ~~generating~~including ~~assets~~commercial ~~owned~~and byresidential ~~MGE~~solar ~~Power~~installations ~~West~~and ~~Campus~~commercial ~~and~~micro isturbines, ~~responsible~~continue ~~for~~to ~~operating~~improve the ~~facility.~~cost-effectiveness ~~Amounts~~of ~~shown~~customer ~~represent~~self-supply ~~MGE's share~~ of ~~the net summer rated capacity~~electricity. ~~Based~~Similarly, onimprovements ~~the~~in ~~terms~~energy ofstorage ~~the~~technology, ~~joint~~such ~~plant~~as ~~agreement~~batteries ~~between MGE~~ and ~~the~~fuel UWcells, ~~the~~enable UWcustomers ~~has the ability~~ to ~~reduce~~meet ~~net~~their ~~capability~~around-the-clock ofelectricity ~~these~~needs ~~units~~without byrelying ~~approximately~~on ~~17 MW in~~ the ~~summer.~~electricity ~~The~~we ~~net summer rated capacity shown reflects this decrease~~provide.

~~(5)~~Legislation or regulations could support these technologies, permit third-party sales, and allow interconnection to our distribution system. Improvements in energy efficiency and voluntary conservation efforts will also affect consumption. AI-driven energy management tools could also enable customers to optimize usage and further reduce purchases from us. Such developments could reduce customer purchases of electricity but may not reduce our investment and operating requirements due to our obligation to serve customers, including those whose self-supply resources fail. Because a portion of our costs are recovered through volumetric charges, reductions in electricity deliveries could affect the timing of our recovery of those costs and may require changes to rate structures.

~~MGE's~~We ~~8.33% share in each of two 615 MW coal-fired generating units. The other owners~~ are ~~Wisconsin~~affected ~~Energy~~by ~~Corporation~~local, ~~which operates the units~~national, and ~~WPPI~~worldwide ~~Energy,~~economic ~~Inc~~activity. MGE leases the electric generating assets owned by MGE Power Elm Road. Unit 1 and Unit 2 entered commercial operation in February 2010 and January 2011, respectively. Amounts shown represent MGE's share of the net summer rated capacity of the Units.

~~(6)~~MGE Energy's and MGE's operations are affected by local, national, and worldwide economic conditions. The consequences of a prolonged period of reduced economic activity may include lower demand for energy, uncertainty regarding energy prices and the capital and commodity markets, and increased credit risk. A decline in energy consumption may adversely affect our revenues and future growth. Increased credit risk reflects the risk that our retail customers will not pay their bills in a timely manner or at all, which may lead to a reduction in liquidity and an eventual increase in bad debt expense.

~~Three~~Higher ~~facilities~~levels ~~are~~of ~~owned~~development byand ~~MGE~~business activity within our service area generally increases the number of customers and ~~three~~their ~~facilities~~use of electricity and gas. Likewise, recessionary economic conditions generally have an adverse impact on our results of operations. Our business activities, including those of our subsidiaries, are ~~leased~~concentrated in the State of Wisconsin. Changes in our local economy could negatively impact the financial condition of our customers, the growth opportunities available to us and our subsidiaries, and our results from operations.

~~(7)~~Our operations have been, and may continue to be, impacted by domestic and global supply chain disruptions which are delaying the delivery of materials, equipment, and other resources that are critical to our business operations and projects under construction, including our renewable energy projects. Supply interruptions could affect our ability to operate and maintain our system and ability to implement our long-term goals. Inflation has also increased prices of equipment, materials, employee wages and benefits, and other resources. Inflationary pressures in the economy could lead to higher expenses which may adversely impact our financial condition and results of operations.

~~These~~Our ~~facilities~~operations ~~are~~could ~~owned~~be adversely affected by ~~MGE~~global climate change.

~~(8)~~A changing climate creates uncertainty and could result in broad changes, both physical and financial in nature, to our operations. Physical risks arising from extreme weather events and changing climate patterns, including swings in intensity, disruption of operations, infrastructure damage, and impact of customer demand. Extreme weather events could lead to substantial financial losses including increased maintenance costs, or unanticipated capital expenditures. The cost of storm restoration efforts may also not be fully recoverable through the regulatory process. We may also incur costs associated with actions taken due to investor interest in reducing our subsidiaries' reliance on fossil fuel generation, and coal in particular. Investors may also move away from investing in fossil fuel generated electricity for reputational or perceived risk-related reasons, which could raise our costs of attracting capital. If we are seen as being proactive in addressing concerns we may experience reputational issues among our customers and the communities that we serve. Those issues could affect customers' energy choices, including efforts at self-supply, and could affect the handling and treatment of our rate requests and cost recovery. We cannot provide any assurance regarding the potential impacts of climate change or related policies and regulations to reduce GHG emissions on our operations, which could have a material adverse impact on our financial condition and results of operations.

~~Nameplate capacity rating is 11 MW.~~22

~~(9)~~The ability to obtain an adequate supply of coal could limit the ability to operate the co-owned coal-fired facilities from which we receive a significant portion of our electric supply.

~~Nameplate~~Changes ~~capacity~~to ~~rating~~the isavailability ~~30 MW.~~of coal and the means to transport coal could:

•

18Affect our operating costs due to increased costs associated with lower levels of owned generation or the need for alternate coal supply or transportation,

•

~~Electric~~Limit ~~and~~the ~~Gas~~ability ~~Distribution~~to ~~Facilities~~generate electricity if the plant operator is unable to arrange timely deliveries of adequate supplies of coal, and

•

~~Major~~Result ~~electric~~in ~~distribution~~potentially ~~lines~~higher ~~and~~costs ~~substations~~for inreplacement ~~service~~purchased atpower ~~December 31,~~as ~~2012,~~well ~~which~~as ~~are~~potential ~~owned~~lost bymarket ~~MGE,~~sales ~~are~~opportunities. ~~as follows:~~

	Miles
Distribution lines:	Overhead	Underground
13.8 kV and under	894	1,143
Distribution:	Substations	Installed Capacity (kVA)
69-13.8 kV	27	1,243,500
13.8-4 kV	28	275,300

A significant portion of our electric generating capacity is dependent on coal. Demand for coal has been, and may continue to be, impacted by prevailing prices for natural gas and coal plant closures and may affect mine performance. Consequently, we are exposed to the risk that counterparties to these contracts will not be able to fulfill their obligations. Disruption in the delivery of fuel, including disruptions as a result of transportation delays, weather, labor relations, force majeure events, or environmental regulations affecting any of our fuel suppliers, has affected, and could in the future affect, our ability to generate electricity at our facilities at the desired level. Should counterparties fail to perform, or other unplanned disruptions occur, we may be forced to fulfill the underlying obligation at higher prices. The Columbia plant operator has been, and the plant operators may be, forced to reduce generation at our jointly-held coal units, which would cause us to replace this generation through additional power purchases from third parties. These factors may also affect the terms under which any of the existing coal supply or transportation agreements are renewed or replaced upon the expiration of their current terms.

~~Gas~~Our ~~facilities~~ability ~~include~~to ~~2,466~~manage ~~miles~~our ofpurchased ~~distribution~~power ~~mains,~~costs ~~which~~is ~~are~~influenced ~~owned~~ by ~~MGE~~a number of uncontrollable factors.

AWe ~~significant~~have ~~portion~~been, ~~of MGE's electric~~ and ~~gas~~will ~~distribution~~continue ~~facilities~~to ~~are~~be, ~~located~~exposed ~~above~~to oradditional ~~underneath~~purchased ~~highways,~~power ~~streets,~~costs ~~other~~to ~~public~~the ~~places~~extent ~~or property~~ that ~~others~~our ~~own.~~power ~~MGE~~needs ~~believes~~cannot ~~that~~be itfully ~~has~~covered ~~satisfactory~~by ~~rights~~the tosupplies ~~use~~available ~~those~~from ~~places~~our orexisting ~~property~~facilities inand ~~the~~contractual ~~form~~arrangements. ofThose ~~permits~~needs, ~~grants, easements~~ and ~~licenses;~~our ~~however~~costs, itcould ~~has~~be ~~not~~affected ~~necessarily undertaken to examine the underlying title to the land upon which the rights rest.~~by:

•

~~Encumbrances~~Increased demand due to, for example, abnormal weather, customer growth, or customer obligations,

•

The ~~principal~~inability ~~plants~~to ~~and~~transmit ~~properties~~our ofowned ~~MGE~~or ~~are~~contracted ~~subject~~power tofrom the ~~lien~~generation ofsource ~~its~~to ~~Indenture~~our ofcustomers ~~Mortgage~~due ~~and~~to ~~Deed~~transmission ofline ~~Trust dated as of January 1~~constraints, ~~1946~~outages, asor ~~amended~~equipment ~~and supplemented~~failures, under which MGE's first mortgage bonds are issued. As of December 31, 2012, there were $1.2 million of first mortgage bonds outstanding. See Footnote 9 for additional information regarding MGE's first mortgage bonds.

•

~~MGE~~Reductions ~~Power~~in ~~Elm~~the ~~Road~~availability ~~has~~of ~~collaterally~~power ~~assigned its right to lease payments~~ from ~~MGE~~our ~~for~~owned ~~the~~or ~~Elm~~contracted ~~Road~~generation ~~Units~~sources indue ~~order~~ to ~~secure~~equipment ~~the~~failures, ~~repayment~~shortages of ~~$73.3 million~~fuel ofor ~~senior~~environmental ~~secured~~limitations ~~notes~~on ~~issued~~operations, byand ~~MGE Power Elm Road. See Footnote 9 for additional information regarding these senior notes.~~

•

~~MGE~~Failure ~~Power West Campus has collaterally assigned its right~~ to ~~lease~~perform ~~payments~~on ~~from MGE for~~ the ~~WCCF~~part ~~in order to secure the repayment~~ of ~~$50.0 million~~any ofparty ~~senior~~from ~~secured~~which ~~notes~~we ~~issued~~purchase bycapacity ~~MGE~~or ~~Power~~energy, ~~West~~whether ~~Campus.~~due ~~See~~to ~~Footnote 9~~equipment ~~for~~failures ~~additional~~or ~~information~~other ~~regarding these senior notes~~causes.

~~Item~~An 3.unexpected ~~Legal~~change ~~Proceedings~~in demand or the availability of generation or transmission facilities can expose us to increased costs of sourcing electricity in the short-term market where pricing may be more volatile.

~~MGE Energy~~The equipment and ~~MGE~~facilities in our operational system are subject to risks that may adversely affect our financial performance.

~~MGE Energy~~Weather conditions, accidents, and ~~its~~catastrophic ~~subsidiaries~~events can result in damage or failures of equipment or facilities and disrupt or limit our ability to generate, ~~including~~transmit, ~~MGE~~transport, ~~from~~purchase, ~~time~~or distribute electricity and gas. Efforts to ~~time~~repair ~~are~~or ~~involved~~replace inequipment ~~various~~and ~~legal~~facilities ~~proceedings~~may ~~that~~take place over prolonged periods or may be unsuccessful. We may also be unable to make the necessary improvements to our operational system, causing service interruptions. Furthermore, our facilities are ~~handled~~interconnected with third-party transmission providers. Damage to or failures of these providers' equipment or facilities is out of our control but could lead to service interruptions. Any resulting interruption of services would result in lost revenues and ~~defended~~additional costs. Lack of gas or decreased gas pressure from interstate pipeline systems may result in unexpected energy interruptions and may lead to additional costs for alternative energy sources. We are also exposed to the ~~ordinary~~risk ~~course~~of accidents or other incidents that could result in damage to or destruction of ~~business~~our facilities or damage to persons or property. Such issues could adversely affect revenues or increase costs to repair and maintain our systems.

~~See~~Our ~~"Environmental"~~operations ~~under~~and ~~Item~~confidential 1,information ~~Business,~~are ~~and~~subject ~~Footnote 18.e~~to ~~for~~the arisk ~~description~~ of ~~several~~physical ~~environmental~~or ~~proceedings~~cyber ~~involving~~attacks, ~~MGE.~~which ~~See~~could ~~Footnote 18.f~~have ~~for~~an aadverse ~~description~~effect ofon ~~other~~our ~~legal~~business ~~matters~~and performance.

~~Item~~We 4operate in a highly engineered industry that requires the continued operation of sophisticated information technology systems and network infrastructure to manage our finances, operate our control facilities, provide electric and gas service to our customers, and enable compliance with applicable regulatory requirements. ~~Mine~~Our ~~Safety~~generation ~~Disclosures~~and distribution facilities and computer-based systems and other infrastructure or physical assets are vulnerable to interruption, the introduction of viruses, malware, ransomware, security breaches, terrorist-style attacks, fire, power loss, system malfunction, network outages, unauthorized access, and other events that may be beyond our control. System interruptions or failures, whether isolated or more widespread, could

~~MGE Energy and MGE~~23

~~Not~~impact ~~applicable~~our ability to provide service to our customers, which could have a material adverse effect on our operations and financial performance.

19Generation, transmission systems, and natural gas pipelines are part of an interconnected system. Therefore, a disruption caused by the impact of a cybersecurity incident on the regional electric transmission grid, natural gas pipeline infrastructure or other fuel sources of our third-party service providers' operations, could also negatively impact our business.

~~PART~~Our IIbusiness includes the collection and retention of personally identifiable information of our customers, shareholders, and employees, who expect that we will adequately protect such information. In some cases, we outsource certain functions to vendors that could be targets of cyber attacks. A significant theft, loss, or fraudulent use of personally identifiable information may cause our business reputation to be adversely impacted and could lead to potentially large costs to notify and protect the impacted persons and subject us to legal claims, fines, or penalties.

~~Item~~We 5maintain security measures to protect our information technology and control systems, network infrastructure and other assets. ~~Market~~Despite ~~for~~such ~~Registrants'~~measures, ~~Common~~we ~~Equity~~have been and may in the future be subject to cyber incidents. While we have not been subject to cyber incidents that have had a material impact on operations to date, ~~Related~~the ~~Stockholder~~safeguards ~~Matters~~we have may not always be effective due to the evolving nature of cyber attacks. Moreover, the rapid evolution and ~~Issuer~~increased ~~Purchases~~adoption of ~~Equity~~AI ~~Securities~~technologies may intensify our cybersecurity risks. We cannot guarantee that the protections we have in place will be completely successful in the event of a cyber attack. If the technology systems were to fail or be breached by a cyber attack, and not be recovered in a timely fashion, we may be unable to fulfill critical business functions, equipment may fail to work and confidential data could be compromised, any additional costs may not be recoverable in rates, or may exceed cyber insurance limits, or may not be covered by cyber insurance and could adversely impact our results of operations.

~~Market~~Catastrophic ~~for~~and ~~Common~~unpredictable ~~Equity~~events, including, but not limited to, terrorist or other physical attacks, could have a material adverse effect on our business.

~~MGE Energy~~A terrorist attack, war, natural disaster, wildfire, severe storms, pandemic virus or disease, or other catastrophic or unpredictable event could adversely affect our future revenues, expenses and operating results by: interrupting our normal business operations; causing employee absences or casualties, including loss of our key employees; interrupting or affecting supplier operations; requiring substantial expenditures and expenses to repair, replace and restore normal business operations; reducing investor confidence; and disrupting, or causing volatility in, capital markets. No assurance can be given that future losses for such events will not exceed the limits of our insurance coverage, if applicable. While we maintain insurance coverage for certain losses arising from catastrophic events, such coverage may be subject to limits, retentions (deductibles), exclusions, or delays in recovery, and may materially increase in cost in the future. Uninsured or underinsured losses could materially and adversely affect our financial condition and results of operations. Facilities for electric generation, transmission, and gas and electric distribution are potential targets of terrorist threats and activities, including both physical or cyber attacks. A terrorist act or catastrophic event at our facilities or the facilities of other companies to which we are interconnected could result in a disruption of our ability to generate, transmit, transport, purchase, or distribute electricity or natural gas. Such an event would have additional adverse effects, including environmental ramifications, increased security and insurance costs, as well as general economic volatility or uncertainty within our service territories. The inability to maintain operational continuity and any additional costs incurred for repairing our facilities or making alternative arrangements could materially and adversely affect our financial condition and results of operations.

~~MGE Energy~~We ~~common~~face ~~stock~~risk isin ~~traded~~connection onwith ~~Nasdaq under~~ the ~~symbol~~completion ~~MGEE. On February 1, 2013, there were approximately 36,421 shareholders~~ of ~~record.~~significant ~~The~~capital ~~following table shows high and low sale prices for the common stock on Nasdaq for each quarter over the past two years~~projects.

		Common stock price range
		2012				2011
		High		Low		High		Low
Fourth quarter	$	53.97	$	47.24	$	47.85	$	39.30
Third quarter	$	56.06	$	46.79	$	43.06	$	37.06
Second quarter	$	47.82	$	43.10	$	42.72	$	39.55
First quarter	$	47.23	$	43.03	$	43.46	$	38.99

Our capital projects, such as our renewable generation and storage projects, are subject to various completion risks that could cause increases in costs or delays in completion. These risks include shortages of, the inability to obtain, the cost of, and the consistency of, labor, materials and equipment; the inability of the contractors to perform under their contracts; the inability to agree to terms of contracts or disputes in contract terms; work stoppages; adverse weather conditions; the inability to obtain necessary permits in a timely manner; changes in applicable laws or regulations; adverse interpretation or enforcement of permit conditions; governmental actions or tariffs; legal action; and unforeseen engineering or technology issues. Our capital projects may also be adversely affected by geopolitical instability, trade policy changes, or shortages of critical materials and equipment. Disruptions in global supply chains could delay project completion, increase costs, or affect system reliability. In the case of our renewable generation projects, we may face delays in the completion of the necessary transmission system connections or upgrades to accommodate the project.

~~MGE~~If a capital project exceeds the approved project costs approved by the PSCW, we may not be able to recover those excess costs through regulated customer rates. If that happens, we may have to finance overruns through cash from operations, which may delay other projects, or by securing additional financing. Any or all of these methods may not be available when or in the amounts needed, on reasonable terms or at all.

~~As of February 1, 2013, there were 17,347,894 outstanding shares of common stock, all of which were held by MGE Energy. There is no market for shares of common stock of MGE.~~24

~~Dividends~~Inability to recover excess costs, obtain additional financing when or if needed on reasonable terms or complete the project in a timely manner, could adversely impact our financial condition and results of operations. Further, our revenues and cash flows may not increase immediately following our expenditure of funds on a particular project or in the period during which the expenditure occurs, which could affect our liquidity and financial position.

~~MGE Energy~~Our stated long-term goals are based on various assumptions and beliefs that may not prove to be achievable in the time frame projected.

~~The~~Some ~~following~~of ~~table~~our ~~sets~~current ~~forth~~long-term goals include MGE ~~Energy~~'s ~~quarterly~~target ~~cash~~of ~~dividends~~net‐zero ~~per~~carbon ~~share~~electricity ~~declared~~by ~~during~~2050 ~~2012~~and MGE's Energy 2030 framework, which describes our plan for growth in renewables generation. MGE is working to achieve a more sustainable energy future using cost‐effective renewable generation and ~~2011:~~storage technologies. Management established these goals in conjunction with our board of directors based upon a number of different internal and external factors that characterize and influence our current and expected future activities. These long-term goals are based on certain assumptions regarding the timing, scope, and relative costs of technological advancements, including generation, storage and energy use technologies; levels of customer participation in programs and partnerships; our ability to transition away from or displace existing coal-fired resources; our ability to complete renewable generation and storage projects in a timely manner and within approved budgets; our ability to obtain recovery of costs in rates; and our ability to obtain the necessary permits or licenses for such projects. These assumptions may differ materially from actual future developments. Accordingly, we may not achieve our stated long-term goals in the timeframe projected or at all.

(Per share)		2012		2011
Fourth quarter	$	0.395	$	0.383
Third quarter	$	0.395	$	0.383
Second quarter	$	0.383	$	0.375
First quarter	$	0.383	$	0.375

Failure to attract and retain an appropriately qualified workforce could affect our operations.

~~MGE~~Because we operate in an industry that requires employees with specialized technical skills, we must attract, train, and retain a specialized workforce to meet current and future needs. Events such as an aging workforce without sufficient replacement workers, mismatch of skill sets to future needs, labor market conditions, evolving employee culture expectations, or unavailability of contract resources may lead to operating challenges and increased costs. Some of the challenges include lack of resources, loss of knowledge, and time required for replacement employees to develop necessary skills. Failure to identify qualified replacement employees could increase costs as a result of decreased productivity and increased safety incidents. If we are unable to attract and retain an appropriately qualified workforce, our operations could be negatively affected. We are also subject to multiple collective bargaining agreements covering approximately 318 employees as of December 31, 2025. Future negotiation of these collective bargaining agreements could lead to work stoppages or other disruptions to our operations, which could adversely affect our financial condition and results of operations.

~~The~~Financial ~~following table sets forth MGE's quarterly cash dividends declared during 2012 and 2011:~~Risk

(In thousands)		2012		2011
Fourth quarter	$	6,948	$	6,728
Third quarter	$	-	$	6,728
Second quarter	$	6,728	$	6,596
First quarter	$	6,728	$	6,596

We are exposed to commodity price risk relating to our purchases of natural gas, electricity, coal, oil, and environmental allowances.

~~See~~We ~~discussion~~face ~~below~~commodity asprice ~~well~~risk asexposure with respect to the ~~"Liquidity~~purchase of natural gas, electricity, coal, oil, and ~~Capital~~environmental ~~Resources~~allowances. -We ~~Financing~~also ~~Activities"~~face ~~under~~risk ~~Item~~through 7our use of derivatives, ~~Management's~~such ~~Discussion~~as futures, forwards, and ~~Analysis~~swaps, to manage our commodity price risk. We could experience increased costs as a result of ~~Financial~~volatility ~~Condition~~in ~~and~~the ~~Results~~market values of ~~Operations,~~those ~~for~~commodities. We could also experience losses on our derivative contracts as a ~~description~~result of ~~restrictions~~that ~~applicable~~market value volatility or if a counterparty fails to ~~dividend~~perform ~~payments~~under bya ~~MGE~~contract.

~~Dividend~~Interest ~~Restrictions~~rate movements and market performance affects our employee benefit plan costs.

~~Dividend~~Prevailing ~~payments~~interest byrates ~~MGE~~affect toour ~~MGE Energy~~assessment ~~are~~and ~~subject~~determination toof ~~restrictions~~discount ~~arising~~rates ~~under~~and are a ~~PSCW~~key ~~rate~~assumption ~~order~~in ~~and,~~the todetermination aof ~~lesser~~the ~~degree,~~costs ~~MGE's~~and ~~first~~funding ~~mortgage~~of ~~bonds~~our defined benefit pension plans. ~~The~~Changes ~~PSCW~~in ~~order~~rates ~~limits~~may impact the amount of ~~dividends~~expense ~~that~~and ~~MGE~~timing ~~may~~of ~~pay~~contributions ~~MGE Energy~~to ~~when~~those ~~its~~plans. ~~common~~The ~~equity~~performance ~~ratio,~~of ~~calculated~~the incapital markets affects the ~~manner~~values ~~used~~of the assets that are held in ~~the~~trust ~~rate~~to ~~proceeding,~~satisfy isthe ~~less~~future ~~than~~obligations ~~55%.~~under ~~Under~~our ~~those~~pension ~~circumstances,~~and ~~MGE~~postretirement ~~may~~benefit ~~not~~plans. ~~pay~~We ~~annual~~have ~~dividends~~significant obligations in ~~excess~~these ofareas ~~$39.8 million~~and ~~plus~~hold ~~dividends~~significant onassets ~~MGE Energy~~in ~~shares~~these ~~issued~~trusts. A decline in ~~excess~~the market value of ~~the~~trust ~~issued~~fund ~~share~~assets ~~number~~may ~~used~~increase inour ~~the~~current ~~rate~~and ~~proceeding~~longer-term ~~forecast~~funding ifrequirements ~~the~~by ~~proceeds~~increasing ~~are~~the ~~invested~~level inof ~~MGE.~~contributions ~~MGE's~~required ~~thirteen~~to ~~month~~meet ~~rolling~~benefit ~~average~~obligations. ~~common~~In ~~equity~~addition, ~~ratio~~changes atin ~~December 31~~workforce demographics, ~~2012~~retirement patterns, islife ~~58.3%~~expectancy, asor ~~determined~~eligibility ~~under~~requirements ~~the~~for Social Security or Medicare could increase benefit costs and funding requirements for our pension and postretirement benefit plans.

20We are exposed to interest rate risk.

~~calculation~~We ~~used~~are inexposed ~~the~~to interest rate ~~proceeding.~~risk ~~MGE~~on ~~paid~~our ~~cash~~variable ~~dividends~~rate ~~of $20~~financing.~~4 million~~ toOur ~~MGE Energy~~borrowing inlevels ~~2012.~~under ~~The~~commercial ~~rate~~paper ~~proceeding~~arrangements ~~calculation~~vary ~~includes~~from asperiod ~~indebtedness~~to ~~imputed~~period ~~amounts~~depending ~~for~~upon ~~MGE's~~capital ~~outstanding~~investments ~~purchase power capacity payments~~ and other ~~PSCW~~factors. ~~adjustments,~~Such ~~but~~interest ~~does~~rate ~~not~~risk ~~include~~means ~~the~~that ~~indebtedness~~we ~~associated~~are ~~with~~exposed ~~MGE~~to ~~Power~~potential ~~Elm~~increased ~~Road~~financing costs and ~~MGE~~associated ~~Power~~cash ~~West~~payments ~~Campus,~~as ~~which~~a ~~are~~result ~~consolidated~~of ~~into~~changes ~~MGE's~~in ~~financial~~short-term ~~statements~~interest ~~but are not direct obligations of MGE~~rates.

MGE has covenanted with the holders of its first mortgage bonds not to declare or pay any dividend or make any other distribution on or purchase any shares of its common stock unless, after giving effect thereto, the aggregate amount of all such dividends and distributions and all amounts applied to such purchases, after December 31, 1945, shall not exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2012, approximately $281.6 million was available for the payment of dividends under this covenant.25

~~Issuer~~We ~~Purchases~~are ofexposed ~~Equity~~to ~~Securities~~counterparty credit risk primarily through our regulated energy business.

Credit risk is the loss and additional expense that may result from counterparty nonperformance. We face credit risk primarily through MGE ~~Energy~~'s regulated energy business. Failure of contractual counterparties to perform their obligations under purchase power agreements, commodity supply arrangements, or other agreements may result in increased expenses for MGE as a result of being forced to cover the shortfall in the spot or short-term market, where prices may be more volatile. That risk may be increased during periods of weak or stressed economic conditions.

Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs*	Maximum number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs*
October 1-31, 2012	31,144	$	52.82	-	-
November 1-30, 2012	38,805		50.39	-	-
December 1-31, 2012	73,100		51.68	-	-
Total	143,049	$	51.58	-	-

As a holding company, we are dependent on upstream cash flows from our subsidiaries for the payment of dividends on our common stock.

*MGE ~~Under~~Energy ~~the~~is ~~Stock~~a ~~Plan~~holding company, ~~common~~with ~~stock~~no ~~shares~~operations ~~deliverable~~of toits ~~plan~~own, ~~participants~~and ~~may~~its beability ~~either~~to ~~newly~~pay ~~issued~~dividends ~~shares~~on orour ~~shares~~common ~~purchased~~stock is dependent on the ~~open~~earnings ~~market,~~and ascash ~~determined~~flows ~~from~~of ~~time~~operating tosubsidiaries ~~time~~and bytheir ~~MGE Energy.~~ability ~~In June 2009, MGE Energy switched~~ to ~~using~~pay ~~open~~upstream ~~market~~dividends ~~purchases~~or to ~~provide~~repay ~~shares~~funds to ~~meet~~MGE ~~obligations~~Energy. toOur ~~participants~~subsidiaries inhave ~~the~~financial ~~Stock~~obligations ~~Plan.~~that ~~The~~must ~~shares~~be ~~are~~satisfied ~~purchased~~before onfunding ~~the~~MGE ~~open~~Energy. ~~market~~These ~~through~~obligations ainclude ~~securities~~debt ~~broker-dealer~~service and ~~then~~obligations ~~are reissued under the Stock Plan as needed~~ to ~~meet~~trade ~~share~~creditors, ~~delivery~~among ~~requirements~~others. ~~The~~Our ~~volume~~subsidiaries ~~and~~are ~~timing~~also ofsubject ~~share~~to ~~repurchases~~contractual inand ~~the~~regulatory ~~open~~restrictions ~~market~~that ~~depends~~may ~~upon~~limit ~~the~~or ~~level~~impair oftheir ~~dividend~~ability ~~reinvestment~~to ~~and~~pay ~~optional~~dividends ~~share purchases being made from time~~ to ~~time~~MGE ~~by plan participants~~Energy. AsCertain aregulatory ~~result,~~orders ~~there~~impose isconditions noon ~~specified~~dividend ~~maximum~~payments ~~number~~based ofon ~~shares to be repurchased and no~~ specified ~~termination~~financial ~~date~~metrics ~~for~~or ~~the~~capital ~~repurchases.~~structure ~~All~~requirements, ~~shares~~which ~~issued~~could ~~through~~restrict the ~~Stock~~amount ~~Plan, whether newly issued~~ or ~~reissued~~timing ~~following~~of ~~open~~dividends ~~market~~paid ~~purchases, are issued and sold pursuant~~ to aMGE ~~registration statement that was filed with the SEC and is currently effective~~Energy.

~~MGE~~Disruptions in the financial markets or changes to our credit ratings may affect our ability to finance at a reasonable cost and in accordance with our planned schedule.

~~None~~The credit markets have experienced disruption and uncertainty. To the extent that such issues affect the ability or willingness of credit providers or investors to participate in the credit markets or particular types of investments, or affect their perception of the risk associated with particular types of investments, our cost of borrowing could be affected. Furthermore, if we are unable to access the capital and credit markets on favorable terms, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity and our ability to repay or refinance our debt. We also rely on our credit ratings to access the credit markets. If our credit ratings are downgraded for any reason, borrowing costs would increase, the number of potential investors could decrease, or we could be required to provide additional credit assurance, including cash collateral, to contract counterparties.

21Item 1B. Unresolved Staff Comments.

~~Stock~~MGE ~~Performance~~Energy ~~Graph~~and MGE

The performance graph below illustrates a five-year comparison of cumulative total returns based on an initial investment of $1,000 in MGE Energy common stock, as compared with the Russell 2000 and the EEI Index for the period 2008 through 2012None. ~~The EEI Index reflects the consolidated performance of Edison Electric Institute investor-owned electric utilities.~~

ValueItem of1C. Investment at December 31,Cybersecurity.

		2007		2008		2009		2010		2011		2012
MGEE	$	1,000	$	970	$	1,099	$	1,369	$	1,552	$	1,747
Russell 2000		1,000		662		842		1,068		1,024		1,191
EEI Index		1,000		741		820		878		1,054		1,076

MGE Energy and MGE

22Risk management and strategy

~~Item~~MGE 6manages its cybersecurity risk in accordance with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. ~~Selected~~Using ~~Financial~~the ~~Data~~core functions of the NIST framework – identify, protect, detect, respond, recover, and governance – MGE employs a cybersecurity strategy program with input from its information technology (IT) leadership, senior management, and MGE Energy's Board of Directors (the Board). MGE maintains policies and procedures concerning cybersecurity matters, including those related to antivirus/malware protection, remote access, authentication, and confidential information. These policies go through an internal review process and are approved by appropriate executives and members of management.

Cybersecurity is considered within MGE ~~Energy~~'s overall Enterprise Risk Management (ERM) program, which establishes an overall approach to enterprise risk management that can be consistently applied across the enterprise. As part of the ERM program, management identifies, assesses, mitigates, and monitors key enterprise risks. The ERM program includes evaluation of cyber risks' causes, impacts, ratings, and mitigations. Enterprise risks are reviewed and updated by management semi-annually.

(MGE's IT Security team trains and collaborates across the organization along with outside partners and governmental agencies to maintain visibility and detection of continuously evolving threats and protection of MGE's digital systems. MGE has developed a security awareness program to help employees make sound security decisions through ongoing security awareness, education, and training activities. MGE has cyber incident response plans that detail identification, response, and recovery procedures in the event of a cyber incident. Periodic third-party penetration tests and vulnerability scans are performed both internally and externally to assess MGE's security measures and validate MGE's processes and procedures during a threat. In ~~thousands~~addition to assessing its own cybersecurity preparedness, ~~except~~MGE's ~~per~~security ~~share~~team ~~amounts)~~also considers and evaluates cybersecurity risks associated with use of third-party service providers to confirm that security standards are met. MGE relies on third parties to deliver its products and services to customers, and a cybersecurity incident at a supplier, subcontractor, or joint venture partner could materially impact MGE. Third-party cybersecurity controls are assessed through a cybersecurity questionnaire, and security and privacy addendums are included

		For the years ended December 31,
		2012		2011		2010		2009		2008
Summary of Operations
Operating revenues:
Regulated electric	$	392,365	$	375,858	$	360,729	$	332,324	$	345,962
Regulated gas		139,727		165,271		165,915		192,334		242,598
Nonregulated		9,231		5,253		5,947		9,161		7,433
Total		541,323		546,382		532,591		533,819		595,993
Operating expenses		410,200		421,170		418,931		431,296		491,418
Other general taxes		18,360		17,344		17,058		17,858		16,793
Operating income		112,763		107,868		96,602		84,665		87,782
Other income, net		10,069		9,214		11,093		8,096		8,044
Interest expense, net		(19,467)		(20,162)		(16,157)		(13,594)		(14,002)
Income before taxes		103,365		96,920		91,538		79,167		81,824
Income tax provision		(38,919)		(35,992)		(33,820)		(28,170)		(29,056)
Net income	$	64,446	$	60,928	$	57,718	$	50,997	$	52,768
Average shares outstanding		23,114		23,114		23,114		23,070		22,197
Basic and diluted earnings per share	$	2.79	$	2.64	$	2.50	$	2.21	$	2.38
Dividends declared per share	$	1.56	$	1.52	$	1.49	$	1.46	$	1.43
Assets
Electric	$	888,444	$	794,738	$	721,721	$	695,897	$	677,540
Gas		285,468		285,702		257,505		249,610		284,211
Assets not allocated		18,559		32,882		22,079		22,342		14,642
Nonregulated energy operations		323,216		299,421		300,862		292,101		271,568
Transmission investments		61,064		57,006		54,241		51,728		46,292
All others		413,291		401,862		376,219		389,744		381,433
Eliminations		(403,118)		(412,729)		(414,734)		(419,537)		(407,411)
Total	$	1,586,924	$	1,458,882	$	1,317,893	$	1,281,885	$	1,268,275
Capitalization including Short-Term Debt
Common shareholders' equity	$	579,429	$	550,952	$	525,080	$	501,795	$	478,202
Long-term debt*		361,504		363,570		336,018		322,470		272,408
Short-term debt		-		-		22,500		64,500		124,500
Total capitalization and short-term debt	$	940,933	$	914,522	$	883,598	$	888,765	$	875,110
*Includes current maturities

23in contracts when applicable. Furthermore, at least annually vendor System and Organization Controls (SOC) 1 or SOC 2 reports are reviewed by internal business owners, if available. MGE's assessment of risks associated with use of third-party providers is part of the overall cybersecurity risk management framework. MGE has a cyber insurance policy to mitigate risk of financial damages. In an event of a material cyber incident, MGE engages representatives of the insurer in accordance with the cyber incident response plan.

~~Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.~~Governance

~~General~~Enterprise-wide risk assessment and oversight are fundamental responsibilities of the Board, including cybersecurity. The Board, of which four members have technology and cybersecurity skills, is involved in the process of overseeing the primary risks faced in the conduct of our business. The Board receives, on an ongoing basis, information from management related to key business risks and mitigation strategies. These business risks include existing and emerging risks related to information technology systems and cybersecurity. Updates to the ERM risk register are provided to the Audit Committee of the Board semiannually, which includes a cybersecurity risk assessment. Annually, management presents the Company's cybersecurity strategy and initiatives to the Board. In addition, management provides quarterly cybersecurity updates to the Audit Committee to inform regarding any incidents, changes in risk or threat landscape, and provide any relevant information regarding trending topics in cybersecurity as it pertains to MGE Energy and its subsidiaries.

~~MGE Energy~~The isChief anFinancial ~~investor-owned~~Officer ~~public~~(CFO) ~~utility~~& ~~holding~~Treasurer ~~company~~and ~~operating~~Chief ~~through~~Information ~~subsidiaries~~Officer (CIO) are the system owners for electronic information and, in ~~five~~that ~~business~~capacity, ~~segments:~~are responsible for the processing, integrity, security, and availability of electronic information under their jurisdiction. The CFO has over 15 years of experience spanning several IT functions and levels of management, IT audit, applications development, project management, infrastructure and telecommunications, and cybersecurity. The CIO has over 25 years of IT experience, including ten years dedicated to cybersecurity in the utility, insurance, and financial sectors, and maintains a Certified Information Systems Security Professional (CISSP) certification. The CIO's cybersecurity experience includes engineering, architecture, incident response, and management.

·MGE has had no material cyber security incidents that affected business strategy, results of operations, or financial condition as of the date of this report. However, MGE Energy and its subsidiaries face risks from cybersecurity threats, including as a result of any cyber incidents, that could materially affect its business strategy, results of operations, and financial condition, cash flows or reputation. However, such risks have not materially affected us to date. For more information about the cybersecurity-related risks we face, see the risks detailed under the heading "Our operations and confidential information are subject to the risk of physical or cyber attacks, which could have an adverse effect on our business and performance" included as part of our risk factor disclosures in Part I, Item 1A. of this Report.

~~Regulated electric utility operations, conducted through MGE,~~27

·Item 2. Properties.

~~Regulated~~Electric ~~gas utility operations, conducted through MGE,~~Generation

·Net summer rated capacity in service as of December 31, 2025, was as follows:

Nonregulated energy operations, conducted through MGE Power and its subsidiaries,


Plants(b)	Location	Commercial Operation Date	Fuel	Nameplate Capacity (MW)	Net Summer Rated Capacity (MW)(a)	No. of Units
Coal Facilities:
Columbia(c)	Portage, WI	1975 & 1978	Low-sulfur Coal	211	213	2
Elm Road Units(c)	Oak Creek, WI	2010 & 2011	Coal	106	109	2

Natural Gas Facilities:
Blount	Madison, WI	1957 & 1961	Natural Gas	100	96	2
Nine Springs	Madison, WI	1964	Natural Gas	16	14	1
Sycamore	Madison, WI	1967 & 1971	Natural Gas	38	30	2
Fitchburg	Fitchburg, WI	1973	Natural Gas	53	34	2
West Marinette	Marinette, WI	2000	Natural Gas/Oil	90	71	1
WCCF(c)	Madison, WI	2005	Natural Gas/Oil	157	132	2
West Riverside(c)	Beloit, WI	2020	Natural Gas	50	47	2

Distributed Generators:
Multiple Locations	Madison, WI	1998-2021	ULSFO(d)	70	53	60

Wind Facilities:
Lincoln-Red River	Kewaunee County, WI	1999	Wind	11	1	17
Top of Iowa	Brookfield, IA	2008	Wind	30	4	18
Forward(c)	Dodge & Fond du Lac Counties, WI	2008	Wind	18	3	86
Saratoga	Howard County, IA	2019	Wind	66	17	33
Red Barn(c)	Grant County, WI	2023	Wind	9	2	28

Solar Facilities:
Morey Field	Middleton, WI	2020	Solar	6	3	4
Two Creeks(c)	Two Creeks, WI	2020	Solar	50	36	48
Dane County	Madison, WI	2020	Solar	10	7	4
O'Brien	Fitchburg, WI	2021	Solar	22	14	8
Badger Hollow I & II(c)	Monfort, WI	2021 & 2023	Solar	100	72	400
Hermsdorf	Madison, WI	2022	Solar	8	6	64
Tyto	Fitchburg, WI	2024	Solar	6	4	24
Paris(c)	Paris, WI	2024	Solar	20	15	53
Strix	Fitchburg, WI	2025	Solar	6	2	24
Darien(c)	Rock & Walworth Counties, WI	2025	Solar	25	17	65

Energy Storage:
Paris(c)	Paris, WI	2025	Battery	11	10	30
Total				1,289	1,012

(a)

·Net summer rated capacity is determined by annual testing (measured in June, July or August) and may vary from year to year due to, among other things, the operating and physical conditions of the units.

(b)

~~Transmission~~All ~~investments,~~facilities ~~representing~~shown ~~our~~are ~~equity~~owned ~~investment~~by inMGE ~~ATC,~~unless ~~and~~footnoted otherwise.

(c)

·MGE jointly owns these facilities with various other utilities. The capacity shown represents MGE's ownership share:

•

~~All~~Columbia ~~other~~is jointly-owned by MGE, WPSC and WPL, which ~~includes~~operates ~~corporate~~the ~~operations~~facility. ~~and~~MGE's ~~services~~ownership interest is 19%. See "Columbia" below for further information.

•

~~Our~~Elm ~~principal~~Road ~~subsidiary~~Units is ~~MGE,~~jointly ~~which~~owned ~~generates~~by ~~and~~MGE, ~~distributes~~WPPI ~~electric energy~~Energy, ~~distributes natural gas~~Inc, and ~~represents a majority portion of our assets~~WEC, ~~liabilities,~~which ~~revenues,~~operates ~~and~~the ~~expenses~~units. MGE's ~~generates~~ownership ~~and~~interest ~~distributes~~is ~~electricity~~8.33%. toSee ~~approximately~~"Elm ~~140,000~~Road ~~customers~~Units" inbelow ~~Dane~~for ~~County,~~further Wisconsin, including the city of Madison, and purchases and distributes natural gas to approximately 145,000 customers in the Wisconsin counties of Columbia, Crawford, Dane, Iowa, Juneau, Monroe, and Vernoninformation.

•

~~Our~~WCCF ~~nonregulated energy operations own interests in electric generating capacity that~~ is ~~leased~~jointly-owned toby MGE. ~~The~~and ~~ownership/leasing~~UW. ~~structure~~Per ~~was~~the ~~adopted~~joint ~~under~~plant ~~applicable~~agreement, ~~state~~the ~~regulatory~~UW ~~guidelines~~is ~~for~~allocated ~~MGE's~~17 ~~participation~~MW ~~in these generation facilities, consisting principally~~ of ~~a stable return on~~ the ~~equity~~net ~~investment~~capability inof ~~the~~these ~~new~~units ~~generation~~during ~~facilities over~~ the ~~term~~summer ofcooling ~~the related leases~~season. The ~~nonregulated~~net ~~energy operations include an ownership interest in two coal~~summer-~~fired~~rated ~~generating~~capacity ~~units~~shown inreflects ~~Oak~~this ~~Creek, Wisconsin and a partial ownership of a cogeneration project on the UW-Madison campus~~decrease. ~~A third party operates the units in Oak Creek, and~~ MGE ~~operates the cogeneration project. Due to the nature of MGE~~'s ~~participation~~ownership ininterest ~~these~~is ~~facilities,~~55%. ~~the~~See ~~results~~"WCCF" ofbelow ~~our~~for ~~nonregulated~~further ~~operations are also consolidated into MGE's consolidated financial position and results of operations under applicable accounting standards~~information.

•

~~Executive~~West ~~Overview~~Riverside is jointly owned by multiple parties including MGE and WPL, which operates the facility. Power from this facility is shared in proportion to each owner's ownership interest. Commercial operation date of facility was 2020. MGE purchased its ownership interest of 6.9% in 2023 and 2024.

Our primary focus today and for the foreseeable future is our core utility customers at MGE as well as creating long-term value for our shareholders. MGE continues to face the challenge of providing its customers with reliable power at competitive prices. MGE meets this challenge by investing in more efficient generation projects, including renewable energy sources. In the future, MGE will continue to focus on growing earnings while controlling operating and fuel costs. MGE will continue to maintain safe and efficient operations in addition to providing customer value. We believe it is critical to maintain a strong credit standing consistent with financial strength in MGE as well as the parent company in order to accomplish these goals.28

•

WeForward ~~earn~~is ~~our~~jointly ~~revenue~~owned ~~and~~by ~~generate~~MGE, ~~cash~~WPL ~~from~~and ~~operations~~WPSC, bywhich ~~providing~~operates ~~electric~~the ~~and~~facility. ~~natural~~Power ~~gas~~from ~~utility~~this ~~services,~~facility ~~including~~is ~~electric~~shared ~~power~~in ~~generation~~proportion ~~and~~to ~~electric~~each ~~power~~owner's ~~and~~ownership ~~gas distribution~~interest. ~~The~~Commercial ~~earnings~~operation ~~and~~date ~~cash~~of ~~flows~~facility ~~from~~was ~~the~~2008. ~~utility~~MGE ~~business~~purchased ~~are~~its ~~sensitive~~12.8% toownership ~~various~~interest ~~external~~in ~~factors,~~2018. ~~including:~~

•

·Red Barn is jointly owned by MGE and WPSC, which operates the facility. MGE's ownership interest is 10%.

•

~~Weather,~~Two Creeks and ~~its~~Badger ~~impact~~Hollow onI ~~customer~~and ~~sales~~II ofare ~~electricity~~both ~~and~~jointly ~~gas~~owned with WPSC, which operates the facilities. MGE's ownership interest is 33%.

•

·Paris and Darien are both jointly owned by MGE, WPSC and WEPCO, which operates the facilities. MGE's ownership interest is 10%.

(d)

~~Economic~~ULSFO ~~conditions,~~is ~~including~~ultra ~~current~~low-sulfur ~~business~~fuel ~~activity and employment and their impact on customer demand,~~oil.

·Columbia

~~Regulation~~MGE and ~~regulatory~~two ~~issues~~other utilities jointly own Columbia, a coal-fired generating facility consisting of two units, which, as of December 31, 2025, accounted for 21% of MGE's net summer rated capacity. Power from this facility is shared in proportion to each owner's ownership interest. As of December 31, 2025, MGE had a 19% ownership interest in Columbia. The other owners are WPL, which operates Columbia, and ~~their~~WPSC. Operational, regulatory, and environmental regulation considerations have impacted and continue to impact onColumbia's generation planning. MGE, as a minority owner, and Columbia's other co-owners continue to evaluate transitioning away from coal and continue to evaluate replacing the ~~timing~~generation from Columbia while maintaining electric service reliability. MGE and ~~recovery~~Columbia's ofco-owners ~~costs,~~are exploring converting Columbia to natural gas.

·The Columbia units burn low-sulfur sub-bituminous coal obtained from the Powder River Basin coal fields located in Wyoming. The coal inventory supply for the Columbia units was approximately 87 days as of December 31, 2024, and approximately 84 days as of December 31, 2025.

~~Energy~~Elm ~~commodity~~Road ~~prices,~~Units and WCCF

·MGE Power Elm Road and two other utilities own undivided interests in the Elm Road Units, consisting of two units, which, as of December 31, 2025, accounted for 11% of MGE's net summer rated capacity. Power from these units is shared in proportion to each owner's ownership interest. MGE Power Elm Road owns an 8.33% ownership interest in the Elm Road Units, and its interest in the Elm Road Units is leased to MGE. The other owners are Wisconsin Energy Corporation, which operates the units, and WPPI Energy, Inc. The Elm Road Units burn sub-bituminous coal from the Powder River Basin in Wyoming and bituminous coal obtained from northern West Virginia and southwestern Pennsylvania. MGE's share of the coal inventory supply for the Elm Road Units was approximately 59 days as of December 31, 2024, and approximately 48 days as of December 31, 2025. MGE Power Elm Road's share of the Elm Road Units is reflected in "Property, plant, and equipment, net" on MGE Energy's and MGE's consolidated balance sheets. In October 2025, MGE, along with the plant co-owners, filed a joint application with the PSCW to end the use of coal as a primary fuel at the Elm Road Units and transition the plant to natural gas. Transition plans and costs will be subject to PSCW approval. By the end of 2030, coal is expected to be used only as a backup fuel at the Elm Road Units. By the end of 2032, MGE expects that the Elm Road Units will be fully transitioned away from coal.

~~Equity~~MGE ~~price~~Power ~~risk~~West ~~pertaining~~Campus and the UW jointly own undivided interests in a natural gas-fired cogeneration facility on the UW campus. The facility has the capacity to ~~pension~~produce ~~related~~30,000 tons of chilled water, 500,000 pounds per hour of steam, and approximately 150 MW of electricity. The UW owns 45% of the facility, which represents its interest in the chilled-water and steam assets. These assets are used to meet a part of the UW's need for air-conditioning and steam-heat capacity. MGE Power West Campus owns 55% of the facility, which represents its interest in the electric generating assets. These assets are used to provide electricity to MGE's customers. The UW's share of the plant and portion of the earnings from the WCCF are not reflected in the consolidated financial statements of MGE Energy or MGE. MGE Power West Campus's share of the plant is reflected in "Property, plant, and equipment, net" on MGE Energy's and MGE's consolidated balance sheets.

·MGE leases MGE Power Elm Road's ownership interest in the Elm Road Units pursuant to two separate facility leases. MGE leases the electric generating assets owned by MGE Power West Campus and is responsible for operating the entire facility. At the end of the respective lease terms, MGE may, at its option, renew the facility lease for an additional term, purchase the leased ownership interest at fair market value, or allow the lease to end. The financial terms of the facility lease agreements are as follows:

Credit market conditions, including interest rates and our debt credit rating,


Facilities	Assumed Capital Structure	Assumed Return on Equity	Lease Expiration
Elm Road Units	55% equity and 45% long-term debt	12.7%	Unit 1: 2040 Unit 2: 2041
WCCF	53% equity and 47% long-term debt	12.1%	2035

·29

~~Environmental~~Electric ~~laws~~ and ~~regulations,~~Gas ~~including~~Distribution ~~adopted and pending environmental rule changes,~~Facilities

·As of December 31, 2025, MGE owned 811 miles of overhead electric distribution line and 1,386 miles of underground electric distribution cable, all of which are located in Wisconsin. These electric distribution facilities are connected by 47 substations, installed with a capacity of 1.2 million kVA. MGE's gas facilities include 3,117 miles of distribution mains, which are all owned by MGE.

~~Construction~~A ~~risk~~significant inportion ~~connection~~of ~~with~~MGE's electric and gas distribution facilities are located above or underneath highways, streets, other public places, or property otherwise not owned by MGE. MGE believes that it has satisfactory rights to use those places or property in the ~~Columbia~~form ~~environmental~~of ~~project~~permits, grants, easements, and licenses; however, it has not necessarily undertaken to examine the underlying title to the land upon which the rights rest.

~~and other factors listed in Item 1A. Risk Factors.~~Encumbrances

~~For~~As of December 31, 2025, the ~~year~~principal ~~ended~~plants ~~December 31~~and properties of MGE were subject to a lien related to its Indenture of Mortgage and Deed of Trust dated as of January 1, ~~2012~~1946, as amended and supplemented, under which MGE ~~Energy~~'s ~~earnings~~first mortgage bonds were ~~$64~~issued.~~4 million~~ orOn ~~$2.79~~January ~~per~~27, ~~share~~2026, ~~compared~~MGE completed a redemption of all outstanding first mortgage bonds, and delivered to ~~$60.9 million~~the orTrustee $2a satisfaction and discharge which, pursuant to the terms of the Indenture, effectively discharged the Indenture.64 ~~per~~MGE ~~share~~Power Elm Road has collaterally assigned its right to lease payments from MGE for the ~~same~~Elm ~~period~~Road Units in order to secure the ~~prior~~repayment ~~year~~of the senior secured notes issued by MGE Power Elm Road. MGE's ~~earnings~~Power West Campus has collaterally assigned its right to lease payments from MGE for the ~~year~~WCCF ~~ended~~in ~~December 31,~~order ~~2012,~~to ~~were~~secure ~~$40.8 million~~the ~~compared~~repayment toof ~~$37~~the senior secured notes issued by MGE Power West Campus.~~3 million~~ ~~for~~See Footnote 14 of the ~~same~~Notes ~~period~~to Consolidated Financial Statements in Part II, Item 8 of this Report for additional information regarding these first mortgage bonds and the ~~prior~~entitlement ~~year~~of certain senior notes issued by MGE to be equally and ratably secured if MGE issues additional first mortgage bonds.

24Item 3. Legal Proceedings.

MGE Energy's ~~income~~and ~~was derived from our business segments as follows:~~MGE

(In millions)		Year Ended December 31,
Business Segment:		2012		2011		2010
Electric Utility	$	36.7	$	29.8	$	30.2
Gas Utility		5.1		8.4		7.4
Nonregulated Energy		18.1		17.9		15.8
Transmission Investments		5.4		5.1		5.1
All Other		(0.9)		(0.3)		(0.8)
Net Income	$	64.4	$	60.9	$	57.7

MGE Energy and its subsidiaries, including MGE, from time to time are involved in various legal proceedings that are handled and defended in the ordinary course of business.

~~Our~~See ~~net~~"Environmental ~~income~~Regulations" ~~during~~under ~~2012~~Part ~~compared~~I, toItem ~~2011~~1. ~~primarily~~Business ~~reflects~~and Footnote 16.a. of the ~~effects~~Notes to Consolidated Financial Statements in Part II, Item 8 of this Report for a description of several environmental proceedings affecting MGE. See Footnote 16b. of the ~~following~~Notes ~~factors:~~to Consolidated Financial Statements under Part II, Item 8. Financial Statements and Supplementary Data in this Report for a description of other legal matters.

·Item 4. Mine Safety Disclosures.

AMGE ~~4.7%~~Energy ~~increase~~and inMGE ~~retail electric revenues, driven by increased residential customer demand primarily as a result of warmer~~-~~than-normal~~ ~~weather.~~Not ~~Cooling degree days (a measure for determining the impact of weather during the cooling season) increased by 31% compared to the prior period~~applicable.

·30

APART 5II.5% decrease in gas sales reflecting lower customer demand due to a milder winter. Heating degree days (a measure for determining the impact of weather during the heating season) decreased by 15% compared to the prior period.

~~MGE~~Market ~~has recognized $1.4 million (after tax) in AFUDC equity related to the Columbia environmental project~~ for ~~the~~Common ~~year ended December 31, 2012.~~Equity

~~Our~~MGE ~~net income during 2011 compared to 2010 primarily reflects the effects of the following factors:~~Energy

·MGE Energy common stock is traded on Nasdaq under the symbol MGEE. As of February 20, 2026, there were 13,655 shareholders of record. The number of record holders is based upon the actual number of holders registered on our books at such date and does not include holders of shares in "street names" or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

AFor ~~3.0%~~additional ~~increase~~information inregarding ~~retail~~dividends ~~electric~~and ~~revenues~~dividend ~~due~~restrictions, see Footnote 15 of the Notes to ~~increased~~the ~~customer~~Consolidated ~~demand~~Financial Statements under Part II, Item 8. Financial Statements and Supplementary Data in this Report.

·MGE

AAs ~~3.0%~~of ~~increase~~February in20, ~~gas~~2026, ~~sales~~there ~~reflecting~~were ~~higher~~17,347,894 ~~customer~~outstanding ~~demand~~shares ~~due~~of toMGE acommon ~~colder~~stock, ~~winter.~~all ~~Heating~~of ~~degree~~which ~~days~~were ~~increased~~held by 3%MGE ~~compared~~Energy. toThere ~~the~~is ~~prior~~no ~~period.~~market for shares of common stock of MGE.

·Equity Compensation Plans

~~The~~See ~~electric~~Item ~~and~~12. ~~gas~~Security ~~utilities~~Ownership ~~received~~of aCertain ~~one-time~~Beneficial ~~$2.6 million~~Owners ~~(pretax)~~and ~~gain~~Management onand aRelated ~~sale~~Stockholder ofMatters ~~property~~below ~~to ATC~~ in ~~March 2010.~~this report.

·Stock Performance Graph

~~Higher~~The ~~nonregulated~~performance ~~energy~~graph ~~revenues~~below ~~are~~illustrates ~~attributable~~a tofive-year ~~both~~comparison ~~Elm~~of ~~Road~~cumulative ~~Units~~total ~~being~~returns inbased ~~commercial~~on ~~operation.~~an ~~Elm~~initial ~~Road~~investment ~~Unit~~ of $1,000 ~~was~~in ~~placed~~MGE ~~in-service~~Energy incommon ~~February 2010~~stock, as compared with the Russell 2000 and ~~Elm~~the ~~Road~~EEI ~~Unit 2~~Index ~~was~~for ~~placed~~the inperiod 2020 through 2025. The EEI Index reflects the consolidated performance of Edison Electric Institute investor-~~service~~owned inelectric ~~January 2011~~utilities. The cumulative total returns over the indicated period are based on historical data and should not be considered indicative of future returns.

~~During~~Cumulative ~~2012,~~Five-Year ~~the~~Total ~~following~~Return ~~events occurred:~~Comparison

~~Columbia~~(assumes ~~Environmental Project: In early 2011~~$1,000 ~~the~~invested ~~PSCW authorized the construction of air emission reduction systems and associated equipment~~ on Columbia Units 1 and 2. MGE's estimated share of the capital expenditures required to complete this project is approximately $140 million. MGE expects to incur capital expenditures as follows: $68 million in 2013 and $12 ~~million in 2014. As of December~~ /31,/2020 ~~2012,~~with ~~MGE~~dividends ~~has accumulated $59.9 million (excluding carrying costs~~reinvested) related to its share of the project, which is reflected in the Construction Work in Progress balance on MGE Energy's and MGE's consolidated balance sheets. Of this amount, MGE has accumulated $55.6 million in 2012.

~~ATC:~~Value ~~MGE~~of ~~Transco~~Investment ~~contributed~~as ~~$2.1 million~~of ~~for voluntary capital contributions to ATC for the year ended~~ December 31, ~~2012.~~

Smart Grid Investment Grant: MGE was approved in 2010 by the U.S. Department of Energy (DOE) under the federal stimulus program for a $5.5 million grant for smart grid projects. The DOE grant requires MGE to match the grant funding, bringing the total cost of the projects to more than $11 million. The projects involve the installation of technologies to boost efficiency, enhance service and improve reliability for customers. The stimulus grant is being used to fund the following projects: advanced metering infrastructure, plug-in hybrid electric vehicles support, and distribution management. As of December 31, 2012, MGE has spent $8.4 million related to these projects and has outstanding agreements to purchase $1.3 million in smart grid related products for 2013.


	2020		2021		2022		2023		2024		2025
MGEE	$	1,000	$	1,199	$	1,048	$	1,102	$	1,463	$	1,247
Russell 2000		1,000		1,148		914		1,068		1,191		1,344
EEI Index		1,000		1,171		1,185		1,082		1,288		1,438

25Item 6. [Reserved]

~~During 2013, several items may affect us, including:~~31

2013Item Rate7. Filing:Management's InDiscussion December 2012, the PSCW authorized MGE to increase 2013 rates for retail electric customers by 3.8% and toAnalysis increaseof ratesFinancial forCondition gas customers by 1.0%. The change in retail electric rates was driven by costs for new environmental equipment at Columbia, final construction costs for the Elm Road Units, transmission reliability enhancements, and purchasedResults powerof costsOperations.

In December 2012, as part of WEPCO's (the operator and primary owner of the Elm Road Units) 2013 Wisconsin rate case, the PSCW determined that 100% of the construction costs for the Elm Road Units were prudently incurred, and approved the recovery in rates of more than 99.5% of these costs. In addition, the PSCW deferred the final decision regarding the $1.8 million fuel flexibility project (MGE Power Elm Road's share) until a future rate proceeding.General

~~Environmental~~MGE ~~Initiatives:~~Energy There are proposed legislation, rules and initiatives involving matters related to air emissions, water effluent, hazardous materials and greenhouse gases, all of which affect generation plant capital expenditures and operating costs as well as future operational planning. Such legislation and rulemaking could significantly affect in particular the costs of owning and operating fossil-fueled generating plants, such as Columbia and the Elm Road Units, from which we derive approximately 43% of our electric generating capacity. We would expect to seek and receive recovery of any such costs in rates; however, it is ~~difficult~~an to estimate the amount of such costs due to the uncertainty as to the timing and form of the legislation and rules, and the scope and time of the recovery of costs in rates. In addition, MGE is involved in claims surrounding the alleged failure, among other things, to obtain necessary air permits and implement necessary emission controls associated with past activities at Columbia. MGE and the other coinvestor-~~owners~~owned ~~are~~public ~~defending~~utility ~~against~~holding ~~these~~company ~~claims.~~operating ~~See~~through ~~Columbia~~subsidiaries ~~discussion~~ in ~~Footnote 18.e~~five inbusiness ~~Notes~~segments: ~~to Consolidated Financial Statements.~~

•

~~Columbia~~Regulated ~~Environmental~~electric ~~Project:~~utility ~~During 2013~~operations, ~~our~~conducted ~~share~~through ofMGE, ~~the~~which ~~capital~~generate ~~expenditures~~and ~~associated~~distribute ~~with~~electricity ~~the~~to ~~Columbia environmental project will be~~ approximately ~~$68 million.~~170,000 Wecustomers ~~intend~~in toDane ~~fund any remaining capital commitments with funds generated from normal operations~~County, ~~and the issuance of long-term and short-term debt.~~Wisconsin,

•

~~General~~Regulated ~~economic~~gas ~~conditions:~~utility ~~Economic~~operations, ~~conditions~~conducted ~~both~~through ~~inside~~MGE, ~~and~~which ~~outside~~distribute ~~our~~natural ~~service~~gas ~~area are expected~~ to ~~continue~~approximately to180,000 ~~affect~~customers ~~the level of demand for our utility services and may affect the collection of our accounts receivable and the creditworthiness of counterparties with whom we do business. We have~~ in ~~place~~seven ~~lines~~south-central ~~of credit aggregating $115.0 million for MGE Energy (including MGE)~~ and ~~$75.0 million~~western ~~for~~Wisconsin ~~MGE to address our liquidity needs.~~counties,

•

~~The~~Nonregulated ~~following~~energy ~~discussion~~operations, isconducted ~~based~~through onMGE ~~the~~Power ~~business~~and ~~segments~~its assubsidiaries, ~~discussed~~which owns interests in ~~Footnote 23.~~electric generating capacity that is leased to MGE,

•

~~Results~~Transmission investments, representing our equity investment in ATC, which owns and operates electric transmission facilities primarily in Wisconsin, and ATC Holdco, a company created to facilitate out-of-state ~~Operations~~electric transmission development and investments, and

•

~~Year~~All ~~Ended December 31~~other, ~~2012,~~which ~~Versus~~includes investing in companies and property that relate to the ~~Year~~regulated ~~Ended~~operations ~~December 31~~and financing the regulated operations, ~~2011~~through its wholly owned subsidiaries CWDC, MAGAEL, and North Mendota, and corporate operations and services.

~~Electric~~Our ~~Utility~~primary ~~Operations~~focus is our core utility customers, which are served by MGE as well as creating long-term value for our shareholders. MGE ~~Energy~~ seeks to meet its customers' expectations for reasonably priced, reliable electric and gas service provided in a responsible manner. That responsibility is manifested in actions MGE has taken, and will continue to take, to achieve its goal of net-zero carbon by 2050.

~~Electric~~As ~~sales~~part of this long‑term transition, MGE continues to evaluate the role of coal‑fired generation in its portfolio, including previously announced plans regarding the Columbia Energy Center and ~~revenues~~the planned fuel transition at the Elm Road Units. MGE remains focused on reducing reliance on coal over time and expanding ownership of renewable generation to support a cleaner, reliable energy future.

~~The~~MGE ~~following~~will ~~table~~continue ~~compares~~to focus on growing earnings while controlling operating and fuel costs. MGE's ~~electric~~goal ~~revenues~~is to provide safe and ~~electric~~efficient ~~kWh~~operations ~~sales~~in byaddition to providing customer ~~class~~value. ~~for~~We ~~each~~believe ofit ~~the~~is ~~periods~~critical ~~indicated:~~to maintain a strong credit rating consistent with financial strength in MGE in order to accomplish these goals.

		Revenues				Sales (kWh)
(in thousands, except cooling degree days)		2012		2011	% Change	2012	2011	% Change
Residential	$	130,581	$	124,524	4.9 %	826,766	821,543	0.6 %
Commercial		207,574		197,621	5.0 %	1,825,701	1,826,636	(0.1)%
Industrial		19,437		19,427	0.1 %	247,179	263,224	(6.1)%
Other-retail/municipal		38,805		36,990	4.9 %	442,906	442,066	0.2 %
Total retail		396,397		378,562	4.7 %	3,342,552	3,353,469	(0.3)%
Sales to the market		991		1,711	(42.1)%	31,588	61,034	(48.2)%
Other revenues		1,811		1,584	14.3 %	-	-	- %
Adjustments to revenues		(6,834)		(5,999)	(13.9)%	-	-	- %
Total	$	392,365	$	375,858	4.4 %	3,374,140	3,414,503	(1.2)%
Cooling degree days (normal 630)						1,068	814	31.2 %

The ownership/leasing structure for our nonregulated energy operations was adopted under applicable state regulatory guidelines for MGE's participation in these generation facilities, consisting principally of a stable return on the equity investment in the new generation facilities over the term of the related leases. The nonregulated energy operations include an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin and a partial ownership of a cogeneration project on the UW-Madison campus. A third party operates the units in Oak Creek, and MGE operates the cogeneration project. Due to the nature of MGE's participation in these facilities, the results of MGE Energy's nonregulated operations are also consolidated into MGE's consolidated financial position and results of operations under applicable accounting standards.

26We have not included a discussion of results of operations and changes in financial position for the year ended December 31, 2024, as compared to the year ended December 31, 2023. That discussion can be found in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 25, 2025.

~~Electric operating revenues increased $16.5 million or 4.4% for the year ended December 31, 2012, due to the following:~~32

(In millions)
Rate changes	$	19.0
Other revenues		0.2
Volume		(1.2)
Adjustments to revenues		(0.8)
Sales to the market		(0.7)
Total	$	16.5

Executive Overview

·We principally earn revenue and generate cash from operations by providing electric and natural gas utility services, including electric power generation and electric power and gas distribution. The earnings and cash flows from the utility business are sensitive to various external factors, including, but not limited to:

•

Rates changes. Rate changes have resulted in $19.0 million of additional revenue in 2012 compared to the same period in the prior year. The change is primarily a result of an electric retail rate increase which was authorized by the PSCW. Effective January 1Weather, ~~2012, the retail rate increased 4.3% or $15.7 million for electric retail customers. The increase in electric rates was driven by MGE's electric fuel~~ and ~~purchased~~its ~~power~~impact ~~costs,~~on increased transmission costs, an update to the Elm Road Units' costs, and an increase for energy efficiency programs. Other factors also contributed to the revenue increase over the prior year, including customer ~~mix (~~sales ~~to various customer classes)~~, ~~demand charges, and customer fixed charges.~~

•

·Economic conditions, including current business activity and employment and their impact on customer demand,

•

~~Volume.~~Rates, ~~During~~regulation ~~the~~and ~~year~~regulatory ~~ended December 31~~issues, ~~2012,~~and ~~there~~their ~~was~~impact aon ~~0.3% decrease in total retail sales volumes compared to~~ the ~~same~~timing ~~period~~and inrecovery ~~the~~of ~~prior year~~costs, ~~reflecting decreased industrial customer demand, offset in part by an increase in residential demand.~~

•

·Energy commodity prices, including natural gas prices,

•

~~Adjustments~~Equity toprice ~~revenues.~~risk ~~The~~pertaining ~~adjustments~~ to ~~revenues~~pension ~~amount~~related ~~includes the elimination of carrying costs for Elm Road Units and WCCF that were collected in electric rates~~assets, ~~which are recognized as nonregulated energy operating revenues in our Nonregulated Energy Operations segment.~~

•

·Credit market conditions, including interest rates and our debt credit rating,

•

~~Sales~~Environmental tolaws ~~the~~and ~~market.~~regulations, ~~Sales~~including toadopted ~~the market represent wholesale sales made to third parties who are not ultimate users of the electricity. These sales may include spot market transactions on the markets operated by MISO~~ and ~~PJM.~~pending ~~These~~environmental ~~sales~~rule ~~may~~changes, ~~also include bilateral sales to other utilities or power marketers.~~ and

•

~~Electric~~Other ~~fuel~~factors ~~and~~listed ~~purchased~~in ~~power~~Item 1A. Risk Factors of this Report.

~~The~~During ~~expense~~the ~~for~~year ~~fuel~~ended ~~for~~December ~~electric~~31, ~~generation~~2025, ~~decreased~~MGE Energy's earnings were $4135.3 9 million or 8$3.5%72 ~~during~~per ~~the~~share ~~year~~compared ~~ended~~to ~~December 31,~~$120.6 ~~2012,~~million ~~compared~~or to$3.33 per share for the same period in the prior year. ~~Internal~~MGE's ~~electric~~earnings ~~generation~~for ~~costs~~the ~~decreased~~year ~~$3.2 million~~ended asDecember a31, ~~result~~2025, ofwere ~~a 6~~$104.3%1 ~~decrease~~million incompared ~~the per-unit cost (largely due~~ to ~~lower~~$89.4 ~~natural~~million ~~gas~~for ~~prices),~~the ~~and~~same ~~lower~~period ~~generation~~in ~~volumes~~the ofprior 1year.~~1% or $1.1 million.~~

~~Excluding~~MGE ~~the~~Energy's ~~fuel~~net ~~rules~~income ~~adjustments~~(loss) ~~discussed~~was ~~below,~~derived ~~purchased~~from ~~power~~our ~~expense~~business ~~increased~~segments ~~$3.6 million~~as during the year ended December 31, 2012, compared to the same period in the prior year. This increase in expense reflects a $3.0 million or 4.7% increase in per-unit cost of purchased power and a $0.6 million or 0.9% increase in the volume of power purchased from third parties. follows:

The PSCW adopted new fuel rules effective January 1, 2011, that require MGE to defer electric fuel-related costs that fall outside a 2% cost tolerance band around the amount used in the most recent rate proceeding. Any fuel rules adjustments are reflected in purchased power expense. During the year ended December 31, 2012, MGE's actual fuel costs fell below the lower end of this tolerance band, which resulted in MGE deferring $6.2 million in fuel-related cost savings to be returned to customers and increased purchased power costs. Any over/under recovery of the deferred costs is determined on an annual basis and adjusted in future billings to customers. After combining the fuel rules adjustments with the actual savings discussed above, purchased power expense increased $9.8 million ($6.2 million fuel rules difference plus the $3.6 million purchased power expense increase discussed above) during the year ended December 31, 2012, compared to the prior year.


(In millions)	Year Ended December 31,
Business Segment:	2025			2024
Electric Utility	$	85.8		$	74.5
Gas Utility		16.3			13.7
Nonregulated Energy		24.8			24.1
Transmission Investments		9.5			8.9
All Other		(0.5	)		(0.6	)
Net Income	$	135.9		$	120.6

27Our net income during 2025 compared to 2024 primarily reflects the effects of the following factors:

Electric ~~operating and maintenance expenses~~Utility

~~Electric~~Earnings ~~operating~~for ~~and~~2025 ~~maintenance~~increased ~~expenses~~year-over-year, primarily driven by a rise in the rate base due to increased ~~$4.7 million~~electric ~~during~~investments approved in the ~~year~~2024/2025 ~~ended~~rate ~~December 31,~~case. ~~2012~~Additionally, ~~compared~~higher electric residential sales contributed to the ~~same~~increase, ~~period~~partially due to growth in ~~2011~~residential customers. ~~The~~Favorable ~~following~~weather ~~changes~~conditions further contributed to ~~the~~increased ~~net~~residential ~~change:~~sales in 2025.

(In millions)
Increased administrative and general costs	$	4.7
Increased customer service costs		0.9
Increased transmission costs		0.6
Increased distribution costs		0.2
Decreased production costs		(1.7)
Total	$	4.7

Gas Utility

~~For~~Higher ~~the~~gas ~~year~~retail ~~ended~~sales ~~December 31,~~in ~~2012,~~2025 ~~increased~~contributed ~~administrative~~to ~~and~~higher ~~general~~gas ~~costs~~earnings ~~are~~for ~~primarily~~2025, ~~due~~compared to ~~increased~~the ~~pension~~same ~~costs,~~period ~~reflecting changes~~ in the ~~discount~~prior ~~rate~~year. ~~and~~Gas ~~assumptions~~retail ~~regarding~~sales ~~investment~~increased ~~returns~~approximately ~~used~~14% infor ~~calculating~~2025, ~~such~~compared ~~costs.~~to ~~Increased~~the ~~customer~~prior ~~service~~year ~~costs~~period. ~~are~~Heating ~~due~~degree todays ~~higher~~(a ~~energy~~measure ~~conservation~~for ~~spending.~~determining ~~Increased~~the ~~transmission~~impact ~~costs~~of ~~are~~weather ~~due~~during tothe ~~higher~~heating ~~transmission~~season) ~~network~~increased ~~costs.~~by ~~Production~~approximately ~~costs~~18% ~~decreased~~in ~~primarily~~2025 ~~due~~compared to ~~decreased~~the ~~costs~~same atperiod ~~Columbia~~in ~~and~~the ~~Blount~~prior year.

~~Electric~~Significant ~~depreciation expense~~Events

~~Electric~~The ~~depreciation~~following ~~expense~~events ~~decreased~~affected ~~$2.3 million~~our ~~for~~results ~~the~~of ~~year~~operations ~~ended December 31, 2012, compared to the same period~~ in ~~the prior year. This decrease is related to the retirement of Blount assets at the end of 2011 due to the switch from operating with coal to natural gas.~~2025:

~~Gas~~2024/2025 ~~Utility~~Rate ~~Operations~~Proceeding: -In ~~MGE Energy~~December 2023, the PSCW approved a 4.17% increase to electric rates and ~~MGE~~1.32% increase to gas rates for 2025. The PSCW approved a 2025 Fuel Cost Plan in December 2024. The plan lowered the 2025 increase in electric rates to 2.63%. See "Other Matters" below for additional information on the 2024/2025 rate proceeding.

~~Gas~~The ~~deliveries~~2024/2025 rate order included an earnings sharing mechanism, under which, if MGE earns above the 9.7% ROE authorized in the rate order: (i) MGE will retain 100% of earnings for the first 15 basis points above the authorized ROE; (ii) 50% of the next 60 basis points will be required to be deferred and ~~revenues~~returned to customers; and (iii) 100% of any remaining excess earnings will be required to be refunded to customers. The earnings calculation excludes fuel rules adjustments.

~~The~~Large Scale Utility Projects: Large scale generation projects recently completed or under construction, are summarized in the following table. ~~compares~~Incurred ~~MGE's~~costs ~~gas~~are ~~revenues~~reflected ~~and~~in ~~gas~~"Property, ~~therms~~plant, ~~delivered~~and byequipment, ~~customer~~net" ~~class~~for ~~during~~projects ~~each~~placed ofin ~~the~~service, ~~periods~~or ~~indicated:~~"Construction

(In thousands, except HDD and average rate per therm of retail customer)		Revenues				Therms Delivered
		2012		2011	% Change	2012	2011	% Change
Residential	$	78,411	$	93,373	(16.0)%	79,936	91,663	(12.8)%
Commercial/Industrial		58,374		68,729	(15.1)%	106,653	104,254	2.3 %
Total retail		136,785		162,102	(15.6)%	186,589	195,917	(4.8)%
Gas transportation		2,465		2,586	(4.7)%	32,202	35,531	(9.4)%
Other revenues		477		583	(18.2)%	-	-	- %
Total	$	139,727	$	165,271	(15.5)%	218,791	231,448	(5.5)%
Heating degree days (normal 7,122)						5,964	6,993	(14.7)%
Average rate per therm of
retail customer	$	0.733	$	0.827	(11.4)%

~~Gas~~work ~~revenues~~in ~~decreased~~progress" ~~$25.5 million~~for orprojects ~~15.5%~~under ~~for~~construction on the ~~year~~consolidated ~~ended~~balance ~~December 31, 2012~~sheets. ~~These~~See ~~changes~~"Capital ~~are~~Expenditures" ~~related~~below tofor ~~the~~additional ~~following~~information ~~factors:~~on projects.

	(In millions)
Source(In millions)		Share ofEstimatedCosts(a)			Costs Incurred as of December 31, 2025(a)(b)
	Gas costs/rates	$	(17.6)
Solar	$	584.0		$	185.4
	Gas deliveries		(7.7)
Wind		73.0			10.7
	Transportation and other effects		(0.2)
Battery		224.3			85.1
	Total	$	(25.5)
Storage		22.0			2.7
Other		11.0			0.1

(a)

·Excluding AFUDC.

(b)

~~Gas~~MGE ~~costs/rates~~received specific approval to recover 100% AFUDC. ~~The~~After ~~average~~tax, ~~retail~~MGE ~~rate~~recognized ~~per~~$5.4 ~~therm~~million, ~~for~~$3.2 ~~the~~million, ~~year~~$2.3 ~~ended~~million, $1.4 million, $0.6 million of AFUDC equity earnings through December 31, ~~2012~~2025, ~~decreased~~on ~~11.4%~~Paris, ~~compared~~Darien, toKoshkonong, ~~the~~High ~~same~~Noon, ~~period~~and inother ~~2011~~projects, ~~reflecting~~respectively, ~~lower~~during ~~natural~~construction. ~~gas~~AFUDC ~~commodity~~has been excluded from the costs incurred in the table above.

·Deferred Fuel Savings: As of December 31, 2025, MGE deferred $7.1 million of 2025 fuel savings. These costs will be subject to the PSCW's annual review of 2025 fuel costs, expected to be completed during 2026. See Footnote 9.b. of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report for further information regarding fuel proceedings.

~~Retail~~2024 ~~gas~~Annual ~~deliveries.~~Fuel ~~For~~Proceeding: ~~the~~MGE ~~year~~had ~~ended~~fuel savings in 2024. As of December 31, ~~2012~~2024, ~~retail~~MGE ~~gas~~deferred ~~deliveries~~$3.0 ~~decreased~~million 4of 2024 fuel savings.8% ~~compared~~The PSCW has completed their review of 2024 fuel costs and approved MGE's return of these savings in October 2025. There was no change to the ~~same~~costs ~~period~~to inbe ~~2011,~~refunded as a result of ~~milder~~the ~~weather~~fuel ~~during~~rules proceedings from the ~~winter~~amount ~~months~~MGE deferred in 2024.

28Tax Update: On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing significant changes to tax credits and compliance requirements. See "Other Matters" below for additional information on the OBBBA.

~~Cost~~ATC Return on Equity: As discussed in "Other Matters" below, ATC's authorized ROE, which is used in calculating its rates and revenues, was the subject of ~~gas~~a ~~sold~~challenge before FERC. A decrease in ATC's ROE could result in lower equity earnings and distributions from ATC in the future. MGE Energy derived approximately 6.6% and 7.4% of net income for 2025 and 2024, respectively, from the investment in ATC.

~~For~~During ~~the year ended December 31~~2026, ~~2012,~~several ~~cost~~items ofmay ~~gas~~affect ~~sold~~our ~~decreased~~financial bycondition ~~$21.3 million,~~and ~~compared~~results ~~to the same period in the prior year. The cost per therm~~ of ~~natural gas decreased 17.2%~~operations, ~~which resulted in $16.2 million of reduced expense. In addition, the volume of purchased gas decreased 5.1%, which resulted in $5.1 million of reduced expense.~~ including:

~~Gas~~2026/2027 ~~operating~~Rate Settlement Agreement: In December 2025, the PSCW approved a unanimous settlement agreement that MGE reached with intervening parties in its 2026/2027 rate case. As part of the settlement agreement, the PSCW approved a 0.15% increase for electric rates and ~~maintenance~~a ~~expenses~~2.77% increase to gas rates for 2026 and a 3.63% increase for electric rates and a 2.04% increase to gas rates for 2027. See "Other Matters" below for additional information on the 2026/2027 rate case settlement.

~~Gas~~Environmental ~~operating~~Initiatives: There are proposed legislative rules and ~~maintenance~~initiatives ~~expenses~~involving ~~increased~~matters ~~$2.4 million~~related ~~for~~to ~~the~~air ~~year~~emissions, ~~ended~~water ~~December 31~~effluent, ~~2012~~hazardous materials, ~~compared~~and togreenhouse gases, all of which affect generation plant capital expenditures and operating costs as well as future operational planning. Legislation and rulemaking addressing climate change and related matters could significantly affect the ~~same~~costs ~~period~~of owning and operating fossil-fueled generating plants. MGE would expect to seek and receive recovery of any such costs in ~~2011~~rates. ~~The~~However, ~~following~~it ~~changes~~is ~~contributed~~difficult to estimate the ~~net~~amount ~~change~~of such costs due to the uncertainty as to the timing and form of any legislation or rules, the timing and effects of any judicial review, and the scope and time of the recovery of costs in rates, which may occur after those costs have been incurred and paid.

(In millions)
Increased administrative and general costs	$	1.3
Increased customer service costs		0.6
Increased customer accounts costs		0.3
Increased distribution costs		0.2
Total	$	2.4

Future Generation - MGE continues to work toward its goal of net-zero carbon electricity by 2050. Solar, wind, and battery storage projects are a major step toward deep decarbonization and greater use of clean energy sources in pursuit of our goal.

•

~~For~~Growing ~~the~~renewable ~~year~~generation ~~ended~~and ~~December 31~~storage. MGE is seeking to acquire, ~~2012~~or has acquired, ~~increased~~joint ~~administrative~~interests in several renewable generation and ~~general~~storage ~~costs~~projects. ~~were~~The ~~primarily~~forecasted ~~due~~capital toexpenditures ~~increased~~include ~~pension~~approximately ~~costs,~~252 ~~reflecting~~MW ~~changes~~of insolar, ~~the~~18 ~~discount~~MW ~~rate~~of wind, and ~~assumptions~~125 ~~regarding~~MW ~~investment~~of ~~returns~~storage, ~~used~~which ininclude ~~calculating~~projects ~~such~~approved ~~costs~~or pending PSCW approval. ~~Increased~~See ~~customer~~the ~~service~~2026-2030 ~~costs~~capital ~~are~~expenditures ~~due~~forecast toincluded ~~higher~~under ~~energy~~"Liquidity ~~conservation~~and ~~spending~~Capital Resources" below for information on those projects.

•

~~Other~~Transitioning ~~Income~~away ~~(Deductions)~~from coal. Elm Road Units: In October 2025, ~~Net~~MGE, along with the plant co-owners, ~~MGE Energy~~filed a joint application with the PSCW to end the use of coal as a primary fuel at the Elm Road Units and ~~MGE~~transition the plant to natural gas. See the

For the year ended December 31, 2012, other income, net for the electric and gas segments increase by $1.4 million, compared to the same period in the prior year related to AFUDC equity recognized on the Columbia environmental project.34

~~Nonregulated~~2026-2030 ~~Energy~~capital ~~Operations~~expenditures -forecast ~~MGE Energy~~included under "Liquidity and Capital Resources" below for additional information. By the end of 2030, coal is expected to be used only as a backup fuel at the Elm Road Units. By the end of 2032, MGE expects that the Elm Road Units will be fully transitioned away from coal.

~~For~~Columbia: ~~the~~Operational, ~~years ended December 31~~regulatory, ~~2012~~ and ~~2011,~~environmental ~~net~~regulation ~~income~~considerations athave ~~the~~impacted ~~nonregulated~~and ~~energy~~continue ~~operations~~to ~~segment~~impact ~~was~~Columbia's ~~$18.1 million~~generation ~~and $17~~planning.~~9 million~~ MGE, ~~respectively.~~as ~~The~~a ~~nonregulated~~minority ~~energy~~owner, ~~operations~~and ~~are~~Columbia's ~~conducted~~other ~~through~~co-owners ~~MGE Energy's~~continue ~~subsidiaries:~~to ~~MGE~~evaluate ~~Power~~transitioning ~~Elm~~away ~~Road~~from coal and ~~MGE~~continue ~~Power~~to ~~West~~evaluate ~~Campus.~~replacing ~~These~~the ~~subsidiaries~~generation ~~have~~from ~~been~~Columbia ~~formed~~while tomaintaining ~~construct,~~electric ~~own~~service reliability. MGE and ~~lease~~Columbia's ~~electric~~co-owners ~~generating~~are ~~capacity~~exploring converting Columbia to ~~assist~~natural ~~MGE~~gas.

~~Transmission~~Environmental ~~Investment~~Initiatives ~~Operations~~– Natural gas distribution: Building upon our long-standing commitment to providing affordable, sustainable energy, MGE ~~Energy~~ has set a goal to achieve net-zero methane emissions from its natural gas distribution system by 2035. If MGE can accelerate plans to achieve net-zero methane emissions from its natural gas system—through the evolution of new technologies, such as renewable natural gas—it will. MGE is working to reduce overall emissions from its natural gas distribution system in a quick and cost-effective manner. MGE offers two voluntary renewable natural gas programs. The initial program, launched in May 2024, enables customers to offset emissions associated with their natural gas consumption through a mechanism in which MGE purchases renewable thermal credits and retires them on behalf of participating customers. The second program, launched in January 2026, enables customers to inject renewable natural gas produced on the customer's premise into MGE's distribution system; customers may sell the natural gas to MGE or another third party and may retain or sell to MGE or another third party the associated environmental attributes.

~~Transmission~~Solar ~~investment~~Procurement ~~other~~Disruptions: ~~income~~MGE is monitoring import regulations under the Uyghur Forced Labor Prevention Act and the U.S. Department of Commerce's new solar tariffs. These disruptions have a potential to impact current and future solar projects which may result in an increase in costs or delays in construction timelines. In the event that such disruptions cause costs to exceed the levels approved for specific projects, we have filed, and expect to continue to file, notifications with the PSCW and expect to request recovery of any increases in MGE's future rate proceedings. See "Other Matters" below for additional information on the solar procurement disruptions.

~~For~~Tariffs: ~~the~~MGE ~~years~~is ~~ended~~monitoring ~~December 31,~~the ~~2012~~actions ~~and~~of ~~2011,~~the ~~other~~Trump ~~income~~Administration atwith ~~the~~respect ~~transmission~~to ~~investment~~certain ~~segment~~proposed ~~was~~or ~~$9.1 million~~recently ~~and~~implemented ~~$8.6 million,~~import ~~respectively.~~tariffs ~~The~~on ~~transmission~~foreign ~~investment~~goods. ~~segment~~These ~~holds~~tariffs ~~our~~have ~~interest~~a inpotential ~~ATC,~~impact ~~and~~on ~~its~~cost ~~income~~of ~~reflects~~operations ~~our~~and ~~equity~~on incurrent ~~the~~and ~~earnings~~future ofcapital ~~ATC~~projects. See ~~Footnote 4.b~~"Other Matters" below for additional information ~~concerning~~on ~~ATC~~the ~~and~~executive ~~summarized~~orders ~~financial~~on ~~information regarding ATC~~Tariffs.

~~Consolidated~~Financing ~~Other~~and ~~General~~Equity ~~Taxes~~Issuance Plans: As of December 31, 2025, MGE has $230 million of remaining regulatory authority from the PSCW to issue long-term debt to finance authorized utility capital expenditures. In January 2026, MGE ~~Energy~~ issued $90 million of long-term debt. See "Liquidity and Capital Resources" below for additional information. MGE expects to use a portion of the remaining authority during 2026 to finance authorized utility capital expenditures. In 2026, MGE Energy expects to begin issuing new shares of common stock to participants in our Direct Stock Purchase and Dividend Reinvestment Plan. The amount and timing of any financings will be primarily driven by capital investments and cash requirements and will depend upon market conditions, regulatory approvals, and other factors.

~~MGE Energy's~~Large-Load Growth: Management is seeing growing interest from large‑load customers, including data‑intensive and ~~MGE's~~technology‑focused ~~other~~operations, ~~general~~seeking ~~taxes~~reliable ~~increased~~and ~~$1.0 million~~scalable orelectric ~~5.9%~~service ~~for~~in ~~the~~our ~~year~~service ~~ended~~territory. ~~December 31~~Our favorable location, ~~2012~~strong regional transmission access, ~~when~~and ~~compared~~proximity to ~~the~~major ~~same~~economic ~~period~~and inresearch ~~2011,~~institutions ~~partially~~support ~~due~~this interest. MGE engages early with prospective customers to ~~increased~~evaluate ~~Wisconsin~~load ~~license~~needs, ~~fee~~interconnection ~~tax~~requirements, and potential system impacts. ~~The~~Although ~~annual~~the ~~license~~timing ~~fee~~and ~~tax~~size ~~expense~~of isindividual ~~based~~projects onremain ~~the~~uncertain, ~~prior~~these ~~year's~~inquiries ~~adjusted~~represent ~~operating~~a ~~revenues.~~potential ~~Tax~~source ~~rates~~of ~~have~~incremental ~~not~~and ~~changed~~durable load growth.

~~Consolidated Income Taxes - MGE Energy and MGE~~35

~~MGE Energy's~~The ~~effective~~following ~~income~~discussion ~~tax~~is ~~rate~~based ~~for~~on the ~~year~~business ~~ended~~segments ~~December 31,~~as ~~2012,~~discussed ~~was 37.7% compared to 37.1% for the same period~~ in ~~2011,~~Footnote ~~and~~22 ~~MGE's~~of ~~effective income tax rate for~~ the ~~year~~Notes ~~ended December 31, 2012, was 37.7% compared~~ to ~~37.0%~~Consolidated ~~for~~Financial ~~the~~Statements ~~same period~~ in ~~2011.~~Part ~~The~~II, ~~effective~~Item ~~income~~8 ~~tax~~of ~~rate~~this ~~differences for both MGE Energy and MGE are primarily due to a lower estimated domestic manufacturing deduction~~Report.

29Results of Operations

~~For~~Year ~~2011~~Ended ~~tax~~December ~~return~~31, ~~purposes~~2025, ~~MGE Energy~~Versus and MGE changed their income tax method of accounting for electric transmission and distribution repairs and accounting for depreciation. The 2012 financial statement impact pertaining to finalization of the ~~electric~~Year ~~transmission~~Ended ~~and~~December ~~distribution~~31, repairs is an increase to deferred tax expense and a corresponding decrease in the current tax provision in the amount of $4.8 million. The 2012 financial statement impact pertaining to finalization of the depreciation adjustment is an increase to deferred tax expense and a corresponding decrease in the current tax provision in the amount of $38.6 million.2024

~~Noncontrolling~~Electric ~~Interest,~~sales ~~Net~~and ~~of Tax - MGE~~revenues

The ~~noncontrolling~~following ~~interest,~~table ~~net~~compares ~~of tax, reflects the accounting required for~~ MGE ~~Energy~~'s ~~interest~~electric inrevenues ~~MGE Power Elm Road (the Elm Road Units)~~ and ~~MGE~~electric ~~Power~~kWh ~~West~~sales ~~Campus~~by ~~(WCCF).~~customer ~~MGE Energy~~class ~~owns 100% of MGE Power Elm Road and MGE Power West Campus; however, due to the contractual agreements~~ for ~~these~~each ~~projects with MGE, the entities are considered VIEs and their results are consolidated with those~~ of ~~MGE,~~ the ~~primary~~years beneficiary of the VIEs. Also included in noncontrolling interest, net of tax, is MGE Energy's interest in MGE Transco. The following table shows MGE Energy's noncontrolling interest, net of tax, reflected on MGE's consolidated statement of incomeindicated:

			Year Ended
		Revenues						Sales (kWh)
			December 31,
(In thousands, except CDD)		2025			2024		% Change	2025	2024	% Change
	(in millions)		2012		2011
Residential		$	187,264		$	174,756	7.2%	899,781	860,759	4.5%
	MGE Power Elm Road	$	14.8	$	14.6
Commercial			258,044			255,240	1.1%	1,807,517	1,777,835	1.7%
	MGE Power West Campus	$	7.5	$	7.5
Industrial			12,330			12,948	(4.8)%	143,206	141,976	0.9%
	MGE Transco	$	2.1	$	1.9
Other-retail/municipal			40,048			40,796	(1.8)%	370,046	373,272	(0.9)%
Total retail			497,686			483,740	2.9%	3,220,550	3,153,842	2.1%
Sales to the market			30,654			10,893	181.4%	402,875	226,004	78.3%
Other revenues			3,214			3,040	5.7%	—	—	—%
Total		$	531,554		$	497,673	6.8%	3,623,425	3,379,846	7.2%
Cooling degree days (normal 733)								757	728	4.0%

~~Results~~Electric ofrevenue ~~Operations~~increased $33.9 million during 2025 compared to 2024, due to the following:

Year Ended December 31, 2011, Versus the Year Ended December 31, 2010


(In millions)
Sales to the market	$	19.8
Rate changes		10.0
Increase in residential volume		6.7
Customer fixed and demand charges		4.9
Net increase in commercial, industrial and other-retail/municipal volume		2.9
Other		0.2
Revenue subject to refund, net		(10.6	)
Total	$	33.9

•

~~Electric~~Sales ~~Utility~~to ~~Operations~~the -market. Sales to the market typically occur when MGE ~~Energy~~ has more generation in the MISO market than are needed for its customer demand. The excess electricity is then sold to other utilities or power marketers in the MISO market. During 2025, market volumes increased compared to 2024, reflecting increase in sales. Additionally, the cost of capacity sold increased, contributing to the revenue generated from increased sales to the market from excess generation and ~~MGE~~purchases. The revenue generated from these sales is largely offset by fuel rules costs, and do not have a significant impact on net income. See fuel rules discussion in Footnote 9 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report.

•

~~Electric~~Rate ~~sales~~changes. In December 2024, the PSCW authorized MGE to increase 2025 rates for retail electric customers by approximately 2.63%. Rates charged to retail customers during 2025 were $10.0 million higher than those charged during 2024. See Footnote 9 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report for further information on the rate increase. Any increase in rates associated with fuel or purchase power costs are generally offset in fuel and ~~revenues~~purchased power costs and do not have a significant impact on net income.

•

~~The~~Residential ~~following~~Volume. ~~table~~During ~~compares~~2025, ~~MGE's~~residential ~~electric~~sales ~~revenues~~increased ~~and~~by ~~electric~~approximately ~~kWh~~5% ~~sales~~compared to 2024. This increase was driven by ~~customer~~favorable ~~class~~weather ~~for~~conditions ~~each~~and ofan increase in customers during 2025, compared to the ~~periods~~same ~~indicated:~~period in the prior year.

•

		Revenues				Sales (kWh)
(in thousands, except cooling degree days)		2011		2010	% Change	2011	2010	% Change
Residential	$	124,524	$	122,237	1.9 %	821,543	826,020	(0.5)%
Commercial		197,621		190,265	3.9 %	1,826,636	1,811,474	0.8 %
Industrial		19,427		20,125	(3.5)%	263,224	267,939	(1.8)%
Other-retail/municipal		36,990		34,795	6.3 %	442,066	421,931	4.8 %
Total retail		378,562		367,422	3.0 %	3,353,469	3,327,364	0.8 %
Sales to the market		1,711		2,005	(14.7)%	61,034	40,593	50.4 %
Other revenues		1,584		1,915	(17.3)%	-	-	- %
Adjustments to revenues		(5,999)		(10,613)	43.5 %	-	-	- %
Total	$	375,858	$	360,729	4.2 %	3,414,503	3,367,957	1.4 %
Cooling degree days (normal 629)						814	829	(1.8)%

Customer fixed and demand charges. During 2025, fixed and demand charges increased $4.9 million primarily attributable to the increase in demand charges for commercial customers.

•

~~Electric~~Commercial, ~~operating~~industrial, ~~revenues~~and ~~increased~~other-retail/municipal ~~$15~~volume.~~1 million~~ orDuring 4.2025, there was an approximately 2% ~~for~~increase in commercial sales compared to the same period in the prior year. ~~ended~~This ~~December 31,~~increase ~~2011,~~was ~~due~~driven toby more favorable weather conditions and increased use per customer in the ~~following:~~current year.

(In millions)
Rate changes	$	8.2
Adjustments to revenues		4.6
Volume		2.9
Sales to the market		(0.3)
Other revenues		(0.3)
Total	$	15.1

•

30Revenue subject to refund. For cost recovery mechanisms, any over-collection of revenues resulting from costs authorized to be collected from customers in rates exceeding actual costs is recorded as a reduction of revenue in the period incurred, as the over-collection is expected to be refunded to customers in a subsequent period. In the year the over-collection is refunded, rates are reduced and offset as revenue subject to refund. There is no net income impact in the year the costs are refunded.

·Electric fuel and purchased power

Rates changes. Rates charged to retail customers for the year ended December 31, 2011, were 2.2% or $8.2 million higher than those charged during the same period in the prior year.


	Year Ended December 31,
(In millions)	2025		2024		$ Change
Fuel for electric generation	$	70.8	$	54.0	$	16.8
Purchased power		20.0		32.9		(12.9	)

InThe ~~January 2011,~~$16.8 ~~the~~million ~~PSCW authorized MGE to~~ increase ~~2011~~in ~~rates~~fuel for ~~retail~~ electric ~~customers~~generation bywas ~~2.3%~~due orto ~~$8.0 million.~~an ~~The~~approximately 16% increase in ~~retail~~internal ~~electric~~generation ~~rates~~as iswell ~~driven~~as byan ~~costs~~approximately ~~for~~13% ~~MGE's~~increase ~~share~~in of the ~~Elm~~average ~~Road Units~~cost.

·Excluding deferred fuel costs, purchased power decreased $6.2 million. The decrease in purchased power was due to an approximately 39% decrease in market purchases as a result of increased internal generation. Furthermore, there was an approximately 1% increase in average cost partially offsetting the decrease in market purchases. Deferred fuel cost recovered in 2024 was $6.7 million. There were no deferred fuel costs recovered during 2025.

~~Adjustments~~Fuel toand ~~revenues.~~purchased ~~The~~power ~~adjustments~~costs toare ~~revenues~~generally ~~amount~~offset ~~includes~~by ~~the~~electric ~~elimination~~revenue ofand ~~carrying~~do ~~costs~~not ~~for~~have ~~Elm~~a ~~Road~~significant ~~Units~~impact ~~and~~on ~~WCCF~~net ~~that~~income. ~~were~~MGE ~~collected~~expects into ~~electric~~seek ~~rates,~~and ~~which~~receive ~~are~~recovery ~~recognized~~of asfuel ~~nonregulated~~and ~~energy~~purchased ~~operating~~power ~~revenues~~costs inoutside ~~our~~the ~~Nonregulated~~fuel ~~Energy~~rules ~~Operations~~bandwidth ~~segment~~in customer rates. ~~The~~See ~~amount~~Footnote ~~eliminated~~9 ~~was~~of ~~$6.0 million~~the ~~and~~Notes ~~$7.0 million~~to ~~for~~Consolidated ~~the~~Financial ~~years~~Statements ~~ended~~in ~~December 31~~Part II, ~~2011~~Item ~~and~~8 ~~2010,~~of ~~respectively~~this Report for further information on the fuel rules bandwidth.

~~During~~Gas ~~the~~deliveries year ended December 31, 2010, MGE recovered in electric rates the costs associated with the estimated commencement of lease payments for Elm Road Unit 2, which did not commence until the commercial operation of the Unit in 2011. These amounts were deferred on MGE's balance sheet. At December 31, 2010, $3.6 million was included in adjustments to revenues to defer these revenues and ~~will be returned to customers in MGE's next base rate case.~~revenues

·The following table compares MGE's gas revenues and gas therms delivered by customer class during each of the years indicated:

Volume. During the year ended December 31, 2011, there was a 0.8% increase in total retail sales volumes compared to the same period in the prior year, reflecting increased commercial customer demand.


(In thousands, except HDD and average	Revenues					Therms Delivered
rate per therm of retail customer)	2025		2024		% Change	2025	2024	% Change
Residential	$	123,719	$	106,150	16.6%	107,304	93,613	14.6%
Commercial/Industrial		80,560		65,021	23.9%	104,697	91,804	14.0%
Total retail		204,279		171,171	19.3%	212,001	185,417	14.3%
Gas transportation		6,582		6,905	(4.7)%	73,342	70,001	4.8%
Other revenues		562		511	10.0%	—	—	—%
Total	$	211,423	$	178,587	18.4%	285,343	255,418	11.7%
Heating degree days (normal 6,876)						6,845	5,812	17.8%
Average rate per therm of retail customer	$	0.964	$	0.923	4.4%

·Gas revenue increased $32.8 million during 2025 compared to 2024, due to the following:

Sales to the market. Sales to the market represent wholesale sales made to third parties who are not ultimate users of the electricity. These sales may include spot market transactions on the markets operated by MISO or PJM. These sales may also include bilateral sales to other utilities or power marketers. Generating units are dispatched by MISO based on cost considerations as well as reliability of the system. Sales to the market typically occur when MGE has more generation and purchases online than is needed for its own system demand. The excess electricity is then sold to others in the market. For the year ended December 31, 2011, market volumes increased compared to the prior year, reflecting increased opportunities for sales, however, market settlement resulted in lower revenue per kWh for the year ended December 31, 2011, reflecting lower market prices. Also included in the sales to the market is a decrease in revenues pertaining to the ancillary services and capacity markets, which have no corresponding market volumes.


(In millions)
Rate changes	$	21.9
Increase in volume		18.2
Revenue subject to refund, net		(3.9	)
Other		(3.4	)
Total	$	32.8



·Rate changes. In December 2023, the PSCW authorized MGE to increase 2025 rates for retail gas customers by approximately 1.32%.

~~Other~~MGE ~~Revenues.~~recovers ~~Other~~the ~~revenues~~cost ~~decreased~~of anatural ~~total~~gas ofin $0its gas segment through the purchased gas adjustment clause (PGA).~~3 million~~ ~~compared~~Under the PGA, MGE is able to pass through to its gas customers the ~~same~~cost ~~period~~of gas. Changes in PGA recoveries affect revenues but do not change net income in view of the ~~prior~~pass-through ~~year~~treatment of the costs. Payments for natural gas increased, driving higher rates during 2025.

~~Electric~~The ~~fuel~~average ~~and~~retail ~~purchased~~rate ~~power~~per therm excluding customer fixed charges for 2025, increased approximately 4% compared to 2024, reflecting an increase in natural gas commodity costs (recovered through the PGA).

The expense for fuel for electric generation increased $8.9 million or 21.2% during the year ended December 31, 2011, compared to the same period in the prior year, reflecting higher generation at the Elm Road Units. Elm Road Unit 1 and Unit 2 entered commercial operation in February 2010 and January 2011, respectively.37

•

~~Purchased power expense decreased by $7~~Volume.~~2 million~~ orFor ~~10.0%~~2025, ~~during~~retail ~~the~~gas ~~year~~deliveries ~~ended~~increased ~~December 31,~~approximately ~~2011,~~14% compared to ~~the~~2024 ~~same~~primarily ~~period~~attributable into ~~the~~unfavorable ~~prior~~weather ~~year.~~conditions ~~This decrease~~ in ~~expense reflects a $7~~2024.~~8 million or 10.9% decrease in the volume of power purchased from third parties, driven by Elm Road Unit 2 becoming operational in January 2011.~~

•

~~Electric~~Revenue ~~operating~~subject to refund. For cost recovery mechanisms, any over-collection of revenues resulting from costs authorized to be collected from customers in rates exceeding actual costs is recorded as a reduction of revenue in the period incurred, as the over-collection is expected to be refunded to customers in a subsequent period. In the year the over-collection is refunded, rates are reduced and ~~maintenance~~offset ~~expenses~~as revenue subject to refund. There is no net income impact in the year the costs are refunded.

•

~~Electric~~Other. ~~operating~~Other ~~and~~gas ~~maintenance~~revenues ~~expenses~~decreased ~~increased~~in ~~$0.6 million~~2025 ~~during~~compared ~~the~~to ~~year~~2024 ~~ended~~primarily ~~December 31,~~related ~~2011, compared~~ to ~~the~~lower ~~same~~residential ~~period~~customer infixed ~~2010~~charges. The ~~following~~PSCW ~~changes~~approved ~~contributed~~a toreduction in the ~~net~~customer ~~change:~~fixed charge component of the residential gas rate in the 2025 rate proceeding.

(In millions)
Increased production costs	$	0.7
Increased distribution costs		0.7
Decreased transmission costs		(0.6)
Decreased customer service costs		(0.2)
Total	$	0.6

Cost of gas sold

~~For~~Cost ~~the~~of ~~year~~gas ~~ended~~sold ~~December 31, 2011,~~ increased ~~production~~$24.3 ~~costs~~million ~~largely~~in ~~reflect~~2025 ~~increased~~compared ~~maintenance~~to at2024. ~~the~~Therms ~~Blount~~delivered ~~plant and~~ increased ~~production~~approximately at14% ~~the~~primarily ~~Elm~~driven ~~Road~~by ~~Units.~~weather ~~Increased~~and ~~distribution~~cost ~~costs~~per ~~are~~therm ~~primarily due to~~ increased ~~tree~~approximately ~~trimming expenses~~14%. ~~These~~MGE ~~increases~~recovers ~~were~~the ~~partially~~cost ~~offset~~of bynatural ~~decreased~~gas ~~transmission~~in ~~costs,~~its ~~primarily~~gas ~~due~~segment tothrough athe ~~decrease~~PGA inas ~~network~~described ~~service~~under ~~fees~~gas ~~pertaining~~deliveries toand ~~ATC~~revenues above.

31Consolidated operations and maintenance expenses

~~Electric~~For ~~depreciation~~2025, ~~expense~~operations and maintenance expenses increased $8.0 million, compared to 2024. The following contributed to the net change:

Electric depreciation expense increased $0.8 million for the year ended December 31, 2011, compared to the same period in the prior year. This increase is related to higher levels of electric assets.


(In millions)
Increased transmission costs	$	3.2
Increased electric production expenses		3.0
Increased customer accounts costs		0.9
Increased administrative and general costs		0.8
Increased other expenses		0.7
Increased gas distribution expenses		0.3
Decreased electric distribution expenses		(0.9	)
Total	$	8.0

•

~~Gas~~Increased ~~Utility~~transmission ~~Operations~~costs -are ~~MGE Energy~~primarily a result of an increase in transmission rate. Transmission costs represent ATC and MISO network transmission expenses authorized to collect in rates. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual costs included in rates and to be recovered or refunded in a future rate proceeding. Transmission cost is generally offset by electric revenue and does not have a significant impact on net income.

•

~~Gas~~Increased ~~deliveries~~electric production expenses are primarily related to operating and ~~revenues~~maintenance costs for the Elm Road Units and renewable generating facilities.

~~The~~Consolidated ~~following~~depreciation ~~table compares MGE's gas revenues and gas therms delivered by customer class during each of the periods indicated:~~expense

(In thousands, except HDD and average rate per therm of retail customer)		Revenues				Therms Delivered
		2011		2010	% Change	2011	2010	% Change
Residential	$	93,373	$	92,947	0.5 %	91,663	87,780	4.4 %
Commercial/Industrial		68,729		69,919	(1.7)%	104,254	100,954	3.3 %
Total retail		162,102		162,866	(0.5)%	195,917	188,734	3.8 %
Gas transportation		2,586		2,488	3.9 %	35,531	35,871	(0.9)%
Other revenues		583		561	3.9 %	-	-	- %
Total	$	165,271	$	165,915	(0.4)%	231,448	224,605	3.0 %
Heating degree days (normal 7,096)						6,993	6,798	2.9 %
Average rate per therm of
retail customer	$	0.827	$	0.863	(4.2)%

Electric depreciation expense increased $4.9 million and gas depreciation expense increased $0.6 million for 2025, compared to 2024. Paris solar was placed in service in December 2024, Darien solar was placed in service in March 2025, and Paris battery was placed in service in June 2025. The timing of the in-service dates contributed to the increase in electric depreciation expense.

~~Gas~~Electric ~~revenues~~and ~~decreased~~gas ~~$0.6 million~~other ~~or 0.4% for the year ended December 31, 2011. These changes are related to the following factors:~~income

(In millions)
Gas costs/rates	$	(7.0)
Gas deliveries		6.2
Transportation and other effects		0.2
Total	$	(0.6)

Electric other income increased $1.0 million and gas other income decreased $0.4 million during 2025, compared to 2024, primarily related to pension and other postretirement costs, excluding service costs. The PSCW has approved MGE to defer as a regulatory asset or liability, the difference between actual pension and other postretirement costs included in rates and to be recovered or refunded in a future rate proceeding. Pension and other postretirement cost is generally offset by electric and gas revenue and does not have a significant impact on net income.

·38

~~Gas~~Nonregulated ~~costs/rates.~~Energy ~~The~~Operations ~~average~~- ~~retail~~MGE ~~rate~~Energy ~~per~~and ~~therm for the year ended December 31, 2011, decreased 4.2% compared to the same period in 2010. The primary contributor to this decrease is significantly lower natural gas commodity costs.~~ MGE

·The nonregulated energy operations are conducted through certain of MGE Energy's subsidiaries: MGE Power Elm Road (the Elm Road Units) and MGE Power West Campus (WCCF), which have been formed to own and lease electric generating capacity to assist MGE. For 2025 and 2024, net income at the nonregulated energy operations segment was $24.8 million and $24.1 million, respectively.

~~Retail~~Transmission ~~gas~~Investment ~~deliveries.~~Operations ~~For~~- ~~the~~MGE ~~year ended December 31, 2011, retail gas deliveries increased 3.8% compared to the same period in 2010, reflecting colder weather during the winter months.~~Energy

~~Cost~~The transmission investment segment holds our interest in ATC and ATC Holdco, and its income reflects our equity in the earnings of ~~gas~~those ~~sold~~investments. ATC Holdco was formed in December 2016 to pursue transmission development opportunities that typically have long development and investment lead times before becoming operational. During 2025 and 2024, other income from the transmission investment segment primarily reflected ATC's operations and was $13.0 million and $12.3 million, respectively. See Footnote 7 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report and "Other Matters" below for summarized financial information regarding ATC.

~~For~~All ~~the~~Other ~~year~~Operations ~~ended~~- ~~December 31,~~MGE 2011, cost of gas sold decreased by $4.3 million, compared to the same period in the prior year. The cost per therm of natural gas decreased 7.4%, which resulted in $8.0 million of reduced expense. This decrease was partially offset by a 3.5% increase in the volume of gas purchased, which resulted in $3.7 million of increased expense. Energy

~~Gas~~Other ~~operating and maintenance expenses~~income

~~Gas~~The ~~operating~~increase ~~and~~of ~~maintenance expenses increased~~ $10.1 6 million ~~for~~in ~~the~~other ~~year~~income ~~ended~~from ~~December 31~~all other operations during 2025 compared to 2024, ~~2011~~primarily reflects results from investment gains recognized in the current year, ~~compared~~from venture capital funds. These venture capital investments support early-stage companies working to advance smart technologies, the ~~same~~customer ~~period~~experience, adistributed ~~year~~energy ~~ago~~resources, electrification, cybersecurity and other priorities for utility companies, such as greater sustainability. ~~The~~This ~~following~~increase ~~changes~~was ~~contributed~~partially offset by a $2.5 million (pre-tax) voluntary contribution to the ~~net~~Madison ~~change~~Gas and Electric Foundation, MGE's philanthropic arm, in 2025.

(In millions)
Increased administrative and general costs	$	0.6
Increased distribution costs		0.3
Increased customer accounts costs		0.2
Total	$	1.1

Consolidated Income Taxes - MGE Energy and MGE

32See Footnote 10 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Report for the effective tax rate reconciliation.

~~For~~Noncontrolling ~~the year ended December 31~~Interest, ~~2011,~~Net ~~increased administrative and general costs were primarily due to increased use~~ of ~~outside~~Tax ~~services.~~- MGE

~~Gas~~Noncontrolling ~~depreciation~~interest, ~~expense~~net of tax, reflects the accounting required for MGE Energy's interest in MGE Power Elm Road and MGE Power West Campus. MGE Energy owns 100% of MGE Power Elm Road and MGE Power West Campus. They are not owned by MGE. Due to the contractual agreements for these projects with MGE, the entities are considered VIEs with respect to MGE and their results are consolidated with those of MGE, the primary beneficiary of the VIEs. The following table shows MGE's noncontrolling interest, net of tax, reflected on MGE's consolidated statement of income:

Gas depreciation expense increased $0.4 million for the year ended December 31, 2011, compared to the same period in the prior year. This increase is related to higher levels of gas assets.


	Year Ended December 31,
(In millions)	2025		2024
MGE Power Elm Road	$	15.2	$	15.6
MGE Power West Campus

Filing Format

Forward-Looking Statements

Where to Find More Information

·PART I.

RegulatedItem electric1. utility operations – generating, purchasing, and distributing electricity through MGEBusiness.

21Item 1B. Unresolved Staff Comments.

ValueItem of1C. Investment at December 31,Cybersecurity.

MGE Energy and MGE

·Item 2. Properties.

24Item 3. Legal Proceedings.

·Item 4. Mine Safety Disclosures.

APART 5II.5% decrease in gas sales reflecting lower customer demand due to a milder winter. Heating degree days (a measure for determining the impact of weather during the heating season) decreased by 15% compared to the prior period.

·Item 5. Market for Registrants' Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Filing Compare · MADISON GAS & ELECTRIC CO