On November 2, 2023, MGE Energy Inc (MGEE, Financial) released its financial results for the third quarter of 2023. The company reported GAAP earnings of $37.9 million, or $1.05 per share, marking an increase from $33.7 million, or $0.93 per share, for the same period in the prior year.
Driving Factors Behind Q3 Performance
The company's third-quarter results were primarily driven by an increase in investments included in rate base. Additionally, warmer-than-normal weather led to an increase in electric residential sales of approximately 5% compared to the third quarter of 2022. "Our third-quarter results were primarily driven by an increase in investments included in rate base. Also, warmer-than-normal weather led to an increase in electric residential sales of approximately 5% compared to the third quarter of 2022," the company stated.
Investments and Earnings
MGE Energy continues to invest in new, cost-effective renewable generation, which is helping to fuel the company's asset growth. An increase in electric investments included in rate base contributed to increased electric earnings for the third quarter of 2023. The timing of depreciation expense also contributed to higher electric earnings in the third quarter of 2023. "Depreciation costs are expected to increase after significant capital projects are completed, including the second phase of Badger Hollow and Paris solar projects," the company noted.
ATC Investment and Gas Net Income
In the third quarter of 2023, earnings from MGE Energy's investment in ATC increased $0.9 million, driven by an estimated possible loss recorded in 2022 from filed complaints regarding MISO transmission owners' authorized return on equity. However, the gas net income in the third quarter of 2023 remained relatively flat compared to the third quarter of 2022.
Financial Summary
For the three months ended September 30, 2023, MGE Energy reported operating revenues of $160.5 million, operating income of $43.8 million, and net income of $37.9 million. Basic and diluted earnings per share were $1.05. For the nine months ended September 30, 2023, the company reported operating revenues of $525.8 million, operating income of $122.2 million, and net income of $97.6 million. Basic and diluted earnings per share were $2.70.
MGE Energy is a public utility holding company. Its principal subsidiary, Madison Gas and Electric, generates and distributes electricity to 161,000 customers in Dane County, Wis., and purchases and distributes natural gas to 173,000 customers in seven south-central and western Wisconsin counties.
Explore the complete 8-K earnings release (here) from MGE Energy Inc for further details.