INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Summary of income tax expense

The following table is a summary of income tax expense for each of the years ended December 31:

(in millions)	2022		2021		2020
Current tax expense (benefit)	$	8.7	$	(18.3)	$	49.8
Deferred income taxes, net	66.3		51.1		5.1
ITCs	(2.8)		(1.6)		(0.4)
Total income tax expense	$	72.2	$	31.2	$	54.5

Statutory rate reconciliation

The provision for income taxes for each of the years ended December 31 differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to income before income taxes as a result of the following:

	2022				2021				2020
(in millions)	Amount		Effective Tax Rate		Amount		Effective Tax Rate		Amount		Effective Tax Rate
Statutory federal income tax	$	64.5	21.0	%	$	55.1	21.0	%	$	58.0	21.0	%
State income taxes net of federal tax benefit	19.5		6.3	%	16.3		6.2	%	16.9		6.1	%
Federal excess deferred tax amortization (1)	(5.2)		(1.7)	%	(5.2)		(2.0)	%	(5.1)		(1.8)	%
Federal excess deferred tax amortization – Wisconsin unprotected (2)	(3.8)		(1.2)	%	(33.0)		(12.6)	%	(12.7)		(4.6)	%
ITC restored	(2.8)		(0.9)	%	(1.6)		(0.6)	%	(0.4)		(0.2)	%
AFUDC–Equity	(1.2)		(0.4)	%	(1.9)		(0.7)	%	(2.5)		(0.9)	%
Other, net	1.2		0.4	%	1.5		0.6	%	0.3		0.1	%
Total income tax expense	$	72.2	23.5	%	$	31.2	11.9	%	$	54.5	19.7	%

(1)    The Tax Legislation required us to remeasure our deferred income taxes and we began to amortize the resulting excess protected deferred income taxes beginning in 2018 in accordance with normalization requirements. The decrease in income tax expense related to the amortization of the deferred tax benefits is offset by a decrease in revenue as the benefits are returned to customers, resulting in no impact on net income.

(2)    In accordance with the rate order received from the PSCW in December 2019, we are amortizing these unprotected deferred tax benefits over periods ranging from two years to four years, to reduce near-term rate impacts to our customers. The decrease in income tax expense related to the amortization of the deferred tax benefits is offset by a decrease in revenue as the benefits are returned to customers, resulting in no impact on net income.

Components of deferred income taxes

The components of deferred income taxes as of December 31 were as follows:

(in millions)	2022		2021
Deferred tax assets
Tax gross up – regulatory items	$	99.9	$	102.4
Future tax benefits	3.5		8.7
Other	23.3		20.5
Total deferred tax assets	$	126.7	$	131.6
Deferred tax liabilities
Property-related	878.3		822.1
Employee benefits and compensation	62.2		49.5
Other	46.9		42.2
Total deferred tax liabilities	987.4		913.8
Deferred tax liability, net	$	860.7	$	782.2

Summary of Operating Loss Carryforwards

The components of net deferred tax assets associated with federal tax benefit carryforwards as of December 31, 2022 and 2021 are summarized in the tables below:

2022 (in millions)	Gross Value		Deferred Tax Effect		Earliest Year of Expiration
Future tax benefits as of December 31, 2022
Federal tax credit	$	—	$	3.5	2041
Balance as of December 31, 2022	$	—	$	3.5

2021 (in millions)	Gross Value		Deferred Tax Effect		Earliest Year of Expiration
Future tax benefits as of December 31, 2021
Federal tax credit	$	—	$	8.7	2041
Balance as of December 31, 2021	$	—	$	8.7