Income Tax Expense (Tables)

12 Months Ended

Dec. 31, 2017



Income Tax Expense
Year Ended December 31	2017			2016			2015
Millions
Current Income Tax Expense (a)
Federal	—			—			—
State	$0.3			$0.4			$0.2
Total Current Income Tax Expense		$0.3			$0.4			$0.2
Deferred Income Tax Expense
Federal		$12.1			$12.0			$19.4
Federal – Remeasurement of Deferred Income Taxes (b)	(13.0		)	—			—
State	15.8			8.1			6.5
Investment Tax Credit Amortization	(0.5		)	(0.7		)	(0.8		)
Total Deferred Income Tax Expense		$14.4			$19.4			$25.1
Total Income Tax Expense		$14.7			$19.8			$25.3


(a)	For the years ended December 31, 2017, 2016 and 2015, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015, the Tax Increase Prevention Act of 2014 and the American Taxpayer Relief Act of 2012. The federal and state NOLs will be carried forward to offset future taxable income.


(b)	Deferred income tax benefit from the remeasurement of deferred income tax assets and liabilities resulting from the TCJA. (See Note 1. Operations and Significant Accounting Policies.)



Reconciliation of Taxes from Federal Statutory
Rate to Total Income Tax Expense
Year Ended December 31	2017			2016			2015
Millions
Income Before Non-Controlling Interest and Income Taxes		$186.9			$175.6			$166.8
Statutory Federal Income Tax Rate	35		%	35		%	35		%
Income Taxes Computed at 35 percent Statutory Federal Rate		$65.4			$61.5			$58.4
Increase (Decrease) in Tax Due to:
State Income Taxes – Net of Federal Income Tax Benefit	10.5			5.6			4.4
Regulatory Differences for Utility Plant	—			(0.1		)	(0.6		)
Production Tax Credits	(45.1		)	(41.5		)	(37.0		)
Change in Fair Value of Contingent Consideration	—			(3.8		)	—
Remeasurement of Deferred Income Taxes (a)	(13.0		)	—			—
Other	(3.1		)	(1.9		)	0.1
Total Income Tax Expense		$14.7			$19.8			$25.3


(a)	Deferred income tax benefit from the remeasurement of deferred income tax assets and liabilities resulting from the TCJA. (See Note 1. Operations and Significant Accounting Policies.)



Deferred Income Tax Assets and Liabilities
As of December 31	2017			2016
Millions
Deferred Income Tax Assets
Employee Benefits and Compensation		$65.9			$104.6
Property Related	104.3			110.5
NOL Carryforwards	99.1			185.6
Tax Credit Carryforwards	294.3			227.4
Power Sales Agreements	35.0			59.3
Regulatory Liabilities	117.7			7.3
Other	33.3			46.9
Gross Deferred Income Tax Assets	749.6			741.6
Deferred Income Tax Asset Valuation Allowance	(60.0		)	(43.0		)
Total Deferred Income Tax Assets		$689.6			$698.6
Deferred Income Tax Liabilities
Property Related		$758.3			$1,039.6
Regulatory Asset for Benefit Obligations	61.4			91.9
Unamortized Investment Tax Credits	32.8			33.3
Partnership Basis Differences	34.9			50.9
Regulatory Assets	32.0			25.6
Other	0.7			11.9
Total Deferred Income Tax Liabilities		$920.1			$1,253.2
Net Deferred Income Taxes (a)		$230.5			$554.6


(a)	Recorded as a net long-term Deferred Income Tax liability on the Consolidated Balance Sheet. Additionally, see Note 1. Operations and Significant Accounting Policies – Revision of Prior Balance Sheet.



NOL and Tax Credit Carryforwards
As of December 31	2017	2016
Millions
Federal NOL Carryforwards (a)	$375.2		$485.3
Federal Tax Credit Carryforwards	$209.2	$163.7
State NOL Carryforwards (a)	$289.9	$294.4
State Tax Credit Carryforwards (b)	$25.6	$21.0


(a)	Pre-tax amounts.


(b)	Net of a $59.5 million valuation allowance as of December 31, 2017 ($42.7 million as of December 31, 2016).



Gross Unrecognized Income Tax Benefits	2017			2016			2015
Millions
Balance at January 1		$2.0			$2.4			$2.0
Additions for Tax Positions Related to the Current Year	0.1			0.1			0.5
Additions for Tax Positions Related to Prior Years	0.1			0.2			0.7
Reductions for Tax Positions Related to Prior Years	(0.1		)	(0.3		)	(0.7		)
Lapse of Statute	(0.4		)	(0.4		)	(0.1		)
Balance as of December 31		$1.7			$2.0			$2.4