Income Tax Expense (Tables)

12 Months Ended

Dec. 31, 2018



Income Tax Expense
Year Ended December 31	2018			2017			2016
Millions
Current Income Tax Expense (a)
Federal	—			—			—
State	$0.3			$0.3			$0.4
Total Current Income Tax Expense		$0.3			$0.3			$0.4
Deferred Income Tax Expense (Benefit)
Federal (b)	$(26.2)				$12.1			$12.0
Federal – Remeasurement of Deferred Income Taxes (c)	—			(13.0		)	—
State	11.0			15.8			8.1
Investment Tax Credit Amortization	(0.6		)	(0.5		)	(0.7		)
Total Deferred Income Tax Expense (Benefit)	$(15.8)				$14.4			$19.4
Total Income Tax Expense (Benefit)	$(15.5)				$14.7			$19.8

(a)

For the years ended December 31, 2018, 2017 and 2016, 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. Federal and state NOLs are being carried forward to offset current and future taxable income.


(b)	For the year ended December 31, 2018, the federal tax benefit is primarily due to production tax credits, and the reduction of the federal statutory tax rate from 35 percent to 21 percent enacted as part of the TCJA.


(c)	For the year ended December 31, 2017, the federal deferred income tax benefit is due to the remeasurement of deferred income tax assets and liabilities resulting from the TCJA.

Reconciliation of Taxes from Federal Statutory Rate to Total Income Tax Expense [Table Text Block]



Reconciliation of Taxes from Federal Statutory
Rate to Total Income Tax Expense
Year Ended December 31	2018			2017			2016
Millions
Income Before Non-Controlling Interest and Income Taxes		$158.6			$186.9			$175.6
Statutory Federal Income Tax Rate	21		%	35		%	35		%
Income Taxes Computed at Statutory Federal Rate		$33.3			$65.4			$61.5
Increase (Decrease) in Tax Due to:
State Income Taxes – Net of Federal Income Tax Benefit	8.9			10.5			5.6
Production Tax Credits	(45.0		)	(45.1		)	(41.5		)
Regulatory Differences – Excess Deferred Tax Benefit (a)	(8.2		)	1.2			1.4
Change in Fair Value of Contingent Consideration	(0.4		)	—			(3.8		)
Remeasurement of Deferred Income Taxes (b)	—			(13.0		)	—
Other	(4.1		)	(4.3		)	(3.4		)
Total Income Tax Expense (Benefit)	$(15.5)				$14.7			$19.8


(a)	Excess deferred income taxes are being returned to customers under both the Average Rate Assumption Method and amortization periods as approved by regulators. (See Note 4. Regulatory Matters.)


(b)	Deferred income tax benefit from the remeasurement of deferred income tax assets and liabilities resulting from the TCJA.

Deferred Tax Assets and Liabilities [Table Text Block]



Deferred Income Tax Assets and Liabilities
As of December 31	2018			2017
Millions
Deferred Income Tax Assets
Employee Benefits and Compensation		$62.2			$65.9
Property-Related	95.2			104.3
NOL Carryforwards	86.1			99.1
Tax Credit Carryforwards	349.8			294.3
Power Sales Agreements	27.5			35.0
Regulatory Liabilities	113.4			117.7
Other	25.1			33.3
Gross Deferred Income Tax Assets	759.3			749.6
Deferred Income Tax Asset Valuation Allowance	(66.5		)	(60.0		)
Total Deferred Income Tax Assets		$692.8			$689.6
Deferred Income Tax Liabilities
Property-Related		$752.5			$758.3
Regulatory Asset for Benefit Obligations	61.0			61.4
Unamortized Investment Tax Credits	32.2			32.8
Partnership Basis Differences	40.8			34.9
Regulatory Assets	29.9			32.0
Other	—			0.7
Total Deferred Income Tax Liabilities		$916.4			$920.1
Net Deferred Income Taxes (a)		$223.6			$230.5


(a)	Recorded as a net long-term Deferred Income Tax liability on the Consolidated Balance Sheet

NOL and Tax Credit Carryforwards [Table Text Block]



NOL and Tax Credit Carryforwards
As of December 31	2018	2017
Millions
Federal NOL Carryforwards (a)	$319.0		$375.2
Federal Tax Credit Carryforwards	$256.4	$209.2
State NOL Carryforwards (a)	$305.8	$289.9
State Tax Credit Carryforwards (b)	$27.4	$25.6


(a)	Pre-tax amounts.


(b)	Net of a $66.0 million valuation allowance as of December 31, 2018 ($59.5 million as of December 31, 2017).

Gross Unrecognized Income Tax Benefits [Table Text Block]



Gross Unrecognized Income Tax Benefits	2018			2017			2016
Millions
Balance at January 1		$1.7			$2.0			$2.4
Additions for Tax Positions Related to the Current Year	0.1			0.1			0.1
Additions for Tax Positions Related to Prior Years	0.1			0.1			0.2
Reductions for Tax Positions Related to Prior Years	(0.2		)	(0.1		)	(0.3		)
Lapse of Statute	(0.1		)	(0.4		)	(0.4		)
Balance as of December 31		$1.6			$1.7			$2.0