Income Tax Expense (Tables)

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Expense

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Millions
Current Income Tax Expense (a)
Federal	$4.0	—	$12.6	—
State	1.1	$0.2	6.5	$0.3
Total Current Income Tax Expense	$5.1	$0.2	$19.1	$0.3
Deferred Income Tax Expense (Benefit)
Federal (b)	$5.2	$(8.4)	$(10.9)	$(20.7)
State	9.1	1.1	12.5	1.4
Investment Tax Credit Amortization	(0.1)	(0.1)	(0.3)	(0.4)
Total Deferred Income Tax Expense (Benefit)	$14.2	$(7.4)	$1.3	$(19.7)
Total Income Tax Expense (Benefit)	$19.3	$(7.2)	$20.4	$(19.4)

(a)For the quarter and nine months ended September 30, 2023, the federal current tax expense was partially offset by production tax credits. For the quarter and nine months ended September 30, 2022, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of certain tax legislation.

(b)For the quarter ended September 30, 2023, the federal deferred tax expense was due to higher pre-tax income at ALLETE Clean Energy, partially offset by production tax credits. For the nine months ended September 30, 2023 and 2022, and the quarter ended September 30, 2022, the federal deferred income tax benefit is primarily due to production tax credits.

Reconciliation of Taxes from Federal Statutory Rate to Total Income Tax Expense

In each quarter, the Company updates its estimate of the annual effective tax rate and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter.

	Quarter Ended				Nine Months Ended
Reconciliation of Taxes from Federal Statutory	September 30,				September 30,
Rate to Total Income Tax Expense	2023		2022		2023		2022
Millions
Income Before Income Taxes	$88.9		$19.6		$168.3		$74.7
Statutory Federal Income Tax Rate	21	%	21	%	21	%	21	%
Income Taxes Computed at Statutory Federal Rate	$18.7		$4.1		$35.3		$15.7
Increase (Decrease) in Income Tax Due to:
State Income Taxes – Net of Federal Income Tax Benefit	8.0		1.1		15.0		6.6
Deferred Revaluation – Net of Federal Income Tax Benefit	—		—		—		(5.2)
Production Tax Credits (a)	(7.7)		(9.7)		(28.3)		(34.4)
Investment Tax Credits (a)	(1.6)		(3.2)		(5.2)		(3.2)
Regulatory Differences – Excess Deferred Tax	(2.3)		(1.5)		(7.5)		(6.7)
Non-Controlling Interest in Subsidiaries	3.0		1.4		8.9		8.4
Other	1.2		0.6		2.2		(0.6)
Total Income Tax Expense (Benefit)	$19.3		$(7.2)		$20.4		$(19.4)

(a)For the quarter and nine months ended September 30, 2023, the credits are presented net of any estimated discount on the sale of certain credits.