Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Summary of Statute of Limitations Applicable to Open Tax Years [Table Text Block]

NSP-Wisconsin is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. Statute of limitations applicable to Xcel Energy’s consolidated federal income tax returns expire as follows:

Tax Year(s)	Expiration
2009 - 2014	October 2019
2015	September 2019
2016	September 2020
2017	September 2021

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits - permanent vs. temporary:

(Millions of Dollars)	Dec. 31, 2018		Dec. 31, 2017
Unrecognized tax benefit — Permanent tax positions	$	2.0	$	1.4
Unrecognized tax benefit — Temporary tax positions	0.8		1.0
Total unrecognized tax benefit	$	2.8	$	2.4

Changes in unrecognized tax benefits:

(Millions of Dollars)	2018			2017			2016
Balance at Jan. 1	$	2.4		$	5.3		$	4.5
Additions based on tax positions related to the current year	0.2			0.4			0.5
Reductions based on tax positions related to the current year	(0.1		)	(0.3		)	—
Additions for tax positions of prior years	0.7			1.3			0.5
Reductions for tax positions of prior years	(0.3		)	(4.3		)	(0.2		)
Settlements with taxing authorities	(0.1		)	—			—
Balance at Dec. 31	$	2.8		$	2.4		$	5.3

Tax Benefits Associated with NOL and Tax Credit Carryforwards

Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:

(Millions of Dollars)	Dec. 31, 2018			Dec. 31, 2017
NOL and tax credit carryforwards	$	(2.1	)	$	(1.9	)

NOL and Tax Credit Carryforwards

NOL amounts represent the tax loss that is carried forward and tax credits represent the deferred tax asset. NOL and tax credit carryforwards as of Dec. 31 were as follows:

(Millions of Dollars)	2018		2017
Federal NOL carryforward	$	—	$	57.8
Federal tax credit carryforwards	4.7		4.3
State NOL carryforward	2.5		5.4

Schedule of Effective Income Tax Rate Reconciliation

Total income tax expense from operations differs from the amount computed by applying the statutory federal income tax rate to income before income tax expense.

Effective income tax rate for years ended Dec. 31:

	2018		2017 (a)		2016 (a)
Federal statutory rate	21.0	%	35.0	%	35.0	%
State income tax on pretax income, net of federal tax effect	6.2	%	5.1	%	5.1	%
Increases (decreases) in tax from:
Regulatory differences - ARAM (b)	(4.3	)	(0.1	)	(0.2	)
Regulatory differences - deferral of ARAM (c)	4.1		—		—
Regulatory differences - other utility plant items	(1.3	)	(1.7	)	(0.6	)
Tax credits recognized, net of federal income tax expense	(0.8	)	(1.0	)	(0.7	)
Adjustments attributable to tax returns	(0.6	)	(2.3	)	(0.3	)
Change in unrecognized tax benefits	0.4		0.8		0.1
Tax reform	—		—		—
Other, net	0.1		—		(0.1	)
Effective income tax rate	24.8	%	35.8	%	38.3	%

^(a)  Prior periods have been reclassified to conform to current year presentation.

^(b)  ARAM is a method to flow back excess deferred taxes to customers.

^(c)  ARAM has been deferred when regulatory treatment has not been established. As Xcel Energy received direction from its regulatory commissions regarding the return of excess deferred taxes to customers, the ARAM deferral was reversed. This resulted in a reduction to tax expense with a corresponding reduction to revenue.

Schedule of Components of Income Tax Expense (Benefit)

Components of income tax expense for years ended Dec. 31:

(Millions of Dollars)	2018			2017			2016
Current federal tax expense	$	7.6		$	2.8		$	5.4
Current state tax expense	1.7			—			0.1
Current change in unrecognized tax expense (benefit)	0.2			(3.7		)	0.5
Deferred federal tax expense	15.6			32.9			29.6
Deferred state tax expense	7.4			8.0			8.2
Deferred change in unrecognized tax expense (benefit)	0.3			4.7			(0.4		)
Deferred ITCs	(0.5		)	(0.5		)	(0.5		)
Total income tax expense	$	32.3		$	44.2		$	42.9

Components of deferred income tax expense as of Dec. 31:

(Millions of Dollars)	2018			2017			2016
Deferred tax expense (benefit) excluding items below	$	24.0		$	(173.9	)	$	39.5
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(0.7		)	219.5			(2.1		)
Deferred tax expense	$	23.3		$	45.6		$	37.4

Schedule of Deferred Tax Assets and Liabilities

Components of net deferred tax liability as of Dec. 31:

(Millions of Dollars)	2018		2017
Deferred tax liabilities:
Difference between book and tax bases of property	$	281.1	$	269.5
Regulatory assets	55.4		58.4
Pension expense	13.9		14.2
Other	6.9		7.0
Total deferred tax liabilities	$	357.3	$	349.1
Deferred tax assets:
Regulatory liabilities	$	53.4	$	55.8
NOL carryforward	0.4		12.6
Environmental remediation	7.8		8.1
Tax credit carryforward	4.7		4.6
Other employee benefits	4.1		3.9
Deferred ITCs	3.0		3.2
Other	3.2		4.2
Total deferred tax assets	$	76.6	$	92.4
Net deferred tax liability	$	280.7	$	256.7