Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

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
2014 - 2016	July 2021

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits — permanent vs. temporary:

(Millions of Dollars)	Dec. 31, 2020		Dec. 31, 2019
Unrecognized tax benefit — Permanent tax positions	$	1	$	2
Unrecognized tax benefit — Temporary tax positions	1		1
Total unrecognized tax benefit	$	2	$	3

Changes in unrecognized tax benefits:

(Millions of Dollars)	2020		2019		2018
Balance at Jan. 1	$	3	$	3	$	2
Additions for tax positions of prior years	1		—		1
Reductions for tax positions of prior years	(2)		—		—
Balance at Dec. 31	$	2	$	3	$	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, 2020		Dec. 31, 2019
NOL and tax credit carryforwards	$	(2)	$	(2)

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)	2020		2019
Federal tax credit carryforwards	$	7	$	5
State NOL carryforward	2		2

Schedule of Effective Income Tax Rate Reconciliation

Effective income tax rate for years ended Dec. 31:

	2020		2019 (a)		2018 (a)
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income tax on pretax income, net of federal tax effect	6.2		6.2		6.2
Increases (decreases) in tax from:
Plant regulatory differences (b)	(19.3)		(5.2)		(1.5)
Amortization of excess nonplant deferred taxes	(12.6)		—		—
Other tax credits, net NOL & tax credit allowances	(1.5)		(1.8)		(0.8)
Change in unrecognized tax benefits	(0.8)		0.7		0.4
Reversal of prior regulatory differences	—		(3.6)		—
Other, net	—		(0.5)		(0.7)
Effective income tax rate	(7.0)	%	16.8	%	24.6	%

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

(b)Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions.

Schedule of Components of Income Tax Expense (Benefit)

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

(Millions of Dollars)	2020		2019		2018
Current federal tax expense	$	25	$	6	$	8
Current state tax expense	6		5		2
Current change in unrecognized tax (benefit) expense	(1)		1		—
Deferred federal tax (benefit) expense	(37)		3		16
Deferred state tax expense	1		2		7
Deferred ITCs	(1)		(1)		(1)
Total income tax (benefit) expense	$	(7)	$	16	$	32

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

(Millions of Dollars)	2020		2019		2018
Deferred tax expense excluding items below	$	9	$	17	$	24
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(45)		(12)		(1)
Deferred tax (benefit) expense	$	(36)	$	5	$	23

Schedule of Deferred Tax Assets and Liabilities

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

(Millions of Dollars)	2020		2019 (a)
Deferred tax liabilities:
Difference between book and tax bases of property	$	324	$	304
Regulatory assets	32		50
Pension expense	12		14
Other	9		7
Total deferred tax liabilities	$	377	$	375
Deferred tax assets:
Regulatory liabilities	$	41	$	47
Tax credit carryforward	8		5
Environmental remediation	6		6
Other employee benefits	4		4
Rate refund	4		9
Deferred ITCs	3		3
Other	4		3
Total deferred tax assets	$	70	$	77
Net deferred tax liability	$	307	$	298

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