INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

INCOME TAXES

Schedule of components total income tax expense

Millions of dollars	2011			2010			2009
Current taxes:
Federal	$	52		$	(47	)	$	63
State	10			1			(6		)
Total current taxes	62			(46		)	57
Deferred taxes, net:
Federal	122			223			94
State	12			13			8
Total deferred taxes	134			236			102
Investment tax credits:
Deferred-state	—			—			20
Amortization of amounts deferred-state	(25		)	(28		)	(9		)
Amortization of amounts deferred-federal	(3		)	(3		)	(3		)
Total investment tax credits	(28		)	(31		)	8
Total income tax expense	$	168		$	159		$	167

Reconciliation of the difference between actual income tax expense and amount calculated from the application of the statutory federal income tax rate

Millions of dollars	2011			2010			2009
Income	$	387		$	376		$	348
Income tax expense	168			159			167
Preferred stock dividends	—			—			9
Total pre-tax income	$	555		$	535		$	524
Income taxes on above at statutory federal income tax rate	$	194		$	187		$	183
Increases (decreases) attributed to:
State income taxes (less federal income tax effect)	15			9			14
Amortization of state investment tax credits (less federal income tax effect)	(16		)	(18		)	(6		)
Allowance for equity funds used during construction	(5		)	(8		)	(10		)
Deductible dividends—Stock Purchase Savings Plan	(9		)	(9		)	(8		)
Amortization of federal investment tax credits	(3		)	(3		)	(3		)
Domestic production activities deduction	(6		)	—			(4		)
Other differences, net	(2		)	1			1
Total income tax expense	$	168		$	159		$	167

Schedule of the tax effects of significant temporary differences comprising the Company's net deferred tax liability

Millions of dollars	2011		2010
Deferred tax assets:
Nondeductible reserves	$	99	$	103
Nuclear decommissioning	47		45
Financial instruments	50		22
Unamortized investment tax credits	29		41
Deferred compensation	23		25
Unbilled revenue	19		19
Monetization of bankruptcy claim	13		14
Other	15		11
Total deferred tax assets	$	295	$	280
Deferred tax liabilities:
Property, plant and equipment	$	1,561	$	1,418
Pension plan income	1		23
Deferred employee benefit plan costs	128		106
Deferred fuel costs	47		42
Other	65		61
Total deferred tax liabilities	1,802		1,650
Net deferred tax liability	$	1,507	$	1,370

Schedule of changes to unrecognized tax benefits

Millions of dollars	2011			2010
Unrecognized tax benefits, January 1	$	36		—
Gross increases—tax positions in prior period	5			—
Gross decreases—tax positions in prior period	(8		)	—
Gross increases—current period tax positions	5			$	36
Settlements	—			—
Lapse of statute of limitations	—			—
Unrecognized tax benefits, December 31	$	38		$	36