Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Details of Income Tax Expense for Continuing Operations Including Noncontrolling Interests

Details of income tax expense for continuing operations including noncontrolling interests were as follows:

Year Ended December 31,	2019			2018			2017
(millions)
Current:
Federal	$	—		$	(16	)	$	(410	)
State		34			—			(18	)
Total current expense (benefit)		34			(16	)		(428	)
Deferred:
Federal
Taxes before operating loss carryforwards, investment tax credits and tax reform		(90	)		(216	)		262
2017 Tax Reform Act impact		—			(176	)		(1	)
Tax utilization expense of operating loss carryforwards		102			46			—
State		(57	)		(52	)		(2	)
Total deferred expense (benefit)		(45	)		(398	)		259
Investment tax credit-amortization		(1	)		(2	)		(2	)
Total income tax expense (benefit)	$	(12	)	$	(416	)	$	(171	)

Schedule of Effective Income Tax Rate Reconciliation

For continuing operations including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to DESC’s effective income tax rate as follows:

Year Ended December 31,	2019			2018			2017
U.S. statutory rate		21.0	%		21.0	%		35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		3.9			3.8			2.3
State investment tax credits		—			0.3			1.5
AFUDC - equity		—			0.2			1.5
Amortization of federal investment tax credits		0.1			0.2			0.6
Production tax credits		0.4			0.9			2.3
Domestic production activities deduction		—			—			5.2
Reversal of excess deferred income taxes		(1.4	)		—			—
Federal legislative change		—			17.5			0.3
NND Project impairment		(2.4	)		(2.3	)		—
Write-off of regulatory asset		(15.8	)		—			—
Changes in unrecognized tax benefits		(5.1	)		—			—
Other		0.2			(0.2	)		1.2
Effective tax rate		0.9	%		41.4	%		49.9	%

Schedule of Deferred Income Taxes

DESC’s deferred income taxes consist of the following:

At December 31,	2019			2018
(millions)
Deferred income taxes:
Total deferred income tax assets	$	1,258		$	971
Total deferred income tax liabilities		1,868			1,960
Total net deferred income tax liabilities	$	610		$	989
Total deferred income taxes:
Depreciation method and plant basis differences	$	1,007		$	998
Excess deferred income taxes		(231	)		(148	)
Unrecovered nuclear plant cost		553			584
DESC rate refund		(169	)		(1	)
Toshiba settlement		(219	)		(231	)
Nuclear decommissioning		(43	)		(9	)
Deferred state income taxes		200			296
Federal benefit of deferred state income taxes		(42	)		(62	)
Deferred fuel, purchased energy and gas costs		7			1
Pension benefits		46			46
Other postretirement benefits		(35	)		(35	)
Loss and credit carryforwards		(391	)		(520	)
Other		(73	)		70
Total net deferred income tax liabilities	$	610		$	989
Deferred Investment Tax Credits-Regulated Operations		19			19
Total Deferred Taxes and Deferred Investment Tax Credits	$	629		$	1,008

Summary of Tax Credit Carryforwards

At December 31, 2019, DESC had the following deductible loss and credit carryforwards:

(millions)	Deductible Amount		Deferred Tax Asset		Expiration Period
Federal losses	$	1,207	$	254	2037
Federal production and other credits		—		38	2031-2038
State losses		1,849		92	2037
State investment and other credits		—		31	2026-2031
Total	$	3,056	$	415

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of changes in DESC’s unrecognized tax benefits follows:

(millions)	2019			2018		2017
Balance at January 1	$	106		$	98	$	350
Increases-prior period positions		76			8		—
Decreases-prior period positions		(53	)		—		(273	)
Increases-current period positions		3			—		21
Balance at December 31	$	132		$	106	$	98