Income Taxes (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

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. The following reconciles such differences:



	Three Months ended March 31
		2018		2017
Federal statutory rate		21.0	%	35.0	%
State tax, net of federal tax effect		2.4		2.1
Increases (decreases) in tax from:
Regulatory differences - ARAM^(a)		(4.1	)	—
Regulatory differences - ARAM deferral ^(b)		2.9		—
Regulatory differences - other utility plant items		(1.5	)	(1.0	)
Other tax credits, net of federal income tax expense		(0.7	)	(0.5	)
Other, net		—		0.5
Effective income tax rate		20.0	%	36.1	%


^(a)	The average rate assumption method (ARAM); a method to flow back excess deferred taxes to customers.


^(b)	As we receive further clarity or direction from our commissions regarding the flow back to customers of excess deferred taxes resulting from the TCJA, the ARAM deferral may decrease during the year, which would result in a reduction to tax expense with a correlating reduction to revenue.

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

SPS is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. The statute of limitations applicable to Xcel Energy’s federal income tax returns expire as follows:



Tax Year(s)		Expiration
2009 - 2011		December 2018
2012 - 2013		October 2018
2014		September 2018
2015		September 2019
2016		September 2020

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the amount of unrecognized tax benefit is as follows:



(Millions of Dollars)	March 31, 2018		Dec. 31, 2017
Unrecognized tax benefit — Permanent tax positions	$	2.4	$	2.3
Unrecognized tax benefit — Temporary tax positions	2.0		2.0
Total unrecognized tax benefit	$	4.4	$	4.3

Tax Benefits Associated with NOL and Tax Credit Carryforwards

The unrecognized tax benefit amounts were reduced by the tax benefits associated with NOL and tax credit carryforwards. The amounts of tax benefits associated with NOL and tax credit carryforwards are as follows:



(Millions of Dollars)	March 31, 2018			Dec. 31, 2017
NOL and tax credit carryforwards	$	(5.9	)	$	(5.9	)