INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Summary of income tax expense

The following table is a summary of income tax expense for each of the years ended December 31:

(in millions)	2021		2020		2019
Current tax expense (benefit)	$	(18.3)	$	49.8	$	(66.1)
Deferred income taxes, net	51.1		5.1		125.5
ITCs	(1.6)		(0.4)		(0.3)
Total income tax expense	$	31.2	$	54.5	$	59.1

Statutory rate reconciliation

The provision for income taxes for each of the years ended December 31 differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to income before income taxes as a result of the following:

	2021				2020				2019
(in millions)	Amount		Effective Tax Rate		Amount		Effective Tax Rate		Amount		Effective Tax Rate
Statutory federal income tax	$	55.1	21.0	%	$	58.0	21.0	%	$	51.2	21.0	%
State income taxes net of federal tax benefit	16.3		6.2	%	16.9		6.1	%	15.1		6.2	%
Federal excess deferred tax amortization – Wisconsin unprotected (1)	(33.0)		(12.6)	%	(12.7)		(4.6)	%	—		—	%
Federal excess deferred tax amortization (2)	(5.2)		(2.0)	%	(5.1)		(1.8)	%	(4.6)		(1.9)	%
AFUDC – Equity	(1.9)		(0.7)	%	(2.5)		(0.9)	%	(1.2)		(0.5)	%
Other, net	(0.1)		—	%	(0.1)		(0.1)	%	(1.4)		(0.6)	%
Total income tax expense	$	31.2	11.9	%	$	54.5	19.7	%	$	59.1	24.2	%

(1)    In accordance with the rate order received from the PSCW in December 2019, we are amortizing these unprotected deferred tax benefits over periods ranging from two years to four years, to reduce near-term rate impacts to our customers. The decrease in income tax expense related to the amortization of the deferred tax benefits is offset by a decrease in revenue as the benefits are returned to customers, resulting in no impact on net income.

(2)    The Tax Legislation required us to remeasure our deferred income taxes and we began to amortize the resulting excess protected deferred income taxes beginning in 2018 in accordance with normalization requirements. The decrease in income tax expense related to the amortization of the deferred tax benefits is offset by a decrease in revenue as the benefits are returned to customers, resulting in no impact on net income.

Components of deferred income taxes

The components of deferred income taxes as of December 31 were as follows:

(in millions)	2021		2020
Deferred tax assets
Tax gross up – regulatory items	$	102.4	$	106.5
Future tax benefits	8.7		33.3
Other	20.5		22.2
Total deferred tax assets	$	131.6	$	162.0
Deferred tax liabilities
Property-related	822.1		749.1
Employee benefits and compensation	49.5		44.6
Other	42.2		51.0
Total deferred tax liabilities	913.8		844.7
Deferred tax liability, net	$	782.2	$	682.7

Summary of Operating Loss Carryforwards

The components of net deferred tax assets associated with federal tax benefit carryforwards as of December 31, 2021 and 2020 are summarized in the tables below:

2021 (in millions)	Gross Value		Deferred Tax Effect		Earliest Year of Expiration
Future tax benefits as of December 31, 2021
Federal tax credit	$	—	$	8.7	2041
Balance as of December 31, 2021	$	—	$	8.7

2020 (in millions)	Gross Value		Deferred Tax Effect		Earliest Year of Expiration
Future tax benefits as of December 31, 2020
Federal tax credit	$	—	$	33.3	2040
Balance as of December 31, 2020	$	—	$	33.3