Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Interest Payable related to Unrecognized Tax Benefits [Table Text Block]

Interest payable related to unrecognized tax benefits:

(Millions of Dollars)	2018		2017			2016
Payable for interest related to unrecognized tax benefits at Jan. 1	$	—	$	(3	)	$	—
Interest income (expense) related to unrecognized tax benefits	—		3			(3		)
Payable for interest related to unrecognized tax benefits at Dec. 31	$	—	$	—		$	(3	)

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

Statute of limitations applicable to Xcel Energy’s consolidated federal income tax returns expire as follows:

Tax Year(s)	Expiration
2009 - 2014	October 2019
2015	September 2019
2016	September 2020
2017	September 2021

Earliest Open Tax Years Subject to Examination by State Taxing Authorities in the Major Operating Jurisdictions

Xcel Energy files consolidated state tax returns based on income in its major operating jurisdictions and various other state income-based tax returns.

As of Dec. 31, 2018, Xcel Energy’s earliest open tax years (subject to examination by state taxing authorities in its major operating jurisdictions) were as follows:

State	Year
Colorado	2009
Minnesota	2009
Texas	2010
Wisconsin	2014

• In the fourth quarter of 2018, the Minnesota audit of tax years 2010 - 2014 concluded with no material adjustments.

• In the third quarter of 2018, the Wisconsin audit of tax years 2012 - 2013 concluded with no material adjustments. In the fourth quarter of 2018, Wisconsin began an audit of tax years 2014 - 2016. No material adjustments have been proposed.

• No other state income tax audits were in progress as of Dec. 31, 2018.

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits - permanent vs. temporary:

(Millions of Dollars)	Dec. 31, 2018		Dec. 31, 2017
Unrecognized tax benefit — Permanent tax positions	$	28	$	20
Unrecognized tax benefit — Temporary tax positions	9		19
Total unrecognized tax benefit	$	37	$	39

Changes in unrecognized tax benefits:

(Millions of Dollars)	2018			2017			2016
Balance at Jan. 1	$	39		$	134		$	121
Additions based on tax positions related to the current year	9			6			8
Reductions based on tax positions related to the current year	(4		)	(4		)	—
Additions for tax positions of prior years	2			15			10
Reductions for tax positions of prior years	(4		)	(105		)	(5		)
Settlements with taxing authorities	(5		)	(7		)	—
Balance at Dec. 31	$	37		$	39		$	134

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, 2018			Dec. 31, 2017
NOL and tax credit carryforwards	$	(35	)	$	(31	)

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)	2018			2017
Federal NOL carryforward	$	—		$	1,072
Federal tax credit carryforwards	553			517
Valuation allowances for federal credit carryforwards	(5		)	(5		)
State NOL carryforwards	1,104			1,592
Valuation allowances for state NOL carryforwards	(50		)	(55		)
State tax credit carryforwards, net of federal detriment (a)	89			90
Valuation allowances for state credit carryforwards, net of federal benefit (b)	(69		)	(68		)

^(a)  State tax credit carryforwards are net of federal detriment of $24 million as of Dec. 31, 2018 and 2017.

^(b)  Valuation allowances for state tax credit carryforwards were net of federal benefit of $18 million as of Dec. 31, 2018 and 2017.

Schedule of Effective Income Tax Rate Reconciliation

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.

Effective income tax rate for years ended Dec. 31:

	2018		2017 (a)		2016 (a)
Federal statutory rate	21.0	%	35.0	%	35.0	%
State income tax on pretax income, net of federal tax effect	5.0		4.1		4.1
Increases (decreases) in tax from:
Regulatory differences - ARAM (b)	(5.8	)	(0.1	)	(0.1	)
Wind production tax credits recognized	(5.2	)	(4.7	)	(3.4	)
Other tax credits recognized, net of federal income tax expense	(2.0	)	(1.0	)	(0.8	)
Regulatory differences - other utility plant items	(1.0	)	(0.7	)	(0.5	)
Regulatory differences - Deferral of ARAM (c)	0.6		—		—
Change in unrecognized tax benefits	0.4		(0.6	)	0.2
Tax reform	—		1.4		—
Other, net	(0.4	)	(1.3	)	(0.4	)
Effective income tax rate	12.6	%	32.1	%	34.1	%

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

^(b)  ARAM is a method to flow back excess deferred taxes to customers.

^(c)  ARAM has been deferred when regulatory treatment has not been established. As Xcel Energy received direction from its regulatory commissions regarding the return of excess deferred taxes to customers, the ARAM deferral was reversed. This resulted in a reduction to tax expense with a corresponding reduction to revenue.

Schedule of Components of Income Tax Expense (Benefit)

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

(Millions of Dollars)	2018			2017			2016
Current federal tax (benefit) expense	$	(34	)	$	1		$	(3	)
Current state tax expense (benefit)	8			(11		)	(4		)
Current change in unrecognized tax (benefit) expense	(6		)	(83		)	6
Deferred federal tax expense	122			460			477
Deferred state tax expense	85			107			112
Deferred change in unrecognized tax expense (benefit)	11			73			(2		)
Deferred investment tax credits	(5		)	(5		)	(5		)
Total income tax expense	$	181		$	542		$	581

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

(Millions of Dollars)	2018			2017			2016
Deferred tax expense (benefit) excluding items below	$	320		$	(2,939	)	$	631
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(102		)	3,583			(45		)
Tax (expense) benefit allocated to other comprehensive income, net of adoption of ASU No. 2018-02, and other	—			(4		)	1
Deferred tax expense	$	218		$	640		$	587

Schedule of Deferred Tax Assets and Liabilities

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

(Millions of Dollars)	2018			2017
Deferred tax liabilities:
Differences between book and tax bases of property	$	5,082		$	4,960
Regulatory assets	599			565
Pension expense	178			199
Other	64			57
Total deferred tax liabilities	$	5,923		$	5,781
Deferred tax assets:
Regulatory liabilities	$	879		$	886
Tax credit carryforward	642			607
NOL carryforward	51			293
NOL and tax credit valuation allowances	(79		)	(77		)
Other employee benefits	124			132
Deferred ITCs	16			17
Rate refund	60			10
Other	65			68
Total deferred tax assets	$	1,758		$	1,936
Net deferred tax liability	$	4,165		$	3,845