Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

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:

Tax Year(s)	Expiration
2009 - 2013	June 2020
2014 - 2016	September 2020

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, 2019, 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	2009
Wisconsin	2014

• In 2018, Wisconsin began an audit of tax years 2014 - 2016. As of Dec. 31, 2019, no material adjustments have been proposed.

•

Xcel Energy had no other state income tax audits in progress for its major operating jurisdictions as of Dec. 31, 2019.

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits - permanent vs. temporary:

(Millions of Dollars)	Dec. 31, 2019		Dec. 31, 2018
Unrecognized tax benefit — Permanent tax positions	$	35	$	28
Unrecognized tax benefit — Temporary tax positions	9		9
Total unrecognized tax benefit	$	44	$	37

Changes in unrecognized tax benefits:

(Millions of Dollars)	2019			2018			2017
Balance at Jan. 1	$	37		$	39		$	134
Additions based on tax positions related to the current year	10			9			6
Reductions based on tax positions related to the current year	(4		)	(4		)	(4		)
Additions for tax positions of prior years	1			2			15
Reductions for tax positions of prior years	—			(4		)	(105		)
Settlements with taxing authorities	—			(5		)	(7		)
Balance at Dec. 31	$	44		$	37		$	39

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, 2019			Dec. 31, 2018
NOL and tax credit carryforwards	$	(40	)	$	(35	)

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:

(Millions of Dollars)	2019			2018
Federal tax credit carryforwards	$	639		$	553
Valuation allowances for federal credit carryforwards	—			(5		)
State NOL carryforwards	937			1,104
Valuation allowances for state NOL carryforwards	(19		)	(50		)
State tax credit carryforwards, net of federal detriment (a)	89			89
Valuation allowances for state credit carryforwards, net of federal benefit (b)	(66		)	(69		)

^(a)  State tax credit carryforwards are net of federal detriment of $24 million as of Dec. 31, 2019 and 2018.

^(b) 

Valuation allowances for state tax credit carryforwards were net of federal benefit of $17 million and $18 million as of Dec. 31, 2019 and 2018, respectively.

Schedule of Effective Income Tax Rate Reconciliation

Effective income tax rate for years ended Dec. 31:

	2019		2018 (a)		2017 (a)
Federal statutory rate	21.0	%	21.0	%	35.0	%
State income tax on pretax income, net of federal tax effect	4.9		5.0		4.1
Increases (decreases) in tax from:
Wind PTCs	(9.4	)	(5.2	)	(4.7	)
Plant regulatory differences (b)	(5.8	)	(6.2	)	(0.8	)
Other tax credits, net of NOL & tax credit allowances	(1.7	)	(1.7	)	(1.0	)
Change in unrecognized tax benefits	0.5		0.4		(0.6	)
Tax reform	—		—		1.4
Other, net	(1.0	)	(0.7	)	(1.3	)
Effective income tax rate	8.5	%	12.6	%	32.1	%

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

^(b)  Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions and additional prepaid pension asset amortization.

Schedule of Components of Income Tax Expense (Benefit)

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

(Millions of Dollars)	2019			2018			2017
Current federal tax (benefit) expense	$	(16	)	$	(34	)	$	1
Current state tax expense (benefit)	4			8			(11		)
Current change in unrecognized tax expense (benefit)	2			(6		)	(83		)
Deferred federal tax expense	55			122			460
Deferred state tax expense	83			85			107
Deferred change in unrecognized tax expense	5			11			73
Deferred ITCs	(5		)	(5		)	(5		)
Total income tax expense	$	128		$	181		$	542

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

(Millions of Dollars)	2019			2018			2017
Deferred tax expense (benefit) excluding items below	$	344		$	320		$	(2,939	)
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(206		)	(102		)	3,583
Tax benefit (expense) allocated to other comprehensive income, net of adoption of ASU No. 2018-02, and other	5			—			(4		)
Deferred tax expense	$	143		$	218		$	640

Schedule of Deferred Tax Assets and Liabilities

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

(Millions of Dollars)	2019			2018 (a)
Deferred tax liabilities:
Differences between book and tax bases of property	$	5,474		$	5,082
Operating lease assets	449			—
Regulatory assets	598			599
Pension expense	173			178
Other	70			60
Total deferred tax liabilities	$	6,764		$	5,919
Deferred tax assets:
Regulatory liabilities	$	847		$	879
Operating lease liabilities	449			—
Tax credit carryforward	727			642
NOL carryforward	38			51
NOL and tax credit valuation allowances	(67		)	(79		)
Other employee benefits	128			124
Deferred ITCs	14			16
Rate refund	26			60
Other	93			61
Total deferred tax assets	$	2,255		$	1,754
Net deferred tax liability	$	4,509		$	4,165

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