INCOME TAXES

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The provision for income taxes 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:

	Three Months Ended September 30, 2021				Three Months Ended September 30, 2020
(in millions)	Amount		Effective Tax Rate		Amount		Effective Tax Rate
Statutory federal income tax	$	71.8	21.0	%	$	65.9	21.0	%
State income taxes net of federal tax benefit	21.5		6.3	%	19.7		6.3	%
PTCs	(17.0)		(5.0)	%	(11.2)		(3.6)	%
Federal excess deferred tax amortization – Wisconsin unprotected	(16.3)		(4.8)	%	(12.5)		(4.0)	%
Federal excess deferred tax amortization	(7.8)		(2.3)	%	(8.3)		(2.6)	%
Other	(1.4)		(0.2)	%	(6.7)		(2.2)	%
Total income tax expense	$	50.8	15.0	%	$	46.9	14.9	%

	Nine Months Ended September 30, 2021				Nine Months Ended September 30, 2020
(in millions)	Amount		Effective Tax Rate		Amount		Effective Tax Rate
Statutory federal income tax	$	263.7	21.0	%	$	242.0	21.0	%
State income taxes net of federal tax benefit	79.2		6.3	%	72.1		6.3	%
PTCs	(64.5)		(5.1)	%	(39.0)		(3.4)	%
Federal excess deferred tax amortization – Wisconsin unprotected	(62.9)		(5.0)	%	(45.7)		(4.0)	%
Federal excess deferred tax amortization	(30.3)		(2.4)	%	(30.2)		(2.6)	%
Other	(5.4)		(0.5)	%	(8.5)		(0.8)	%
Total income tax expense	$	179.8	14.3	%	$	190.7	16.5	%

The effective tax rates of 15.0% and 14.3% for the three and nine months ended September 30, 2021, respectively, differ from the United States statutory federal income tax rate of 21%, primarily due to PTCs generated from ownership interests in wind generation facilities in our non-utility energy infrastructure segment and the recognition of certain unprotected deferred tax benefits created as a result of the Tax Legislation. In accordance with the rate order received from the PSCW in December 2019, our Wisconsin utilities are amortizing the unprotected deferred tax benefits over periods ranging from two years to four years, to reduce near-term rate impacts to their customers. In addition, the impact of the protected benefits associated with the Tax Legislation, as discussed in more detail below, drove a decrease in the effective tax rate. These items were partially offset by state income taxes.

The effective tax rates of 14.9% and 16.5% for the three and nine months ended September 30, 2020, respectively, differ from the United States statutory federal income tax rate of 21%, primarily due to the recognition of certain unprotected deferred tax benefits created as a result of the Tax Legislation. In addition, PTCs generated from ownership interests in wind generation facilities in our non-utility energy infrastructure segment and the impact of the protected benefits associated with the Tax Legislation, as discussed in more detail below, drove a decrease in the effective tax rate. These items were partially offset by state income taxes.

The Tax Legislation required our regulated utilities to remeasure their deferred income taxes and we began to amortize the resulting excess protected deferred income taxes beginning in 2018 in accordance with normalization requirements (see federal excess deferred tax amortization line above).

See Note 22, Regulatory Environment, for more information on unprotected tax benefits.