Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Summary of Statute of Limitations Applicable to Open Tax Years

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

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

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	$	3.7	$	3.0
Unrecognized tax benefit — Temporary tax positions	1.5		1.5
Total unrecognized tax benefit	$	5.2	$	4.5

Changes in unrecognized tax benefits:

(Millions of Dollars)	2019			2018			2017
Balance at Jan. 1	$	4.5		$	4.3		$	28.7
Additions based on tax positions related to the current year	0.7			0.6			0.9
Reductions based on tax positions related to the current year	(0.1		)	(0.1		)	(0.6		)
Additions for tax positions of prior years	0.2			0.1			1.3
Reductions for tax positions of prior years	(0.1		)	(0.3		)	(19.9		)
Settlements with taxing authorities	—			(0.1		)	(6.1		)
Balance at Dec. 31	$	5.2		$	4.5		$	4.3

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	$	(4.4	)	$	(3.8	)

Interest Payable related to Unrecognized Tax Benefits

Interest payable related to unrecognized tax benefits:

(Millions of Dollars)	2019		2018		2017
Receivable (payable) for interest related to unrecognized tax benefits at Jan. 1	$	0.7	$	0.5	$	(0.9	)
Interest income related to unrecognized tax benefits	—		0.2		1.4
Receivable for interest related to unrecognized tax benefits at Dec. 31	$	0.7	$	0.7	$	0.5

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)	2019		2018
Federal tax credit carryforwards	$	29.5	$	5.7
State NOL carryforwards	1.2		2.9

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:

	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	2.2	%	2.3	%	2.0	%
Increases (decreases) in tax from:
Wind PTCs	(7.9	)	—		—
Plant regulatory differences (b)	(5.0	)	(4.8	)	(0.9	)
Amortization of excess nonplant deferred taxes	(0.9	)	(1.2	)	—
Other tax credits, net of NOL & tax credit allowances	(0.6	)	(0.7	)	(0.6	)
Adjustments attributable to tax returns	(0.1	)	(1.5	)	(0.4	)
Change in unrecognized tax benefits	0.2		0.1		(1.0	)
Tax reform	—		—		(3.5	)
Other, net	—		0.2		(0.5	)
Effective income tax rate	8.9	%	15.4	%	30.1	%

^(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.

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	$	(3.9	)	$	12.3		$	(20.9	)
Current state tax expense (benefit)	0.6			2.3			(12.8		)
Current change in unrecognized tax expense (benefit)	—			2.3			(24.3		)
Deferred federal tax expense	22.3			20.5			89.9
Deferred state tax expense	6.0			3.6			14.5
Deferred change in unrecognized tax expense (benefit)	0.7			(2.0		)	22.1
Deferred ITCs	(0.1		)	(0.1		)	(0.1		)
Total income tax expense	$	25.6		$	38.9		$	68.4

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

(Millions of Dollars)	2019			2018			2017
Deferred tax expense (benefit) excluding items below	$	52.7		$	44.2		$	(414.2	)
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(23.8		)	(22.0		)	540.7
Tax benefit (expense) allocated to other comprehensive income, net of adoption of ASU No. 2018-02, and other	0.1			(0.1		)	—
Deferred tax expense	$	29.0		$	22.1		$	126.5

Schedule of Deferred Tax Assets and Liabilities

Components of the 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	$	758.7	$	680.6
Operating lease assets	115.8		—
Regulatory assets	49.7		49.2
Pension expense	33.1		32.3
Total deferred tax liabilities	$	957.3	$	762.1
Deferred tax assets:
Regulatory liabilities	$	111.2	$	116.8
Operating lease liabilities	115.8		—
Tax credit carryforward	29.5		5.7
Deferred fuel costs	18.3		12.7
Other employee benefits	5.8		5.6
NOL carryforward	0.1		0.2
Other	4.8		2.0
Total deferred tax assets	285.5		143.0
Net deferred tax liability	$	671.8	$	619.1

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