Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Summary of Statute of Limitations Applicable to Open Tax Years

Tax Year(s)	Expiration
2014 - 2016	March 2024
2019	October 2023

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits — permanent vs temporary:

(Millions of Dollars)	Dec. 31, 2022		Dec. 31, 2021
Unrecognized tax benefit — Permanent tax positions	$	5	$	4
Unrecognized tax benefit — Temporary tax positions	4		4
Total unrecognized tax benefit	$	9	$	8

Changes in unrecognized tax benefits:

(Millions of Dollars)	2022		2021		2020
Balance at Jan. 1	$	8	$	7	$	5
Additions based on tax positions related to the current year	1		1		1
Additions for tax positions of prior years	—		—		5
Reductions for tax positions of prior years	—		—		(4)
Balance at Dec. 31	$	9	$	8	$	7

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, 2022		Dec. 31, 2021
NOL and tax credit carryforwards	$	(8)	$	(7)

Interest Payable related to Unrecognized Tax Benefits

Interest payable related to unrecognized tax benefits:

(Millions of Dollars)	2022		2021		2020
(Payable) receivable for interest related to unrecognized tax benefits at Jan. 1	$	(1)	$	(1)	$	1
Interest expense related to unrecognized tax benefits	1		—		(2)
(Payable) receivable for interest related to unrecognized tax benefits at Dec. 31	$	—	$	(1)	$	(1)

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)	2022		2021
Federal NOL carryforward	$	8	$	336
Federal tax credit carryforwards	294		187
State NOL carryforwards	4		111

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:

	2022		2021 (c)		2020 (c)
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income tax on pretax income, net of federal tax effect	2.3		2.5		2.3
Increases (decreases) in tax from:
Wind PTCs (a)	(35.9)		(39.7)		(18.3)
Plant regulatory differences (b)	(3.8)		(4.8)		(6.4)
Amortization of excess nonplant deferred taxes	(0.9)		(1.1)		(0.8)
Other, net	(0.6)		(0.7)		(1.3)
Effective income tax rate	(17.9)	%	(22.8)	%	(3.5)	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(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 taxes are offset by corresponding revenue reductions.

(c)Prior period amounts have been restated to conform to current year presentation.

Schedule of Components of Income Tax Expense (Benefit)

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

(Millions of Dollars)	2022		2021		2020
Current federal tax benefit	$	(65)	$	(11)	$	(31)
Current state tax benefit	(5)		(1)		(1)
Deferred federal tax expense (benefit)	3		(57)		13
Deferred state tax expense	13		9		8
Deferred change in unrecognized tax expense	1		1		1
Total income tax benefit	$	(53)	$	(59)	$	(10)

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

(Millions of Dollars)	2022		2021		2020
Deferred tax expense (benefit) excluding items below	$	37	$	(23)	$	53
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities	(20)		(24)		(31)
Deferred tax expense (benefit)	$	17	$	(47)	$	22

Schedule of Deferred Tax Assets and Liabilities

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

(Millions of Dollars)	2022		2021 (a)
Deferred tax liabilities:
Differences between book and tax bases of property	$	1,015	$	942
Operating lease assets	97		103
Regulatory assets	61		65
Deferred fuel costs	35		34
Pension expense	33		34
Other	1		1
Total deferred tax liabilities	$	1,242	$	1,179
Deferred tax assets:
Operating lease liabilities	$	97	$	103
Regulatory liabilities	98		98
Tax credit carryforward	294		187
NOL carryforward	2		76
Other employee benefits	6		7
Other	6		6
Total deferred tax assets	503		477
Net deferred tax liability	$	739	$	702

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