Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense

Income tax expense consists of the following components:

(millions)
For the year ended December 31,	2017			2016		2015
Current income taxes
Federal	$	(1	)	$	53	$	38
State		6			12		8
Deferred income taxes
Federal		170			76		105
State		23			11		15
Investment tax credits, net of amortization		(1	)		0		0
Total income tax expense	$	197		$	152	$	166

Schedule of Income Taxes Calculated on Income before Income Taxes and Provision for Income Taxes

For the three years presented, the overall effective tax rate differs from the 35% U.S. federal statutory rate as presented below:

(millions)
For the year ended December 31,	2017			2016			2015
Income before provision for income taxes	$	513		$	438		$	442
Federal statutory income tax rates		35	%		35	%		35	%
Income taxes, at statutory income tax rate		180			153			155
Increase (decrease) due to
State income tax, net of federal income tax		19			15			15
AFUDC-equity		(1	)		(8	)		(6	)
Tax credits		(3	)		(7	)		0
Other		2			(1	)		2
Total income tax expense on consolidated statements of income	$	197		$	152		$	166
Income tax expense as a percent of income from continuing operations,    before income taxes		38.4	%		34.8	%		37.5	%

Schedule of Deferred Tax Assets and Liabilities

The principal components of TEC’s deferred tax assets and liabilities recognized in the balance sheet are as follows:

(millions)
As of December 31,	2017			2016
Deferred tax liabilities (1)
Property related	$	924		$	1,549
Pension and postretirement benefits		57			105
Pension		43			69
Total deferred tax liabilities		1,024			1,723
Deferred tax assets (1)
Loss and credit carryforwards (2)		91			91
Medical benefits		24			47
Insurance reserves		(5	)		27
Pension and postretirement benefits		57			105
Capitalized energy conservation assistance costs		13			23
Other		19			23
Total deferred tax assets		199			316
Total deferred tax liability, net	$	825		$	1,407

(1) Certain property related assets and liabilities have been netted.

(2) Deferred tax assets for net operating loss and tax credit carryforwards have been reduced by unrecognized tax benefits of $8 million.

Schedule of Unrecognized Tax Benefits

The following table provides details of the change in unrecognized tax benefits as follows:

(millions)	2017		2016		2015
Balance at January 1,	$	7	$	0	$	0
Increases due to tax positions related to current year		1		7		0
Balance at December 31	$	8	$	7	$	0