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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 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:
|  | 2023 |  | 2022 |  | 2021
Federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income tax on pretax income, net of federal tax effect |  | 4.9 |  |  | 4.9 |  |  | 5.0 |
(Decreases) increases in tax from: |  |  |  |  |  |
Wind PTCs (a) |  | (28.1) |  |  | (27.4) |  |  | (23.4) |
Plant regulatory differences (b) |  | (5.6) |  |  | (5.5) |  |  | (6.2) |
Other tax credits, net NOL & tax credit allowances |  | (1.3) |  |  | (1.3) |  |  | (1.1) |
Other, net |  | 0.1 |  |  | (0.1) |  |  | 0.1 |
Effective income tax rate |  | (9.0) | % |  | (8.4) | % |  | (4.6) | %
(a)Wind PTCs net of estimated transfer discount are credited to customers (reduction to revenue) and do not materially impact net income. (b)Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions. Components of income tax expense for years ended Dec. 31:
(Millions of Dollars) |  | 2023 |  | 2022 |  | 2021
Current federal tax expense |  | $ | 113 |  |  | $ | 1 |  |  | $ | 15 |
Current state tax expense (benefit) |  | 16 |  |  | 3 |  |  | (2) |
Current change in unrecognized tax (benefit) expense |  | (21) |  |  | 5 |  |  | 1 |
Deferred federal tax benefit |  | (331) |  |  | (239) |  |  | (183) |
Deferred state tax expense |  | 75 |  |  | 96 |  |  | 99 |
Deferred change in unrecognized tax expense |  | 7 |  |  | 3 |  |  | 5 |
Deferred ITCs |  | (5) |  |  | (4) |  |  | (5) |
Total income tax benefit |  | $ | (146) |  |  | $ | (135) |  |  | $ | (70) |
Components of deferred income tax expense as of Dec. 31:
(Millions of Dollars) |  | 2023 |  | 2022 |  | 2021
Deferred tax expense (benefit) excluding items below |  | $ | 129 |  |  | $ | (138) |  |  | $ | 148 |
Adjustments to deferred income taxes for wind production tax credit cash transfers (a) |  | (190) |  |  | — |  |  | — |
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities |  | (188) |  |  | 8 |  |  | (221) |
Tax benefit allocated to other comprehensive income and other |  | — |  |  | (10) |  |  | (6) |
Deferred tax benefit |  | $ | (249) |  |  | $ | (140) |  |  | $ | (79) |
(a)Proceeds from tax credit transfers are included in cash received (paid) for income taxes in the consolidated statement of cash flows. Components of net deferred tax liability as of Dec. 31:
(Millions of Dollars) |  | 2023 |  | 2022 (a)
Deferred tax liabilities: |  |  |  |
Differences between book and tax bases of property |  | $ | 6,744 |  |  | $ | 6,442 |
Regulatory assets |  | 538 |  |  | 484 |
Operating lease assets |  | 327 |  |  | 325 |
Pension expense |  | 151 |  |  | 159 |
Deferred fuel costs |  | 67 |  |  | 222 |
Other |  | 84 |  |  | 90 |
Total deferred tax liabilities |  | $ | 7,911 |  |  | $ | 7,722 |
Deferred tax assets: |  |  |  |
Tax credit carryforward |  | $ | 1,718 |  |  | $ | 1,679 |
Regulatory liabilities |  | 730 |  |  | 718 |
Operating lease liabilities |  | 327 |  |  | 325 |
Other employee benefits |  | 117 |  |  | 102 |
Deferred investment tax credits |  | 16 |  |  | 14 |
NOL carryforward |  | — |  |  | 57 |
NOL and tax credit valuation allowances |  | (70) |  |  | (62) |
Other |  | 188 |  |  | 133 |
Total deferred tax assets |  | 3,026 |  |  | 2,966 |
Net deferred tax liability |  | $ | 4,885 |  |  | $ | 4,756 |
(a)Prior periods have been reclassified to conform to current year presentation. Other Income Tax Matters — 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) |  | 2023 |  | 2022
Federal NOL carryforward |  | $ | — |  |  | $ | 20 |
Federal tax credit carryforwards |  | 1,644 |  |  | 1,593 |
Valuation allowances for federal credit carryforwards |  | (10) |  |  | — |
State NOL carryforwards |  | 11 |  |  | 1,022 |
Valuation allowances for state NOL carryforwards |  | (2) |  |  | (3) |
State tax credit carryforwards, net of federal detriment (a) |  | 74 |  |  | 85 |
Valuation allowances for state credit carryforwards, net of federal benefit (b) |  | (60) |  |  | (62) |
(a)State tax credit carryforwards are net of federal detriment of $20 million and $23 million as of Dec. 31, 2023 and 2022, respectively. (b)Valuation allowances for state tax credit carryforwards were net of federal benefit of $16 million as of Dec. 31, 2023 and 2022. Federal carryforward periods expire between 2037 and 2043 and state carryforward periods expire starting 2024. Unrecognized Tax Benefits Federal Audit — Statute of limitations applicable to Xcel Energy’s consolidated federal income tax returns expire as follows:
Tax Year(s) |  | Expiration
2014 - 2016 |  | March 2025
2020 |  | September 2024
Additionally, the statute of limitations related to the federal tax credit carryforwards will remain open until those credits are utilized in subsequent returns. Further, the statute of limitations related to the additional federal tax loss carryback claim filed in 2020 has been extended. As of Dec. 31, 2023 the IRS issued its Revenue Agent’s Report related to the federal tax loss carryback claim. The Company materially agrees with the report and re-recognized the related benefit in December 2023. State Audits — 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, 2023, Xcel Energy’s earliest open tax years (subject to examination by state taxing authorities in its major operating jurisdictions) were as follows:
State |  | Tax Year(s) |  | Expiration
Colorado |  | 2014 - 2016 |  | March 2026
Colorado |  | 2019 |  | October 2024
Minnesota |  | 2014 - 2016 |  | September 2025
Minnesota |  | 2019 |  | May 2024
Texas |  | 2016, 2018 |  | May 2024
Texas |  | 2017 |  | July 2025
Texas |  | 2019 |  | August 2024
Wisconsin |  | 2016 - 2018 |  | May 2024
Wisconsin |  | 2019 |  | October 2024
•In 2020, Minnesota began an audit of tax years 2015 - 2018. In 2022, the state of Minnesota issued its audit report and in 2023, the Company agreed to the report without any material adjustments. •In 2021, Texas began an audit of tax years 2016 - 2019. As of Dec. 31, 2023, no material adjustments have been proposed. •In 2021, Wisconsin began an audit of tax years 2016-2019. As of Dec. 31, 2023, no material adjustments have been proposed. •No other state income tax audits are in progress for its major operating jurisdictions as of Dec. 31, 2023. Unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the ETR. In addition, the unrecognized tax benefit balance includes temporary tax positions for which deductibility is highly certain, but for which there is uncertainty about the timing. A change in the period of deductibility would not affect the ETR but would accelerate the payment to the taxing authority. Unrecognized tax benefits - permanent vs. temporary:
(Millions of Dollars) |  | Dec. 31, 2023 |  | Dec. 31, 2022
Unrecognized tax benefit — Permanent tax positions |  | $ | 41 |  |  | $ | 55 |
Unrecognized tax benefit — Temporary tax positions |  | — |  |  | 12 |
Total unrecognized tax benefit |  | $ | 41 |  |  | $ | 67 |
Changes in unrecognized tax benefits:
(Millions of Dollars) |  | 2023 |  | 2022 |  | 2021
Balance at Jan. 1 |  | $ | 67 |  |  | $ | 58 |  |  | $ | 52 |
Additions based on tax positions related to the current year |  | 5 |  |  | 7 |  |  | 5 |
Additions for tax positions of prior years |  | 1 |  |  | 6 |  |  | 2 |
Reductions for tax positions of prior years |  | (29) |  |  | (1) |  |  | (1) |
Reductions for tax positions related to settlements with taxing authorities |  | (1) |  |  | (1) |  |  | — |
Reductions for tax positions related to statute of limitations |  | (2) |  |  | (2) |  |  | — |
Balance at Dec. 31 |  | $ | 41 |  |  | $ | 67 |  |  | $ | 58 |
Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:
(Millions of Dollars) |  | Dec. 31, 2023 |  | Dec. 31, 2022
NOL and tax credit carryforwards |  | $ | (35) |  |  | $ | (40) |
As IRS audits resume and as state audits progress, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $14 million in the next 12 months. Payable for interest related to unrecognized tax benefits is partially offset by the interest benefit associated with NOL and tax credit carryforwards. Interest payable related to unrecognized tax benefits:
(Millions of Dollars) |  | 2023 |  | 2022 |  | 2021
Payable for interest related to unrecognized tax benefits at Jan. 1 |  | $ | (4) |  |  | $ | (3) |  |  | $ | (3) |
Interest benefit (expense) related to unrecognized tax benefits |  | 3 |  |  | (1) |  |  | — |
Payable for interest related to unrecognized tax benefits at Dec. 31 |  | $ | (1) |  |  | $ | (4) |  |  | $ | (3) |
No penalties were accrued related to unrecognized tax benefits as of Dec. 31, 2023, 2022 or 2021.

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