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INCOME TAXES | 6 Months Ended
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Jun. 30, 2026
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Statutory Rate Reconciliation 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 June 30, 2026 |  | Three Months Ended June 30, 2025
(in millions) |  | Amount |  | Effective Tax Rate |  | Amount |  | Effective Tax Rate
Income before income taxes |  | $ | 328.0 |  |  |  |  | $ | 262.5 |  |  |
United States federal statutory income tax rate |  | $ | 68.5 |  |  | 21.0 | % |  | $ | 55.6 |  |  | 21.0 | %
State and local income taxes net of federal tax effect (1) |  | 18.7 |  |  | 5.7 | % |  | 15.2 |  |  | 5.8 | %
Tax credits |  |  |  |  |  |  |  |
PTCs, net (2) |  | (38.8) |  |  | (12.0) | % |  | (40.5) |  |  | (15.3) | %
Other |  | (1.5) |  |  | (0.4) | % |  | (1.3) |  |  | (0.5) | %
Nontaxable or nondeductible items |  |  |  |  |  |  |  |
AFUDC-Equity (3) |  | (7.8) |  |  | (2.4) | % |  | (2.7) |  |  | (1.0) | %
Other |  | 2.2 |  |  | 0.7 | % |  | 2.3 |  |  | 0.9 | %
Other adjustments |  |  |  |  |  |  |  |
Federal excess deferred tax amortization (4) |  | (6.8) |  |  | (2.1) | % |  | (6.8) |  |  | (2.6) | %
Other, net |  | (7.5) |  |  | (2.3) | % |  | (2.3) |  |  | (0.9) | %
Total income tax expense |  | $ | 27.0 |  |  | 8.2 | % |  | $ | 19.5 |  |  | 7.4 | %
|  | Six Months Ended June 30, 2026 |  | Six Months Ended June 30, 2025
(in millions) |  | Amount |  | Effective Tax Rate |  | Amount |  | Effective Tax Rate
Income before income taxes |  | $ | 1,187.2 |  |  |  |  | $ | 1,048.7 |  |  |
United States federal statutory income tax rate |  | $ | 248.6 |  |  | 21.0 | % |  | $ | 220.4 |  |  | 21.0 | %
State and local income taxes net of federal tax effect (1) |  | 68.0 |  |  | 5.7 | % |  | 63.7 |  |  | 6.1 | %
Tax credits |  |  |  |  |  |  |  |
PTCs, net (2) |  | (168.5) |  |  | (14.2) | % |  | (160.6) |  |  | (15.3) | %
Other |  | (5.4) |  |  | (0.5) | % |  | (4.6) |  |  | (0.4) | %
Nontaxable or nondeductible items |  |  |  |  |  |  |  |
AFUDC-Equity (3) |  | (26.9) |  |  | (2.3) | % |  | (11.2) |  |  | (1.1) | %
Other |  | 8.0 |  |  | 0.7 | % |  | 5.7 |  |  | 0.5 | %
Changes in unrecognized tax benefits |  | — |  |  | — | % |  | 0.1 |  |  | — | %
Other adjustments |  |  |  |  |  |  |  |
Federal excess deferred tax amortization (4) |  | (25.3) |  |  | (2.1) | % |  | (25.5) |  |  | (2.5) | %
Other, net |  | (18.4) |  |  | (1.6) | % |  | (7.8) |  |  | (0.7) | %
Total income tax expense |  | $ | 80.1 |  |  | 6.7 | % |  | $ | 80.2 |  |  | 7.6 | %
(1) State taxes in Wisconsin made up the majority of the tax effect in this category. (2) PTCs are an inflation adjusted United States federal income tax credit for each kilowatt hour of electricity generated by certain renewable energy projects. (3) AFUDC-Equity represents the cost of capital (i.e. ROE) that is added to the construction cost of an asset while it is being built. The tax benefit for regulated utilities from AFUDC-Equity is a regulatory gross-up to allow the recovery of income taxes on the equity portion of construction costs, even though it is not a tax deductible expense. (4) The Tax Cuts and Jobs Act of 2017 required our regulated utilities to remeasure their deferred income taxes and we began to amortize the resulting excess deferred income taxes beginning in 2018, in accordance with normalization requirements. The decrease in income tax expense related to the amortization of the deferred tax benefits is offset by a decrease in revenue as the benefits are returned to customers, resulting in no impact on net income. The IRA contains a tax credit transferability provision that allows us to sell PTCs and ITCs produced after December 31, 2022, to third parties. Under this transferability provision, we entered into agreements to sell substantially all of the PTCs and ITCs we generated in 2025 to third parties. We have also entered into an agreement to sell the majority of PTCs that we expect to generate in 2026 to third parties. We elect to account for tax credits transferred under the scope of ASC 740. We include the discount from the sale of tax credits as a component of income tax expense. We also include any expected proceeds from the sale of tax credits in the evaluation of the realizability of deferred tax assets related to PTCs and ITCs. The sale of tax credits is presented in the operating activities section of the statements of cash flows consistent with the presentation of cash taxes paid. Cash Paid (Received) For Income Taxes, Net The table below is a summary of income taxes paid (received) by jurisdiction:
|  | Six Months Ended June 30
(in millions) |  | 2026 |  | 2025
Federal |  | $ | (94.9) |  | (1) | $ | (108.2) |  | (2)
State |  | 0.1 |  |  | (25.0) |  |
Total income taxes received, net |  | $ | (94.8) |  |  | $ | (133.2) |  |
(1) Amount includes $118.4 million of cash received, related to 2026 and 2025 PTCs that were sold to third parties. (2) Amount includes $113.0 million of cash received, related to 2025 and 2024 PTCs that were sold to third parties. The table below is a summary of income taxes received or paid (net of refunds) that exceeded five percent of total income taxes received or paid (net of refunds) by jurisdiction. There was no jurisdiction exceeding the threshold for the six months ended June 30, 2026.
(in millions) |  | Six Months Ended June 30, 2025
Wisconsin |  | $ | (25.0) |

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