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Income Tax Expense | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Tax Expense [Text Block] | INCOME TAX EXPENSE
Income Tax Expense |  |  |
Year Ended December 31 | 2015 |  | 2014 |  | 2013 |
Millions |  |  |
Current Tax Expense |  |  |
Federal (a) | — |  | $1.1 | — |
State (a) | $0.2 | 2.9 | $0.1
Total Current Tax Expense | 0.2 |  | 4.0 |  | 0.1 |
Deferred Tax Expense |  |  |
Federal | 19.4 |  | 25.3 |  | 22.9 |
State | 6.5 |  | 8.2 |  | 6.5 |
Investment Tax Credit Amortization | (0.8 | ) | (0.8 | ) | (0.8 | )
Total Deferred Tax Expense | 25.1 |  | 32.7 |  | 28.6 |
Total Income Tax Expense |  | $25.3 |  |  | $36.7 |  |  | $28.7 |
(a) | For the years ended December 31, 2015, 2014, and 2013, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015, the Tax Increase Prevention Act of 2014 and the American Taxpayer Relief Act of 2012. The federal and state NOLs will be carried forward to offset future taxable income. The year ended December 31, 2014 includes the resolution of an Internal Revenue Service examination for tax years 2005 through 2009 and the impacts of initiatives implemented on the 2013 federal and state tax returns to utilize tax carryforwards that may have expired.
Reconciliation of Taxes from Federal Statutory |  |  |
Rate to Total Income Tax Expense |  |  |
Year Ended December 31 | 2015 |  | 2014 |  | 2013 |
Millions |  |  |
Income Before Non-Controlling Interest and Income Taxes |  | $166.8 |  |  | $162.2 |  |  | $133.4 |
Statutory Federal Income Tax Rate | 35 | % | 35 | % | 35 | %
Income Taxes Computed at 35 percent Statutory Federal Rate |  | $58.4 |  |  | $56.8 |  |  | $46.7 |
Increase (Decrease) in Tax Due to: |  |  |
State Income Taxes – Net of Federal Income Tax Benefit | 4.4 |  | 7.2 |  | 4.3 |
Regulatory Differences for Utility Plant | (0.6 | ) | (3.5 | ) | (2.2 | )
Production Tax Credits | (37.0 | ) | (23.7 | ) | (19.2 | )
Other | 0.1 |  | (0.1 | ) | (0.9 | )
Total Income Tax Expense |  | $25.3 |  |  | $36.7 |  |  | $28.7 |
The effective tax rate on income was 15.2 percent for 2015 (22.6 percent for 2014; 21.5 percent for 2013). The 2015, 2014, and 2013 effective rates were primarily impacted by production tax credits and by the deduction for AFUDC–Equity (included in Regulatory Differences for Utility Plant in the preceding table). NOTE 15. INCOME TAX EXPENSE (Continued)
Deferred Tax Assets and Liabilities |  |
As of December 31 | 2015 |  | 2014 |
Millions |  |
Deferred Tax Assets |  |
Employee Benefits and Compensation |  | $105.4 |  |  | $102.2 |
Property Related | 126.6 |  | 102.7 |
NOL Carryforwards | 186.4 |  | 156.5 |
Tax Credit Carryforwards | 164.8 |  | 95.7 |
Power Purchase Agreements | 73.0 |  | 51.8 |
Other | 21.8 |  | 17.0 |
Gross Deferred Tax Assets | 678.0 |  | 525.9 |
Deferred Tax Asset Valuation Allowance | (31.6 | ) | (22.1 | )
Total Deferred Tax Assets |  | $646.4 |  |  | $503.8 |
Deferred Tax Liabilities |  |
Property Related |  | $1,053.0 |  |  | $848.8 |
Regulatory Asset for Benefit Obligations | 89.4 |  | 89.9 |
Unamortized Investment Tax Credits | 26.0 |  | 10.3 |
Partnership Basis Differences | 47.8 |  | 41.9 |
Other | 10.0 |  | 16.1 |
Total Deferred Tax Liabilities |  | $1,226.2 |  |  | $1,007.0 |
Net Deferred Income Taxes |  | $579.8 |  |  | $503.2 |
Recorded as: |  |
Net Current Deferred Tax Assets (a) | — |  | $7.5
Net Long-Term Deferred Tax Liabilities |  | $579.8 |  | 510.7 |
Net Deferred Income Taxes |  | $579.8 |  |  | $503.2 |
(a) | For discussion of classification of deferred income taxes see Note 1. Operations and Significant Accounting Policies - New Accounting Standards - Balance Sheet Classification of Deferred Taxes.
NOL and Tax Credit Carryforwards |  |
As of December 31 | 2015 | 2014 |
Millions |  |
Federal NOL Carryforwards (a) | $493.0 |  | $413.7 |
Federal Tax Credit Carryforwards | $113.6 | $59.3
State NOL Carryforwards (a) | $228.6 | $184.7
State Tax Credit Carryforwards (b) | $20.0 | $14.7
(a) | Pretax amounts.
(b) | Net of a $31.2 million valuation allowance as of December 31, 2015 ($21.7 million as of December 31, 2014).
The federal NOL and tax credit carryforward periods expire between 2030 and 2035. We expect to fully utilize the federal NOL and federal tax credit carryforwards; therefore no federal valuation allowance has been recognized as of December 31, 2015. The state NOL and tax credit carryforward periods expire between 2025 and 2045. We have established a valuation allowance against certain state NOL and tax credits that we do not expect to utilize before their expiration. NOTE 15. INCOME TAX EXPENSE (Continued)
Gross Unrecognized Income Tax Benefits | 2015 |  | 2014 |  | 2013 |
Millions |  |  |
Balance at January 1 |  | $2.0 |  |  | $1.2 |  |  | $2.7 |
Additions for Tax Positions Related to the Current Year | 0.5 |  | — |  | 0.1 |
Additions for Tax Positions Related to Prior Years | 0.7 |  | 1.0 |  | 1.3 |
Reductions for Tax Positions Related to Prior Years | (0.7 | ) | — |  | — |
Reductions for Settlements | — |  | — |  | (2.9 | )
Lapse of Statute | (0.1 | ) | (0.2 | ) | — |
Balance as of December 31 |  | $2.4 |  |  | $2.0 |  |  | $1.2 |
Unrecognized tax benefits are the differences between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the “more-likely-than-not” criteria. The unrecognized tax benefit balance includes permanent tax positions which, if recognized would affect the annual effective income tax rate. In addition, the unrecognized tax benefit balance includes temporary tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. A change in the period of deductibility would not affect the effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The gross unrecognized tax benefits as of December 31, 2015, included $0.5 million of net unrecognized tax benefits which, if recognized, would affect the annual effective income tax rate. The decrease in the unrecognized tax benefit balance of $2.9 million in 2013 was due to the removal of our uncertain tax positions for positions effectively settled with the Internal Revenue Service for tax years 2005 through 2009. As of December 31, 2015, we had no accrued interest (none as of December 31, 2014; $0.5 million as of December 31, 2013) related to unrecognized tax benefits included on our Consolidated Balance Sheet due to our NOL carryforwards. We classify interest related to unrecognized tax benefits as interest expense and tax-related penalties in operating expenses on our Consolidated Statement of Income. Interest expense related to unrecognized tax benefits on our Consolidated Statement of Income was immaterial in 2015 (immaterial in 2014, and in 2013). There were no penalties recognized in 2015, 2014 or 2013. The unrecognized tax benefit amounts have been presented as reductions to the tax benefits associated with NOL and tax credit carryforwards on our Consolidated Balance Sheet. No material changes to unrecognized tax benefits are expected during the next 12 months. ALLETE and its subsidiaries file a consolidated federal income tax return as well as combined and separate state income tax returns in various jurisdictions. ALLETE has no open federal or state audits, and is no longer subject to federal examination for years before 2012 or state examination for years before 2011.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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