v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
6. 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 reconciliation:
Six Months Ended June 30
(Millions of Dollars)20262025
Income before income taxes (domestic)$163 $123 
Federal statutory rate impact34 26 
(Decreases) increases in tax from:
Tax credits
PTCs (a)
(72)(61)
Regulatory adjustments (b)
AFUDC equity(7)(2)
Plant related excess deferred taxes(3)(4)
Other1 1 
State income taxes, net of federal tax effect (c)
3 2 
Other— 1 
Income tax benefit$(44)$(37)
Six Months Ended June 30
20262025
Federal statutory rate21.0 %21.0 %
(Decreases) increases in tax from:
Tax credits
PTCs (a)
(44.2)(49.7)
Other(0.2)(0.3)
Regulatory adjustments (b)
AFUDC equity(4.2)(1.5)
Plant related excess deferred taxes(1.9)(3.0)
Other0.6 0.8 
State income taxes, net of federal tax effect (c)
1.9 1.8 
Other— 0.8 
Effective income tax rate(27.0)%(30.1)%
(a)Wind PTCs (net of transfer discounts) are generally credited to customers (reduction to revenue) and do not materially impact earnings.
(b)Regulatory adjustments primarily relate to the credit of plant related excess deferred taxes to customers for tax rate changes as well as the capitalization of AFUDC equity for book purposes only. Income tax benefits associated with the credit of excess deferred taxes are offset by corresponding revenue reductions.
(c)State and local income taxes are primarily New Mexico state taxes.