Company: WELPM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000107815-25-000207
Chunk: 118

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 118
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 21.6 %The effective tax rates for the three and nine months ended September 30, 2025, differ from the United States statutory federal income tax rate of 21%, primarily due to PTCs, the impact of the deferred tax benefits associated with the Tax Legislation, as discussed in more detail below, the impact of the income tax benefits associated with AFUDC-Equity, driven by continued capital investment, and the flow through of tax repairs in connection with our rate order approved by the PSCW, effective January 1, 2025. These items were partially offset by state income taxes.The effective tax rates for the three and nine months ended September 30, 2024, do not materially differ from the United States statutory federal income tax rate of 21%. This is primarily due to the impact of the deferred tax benefits associated with the Tax Legislation, as discussed in more detail below, and PTCs, offset by state income taxes.The Tax Legislation required us to remeasure the deferred income taxes at our utility segment, and we began to amortize the resulting excess protected deferred income taxes beginning in 2018 in accordance with normalization requirements (see federal excess deferred tax amortization lines above). 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, WEC Energy Group entered into agreements in October 2024, April 2025, and September 2025, to sell the majority of the PTCs we generate in 2025 and 2026 to third parties. In May 2025, WEC Energy Group entered into an agreement to sell the majority of our remaining unsold PTCs we generated in 2024 to a third party. In September 2025, WEC Energy Group entered into an agreement to sell substantially all of the ITCs we generate in 2025 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.

09/30/2025 Form 10-Q15