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Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Summary of Significant Factors Impact on Difference Between Effective Tax Rate and Federal Statutory Rate

The following table summarizes the significant factors impacting the difference between our effective tax rate and the federal statutory rate for the three and nine months ended September 30 (dollars in thousands):

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Federal income taxes at statutory rates

 

$

1,876

 

 

 

21.0

%

 

$

1,204

 

 

 

21.0

%

 

$

22,173

 

 

 

21.0

%

 

$

15,167

 

 

 

21.0

%

Increase (decrease) in tax resulting from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect of regulatory treatment of utility
      plant differences

 

 

(3,277

)

 

 

(36.7

)

 

 

(2,427

)

 

 

(42.3

)

 

 

(9,721

)

 

 

(9.2

)

 

 

(7,244

)

 

 

(10.0

)

State income tax expense

 

 

143

 

 

 

1.6

 

 

 

(363

)

 

 

(6.3

)

 

 

975

 

 

 

0.9

 

 

 

539

 

 

 

0.7

 

Non-plant excess deferred turnaround (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(8,476

)

 

 

(11.8

)

Settlement of prior year tax returns

 

 

(400

)

 

 

(4.5

)

 

 

524

 

 

 

9.1

 

 

 

(400

)

 

 

(0.4

)

 

 

1,565

 

 

 

2.2

 

Flow through related to deduction of meters
     and mixed service costs (2)

 

 

(5,277

)

 

 

(59.0

)

 

 

—

 

 

 

—

 

 

 

(5,277

)

 

 

(5.0

)

 

 

—

 

 

 

—

 

Settlement of equity awards

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

909

 

 

 

0.9

 

 

 

165

 

 

 

0.2

 

Other

 

 

1,503

 

 

 

16.8

 

 

 

1,921

 

 

 

33.5

 

 

 

471

 

 

 

0.4

 

 

 

(244

)

 

 

(0.3

)

Total income tax expense (benefit)

 

$

(5,432

)

 

 

(60.8

)%

 

$

859

 

 

 

15.0

%

 

$

9,130

 

 

 

8.6

%

 

$

1,472

 

 

 

2.0

%
(1)
In March 2020, the WUTC approved an all-party settlement agreement related to electric tax benefits that were set aside for Colstrip in the 2020 general rate case order. In the approved settlement agreement, the parties agreed to utilize $10.9 million ($8.4 million when tax-effected) of the electric tax benefits to offset costs associated with accelerating the depreciation of Colstrip Units 3 & 4, to reflect a remaining useful life of those units through December 31, 2025. In the second quarter 2020, the Company recorded a one-time increase to depreciation expense with an offsetting decrease to income tax expense.
(2)
With the approval of the Idaho and Washington general rate cases in September 2021, a change in tax methodology resulted in recognizing a flow through benefit related to meters and mixed service costs.