Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense for the years ended December 31 was as follows (in thousands):



	2018			2017		2016
Current:
Federal	$	5,454		$	13,124	$	1,838

Deferred:
Federal	5,958			1,004		20,690
Excess deferred tax amortization	(740		)	—		—
	$	5,218		$	1,004	$	20,690

Total income tax expense	$	10,672		$	14,128	$	22,528

Schedule of Deferred Tax Assets and Liabilities

The temporary differences, which gave rise to the net deferred tax liability, for the years ended December 31 were as follows (in thousands):



	2018			2017
Deferred tax assets:
Employee benefits	$	2,404		$	3,012
Regulatory liabilities	25,587			24,984
Other	2,317			1,678
Total deferred tax assets	30,308			29,674

Deferred tax liabilities:
Accelerated depreciation and other plant related differences	(125,594		)	(122,002		)
Regulatory assets	(7,147		)	(7,008		)
Employee benefits	(2,719		)	(2,595		)
Deferred costs	(8,572		)	(8,447		)
Other	(285		)	(240		)
Total deferred tax liabilities	(144,317		)	(140,292		)

Net deferred tax liability	$	(114,009	)	$	(110,618	)

Schedule of Effective Income Tax Rate Reconciliation

The effective tax rate differs from the federal statutory rate for the years ended December 31, as follows:



	2018	2017	2016
Federal statutory rate	21.0%	35.0%	35.0%
Amortization of excess deferred and investment tax credits	(1.3)	(0.1)	(0.4)
AFUDC Equity	0.1	(1.0)	(0.9)
Flow-through adjustments ^(a)	(1.7)	(1.8)	(0.9)
Tax credits	—	—	(0.1)
TCJA corporate rate reduction ^(b)	2.5	(9.2)	—
Other	(1.7)	(1.3)	0.6
	18.9%	21.6%	33.3%

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(a)	Flow-through adjustments related primarily to an accounting method change for tax purposes that allows us to take a current tax deduction for repair costs. We recorded a deferred income tax liability in recognition of the temporary difference created between book and tax treatment and we flowed the tax benefit through to tax expense.

(b)

On December 22, 2017, the TCJA was signed into law reducing the federal corporate rate from 35% to 21%, effective January 1, 2018. The 2017 effective tax rate reduction reflects the revaluation of deferred income taxes required by the change. During the year ended December 31, 2018, we recorded approximately $0.9 million of additional tax expense associated with changes in the prior estimated impacts of TCJA related items.

Summary of Deferred Tax Liability Not Recognized

The following table reconciles the total amounts of unrecognized tax benefits, without interest, included in Other deferred credits and other liabilities on the accompanying Balance Sheet (in thousands):



	2018			2017
Unrecognized tax benefits at January 1	$	302		$	493
Additions for current year tax positions	—			13
Additions for prior year tax positions	2			—
Reductions for prior year tax positions	(55		)	(204		)
Unrecognized tax benefits at December 31	$	249		$	302