9. INCOME TAX

A reconciliation between income taxes calculated at the statutory federal tax rate and the provision for income taxes reflected in the consolidated financial statements is as follows:



Dollars in thousands	2012			2011			2010
Income taxes at federal statutory rate	$	36,386		$	37,550		$	42,745
Increase (decrease):
Current state income tax, net of federal tax benefit	4,773			4,945			5,803
Amortization of investment and energy tax credits	(350		)	(442		)	(525		)
Differences required to be flowed-through by regulatory commissions	1,718			1,647			1,647
Gains on company and trust-owned life insurance	(800		)	(786		)	(715		)
Regulatory asset impairment	2,700			—			—
Other, net	(323		)	468			507
Total provision for income taxes	$	44,104		$	43,382		$	49,462
Effective tax rate	42.4		%	40.4		%	40.5		%

The increase in the effective income tax rate for 2012 compared to the same period in 2011 was primarily due to the one-time, after-tax charge of $2.7 million in 2012 related to the OPUC's rate case order that the Company could not recover deferred amounts resulting from the 2009 Oregon tax rate change.

The provision (benefit) for current and deferred income taxes consists of the following:



In thousands	2012		2011			2010
Current
Federal	$	1,693	$	130		$	(28,592	)
State	99		(929		)	1,441
	1,792		(799		)	(27,151		)
Deferred
Federal	31,767		35,481			69,159
State	10,545		8,700			7,454
	42,312		44,181			76,613
Total provision for income taxes	$	44,104	$	43,382		$	49,462
Total income taxes paid	$	2,979	$	1,756		$	22,600

The following table summarizes the total provision (benefit) for income taxes for the regulated utility and non-utility business segments for the three years ended December 31:



In thousands	2012			2011			2010
Regulated utility:
Current	$	1,909		$	(4,646	)	$	(1,464	)
Deferred	39,864			50,152			47,741
Deferred investment and energy tax credits	(350		)	(422		)	(525		)
	41,423			45,084			45,752
Non-utility business segments:
Current	(117		)	3,846			(25,687		)
Deferred	2,798			(5,548		)	29,397
	2,681			(1,702		)	3,710
Total provision for income taxes	$	44,104		$	43,382		$	49,462

The following table summarizes the tax effect of significant items comprising our deferred income tax accounts for the two years ended December 31:



In thousands	2012			2011
Deferred tax liabilities:
Plant and property	$	322,527		$	292,235
Regulatory adjustment for income taxes paid	—			2,106
Regulatory income tax assets	60,253			65,755
Regulatory liabilities	51,424			35,638
Non-regulated deferred tax liabilities	43,824			43,373
Total	$	478,028		$	439,107
Deferred tax assets:
Regulatory assets	$	(7,724	)	$	4,727
Unfunded pension and postretirement obligations	6,024			5,119
Non-regulated deferred tax assets	(1,235		)	1,161
Alternative minimum tax credit carryforward	1,986			1,626
Loss and credit carryforwards	32,997			14,255
Total	32,048			26,888
Deferred income tax liabilities, net	445,980			412,219
Deferred investment tax credits	624			990
Deferred income taxes and investment tax credits	$	446,604		$	413,209

We have determined that we are more likely than not to realize all recorded deferred tax assets as of December 31, 2012.

On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act), which allows 100% bonus depreciation for qualified property placed in service between September 9, 2010 through December 31, 2011. It also extended the 50% bonus depreciation deduction to qualifying property placed in service through 2012. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (“the Act”). This Act extended 50% bonus depreciation under §168(k) through 2013 for MACRS property with a recovery period of 20 years or less.

The Company estimates that it has net operating loss (NOL) carryforwards to 2013 of $83.4 million for federal and $76.6 million for Oregon. The NOL carryforwards will be carried forward to reduce our current tax liability in future years. We anticipate that we will be able to utilize the entire NOL carryforwards before they expire in 20 years for federal and 15 years for Oregon.

Uncertain tax positions are accounted for in accordance with accounting standards that require management’s assessment of the expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. Until such positions are sustained by the taxing authorities, we would not recognize the tax benefits resulting from such positions and would report the tax effect as a liability in the Company’s consolidated balance sheet. As of December 31, 2012, we had no reserves for uncertain tax positions.

The Company settled the Oregon Department of Revenue (ODOR) examination of tax years 2006 through 2009. This settlement resulted in an additional $0.2 million state tax expense, including interest, but that amount was offset by a corresponding refund claim with the state of California. As of December 31, 2012, the Company is subject to examination by the Internal Revenue Service for the years 2009 through 2012.

Interest and penalties related to any future income tax deficiencies are recorded within income tax expense in the consolidated statements of income.