Income tax Income tax (Notes)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

Income tax expense for interim periods is based on the estimated annual effective tax rate, which includes tax credits, regulatory flow-through adjustments, and other items, applied to the Company’s year-to-date, pre-tax income. The significant differences between the Federal statutory tax rate and PGE’s effective tax rate are reflected in the following table:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Federal statutory tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Federal tax credits*	(11.2)		(9.5)		(10.0)		(10.0)
State and local taxes, net of federal tax benefit	8.3		9.0		8.8		9.0
Flow-through depreciation and cost basis differences	(0.6)		0.6		0.5		0.6
Amortization of excess deferred income tax	(3.8)		(4.1)		(3.7)		(4.3)
Other	7.1		(0.1)		0.9		(0.1)
Effective tax rate	20.8	%	16.9	%	17.5	%	16.2	%

* Federal tax credits primarily consist of production tax credits (PTCs) earned from Company-owned wind-powered generating facilities. PTCs are earned based on a per-kilowatt hour rate and, as a result, the annual amount of PTCs earned will vary based on weather conditions and availability of the facilities. PTCs are earned for 10 years from the in-service dates of the corresponding facilities. PGE’s PTC generation will end at various dates through 2033.

Carryforwards

Federal tax credit carryforwards as of June 30, 2023 and December 31, 2022 were $100 million and $102 million, respectively. These credits primarily consist of PTCs, which will expire at various dates through 2043. PGE believes that it is more likely than not that its deferred income tax assets as of June 30, 2023 will be realized; accordingly, no valuation allowance has been recorded. As of June 30, 2023, and December 31, 2022, PGE had no material unrecognized tax benefits.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022 (IRA) was signed into law on August 16, 2022. There was no immediate impact of the IRA to PGE’s results of operations for the three and six months ended June 30, 2023. PGE is closely monitoring guidance from the IRS regarding the enhanced energy credits available under the IRA. PGE expects to be able to generate and utilize increased energy credits in future periods, and continues to hold that it is more likely than not that the deferred income tax assets will be realized.