Income Taxes

PSEG’s, PSE&G’s and Power's effective tax rates for the three months and nine months ended September 30, 2015 and 2014 were as follows:




	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2015	2014	2015	2014
PSEG	39.4%	37.0%	38.8%	37.8%
PSE&G	38.2%	38.5%	38.7%	38.6%
Power	40.3%	39.4%	38.6%	38.6%

For the three months ended September 30, 2015, PSE&G's effective tax rate was lower than the statutory tax rate of 40.85% due primarily to the beneficial impact of plant related flow-through items.

For the nine months ended September 30, 2015, PSEG's and Power’s effective tax rates were lower than the statutory tax rate of 40.85% primarily due to a manufacturing deduction under Section 199 of the Internal Revenue Code (IRC) and the tax benefit associated with the income tax rate differential of carrying back federal net operating tax losses under section 172(f) of the IRC. PSE&G's effective tax rate was lower than the statutory tax rate due primarily to the beneficial impact of plant related flow-through items.

For the three months and nine months ended September 30, 2015, as compared to the same periods in the prior year, PSEG's increase was due primarily to the absence of the 2014 audit settlement.

In August 2014, PSEG received notice from the Internal Revenue Service (IRS) that the audit settlement covering tax years 2007 through 2010 had been approved by the Joint Committee on Taxation. This effectively settled all issues with the IRS through 2010. In September 2014, PSEG received refunds from the IRS totaling $121 million, representing the net settlement of all disputed amounts, including interest, through the tax year 2010. As a result of the settlement of this audit, PSEG recorded a $12 million reduction of tax expense in the quarter ended September 30, 2014.

Income Taxes [Line Items]

Income Taxes

PSEG’s, PSE&G’s and Power's effective tax rates for the three months and nine months ended September 30, 2015 and 2014 were as follows:




	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2015	2014	2015	2014
PSEG	39.4%	37.0%	38.8%	37.8%
PSE&G	38.2%	38.5%	38.7%	38.6%
Power	40.3%	39.4%	38.6%	38.6%

For the three months ended September 30, 2015, PSE&G's effective tax rate was lower than the statutory tax rate of 40.85% due primarily to the beneficial impact of plant related flow-through items.

For the nine months ended September 30, 2015, PSEG's and Power’s effective tax rates were lower than the statutory tax rate of 40.85% primarily due to a manufacturing deduction under Section 199 of the Internal Revenue Code (IRC) and the tax benefit associated with the income tax rate differential of carrying back federal net operating tax losses under section 172(f) of the IRC. PSE&G's effective tax rate was lower than the statutory tax rate due primarily to the beneficial impact of plant related flow-through items.

For the three months and nine months ended September 30, 2015, as compared to the same periods in the prior year, PSEG's increase was due primarily to the absence of the 2014 audit settlement.

In August 2014, PSEG received notice from the Internal Revenue Service (IRS) that the audit settlement covering tax years 2007 through 2010 had been approved by the Joint Committee on Taxation. This effectively settled all issues with the IRS through 2010. In September 2014, PSEG received refunds from the IRS totaling $121 million, representing the net settlement of all disputed amounts, including interest, through the tax year 2010. As a result of the settlement of this audit, PSEG recorded a $12 million reduction of tax expense in the quarter ended September 30, 2014.