Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

PSEG recorded the following amounts related to its unrecognized tax benefits, which were primarily comprised of amounts recorded for PSE&G, Power and Energy Holdings:




2015	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2015	$	332		$	165		$	70		$	95
Increases as a Result of Positions Taken in a Prior Period	87			55			28			4
Decreases as a Result of Positions Taken in a Prior Period	(50		)	(43		)	(6		)	(1		)
Increases as a Result of Positions Taken during the Current Period	28			5			23			—
Decreases as a Result of Positions Taken during the Current Period	(1		)	(1		)	—			—
Decreases as a Result of Settlements with Taxing Authorities	(10		)	—			(4		)	(5		)
Decreases due to Lapses of Applicable Statute of Limitations	—			—			—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2015	$	386		$	181		$	111		$	93
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(264		)	(162		)	(68		)	(34		)
Regulatory Asset—Unrecognized Tax Benefits	(27		)	(27		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	95		$	(8	)	$	43		$	59




2014	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2014	$	478		$	208		$	156		$	110
Increases as a Result of Positions Taken in a Prior Period	82			65			17			—
Decreases as a Result of Positions Taken in a Prior Period	(190		)	(92		)	(80		)	(18		)
Increases as a Result of Positions Taken during the Current Period	30			16			9			5
Decreases as a Result of Positions Taken during the Current Period	(8		)	—			(8		)	—
Decreases as a Result of Settlements with Taxing Authorities	(60		)	(32		)	(24		)	(2		)
Decreases due to Lapses of Applicable Statute of Limitations	—			—			—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2014	$	332		$	165		$	70		$	95
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(225		)	(138		)	(52		)	(35		)
Regulatory Asset—Unrecognized Tax Benefits	(27		)	(27		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	80		$	—		$	18		$	60




2013	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2013	$	402		$	163		$	134		$	101
Increases as a Result of Positions Taken in a Prior Period	83			39			33			11
Decreases as a Result of Positions Taken in a Prior Period	(30		)	(9		)	(19		)	(2		)
Increases as a Result of Positions Taken during the Current Period	23			15			8			—
Decreases as a Result of Positions Taken during the Current Period	—			—			—			—
Decreases as a Result of Settlements with Taxing Authorities	—			—			—			—
Decreases due to Lapses of Applicable Statute of Limitations	—			—			—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2013	$	478		$	208		$	156		$	110
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(320		)	(177		)	(105		)	(37		)
Regulatory Asset—Unrecognized Tax Benefits	(30		)	(30		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	128		$	1		$	51		$	73

Interest And Penalties Related To Uncertain Tax Positions

PSEG and its subsidiaries include accrued interest and penalties related to uncertain tax positions required to be recorded, as Income Tax Expense in the Consolidated Statements of Operations. Accumulated interest and penalties that are recorded on the Consolidated Balance Sheets on uncertain tax positions were as follows:




	Accumulated Interest and Penalties on Uncertain Tax Positions as of December 31,
	2015		2014		2013
	Millions
PSE&G	$	20	$	15	$	6
Power	6		9		(2		)
Energy Holdings	40		45		44
Total	$	66	$	69	$	48

Possible Decrease In Total Unrecognized Tax Benefits Including Interest

It is reasonably possible that total unrecognized tax benefits will decrease within the next twelve months due to either agreements with various taxing authorities upon audit or the expiration of the Statute of Limitations. These potential decreases are as follows:




Possible Decrease in Total Unrecognized Tax Benefits	Over the next 12 Months
	Millions
PSEG	$	158
PSE&G	$	102
Power	$	42

Description Of Income Tax Years By Material Jurisdictions

A description of income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are:




	PSEG	PSE&G	Power
United States
Federal	2011-2014	N/A	N/A
New Jersey	2006-2014	2006-2014	N/A
Pennsylvania	2006-2014	2006-2014	N/A
Connecticut	2002-2014	N/A	N/A
Texas	2007-2014	N/A	N/A
California	2003-2014	N/A	N/A
New York	2011-2014	N/A	2011-2014

PSEG [Member]

Income Taxes [Line Items]

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:




	Years Ended December 31,
PSEG	2015			2014			2013
	Millions
Net Income	$	1,679		$	1,518		$	1,243
Income Taxes:
Operating Income:
Current Expense:
Federal	$	243		$	335		$	487
State	85			58			42
Total Current	328			393			529
Deferred Expense:
Federal	540			262			147
State	104			260			118
Total Deferred	644			522			265
Investment Tax Credit (ITC)	29			23			18
Total Income Taxes	$	1,001		$	938		$	812
Pre-Tax Income	$	2,680		$	2,456		$	2,055
Tax Computed at Statutory Rate @ 35%	$	938		$	860		$	719
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	129			145			108
Uncertain Tax Positions	7			(9		)	10
Manufacturing Deduction	(10		)	(16		)	(9		)
NDT Fund	7			14			12
Plant-Related Items	(20		)	(13		)	(14		)
Tax Credits	(13		)	(14		)	(9		)
Audit Settlement	—			(12		)	—
Nuclear Decommissioning Tax Carryback	(33		)	—			—
Other	(4		)	(17		)	(5		)
Sub-Total	63			78			93
Total Income Tax Provision	$	1,001		$	938		$	812
Effective Income Tax Rate	37.4		%	38.2		%	39.5		%

Deferred Income Taxes

The following is an analysis of deferred income taxes for PSEG:




	As of December 31,
PSEG	2015		2014
	Millions
Deferred Income Taxes
Assets:
Current (net)	$	—	$	11
Noncurrent
OPEB	$	256	$	269
Related to Uncertain Tax Position	160		160
Securitization-Overcollection	27		55
Total Noncurrent Assets	$	443	$	484
Total Assets	$	443	$	495
Liabilities:
Current (net)
Securitization	$	—	$	163
Other	—		10
Total Current Liabilities (net)	$	—	$	173
Noncurrent:
Plant-Related Items	$	6,174	$	5,422
New Jersey Corporate Business Tax	615		535
Leasing Activities	612		623
Pension Costs	218		219
AROs and NDT Fund	393		419
Taxes Recoverable Through Future Rate (net)	191		196
Other	244		240
Total Noncurrent Liabilities	$	8,447	$	7,654
Total Liabilities	$	8,447	$	7,827
Summary of Accumulated Deferred Income Taxes:
Net Current Deferred Income Tax Assets	$	—	$	11
Net Current Deferred Income Tax Liabilities	$	—	$	173
Net Noncurrent Deferred Income Tax Liabilities	$	8,004	$	7,170
ITC	162		133
Net Total Noncurrent Deferred Income Taxes and ITC	$	8,166	$	7,303

The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. Also, the deferred tax effect of AROs is presented net of the deferred tax effect of the associated funding of those obligations.

PSEG has early adopted the accounting standards update Balance Sheet Classification of Deferred Taxes as of December 31, 2015. This standard requires noncurrent classification of all deferred tax assets and liabilities. For further details refer to Note 2. Recent Accounting Standards.

PSE&G [Member]

Income Taxes [Line Items]

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:




	Years Ended December 31,
PSE&G	2015			2014			2013
	Millions
Net Income	$	787		$	725		$	612
Income Taxes:
Operating Income:
Current Expense:
Federal	$	32		$	124		$	183
State	52			16			—
Total Current	84			140			183
Deferred Expense:
Federal	325			214			101
State	52			84			92
Total Deferred	377			298			193
ITC	9			11			5
Total Income Taxes	$	470		$	449		$	381
Pre-Tax Income	$	1,257		$	1,174		$	993
Tax Computed at Statutory Rate @ 35%	$	440		$	411		$	348
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	67			65			59
Uncertain Tax Positions	(14		)	—			—
Plant-Related Items	(20		)	(13		)	(14		)
Tax Credits	(6		)	(7		)	(6		)
Audit Settlement	—			1			—
Other	3			(8		)	(6		)
Sub-Total	30			38			33
Total Income Tax Provision	$	470		$	449		$	381
Effective Income Tax Rate	37.4		%	38.2		%	38.4		%

Deferred Income Taxes

The following is an analysis of deferred income taxes for PSE&G:




	As of December 31,
PSE&G	2015		2014
	Millions
Deferred Income Taxes
Assets:
Current (net)	$	—	$	24
Noncurrent:
OPEB	$	164	$	173
Securitization-Overcollection	27		55
Total Noncurrent Assets	$	191	$	228
Total Assets	$	191	$	252
Liabilities:
Current (net)
Securitization	$	—	$	163
Other	—		2
Total Current Liabilities (net)	$	—	$	165
Noncurrent:
Plant-Related Items	$	4,435	$	3,869
New Jersey Corporate Business Tax	312		268
Conservation Costs	40		48
Pension Costs	262		269
Taxes Recoverable Through Future Rate (net)	191		196
Other	54		84
Total Noncurrent Liabilities	$	5,294	$	4,734
Total Liabilities	$	5,294	$	4,899
Summary of Accumulated Deferred Income Taxes:
Net Current Deferred Income Tax Assets	$	—	$	24
Net Current Deferred Income Tax Liabilities	$	—	$	165
Net Noncurrent Deferred Income Tax Liabilities	$	5,103	$	4,506
ITC	78		69
Net Total Noncurrent Deferred Income Taxes and ITC	$	5,181	$	4,575

The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals.

Power [Member]

Income Taxes [Line Items]

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of reported income tax expense for Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:




	Years Ended December 31,
Power	2015			2014			2013
	Millions
Net Income	$	856		$	760		$	644
Income Taxes:
Operating Income:
Current Expense:
Federal	$	220		$	231		$	262
State	30			39			40
Total Current	250			270			302
Deferred Expense:
Federal	189			163			69
State	52			48			35
Total Deferred	241			211			104
ITC	20			10			13
Total Income Taxes	$	511		$	491		$	419
Pre-Tax Income	$	1,367		$	1,251		$	1,063
Tax Computed at Statutory Rate @ 35%	$	478		$	438		$	372
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	59			58			51
Manufacturing Deduction	(10		)	(16		)	(10		)
NDT Fund	7			15			12
Tax Credits	(7		)	(6		)	(2		)
Uncertain Tax Positions	22			(8		)	3
Audit Settlement	—			(4		)	—
Nuclear Decommissioning Tax Carryback	(33		)	—			—
Other	(5		)	14			(7		)
Sub-Total	33			53			47
Total Income Tax Provision	$	511		$	491		$	419
Effective Income Tax Rate	37.4		%	39.2		%	39.4		%

Deferred Income Taxes

The following is an analysis of deferred income taxes for Power:




	As of December 31,
Power	2015		2014
	Millions
Deferred Income Taxes
Assets:
Current	$	—	$	—
Noncurrent:
Pension Costs	$	56	$	52
Contractual Liabilities & Environmental Costs	18		18
Related to Uncertain Tax Positions	47		23
Other	—		70
Total Noncurrent Assets	$	121	$	163
Total Assets	$	121	$	163
Liabilities:
Current (net)	$	—	$	43
Noncurrent:
Plant-Related Items	$	1,736	$	1,552
New Jersey Corporate Business Tax	243		192
AROs and NDT Fund	395		420
Other	10		—
Total Noncurrent Liabilities	$	2,384	$	2,164
Total Liabilities	$	2,384	$	2,207
Summary of Accumulated Deferred Income Taxes:
Net Current Deferred Income Tax Assets	$	—	$	—
Net Current Deferred Income Tax Liabilities	$	—	$	43
Net Noncurrent Deferred Income Tax Liabilities	$	2,263	$	2,001
ITC	84		64
Net Total Noncurrent Deferred Income Taxes and ITC	$	2,347	$	2,065

In the above table, the deferred tax effect of asset retirement obligations is presented net of the deferred tax effect of the associated funding of those obligations.