Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes [Line Items]

Income Taxes

Income Taxes

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	2017			2016			2015
	Millions
Net Income	$	1,574		$	887		$	1,679
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	86		$	(74	)	$	243
State	(31		)	61			85
Total Current	55			(13		)	328
Deferred (Benefit) Expense:
Federal	(482		)	311			540
State	92			28			104
Total Deferred	(390		)	339			644
Investment Tax Credit (ITC)	29			85			29
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Pre-Tax Income	$	1,268		$	1,298		$	2,680
Tax Computed at Statutory Rate @ 35%	$	444		$	454		$	938
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	36			56			129
Uncertain Tax Positions	(3		)	(31		)	7
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(22		)	(25		)	(13		)
Audit Settlement	6			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(755		)	—			—
Other	5			(9		)	(4		)
Sub-Total	(750		)	(43		)	63
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Effective Income Tax Rate	(24.1		)%	31.7		%	37.4		%

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

	As of December 31,
PSEG	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	217		283
Related to Uncertain Tax Position	142		155
Total Noncurrent Assets	$	961	$	438
Liabilities:
Noncurrent:
Plant-Related Items	$	4,257	$	6,593
New Jersey Corporate Business Tax	674		674
Leasing Activities	384		565
AROs and NDT Fund	233		398
Pension Costs	123		197
Taxes Recoverable Through Future Rates (net)	80		208
Other	171		212
Total Noncurrent Liabilities	$	5,922	$	8,847
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	4,961	$	8,409
ITC	279		249
Net Total Noncurrent Deferred Income Taxes and ITC	$	5,240	$	8,658

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSEG is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	973		$	889		$	787
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(52	)	$	(153	)	$	32
State	(1		)	10			52
Total Current	(53		)	(143		)	84
Deferred Expense:
Federal	492			551			325
State	129			102			52
Total Deferred	621			653			377
ITC	(5		)	5			9
Total Income Tax Expense	$	563		$	515		$	470
Pre-Tax Income	$	1,536		$	1,404		$	1,257
Tax Computed at Statutory Rate @ 35%	$	538		$	491		$	440
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	83			72			67
Uncertain Tax Positions	(9		)	(18		)	(14		)
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(9		)	(7		)	(6		)
Provisional Deferred Tax Benefit - Tax Act	(10		)	—			—
Other	(7		)	(3		)	3
Sub-Total	25			24			30
Total Income Tax Expense	$	563		$	515		$	470
Effective Income Tax Rate	36.7		%	36.7		%	37.4		%

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

	As of December 31,
PSE&G	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	116		189
Total Noncurrent Assets	$	718	$	189
Liabilities:
Noncurrent:
Plant-Related Items	$	3,311	$	4,983
New Jersey Corporate Business Tax	378		385
Pension Costs	152		252
Conservation Costs	24		33
Taxes Recoverable Through Future Rates (net)	80		208
Other	86		118
Total Noncurrent Liabilities	$	4,031	$	5,979
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	3,313	$	5,790
ITC	78		83
Net Total Noncurrent Deferred Income Taxes and ITC	$	3,391	$	5,873

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSE&G is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	479		$	18		$	856
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	95		$	107		$	220
State	(17		)	40			30
Total Current	78			147			250
Deferred (Benefit) Expense:
Federal	(804		)	(222		)	189
State	(37		)	(68		)	52
Total Deferred	(841		)	(290		)	241
ITC	34			82			20
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Pre-Tax (Loss) Income	$	(250	)	$	(43	)	$	1,367
Tax Computed at Statutory Rate @ 35%	$	(88	)	$	(15	)	$	478
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(36		)	(18		)	59
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Tax Credits	(12		)	(18		)	(7		)
Uncertain Tax Positions	7			9			22
Audit Settlement	1			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(610		)	—			—
Other	3			(5		)	(5		)
Sub-Total	(641		)	(46		)	33
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Effective Income Tax Rate	291.6		%	141.9		%	37.4		%

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

	As of December 31,
Power	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Related to Uncertain Tax Positions	$	45	$	53
Pension Costs	40		68
Contractual Liabilities & Environmental Costs	12		18
Other	93		76
Total Noncurrent Assets	$	190	$	215
Liabilities:
Noncurrent:
Plant-Related Items	$	935	$	1,605
AROs and NDT Fund	235		400
New Jersey Corporate Business Tax	225		214
Total Noncurrent Liabilities	$	1,395	$	2,219
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	1,205	$	2,004
ITC	201		166
Net Total Noncurrent Deferred Income Taxes and ITC	$	1,406	$	2,170

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.

PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. See Note 6. Regulatory Assets and Liabilities.

In December 2017, the U.S. government enacted comprehensive tax legislation. The Tax Act establishes new tax laws that will take effect in 2018, including, but not limited to (1) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) a new limitation on deductible interest expense; (4) the repeal of the domestic production activity deduction; (5) limitations on the deductibility of certain executive compensation; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80% of taxable income. In addition, certain changes were made to the bonus depreciation rules that will impact 2017.

The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

PSEG, PSE&G and Power are subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change is enacted.

The majority of the current period activity was determined using the federal income tax rate of 35% and state income tax rate of 9%. As required under ASC 740, the ending 2017 deferred tax balances were adjusted to reflect the enacted lower tax rate, which resulted in a one-time, provisional deferred tax benefit of $755 million, including $610 million related to Power and $149 million related to Energy Holdings (including other impacts related to the new tax legislation, PSEG’s net non-cash provisional earnings benefit was $745 million, including $588 million related to Power and $147 million related to Energy Holdings). In addition, PSE&G had excess deferred taxes of approximately $2.1 billion as of December 31, 2017 and recorded a $2.9 billion revenue impact of these excess deferred taxes as Regulatory Liabilities where it is probable that refunds will be made to customers in future rates. The amount and timing of any such refund cannot be determined at this time.

For certain aspects of the Tax Act, which are discussed below, PSEG, PSE&G and Power made reasonable, good faith estimates for which provisional amounts were recorded.

PSEG’s accounting for the following elements of the Tax Act is incomplete. However, PSEG was able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017 for Power and PSE&G, including the information required to compute the applicable depreciable tax basis, and the impact on PSEG’s, PSE&G’s and Power’s deferred taxes associated with FIN 48 reserves.

Further, the Tax Act is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service (IRS), as well as state tax authorities. The Tax Act could also be subject to potential amendments and technical corrections which could impact PSEG, PSE&G and Power’s financial statements.

In December 2015, the U.S. government enacted the Protecting Americans from Tax Hikes Act of 2015 (2015 Tax Act). Among other provisions, the 2015 Tax Act included an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The provisions of the 2015 Tax Act have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. Those tax benefits would have otherwise been received over an estimated average 20 year period. However, the tax benefits have a negative impact on the rate base of several of PSE&G’s programs.

For the period beginning September 28, 2017, subject to the transition rules, the Tax Act has modified the bonus depreciation rules of the 2015 Tax Act. Subject to further guidance, it is expected that Power will be entitled to 100% expensing and bonus depreciation will no longer apply to PSE&G.

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:

2017	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2017	$	328		$	140		$	128		$	57
Increases as a Result of Positions Taken in a Prior Period	40			15			18			8
Decreases as a Result of Positions Taken in a Prior Period	(32		)	(11		)	(10		)	(13		)
Increases as a Result of Positions Taken during the Current Period	12			5			6			1
Decreases as a Result of Positions Taken during the Current Period	(1		)	(1		)	—			—
Decreases as a Result of Settlements with Taxing Authorities	—			—			—			—
Decreases due to Lapses of Applicable Statute of Limitations	(13		)	(13		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2017	$	334		$	135		$	142		$	53
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(157		)	(73		)	(72		)	(12		)
Regulatory Asset—Unrecognized Tax Benefits	(56		)	(56		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	121		$	6		$	70		$	41

2016	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2016	$	386		$	181		$	111		$	93
Increases as a Result of Positions Taken in a Prior Period	12			3			6			2
Decreases as a Result of Positions Taken in a Prior Period	(62		)	(23		)	(1		)	(38		)
Increases as a Result of Positions Taken during the Current Period	19			6			12			—
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	(27		)	(27		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2016	$	328		$	140		$	128		$	57
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(200		)	(106		)	(74		)	(20		)
Regulatory Asset—Unrecognized Tax Benefits	(31		)	(31		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	97		$	3		$	54		$	37

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

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,
	2017		2016		2015
	Millions
PSE&G	$	25	$	22	$	20
Power	24		17		6
Energy Holdings	21		20		40
Total	$	70	$	59	$	66

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

Possible (Increase)/Decrease in Total Unrecognized Tax Benefits	Over the next 12 Months
	Millions
PSEG	$	69
PSE&G	$	35
Power	$	30

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	2011-2016	N/A	N/A
New Jersey	2006-2016	2011-2016	N/A
Pennsylvania	2014-2016	2014-2016	N/A
Connecticut	2016	N/A	N/A
Texas	2008-2016	N/A	N/A
California	2006-2016	N/A	N/A
New York	2014-2016	N/A	2014-2016

PSE&G [Member]

Income Taxes [Line Items]

Income Taxes

Income Taxes

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	2017			2016			2015
	Millions
Net Income	$	1,574		$	887		$	1,679
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	86		$	(74	)	$	243
State	(31		)	61			85
Total Current	55			(13		)	328
Deferred (Benefit) Expense:
Federal	(482		)	311			540
State	92			28			104
Total Deferred	(390		)	339			644
Investment Tax Credit (ITC)	29			85			29
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Pre-Tax Income	$	1,268		$	1,298		$	2,680
Tax Computed at Statutory Rate @ 35%	$	444		$	454		$	938
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	36			56			129
Uncertain Tax Positions	(3		)	(31		)	7
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(22		)	(25		)	(13		)
Audit Settlement	6			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(755		)	—			—
Other	5			(9		)	(4		)
Sub-Total	(750		)	(43		)	63
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Effective Income Tax Rate	(24.1		)%	31.7		%	37.4		%

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

	As of December 31,
PSEG	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	217		283
Related to Uncertain Tax Position	142		155
Total Noncurrent Assets	$	961	$	438
Liabilities:
Noncurrent:
Plant-Related Items	$	4,257	$	6,593
New Jersey Corporate Business Tax	674		674
Leasing Activities	384		565
AROs and NDT Fund	233		398
Pension Costs	123		197
Taxes Recoverable Through Future Rates (net)	80		208
Other	171		212
Total Noncurrent Liabilities	$	5,922	$	8,847
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	4,961	$	8,409
ITC	279		249
Net Total Noncurrent Deferred Income Taxes and ITC	$	5,240	$	8,658

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSEG is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	973		$	889		$	787
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(52	)	$	(153	)	$	32
State	(1		)	10			52
Total Current	(53		)	(143		)	84
Deferred Expense:
Federal	492			551			325
State	129			102			52
Total Deferred	621			653			377
ITC	(5		)	5			9
Total Income Tax Expense	$	563		$	515		$	470
Pre-Tax Income	$	1,536		$	1,404		$	1,257
Tax Computed at Statutory Rate @ 35%	$	538		$	491		$	440
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	83			72			67
Uncertain Tax Positions	(9		)	(18		)	(14		)
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(9		)	(7		)	(6		)
Provisional Deferred Tax Benefit - Tax Act	(10		)	—			—
Other	(7		)	(3		)	3
Sub-Total	25			24			30
Total Income Tax Expense	$	563		$	515		$	470
Effective Income Tax Rate	36.7		%	36.7		%	37.4		%

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

	As of December 31,
PSE&G	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	116		189
Total Noncurrent Assets	$	718	$	189
Liabilities:
Noncurrent:
Plant-Related Items	$	3,311	$	4,983
New Jersey Corporate Business Tax	378		385
Pension Costs	152		252
Conservation Costs	24		33
Taxes Recoverable Through Future Rates (net)	80		208
Other	86		118
Total Noncurrent Liabilities	$	4,031	$	5,979
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	3,313	$	5,790
ITC	78		83
Net Total Noncurrent Deferred Income Taxes and ITC	$	3,391	$	5,873

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSE&G is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	479		$	18		$	856
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	95		$	107		$	220
State	(17		)	40			30
Total Current	78			147			250
Deferred (Benefit) Expense:
Federal	(804		)	(222		)	189
State	(37		)	(68		)	52
Total Deferred	(841		)	(290		)	241
ITC	34			82			20
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Pre-Tax (Loss) Income	$	(250	)	$	(43	)	$	1,367
Tax Computed at Statutory Rate @ 35%	$	(88	)	$	(15	)	$	478
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(36		)	(18		)	59
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Tax Credits	(12		)	(18		)	(7		)
Uncertain Tax Positions	7			9			22
Audit Settlement	1			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(610		)	—			—
Other	3			(5		)	(5		)
Sub-Total	(641		)	(46		)	33
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Effective Income Tax Rate	291.6		%	141.9		%	37.4		%

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

	As of December 31,
Power	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Related to Uncertain Tax Positions	$	45	$	53
Pension Costs	40		68
Contractual Liabilities & Environmental Costs	12		18
Other	93		76
Total Noncurrent Assets	$	190	$	215
Liabilities:
Noncurrent:
Plant-Related Items	$	935	$	1,605
AROs and NDT Fund	235		400
New Jersey Corporate Business Tax	225		214
Total Noncurrent Liabilities	$	1,395	$	2,219
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	1,205	$	2,004
ITC	201		166
Net Total Noncurrent Deferred Income Taxes and ITC	$	1,406	$	2,170

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.

PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. See Note 6. Regulatory Assets and Liabilities.

In December 2017, the U.S. government enacted comprehensive tax legislation. The Tax Act establishes new tax laws that will take effect in 2018, including, but not limited to (1) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) a new limitation on deductible interest expense; (4) the repeal of the domestic production activity deduction; (5) limitations on the deductibility of certain executive compensation; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80% of taxable income. In addition, certain changes were made to the bonus depreciation rules that will impact 2017.

The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

PSEG, PSE&G and Power are subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change is enacted.

The majority of the current period activity was determined using the federal income tax rate of 35% and state income tax rate of 9%. As required under ASC 740, the ending 2017 deferred tax balances were adjusted to reflect the enacted lower tax rate, which resulted in a one-time, provisional deferred tax benefit of $755 million, including $610 million related to Power and $149 million related to Energy Holdings (including other impacts related to the new tax legislation, PSEG’s net non-cash provisional earnings benefit was $745 million, including $588 million related to Power and $147 million related to Energy Holdings). In addition, PSE&G had excess deferred taxes of approximately $2.1 billion as of December 31, 2017 and recorded a $2.9 billion revenue impact of these excess deferred taxes as Regulatory Liabilities where it is probable that refunds will be made to customers in future rates. The amount and timing of any such refund cannot be determined at this time.

For certain aspects of the Tax Act, which are discussed below, PSEG, PSE&G and Power made reasonable, good faith estimates for which provisional amounts were recorded.

PSEG’s accounting for the following elements of the Tax Act is incomplete. However, PSEG was able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017 for Power and PSE&G, including the information required to compute the applicable depreciable tax basis, and the impact on PSEG’s, PSE&G’s and Power’s deferred taxes associated with FIN 48 reserves.

Further, the Tax Act is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service (IRS), as well as state tax authorities. The Tax Act could also be subject to potential amendments and technical corrections which could impact PSEG, PSE&G and Power’s financial statements.

In December 2015, the U.S. government enacted the Protecting Americans from Tax Hikes Act of 2015 (2015 Tax Act). Among other provisions, the 2015 Tax Act included an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The provisions of the 2015 Tax Act have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. Those tax benefits would have otherwise been received over an estimated average 20 year period. However, the tax benefits have a negative impact on the rate base of several of PSE&G’s programs.

For the period beginning September 28, 2017, subject to the transition rules, the Tax Act has modified the bonus depreciation rules of the 2015 Tax Act. Subject to further guidance, it is expected that Power will be entitled to 100% expensing and bonus depreciation will no longer apply to PSE&G.

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:

2017	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2017	$	328		$	140		$	128		$	57
Increases as a Result of Positions Taken in a Prior Period	40			15			18			8
Decreases as a Result of Positions Taken in a Prior Period	(32		)	(11		)	(10		)	(13		)
Increases as a Result of Positions Taken during the Current Period	12			5			6			1
Decreases as a Result of Positions Taken during the Current Period	(1		)	(1		)	—			—
Decreases as a Result of Settlements with Taxing Authorities	—			—			—			—
Decreases due to Lapses of Applicable Statute of Limitations	(13		)	(13		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2017	$	334		$	135		$	142		$	53
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(157		)	(73		)	(72		)	(12		)
Regulatory Asset—Unrecognized Tax Benefits	(56		)	(56		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	121		$	6		$	70		$	41

2016	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2016	$	386		$	181		$	111		$	93
Increases as a Result of Positions Taken in a Prior Period	12			3			6			2
Decreases as a Result of Positions Taken in a Prior Period	(62		)	(23		)	(1		)	(38		)
Increases as a Result of Positions Taken during the Current Period	19			6			12			—
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	(27		)	(27		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2016	$	328		$	140		$	128		$	57
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(200		)	(106		)	(74		)	(20		)
Regulatory Asset—Unrecognized Tax Benefits	(31		)	(31		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	97		$	3		$	54		$	37

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

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,
	2017		2016		2015
	Millions
PSE&G	$	25	$	22	$	20
Power	24		17		6
Energy Holdings	21		20		40
Total	$	70	$	59	$	66

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

Possible (Increase)/Decrease in Total Unrecognized Tax Benefits	Over the next 12 Months
	Millions
PSEG	$	69
PSE&G	$	35
Power	$	30

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	2011-2016	N/A	N/A
New Jersey	2006-2016	2011-2016	N/A
Pennsylvania	2014-2016	2014-2016	N/A
Connecticut	2016	N/A	N/A
Texas	2008-2016	N/A	N/A
California	2006-2016	N/A	N/A
New York	2014-2016	N/A	2014-2016

Power [Member]

Income Taxes [Line Items]

Income Taxes

Income Taxes

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	2017			2016			2015
	Millions
Net Income	$	1,574		$	887		$	1,679
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	86		$	(74	)	$	243
State	(31		)	61			85
Total Current	55			(13		)	328
Deferred (Benefit) Expense:
Federal	(482		)	311			540
State	92			28			104
Total Deferred	(390		)	339			644
Investment Tax Credit (ITC)	29			85			29
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Pre-Tax Income	$	1,268		$	1,298		$	2,680
Tax Computed at Statutory Rate @ 35%	$	444		$	454		$	938
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	36			56			129
Uncertain Tax Positions	(3		)	(31		)	7
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(22		)	(25		)	(13		)
Audit Settlement	6			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(755		)	—			—
Other	5			(9		)	(4		)
Sub-Total	(750		)	(43		)	63
Total Income Tax (Benefit) Expense	$	(306	)	$	411		$	1,001
Effective Income Tax Rate	(24.1		)%	31.7		%	37.4		%

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

	As of December 31,
PSEG	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	217		283
Related to Uncertain Tax Position	142		155
Total Noncurrent Assets	$	961	$	438
Liabilities:
Noncurrent:
Plant-Related Items	$	4,257	$	6,593
New Jersey Corporate Business Tax	674		674
Leasing Activities	384		565
AROs and NDT Fund	233		398
Pension Costs	123		197
Taxes Recoverable Through Future Rates (net)	80		208
Other	171		212
Total Noncurrent Liabilities	$	5,922	$	8,847
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	4,961	$	8,409
ITC	279		249
Net Total Noncurrent Deferred Income Taxes and ITC	$	5,240	$	8,658

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSEG is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	973		$	889		$	787
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(52	)	$	(153	)	$	32
State	(1		)	10			52
Total Current	(53		)	(143		)	84
Deferred Expense:
Federal	492			551			325
State	129			102			52
Total Deferred	621			653			377
ITC	(5		)	5			9
Total Income Tax Expense	$	563		$	515		$	470
Pre-Tax Income	$	1,536		$	1,404		$	1,257
Tax Computed at Statutory Rate @ 35%	$	538		$	491		$	440
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	83			72			67
Uncertain Tax Positions	(9		)	(18		)	(14		)
Plant-Related Items	(23		)	(20		)	(20		)
Tax Credits	(9		)	(7		)	(6		)
Provisional Deferred Tax Benefit - Tax Act	(10		)	—			—
Other	(7		)	(3		)	3
Sub-Total	25			24			30
Total Income Tax Expense	$	563		$	515		$	470
Effective Income Tax Rate	36.7		%	36.7		%	37.4		%

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

	As of December 31,
PSE&G	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Regulatory Liability Excess Deferred Tax	$	602	$	—
OPEB	116		189
Total Noncurrent Assets	$	718	$	189
Liabilities:
Noncurrent:
Plant-Related Items	$	3,311	$	4,983
New Jersey Corporate Business Tax	378		385
Pension Costs	152		252
Conservation Costs	24		33
Taxes Recoverable Through Future Rates (net)	80		208
Other	86		118
Total Noncurrent Liabilities	$	4,031	$	5,979
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	3,313	$	5,790
ITC	78		83
Net Total Noncurrent Deferred Income Taxes and ITC	$	3,391	$	5,873

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.

In December 2017, new tax legislation was enacted, reducing the statutory U.S. corporate income tax rate from a maximum of 35% to 21%, effective January 1, 2018. PSE&G is subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate was enacted. The impact of the reduced tax rate is the primary reason for the decrease in the deferred tax liabilities.

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	2017			2016			2015
	Millions
Net Income	$	479		$	18		$	856
Income Taxes:
Operating Income:
Current Expense (Benefit):
Federal	$	95		$	107		$	220
State	(17		)	40			30
Total Current	78			147			250
Deferred (Benefit) Expense:
Federal	(804		)	(222		)	189
State	(37		)	(68		)	52
Total Deferred	(841		)	(290		)	241
ITC	34			82			20
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Pre-Tax (Loss) Income	$	(250	)	$	(43	)	$	1,367
Tax Computed at Statutory Rate @ 35%	$	(88	)	$	(15	)	$	478
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	(36		)	(18		)	59
Manufacturing Deduction	(13		)	(17		)	(10		)
NDT Fund	19			3			7
Tax Credits	(12		)	(18		)	(7		)
Uncertain Tax Positions	7			9			22
Audit Settlement	1			—			—
Nuclear Decommissioning Tax Carryback	—			—			(33		)
Provisional Deferred Tax Benefit - Tax Act	(610		)	—			—
Other	3			(5		)	(5		)
Sub-Total	(641		)	(46		)	33
Total Income Tax (Benefit) Expense	$	(729	)	$	(61	)	$	511
Effective Income Tax Rate	291.6		%	141.9		%	37.4		%

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

	As of December 31,
Power	2017		2016
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Related to Uncertain Tax Positions	$	45	$	53
Pension Costs	40		68
Contractual Liabilities & Environmental Costs	12		18
Other	93		76
Total Noncurrent Assets	$	190	$	215
Liabilities:
Noncurrent:
Plant-Related Items	$	935	$	1,605
AROs and NDT Fund	235		400
New Jersey Corporate Business Tax	225		214
Total Noncurrent Liabilities	$	1,395	$	2,219
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	1,205	$	2,004
ITC	201		166
Net Total Noncurrent Deferred Income Taxes and ITC	$	1,406	$	2,170

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.

PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. See Note 6. Regulatory Assets and Liabilities.

In December 2017, the U.S. government enacted comprehensive tax legislation. The Tax Act establishes new tax laws that will take effect in 2018, including, but not limited to (1) reduction of the U.S. federal corporate tax rate from a maximum of 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT); (3) a new limitation on deductible interest expense; (4) the repeal of the domestic production activity deduction; (5) limitations on the deductibility of certain executive compensation; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80% of taxable income. In addition, certain changes were made to the bonus depreciation rules that will impact 2017.

The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

PSEG, PSE&G and Power are subject to ASC 740, which requires that the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change is enacted.

The majority of the current period activity was determined using the federal income tax rate of 35% and state income tax rate of 9%. As required under ASC 740, the ending 2017 deferred tax balances were adjusted to reflect the enacted lower tax rate, which resulted in a one-time, provisional deferred tax benefit of $755 million, including $610 million related to Power and $149 million related to Energy Holdings (including other impacts related to the new tax legislation, PSEG’s net non-cash provisional earnings benefit was $745 million, including $588 million related to Power and $147 million related to Energy Holdings). In addition, PSE&G had excess deferred taxes of approximately $2.1 billion as of December 31, 2017 and recorded a $2.9 billion revenue impact of these excess deferred taxes as Regulatory Liabilities where it is probable that refunds will be made to customers in future rates. The amount and timing of any such refund cannot be determined at this time.

For certain aspects of the Tax Act, which are discussed below, PSEG, PSE&G and Power made reasonable, good faith estimates for which provisional amounts were recorded.

PSEG’s accounting for the following elements of the Tax Act is incomplete. However, PSEG was able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017 for Power and PSE&G, including the information required to compute the applicable depreciable tax basis, and the impact on PSEG’s, PSE&G’s and Power’s deferred taxes associated with FIN 48 reserves.

Further, the Tax Act is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service (IRS), as well as state tax authorities. The Tax Act could also be subject to potential amendments and technical corrections which could impact PSEG, PSE&G and Power’s financial statements.

In December 2015, the U.S. government enacted the Protecting Americans from Tax Hikes Act of 2015 (2015 Tax Act). Among other provisions, the 2015 Tax Act included an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The provisions of the 2015 Tax Act have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. Those tax benefits would have otherwise been received over an estimated average 20 year period. However, the tax benefits have a negative impact on the rate base of several of PSE&G’s programs.

For the period beginning September 28, 2017, subject to the transition rules, the Tax Act has modified the bonus depreciation rules of the 2015 Tax Act. Subject to further guidance, it is expected that Power will be entitled to 100% expensing and bonus depreciation will no longer apply to PSE&G.

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:

2017	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2017	$	328		$	140		$	128		$	57
Increases as a Result of Positions Taken in a Prior Period	40			15			18			8
Decreases as a Result of Positions Taken in a Prior Period	(32		)	(11		)	(10		)	(13		)
Increases as a Result of Positions Taken during the Current Period	12			5			6			1
Decreases as a Result of Positions Taken during the Current Period	(1		)	(1		)	—			—
Decreases as a Result of Settlements with Taxing Authorities	—			—			—			—
Decreases due to Lapses of Applicable Statute of Limitations	(13		)	(13		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2017	$	334		$	135		$	142		$	53
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(157		)	(73		)	(72		)	(12		)
Regulatory Asset—Unrecognized Tax Benefits	(56		)	(56		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	121		$	6		$	70		$	41

2016	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2016	$	386		$	181		$	111		$	93
Increases as a Result of Positions Taken in a Prior Period	12			3			6			2
Decreases as a Result of Positions Taken in a Prior Period	(62		)	(23		)	(1		)	(38		)
Increases as a Result of Positions Taken during the Current Period	19			6			12			—
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	(27		)	(27		)	—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2016	$	328		$	140		$	128		$	57
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(200		)	(106		)	(74		)	(20		)
Regulatory Asset—Unrecognized Tax Benefits	(31		)	(31		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	97		$	3		$	54		$	37

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

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,
	2017		2016		2015
	Millions
PSE&G	$	25	$	22	$	20
Power	24		17		6
Energy Holdings	21		20		40
Total	$	70	$	59	$	66

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

Possible (Increase)/Decrease in Total Unrecognized Tax Benefits	Over the next 12 Months
	Millions
PSEG	$	69
PSE&G	$	35
Power	$	30

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	2011-2016	N/A	N/A
New Jersey	2006-2016	2011-2016	N/A
Pennsylvania	2014-2016	2014-2016	N/A
Connecticut	2016	N/A	N/A
Texas	2008-2016	N/A	N/A
California	2006-2016	N/A	N/A
New York	2014-2016	N/A	2014-2016