Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017




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

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

Possible Decrease In Total Unrecognized Tax Benefits Including Interest

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

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	2011-2016	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

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	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		%

Deferred Income Taxes

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.

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	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		%

Deferred Income Taxes

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.

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	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		%

Deferred Income Taxes

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.