Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018




2018	PSEG			PSE&G			Power			Energy Holdings
	Millions
Total Amount of Unrecognized Tax Benefits as of January 1, 2018	$	334		$	135		$	142		$	53
Increases as a Result of Positions Taken in a Prior Period	11			4			4			3
Decreases as a Result of Positions Taken in a Prior Period	(70		)	(31		)	(37		)	(2		)
Increases as a Result of Positions Taken during the Current Period	52			3			48			—
Decreases as a Result of Positions Taken during the Current Period	(3		)	(3		)	—			—
Decreases as a Result of Settlements with Taxing Authorities	(6		)	—			(6		)	—
Decreases due to Lapses of Applicable Statute of Limitations	—			—			—			—
Total Amount of Unrecognized Tax Benefits as of December 31, 2018	$	318		$	108		$	151		$	54
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits	(173		)	(57		)	(104		)	(12		)
Regulatory Asset—Unrecognized Tax Benefits	(46		)	(46		)	—			—
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties)	$	99		$	5		$	47		$	42




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

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,
	2018		2017		2016
	Millions
PSE&G	$	12	$	25	$	22
Power	9		24		17
Energy Holdings	22		21		20
Total	$	43	$	70	$	59

Possible Decrease In Total Unrecognized Tax Benefits Including Interest

t 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	$	112
PSE&G	$	62
Power	$	34

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	2011-2017	N/A	N/A
New Jersey	2006-2017	2011-2017	N/A
Pennsylvania	2015-2017	2015-2017	N/A
Connecticut	2016-2017	N/A	N/A
California	2006-2017	N/A	N/A
New York	2017	N/A	2017

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 21% in 2018 and 35% in 2017 and 2016 is as follows:




	Years Ended December 31,
PSEG	2018			2017			2016
	Millions
Net Income	$	1,438		$	1,574		$	887
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(97	)	$	86		$	(74	)
State	83			(31		)	61
Total Current	(14		)	55			(13		)
Deferred Expense (Benefit):
Federal	373			(482		)	311
State	71			92			28
Total Deferred	444			(390		)	339
Investment Tax Credit (ITC)	(13		)	29			85
Total Income Tax Expense (Benefit)	$	417		$	(306	)	$	411
Pre-Tax Income	$	1,855		$	1,268		$	1,298
Tax Computed at Statutory Rate @ 21% in 2018 and 35% in 2017 and 2016	$	390		$	444		$	454
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	123			36			56
Uncertain Tax Positions	(24		)	(3		)	(31		)
Manufacturing Deduction	—			(13		)	(17		)
NDT Fund	(13		)	19			3
Plant-Related Items	(10		)	(23		)	(20		)
Tax Credits	(16		)	(22		)	(25		)
Audit Settlement	—			6			—
Tax Adjustment Credit	(30		)	—			—
Deferred Tax Expense (Benefit) - Tax Act	3			(755		)	—
Other	(6		)	5			(9		)
Sub-Total	27			(750		)	(43		)
Total Income Tax Expense (Benefit)	$	417		$	(306	)	$	411
Effective Income Tax Rate	22.5		%	(24.1		)%	31.7		%

Deferred Income Taxes

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




	As of December 31,
PSEG	2018		2017
	Millions
Deferred Income Taxes
Assets:
Noncurrent
Regulatory Liability Excess Deferred Tax	$	606	$	602
OPEB	163		217
Related to Uncertain Tax Position	71		142
Total Noncurrent Assets	$	840	$	961

Liabilities:
Noncurrent:
Plant-Related Items	$	4,817	$	4,257
New Jersey Corporate Business Tax	756		674
Leasing Activities	307		384
AROs and NDT Fund	196		233
Pension Costs	111		123
Taxes Recoverable Through Future Rates (net)	89		80
Other	12		171
Total Noncurrent Liabilities	$	6,288	$	5,922
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	5,448	$	4,961
ITC	265		279
Net Total Noncurrent Deferred Income Taxes and ITC	$	5,713	$	5,240

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. 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.

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 21% in 2018 and 35% in 2017 and 2016 is as follows:




	Years Ended December 31,
PSE&G	2018			2017			2016
	Millions
Net Income	$	1,067		$	973		$	889
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(62	)	$	(52	)	$	(153	)
State	1			(1		)	10
Total Current	(61		)	(53		)	(143		)
Deferred Expense:
Federal	287			492			551
State	122			129			102
Total Deferred	409			621			653
ITC	(4		)	(5		)	5
Total Income Tax Expense	$	344		$	563		$	515
Pre-Tax Income	$	1,411		$	1,536		$	1,404
Tax Computed at Statutory Rate @ 21% in 2018 and 35% in 2017 and 2016	$	296		$	538		$	491
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	98			83			72
Uncertain Tax Positions	(1		)	(9		)	(18		)
Plant-Related Items	(10		)	(23		)	(20		)
Tax Credits	(8		)	(9		)	(7		)
Tax Adjustment Credit	(30		)	—			—
Deferred Tax Benefit - Tax Act	—			(10		)	—
Other	(1		)	(7		)	(3		)
Sub-Total	48			25			24
Total Income Tax Expense	$	344		$	563		$	515
Effective Income Tax Rate	24.4		%	36.7		%	36.7		%

Deferred Income Taxes

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




	As of December 31,
PSE&G	2018		2017
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Regulatory Liability Excess Deferred Tax	$	606	$	602
OPEB	114		116
Total Noncurrent Assets	$	720	$	718
Liabilities:
Noncurrent:
Plant-Related Items	$	3,622	$	3,311
New Jersey Corporate Business Tax	486		378
Pension Costs	159		152
Conservation Costs	36		24
Taxes Recoverable Through Future Rates (net)	89		80
Other	84		86
Total Noncurrent Liabilities	$	4,476	$	4,031
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	3,756	$	3,313
ITC	74		78
Net Total Noncurrent Deferred Income Taxes and ITC	$	3,830	$	3,391

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.

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 21% in 2018 and 35% in 2017 and 2016 is as follows:




	Years Ended December 31,
Power	2018			2017			2016
	Millions
Net Income	$	365		$	479		$	18
Income Taxes:
Operating Income:
Current (Benefit) Expense:
Federal	$	(164	)	$	95		$	107
State	24			(17		)	40
Total Current	(140		)	78			147
Deferred Expense (Benefit):
Federal	214			(804		)	(222		)
State	1			(37		)	(68		)
Total Deferred	215			(841		)	(290		)
ITC	(9		)	34			82
Total Income Tax Expense (Benefit)	$	66		$	(729	)	$	(61	)
Pre-Tax Income (Loss)	$	431		$	(250	)	$	(43	)
Tax Computed at Statutory Rate @ 21% in 2018 and 35% in 2017 and 2016	$	91		$	(88	)	$	(15	)
Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments:
State Income Taxes (net of federal income tax)	21			(36		)	(18		)
Manufacturing Deduction	—			(13		)	(17		)
NDT Fund	(13		)	19			3
Tax Credits	(7		)	(12		)	(18		)
Uncertain Tax Positions	(24		)	7			9
Audit Settlement	—			1			—
Deferred Tax Benefit - Tax Act	(1		)	(610		)	—
Other	(1		)	3			(5		)
Sub-Total	(25		)	(641		)	(46		)
Total Income Tax Expense (Benefit)	$	66		$	(729	)	$	(61	)
Effective Income Tax Rate	15.3		%	291.6		%	141.9		%

Deferred Income Taxes

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




	As of December 31,
Power	2018		2017
	Millions
Deferred Income Taxes
Assets:
Noncurrent:
Related to Uncertain Tax Positions	$	60	$	45
Pension Costs	52		40
Contractual Liabilities & Environmental Costs	9		12
Other	98		93
Total Noncurrent Assets	$	219	$	190
Liabilities:
Noncurrent:
Plant-Related Items	$	1,189	$	935
AROs and NDT Fund	197		235
New Jersey Corporate Business Tax	260		225
Total Noncurrent Liabilities	$	1,646	$	1,395
Summary of Accumulated Deferred Income Taxes:
Net Noncurrent Deferred Income Tax Liabilities	$	1,427	$	1,205
ITC	192		201
Net Total Noncurrent Deferred Income Taxes and ITC	$	1,619	$	1,406