Income Taxes

3 Months Ended

Mar. 31, 2018

Schedule of Effective Income Tax Rate Reconciliation [Line Items]

Income Taxes

Tax Cuts and Jobs Act

2017 Tax Reform impacts many areas of income tax law. The most material items include the reduction of the federal corporate tax rate from 35% to 21% effective January 1, 2018, the one-time repatriation tax of foreign earnings and profits and limitations on bonus depreciation for utility property.

In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") 118 to assist in the implementation process of the 2017 Tax Reform by allowing for calculations to be classified as provisional and subject to remeasurement. There are three different classifications for the accounting: (1) completed, (2) not complete but reasonably estimable or (3) not complete and amounts are not reasonably estimable. The Company has recorded the impacts of the 2017 Tax Reform and believes all the impacts to be complete with the exception of the repatriation tax on foreign earnings and interpretations of the bonus depreciation rules. The Company has determined the amounts recorded and the interpretations relating to these two items to be provisional and subject to remeasurement during the measurement period upon obtaining the necessary additional information to complete the accounting. The Company believes the estimates for the repatriation tax to be reasonable, however, additional time is required to validate the inputs to the foreign earnings and profits calculation, the basis on which the repatriation tax is determined, and additional guidance is required to determine state income tax implications. The Company also believes its interpretations for bonus depreciation to be reasonable, however, as the guidance is clarified, estimates may change. The accounting is estimated to be completed by December 2018. During the three-month period ended March 31, 2018, the Company reduced the liability estimate by $25 million based on additional guidance for certain state income tax implications of the repatriation tax. The accounting is estimated to be completed by December 2018.

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax expense is as follows:



	Three-Month Periods
	Ended March 31,
	2018		2017

Federal statutory income tax rate	21	%	35	%
Income tax credits	(45	)	(16	)
State income tax, net of federal income tax benefit	(30	)	(5	)
Income tax effect of foreign income	(16	)	(5	)
Effects of ratemaking	(8	)	(1	)
Equity income	1		1
Other	(1	)	—
Effective income tax rate	(78	)%	9	%

The effective tax rate decreased primarily due to the reduction in the United States federal corporate income tax rate from 35% to 21%, effective January 1, 2018, lower consolidated state income tax expense, lower United States income taxes on foreign earnings, higher production tax credits recognized of $29 million and the favorable impacts of rate making.

Income tax credits relate primarily to production tax credits from wind-powered generating facilities owned by MidAmerican Energy, PacifiCorp and BHE Renewables. Federal renewable electricity production tax credits are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service.

Berkshire Hathaway includes the Company in its United States federal income tax return. The Company's provision for income taxes has been computed on a stand-alone basis, and substantially all of its currently payable or receivable federal income taxes are remitted to or received from Berkshire Hathaway. For the three-month periods ended March 31, 2018 and 2017, the Company did not receive or make any cash payments for federal income taxes from or to Berkshire Hathaway.

PacifiCorp [Member]

Schedule of Effective Income Tax Rate Reconciliation [Line Items]

Income Tax Disclosure [Text Block]

Income Taxes

Tax Cuts and Jobs Act

2017 Tax Reform impacts many areas of income tax law. The most material items include the reduction of the federal corporate tax rate from 35% to 21% effective January 1, 2018 and limitations on bonus depreciation for utility property.

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax expense is as follows:



	Three-Month Periods
	Ended March 31,
	2018		2017

Federal statutory income tax rate	21	%	35	%
State income tax, net of federal income tax benefit	4		3
Federal income tax credits	(5	)	(5	)
Effects of ratemaking	(4	)	1
Other	(2	)	(2	)
Effective income tax rate	14	%	32	%

Income tax credits relate primarily to production tax credits earned by PacifiCorp’s wind-powered generating facilities. Federal renewable electricity production tax credits are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service.

Berkshire Hathaway includes PacifiCorp in its United States federal income tax return. PacifiCorp's provision for income taxes has been computed on a stand-alone basis, and substantially all of its currently payable or receivable federal income taxes are remitted to or received from Berkshire Hathaway Energy Company. For the three-month periods ended March 31, 2018 and 2017, PacifiCorp did not receive or make any cash payments for federal income taxes from or to Berkshire Hathaway Energy Company.

Sierra Pacific Power Company [Member]

Schedule of Effective Income Tax Rate Reconciliation [Line Items]

Income Tax Disclosure [Text Block]

Income Taxes

Tax Cuts and Jobs Act

2017 Tax Reform impacts many areas of income tax law. The most material items include the reduction of the federal corporate tax rate from 35% to 21% effective January 1, 2018, the elimination of the deduction for production activities and limitations on bonus depreciation for utility property.

In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 to assist in the implementation process of the 2017 Tax Reform by allowing for calculations to be classified as provisional and subject to remeasurement. There are three different classifications for the accounting: (1) completed, (2) not complete but reasonably estimable or (3) not complete and amounts are not reasonably estimable. Sierra Pacific has recorded the impacts of the 2017 Tax Reform and believes all the impacts to be complete with the exception of interpretations of the bonus depreciation rules. Sierra Pacific has determined the amounts recorded and the interpretations relating to this items to be provisional and subject to remeasurement during the measurement period upon obtaining the necessary additional information to complete the accounting. Sierra Pacific believes its interpretations for bonus depreciation to be reasonable, however, as the guidance is clarified estimates may change. The accounting is estimated to be completed by December 2018.

A reconciliation of the federal statutory income tax rate to the effective income tax rate applicable to income before income tax expense is as follows:



	Three-Month Periods
	Ended March 31,
	2018		2017

Federal statutory income tax rate	21	%	35	%
Effects of ratemaking	(5	)	—
Other	(1	)	—
Effective income tax rate	15	%	35	%

MidAmerican Energy Company [Member]

Schedule of Effective Income Tax Rate Reconciliation [Line Items]

Income Tax Disclosure [Text Block]

Income Taxes

Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act ("2017 Tax Reform") impacts many areas of income tax law. The most material items include the reduction of the federal corporate tax rate from 35% to 21% effective January 1, 2018, and limitations on bonus depreciation for utility property.

A reconciliation of the federal statutory income tax rate to MidAmerican Energy's effective income tax rate applicable to income before income tax benefit is as follows:



	Three-Month Periods
	Ended March 31,
	2018		2017

Federal statutory income tax rate	21	%	35	%
Income tax credits	(137	)	(80	)
State income tax, net of federal income tax benefit	(9	)	2
Effects of ratemaking	(18	)	(12	)
Other, net	2		1
Effective income tax rate	(141	)%	(54	)%

Income tax credits relate primarily to production tax credits from MidAmerican Energy's wind-powered generating facilities. Federal renewable electricity production tax credits are earned as energy from qualifying wind-powered generating facilities is produced and sold and are based on a per-kilowatt hour rate pursuant to the applicable federal income tax law. Wind-powered generating facilities are eligible for the credits for 10 years from the date the qualifying generating facilities are placed in-service.

Berkshire Hathaway includes BHE and subsidiaries in its United States federal income tax return. Consistent with established regulatory practice, MidAmerican Energy's provision for income taxes has been computed on a stand-alone basis, and substantially all of its currently payable or receivable income taxes are remitted to or received from BHE. MidAmerican Energy received net cash payments for income taxes from BHE totaling $14 million and $- million for the three-month periods ended March 31, 2018 and 2017, respectively.

MidAmerican Funding, LLC and Subsidiaries [Domain]

Schedule of Effective Income Tax Rate Reconciliation [Line Items]

Income Tax Disclosure [Text Block]

Income Taxes

A reconciliation of the federal statutory income tax rate to MidAmerican Funding's effective income tax rate applicable to income before income tax benefit is as follows:



	Three-Month Periods
	Ended March 31,
	2018		2017

Federal statutory income tax rate	21	%	35	%
Income tax credits	(151	)	(87	)
State income tax, net of federal income tax benefit	(10	)	2
Effects of ratemaking	(20	)	(13	)
Other, net	2		(2	)
Effective income tax rate	(158	)%	(65	)%

Berkshire Hathaway includes BHE and subsidiaries in its United States federal income tax return. Consistent with established regulatory practice, MidAmerican Funding's and MidAmerican Energy's provisions for income taxes have been computed on a stand-alone basis, and substantially all of their currently payable or receivable income taxes are remitted to or received from BHE. MidAmerican Funding received net cash payments for income taxes from BHE totaling $14 million and $- million for the three-month periods ended March 31, 2018 and 2017, respectively.