3.	Income Taxes

The provisions for income taxes consist of:

	2012			2011			2010
Federal current	$	2,100		$	1,357		$	1,872
State current		1,195			413			1,115
Federal deferred		2,371			3,291			2,645
State deferred		(21	)		(63	)		(16	)
Federal investment tax credit, net of current utilization		(39	)		(39	)		(38	)
Total income taxes	$	5,606		$	4,959		$	5,578

A reconciliation of the statutory Federal tax provision (34%) to the total provision follows:

	2012			2011			2010
Statutory Federal tax provision	$	5,069		$	4,775		$	4,933
State income taxes, net of Federal benefit		775			231			725
Tax-exempt interest		(33	)		(32	)		(37	)
Amortization of investment tax credit		(39	)		(39	)		(38	)
Cash value of life insurance		(27	)		90			70
Domestic production deduction		(140	)		(115	)		(127	)
Other, net		1			49			52
Total income taxes	$	5,606		$	4,959		$	5,578

The tax effects of temporary differences between book and tax balances that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2012 and 2011 are summarized in the following table:

	2012			2011
Deferred tax assets:
Reserve for doubtful accounts	$	124		$	135
Compensated absences		200			190
Deferred compensation		1,328			1,234
Customers' advances and contributions		37			57
Deferred taxes associated with the gross-up of revenues necessary to return, in rates, the effect of temporary differences		114			119
Pensions		4,895			4,776
Contributions carryover		-			36
Other costs deducted for book, not for tax		43			39
Total deferred tax assets		6,741			6,586

Deferred tax liabilities:
Accelerated depreciation		30,454			27,850
Investment tax credit		482			505
Deferred taxes associated with the gross-up of revenues necessary to recover, in rates, the effect of temporary differences		1,991			1,864
Tax effect of pension regulatory asset		5,782			5,663
Other costs deducted for tax, not for book		249			285
Total deferred tax liabilities		38,958			36,167

Net deferred tax liability	$	32,217		$	29,581

Reflected on balance sheets as:
Current deferred tax asset	$	(208	)	$	(228	)
Noncurrent deferred tax liability		32,425			29,809
Net deferred tax liability	$	32,217		$	29,581

No valuation allowance is required for deferred tax assets as of December 31, 2012 and 2011. In assessing the soundness of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and the current regulatory environment, management believes it is more likely than not that the Company will realize the benefits of these deductible differences.

The Company determined that there were no uncertain tax positions meeting the recognition and measurement test of the professional standards recorded in the years that remain open for review by taxing authorities. The federal income tax returns and the state income tax returns for the years 2009 through 2011 remain open. The Company has not yet filed tax returns for 2012, but has not taken any new positions in its 2012 income tax provision.

The Company's policy is to recognize interest and penalties related to income tax matters in other expenses. There were no interest or penalties for the years ended December 31, 2012, 2011, and 2010.