INCOME TAXES (Notes)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Tax Disclosure

INCOME TAXES

The following table sets forth our provision for income taxes for the periods indicated:

	Year Ended December 31,
	2025		2024		2023
	(Thousands of dollars)
Current income tax provision (benefit)
Federal	$	8,484	$	(68,660)	$	16,551
State	(756)		(1,476)		(829)
Total current income tax provision (benefit)	7,728		(70,136)		15,722
Deferred income tax provision (benefit)
Federal	46,808		110,717		21,905
State	2,699		(4,195)		2,868
Total deferred income tax provision (benefit)	49,507		106,522		24,773
Total provision for income taxes	$	57,235	$	36,386	$	40,495

The following table is a reconciliation of our income tax provision for the periods indicated:

	Year Ended December 31,
	2025				2024				2023
	(Thousands of dollars, except percentages)
Income before income taxes	$	321,459			$	259,236			$	271,727
Federal statutory income tax rate	21.00		%		21.00		%		21.00		%
Provision for federal income taxes	67,506			21.00%	54,439			21.00%	57,063			21.00%
State income taxes, net of federal tax benefit	6,155			1.91%	4,333			1.67%	3,834			1.41%
Tax effect of permanent differences	2,302			0.72%	2,018			0.78%	1,860			0.68%
Tax effect of state income tax deduction	(393)			(0.12)%	(209)			(0.08)%	(443)			(0.16)%
Amortization of excess deferred federal income taxes	(13,382)			(4.16)%	(15,680)			(6.05)%	(20,565)			(7.57)%
Amortization of excess deferred state income taxes	(4,211)			(1.31)%	(10,004)			(3.86)%	(1,795)			(0.66)%
Tax (expense) benefit for employee share-based compensation	(116)			(0.04)%	1,063			0.41%	418			0.15%
Other, net	(626)			(0.19)%	426			0.16%	123			0.05%
Total provision for income taxes and effective income tax rate	$	57,235		17.81%	$	36,386		14.03%	$	40,495		14.90%

As of December 31, 2025, we have no uncertain tax positions. Oklahoma continued to represent more than 50 percent of state income taxes, net of federal tax benefits and effect of state income taxes. Changes in tax laws or tax rates are recognized in the financial reporting period that includes the enactment date. On July 4, 2025, the One Big Beautiful Bill Act was signed into law, introducing several corporate tax changes. After evaluating the legislation, we do not expect it to have a material impact on our income taxes. We will continue to monitor developments and assess future implications as additional guidance becomes available.

Following Revenue Procedure 2024-15, we amended our 2022 federal tax return to request a refund of $55.6 million, which remains pending approval by the Joint Committee of Taxation. Additionally, we filed an amended Oklahoma corporate income tax return in the first quarter of 2025 and received a $1.5 million refund in October 2025.

Income tax expense reflects credits for the amortization of the regulatory liability associated with EDIT, embedded in base rates, of $17.6 million and $25.7 million for the years ending December 31, 2025, and 2024, respectively.

The following table sets forth the tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities for the periods indicated:

	December 31,
	2025		2024
	(Thousands of dollars)
Deferred tax assets
Regulatory adjustments for enacted tax rate changes	$	95,721	$	100,718
Net operating loss	362,558		405,316
Lease obligation basis	2,773		3,669
Purchased-gas cost adjustment	10,900		—
Other	3,359		—
Total deferred tax assets	475,311		509,703
Deferred tax liabilities
Excess of tax over book depreciation	996,128		930,680
Winter weather event costs	363,988		381,818
Purchased-gas cost adjustment	—		8,654
Other regulatory assets and liabilities, net	69,962		73,904
Employee benefits and other accrued liabilities	6,165		934
Right-of-use asset basis	2,942		3,866
Other	—		1,585
Total deferred tax liabilities	1,439,185		1,401,441
Net deferred tax liabilities	$	963,874	$	891,738

At December 31, 2025, we had $338.4 million (tax effected) of federal net operating loss carryforwards and $24.1 million (tax effected) of state net operating loss carryforwards available to offset future taxable income.

We have filed our consolidated federal and state income tax returns for years 2022, 2023, and 2024. We are no longer subject to income tax examination for years prior to 2022.