Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income before income taxes from continuing operations for each of the years ended December 31 were as follows:

	2024		2023		2022
	(In thousands)
United States	$	198,662	$	340,330	$	123,447
Income before income taxes from continuing operations	$	198,662	$	340,330	$	123,447

Income tax expense (benefit) from continuing operations for the years ended December 31 was as follows:

	2024		2023		2022
	(In thousands)
Current:
Federal	$	30,412	$	8,271	$	(15,849)
State	3,255		3,251		1,857
	33,667		11,522		(13,992)
Deferred:
Income taxes:
Federal	(17,321)		(3,331)		15,038
State	(1,805)		(125)		4,251
Investment tax credit - net	3,048		2,147		898
	(16,078)		(1,309)		20,187
Total income tax expense	$	17,589	$	10,213	$	6,195

Components of deferred tax assets and deferred tax liabilities at December 31 were as follows:

	2024		2023
	(In thousands)
Deferred tax assets:
Environmental compliance	$	33,730	$	28,873
Pension and postretirement	25,508		27,584
Compensation-related	15,651		17,106
Customer advances	9,719		8,312
Cost recovery mechanisms	7,402		5,314
Legal and environmental contingencies	5,317		4,881
Other	20,386		13,045
Total deferred tax assets	117,713		105,115
Deferred tax liabilities:
Basis differences on property, plant and equipment	426,493		404,039
Pension and postretirement	48,355		39,110
Purchased gas adjustment	20,441		34,618
Environmental compliance	17,260		16,221
Cost recovery mechanisms	19,245		22,604
Legal and environmental contingencies	6,300		5,902
Other	19,931		33,947
Total deferred tax liabilities	558,025		556,441
Valuation allowance	1,008		1,010
Net deferred income tax liability	$	441,320	$	452,336

As of both December 31, 2024 and 2023, the Company had various state income tax net operating loss carryforwards of $1.0 million and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $31.6 million and $33.7 million, respectively. The state income tax credit carryforwards are due to expire between 2026 and 2038. Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future.

The following table reconciles the change in the net deferred income tax liability from December 31, 2023, to December 31, 2024, to deferred income tax expense:

	2024
(In thousands)
Change in net deferred income tax liability from the preceding table	$	(11,016)
Excess deferred income tax amortization	(8,121)
Deferred taxes associated with other comprehensive income	(532)
Other	3,591
Deferred income tax expense for the period	$	(16,078)

Total income tax expense differs from the amount computed by applying the statutory federal income tax rate to income before taxes. The reasons for this difference were as follows:

Years ended December 31,	2024			2023			2022
	Amount		%	Amount		%	Amount		%
	(Dollars in thousands)
Computed tax at federal statutory rate	$	41,719	21.0	$	71,469	21.0	$	25,924	21.0
Increases (reductions) resulting from:
State income taxes, net of federal income tax	4,047		2.0	3,605		1.1	2,484		2.0
State investment tax credit, net of federal income tax	2,400		1.2	1,545		.5	1,624		1.3
Executive compensation	2,111		1.1	564		.2	683		.6
Federal renewable energy credit	(16,871)		(8.5)	(15,175)		(4.5)	(15,343)		(12.4)
Excess deferred income tax amortization	(8,121)		(4.1)	(8,383)		(2.5)	(9,008)		(7.3)
State tax rate change	(2,317)		(1.2)	(9)		—	(3)		—
Research and development tax credit	(1,465)		(.7)	(1,985)		(.6)	(1,692)		(1.4)
Nonqualified benefit plans	(1,142)		(.6)	(1,313)		(.4)	1,516		1.2
Tax-free debt for equity exchange	—		—	(38,967)		(11.4)	—		—
Other	(2,772)		(1.4)	(1,138)		(.3)	10		—
Total income tax expense	$	17,589	8.8	$	10,213	3.1	$	6,195	5.0

The Company's effective tax rate for 2024 differs from the U.S. federal statutory rate of 21 percent due primarily to the impact of credits and deductions provided by law and excess deferred income tax amortization.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Company is no longer subject to U.S. federal, non-U.S., state or local income tax examinations by tax authorities for years ending prior to 2020.

Total reserves for uncertain tax positions were not material. The Company recognizes interest and penalties accrued relative to unrecognized tax benefits in income tax expense.