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Income Taxes
 3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Income Taxes
 
The following table reconciles our effective income tax rate to the federal statutory rate:
 
Three Months Ended March 31,
 
 
2014
 
2013
 
Federal statutory rate
35.0
 %
 
35.0
 %
 
State income, net of federal provisions
0.6

 
(3.2
)
 
Flow-through repairs deductions
(18.1
)
 
(18.0
)
 
Production tax credits
(2.7
)
 
(2.7
)
 
Plant and depreciation of flow through items
0.8

 
2.0

 
Other, net
(0.7
)
 
(1.4
)
 
 
14.9
 %
 
11.7
 %
 

The following table summarizes the significant differences in income tax expense based on the differences between our effective tax rate and the federal statutory rate (in thousands):
 
Three Months Ended March 31,
 
 
2014
 
2013
 
Income Before Income Taxes
$
53,573

 
$
42,946

 
 
 
 
 
 
Income tax calculated at 35% federal statutory rate
18,751

 
15,031

 
 
 
 
 
 
Permanent or flow through adjustments:
 
 
 
 
State income, net of federal provisions
371

 
(1,392
)
 
Flow-through repairs deductions
(9,693
)
 
(7,710
)
 
Production tax credits
(1,430
)
 
(1,168
)
 
Plant and depreciation of flow through items
410

 
846

 
Other, net
(416
)
 
(563
)
 
 
$
(10,758
)
 
$
(9,987
)
 
 
 
 
 
 
Income tax expense
$
7,993

 
$
5,044

 

Our effective tax rate differs from the federal statutory tax rate of 35% primarily due to the regulatory impact of flowing through the federal and state tax benefit of repairs deductions, state tax benefit of bonus depreciation deductions and production tax credits. The regulatory accounting treatment of these deductions requires immediate income recognition for temporary tax differences of this type, which is referred to as the flow-through method. When the flow-through method of accounting for temporary differences is reflected in regulated revenues, we record deferred income taxes and establish related regulatory assets and liabilities.

Uncertain Tax Positions

We have unrecognized tax benefits of approximately $114.1 million as of March 31, 2014, including approximately $79.5 million that, if recognized, would impact our effective tax rate. It is reasonably possible that a significant portion of our unrecognized tax benefits may decrease in the next 12 months.

Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. During the three months ended March 31, 2014, we did not recognize expense for interest or penalties in the Condensed Consolidated Statement of Income. As of March 31, 2014 and December 31, 2013, we had $0.4 million of interest accrued in the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2013, we did not recognize expense for interest or penalties and did not have any amounts accrued for the payment of interest and penalties.

In September 2013, the Internal Revenue Service (IRS) issued final tangible property regulations, which include guidance on a safe harbor method for determining the tax treatment of repair costs related to electric transmission and distribution property. The regulations were effective January 1, 2014. The most substantial area of the regulations is determining if an expenditure related to tangible property is a repair or should be capitalized. In recent years, we filed changes in the method of accounting related to repairs of utility property. We will file accounting method changes to comply with the regulations as issued, but do not expect the changes to have a material effect on our financial position or results of operations.

Our federal tax returns from 2000 forward remain subject to examination by the IRS.