Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

6. INCOME TAXES

DESC’s effective tax rate for the nine months ended September 30, 2022 is 20.1% compared to 7.2% for the nine months ended September 30, 2021. DESC’s effective tax rate for the nine months ended September 30, 2021 is primarily attributable to nominal year-to-date pre-tax income resulting from charges associated with the settlement of the South Carolina electric base rate case.   

As of September 30, 2022, there have been no material changes in DESC’s unrecognized tax benefits.  It is reasonably possible that recent case law and interactions with the taxing authority could result in a decrease in unrecognized tax benefits by up to $26 million during the next twelve months. If such changes were to occur, other than revisions of the accrual for interest on tax underpayments and overpayments, earnings could increase by up to $26 million. See Note 7 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of these unrecognized tax benefits.