Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

AWR’s effective income tax rate (“ETR”) was 21.9% and 23.2% for the three months ended September 30, 2024 and 2023, respectively, and was 23.4% and 24.3% for the nine months ended September 30, 2024 and 2023, respectively. GSWC’s ETR was 22.6% and 24.9% for the three months ended September 30, 2024 and 2023, respectively, and was 24.0% and 25.3% for the nine months ended September 30, 2024 and 2023, respectively.

The AWR and GSWC ETRs differed from the federal corporate statutory tax rate of 21% primarily due to (i) state taxes; (ii) permanent differences, including certain tax effects from stock compensation; (iii) the ongoing amortization of the excess deferred income tax liability; and (iv) differences between book and taxable income that are treated as flowed-through adjustments in accordance with regulatory requirements (principally from plant, rate-case, and compensation-related items). As regulated utilities, GSWC and BVES treat certain temporary differences as being flowed-through to customers in computing their income tax expense consistent with the income tax method used in their CPUC-jurisdiction rate making. Flowed-through items either increase or decrease tax expense and thus impact the ETR.