Significant Accounting Policies (Notes)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

SIGNIFICANT ACCOUNTING POLICIES

Other Income

Other income is recognized for non-operating income such as equity earnings, allowance for equity funds used during construction and contract services. Power & Industrial Projects also recognizes Other income in connection with the sale of membership interests in reduced emissions fuel facilities to investors. In exchange for the cash received, the investors will receive a portion of the economic attributes of the facilities, including income tax attributes. The transactions are not treated as a sale of membership interests for financial reporting purposes. Other income is considered earned when refined coal is produced and tax credits are generated. Power & Industrial Projects recognized approximately $25 million of Other income for the three months ended September 30, 2014 and 2013, respectively, and approximately $57 million and $60 million of Other income for the nine months ended September 30, 2014 and 2013, respectively.

Changes in Accumulated Other Comprehensive Loss

For the three and nine months endedSeptember 30, 2014 and 2013, reclassifications out of accumulated other comprehensive loss for the Company were not material. Changes in accumulated other comprehensive loss are presented in the Consolidated Statements of Changes in Equity.

Intangible Assets

The Company has certain intangible assets relating to emission allowances, renewable energy credits and non-utility contracts as shown below:

	September 30, 2014		December 31, 2013
	(In millions)
Emission allowances	$	1	$	2
Renewable energy credits	50		51
Contract intangible assets	123		126
	174		179
Less accumulated amortization	54		45
Intangible assets, net	120		134
Less current intangible assets	12		12
	$	108	$	122

Emission allowances and renewable energy credits are charged to expense, using average cost, as the allowances and credits are consumed in the operation of the business. The Company amortizes contract intangible assets on a straight-line basis over the expected period of benefit, ranging from 1 to 28 years.

Income Taxes

The Company's effective tax rate for the three months ended September 30, 2014 was 12% as compared to 28% for the three months ended September 30, 2013. The Company's effective tax rate for the nine months ended September 30, 2014 was 27% as compared to 29% for the nine months ended September 30, 2013. The 16% decrease in the effective tax rate for the three months ended September 30, 2014 is due to higher production tax credits. The 2% decrease in effective tax rate for the nine months ended September 30, 2014 is due to higher production tax credits, partially offset by $8 million of deferred tax expense resulting from New York state income tax reform enacted on March 31, 2014.

The Company had $2 million of unrecognized tax benefits at September 30, 2014, that, if recognized, would favorably impact its effective tax rate. The Company believes that it is possible that there will be a decrease in the unrecognized tax benefits of up to $1 million in the next twelve months.