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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes [Line Items] |
Income Taxes | Income Taxes A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSEG |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 887 |  |  | $ | 1,679 |  |  | $ | 1,518 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (74 | ) |  | $ | 243 |  |  | $ | 335 |  |
| State |  | 61 |  |  | 85 |  |  | 58 |  |
| Total Current |  | (13 | ) |  | 328 |  |  | 393 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 311 |  |  | 540 |  |  | 262 |  |
| State |  | 28 |  |  | 104 |  |  | 260 |  |
| Total Deferred |  | 339 |  |  | 644 |  |  | 522 |  |
| Investment Tax Credit (ITC) |  | 85 |  |  | 29 |  |  | 23 |  |
| Total Income Taxes |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Pre-Tax Income |  | $ | 1,298 |  |  | $ | 2,680 |  |  | $ | 2,456 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 454 |  |  | $ | 938 |  |  | $ | 860 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 56 |  |  | 129 |  |  | 145 |  |
| Uncertain Tax Positions |  | (31 | ) |  | 7 |  |  | (9 | ) |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 14 |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (25 | ) |  | (13 | ) |  | (14 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (12 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (9 | ) |  | (4 | ) |  | (17 | ) |
| Sub-Total |  | (43 | ) |  | 63 |  |  | 78 |  |
| Total Income Tax Provision |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Effective Income Tax Rate |  | 31.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSEG:
|  |  | As of December 31, |
| PSEG |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent |  |  |  |  |
| OPEB |  | $ | 283 |  |  | $ | 256 |  |
| Related to Uncertain Tax Position |  | 155 |  |  | 160 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 438 |  |  | $ | 443 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 6,593 |  |  | $ | 6,174 |  |
| New Jersey Corporate Business Tax |  | 674 |  |  | 615 |  |
| Leasing Activities |  | 565 |  |  | 612 |  |
| Pension Costs |  | 197 |  |  | 218 |  |
| AROs and NDT Fund |  | 398 |  |  | 393 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 212 |  |  | 244 |  |
| Total Noncurrent Liabilities |  | $ | 8,847 |  |  | $ | 8,447 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 8,409 |  |  | $ | 8,004 |  |
| ITC |  | 249 |  |  | 162 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 8,658 |  |  | $ | 8,166 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. Also, the deferred tax effect of AROs is presented net of the deferred tax effect of the associated funding of those obligations. A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSE&G |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 889 |  |  | $ | 787 |  |  | $ | 725 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (153 | ) |  | $ | 32 |  |  | $ | 124 |  |
| State |  | 10 |  |  | 52 |  |  | 16 |  |
| Total Current |  | (143 | ) |  | 84 |  |  | 140 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 551 |  |  | 325 |  |  | 214 |  |
| State |  | 102 |  |  | 52 |  |  | 84 |  |
| Total Deferred |  | 653 |  |  | 377 |  |  | 298 |  |
| ITC |  | 5 |  |  | 9 |  |  | 11 |  |
| Total Income Taxes |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Pre-Tax Income |  | $ | 1,404 |  |  | $ | 1,257 |  |  | $ | 1,174 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 491 |  |  | $ | 440 |  |  | $ | 411 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 72 |  |  | 67 |  |  | 65 |  |
| Uncertain Tax Positions |  | (18 | ) |  | (14 | ) |  | — |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (7 | ) |  | (6 | ) |  | (7 | ) |
| Audit Settlement |  | — |  |  | — |  |  | 1 |  |
| Other |  | (3 | ) |  | 3 |  |  | (8 | ) |
| Sub-Total |  | 24 |  |  | 30 |  |  | 38 |  |
| Total Income Tax Provision |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Effective Income Tax Rate |  | 36.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSE&G:
|  |  | As of December 31, |
| PSE&G |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| OPEB |  | $ | 189 |  |  | $ | 164 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 189 |  |  | $ | 191 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 4,983 |  |  | $ | 4,435 |  |
| New Jersey Corporate Business Tax |  | 385 |  |  | 312 |  |
| Conservation Costs |  | 33 |  |  | 40 |  |
| Pension Costs |  | 252 |  |  | 262 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 118 |  |  | 54 |  |
| Total Noncurrent Liabilities |  | $ | 5,979 |  |  | $ | 5,294 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 5,790 |  |  | $ | 5,103 |  |
| ITC |  | 83 |  |  | 78 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 5,873 |  |  | $ | 5,181 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. A reconciliation of reported income tax expense for Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| Power |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 18 |  |  | $ | 856 |  |  | $ | 760 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | 107 |  |  | $ | 220 |  |  | $ | 231 |  |
| State |  | 40 |  |  | 30 |  |  | 39 |  |
| Total Current |  | 147 |  |  | 250 |  |  | 270 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | (222 | ) |  | 189 |  |  | 163 |  |
| State |  | (68 | ) |  | 52 |  |  | 48 |  |
| Total Deferred |  | (290 | ) |  | 241 |  |  | 211 |  |
| ITC |  | 82 |  |  | 20 |  |  | 10 |  |
| Total Income Taxes |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Pre-Tax Income |  | $ | (43 | ) |  | $ | 1,367 |  |  | $ | 1,251 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | (15 | ) |  | $ | 478 |  |  | $ | 438 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | (18 | ) |  | 59 |  |  | 58 |  |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 15 |  |
| Tax Credits |  | (18 | ) |  | (7 | ) |  | (6 | ) |
| Uncertain Tax Positions |  | 9 |  |  | 22 |  |  | (8 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (4 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (5 | ) |  | (5 | ) |  | 14 |  |
| Sub-Total |  | (46 | ) |  | 33 |  |  | 53 |  |
| Total Income Tax Provision |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Effective Income Tax Rate |  | 141.9 | % |  | 37.4 | % |  | 39.2 | % |
The following is an analysis of deferred income taxes for Power:
|  |  | As of December 31, |
| Power |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Pension Costs |  | $ | 68 |  |  | $ | 56 |  |
| Contractual Liabilities & Environmental Costs |  | 18 |  |  | 18 |  |
| Related to Uncertain Tax Positions |  | 53 |  |  | 47 |  |
| Other |  | 76 |  |  | — |  |
| Total Noncurrent Assets |  | $ | 215 |  |  | $ | 121 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 1,605 |  |  | $ | 1,736 |  |
| New Jersey Corporate Business Tax |  | 214 |  |  | 243 |  |
| AROs and NDT Fund |  | 400 |  |  | 395 |  |
| Other |  | — |  |  | 10 |  |
| Total Noncurrent Liabilities |  | $ | 2,219 |  |  | $ | 2,384 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 2,004 |  |  | $ | 2,263 |  |
| ITC |  | 166 |  |  | 84 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 2,170 |  |  | $ | 2,347 |  |
In the above table, the deferred tax effect of asset retirement obligations is presented net of the deferred tax effect of the associated funding of those obligations. PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. These amounts were determined using the enacted federal income tax rate of 35% and state income tax rate of 9%. For additional information, see Note 6. Regulatory Assets and Liabilities. In December 2014, the Tax Increase Prevention Act of 2014 was enacted, which extended the 50% bonus depreciation rules for qualified property that was placed into service before January 1, 2015 and for long production property that was placed into service in 2015. In December 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (Tax Act). Among other provisions, the Tax Act includes an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The rate is reduced to 40% and 30% for eligible property placed in service in 2018 and 2019, respectively. In addition, long production property placed in service in 2020 will also qualify for 30% bonus depreciation. The ITC rate has been extended through December 31, 2019 but is reduced to 26% and 22% for projects commenced in 2020 and 2021, respectively. The financial impact of the extensions of the ITC rate will depend upon future transactions. These provisions have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. These tax benefits would have otherwise been received over an estimated average 20 year period. However, these tax benefits will have a negative impact on the rate base of several of PSE&G’s programs. PSEG recorded the following amounts related to its unrecognized tax benefits, which were primarily comprised of amounts recorded for PSE&G, Power and Energy Holdings:
| 2016 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2016 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 12 |  |  | 3 |  |  | 6 |  |  | 2 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (62 | ) |  | (23 | ) |  | (1 | ) |  | (38 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 19 |  |  | 6 |  |  | 12 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases due to Lapses of Applicable Statute of Limitations |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2016 |  | $ | 328 |  |  | $ | 140 |  |  | $ | 128 |  |  | $ | 57 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (200 | ) |  | (106 | ) |  | (74 | ) |  | (20 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (31 | ) |  | (31 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 97 |  |  | $ | 3 |  |  | $ | 54 |  |  | $ | 37 |  |
| 2015 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2015 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 87 |  |  | 55 |  |  | 28 |  |  | 4 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (50 | ) |  | (43 | ) |  | (6 | ) |  | (1 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 28 |  |  | 5 |  |  | 23 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (1 | ) |  | (1 | ) |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (10 | ) |  | — |  |  | (4 | ) |  | (5 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2015 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (264 | ) |  | (162 | ) |  | (68 | ) |  | (34 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 95 |  |  | $ | (8 | ) |  | $ | 43 |  |  | $ | 59 |  |
| 2014 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2014 |  | $ | 478 |  |  | $ | 208 |  |  | $ | 156 |  |  | $ | 110 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 82 |  |  | 65 |  |  | 17 |  |  | — |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (190 | ) |  | (92 | ) |  | (80 | ) |  | (18 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 30 |  |  | 16 |  |  | 9 |  |  | 5 |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (8 | ) |  | — |  |  | (8 | ) |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (60 | ) |  | (32 | ) |  | (24 | ) |  | (2 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2014 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (225 | ) |  | (138 | ) |  | (52 | ) |  | (35 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 80 |  |  | $ | — |  |  | $ | 18 |  |  | $ | 60 |  |
PSEG and its subsidiaries include accrued interest and penalties related to uncertain tax positions required to be recorded, as Income Tax Expense in the Consolidated Statements of Operations. Accumulated interest and penalties that are recorded on the Consolidated Balance Sheets on uncertain tax positions were as follows:
|  |  | Accumulated Interest and Penalties on Uncertain Tax Positions as of December 31, |
|  |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| PSE&G |  | $ | 22 |  |  | $ | 20 |  |  | $ | 15 |  |
| Power |  | 17 |  |  | 6 |  |  | 9 |  |
| Energy Holdings |  | 20 |  |  | 40 |  |  | 45 |  |
| Total |  | $ | 59 |  |  | $ | 66 |  |  | $ | 69 |  |
It is reasonably possible that total unrecognized tax benefits will significantly increase or decrease within the next twelve months due to either agreements with various taxing authorities upon audit, the expiration of the Statute of Limitations, or other pending tax matters. These potential increases or decreases are as follows:
| Possible (Increase)/Decrease in Total Unrecognized Tax Benefits |  | Over the next 12 Months |
|  |  | Millions |
| PSEG |  | $ | 14 |  |
| PSE&G |  | $ | 3 |  |
| Power |  | $ | 7 |  |
A description of income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are:
|  |  | PSEG |  | PSE&G |  | Power |
| United States |  |  |  |  |  |  |
| Federal |  | 2011-2015 |  | N/A |  | N/A |
| New Jersey |  | 2006-2015 |  | 2011-2015 |  | N/A |
| Pennsylvania |  | 2006-2015 |  | 2007-2015 |  | N/A |
| Connecticut |  | 2007-2015 |  | N/A |  | N/A |
| Texas |  | 2008-2015 |  | N/A |  | N/A |
| California |  | 2006-2015 |  | N/A |  | N/A |
| New York |  | 2014-2015 |  | N/A |  | 2014-2015 |
PSE&G [Member] |
Income Taxes [Line Items] |
Income Taxes | Income Taxes A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSEG |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 887 |  |  | $ | 1,679 |  |  | $ | 1,518 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (74 | ) |  | $ | 243 |  |  | $ | 335 |  |
| State |  | 61 |  |  | 85 |  |  | 58 |  |
| Total Current |  | (13 | ) |  | 328 |  |  | 393 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 311 |  |  | 540 |  |  | 262 |  |
| State |  | 28 |  |  | 104 |  |  | 260 |  |
| Total Deferred |  | 339 |  |  | 644 |  |  | 522 |  |
| Investment Tax Credit (ITC) |  | 85 |  |  | 29 |  |  | 23 |  |
| Total Income Taxes |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Pre-Tax Income |  | $ | 1,298 |  |  | $ | 2,680 |  |  | $ | 2,456 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 454 |  |  | $ | 938 |  |  | $ | 860 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 56 |  |  | 129 |  |  | 145 |  |
| Uncertain Tax Positions |  | (31 | ) |  | 7 |  |  | (9 | ) |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 14 |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (25 | ) |  | (13 | ) |  | (14 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (12 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (9 | ) |  | (4 | ) |  | (17 | ) |
| Sub-Total |  | (43 | ) |  | 63 |  |  | 78 |  |
| Total Income Tax Provision |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Effective Income Tax Rate |  | 31.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSEG:
|  |  | As of December 31, |
| PSEG |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent |  |  |  |  |
| OPEB |  | $ | 283 |  |  | $ | 256 |  |
| Related to Uncertain Tax Position |  | 155 |  |  | 160 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 438 |  |  | $ | 443 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 6,593 |  |  | $ | 6,174 |  |
| New Jersey Corporate Business Tax |  | 674 |  |  | 615 |  |
| Leasing Activities |  | 565 |  |  | 612 |  |
| Pension Costs |  | 197 |  |  | 218 |  |
| AROs and NDT Fund |  | 398 |  |  | 393 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 212 |  |  | 244 |  |
| Total Noncurrent Liabilities |  | $ | 8,847 |  |  | $ | 8,447 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 8,409 |  |  | $ | 8,004 |  |
| ITC |  | 249 |  |  | 162 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 8,658 |  |  | $ | 8,166 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. Also, the deferred tax effect of AROs is presented net of the deferred tax effect of the associated funding of those obligations. A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSE&G |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 889 |  |  | $ | 787 |  |  | $ | 725 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (153 | ) |  | $ | 32 |  |  | $ | 124 |  |
| State |  | 10 |  |  | 52 |  |  | 16 |  |
| Total Current |  | (143 | ) |  | 84 |  |  | 140 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 551 |  |  | 325 |  |  | 214 |  |
| State |  | 102 |  |  | 52 |  |  | 84 |  |
| Total Deferred |  | 653 |  |  | 377 |  |  | 298 |  |
| ITC |  | 5 |  |  | 9 |  |  | 11 |  |
| Total Income Taxes |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Pre-Tax Income |  | $ | 1,404 |  |  | $ | 1,257 |  |  | $ | 1,174 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 491 |  |  | $ | 440 |  |  | $ | 411 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 72 |  |  | 67 |  |  | 65 |  |
| Uncertain Tax Positions |  | (18 | ) |  | (14 | ) |  | — |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (7 | ) |  | (6 | ) |  | (7 | ) |
| Audit Settlement |  | — |  |  | — |  |  | 1 |  |
| Other |  | (3 | ) |  | 3 |  |  | (8 | ) |
| Sub-Total |  | 24 |  |  | 30 |  |  | 38 |  |
| Total Income Tax Provision |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Effective Income Tax Rate |  | 36.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSE&G:
|  |  | As of December 31, |
| PSE&G |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| OPEB |  | $ | 189 |  |  | $ | 164 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 189 |  |  | $ | 191 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 4,983 |  |  | $ | 4,435 |  |
| New Jersey Corporate Business Tax |  | 385 |  |  | 312 |  |
| Conservation Costs |  | 33 |  |  | 40 |  |
| Pension Costs |  | 252 |  |  | 262 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 118 |  |  | 54 |  |
| Total Noncurrent Liabilities |  | $ | 5,979 |  |  | $ | 5,294 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 5,790 |  |  | $ | 5,103 |  |
| ITC |  | 83 |  |  | 78 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 5,873 |  |  | $ | 5,181 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. A reconciliation of reported income tax expense for Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| Power |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 18 |  |  | $ | 856 |  |  | $ | 760 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | 107 |  |  | $ | 220 |  |  | $ | 231 |  |
| State |  | 40 |  |  | 30 |  |  | 39 |  |
| Total Current |  | 147 |  |  | 250 |  |  | 270 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | (222 | ) |  | 189 |  |  | 163 |  |
| State |  | (68 | ) |  | 52 |  |  | 48 |  |
| Total Deferred |  | (290 | ) |  | 241 |  |  | 211 |  |
| ITC |  | 82 |  |  | 20 |  |  | 10 |  |
| Total Income Taxes |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Pre-Tax Income |  | $ | (43 | ) |  | $ | 1,367 |  |  | $ | 1,251 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | (15 | ) |  | $ | 478 |  |  | $ | 438 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | (18 | ) |  | 59 |  |  | 58 |  |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 15 |  |
| Tax Credits |  | (18 | ) |  | (7 | ) |  | (6 | ) |
| Uncertain Tax Positions |  | 9 |  |  | 22 |  |  | (8 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (4 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (5 | ) |  | (5 | ) |  | 14 |  |
| Sub-Total |  | (46 | ) |  | 33 |  |  | 53 |  |
| Total Income Tax Provision |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Effective Income Tax Rate |  | 141.9 | % |  | 37.4 | % |  | 39.2 | % |
The following is an analysis of deferred income taxes for Power:
|  |  | As of December 31, |
| Power |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Pension Costs |  | $ | 68 |  |  | $ | 56 |  |
| Contractual Liabilities & Environmental Costs |  | 18 |  |  | 18 |  |
| Related to Uncertain Tax Positions |  | 53 |  |  | 47 |  |
| Other |  | 76 |  |  | — |  |
| Total Noncurrent Assets |  | $ | 215 |  |  | $ | 121 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 1,605 |  |  | $ | 1,736 |  |
| New Jersey Corporate Business Tax |  | 214 |  |  | 243 |  |
| AROs and NDT Fund |  | 400 |  |  | 395 |  |
| Other |  | — |  |  | 10 |  |
| Total Noncurrent Liabilities |  | $ | 2,219 |  |  | $ | 2,384 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 2,004 |  |  | $ | 2,263 |  |
| ITC |  | 166 |  |  | 84 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 2,170 |  |  | $ | 2,347 |  |
In the above table, the deferred tax effect of asset retirement obligations is presented net of the deferred tax effect of the associated funding of those obligations. PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. These amounts were determined using the enacted federal income tax rate of 35% and state income tax rate of 9%. For additional information, see Note 6. Regulatory Assets and Liabilities. In December 2014, the Tax Increase Prevention Act of 2014 was enacted, which extended the 50% bonus depreciation rules for qualified property that was placed into service before January 1, 2015 and for long production property that was placed into service in 2015. In December 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (Tax Act). Among other provisions, the Tax Act includes an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The rate is reduced to 40% and 30% for eligible property placed in service in 2018 and 2019, respectively. In addition, long production property placed in service in 2020 will also qualify for 30% bonus depreciation. The ITC rate has been extended through December 31, 2019 but is reduced to 26% and 22% for projects commenced in 2020 and 2021, respectively. The financial impact of the extensions of the ITC rate will depend upon future transactions. These provisions have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. These tax benefits would have otherwise been received over an estimated average 20 year period. However, these tax benefits will have a negative impact on the rate base of several of PSE&G’s programs. PSEG recorded the following amounts related to its unrecognized tax benefits, which were primarily comprised of amounts recorded for PSE&G, Power and Energy Holdings:
| 2016 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2016 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 12 |  |  | 3 |  |  | 6 |  |  | 2 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (62 | ) |  | (23 | ) |  | (1 | ) |  | (38 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 19 |  |  | 6 |  |  | 12 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases due to Lapses of Applicable Statute of Limitations |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2016 |  | $ | 328 |  |  | $ | 140 |  |  | $ | 128 |  |  | $ | 57 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (200 | ) |  | (106 | ) |  | (74 | ) |  | (20 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (31 | ) |  | (31 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 97 |  |  | $ | 3 |  |  | $ | 54 |  |  | $ | 37 |  |
| 2015 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2015 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 87 |  |  | 55 |  |  | 28 |  |  | 4 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (50 | ) |  | (43 | ) |  | (6 | ) |  | (1 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 28 |  |  | 5 |  |  | 23 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (1 | ) |  | (1 | ) |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (10 | ) |  | — |  |  | (4 | ) |  | (5 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2015 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (264 | ) |  | (162 | ) |  | (68 | ) |  | (34 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 95 |  |  | $ | (8 | ) |  | $ | 43 |  |  | $ | 59 |  |
| 2014 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2014 |  | $ | 478 |  |  | $ | 208 |  |  | $ | 156 |  |  | $ | 110 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 82 |  |  | 65 |  |  | 17 |  |  | — |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (190 | ) |  | (92 | ) |  | (80 | ) |  | (18 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 30 |  |  | 16 |  |  | 9 |  |  | 5 |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (8 | ) |  | — |  |  | (8 | ) |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (60 | ) |  | (32 | ) |  | (24 | ) |  | (2 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2014 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (225 | ) |  | (138 | ) |  | (52 | ) |  | (35 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 80 |  |  | $ | — |  |  | $ | 18 |  |  | $ | 60 |  |
PSEG and its subsidiaries include accrued interest and penalties related to uncertain tax positions required to be recorded, as Income Tax Expense in the Consolidated Statements of Operations. Accumulated interest and penalties that are recorded on the Consolidated Balance Sheets on uncertain tax positions were as follows:
|  |  | Accumulated Interest and Penalties on Uncertain Tax Positions as of December 31, |
|  |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| PSE&G |  | $ | 22 |  |  | $ | 20 |  |  | $ | 15 |  |
| Power |  | 17 |  |  | 6 |  |  | 9 |  |
| Energy Holdings |  | 20 |  |  | 40 |  |  | 45 |  |
| Total |  | $ | 59 |  |  | $ | 66 |  |  | $ | 69 |  |
It is reasonably possible that total unrecognized tax benefits will significantly increase or decrease within the next twelve months due to either agreements with various taxing authorities upon audit, the expiration of the Statute of Limitations, or other pending tax matters. These potential increases or decreases are as follows:
| Possible (Increase)/Decrease in Total Unrecognized Tax Benefits |  | Over the next 12 Months |
|  |  | Millions |
| PSEG |  | $ | 14 |  |
| PSE&G |  | $ | 3 |  |
| Power |  | $ | 7 |  |
A description of income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are:
|  |  | PSEG |  | PSE&G |  | Power |
| United States |  |  |  |  |  |  |
| Federal |  | 2011-2015 |  | N/A |  | N/A |
| New Jersey |  | 2006-2015 |  | 2011-2015 |  | N/A |
| Pennsylvania |  | 2006-2015 |  | 2007-2015 |  | N/A |
| Connecticut |  | 2007-2015 |  | N/A |  | N/A |
| Texas |  | 2008-2015 |  | N/A |  | N/A |
| California |  | 2006-2015 |  | N/A |  | N/A |
| New York |  | 2014-2015 |  | N/A |  | 2014-2015 |
Power [Member] |
Income Taxes [Line Items] |
Income Taxes | Income Taxes A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSEG |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 887 |  |  | $ | 1,679 |  |  | $ | 1,518 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (74 | ) |  | $ | 243 |  |  | $ | 335 |  |
| State |  | 61 |  |  | 85 |  |  | 58 |  |
| Total Current |  | (13 | ) |  | 328 |  |  | 393 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 311 |  |  | 540 |  |  | 262 |  |
| State |  | 28 |  |  | 104 |  |  | 260 |  |
| Total Deferred |  | 339 |  |  | 644 |  |  | 522 |  |
| Investment Tax Credit (ITC) |  | 85 |  |  | 29 |  |  | 23 |  |
| Total Income Taxes |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Pre-Tax Income |  | $ | 1,298 |  |  | $ | 2,680 |  |  | $ | 2,456 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 454 |  |  | $ | 938 |  |  | $ | 860 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 56 |  |  | 129 |  |  | 145 |  |
| Uncertain Tax Positions |  | (31 | ) |  | 7 |  |  | (9 | ) |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 14 |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (25 | ) |  | (13 | ) |  | (14 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (12 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (9 | ) |  | (4 | ) |  | (17 | ) |
| Sub-Total |  | (43 | ) |  | 63 |  |  | 78 |  |
| Total Income Tax Provision |  | $ | 411 |  |  | $ | 1,001 |  |  | $ | 938 |  |
| Effective Income Tax Rate |  | 31.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSEG:
|  |  | As of December 31, |
| PSEG |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent |  |  |  |  |
| OPEB |  | $ | 283 |  |  | $ | 256 |  |
| Related to Uncertain Tax Position |  | 155 |  |  | 160 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 438 |  |  | $ | 443 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 6,593 |  |  | $ | 6,174 |  |
| New Jersey Corporate Business Tax |  | 674 |  |  | 615 |  |
| Leasing Activities |  | 565 |  |  | 612 |  |
| Pension Costs |  | 197 |  |  | 218 |  |
| AROs and NDT Fund |  | 398 |  |  | 393 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 212 |  |  | 244 |  |
| Total Noncurrent Liabilities |  | $ | 8,847 |  |  | $ | 8,447 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 8,409 |  |  | $ | 8,004 |  |
| ITC |  | 249 |  |  | 162 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 8,658 |  |  | $ | 8,166 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. Also, the deferred tax effect of AROs is presented net of the deferred tax effect of the associated funding of those obligations. A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| PSE&G |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 889 |  |  | $ | 787 |  |  | $ | 725 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | (153 | ) |  | $ | 32 |  |  | $ | 124 |  |
| State |  | 10 |  |  | 52 |  |  | 16 |  |
| Total Current |  | (143 | ) |  | 84 |  |  | 140 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | 551 |  |  | 325 |  |  | 214 |  |
| State |  | 102 |  |  | 52 |  |  | 84 |  |
| Total Deferred |  | 653 |  |  | 377 |  |  | 298 |  |
| ITC |  | 5 |  |  | 9 |  |  | 11 |  |
| Total Income Taxes |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Pre-Tax Income |  | $ | 1,404 |  |  | $ | 1,257 |  |  | $ | 1,174 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | 491 |  |  | $ | 440 |  |  | $ | 411 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | 72 |  |  | 67 |  |  | 65 |  |
| Uncertain Tax Positions |  | (18 | ) |  | (14 | ) |  | — |  |
| Plant-Related Items |  | (20 | ) |  | (20 | ) |  | (13 | ) |
| Tax Credits |  | (7 | ) |  | (6 | ) |  | (7 | ) |
| Audit Settlement |  | — |  |  | — |  |  | 1 |  |
| Other |  | (3 | ) |  | 3 |  |  | (8 | ) |
| Sub-Total |  | 24 |  |  | 30 |  |  | 38 |  |
| Total Income Tax Provision |  | $ | 515 |  |  | $ | 470 |  |  | $ | 449 |  |
| Effective Income Tax Rate |  | 36.7 | % |  | 37.4 | % |  | 38.2 | % |
The following is an analysis of deferred income taxes for PSE&G:
|  |  | As of December 31, |
| PSE&G |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| OPEB |  | $ | 189 |  |  | $ | 164 |  |
| Securitization-Overcollection |  | — |  |  | 27 |  |
| Total Noncurrent Assets |  | $ | 189 |  |  | $ | 191 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 4,983 |  |  | $ | 4,435 |  |
| New Jersey Corporate Business Tax |  | 385 |  |  | 312 |  |
| Conservation Costs |  | 33 |  |  | 40 |  |
| Pension Costs |  | 252 |  |  | 262 |  |
| Taxes Recoverable Through Future Rate (net) |  | 208 |  |  | 191 |  |
| Other |  | 118 |  |  | 54 |  |
| Total Noncurrent Liabilities |  | $ | 5,979 |  |  | $ | 5,294 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 5,790 |  |  | $ | 5,103 |  |
| ITC |  | 83 |  |  | 78 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 5,873 |  |  | $ | 5,181 |  |
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals. A reconciliation of reported income tax expense for Power with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 35% is as follows:
|  |  | Years Ended December 31, |
| Power |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| Net Income |  | $ | 18 |  |  | $ | 856 |  |  | $ | 760 |  |
| Income Taxes: |  |  |  |  |  |  |
| Operating Income: |  |  |  |  |  |  |
| Current Expense: |  |  |  |  |  |  |
| Federal |  | $ | 107 |  |  | $ | 220 |  |  | $ | 231 |  |
| State |  | 40 |  |  | 30 |  |  | 39 |  |
| Total Current |  | 147 |  |  | 250 |  |  | 270 |  |
| Deferred Expense: |  |  |  |  |  |  |
| Federal |  | (222 | ) |  | 189 |  |  | 163 |  |
| State |  | (68 | ) |  | 52 |  |  | 48 |  |
| Total Deferred |  | (290 | ) |  | 241 |  |  | 211 |  |
| ITC |  | 82 |  |  | 20 |  |  | 10 |  |
| Total Income Taxes |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Pre-Tax Income |  | $ | (43 | ) |  | $ | 1,367 |  |  | $ | 1,251 |  |
| Tax Computed at Statutory Rate @ 35% |  | $ | (15 | ) |  | $ | 478 |  |  | $ | 438 |  |
| Increase (Decrease) Attributable to Flow-Through of Certain Tax Adjustments: |  |  |  |  |  |  |
| State Income Taxes (net of federal income tax) |  | (18 | ) |  | 59 |  |  | 58 |  |
| Manufacturing Deduction |  | (17 | ) |  | (10 | ) |  | (16 | ) |
| NDT Fund |  | 3 |  |  | 7 |  |  | 15 |  |
| Tax Credits |  | (18 | ) |  | (7 | ) |  | (6 | ) |
| Uncertain Tax Positions |  | 9 |  |  | 22 |  |  | (8 | ) |
| Audit Settlement |  | — |  |  | — |  |  | (4 | ) |
| Nuclear Decommissioning Tax Carryback |  | — |  |  | (33 | ) |  | — |  |
| Other |  | (5 | ) |  | (5 | ) |  | 14 |  |
| Sub-Total |  | (46 | ) |  | 33 |  |  | 53 |  |
| Total Income Tax Provision |  | $ | (61 | ) |  | $ | 511 |  |  | $ | 491 |  |
| Effective Income Tax Rate |  | 141.9 | % |  | 37.4 | % |  | 39.2 | % |
The following is an analysis of deferred income taxes for Power:
|  |  | As of December 31, |
| Power |  | 2016 |  | 2015 |
|  |  | Millions |
| Deferred Income Taxes |  |  |  |  |
| Assets: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Pension Costs |  | $ | 68 |  |  | $ | 56 |  |
| Contractual Liabilities & Environmental Costs |  | 18 |  |  | 18 |  |
| Related to Uncertain Tax Positions |  | 53 |  |  | 47 |  |
| Other |  | 76 |  |  | — |  |
| Total Noncurrent Assets |  | $ | 215 |  |  | $ | 121 |  |
| Liabilities: |  |  |  |  |
| Noncurrent: |  |  |  |  |
| Plant-Related Items |  | $ | 1,605 |  |  | $ | 1,736 |  |
| New Jersey Corporate Business Tax |  | 214 |  |  | 243 |  |
| AROs and NDT Fund |  | 400 |  |  | 395 |  |
| Other |  | — |  |  | 10 |  |
| Total Noncurrent Liabilities |  | $ | 2,219 |  |  | $ | 2,384 |  |
| Summary of Accumulated Deferred Income Taxes: |  |  |  |  |
| Net Noncurrent Deferred Income Tax Liabilities |  | $ | 2,004 |  |  | $ | 2,263 |  |
| ITC |  | 166 |  |  | 84 |  |
| Net Total Noncurrent Deferred Income Taxes and ITC |  | $ | 2,170 |  |  | $ | 2,347 |  |
In the above table, the deferred tax effect of asset retirement obligations is presented net of the deferred tax effect of the associated funding of those obligations. PSEG, PSE&G and Power each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities irrespective of the treatment for rate-making purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. These amounts were determined using the enacted federal income tax rate of 35% and state income tax rate of 9%. For additional information, see Note 6. Regulatory Assets and Liabilities. In December 2014, the Tax Increase Prevention Act of 2014 was enacted, which extended the 50% bonus depreciation rules for qualified property that was placed into service before January 1, 2015 and for long production property that was placed into service in 2015. In December 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (Tax Act). Among other provisions, the Tax Act includes an extension of the bonus depreciation rules and the 30% ITC for qualified property placed into service after 2016. Qualified property that is placed in service from January 1, 2015 through December 31, 2017 is eligible for 50% bonus depreciation. The rate is reduced to 40% and 30% for eligible property placed in service in 2018 and 2019, respectively. In addition, long production property placed in service in 2020 will also qualify for 30% bonus depreciation. The ITC rate has been extended through December 31, 2019 but is reduced to 26% and 22% for projects commenced in 2020 and 2021, respectively. The financial impact of the extensions of the ITC rate will depend upon future transactions. These provisions have generated significant cash tax benefits for PSEG, PSE&G and Power through tax benefits related to the accelerated depreciation. These tax benefits would have otherwise been received over an estimated average 20 year period. However, these tax benefits will have a negative impact on the rate base of several of PSE&G’s programs. PSEG recorded the following amounts related to its unrecognized tax benefits, which were primarily comprised of amounts recorded for PSE&G, Power and Energy Holdings:
| 2016 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2016 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 12 |  |  | 3 |  |  | 6 |  |  | 2 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (62 | ) |  | (23 | ) |  | (1 | ) |  | (38 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 19 |  |  | 6 |  |  | 12 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | — |  |  | — |  |  | — |  |  | — |  |
| Decreases due to Lapses of Applicable Statute of Limitations |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2016 |  | $ | 328 |  |  | $ | 140 |  |  | $ | 128 |  |  | $ | 57 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (200 | ) |  | (106 | ) |  | (74 | ) |  | (20 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (31 | ) |  | (31 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 97 |  |  | $ | 3 |  |  | $ | 54 |  |  | $ | 37 |  |
| 2015 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2015 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 87 |  |  | 55 |  |  | 28 |  |  | 4 |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (50 | ) |  | (43 | ) |  | (6 | ) |  | (1 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 28 |  |  | 5 |  |  | 23 |  |  | — |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (1 | ) |  | (1 | ) |  | — |  |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (10 | ) |  | — |  |  | (4 | ) |  | (5 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2015 |  | $ | 386 |  |  | $ | 181 |  |  | $ | 111 |  |  | $ | 93 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (264 | ) |  | (162 | ) |  | (68 | ) |  | (34 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 95 |  |  | $ | (8 | ) |  | $ | 43 |  |  | $ | 59 |  |
| 2014 |  | PSEG |  | PSE&G |  | Power |  | Energy Holdings |
|  |  | Millions |
| Total Amount of Unrecognized Tax Benefits as of January 1, 2014 |  | $ | 478 |  |  | $ | 208 |  |  | $ | 156 |  |  | $ | 110 |  |
| Increases as a Result of Positions Taken in a Prior Period |  | 82 |  |  | 65 |  |  | 17 |  |  | — |  |
| Decreases as a Result of Positions Taken in a Prior Period |  | (190 | ) |  | (92 | ) |  | (80 | ) |  | (18 | ) |
| Increases as a Result of Positions Taken during the Current Period |  | 30 |  |  | 16 |  |  | 9 |  |  | 5 |  |
| Decreases as a Result of Positions Taken during the Current Period |  | (8 | ) |  | — |  |  | (8 | ) |  | — |  |
| Decreases as a Result of Settlements with Taxing Authorities |  | (60 | ) |  | (32 | ) |  | (24 | ) |  | (2 | ) |
| Decreases due to Lapses of Applicable Statute of Limitations |  | — |  |  | — |  |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits as of December 31, 2014 |  | $ | 332 |  |  | $ | 165 |  |  | $ | 70 |  |  | $ | 95 |  |
| Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |  | (225 | ) |  | (138 | ) |  | (52 | ) |  | (35 | ) |
| Regulatory Asset—Unrecognized Tax Benefits |  | (27 | ) |  | (27 | ) |  | — |  |  | — |  |
| Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |  | $ | 80 |  |  | $ | — |  |  | $ | 18 |  |  | $ | 60 |  |
PSEG and its subsidiaries include accrued interest and penalties related to uncertain tax positions required to be recorded, as Income Tax Expense in the Consolidated Statements of Operations. Accumulated interest and penalties that are recorded on the Consolidated Balance Sheets on uncertain tax positions were as follows:
|  |  | Accumulated Interest and Penalties on Uncertain Tax Positions as of December 31, |
|  |  | 2016 |  | 2015 |  | 2014 |
|  |  | Millions |
| PSE&G |  | $ | 22 |  |  | $ | 20 |  |  | $ | 15 |  |
| Power |  | 17 |  |  | 6 |  |  | 9 |  |
| Energy Holdings |  | 20 |  |  | 40 |  |  | 45 |  |
| Total |  | $ | 59 |  |  | $ | 66 |  |  | $ | 69 |  |
It is reasonably possible that total unrecognized tax benefits will significantly increase or decrease within the next twelve months due to either agreements with various taxing authorities upon audit, the expiration of the Statute of Limitations, or other pending tax matters. These potential increases or decreases are as follows:
| Possible (Increase)/Decrease in Total Unrecognized Tax Benefits |  | Over the next 12 Months |
|  |  | Millions |
| PSEG |  | $ | 14 |  |
| PSE&G |  | $ | 3 |  |
| Power |  | $ | 7 |  |
A description of income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are:
|  |  | PSEG |  | PSE&G |  | Power |
| United States |  |  |  |  |  |  |
| Federal |  | 2011-2015 |  | N/A |  | N/A |
| New Jersey |  | 2006-2015 |  | 2011-2015 |  | N/A |
| Pennsylvania |  | 2006-2015 |  | 2007-2015 |  | N/A |
| Connecticut |  | 2007-2015 |  | N/A |  | N/A |
| Texas |  | 2008-2015 |  | N/A |  | N/A |
| California |  | 2006-2015 |  | N/A |  | N/A |
| New York |  | 2014-2015 |  | N/A |  | 2014-2015 |

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