XML 35 R19.htm IDEA: XBRL DOCUMENT
v3.20.2

Income Tax | 6 Months Ended
--- | ---
Jun. 30, 2020
Income Tax Disclosure [Abstract] |
Income Tax | Income Tax In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. The CARES Act provides relief to corporate taxpayers by permitting a five-year carryback of net operating losses (NOLs) for tax years 2018, 2019 and 2020, removing the 80 percent limitation when applying the NOLs to carryback years, increasing the 30 percent limitation on interest deductibility to 50 percent of adjusted taxable income for tax years 2019 and 2020, and provides for certain employment tax credits and refunds for eligible employers. Under the CARES Act, Con Edison will carryback its $29 million NOL from tax year 2018 to tax year 2013 generating a $2.5 million net tax refund for which a tax receivable was established in the first quarter of 2020. In addition, Con Edison recognized a discrete income tax benefit of $4 million in the first quarter of 2020, due to the higher federal statutory tax rate in 2013. The 2018 federal NOL was recorded at 21 percent and will be carried back to tax year 2013, which had a 35 percent federal statutory tax rate. This tax benefit was primarily recognized at the Clean Energy Businesses. Con Edison’s income tax expense decreased to $9 million for the three months ended June 30, 2020 from $19 million for the three months ended June 30, 2019. The decrease in income tax expense is primarily due to an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, offset in part by higher income before income tax expense, the absence of the amortization of excess deferred state income taxes, higher state income taxes and higher allowance for uncollectible accounts. CECONY’s income tax expense decreased to $7 million for the three months ended June 30, 2020 from $27 million for the three months ended June 30, 2019. The decrease in income tax expense is primarily due to lower income before income tax expense and an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, offset in part by the absence of the amortization of excess deferred state income taxes and higher allowance for uncollectible accounts. Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the three months ended June 30, 2020 and 2019 is as follows:
| Con Edison | CECONY
(% of Pre-tax income) | 2020 |  | 2019 |  | 2020 |  | 2019 |
STATUTORY TAX RATE |  |  |  |
Federal | 21 | % | 21 | % | 21 | % | 21 | %
Changes in computed taxes resulting from: |  |  |  |
State income tax | 6 |  | 6 |  | 6 |  | 5 |
Amortization of excess deferred federal income taxes | (20 | ) | (9 | ) | (25 | ) | (9 | )
Taxes attributable to non-controlling interest | (2 | ) | (4 | ) | — |  | — |
Cost of removal | 4 |  | 2 |  | 5 |  | 2 |
Other plant-related items | (3 | ) | (1 | ) | (4 | ) | (1 | )
Allowance for uncollectible accounts | 1 |  | — |  | 1 |  | — |
Renewable energy credits | (4 | ) | (4 | ) | — |  | — |
Amortization of excess deferred state income taxes | — |  | (2 | ) | — |  | (2 | )
Other | 1 |  | 1 |  | — |  | (1 | )
Effective tax rate | 4 | % | 10 | % | 4 | % | 15 | %
Con Edison’s income tax expense decreased to $64 million for the six months ended June 30, 2020 from $127 million for the six months ended June 30, 2019. The decrease in income tax expense is primarily due to lower income before income tax expense, an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, higher renewable energy credits and a $4 million income tax benefit due to the ability to carryback a net operating loss from the 2018 tax year to the 2013 tax year as allowed under the CARES Act, offset in part by the absence of the amortization of excess deferred state income taxes and higher allowance for uncollectible accounts. CECONY’s income tax expense decreased to $102 million for the six months ended June 30, 2020 from $151 million for the six months ended June 30, 2019. The decrease in income tax expense is primarily due to lower income before income tax expense, lower state income taxes and an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, offset in part by the absence of the amortization of excess deferred state income taxes and higher allowance for uncollectible accounts. Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the six months ended June 30, 2020 and 2019 is as follows:
| Con Edison | CECONY
(% of Pre-tax income) | 2020 |  | 2019 |  | 2020 |  | 2019 |
STATUTORY TAX RATE |  |  |  |
Federal | 21 | % | 21 | % | 21 | % | 21 | %
Changes in computed taxes resulting from: |  |  |  |
State income tax | 5 |  | 5 |  | 5 |  | 5 |
Amortization of excess deferred federal income taxes | (12 | ) | (4 | ) | (12 | ) | (4 | )
Taxes attributable to non-controlling interest | (1 | ) | (1 | ) | — |  | — |
Cost of removal | 2 |  | 1 |  | 2 |  | 1 |
Other plant-related items | (2 | ) | (1 | ) | (2 | ) | — |
Renewable energy credits | (3 | ) | (2 | ) | — |  | — |
CARES Act NOL carryback | (1 | ) | — |  | — |  | — |
Amortization of excess deferred state income taxes | — |  | (1 | ) | — |  | (1 | )
Other | 1 |  | (1 | ) | 1 |  | (1 | )
Effective tax rate | 10 | % | 17 | % | 15 | % | 21 | %
CECONY deferred as regulatory liabilities its estimated net benefits for its electric service under the TCJA for the six months ended June 30, 2019. The net benefits include the revenue requirement impact of the reduction in the corporate federal income tax rate to 21 percent, the elimination for utilities of bonus depreciation and the amortization of excess deferred federal income taxes the utilities collected from customers that will not need to be paid to the Internal Revenue Service under the TCJA. See “Other Regulatory Matters” in Note B. Under CECONY’s new electric rate plan that began in the first quarter of 2020, the deferral of its net benefits for its electric service ceased and is included in its new rates. Additionally, the amortization of the unprotected excess deferred federal income taxes for its electric and gas services is being amortized over a five-year period, which increased the tax benefit in the first six months of 2020. Uncertain Tax Positions At June 30, 2020, the estimated liability for uncertain tax positions for Con Edison was $13 million ($3 million for CECONY). Con Edison reasonably expects to resolve within the next twelve months approximately $1 million of various federal and state uncertainties due to the expected completion of ongoing tax examinations, of which the entire amount, if recognized, would reduce Con Edison's effective tax rate. The amount related to CECONY is immaterial. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is $13 million ($12 million, net of federal taxes) with $3 million attributable to CECONY. The Companies recognize interest on liabilities for uncertain tax positions in interest expense and would recognize penalties, if any, in operating expenses in the Companies’ consolidated income statements. In the six months ended June 30, 2020, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At June 30, 2020 and December 31, 2019, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration