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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Taxes [Abstract] |
Income Taxes | 7. Income Taxes Income Tax Expense (Benefit) The following table presents the components of income tax expense (benefit).
|  | OGE Energy |  |  | OG&E |
Year Ended December 31 (In millions) |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2022 |  |  | 2021 |  |  | 2020 |
Provision (benefit) for current income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 250.8 |  |  | $ | 16.4 |  |  | $ | 8.4 |  |  | $ | (141.2 | ) |  | $ | (9.0 | ) |  | $ | (3.8 | )
State |  |  | 28.8 |  |  |  | 1.7 |  |  |  | 0.5 |  |  |  | (0.9 | ) |  |  | 9.0 |  |  |  | (0.6 | )
Total provision (benefit) for current income taxes |  |  | 279.6 |  |  |  | 18.1 |  |  |  | 8.9 |  |  |  | (142.1 | ) |  |  | — |  |  |  | (4.4 | )
Provision (benefit) for deferred income taxes, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (110.8 | ) |  |  | 133.1 |  |  |  | (105.2 | ) |  |  | 219.9 |  |  |  | 58.3 |  |  |  | 45.7 |
State |  |  | (45.2 | ) |  |  | (10.0 | ) |  |  | (31.1 | ) |  |  | (1.4 | ) |  |  | (16.5 | ) |  |  | (6.6 | )
Total provision (benefit) for deferred income taxes, net |  |  | (156.0 | ) |  |  | 123.1 |  |  |  | (136.3 | ) |  |  | 218.5 |  |  |  | 41.8 |  |  |  | 39.1 |
Total income tax expense (benefit) |  | $ | 123.6 |  |  | $ | 141.2 |  |  | $ | (127.4 | ) |  | $ | 76.4 |  |  | $ | 41.8 |  |  | $ | 34.7 |
OGE Energy files consolidated income tax returns in the U.S. federal jurisdiction and various state jurisdictions. OG&E is a part of the consolidated income tax return of OGE Energy. With few exceptions, the Registrants are no longer subject to U.S. federal tax or state and local examinations by tax authorities for years prior to 2018. Income taxes are generally allocated to each company in the affiliated group, including OG&E, based on its stand-alone taxable income or loss. Federal investment tax credits previously claimed on electric company property have been deferred and will be amortized to income over the life of the related property. Additionally, OG&E earned federal tax credits associated with production from its wind facilities through January 2022. Oklahoma production and investment state tax credits are also earned on investments in electric and solar generating facilities which further reduce OG&E's effective tax rate. The following table presents a reconciliation of the statutory tax rates to the effective income tax rate.
|  | OGE Energy |  |  | OG&E |
Year Ended December 31 |  | 2022 |  | 2021 |  | 2020 |  |  | 2022 |  | 2021 |  | 2020 |
Statutory federal tax rate |  |  | 21.0 | % |  | 21.0 | % |  | 21.0 | % |  |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit |  |  | (1.0 | ) |  | 0.9 |  |  | (1.4 | ) |  |  | (0.4 | ) |  | (1.4 | ) |  | (1.6 | )
Stock-based compensation |  |  | — |  |  | 0.1 |  |  | (0.3 | ) |  |  | — |  |  | — |  |  | — |
Executive compensation limitation |  |  | 0.1 |  |  | 0.1 |  |  | 0.2 |  |  |  | — |  |  | — |  |  | — |
Amortization of net unfunded deferred taxes |  |  | (3.2 | ) |  | (2.1 | ) |  | (4.4 | ) |  |  | (5.0 | ) |  | (4.6 | ) |  | (4.8 | )
Federal renewable energy credit (A) |  |  | — |  |  | (2.0 | ) |  | (5.0 | ) |  |  | — |  |  | (4.4 | ) |  | (5.4 | )
Remeasurement of state deferred taxes due to Energy Transfer merger (B) |  |  | — |  |  | (1.1 | ) |  | — |  |  |  | — |  |  | — |  |  | — |
Remeasurement of state deferred tax liabilities |  |  | (0.6 | ) |  | (0.6 | ) |  | 0.9 |  |  |  | — |  |  | — |  |  | — |
401(k) dividends |  |  | (0.2 | ) |  | (0.2 | ) |  | (0.4 | ) |  |  | — |  |  | — |  |  | — |
Impairment of OGE Energy's investment in Enable (C) |  |  | — |  |  | — |  |  | 31.6 |  |  |  | — |  |  | — |  |  | — |
Other |  |  | (0.4 | ) |  | — |  |  | 0.1 |  |  |  | (0.8 | ) |  | (0.2 | ) |  | 0.1 |
Effective income tax rate |  |  | 15.7 | % |  | 16.1 | % |  | 42.3 | % |  |  | 14.8 | % |  | 10.4 | % |  | 9.3 | %
(A) Represents credits primarily associated with the production from OG&E's wind farms. (B) In connection with the Enable and Energy Transfer merger, the state income tax rates were expected to decrease, as Energy Transfer operates in significantly more states with generally lower tax rates than the historic Enable operating area. (C) As discussed in Note 1, OGE Energy recorded a $780.0 million impairment on its investment in Enable in March 2020, which resulted in a tax benefit being recorded that caused a significant variance to the effective tax rate. This variance has been presented in the table as a single line item in order to facilitate comparability of other components of the effective tax rate. The deferred tax provisions are recognized as costs in the ratemaking process by the commissions having jurisdiction over the rates charged by OG&E. The following table presents the components of Deferred Income Taxes at December 31, 2022 and 2021.
|  | OGE Energy |  |  | OG&E |
December 31 (In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Deferred income tax liabilities, net: |  |  |  |  |  |  |  |  |  |  |  |
Accelerated depreciation and other property related differences |  | $ | 1,714.5 |  |  | $ | 1,677.3 |  |  | $ | 1,714.5 |  |  | $ | 1,677.3 |
Investment in Energy Transfer's equity securities |  |  | — |  |  |  | 363.5 |  |  |  | — |  |  |  | — |
Regulatory assets |  |  | 54.8 |  |  |  | 52.1 |  |  |  | 54.7 |  |  |  | 52.1 |
Pension Plan |  |  | 18.0 |  |  |  | 10.7 |  |  |  | 35.4 |  |  |  | 32.0 |
Other |  |  | (5.1 | ) |  |  | 7.4 |  |  |  | (5.8 | ) |  |  | (4.7 | )
Derivative instruments |  |  | 2.4 |  |  |  | 2.2 |  |  |  | — |  |  |  | — |
Bond redemption-unamortized costs |  |  | 1.6 |  |  |  | 1.8 |  |  |  | 1.6 |  |  |  | 1.8 |
Income taxes recoverable from customers, net |  |  | (216.7 | ) |  |  | (225.8 | ) |  |  | (216.7 | ) |  |  | (225.8 | )
State tax credits |  |  | (221.2 | ) |  |  | (221.2 | ) |  |  | (208.5 | ) |  |  | (205.9 | )
Federal tax credits |  |  | — |  |  |  | (208.4 | ) |  |  | — |  |  |  | (209.8 | )
Regulatory liabilities |  |  | (60.8 | ) |  |  | (72.0 | ) |  |  | (60.8 | ) |  |  | (72.0 | )
Asset retirement obligations |  |  | (18.8 | ) |  |  | (19.4 | ) |  |  | (18.8 | ) |  |  | (19.4 | )
Postretirement medical and life insurance benefits |  |  | (19.2 | ) |  |  | (19.2 | ) |  |  | (12.7 | ) |  |  | (13.0 | )
Accrued liabilities |  |  | (11.2 | ) |  |  | (9.5 | ) |  |  | (7.3 | ) |  |  | (7.3 | )
Deferred federal investment tax credits |  |  | (2.9 | ) |  |  | (3.1 | ) |  |  | (2.9 | ) |  |  | (3.1 | )
Net operating losses |  |  | — |  |  |  | (1.0 | ) |  |  | — |  |  |  | — |
Accrued vacation |  |  | (1.4 | ) |  |  | (1.5 | ) |  |  | (1.1 | ) |  |  | (1.2 | )
Uncollectible accounts |  |  | (0.5 | ) |  |  | (0.6 | ) |  |  | (0.5 | ) |  |  | (0.6 | )
Total deferred income tax liabilities, net |  | $ | 1,233.5 |  |  | $ | 1,333.3 |  |  | $ | 1,271.1 |  |  | $ | 1,000.4 |
As of December 31, 2022, the Registrants have classified $16.4 million of unrecognized tax benefits as a reduction of deferred tax assets recorded. Management is currently unaware of any issues under review that could result in significant additional payments, accruals or other material deviation from this amount. The following table presents a reconciliation of the Registrants' total gross unrecognized tax benefits as of the years ended December 31, 2022, 2021 and 2020.
(In millions) |  | 2022 |  |  | 2021 |  |  | 2020 |
Balance at January 1 |  | $ | 22.4 |  |  | $ | 21.9 |  |  | $ | 20.7 |
Tax positions related to current year: |  |  |  |  |  |  |  |  |
Additions |  |  | — |  |  |  | 1.7 |  |  |  | 1.2 |
Reductions |  |  | (1.7 | ) |  |  | (1.2 | ) |  |  | — |
Balance at December 31 |  | $ | 20.7 |  |  | $ | 22.4 |  |  | $ | 21.9 |
As of December 31, 2022, 2021 and 2020, there were $16.4 million, $18.1 million and $17.6 million, respectively, of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. Where applicable, the Registrants classify income tax-related interest and penalties as interest expense and other expense, respectively. During the years ended December 31, 2022, 2021 and 2020, there were no income tax-related interest or penalties recorded with regard to uncertain tax positions. The Registrants recognize tax benefits from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50 pe rcent likelihood of being realized on settlement. In 2022, the reserve for certain federal research and development credits of $1.7 million, which was recorded in 2021, was reversed. The Registrants sustained federal and state tax operating losses through 2012 caused primarily by bonus depreciation and other book versus tax temporary differences. Federal and state net operating losses generated during those years have been fully utilized, and the related various tax credits are being carried as deferred tax assets and will be utilized in future periods. Under current law, the Registrants anticipate future taxable income will be sufficient to utilize all credits before they begin to expire after 2022. The following table presents a summary of these carry forwards.
|  | OGE Energy |  |  | OG&E |  |  |
(In millions) |  | Carry Forward Amount |  |  | Deferred Tax Asset |  |  | Carry Forward Amount |  |  | Deferred Tax Asset |  |  | Earliest Expiration Date
State tax credits: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oklahoma investment tax credits |  | $ | 242.8 |  |  | $ | 191.8 |  |  | $ | 226.7 |  |  | $ | 179.1 |  |  | N/A
Oklahoma capital investment board credits |  | $ | 12.8 |  |  | $ | 12.8 |  |  | $ | 12.8 |  |  | $ | 12.8 |  |  | N/A
Oklahoma zero emission tax credits |  | $ | 22.6 |  |  | $ | 16.6 |  |  | $ | 22.6 |  |  | $ | 16.6 |  |  | 2023
N/A - not applicable In connection with its investment in Energy Transfer during 2022, OGE Energy anticipates operating losses in various state jurisdictions. As discussed in Note 1, OGE Energy has fully disposed of its investment in Energy Transfer, and it does not expect future taxable income in these states. Therefore, as of December 31, 2022, OGE Energy has recorded a valuation allowance of $2.7 million, which eliminated the related deferred tax asset balance. OGE Energy did no t record any valuation allowances as of December 31, 2021.

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- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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