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INCOME TAXES (Tables) | 12 Months Ended
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Sep. 30, 2016
Income Tax Disclosure [Abstract] |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. federal statutory rate of 35 percent to the effective rate from operations for the fiscal years ended September 30, 2016, 2015 and 2014 is as follows:
(Thousands) | 2016 | 2015 | 2014
Statutory income tax expense | $ | 54,321 |  | $ | 84,239 |  | $ | 67,834 |
Change resulting from: |  |  |
State income taxes | 6,044 |  | 8,233 |  | 7,785 |
Cost of removal of assets placed in service prior to1981 | (5,738 | ) | (5,149 | ) | (4,437 | )
Investment/production tax credits | (32,491 | ) | (30,096 | ) | (23,083 | )
Basis adjustment of solar assets due to ITC | 4,453 |  | 4,861 |  | 3,959 |
Other | (3,059 | ) | (2,364 | ) | (218 | )
Income tax provision | $ | 23,530 |  | $ | 59,724 |  | $ | 51,840 |
Effective income tax rate | 15.2 | % | 24.8 | % | 26.8 | %
Schedule of Components of Income Tax Provision (Benefit) | The income tax provision (benefit) from operations consists of the following:
(Thousands) | 2016 | 2015 | 2014
Current: |  |  |
Federal | $ | (23,597 | ) | $ | 20,492 |  | $ | 37,904 |
State | (2,209 | ) | 5,473 |  | 11,096 |
Deferred: |  |  |
Federal | 70,386 |  | 56,480 |  | 24,963 |
State | 11,441 |  | 7,375 |  | 960 |
Investment/production tax credits | (32,491 | ) | (30,096 | ) | (23,083 | )
Income tax provision | $ | 23,530 |  | $ | 59,724 |  | $ | 51,840 |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences, which give rise to deferred tax assets and (liabilities), consist of the following:
(Thousands) | 2016 |  | 2015
Deferred tax assets |  |  |
Investment tax credits (1) | $ | 76,517 |  |  | $ | 24,770 |
Deferred service contract revenue | 3,601 |  |  | 3,440 |
Incentive compensation | 8,128 |  |  | 10,369 |
Fair value of derivatives | 1,179 |  |  | — |
Federal net operating losses | 27,541 |  |  | — |
State net operating losses | 18,113 |  |  | 12,757 |
Conservation incentive plan | — |  |  | 2,091 |
Underrecovered gas costs | 3,831 |  |  | 2,827 |
Other | 11,668 |  |  | 12,762 |
Total deferred tax assets | $ | 150,578 |  |  | $ | 69,016 |
Deferred tax liabilities |  |  |
Property related items | $ | (532,027 | ) |  | $ | (440,420 | )
Remediation costs | (7,928 | ) |  | (7,641 | )
Equity investments | (37,740 | ) |  | (37,930 | )
Postemployment benefits | (7,902 | ) |  | (2,976 | )
Fair value of derivatives | — |  |  | (3,180 | )
Conservation incentive plan | (14,953 | ) |  | — |
Other | (14,610 | ) |  | (13,409 | )
Total deferred tax liabilities | $ | (615,160 | ) |  | $ | (505,556 | )
Total net deferred tax liabilities | $ | (464,582 | ) |  | $ | (436,540 | )
(1) | Includes $2.5 million and $2.7 million for NJNG for fiscal 2016 and fiscal 2015, respectively, which is being amortized over the life of the related assets, and $74 million and $22.1 million for NJRCEV for fiscal 2016 and fiscal 2015, respectively, which is ITC carryforward.
Schedule of Deferred Tax assets Expiration | The deferred tax assets will expire as follows:
(Thousands) |
Fiscal years 2017 - 2021 | $ | — |
Fiscal years 2022 - 2026 | — |
Fiscal years 2027 - 2031 | 835 |
Fiscal years 2032 - 2036 | 118,849 |
Total | $ | 119,684 |

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