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INCOME TAXES (Tables) | 12 Months Ended
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Sep. 30, 2017
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, 2017, 2016 and 2015 is as follows:
(Thousands) | 2017 | 2016 | 2015
Statutory income tax expense | $ | 52,643 |  | $ | 54,321 |  | $ | 84,239 |
Change resulting from: |  |  |
State income taxes | 8,222 |  | 6,044 |  | 8,233 |
Cost of removal of assets placed in service prior to1981 | (6,886 | ) | (5,738 | ) | (5,149 | )
Investment/production tax credits | (34,526 | ) | (32,491 | ) | (30,096 | )
Basis adjustment of solar assets due to ITC | 4,256 |  | 4,453 |  | 4,861 |
AFUDC equity | (2,624 | ) | (1,531 | ) | (1,339 | )
Other | (2,742 | ) | (1,528 | ) | (1,025 | )
Income tax provision | $ | 18,343 |  | $ | 23,530 |  | $ | 59,724 |
Effective income tax rate | 12.2 | % | 15.2 | % | 24.8 | %
Schedule of Components of Income Tax Provision (Benefit) | The income tax (benefit) provision from operations consists of the following:
(Thousands) | 2017 | 2016 | 2015
Current: |  |  |
Federal | $ | (16,023 | ) | $ | (23,597 | ) | $ | 20,492 |
State | 2,470 |  | (2,209 | ) | 5,473 |
Deferred: |  |  |
Federal | 54,965 |  | 70,386 |  | 56,480 |
State | 11,457 |  | 11,441 |  | 7,375 |
Investment/production tax credits | (34,526 | ) | (32,491 | ) | (30,096 | )
Income tax provision | $ | 18,343 |  | $ | 23,530 |  | $ | 59,724 |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences, which give rise to deferred tax assets and (liabilities), consist of the following:
(Thousands) | 2017 |  | 2016
Deferred tax assets |  |  |
Investment tax credits (1) | $ | 111,642 |  |  | $ | 76,517 |
Deferred service contract revenue | 3,877 |  |  | 3,601 |
Incentive compensation | 6,260 |  |  | 8,128 |
Fair value of derivatives | 11,519 |  |  | 1,179 |
Federal net operating losses | 28,487 |  |  | 27,541 |
State net operating losses | 23,597 |  |  | 18,113 |
Overrecovered gas costs | — |  |  | 3,831 |
Other | 13,845 |  |  | 11,668 |
Total deferred tax assets | $ | 199,227 |  |  | $ | 150,578 |
Deferred tax liabilities |  |  |
Property related items | $ | (620,850 | ) |  | $ | (532,027 | )
Remediation costs | (11,625 | ) |  | (7,928 | )
Equity investments | (38,370 | ) |  | (37,740 | )
Postemployment benefits | (6,855 | ) |  | (7,902 | )
Conservation incentive plan | (7,195 | ) |  | (14,953 | )
Underrecovered gas costs | (4,035 | ) |  | — |
Other | (16,643 | ) |  | (14,610 | )
Total deferred tax liabilities | $ | (705,573 | ) |  | $ | (615,160 | )
Total net deferred tax liabilities | $ | (506,346 | ) |  | $ | (464,582 | )
(1) | Includes $2.3 million and $2.5 million for NJNG for fiscal 2017 and 2016, respectively, which is being amortized over the life of the related assets, and$109.3 million and $74 million for Clean Energy Ventures for fiscal 2017 and 2016, respectively, which is ITC carryforward.
Schedule of Deferred Tax Assets Expiration | The deferred tax assets will expire as follows:
(Thousands) |
Fiscal years 2018 - 2022 | $ | 313 |
Fiscal years 2023 - 2027 | 1,051 |
Fiscal years 2028 - 2032 | 796 |
Fiscal years 2033 - 2037 | 159,237 |
Total | $ | 161,397 |

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