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INCOME TAXES (Tables)

12 Months Ended

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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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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-Publisher FASB
-Name Accounting Standards Codification
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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