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INCOME TAXES (Tables) | 12 Months Ended
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Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Schedule of Components of Income Tax Provision | The income tax provision from operations for the fiscal years ended September 30, consists of the following:
(Thousands) | 2022 | 2021 | 2020
Current: |  |  |
Federal | $ | 4,238 |  | $ | 651 |  | $ | (2,164) |
State | 2,104 |  | 1,703 |  | 6,763 |
Deferred: |  |  |
Federal | 55,968 |  | 25,030 |  | 28,817 |
State | 14,185 |  | 6,224 |  | 3,400 |
Investment/production tax credits | (300) |  | (322) |  | (322) |
Income tax provision | $ | 76,195 |  | $ | 33,286 |  | $ | 36,494 |
Schedule of Deferred Tax Assets and Liabilities | As of September 30, the temporary differences, which give rise to deferred tax assets (liabilities), consist of the following:
(Thousands) | 2022 |  | 2021
Deferred tax assets |  |  |
Investment tax credits (1) | $ | 212,506 |  |  | $ | 225,036 |
State net operating losses | 36,950 |  |  | 38,108 |
Fair value of derivatives | 6,506 |  |  | 16,333 |
Impairment of equity method investment | 14,124 |  |  | 15,395 |
Postemployment benefits | 2,751 |  |  | 9,665 |
Incentive compensation | 7,297 |  |  | 6,894 |
Amortization of intangibles | 6,474 |  |  | 6,540 |
Overrecovered natural gas costs | 4,977 |  |  | 1,540 |
Allowance for doubtful accounts | 5,761 |  |  | 6,561 |
Other | 5,748 |  |  | 6,140 |
Total deferred tax assets | 303,094 |  |  | 332,212 |
Less: Valuation allowance | (22,241) |  |  | (23,613) |
Total deferred tax assets net of valuation allowance | $ | 280,853 |  |  | $ | 308,599 |
Deferred tax liabilities |  |  |
Property-related items | $ | (468,115) |  |  | $ | (419,753) |
Remediation costs | (18,490) |  |  | (16,347) |
Investments in equity investees | (19,176) |  |  | (21,739) |
Conservation incentive plan | (6,457) |  |  | (3,309) |
Other | (4,615) |  |  | (6,203) |
Total deferred tax liabilities | $ | (516,853) |  |  | $ | (467,351) |
Total net deferred tax liabilities | $ | (236,000) |  |  | $ | (158,752) |
(1)Includes approximately $732,000 and $814,000 for NJNG for fiscal 2022 and 2021, respectively, which is being amortized over the life of the related assets. (2)See discussion of federal net operating loss utilization in the Other Tax Items section of this note.
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. federal statutory rate to the effective rate from operations for the fiscal years ended September 30, is as follows:
(Thousands) | 2022 | 2021 | 2020
Statutory income tax expense | $ | 73,735 |  | $ | 31,747 |  | $ | 41,896 |
Change resulting from: |  |  |
Investment/production tax credits | (300) |  | (322) |  | (322) |
Cost of removal of assets placed in service prior to 1981 | (3,533) |  | (5,366) |  | (5,362) |
AFUDC equity | (2,361) |  | (786) |  | (4,933) |
State income taxes, net of federal benefit | 13,072 |  | 6,124 |  | 11,965 |
NJ Unitary method change | — |  | — |  | (15,345) |
Valuation allowance | (1,372) |  | 5,974 |  | 13,604 |
Tax Act - utility excess deferred income taxes amortized | (3,573) |  | (3,573) |  | (3,573) |
Other | 527 |  | (512) |  | (1,436) |
Income tax provision | $ | 76,195 |  | $ | 33,286 |  | $ | 36,494 |
Effective income tax rate | 21.7 | % | 22.0 | % | 18.3 | %
Schedule of the Reserve for Uncertain Tax Benefits | The reserve for uncertain tax benefits for the fiscal year ended September 30, is as follows:
(Thousands) | 2022 | 2021 |
Balance at October 1, | $ | — |  | $ | 4,930 |  |
Reversal of settled tax positions during the current fiscal period | — |  | (4,930) |  |
Balance at period end | $ | — |  | $ | — |  |

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