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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) from continuing operations for the years ended December 31 was (in thousands):
|  | 2022 |  |  | 2021 |  |  | 2020 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (467 | ) |  | $ | 574 |  |  | $ | (6,020 | )
State |  |  | 80 |  |  |  | (666 | ) |  |  | 847 |
Current income tax (benefit) |  |  | (387 | ) |  |  | (92 | ) |  |  | (5,173 | )
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 23,205 |  |  |  | 2,170 |  |  |  | 35,672 |
State |  |  | 2,387 |  |  |  | 5,091 |  |  |  | 2,419 |
Deferred income tax expense |  |  | 25,592 |  |  |  | 7,261 |  |  |  | 38,091 |
Income tax expense |  | $ | 25,205 |  |  | $ | 7,169 |  |  | $ | 32,918 |
Schedule of Effective Income Tax Rate Reconciliation | Effective Tax Rates The effective tax rate differs from the federal statutory rate for the years ended December 31, as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Federal statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income tax (net of federal tax effect) (a) |  |  | 0.5 |  |  |  | 1.2 |  |  |  | 2.4 |
Non-controlling interest (b) |  |  | (0.9 | ) |  |  | (1.2 | ) |  |  | (1.2 | )
Tax credits |  |  | (7.7 | ) |  |  | (8.4 | ) |  |  | (9.2 | )
Flow-through adjustments (c) |  |  | (1.4 | ) |  |  | (3.2 | ) |  |  | (1.6 | )
Uncertain Tax Benefits |  |  | — |  |  |  | 0.3 |  |  |  | 1.5 |
Valuation Allowance |  |  | — |  |  |  | — |  |  |  | 0.7 |
Other tax differences |  |  | (0.1 | ) |  |  | (0.2 | ) |  |  | 0.6 |
Amortization of excess deferred income tax expense (d) |  |  | (2.5 | ) |  |  | (3.1 | ) |  |  | (2.3 | )
TCJA bill credits (e) |  |  | (0.4 | ) |  |  | (3.6 | ) |  |  | — |
Effective Tax Rate |  |  | 8.5 | % |  |  | 2.8 | % |  |  | 11.9 | %
(a) The state effective tax rate contains the tax expense attributable to multiple statutory state rate reductions in the Company's state jurisdictions. (b) The effective tax rate reflects the income attributable to the non-controlling interest in Black Hills Colorado IPP for which a tax provision was not recorded. (c) Flow-through adjustments related primarily to accounting method changes for tax purposes that allow us to take a current tax deduction for repair costs, certain indirect costs and gain deferral. We recorded a deferred income tax liability in recognition of the temporary difference created between book and tax treatment and flowed the tax benefit through to tax expense. A regulatory asset was established to reflect the recovery of future increases in taxes payable from customers as the temporary differences reverse. As a result of this regulatory treatment, we continue to record tax benefits consistent with the flow-through method. (d) Primarily TCJA - see above. (e) Primarily related to one-time bill credits of TCJA benefits which were delivered to Colorado Electric and Nebraska Gas customers in 2021. These bill credits, which resulted in a reduction in revenue, were offset by a reduction in income tax expense and resulted in a minimal impact to Net income for the year ended December 31, 2021.
Schedule of Deferred Tax Assets and Liabilities | The temporary differences, which gave rise to the net deferred tax liability, for the years ended December 31 were as follows (in thousands):
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Regulatory liabilities |  | $ | 74,728 |  |  | $ | 77,099 |
State tax credits |  |  | 22,817 |  |  |  | 23,342 |
Federal NOL |  |  | 191,992 |  |  |  | 227,535 |
State NOL |  |  | 23,031 |  |  |  | 33,639 |
Partnership |  |  | 12,755 |  |  |  | 13,395 |
Credit Carryovers |  |  | 90,881 |  |  |  | 68,646 |
Other deferred tax assets |  |  | 45,407 |  |  |  | 31,996 |
Less: Valuation allowance |  |  | (15,476 | ) |  |  | (14,719 | )
Total deferred tax assets |  |  | 446,135 |  |  |  | 460,933 |
Deferred tax liabilities: |  |  |  |  |  |
Accelerated depreciation, amortization and other property-related differences |  |  | (645,762 | ) |  |  | (597,284 | )
Regulatory assets |  |  | (94,433 | ) |  |  | (124,582 | )
Goodwill |  |  | (57,884 | ) |  |  | (45,471 | )
State deferred tax liability |  |  | (98,200 | ) |  |  | (109,136 | )
Other deferred tax liabilities |  |  | (58,797 | ) |  |  | (49,848 | )
Total deferred tax liabilities |  |  | (955,076 | ) |  |  | (926,321 | )
Net deferred tax liability |  | $ | (508,941 | ) |  | $ | (465,388 | )
Summary of Operating Loss and Tax Credit Carryforwards | At December 31, 2022, we have federal NOL and state NOL and tax credit carryforwards that will expire at various dates as follows (in thousands):
|  | Amounts |  |  | Expiration Dates
Federal NOL Carryforward |  | $ | 330,085 |  |  | 2023 to 2037
Federal NOL Carryforward |  | $ | 584,161 |  |  | No expiration
State NOL Carryforward (a) |  | $ | 408,269 |  |  | 2023 to 2041
State Tax Credit Carryforward |  | $ | 22,817 |  |  | 2023 to 2041
(a) The carryforward balance is reflected on the basis of apportioned tax losses to jurisdictions imposing state income taxes.
Summary of Income Tax Contingencies | The following table reconciles the total amounts of unrecognized tax benefits, without interest, at the beginning and end of the period included in Other deferred credits and other liabilities on the accompanying Consolidated Balance Sheets (in thousands):
Changes in Uncertain Tax Positions: |  | 2022 |  |  | 2021 |  |  | 2020 |
Beginning balance |  | $ | 10,554 |  |  | $ | 8,383 |  |  | $ | 4,165 |
Additions for prior year tax positions |  |  | 7 |  |  |  | 448 |  |  |  | 3,788 |
Reductions for prior year tax positions |  |  | (773 | ) |  |  | (732 | ) |  |  | (1,313 | )
Additions for current year tax positions |  |  | 2,097 |  |  |  | 2,455 |  |  |  | 1,743 |
Ending balance |  | $ | 11,885 |  |  | $ | 10,554 |  |  | $ | 8,383 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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