Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | (11) Income Taxes
Transfers of Production Tax Credits
In August 2022, President Biden signed H.R. 5376 into law, commonly known as the IRA of 2022, or IRA. The IRA contains a tax credit transferability provision that allows us to transfer (e.g. sell) PTCs produced after December 31, 2022, to third parties. In January 2025, under this transferability provision, we entered into an agreement with a third party to sell $17.0 million of our 2024 generated PTCs.
We expect to continue to explore the ability to efficiently monetize our tax credits through third party transferability agreements.
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed H.R. 1, commonly referred to as the OBBBA, a legislative package designed to permanently extend certain expiring provisions of the TCJA and deliver additional tax relief for individuals and businesses. The OBBBA introduced changes to federal energy policies by rolling back several clean energy provisions and codified restrictions related to prohibited foreign entities, termination and restrictions on clean energy PTCs, and extension and modification of clean fuel production. The OBBBA does not repeal tax credit transferability provisions enacted under the IRA and continues to permit the execution of our transferability agreements as originally agreed upon, but restricts credit transfers to prohibited foreign entities. Additionally, on July 7, 2025, President Trump issued Executive Order 14315, which relates to the implementation of such changes to energy tax credits. Further clarity is expected from the Secretaries of the Treasury and the Interior as it relates to their findings and actions taken under Executive Order 14315 within 45 days. We are currently evaluating the provisions of the OBBBA and Executive Order 14315 on our consolidated financial statements but we do not anticipate impacts to our clean energy generation facilities already in service or the execution of Colorado Electric's Clean Energy Plan.
Income Tax (Expense) and Effective Tax Rates
Three Months Ended June 30, 2025, Compared to the Three Months Ended June 30, 2024
Income tax (expense) for the three months ended June 30, 2025, was $(4.4) million compared to $(3.7) million reported for the same period in 2024. For the three months ended June 30, 2025, the effective tax rate was 13.3%, which was comparable to 13.0% for the same period in 2024.
Six Months Ended June 30, 2025, Compared to the Six Months Ended June 30, 2024
Income tax (expense) for the six months ended June 30, 2025, was $(22.5) million compared to $(20.6) million reported for the same period in 2024. For the six months ended June 30, 2025, the effective tax rate was 12.0%, which was comparable to 11.7% for the same period in 2024. |