Income taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes | Income taxes The Company’s and Utilities’ effective tax rates (combined federal and state income tax rates) for the six months ended June 30, 2026, were both 24%. These rates differ from the combined statutory rates, primarily due to the Utilities’ amortization of excess deferred income taxes related to the 2017 Tax Cuts and Jobs Act reduction in tax rate from 35% to 21%, partially offset by higher executive compensation limitations and the impact of the Utilities' remeasurement of the remaining wildfire tort-related settlement liability to present value. For the six months ended June 30, 2025, the Company’s and Utilities’ effective tax rates were 27% and 21%, respectively. The Company’s effective tax rate was lower for the first six months of 2026, compared to 2025, primarily due to the lesser impact of discrete tax items in 2026 than in 2025. The primary discrete tax item affecting the 2026 periods was the Utilities’ remeasurement of the remaining wildfire tort-related settlement liability to present value. In contrast, the primary discrete tax item affecting the 2025 periods was the recapture of investment tax credits. The Utilities’ effective tax rate was higher for the first six months of 2026, compared to 2025, primarily due to a discrete tax expense recognized in 2026 resulting from the remeasurement of the Utilities’ remaining wildfire tort-related settlement liability at present value. On July 4, 2025, federal tax legislation, commonly referred to as the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions, was signed into law in the United States. The Company recognized the impact of OBBBA. The Company will continue to assess the legislation’s impact on future reporting periods; however, the legislation is not anticipated to have a material impact on the Company’s financial statements. Currently, there are no active Internal Revenue Service income tax examinations. In January 2026, the Company was notified that the State of Hawaii would audit the Company’s income tax returns for tax years 2022 through 2024. The audit is ongoing, however, on June 23, 2026, the Company received a schedule of proposed income tax assessments from the Hawaii Department of Taxation. The proposed assessment relates to the capital goods excise tax credit claimed on the 2022 Hawaii State tax return, which the Company does not plan to dispute. The Company recorded an additional $0.3 million of tax expense as a discrete item during the second quarter of 2026 related to this proposed assessment. The Company has sufficient tax credit carryforwards on its 2022 Hawaii State tax return and intends to use those carryforward credits to satisfy the proposed tax assessment.
|