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Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
For the year ended December 31, 2019, approximately 10.2% of the Company’s energy output was obtained at an average cost of approximately $0.033 per Kilowatt Hour (kWh) through long-term contracts with three of the Washington Public Utility Districts (PUDs) that own hydroelectric projects on the Columbia River.  The purchase of power from the Columbia River projects is on a pro rata share basis under which the Company pays a proportionate share of the annual debt service, operating and maintenance costs and other expenses associated with each project, in proportion to the contractual share of power that PSE obtains from that project.  In these instances, PSE’s payments are not contingent upon the projects being operable; therefore, PSE is required to make the payments even if power is not delivered.  These projects are financed substantially through debt service payments and their annual costs should not vary significantly over the term of the contracts unless additional financing is required to meet the costs of major maintenance, repairs or replacements, or license requirements.  The Company’s share of the costs and the output of the projects is subject to reduction due to various withdrawal rights of the PUDs and others over the contract lives.
The Company's expenses under these PUD contracts were as follows for the years ended December 31, :

(Dollars in Thousands)201920182017
PUD contract costs$87,135  $80,165  $73,827  
As of December 31, 2019, the Company purchased portions of the power output of the PUDs' projects as set forth in the following table:
Company's Current Share of
(Dollars in Thousands)Contract
Expiration
Percent of
Output
Megawatt CapacityEstimated 2020 Costs2020 Debt Service CostsInterest included in 2020 Debt Service CostsDebt Outstanding
Chelan County PUD:
Rock Island Project203125.0 %156$34,180  $11,499  $5,681  $96,956  
Rocky Reach Project203125.0  32531,190  4,940  2,129  33,317  
Douglas County PUD:
Wells Project1
202827.1  22843,004  —  —  —  
Grant County PUD:
Priest Rapids Development20520.6  61,831  1,085  586  12,793  
Wanapum Development20520.6  71,831  1,085  586  12,793  
Total722$112,036  $18,609  $8,982  $155,859  
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1.In March 2017, PSE entered a new PPA with Douglas County PUD for Wells Project output that begins upon expiration of the existing contract on August 31, 2018, and continues through September 30, 2028.

The following table summarizes the Company’s estimated payment obligations for power purchases from the Columbia River projects, electric portfolio contracts and electric wholesale market transactions.  These contracts have varying terms and may include escalation and termination provisions.

(Dollars in Thousands)20202021202220232024ThereafterTotal
Columbia River projects$121,680  $111,125  $103,879  $103,377  $102,976  $609,912  $1,152,949  
Electric portfolio contracts263,940  300,795  302,838  307,888  315,593  969,383  2,460,437  
Electric wholesale market transactions188,822  24,901  3,190  —  —  —  216,913  
Total$574,442  $436,821  $409,907  $411,265  $418,569  $1,579,295  $3,830,299  

Total purchased power contracts provided the Company with approximately 12.5 million, 14.1 million and 14.5 million MWhs of firm energy at a cost of approximately $550.6 million, $508.2 million and $456.4 million for the years 2019, 2018, and 2017, respectively.

Natural Gas Supply Obligations
The Company has entered into various firm supply, transportation and storage service contracts in order to ensure adequate availability of natural gas supply for its customers and generation requirements.  The Company contracts for its long-term natural gas supply on a firm basis, which means the Company has a 100% daily take obligation and the supplier has a 100% daily delivery obligation to ensure service to PSE’s customers and generation requirements. The transportation and storage contracts, which have remaining terms from 1 year to 25 years, provide that the Company must pay a fixed demand charge each month, regardless of actual usage.  The Company incurred demand charges for 2019 for firm transportation, storage and peaking services for its natural gas customers of $125.1 million. The Company incurred demand charges in 2019 for firm transportation and storage services for the natural gas supply for its combustion turbines in the amount of $51.2 million.
The following table summarizes the Company’s obligations for future natural gas supply and demand charges through the primary terms of its existing contracts.  The quantified obligations are based on the FERC and CER (Canadian Energy Regulator) currently authorized rates, which are subject to change.
Natural Gas Supply and Demand Charge Obligations
(Dollars in Thousands)
20202021202220232024ThereafterTotal
Natural gas portfolio contracts$273,263  $196,806  $178,208  $148,165  $82,509  $—  $878,951  
Firm transportation service176,741  173,133  172,190  161,508  116,842  828,136  1,628,550  
Firm storage service8,954  4,503  3,014  853  140  213  17,677  
Total$458,958  $374,442  $353,412  $310,526  $199,491  $828,349  $2,525,178  

Service Contracts
The following table summarizes the Company’s estimated obligations for service contracts through the terms of its existing contracts.
Service Contract Obligations
(Dollars in Thousands)
20202021202220232024ThereafterTotal
Energy production service contracts$28,474  $29,219  $29,923  $30,645  $31,400  $141,817  $291,478  
Automated meter reading system43,971  44,849  45,526  46,218  46,926  96,149  323,639  
Total$72,445  $74,068  $75,449  $76,863  $78,326  $237,966  $615,117  

Other Commitments and Contingencies
For information regarding PSE's environmental remediation obligations, see Note 4, "Regulation and Rates," to the consolidated financial statements included in Item 8 of this report.