Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosures [Line Items]

Schedule of Components of Income Tax Expense (Benefit)

The details of income tax (benefit) expense are as follows:

Puget Energy	Year Ended December 31,
(Dollars in Thousands)	2019		2018		2017
Charged to operating expenses:
Current:
Federal	$	9,424	$	10,382	$	1,127
State	164		263		17
Deferred:
Federal	7,357		19,451		254,420
State	128		(4)		(421)
Total income tax expense	$	17,073	$	30,092	$	255,143

Schedule of Effective Income Tax Rate Reconciliation

The following reconciliation compares pre-tax book income at the federal statutory rate of 21.0% in 2019 and 2018 and 35.0% in 2017 to the actual income tax expense in the Statements of Income:

Puget Energy	Year Ended December 31,
(Dollars in Thousands)	2019			2018			2017
Income taxes at the statutory rate	$	47,834		$	55,800		$	148,847
Increase (decrease):
Utility plant differences1	$	(23,025)		$	(25,871)		$	—
AFUDC, net	(4,462)			(4,173)			(4,506)
Executive compensation	2,596			4,439			—
Treasury grant amortization	(7,870)			(4,861)			(9,537)
Tax reform	—			—			117,185
Other–net	2,000			4,758			3,154
Total income tax expense	$	17,073		$	30,092		$	255,143
Effective tax rate	7.5		%	11.3		%	60.0		%

Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	2019			2018			2017
Income taxes at the statutory rate	$	69,735		$	77,251		$	185,430
Increase (decrease):
Utility plant differences1	$	(23,025)		$	(25,871)		$	—
AFUDC, net	(4,462)			(4,173)			(4,506)
Executive Compensation	2,596			4,439			—
Treasury grant amortization	(7,870)			(4,861)			(9,537)
Tax reform	—			—			36,328
Other–net	2,174			3,915			4,271
Total income tax expense	$	39,148		$	50,700		$	211,986
Effective tax rate	11.8		%	13.8		%	40.0		%

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^1.Utility plant differences include the reversal of excess deferred taxes using the average rate assumption method in the amount of $27.6 million and $29.8 million in 2019, and 2018, respectively.

Schedule of Deferred Tax Assets and Liabilities

The Company’s net deferred tax liability at December 31, 2019, and 2018, is composed of amounts related to the following types of temporary differences:

Puget Energy	At December 31,
(Dollars in Thousands)	2019		2018
Utility plant and equipment	$	1,943,730	$	1,998,721
Other deferred tax liabilities	133,440		113,051
Subtotal deferred tax liabilities	2,077,170		2,111,772
Net operating loss carryforward	(238,869)		(224,885)
Net regulatory liability for income taxes	(946,179)		(975,974)
Production tax credit carryforward	(67,402)		(121,616)
Subtotal deferred tax assets	(1,252,450)		(1,322,475)
Total net deferred tax liabilities	$	824,720	$	789,297

Puget Sound Energy	At December 31,
(Dollars in Thousands)	2019		2018
Utility plant and equipment	$	1,943,730	$	1,998,721
Other, net deferred tax liabilities	47,774		25,880
Subtotal deferred tax liabilities	1,991,504		2,024,601
Net regulatory liability for income taxes	(946,936)		(976,582)
Production tax credit carryforward	(67,405)		(121,616)
Subtotal deferred tax assets	(1,014,341)		(1,098,198)
Total net deferred tax liabilities	$	977,163	$	926,403

Subsidiaries [Member]

Income Tax Disclosures [Line Items]

Schedule of Components of Income Tax Expense (Benefit)

Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	2019		2018		2017
Charged to operating expenses:
Current:
Federal	$	18,093	$	19,283	$	1,127
State	570		438		17
Deferred:
Federal	20,485		30,979		210,842
State	—		—		—
Total income tax expense	$	39,148	$	50,700	$	211,986