Accounting for Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2021

Derivative [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the volumes, fair values and classification of the Company's derivative instruments recorded on the balance sheets:

Puget Energy and Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	Volumes (millions)		Assets1				Liabilities²
	2021	2020	2021		2020		2021		2020
Electric portfolio derivatives	*	*	$	74,829	$	22,544	$	85,424	$	46,922
Natural gas derivatives (MMBtus)3	347	320	79,578		19,276		18,850		14,352
Total derivative contracts			$	154,407	$	41,820	$	104,274	$	61,274
Current			128,210		33,015		63,309		31,441
Long-term			26,197		8,805		40,965		29,833
Total derivative contracts			$	154,407	$	41,820	$	104,274	$	61,274

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1.Balance sheet classification: Current and Long-term Unrealized gain on derivative instruments.

2.Balance sheet classification: Current and Long-term Unrealized loss on derivative instruments.

3.All fair value adjustments on derivatives relating to the natural gas business have been deferred in accordance with ASC 980, “Regulated Operations,” due to the PGA mechanism. The net derivative asset or liability and offsetting regulatory liability or asset are related to contracts used to economically hedge the cost of physical gas purchased to serve natural gas customers.

*Electric portfolio derivatives consist of electric generation fuel of 238.0 million One Million British Thermal Units (MMBtus) and purchased electricity of 8.1 million megawatt hours (MWhs) at December 31, 2021, and 212.2 million MMBtus and 6.6 million MWhs at December 31, 2020.

Offsetting Assets and Liabilities [Table Text Block]

The following tables present the potential effect of netting arrangements, including rights of set-off associated with the Company's derivative assets and liabilities:

Puget Energy and Puget Sound Energy
December 31, 2021
(Dollars in Thousands)	Gross Amount Recognized in the Consolidated Balance Sheet1		Gross Amounts Offset in the Consolidated Balance Sheet		Net of Amounts Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet
							Commodity Contracts2		Cash Collateral Received/Pledged		Net Amount
Assets:
Energy derivative contracts	$	154,407	$	—	$	154,407	$	(40,833)	$	—	$	113,574
Liabilities:
Energy derivative contracts	104,274		—		104,274		(40,833)		(1,743)		61,698

Puget Energy and  Puget Sound Energy
December 31, 2020
(Dollars in Thousands)	Gross Amount Recognized1		Gross Amounts Offset in the Consolidated Balance Sheet		Net of Amounts Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet
							Commodity Contracts2		Cash Collateral Received/Pledged		Net Amount
Assets
Energy Derivative Contracts	$	41,820	$	—	$	41,820	$	(21,696)	$	—	$	20,124
Liabilities
Energy Derivative Contracts	61,274		—		61,274		(21,696)		(9,343)		30,235

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1.All Derivative Contract deals are executed under ISDA, NAESB, and WSPP master agreements with right of set-off.

2.Balance sheet classification: Current and Long-term Unrealized loss on derivative instruments.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

The following tables present the effect and locations of the realized and unrealized gains (losses) of the Company's derivatives recorded on the statements of income:

Puget Energy and Puget Sound Energy		Year Ended December 31,
(Dollars in Thousands)	Location	2021		2020		2019
Gas for Power Derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	$	26,686	$	5,534	$	16,970
Realized	Electric generation fuel	76,504		5,246		10,828
Power Derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	(12,901)		(32,341)		(20,544)
Realized	Purchased electricity	(3,044)		(14,958)		48,686
Total gain (loss) recognized in income on derivatives		$	87,245	$	(36,519)	$	55,940

Schedule of Credit Risk Related Contingent Features [Table Text Block]

The following table presents the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position and the amount of additional collateral the Company could be required to post:

Puget Energy and Puget Sound Energy	December 31,
(Dollars in Thousands)	2021						2020
Contingent Feature	Fair Value1 Liability		Posted Collateral		Contingent Collateral		Fair Value1 Liability		Posted Collateral		Contingent Collateral
Credit rating2	$	52,537	$	—	$	52,537	$	26,966	$	—	$	26,966
Requested credit for adequate assurance	9,380		—		—		6,576		—		—
Forward value of contract3	1,743		12,782		N/A		9,343		20,903		N/A
Total	$	63,660	$	12,782	$	52,537	$	42,885	$	20,903	$	26,966

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1.Represents the derivative fair value of contracts with contingent features for counterparties in net derivative liability positions. Excludes NPNS, accounts payable and accounts receivable.

2.Failure by PSE to maintain an investment grade credit rating from each of the major credit rating agencies provides counterparties a contractual right to demand collateral.

3.Collateral requirements may vary, based on changes in the forward value of underlying transactions relative to contractually defined collateral thresholds.