10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from ________ to ________

Commission File Number Exact name of registrant as specified in its charter, state of incorporation,
address of principal executive offices, telephone number I.R.S.
Employer
Identification
Number

1-16305 PUGET ENERGY, INC. A Washington Corporation 355 110th Ave NE Bellevue, Washington 98004 (425) 454-6363 91-1969407

1-4393 PUGET SOUND ENERGY, INC. A Washington Corporation 355 110th Ave NE Bellevue, Washington 98004 (425) 454-6363 91-0374630

Securities Registered pursuant to Section 12(b) of the Securities Exchange Act of 1934

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Puget Energy, Inc. Yes /X/ No /  / Puget Sound Energy, Inc. Yes /X/ No /  /

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Puget Energy, Inc. Yes /X/ No /  / Puget Sound Energy, Inc. Yes /X/ No /  /

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer", "accelerated filer," a smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Puget Energy, Inc.	Large accelerated filer	/  /	Accelerated filer	/  /	Non-accelerated Filer	/X/	Smaller reporting company	/  /	Emerging growth company	/  /
Puget Sound Energy, Inc.	Large accelerated filer	/  /	Accelerated filer	/  /	Non-accelerated Filer	/X/	Smaller reporting company	/  /	Emerging growth company	/  /

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. / /

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Puget Energy, Inc. Yes /  / No /X/ Puget Sound Energy, Inc. Yes /  / No /X/

All of the outstanding shares of voting stock of Puget Energy, Inc. are held by Puget Equico LLC, an indirect wholly-owned subsidiary of Puget Holdings LLC.  All of the outstanding shares of voting stock of Puget Sound Energy, Inc. are held by Puget Energy, Inc.

Table of Contents

		Page
Definitions		3
Filing Format		4
Forward-Looking Statements		4
Part I.	Financial Information	5
Item 1.	Financial Statements	5
	Puget Energy, Inc.
	Consolidated Statements of Income – Three and Six Months Ended June 30, 2023 and 2022	5
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2023 and 2022	6
	Consolidated Balance Sheets – June 30, 2023 and December 31, 2022	7
	Consolidated Statements of Common Shareholder's Equity - June 30, 2023 and December 31, 2022	8
	Consolidated Statements of Cash Flows – Three and Six Months Ended June 30, 2023 and 2022	9
	Puget Sound Energy, Inc.
	Consolidated Statements of Income – Three and Six Months Ended June 30, 2023 and 2022	12
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2023 and 2022	11
	Consolidated Balance Sheets – June 30, 2023 and December 31, 2022	12
	Consolidated Statements of Common Shareholder's Equity - June 30, 2023 and December 31, 2022	13
	Consolidated Statements of Cash Flows – Three and Six Months Ended June 30, 2023 and 2022	14
	Notes
	Combined Notes to Consolidated Financial Statements	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	65
Item 4.	Controls and Procedures	66
Part II.	Other Information	66
Item 1.	Legal Proceedings	66
Item 1A.	Risk Factors	67
Item 5.	Other Information	67
Item 6.	Exhibits	67
Exhibit Index		68
Signatures		69

2

DEFINITIONS

ASU	Accounting Standards Update
ASC	Accounting Standards Codification
EBITDA	Earnings Before Interest, Tax, Depreciation and Amortization
FASB	Financial Accounting Standards Board
GAAP	U.S. Generally Accepted Accounting Principles
GHG	Greenhouse gas
GRC	General Rate Case
IBEW	International Brotherhood of Electrical Workers
ISDA	International Swaps and Derivatives Association
LIBOR	London Interbank Offered Rate
LNG	Liquefied Natural Gas
MMBtu	One Million British Thermal Units
MWh	Megawatt Hour (one MWh equals one thousand kWh)
NAESB	North American Energy Standards Board
NPNS	Normal Purchase Normal Sale
PCA	Power Cost Adjustment
PCORC	Power Cost Only Rate Case
PGA	Purchased Gas Adjustment
PTCs	Production Tax Credits
PSE	Puget Sound Energy, Inc.
Puget Energy	Puget Energy, Inc.
Puget Holdings	Puget Holdings LLC
Puget LNG	Puget LNG, LLC
SERP	Supplemental Executive Retirement Plan
UA	The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada
Washington Commission	Washington Utilities and Transportation Commission
WSPP	WSPP, Inc.

3

FILING FORMAT

This combined Quarterly Report on Form 10-Q is separately filed by Puget Energy, Inc. (Puget Energy) and Puget Sound Energy, Inc. (PSE).  Information in this filing relating to PSE is filed by PSE on its own behalf. PSE makes no representation as to information relating to Puget Energy (except as it may relate to PSE) or any other affiliate or subsidiary of Puget Energy. Any references in this report to “the Company” are to Puget Energy and PSE collectively.

FORWARD-LOOKING STATEMENTS

Puget Energy and PSE include the following cautionary statements in this Form 10-Q to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by or on behalf of Puget Energy or PSE.  This report includes forward-looking statements, which are statements of expectations, beliefs, plans, objectives and assumptions of future events or performance.  Words or phrases such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “future,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” “projects,” “should,” “will likely result,” “will continue” or similar expressions are intended to identify certain of these forward-looking statements and may be included in discussion of, among other things, our anticipated operating or financial performance, business plans and prospects, planned capital expenditures and other future expectations. In particular, these include statements relating to future actions, business plans and prospects, future performance expenses, the outcome of contingencies, such as legal proceedings, government regulation and financial results.

Forward-looking statements reflect current expectations and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed.  There can be no assurance that Puget Energy’s and PSE’s expectations, beliefs or projections will be achieved or accomplished.  

In addition to other factors and matters discussed elsewhere in this report, some important risks that could cause actual results or outcomes for Puget Energy and PSE to differ materially from past results and those discussed in the forward-looking statements include:

● Governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission (FERC) and the Washington Utilities and Transportation Commission (Washington Commission), that may affect our ability to recover costs and earn a reasonable return, including but not limited to disallowance or delays in the recovery of capital investments and operating costs and discretion over allowed return on investment;

● Changes in, adoption of and compliance with laws and regulations, including decisions and policies concerning the environment, climate change, greenhouse gas or other emissions or by-products of electric generation (including coal ash or other substances), natural resources, and fish and wildlife (including the Endangered Species Act) as well as the risk of litigation arising from such matters, whether involving public or private claimants or regulatory investigative or enforcement measures;

● Changes in tax law, related regulations or differing interpretation, or enforcement of applicable law by the Internal Revenue Service (IRS) or other taxing jurisdiction; and PSE's ability to recover costs in a timely manner arising from such changes;

● Inability to realize deferred tax assets and use production tax credits (PTCs) due to insufficient future taxable income;

● Accidents or natural disasters, such as hurricanes, windstorms, earthquakes, floods, landslides, fires and wildfires (either affecting or caused by PSE's facilities or infrastructure), extreme weather conditions and other acts of God, terrorism, asset-based or cyber-based attacks, pandemic or similar significant events, which can interrupt service and lead to lost revenue, cause temporary supply disruptions and/or price spikes in the cost of fuel and raw materials, impose extraordinary costs, and can subject the Company to liability;

● Commodity price risks associated with procuring natural gas and power in wholesale markets from creditworthy counterparties;

● Wholesale market disruption, which may result in a deterioration of market liquidity, increase the risk of counterparty default, affect the regulatory and legislative process in unpredictable ways, negatively affect wholesale energy prices and/or impede PSE's ability to manage its energy portfolio risks and procure energy supply, affect the availability and access to capital and credit markets and/or impact delivery of energy to PSE from its suppliers;

● Financial difficulties of other energy companies and related events, which may affect the regulatory and legislative process in unpredictable ways, adversely affect the availability of and access to capital and credit markets and/or impact delivery of energy to PSE from its suppliers;

● The effect of wholesale market structures (including, but not limited to, regional market designs or transmission organizations) or other related federal initiatives;

● PSE electric or natural gas distribution system failure, blackouts or large curtailments of transmission systems (whether PSE's or others'), or failure of the interstate natural gas pipeline delivering to PSE's system, all of which can affect PSE's ability to deliver power or natural gas to its customers and generating facilities;

● Electric plant generation and transmission system outages, which can have an adverse impact on PSE's expenses with respect to repair costs, added costs to replace energy or higher costs associated with dispatching a more expensive generation resource;

● The ability to restart generation following a regional transmission disruption;

● The ability of a natural gas or electric plant to operate as intended;

● PSE's resource adequacy needs to meet the Clean Energy Transformation Act (CETA) and the Climate Commitment Act (CCA) requirements, through a combination of owned or contracted resources, may significantly increase power and gas costs if pricing pressures and supply constraints on resource acquisitions increase;

● Changes in climate, weather conditions, or sustained extreme weather events in the Pacific Northwest, which could have effects on customer usage and PSE's revenue and expenses;

● Regional or national weather, which could impact PSE's ability to procure adequate supplies of natural gas, fuel or purchased power to serve its customers and the cost of procuring such supplies;

● Variable hydrological conditions, which can impact streamflow and PSE's ability to generate electricity from hydroelectric facilities;

● Variable wind conditions, which can impact PSE's ability to generate electricity from wind facilities;

● The ability to renew contracts for electric and natural gas supply and the price of renewal;

● Industrial, commercial and residential growth and demographic patterns in the service territories of PSE;

● General economic conditions in the Pacific Northwest, such as inflation, which may impact customer consumption or affect PSE's accounts receivable;

● The loss of significant customers, changes in the business of significant customers or the condemnation of PSE's facilities as a result of municipalization or other government action or negotiated settlement, which may result in changes in demand for PSE's services;

● The failure of information systems or the failure to secure information system data, which may impact the operations and cost of PSE's customer service, generation, distribution and transmission;

● Opposition and social activism that may hinder PSE's ability to perform work or construct infrastructure;

● Capital market conditions, including changes in the availability of capital and interest rate fluctuations;

● Employee workforce factors including strikes; work stoppages; retirements; absences due to pandemics, accidents, natural disasters or other significant, unforeseeable events; availability of qualified employees or the loss of a key executive;

● PSE's service territory operates within a region of high demand for skilled workers resulting in significant competition and inflated wages, which puts pressure on PSE's ability to attract, retain and compensate employees;

● The ability to obtain insurance coverage, the availability of insurance for certain specific losses, including those arising from catastrophic events such as wildfires and the cost of such insurance;

● Changes in Puget Energy's or PSE's credit ratings, which may have an adverse impact on the availability and cost of capital for Puget Energy or PSE generally;

● Deteriorating values of the equity, fixed income and other markets which could significantly impact the value of investments of PSE's retirement plan, post-retirement medical benefit plan trusts and the funding of obligations thereunder; and

● Recent laws proposed or passed by various municipalities in PSE's service territory, including Seattle, seek to reduce or eliminate the use of natural gas in various contexts, such as for space, cooking, and water heating in new commercial and multifamily buildings. Such laws may impact operations due to costs and delays from incremental permitting and other requirements that are outside PSE's control.

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.  For further information, see Part I, Item 1A, “Risk Factors” in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2022.

4

PART I                    FINANCIAL INFORMATION

Item 1.                      Financial Statements

PUGET ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating revenue:
Electric	$	680,639	$	594,331	$	1,690,799	$	1,350,708
Natural gas	270,140		236,054		787,398		662,402
Other	12,849		11,991		26,618		22,703
Total operating revenue	963,628		842,376		2,504,815		2,035,813
Operating expenses:
Energy costs:
Purchased electricity	227,539		212,391		567,355		450,594
Electric generation fuel	64,147		46,498		214,401		107,142
Residential exchange	(16,181)		(16,783)		(39,712)		(39,853)
Purchased natural gas	114,917		92,452		350,399		269,785
Unrealized (gain) loss on derivative instruments, net	30,802		9,273		222,925		(122,648)
Utility operations and maintenance	174,497		160,933		369,488		331,233
Non-utility expense and other	13,858		15,299		29,904		30,718
Depreciation & amortization	187,491		165,676		376,208		330,252
Conservation amortization	26,259		25,906		64,478		56,047
Taxes other than income taxes	92,150		86,544		225,840		207,921
Total operating expenses	915,479		798,189		2,381,286		1,621,191
Operating income (loss)	48,149		44,187		123,529		414,622
Other income (expense):
Other income	17,294		13,231		30,992		26,395
Other expense	(3,427)		(4,538)		(5,904)		(7,692)
Interest charges:
AFUDC	5,874		3,974		11,482		8,103
Interest expense	(93,391)		(86,194)		(183,433)		(172,662)
Income (loss) before income taxes	(25,501)		(29,340)		(23,334)		268,766
Income tax (benefit) expense	11,409		4,156		13,607		23,967
Net income (loss)	$	(36,910)	$	(33,496)	$	(36,941)	$	244,799

The accompanying notes are an integral part of the financial statements.

5

PUGET ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	(36,910)	$	(33,496)	$	(36,941)	$	244,799
Other comprehensive income (loss):
Net unrealized gain (loss) from pension and postretirement plans, net of tax of $(1,883), $488, $(2,059) and $975, respectively	(7,085)		1,831		(7,743)		3,662
Other comprehensive income (loss)	(7,085)		1,831		(7,743)		3,662
Comprehensive income (loss)	$	(43,995)	$	(31,665)	$	(44,684)	$	248,461

The accompanying notes are an integral part of the financial statements.

6

PUGET ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)

ASSETS

	June 30, 2023		December 31, 2022
Utility plant (at original cost, including construction work in progress of $1,068,267 and $861,801 respectively):
Electric plant	$	10,585,124	$	10,300,895
Natural gas plant	4,837,939		4,721,982
Common plant	1,013,304		1,103,783
Less: Accumulated depreciation and amortization	(4,414,522)		(4,341,789)
Net utility plant	12,021,845		11,784,871
Other property and investments:
Goodwill	1,656,513		1,656,513
Other property and investments	314,098		328,535
Total other property and investments	1,970,611		1,985,048
Current assets:
Cash and cash equivalents	253,144		105,740
Restricted cash	36,504		63,045
Accounts receivable, net of allowance for doubtful accounts of $42,666 and $41,962, respectively	408,215		673,236
Unbilled revenue	182,961		284,022
Materials and supplies, at average cost	141,268		132,172
Fuel and natural gas inventory, at average cost	83,849		94,075
Unrealized gain on derivative instruments	95,490		587,029
Prepaid expense and other	55,669		41,940
Power contract acquisition adjustment gain	17,033		16,736
Total current assets	1,274,133		1,997,995
Other long-term and regulatory assets:
Power cost adjustment mechanism	93,762		112,207
Regulatory assets related to power contracts	6,905		7,904
Other regulatory assets	930,731		784,231
Unrealized gain on derivative instruments	53,978		94,621
Power contract acquisition adjustment gain	39,555		46,924
Operating lease right-of-use asset	187,508		193,509
Other	171,456		180,204
Total other long-term and regulatory assets	1,483,895		1,419,600
Total assets	$	16,750,484	$	17,187,514

The accompanying notes are an integral part of the financial statements.

PUGET ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)

CAPITALIZATION AND LIABILITIES

	June 30, 2023		December 31, 2022
Capitalization:
Common shareholder’s equity:
Common stock $0.01 par value, 1,000 shares authorized, 200 shares outstanding	$	—	$	—
Additional paid-in capital	3,523,532		3,523,532
Retained earnings	1,385,965		1,465,331
Accumulated other comprehensive income (loss), net of tax	(32,517)		(24,774)
Total common shareholder’s equity	4,876,980		4,964,089
Long-term debt:
First mortgage bonds and senior notes	5,062,000		4,662,000
Pollution control bonds	161,860		161,860
Long-term debt	2,000,000		2,034,300
Debt discount issuance costs and other	(193,332)		(194,787)
Total long-term debt	7,030,528		6,663,373
Total capitalization	11,907,508		11,627,462
Current liabilities:
Accounts payable	306,802		665,750
Short-term debt	135,800		441,300
Accrued expenses:
Taxes	131,616		116,098
Salaries and wages	52,035		60,537
Interest	64,812		62,148
Unrealized loss on derivative instruments	108,923		124,976
Power contract acquisition adjustment loss	1,536		1,638
Operating lease liabilities	20,654		20,342
Other	65,333		70,685
Total current liabilities	887,511		1,563,474
Other long-term and regulatory liabilities:
Deferred income taxes	945,267		985,947
Unrealized loss on derivative instruments	22,311		18,366
Purchased gas adjustment liability	138,996		3,536
Regulatory liabilities	906,593		1,147,143
Regulatory liability for deferred income taxes	784,844		811,161
Regulatory liabilities related to power contracts	56,588		63,660
Power contract acquisition adjustment loss	5,369		6,266
Operating lease liabilities	174,354		181,265
Finance lease liabilities	100,904		102,518
Compliance obligation	138,676		—
Other deferred credits	681,563		676,716
Total long-term and regulatory liabilities	3,955,465		3,996,578
Commitments and contingencies (Note 8)
Total capitalization and liabilities	$	16,750,484	$	17,187,514

The accompanying notes are an integral part of the financial statements.

7

PUGET ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY

(Dollars in Thousands)

(Unaudited)

	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)
	Shares	Amount				Retained Earnings				Total Equity
Balance at December 31, 2021	200	$	—	$	3,523,532	$	1,067,216	$	(27,432)	$	4,563,316
Net income (loss)	—	—		—		278,295		—		278,295
Common stock dividend paid	—	—		—		(939)		—		(939)
Other comprehensive income (loss)	—	—		—		—		1,831		1,831
Balance at March 31, 2022	200	$	—	$	3,523,532	$	1,344,572	$	(25,601)	$	4,842,503
Net income (loss)	—	—		—		(33,496)		—		(33,496)
Common stock dividend paid	—	—		—		(294)		—		(294)
Other comprehensive income (loss)	—	—		—		—		1,831		1,831
Balance at June 30, 2022	200	$	—	$	3,523,532	$	1,310,782	$	(23,770)	$	4,810,544
Balance at December 31, 2022	200	$	—	$	3,523,532	$	1,465,331	$	(24,774)	$	4,964,089
Net income (loss)	—	—		—		(31)		—		(31)
Common stock dividend paid	—	—		—		(28,133)		—		(28,133)
Other comprehensive income (loss)	—	—		—		—		(658)		(658)
Balance at March 31, 2023	200	$	—	$	3,523,532	$	1,437,167	$	(25,432)	$	4,935,267
Net income (loss)	—	—		—		(36,910)		—		(36,910)
Common stock dividend paid	—	—		—		(14,292)		—		(14,292)
Other comprehensive income (loss)	—	—		—		—		(7,085)		(7,085)
Balance at June 30, 2023	200	$	—	$	3,523,532	$	1,385,965	$	(32,517)	$	4,876,980

The accompanying notes are an integral part of the consolidated financial statements.

8

PUGET ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30,
	2023		2022
Operating activities:
Net Income (loss)	$	(36,941)	$	244,799
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	376,208		330,252
Conservation amortization	64,478		56,047
Deferred income taxes and tax credits, net	(64,939)		(2,699)
Net unrealized (gain) loss on derivative instruments	222,925		(122,648)
AFUDC - equity	(17,270)		(13,887)
Other non-cash	10,479		4,180
Regulatory assets and liabilities	19,201		9,939
Purchased gas adjustment	159,676		3,401
GHG emission allowances	(60,231)		—
Other long term assets and liabilities	(8,421)		(11,079)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	337,513		158,608
Materials and supplies	(9,096)		(9,788)
Fuel and natural gas inventory	10,226		(31,502)
Prepayments and other	(13,729)		(5,757)
Accounts payable	(368,458)		(50,649)
Taxes payable	15,518		(16,963)
Other	(18,541)		(9,514)
Net cash provided by (used in) operating activities	618,598		532,740
Investing activities:
Construction expenditures - excluding equity AFUDC	(536,778)		(483,754)
Other	14,038		(566)
Net cash provided by (used in) investing activities	(522,740)		(484,320)
Financing activities:
Change in short-term debt, net	(339,800)		(76,000)
Dividends paid	(42,425)		(1,233)
Proceeds from long-term debt and bonds issued	396,488		448,075
Redemption of bonds and notes	—		(450,000)
Other	10,742		6,633
Net cash provided by (used in) financing activities	25,005		(72,525)
Net increase (decrease) in cash, cash equivalents, and restricted cash	120,863		(24,105)
Cash, cash equivalents, and restricted cash at beginning of period	168,785		103,150
Cash, cash equivalents, and restricted cash at end of period	$	289,648	$	79,045
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	$	155,933	$	163,329
Cash payments (refunds) for income taxes	39,392		25,244
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	$	69,685	$	67,845

The accompanying notes are an integral part of the financial statements.

9

PUGET SOUND ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating revenue:
Electric	$	680,639	$	594,331	$	1,690,799	$	1,350,708
Natural gas	270,140		236,054		787,398		662,402
Other	6,105		11,991		15,338		22,668
Total operating revenue	956,884		842,376		2,493,535		2,035,778
Operating expenses:
Energy costs:
Purchased electricity	227,539		212,391		567,355		450,594
Electric generation fuel	64,147		46,498		214,401		107,142
Residential exchange	(16,181)		(16,783)		(39,712)		(39,853)
Purchased natural gas	114,917		92,452		350,399		269,785
Unrealized (gain) loss on derivative instruments, net	30,802		9,273		222,925		(122,648)
Utility operations and maintenance	174,497		160,933		369,488		331,233
Non-utility expense and other	6,720		11,842		14,734		24,656
Depreciation & amortization	185,815		164,009		372,858		327,713
Conservation amortization	26,259		25,906		64,478		56,047
Taxes other than income taxes	90,632		86,243		223,896		207,359
Total operating expenses	905,147		792,764		2,360,822		1,612,028
Operating income (loss)	51,737		49,612		132,713		423,750
Other income (expense):
Other income	16,349		11,005		29,169		21,973
Other expense	(3,427)		(4,538)		(5,904)		(7,692)
Interest charges:
AFUDC	5,874		3,974		11,482		8,103
Interest expense	(69,928)		(62,663)		(136,911)		(125,807)
Income (loss) before income taxes	605		(2,610)		30,549		320,327
Income tax (benefit) expense	(860)		3,708		1,549		38,564
Net income (loss)	$	1,465	$	(6,318)	$	29,000	$	281,763

The accompanying notes are an integral part of the financial statements.

10

PUGET SOUND ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	1,465	$	(6,318)	$	29,000	$	281,763
Other comprehensive income(loss):
Net unrealized gain (loss) from pension and postretirement plans, net of tax of $(1,803), $953, $(1,793) and $1,906, respectively.	(6,785)		3,587		(6,749)		7,175
Amortization of treasury interest rate swaps to earnings, net of tax of $26, $24, $52 and $50, respectively.	95		98		192		195
Other comprehensive income (loss)	(6,690)		3,685		(6,557)		7,370
Comprehensive income (loss)	$	(5,225)	$	(2,633)	$	22,443	$	289,133

The accompanying notes are an integral part of the financial statements.

11

PUGET SOUND ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)

ASSETS

	June 30, 2023		December 31, 2022
Utility plant (at original cost, including construction work in progress of $1,068,267 and $861,801, respectively):
Electric plant	$	12,342,442	$	12,071,531
Natural gas plant	5,390,844		5,276,156
Common plant	1,034,170		1,125,217
Less:  Accumulated depreciation and amortization	(6,745,611)		(6,688,033)
Net utility plant	12,021,845		11,784,871
Other property and investments:
Other property and investments	68,790		80,076
Total other property and investments	68,790		80,076
Current assets:
Cash and cash equivalents	248,718		102,840
Restricted cash	36,504		63,045
Accounts receivable, net of allowance for doubtful accounts of $42,666 and $41,962, respectively	407,569		671,071
Unbilled revenue	182,961		284,014
Materials and supplies, at average cost	141,268		132,172
Fuel and natural gas inventory, at average cost	82,453		91,783
Unrealized gain on derivative instruments	95,490		587,029
Prepaid expense and other	55,537		41,940
Total current assets	1,250,500		1,973,894
Other long-term and regulatory assets:
Power cost adjustment mechanism	93,762		112,207
Other regulatory assets	930,731		784,231
Unrealized gain on derivative instruments	53,978		94,621
Operating lease right-of-use asset	187,508		193,509
Other	168,433		176,833
Total other long-term and regulatory assets	1,434,412		1,361,401
Total assets	$	14,775,547	$	15,200,242

The accompanying notes are an integral part of the financial statements.

PUGET SOUND ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)

CAPITALIZATION AND LIABILITIES

	June 30, 2023		December 31, 2022
Capitalization:
Common shareholder’s equity:
Common stock $0.01 par value, 150,000,000 shares authorized, 85,903,791 shares outstanding	$	859	$	859
Additional paid-in capital	3,535,105		3,535,105
Retained earnings	1,417,161		1,438,163
Accumulated other comprehensive income (loss), net of tax	(109,601)		(103,044)
Total common shareholder’s equity	4,843,524		4,871,083
Long-term debt:
First mortgage bonds and senior notes	5,062,000		4,662,000
Pollution control bonds	161,860		161,860
Debt discount, issuance costs and other	(40,780)		(37,095)
Total long-term debt	5,183,080		4,786,765
Total capitalization	10,026,604		9,657,848
Current liabilities:
Accounts payable	306,943		664,457
Short-term debt	—		357,000
Accrued expenses:
Taxes	134,152		116,472
Salaries and wages	52,035		60,537
Interest	54,869		52,170
Unrealized loss on derivative instruments	108,923		124,976
Operating lease liabilities	20,654		20,342
Other	65,333		70,685
Total current liabilities	742,909		1,466,639
Other long-term and regulatory liabilities:
Deferred income taxes	1,062,421		1,139,600
Unrealized loss on derivative instruments	22,311		18,366
Purchased gas adjustment liability	138,996		3,536
Regulatory liabilities	905,329		1,145,879
Regulatory liabilities for deferred income tax	785,401		811,724
Operating lease liabilities	174,354		181,265
Finance lease liabilities	100,904		102,518
Compliance obligation	138,676		—
Other deferred credits	677,642		672,867
Total long-term and regulatory liabilities	4,006,034		4,075,755
Commitments and contingencies (Note 8)
Total capitalization and liabilities	$	14,775,547	$	15,200,242

The accompanying notes are an integral part of the financial statements.

12

PUGET SOUND ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY

(Dollars in Thousands)

(Unaudited)

	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)
	Shares	Amount				Retained Earnings				Total Equity
Balance at December 31, 2021	85,903,791	$	859	$	3,485,105	$	982,607	$	(113,141)	$	4,355,430
Net income (loss)	—	—		—		288,081		—		288,081
Common stock dividend paid	—	—		—		(13,896)		—		(13,896)
Other comprehensive income (loss)	—	—		—		—		3,685		3,685
Balance at March 31, 2022	85,903,791	$	859	$	3,485,105	$	1,256,792	$	(109,456)	$	4,633,300
Net income (loss)	—	—		—		(6,318)		—		(6,318)
Common stock dividend paid	—	—		—		(2,037)		—		(2,037)
Other comprehensive income (loss)	—	—		—		—		3,685		3,685
Balance at June 30, 2022	85,903,791	$	859	$	3,485,105	$	1,248,437	$	(105,771)	$	4,628,630
Balance at December 31, 2022	85,903,791	$	859	$	3,535,105	$	1,438,163	$	(103,044)	$	4,871,083
Net income (loss)	—	—		—		27,535		—		27,535
Common stock dividend paid	—	—		—		(28,002)		—		(28,002)
Other comprehensive income (loss)	—	—		—		—		133		133
Balance at March 31, 2023	85,903,791	$	859	$	3,535,105	$	1,437,696	$	(102,911)	$	4,870,749
Net income (loss)	—	—		—		1,465		—		1,465
Common stock dividend paid	—	—		—		(22,000)		—		(22,000)
Other comprehensive income (loss)	—	—		—		—		(6,690)		(6,690)
Balance at June 30, 2023	85,903,791	$	859	$	3,535,105	$	1,417,161	$	(109,601)	$	4,843,524

The accompanying notes are an integral part of the consolidated financial statements.

13

PUGET SOUND ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30,
	2023		2022
Operating activities:
Net Income (loss)	$	29,000	$	281,763
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	372,858		327,713
Conservation amortization	64,478		56,047
Deferred income taxes and tax credits, net	(101,759)		(12,285)
Net unrealized (gain) loss on derivative instruments	222,925		(122,648)
AFUDC - equity	(17,270)		(13,887)
Other non-cash	5,227		(1,299)
Regulatory assets and liabilities	19,201		9,939
Purchased gas adjustment	159,676		3,401
GHG emission allowances	(60,231)		—
Other long term assets and liabilities	(7,163)		(6,523)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	335,986		160,983
Materials and supplies	(9,096)		(9,788)
Fuel and natural gas inventory	9,330		(31,142)
Prepayments and other	(13,597)		(5,757)
Accounts payable	(367,024)		(58,115)
Taxes payable	17,680		(22,667)
Other	(18,507)		(3,279)
Net cash provided by (used in) operating activities	641,714		552,456
Investing activities:
Construction expenditures - excluding equity AFUDC	(536,654)		(483,117)
Other	14,038		(566)
Net cash provided by (used in) investing activities	(522,616)		(483,683)
Financing activities:
Change in short-term debt, net	(357,000)		(85,000)
Dividends paid	(50,002)		(15,933)
Proceeds from long-term debt and bonds issued	396,488		—
Other	10,753		10,399
Net cash provided by (used in) financing activities	239		(90,534)
Net increase (decrease) in cash, cash equivalents, and restricted cash	119,337		(21,761)
Cash, cash equivalents, and restricted cash at beginning of period	165,885		96,247
Cash, cash equivalents, and restricted cash at end of period	$	285,222	$	74,486
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	$	119,815	$	115,192
Cash payments (refunds) for income taxes	61,995		55,131
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	$	69,685	$	67,845

The accompanying notes are an integral part of the financial statements.

14

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1)Summary of Consolidation and Significant Accounting Policy

Basis of Presentation

Puget Energy is an energy services holding company that owns PSE. PSE is a public utility incorporated in the state of Washington that furnishes electric and natural gas services in a territory covering approximately 6,000 square miles, primarily in the Puget Sound region. Puget Energy also has a wholly-owned non-regulated subsidiary, Puget LNG, LLC (Puget LNG), which has the sole purpose of owning, developing and financing the non-regulated activity of the Tacoma liquefied natural gas (LNG) facility. PSE and Puget LNG are considered related parties with similar ownership by Puget Energy. Therefore, capital and operating costs that are incurred by PSE and allocated to Puget LNG are related party transactions by nature.

In 2009, Puget Holdings, LLC (Puget Holdings), owned by a consortium of long-term infrastructure investors, completed its merger with Puget Energy (the merger). As a result of the merger, all of Puget Energy’s common stock is indirectly owned by Puget Holdings. The acquisition of Puget Energy was accounted for in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, “Business Combinations” (ASC 805) as of the date of the merger. ASC 805 requires the acquirer to recognize and measure identifiable assets acquired and liabilities assumed at fair value as of the merger date.

The consolidated financial statements of Puget Energy reflect the accounts of Puget Energy and its subsidiaries. PSE’s consolidated financial statements include the accounts of PSE and its subsidiary. Puget Energy and PSE are collectively referred to herein as “the Company”. The consolidated financial statements are presented after elimination of all significant intercompany items and transactions. PSE’s consolidated financial statements continue to be accounted for on a historical basis and do not include any ASC 805 purchase accounting adjustments. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Greenhouse Gas Emission Allowances

PSE is required to obtain emission allowances or offset credits for greenhouse gas (GHG) emissions associated with electricity it generates or imports into Washington State and natural gas supplied to customers in accordance with the cap-and- invest program included in the Climate Commitment Act (CCA). PSE records allocated and purchased emission allowances at cost, similar to an inventory method. PSE measures the compliance obligation at the weighted average cost of allowances held plus the fair value of additional allowances required to satisfy the obligation after adjustment for applicable no-cost allowances received. PSE includes the obligation in current liabilities and long-term liabilities reported in the "Compliance obligations" line item on the consolidated balance sheets based on the dates the allowances are to be surrendered. Consistent with ASC 980, PSE defers costs and revenues associated with the cap-and-invest program through regulatory assets and liabilities.

Allowance for Credit Losses

The Company measures expected credit losses on trade receivables on a collective basis by receivable type, which include electric retail receivables, gas retail receivables, and electric wholesale receivables. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

15

The following table presents the activity in the allowance for credit losses for accounts receivable for the six months ended June 30, 2023 and 2022:

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022
Allowance for credit losses:
Beginning balance	$	41,962	$	34,958
Provision for credit loss expense	17,334		15,727
Receivables charged-off	(16,630)		(8,343)
Total ending allowance balance	$	42,666	$	42,342

Tacoma LNG Facility

In February 2022, the Tacoma LNG facility at the Port of Tacoma completed commissioning and commenced commercial operations. The Tacoma LNG facility provides peak-shaving services to PSE's natural gas customers, and provides LNG as fuel to transportation customers, mainly the marine market. In 2019, the Puget Sound Clean Air Agency issued the air quality permit for the facility, and the Pollution Hearings Control Board of Washington State upheld the approval following extended litigation. This decision was appealed with the Pierce County Superior Court by the Puyallup Tribe of Indians and nonprofit law firm Earthjustice and the case was granted direct review by the Pierce County Court of Appeals Division II where it is currently pending.

Pursuant to an order by the Washington Commission, PSE will be allocated approximately 43.0% of common capital and operating costs, consistent with the regulated portion of the Tacoma LNG facility. The remaining 57.0% of common capital and operating costs of the Tacoma LNG facility will be allocated to Puget LNG. Per this allocation of costs, $243.3 million and $246.5 million of non-utility plant operating cost is reported in the Puget Energy "Other property and investments" line item as of June 30, 2023 and December 31, 2022, respectively. Additionally, $14.1 million and $5.4 million of operating costs are reported in the Puget Energy "Non-utility expense and other" financial statement line item for the six months ended June 30, 2023, and June 30, 2022, respectively. Further, $238.1 million and $245.7 million of natural gas plant related to PSE’s portion of the Tacoma LNG facility is reported in the PSE “Utility plant - Natural gas plant” financial statement line item as of June 30, 2023 and December 31, 2022, respectively, as PSE is a regulated entity.

Variable Interest Entities

In April 2017, PSE entered into a power purchase agreement (PPA) with Skookumchuck Wind Energy Project, LLC (Skookumchuck) pursuant to which Skookumchuck would develop a wind generation facility and sell bundled energy and associated attributes, namely renewable energy certificates (RECs), to PSE over a term of 20 years. Skookumchuck commenced commercial operation in November 2020. In May 2020, PSE entered into a PPA with Golden Hills Wind Farm, LLC (Golden Hills) pursuant to which Golden Hills would develop a wind generation facility and sell bundled energy and associated attributes, namely RECs, to PSE over a term of 20 years. On April 29, 2022, Golden Hills commenced commercial operations. In February 2021, PSE entered into a PPA with Clearwater Wind Project, LLC (Clearwater) in which Clearwater would develop a wind generation facility and sell energy and associated attributes to PSE over a term of 25 years. On November 8, 2022, Clearwater commenced commercial operations. For each of the aforementioned PPAs, PSE has no equity investment in the generation facilities, but is the only customer of each facility. PSE has concluded that Skookumchuck, Golden Hills, and Clearwater represent variable interest entities (VIE) and that PSE is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of the facilities. Additionally, PSE does not have the obligation to absorb losses or receive benefits. As a result, PSE does not consolidate the VIEs.

Purchased energy of $47.9 million and $11.7 million were recognized in purchased electricity on the Company's consolidated statements of income for the six months ended June 30, 2023 and June 30, 2022, respectively. Additionally, $0.9 million and $3.8 million were included in accounts payable on the Company's balance sheet as of June 30, 2023 and December 31, 2022, respectively.

16

(2)  New Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848". ASU 2022-06 postpones the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. As of June 30, 2023, the Company is not aware of any current agreements that reference LIBOR and thus, has not utilized any practical expedients. The Company continues to assess other agreements to determine if LIBOR is included and if the expedients would be utilized through the allowed period of December 2024.

(3) Revenue

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the three months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	326,352	$	171,040	$	—	$	497,392
Commercial	248,204		81,825		—		330,029
Industrial	28,521		6,192		—		34,713
Other	5,219		—		—		5,219
Wholesale	59,892		—		—		59,892
Transmission and transportation	10,628		5,260		—		15,888
Miscellaneous	6,984		(50)		12,849		19,783
Total revenue from contracts with customers	$	685,800	$	264,267	$	12,849	$	962,916
Total other revenue2	(5,161)		5,873		—		712
Total operating revenue	$	680,639	$	270,140	$	12,849	$	963,628

_____________

1 Other includes $6.7 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

17

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other		Total
Retail
Residential	$	297,255	$	159,200	$	—	$	456,455
Commercial	226,570		72,275		—		298,845
Industrial	27,711		5,121		—		32,832
Other	4,496		—		—		4,496
Wholesale	24,061		—		—		24,061
Transmission and transportation	10,633		5,088		—		15,721
Miscellaneous	4,019		53		11,991		16,063
Total revenue from contracts with customers	$	594,745	$	241,737	$	11,991	$	848,473
Total other revenue1	(414)		(5,683)		—		(6,097)
Total operating revenue	$	594,331	$	236,054	$	11,991	$	842,376

_____________

1 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the six months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	797,207	$	521,064	$	—	$	1,318,271
Commercial	539,693		234,062		—		773,755
Industrial	62,368		17,283		—		79,651
Other	10,720		—		—		10,720
Wholesale	202,152		—		—		202,152
Transmission and transportation	25,114		10,954		—		36,068
Miscellaneous	10,975		(418)		26,618		37,175
Total revenue from contracts with customers	$	1,648,229	$	782,945	$	26,618	$	2,457,792
Total other revenue2	42,570		4,453		—		47,023
Total operating revenue	$	1,690,799	$	787,398	$	26,618	$	2,504,815

_____________

1 Other includes $11.3 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

18

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	713,515	$	451,796	$	—	$	1,165,311
Commercial	483,589		193,254		—		676,843
Industrial	57,784		13,206		—		70,990
Other	9,257		—		—		9,257
Wholesale	37,208		—		—		37,208
Transmission and transportation	21,855		10,534		—		32,389
Miscellaneous	5,169		362		22,703		28,234
Total revenue from contracts with customers	$	1,328,377	$	669,152	$	22,703	$	2,020,232
Total other revenue2	22,331		(6,750)		—		15,581
Total operating revenue	$	1,350,708	$	662,402	$	22,703	$	2,035,813

1 Other includes $0.1 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Transaction Price Allocated to Remaining Performance Obligations

In December 2020, Puget LNG entered into a contract with one customer where Puget LNG is selling LNG over a 10-year delivery period beginning April 2024. The contract requires the customer to purchase a minimum annual quantity even if the customer does not take delivery. The price of the LNG includes a fixed charge, a fuel charge that includes both a market index and fixed margin component and other variable consideration. The fixed transaction price is allocated to the remaining performance obligations which is determined by the fixed charge components multiplied by the outstanding minimum annual quantity. Based on management’s best estimate of commencement, the Company expects to recognize this revenue over the following time periods:

Puget Energy
(Dollars in Thousands)	2024		2025		2026		2027		2028		Thereafter		Total
Remaining performance obligations	$	15,359	$	19,710	$	19,454	$	19,454	$	19,454	$	102,135	$	195,566

The Company has elected the optional exemption in ASC 606, "Revenues from Contracts with Customers", under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. The primary sources of variability are (a) fluctuations in market index prices of natural gas used to determine aspects of variable pricing and (b) variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG or natural gas. As each unit of LNG or natural gas represents a separate performance obligation, future volumes are wholly unsatisfied.

(4) Accounting for Derivative Instruments and Hedging Activities

PSE employs various energy portfolio optimization strategies but is not in the business of assuming risk for the purpose of realizing speculative trading revenue. The nature of serving regulated electric customers with its portfolio of owned and contracted electric generation resources exposes PSE and its customers to some volumetric and commodity price risks within the sharing mechanism of the Power Cost Adjustment. Therefore, wholesale market transactions and PSE's related hedging strategies are focused on reducing costs and risks where feasible, thus reducing volatility in costs in the portfolio. In order to manage its exposure to the variability in future cash flows for forecasted energy transactions, PSE utilizes a programmatic hedging strategy, which extends out three years. PSE's hedging strategy includes a risk-responsive component for the core natural gas portfolio, which utilizes quantitative risk-based measures with defined objectives to balance both portfolio risk and hedge costs.

19

PSE's energy risk portfolio management function monitors and manages these risks using analytical models and tools. In order to manage risks effectively, PSE enters into forward physical electric and natural gas purchase and sale agreements, fixed-for-floating swap contracts, and commodity call/put options. Currently, the Company does not apply cash flow hedge accounting and therefore records all mark-to-market gains or losses through earnings.

The Company manages its interest rate risk through the issuance of mostly fixed-rate debt with varied maturities. The Company utilizes internal cash from operations, borrowings under its commercial paper program and its credit facilities to meet short-term funding needs. The Company may enter into swap instruments or other financial hedge instruments to manage the interest rate risk associated with these debts.

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
	June 30, 2023					December 31, 2022
(Dollars in Thousands)	Volumes (millions)	Assets1		Liabilities2		Volumes (millions)	Assets1		Liabilities2
Electric portfolio derivatives	*	$	114,282	$	86,623	*	$	337,703	$	87,120
Natural gas derivatives (MMBtus)3	256	35,186		44,611		322	343,947		56,222
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342
Current		$	95,490	$	108,923		$	587,029	$	124,976
Long-term		53,978		22,311			94,621		18,366
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342

_______________

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 purchased gas adjustment (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 230.3 million British Thermal Units (MMBtu) and purchased electricity of 3.1 million Megawatt hours (MWhs) at June 30, 2023, and 234.9 million MMBtus and 5.3 million MWhs at December 31, 2022.

It is the Company's policy to record all derivative transactions on a gross basis at the contract level without offsetting assets or liabilities. The Company generally enters into transactions using the following master agreements: WSPP, Inc. (WSPP) agreements, which standardize physical power contracts; International Swaps and Derivatives Association (ISDA) agreements, which standardize financial natural gas and electric contracts; and North American Energy Standards Board (NAESB) agreements, which standardize physical natural gas contracts. The Company believes that such agreements reduce credit risk exposure because such agreements provide for the netting and offsetting of monthly payments as well as the right of set-off in the event of counterparty default. The set-off provision can be used as a final settlement of accounts which extinguishes the mutual debts owed between the parties in exchange for a new net amount. For further details regarding the fair value of derivative instruments, see Note 5, "Fair Value Measurements," in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

20

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
	At June 30, 2023
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	149,468	$	—	$	149,468	$	(72,861)	$	—	$	76,607
Liabilities:
Energy derivative contracts	$	131,234	$	—	$	131,234	$	(72,861)	$	(5,887)	$	52,486

Puget Energy and Puget Sound Energy	At December 31, 2022
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	681,650	$	—	$	681,650	$	(125,334)	$	—	$	556,316
Liabilities:
Energy derivative contracts	$	143,342	$	—	$	143,342	$	(125,334)	$	(5,661)	$	12,347

_______________

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

The following table presents the effect and classification of the realized and unrealized gains (losses) of the Company's derivatives recorded on the statements of income:

Puget Energy and Puget Sound Energy		Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in Thousands)	Classification	2023		2022		2023		2022
Gas for power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	$	(9,693)	$	(16,582)	$	(114,339)	$	70,291
Realized	Electric generation fuel	(13,572)		16,039		74,695		43,130
Power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	(21,109)		7,309		(108,586)		52,357
Realized	Purchased electricity	(3,885)		4,454		47,132		7,045
Total gain (loss) recognized in income on derivatives		$	(48,259)	$	11,220	$	(101,098)	$	172,823

21

The Company is exposed to credit risk primarily through buying and selling electricity and natural gas to serve its customers. Credit risk is the potential loss resulting from a counterparty's non-performance under an agreement. The Company manages credit risk with policies and procedures for, among other things, counterparty credit analysis, exposure measurement, and exposure monitoring and mitigation.

The Company monitors counterparties for significant swings in credit default swap rates, credit rating changes by external rating agencies, ownership changes or financial distress. Where deemed appropriate, the Company may request collateral or other security from its counterparties to mitigate potential credit default losses. Criteria employed in this decision include, among other things, the perceived creditworthiness of the counterparty and the expected credit exposure.

It is possible that volatility in energy commodity prices could cause the Company to have material credit risk exposure with one or more counterparties. If such counterparties fail to perform their obligations under one or more agreements, the Company could suffer a material financial loss. However, as of June 30, 2023, approximately 99.5% of the Company's energy portfolio exposure, excluding normal purchase normal sale (NPNS) transactions, is with counterparties that are rated investment grade by rating agencies and 0.5% are either rated below investment grade or not rated by rating agencies. The Company assesses credit risk internally for counterparties that are not rated by the major rating agencies.

The Company computes credit reserves at a master agreement level by counterparty. The Company considers external credit ratings and market factors in the determination of reserves, such as credit default swaps and bond spreads. The Company recognizes that external ratings may not always reflect how a market participant perceives a counterparty's risk of default. The Company uses both default factors published by Standard & Poor's and factors derived through analysis of market risk, which reflect the application of an industry standard recovery rate. The Company selects a default factor by counterparty at an aggregate master agreement level based on a weighted average default tenor for that counterparty's deals. The default tenor is determined by weighting the fair value and contract tenors for all deals for each counterparty to derive an average value. The default factor used is dependent upon whether the counterparty is in a net asset or a net liability position after applying the master agreement levels.

The Company applies the counterparty's default factor to compute credit reserves for counterparties that are in a net asset position. The Company calculates a non-performance risk on its derivative liabilities by using its estimated incremental borrowing rate over the risk-free rate. Credit reserves are netted against the unrealized gain (loss) positions. The majority of the Company's derivative contracts are with financial institutions and other utilities operating within the Western Electricity Coordinating Council. PSE also transacts power futures contracts on the Intercontinental Exchange (ICE), and natural gas contracts on the ICE natural gas exchange (NGX) platform. Execution of contracts on ICE requires the daily posting of margin calls as collateral through a futures and clearing agent. As of June 30, 2023, PSE had cash posted as collateral of $21.9 million related to contracts executed on the ICE platform. In August 2022, PSE entered into a standby letter of credit agreement with TD Bank allowing standby letter of credit postings of up to $50.0 million as a condition of transacting on the ICE NGX platform. As of June 30, 2023, PSE had no cash posted with ICE NGX and $7.0 million issued under the standby letter of credit agreement. PSE did not trigger any collateral requirements with any of its counterparties nor were any of PSE's counterparties required to post collateral resulting from credit rating downgrades during the three months ended June 30, 2023.

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
(Dollars in Thousands)	At June 30, 2023						At December 31, 2022
	Fair Value1		Posted		Contingent		Fair Value1		Posted		Contingent
Contingent Feature	Liability		Collateral		Collateral		Liability		Collateral		Collateral
Credit rating2	$	1,229	$	—	$	1,229	$	3,157	$	—	$	3,157
Requested credit for adequate assurance	27,424		—		—		4,157		—		—
Forward value of contract3	5,887		21,891		N/A		5,661		56,200		N/A
Total	$	34,540	$	21,891	$	1,229	$	12,975	$	56,200	$	3,157

_______________

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.

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(5) Fair Value Measurements

ASC 820 established a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy categorizes the inputs into three levels with the highest priority given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority given to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Level 1 primarily consists of financial instruments such as exchange-traded derivatives and listed equities. Equity securities that are also classified as cash equivalents are considered Level 1 if there are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded derivatives such as over-the-counter forwards and options.

Level 3 - Pricing inputs include significant inputs that have little or no observability as of the reporting date. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Financial assets and liabilities measured at fair value are classified in their entirety in the appropriate fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy. The Company primarily determines fair value measurements classified as Level 2 or Level 3 using a combination of the income and market valuation approaches. The process of determining the fair values is the responsibility of the derivative accounting department, which reports to the Controller and Principal Accounting Officer. Inputs used to estimate the fair value of forwards, swaps and options include market-price curves, contract terms and prices, credit-risk adjustments, and discount factors. Additionally, for options, the Black-Scholes option valuation model and implied market volatility curves are used. Inputs used to estimate fair value in industry-standard models are categorized as Level 2 inputs as substantially all assumptions and inputs are observable in active markets throughout the full term of the instruments. On a daily basis, the Company obtains quoted forward prices for the electric and natural gas markets from an independent external pricing service.

The Company considers its electric and natural gas contracts as Level 2 derivative instruments as such contracts are commonly traded as over-the-counter forwards with indirectly observable price quotes. However, certain energy derivative instruments with maturity dates falling outside the range of observable price quotes or that are transacted at illiquid delivery locations are classified as Level 3 in the fair value hierarchy. Management's assessment is based on the trading activity in real-time and forward electric and natural gas markets. Each quarter, the Company confirms the validity of pricing-service quoted prices used to value Level 2 commodity contracts with the actual prices of commodity contracts entered into during the most recent quarter. The Company’s environmental compliance obligation is categorized in Level 2 of the fair value hierarchy and is measured at fair value using a market approach based on quoted prices from an independent pricing service.

Assets and Liabilities with Estimated Fair Value

The carrying values of cash and cash equivalents, restricted cash, and short-term debt as reported on the balance sheet are reasonable estimates of their fair value due to the short-term nature of these instruments and are classified as Level 1 in the fair value hierarchy. The carrying value of other investments of $44.2 million and $55.0 million at June 30, 2023 and December 31, 2022 respectively, are included in "Other property and investments" on the balance sheet. These values are also reasonable estimates of their fair value and classified as Level 2 in the fair value hierarchy as they are valued based on market rates for similar transactions.

23

The fair value of the long-term notes was estimated using the discounted cash flow method with the U.S. Treasury yields and the Company's credit spreads as inputs, interpolating to the maturity date of each issue. The carrying values and estimated fair values were as follows:

Puget Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount1	2	$	7,030,528	$	6,601,133	$	6,629,073	$	6,149,797
Long-term debt (variable-rate)	2	—		—		34,300		34,300
Total liabilities		$	7,030,528	$	6,601,133	$	6,663,373	$	6,184,097

Puget Sound Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount2	2	$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010
Total liabilities		$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010

_______________

1 The carrying value includes debt issuances costs of $21.8 million and $21.5 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

2 The carrying value includes debt issuances costs of $21.9 million and $21.4 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company's financial assets and liabilities by level, within the fair value hierarchy, that were accounted for at fair value on a recurring basis:

Puget Energy and Puget Sound Energy	Fair Value At June 30, 2023						Fair Value At December 31, 2022
(Dollars in Thousands)	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Electric derivative instruments	$	39,846	$	74,436	$	114,282	$	218,610	$	119,093	$	337,703
Natural gas derivative instruments	34,502		684		35,186		342,988		959		343,947
Total assets	$	74,348	$	75,120	$	149,468	$	561,598	$	120,052	$	681,650
Liabilities:
Electric derivative instruments	$	70,094	$	16,529	$	86,623	$	84,105	$	3,015	$	87,120
Natural gas derivative instruments	44,031		580		44,611		55,136		1,086		56,222
Compliance obligations	138,676		—		138,676		—		—		—
Total liabilities	$	252,801	$	17,109	$	269,910	$	139,241	$	4,101	$	143,342

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Puget Energy and Puget Sound Energy	Three Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	69,734	$	215	$	69,949	$	(6,010)	$	(1,212)	$	(7,222)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings1	(16,296)		—		(16,296)		4,814		—		4,814
Included in regulatory assets / liabilities	—		135		135		—		70		70
Settlements	4,469		(246)		4,223		7,018		271		7,289
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	—		—		—		94		154		248
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	116,078	$	(127)	$	115,951	$	(42,752)	$	(2,120)	$	(44,872)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings2	(35,063)		—		(35,063)		43,633		—		43,633
Included in regulatory assets / liabilities	—		44		44		—		485		485
Settlements	(23,325)		17		(23,308)		4,766		595		5,361
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	217		170		387		269		323		592
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

___________________

1 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(16.1) million and $4.6 million for the three months ended June 30, 2023 and 2022, respectively.

2 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(25.9) million and $40.8 million for the six months ended June 30, 2023 and 2022, respectively.

Realized gains and losses on energy derivatives for Level 3 recurring items are included in energy costs in the Company's consolidated statements of income under purchased electricity, electric generation fuel or purchased natural gas when settled. Unrealized gains and losses on energy derivatives for Level 3 recurring items are included in net unrealized (gain) loss on derivative instruments in the Company's consolidated statements of income.

The Company does not use internally developed models to make adjustments to significant unobservable pricing inputs. The only significant unobservable input into the fair value measurement of the Company's Level 3 assets and liabilities is the forward price for electric and natural gas contracts. The weighted average price is calculated as the total market value divided by the total volume of the Company's Level 3 electric and gas commodity contracts, respectively, as of the reporting date.

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The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of June 30, 2023:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	74,436	$	16,529	Discounted cash flow	Power prices (per MWh)	$	58.45	$	198.55	$	113.50
Natural gas	$	684	$	580	Discounted cash flow	Natural gas prices (per MMBtu)	$	1.14	$	6.63	$	2.57

_______________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of December 31, 2022:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	119,093	$	3,015	Discounted cash flow	Power prices (per MWh)	$	55.79	$	291.03	$	131.51
Natural gas	$	959	$	1,086	Discounted cash flow	Natural gas prices (per MMBtu)	$	3.84	$	7.00	$	4.87

___________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

The significant unobservable inputs listed above would have a direct impact on the fair values of the above instruments if they were adjusted. Consequently, significant increases or decreases in the forward prices of electricity or natural gas in isolation would result in a significantly higher or lower fair value for Level 3 assets and liabilities. Generally, interrelationships exist between market prices of natural gas and power. As such, an increase in natural gas pricing would potentially have a similar impact on forward power markets. As of June 30, 2023 and December 31, 2022, a hypothetical 10% increase or decrease in market prices of natural gas and electricity would change the fair value of the Company's derivative portfolio, classified as Level 3 within the fair value hierarchy, by $26.5 million and $37.6 million, respectively.

Long-Lived Assets Measured at Fair Value on a Nonrecurring Basis

Puget Energy records the fair value of its intangible assets in accordance with ASC 360, “Property, Plant, and Equipment,” (ASC 360). The fair value assigned to the power contracts was determined using an income approach comparing the contract rate to the market rate for power over the remaining period of the contracts incorporating non-performance risk. Management also incorporated certain assumptions related to quantities and market presentation that it believes market participants would make in the valuation. The fair value of the power contracts is amortized as the contracts settle.

ASC 360 requires long-lived assets to be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. One such triggering event is a significant decrease in the forward market prices of power.

As of June 30, 2023, Puget Energy completed valuation and impairment testing of its power purchase contracts classified as intangible assets and determined that no impairment was needed. These intangible assets exist as a result of the merger in 2009, at which time the consolidated assets and liabilities were revalued in accordance with ASC 805, "Business Combinations."

(6) Retirement Benefits

PSE has a defined benefit pension plan (Qualified Pension Benefits) covering a substantial majority of PSE employees. For employees hired prior to 2014, pension benefits earned are a function of age, salary, years of service and, in the case of employees in the cash balance formula plan, the applicable annual interest crediting rates. Effective January 1, 2014, all new UA represented employees hired or rehired receive annual pay credits of 4.0% of eligible pay each year in the cash balance

26

formula of the defined pension plan. Effective January 1, 2014 for non-represented employees, and December 12, 2014 for employees represented by the IBEW, newly hired or rehired employees receive annual employer contributions of 4.0% of eligible pay each year into the cash balance formula of the defined benefit pension or 401k plan account. PSE also has a non-qualified Supplemental Executive Retirement Plan (SERP) for certain key senior management employees that closed to new participants in 2019. Effective 2019, PSE has an officer restoration benefit for new officers who join PSE or are promoted, such that company contributions under PSE’s applicable tax-qualified plan, which otherwise would have been credited if not for the IRS limitations, are credited at 4.0% of earnings to an account with the Deferred Compensation Plan.

In addition to providing pension benefits, PSE provides legacy group health care and life insurance benefits (Plan) for certain retired employees. These benefits are provided principally through an insurance company. The insurance premiums, paid primarily by retirees, are based on the benefits provided during the prior year.

Puget Energy's retirement plans were remeasured as a result of the merger in 2009, which represents the difference between Puget Energy and PSE's retirement plans. The components of service cost are included within utility operations and maintenance for PSE and within non-utility expense and other for Puget Energy while all non-service cost components are included in other income.

For further information, see Note 13, "Retirement Benefits" in the Combined Notes to Consolidated Financial Statements included in Item 8 of the Company's Form 10-K for the period ended December 31, 2022.

The following tables summarize the Company’s net periodic benefit cost for the three and six months ended June 30, 2023 and 2022:

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(99)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	(360)		1,563		—		618		(51)		(4)
Net periodic benefit cost	$	(136)	$	1,255	$	567	$	1,142	$	39	$	39

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,507)		—		—		(159)		(198)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	(1,226)		3,191		—		1,236		(101)		(8)
Net periodic benefit cost	$	(1,093)	$	2,990	$	1,137	$	2,286	$	79	$	77

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Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(98)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	—		3,734		22		662		(54)		(6)
Net periodic benefit cost	$	224	$	3,426	$	589	$	1,186	$	36	$	38

Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,508)		—		—		(159)		(197)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	—		7,540		42		1,324		(109)		(11)
Net periodic benefit cost	$	133	$	7,338	$	1,179	$	2,374	$	71	$	75

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The following table summarizes the Company’s change in benefit obligation for the periods ended June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended		Year Ended		Six Months Ended		Year Ended		Six Months Ended		Year Ended
(Dollars in Thousands)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Change in benefit obligation:
Benefit obligation at beginning of period	$	589,278	$	834,960	$	32,046	$	43,155	$	9,015	$	11,654
Amendments	—		—		—		—		—		38
Service cost	9,265		26,351		143		557		94		217
Interest cost	16,188		24,263		849		1,253		231		311
Curtailment	—		—		(2,772)		—		—		—
Actuarial loss (gain)	11,301		(215,005)		251		(5,260)		—		(2,397)
Benefits paid	(22,760)		(80,226)		(2,507)		(7,659)		(639)		(808)
Administrative expense	—		(1,065)		—		—		—		—
Benefit obligation at end of period	$	603,272	$	589,278	$	28,010	$	32,046	$	8,701	$	9,015

The aggregate expected contributions by the Company to fund the qualified pension plan, SERP and the other postretirement plans for the year ending December 31, 2023, are expected to be at least $18.0 million, $3.5 million and $0.3 million, respectively. The Company contributed $2.5 million and $1.0 million to fund the SERP during each of the six months ended June 30, 2023 and the six months ended June 30, 2022, respectively. The Company contributed an immaterial amount to fund the other postretirement plans.

(7) Regulation and Rates

General Rate Case

On December 22, 2022, the Washington Commission issued an order on PSE’s 2022 general rate case (GRC), which was filed on January 31, 2022 that approved a weighted cost of capital of 7.16%, or 6.62% after-tax, a capital structure of 49.0% in common equity in 2023 and 2024, and a return on equity of 9.4%. On January 6, 2023, the Washington Commission approved PSE’s natural gas rates in its compliance filing with an overall net revenue change of $70.8 million or 6.4% in 2023 and $19.5 million or 1.7% in 2024, with an effective date of January 7, 2023. On January 10, 2023, the Washington Commission approved PSE’s electric rates in its compliance filing with an overall net revenue change of $247.0 million or 10.8% in 2023 and $33.1 million or 1.3% in 2024 with an effective date of January 11, 2023. Per the 2022 GRC Final Order in Docket No. UE-220066, power cost only rate case (PCORC) rates were set to zero as of January 11, 2023 and PSE agreed not to file a PCORC during 2023 and 2024, the two-year rate plan agreed to in the GRC settlement.

Prior rates were subject to the 2019 GRC and included a weighted cost of capital of 7.39% or 6.8% after-tax, a capital structure of 48.5% in common equity, and a return on equity of 9.4%. The annualized overall rate impacts were an electric revenue increase of $48.3 million, or 2.3%, and a natural gas increase of $4.9 million, or 0.6%, effective October 1, 2021. For further information, see Note 4, "Regulation and Rates" in the Combined Notes to Consolidated Financial Statements included in Item 8 of the Company's Form 10-K for the period ended December 31, 2022.

Climate Commitment Act Deferral

On December 29, 2022, PSE filed accounting petitions with the Washington Commission requesting authorization to defer costs and revenues associated with the Company’s compliance with the Climate Commitment Act (CCA) codified in law within Revised Code of Washington (RCW) 70A.65. On February 28, 2023, in Order 01 under Docket No. UE-220974 and UG-220975, the Washington Commission granted PSE approval to defer the cost of emission allowances to comply with the CCA and the proceeds from no-cost allowances consigned to auction beginning January 1, 2023. This accounting treatment is necessary in order for PSE to defer and seek recovery of CCA costs that are not currently included in rates. As of June 30,

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2023, PSE deferred $129.0 million and $69.9 million of CCA compliance costs for natural gas and electric liabilities, respectively. Additionally, PSE will consign for auction at least the minimum amount of no-cost emission allowances allocated for natural gas operations in compliance with the CCA, the proceeds of which will be used for the benefit of natural gas customers, as determined by the Washington Commission. PSE will not record a regulatory liability to defer the proceeds until consigned allowances are sold at auction. As of June 30, 2023, PSE has no regulatory liability related to proceeds from the sale of consigned GHG emission allowances.

In October 2022, the Washington Department of Ecology (WDOE) published final regulations to implement the cap and invest program. The WDOE also indicated that they will have subsequent rulemakings that will build off initial rulemaking as program implementation gets underway and progress with Washington State carbon goals are evaluated. One component of the CCA rules stipulates the WDOE shall provide qualifying electric utilities, such as PSE, with no-cost allowances based on the cost burden of the program to electric customers, which is derived using a forecast of emissions. An additional component of the CCA rules stipulates that the allocation of no-cost allowances is adjusted over time to take into account the cumulative total of no-cost allowances an electric utility has been given relative to its reported GHG emissions. Such adjustments will be made through a WDOE adjustment in the fourth quarter of the following year. WDOE has indicated that such adjustment would take into account the cumulative total of allowances an electric utility has received relative to its reported GHG emissions. WDOE would add allowances to an electric utility's account if such account has an allowance deficit, and WDOE would add fewer allowances to an electric utility's account going forward if such account had previously allocated excess allowances. WDOE has not provided further guidance or rules specifying how such adjustments will be determined. As a result, the Company cannot predict the impact of such adjustments.

As of June 30, 2023, PSE's CCA electric compliance obligation is based upon the WDOE's initial allocation of no-cost allowances. However, qualifying electric utilities can submit revised emissions forecasts approved by the Washington Commission to WDOE by July 30, 2023, and the WDOE, if appropriate, may adjust the initial allocation schedule of no-cost allowances to reflect such revised 2023 emissions forecasts. PSE filed its revised forecast of 2023 emission under Docket No. UE 220797, which was approved by the Washington Commission on July 27, 2023 and then submitted to the WDOE on July 27, 2023. WDOE must approve any additional allowance allocation based on the July 2023 revised forecast no later than October 1, 2023 and this may result in the allocation of additional no-cost allowances to PSE for 2023, which may impact PSE's CCA compliance costs, and thus, the electric deferred CCA compliance costs consistent with Docket No. UE-220974.

Following the October 1, 2023 WDOE decision PSE's no-cost allowance allocation will be set for 2023 until the fourth quarter of 2024 when there is an opportunity to request a "true-up" of no-cost allowances under the aforementioned adjustment mechanism. However, as of June 30, 2023, due to the uncertainty around implementation of the adjustment mechanism PSE did not adjust the CCA electric compliance obligation anticipating an adjustment to no cost allowances to reported 2023 electric GHG emissions and does not plan to make such adjustment until a formal true-up allocation has been granted by the WDOE.

Revenue Decoupling Adjustment Mechanism

In June 2021, the Washington Commission approved the multi-party settlement agreement, which was filed within PSE’s PCORC filing. As part of this settlement agreement, the electric annual fixed power cost allowed revenue was updated to reflect changes in the approved revenue requirement and took effect on July 1, 2021.

In September 2021, the Washington Commission approved the 2019 GRC filing. As part of this filing, the annual electric and gas delivery cost allowed revenue was updated to reflect changes in the approved revenue requirement. The changes took effect on October 1, 2021.

On January 6, 2023, the Washington Commission approved the natural gas 2022 GRC filing. As part of this filing, the annual gas delivery allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 7, 2023.

On January 10, 2023, the Washington Commission approved the electric 2022 GRC filing. As part of this filing, the annual electric delivery and fixed power cost allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 11, 2023.

On June 30, 2023, PSE performed an analysis to determine if electric and natural gas decoupling revenue deferrals would be collected from customers within 24 months of the annual period, per ASC 980.  If not, for GAAP purposes only, PSE would need to record a reserve against the decoupling revenue and corresponding regulatory asset balance.  Once the reserve is probable of collection within 24 months from the end of the annual period, the reserve can be recognized as decoupling revenue. Based on the analyses, no reserve adjustment was recorded as of June 30, 2023 and 2022.

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Power Cost Adjustment Mechanism

PSE currently has a power cost adjustment (PCA) mechanism that provides for the deferral of power costs that vary from the “power cost baseline” level of power costs. The “power cost baseline” levels are set, in part, based on normalized assumptions about weather and hydroelectric conditions.  Excess power costs or savings are apportioned between PSE and its customers pursuant to the graduated scale set forth in the PCA mechanism and will trigger a surcharge or refund when the cumulative deferral trigger is reached.

Effective January 1, 2017, the following graduated scale is used in the PCA mechanism:

	Company’s Share				Customers' Share
Annual Power Cost Variability	Over		Under		Over		Under
Over or under collected by up to $17 million	100	%	100	%	—	%	—	%
Over or under collected by between $17 million - $40 million	35		50		65		50
Over or under collected beyond $40 + million	10		10		90		90

For the six months ended June 30, 2023, in its PCA mechanism, PSE over recovered its allowable costs by $12.1 million of which zero was apportioned to customers and $2.4 million of interest was accrued on the deferred customer balance. This compares to an under recovery of allowable costs of $26.6 million for the six months ended June 30, 2022, of which $4.8 million was apportioned to customers and accrued $0.6 million of interest on the total deferred customer balance.

Power Cost Adjustment Clause

PSE exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2022. During 2022, actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $110.1 million. Under the terms of the PCA’s sharing mechanism for under-recovered power costs, PSE absorbed $39.0 million of the under-recovered amount, and customers were responsible for the remaining $71.1 million, or $76.4 million including interest and adjusted for revenue sensitive items. On April 28, 2023, PSE filed the 2022 PCA report under Docket No. UE-230313 that proposed a recovery of the deferred balance, which included a revenue requirement increase of 0.9% in overall bill for all customers, with rates proposed to go into effect from December 1, 2023 through December 31, 2024.

PSE also exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2021, as actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $68.0 million. PSE absorbed $31.3 million of the under-recovered amount, and customers were responsible for the remaining $36.7 million, or $38.4 million including interest. In October 2022, the Washington Commission approved PSE's 2021 PCA report that proposed to recover the deferred balance for the 2021 PCA period by keeping the current rates and allowing recovery from January 1, 2023 through November 30, 2023.

Purchased Gas Adjustment Mechanism

In October 2021, the Washington Commission approved PSE's request for PGA rates in Docket UG-210721, effective November 1, 2021. As part of that filing, PSE requested an annual revenue increase of $59.1 million, where PGA rates, under Schedule 101, increase annual revenue by $80.6 million, and the tracker rates under Schedule 106, decrease annual revenue by $21.5 million. Those annual 2021 PGA rate increases will be set in addition to continuing the collection on the remaining balance of $69.4 million under Supplemental Schedule 106B, which were set, in effect, through September 30, 2023 per the 2019 GRC.

In October 2022, the Washington Commission approved PSE's request for PGA rates in Docket No. UG-220715, effective November 1, 2022. As part of that filing, PSE requested an annual revenue increase of $155.3 million, where PGA rates, under Schedule 101, increase annual revenue by $142.1 million, and the tracker rates under Schedule 106 increase annual revenue by $13.2 million.

In November 2022, the FERC approved a settlement of a counterparty, FERC Docket No. RP17-346. Under the terms, PSE was allocated $24.2 million related to PSE natural gas services, which was recorded on December 31, 2022 and included below. The 2022 GRC order requires PSE to amortize the refund in 2023 as a credit against natural gas costs and therefore pass back the refund to customers through the PGA mechanism.

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The following table presents the PGA mechanism balances and activity at June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	At June 30,		At December 31,
PGA (liability)/receivable balance and activity	2023		2022
PGA (liability)/receivable beginning balance	$	(3,536)	$	57,935
Actual natural gas costs	218,066		457,950
Allowed PGA recovery	(347,969)		(496,879)
Interest	(2,220)		1,674
Refund/interest from counterparty settlement	(3,337)		(24,216)
PGA (liability)/receivable ending balance	$	(138,996)	$	(3,536)

Storm Loss Deferral Mechanism

The Washington Commission has defined deferrable weather-related events and provided that costs in excess of the annual cost threshold may be deferred for qualifying damage costs that meet the modified Institute of Electrical and Electronics Engineers outage criteria for system average interruption duration index. For the six months ended June 30, 2023, PSE incurred $6.1 million in weather-related electric transmission and distribution system restoration costs related to 2023 and 2022 storms, of which the company deferred zero and $2.1 million as regulatory assets related to storms that occurred in 2023 and 2022, respectively. This compares to $6.7 million incurred in weather-related electric transmission and distribution system restoration costs for the six months ended June 30, 2022, of which the Company deferred zero and $0.1 million as regulatory assets related to storms that occurred in 2022 and 2021, respectively. Under the 2017 GRC Order, the storm loss deferral mechanism approved the following: (i) the cumulative annual cost threshold for deferral of storms under the mechanism at $10.0 million; and (ii) qualifying events where the total qualifying cost is less than $0.5 million will not qualify for deferral and these costs will also not count toward the $10.0 million annual cost threshold.

(8) Commitments and Contingencies

Legal Matters

Washington Climate Commitment Act

In 2021, the Washington Legislature adopted the CCA, which establishes a GHG emissions cap-and-invest program that caps GHG emissions beginning on January 1, 2023, and makes further reductions to the cap annually through 2050. The Washington Department of Ecology (WDOE) published final regulations to implement the program on September 29, 2022, which became effective on October 30, 2022. WDOE also indicated that there will be subsequent rulemakings and interpretations that will build off initial rulemaking as program implementation proceeds and Washington state carbon goals are evaluated. One component of the CCA rules stipulates GHG emissions associated with imported electricity are covered emissions and require an allowance offset for the first jurisdictional deliverer serving as the electricity importer for that electricity. Per RCW 70A.65.010(42)(d), imported electricity does not include electricity imports of unspecified electricity that are netted by exports of unspecified electricity to any jurisdiction not covered by a linked program by the same entity within the same hour. Under this definition, hourly power transmission data is required to determine PSE’s net imported electricity compliance obligation. Although the Company is actively engaged in determining the hourly net unspecified electricity imports and exports, it is uncertain whether netting unspecified imports and exports by hour will be the method required by the WDOE to calculate the compliance obligation, and PSE expects further rulemaking and interpretations to clarify this uncertainty in future periods. Due to the estimation uncertainty as of the date of this disclosure, the company considered a range of outcomes depending on whether all unspecified electricity imports and exports fully net on an hourly basis, none net, or a portion do. As of June 30, 2023, the Company's estimated the range of possible outcomes to be between $69.9 million and $110.1 million depending on the methodology applied in netting unspecified electricity imports and exports. Since no amount in the range represents a better estimate than any other amount, the Company accrued to the minimum amount in the range. As existing uncertainties are resolved in future periods, any change in compliance costs as a result of such estimated additional liabilities would be deferred under ASC 980 as a regulatory asset as an increase the electric compliance costs consistent with Docket No. UE-220974, as these amounts will be recoverable from customers in future utility rates.

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Colstrip

PSE has a 50% ownership interest in Colstrip Units 1 and 2 and a 25% interest in each of Colstrip Units 3 and 4, which are coal-fired generating units located in Colstrip, Montana. PSE has accelerated the depreciation of Colstrip Units 3 and 4 to December 31, 2025 as part of the 2019 GRC. The 2017 GRC repurposed PTCs and hydro-related treasury grants to recover unrecovered plant costs and to fund and recover decommissioning and remediation costs for Colstrip Units 1 through 4. On September 2, 2022, PSE and Talen Energy reached an agreement to transfer PSE's ownership interest in Colstrip Units 3 and 4 to Talen Energy on December 31, 2025. Management evaluated Colstrip Units 3 and 4 and determined that the applicable held for sale accounting criteria were not met as of June 30, 2023 and December 31, 2022. As such, Colstrip Units 3 and 4 are classified as electric utility plant on the Company's balance sheet as of June 30, 2023 and December 31, 2022.

Consistent with a June 2019 announcement, Talen permanently shut down Units 1 and 2 at the end of 2019 due to operational losses associated with the Units. Colstrip Units 1 and 2 were retired effective December 31, 2019. The Washington Clean Energy Transformation Act requires the Washington Commission to provide recovery of the investment, decommissioning, and remediation costs associated with the facilities that are not recovered through the repurposed PTCs and hydro-related treasury grants. The full scope of decommissioning activities and costs may vary from the estimates that are available at this time.

In May 2021, PSE along with the Colstrip owners, Avista Corporation, PacifiCorp and Portland General Electric Company, filed a lawsuit against the Montana Attorney General challenging the constitutionality of Montana Senate Bill 266. On September 28, 2022, the magistrate judge in the District Court proceeding issued a recommendation to the presiding U.S. District Court Judge that a permanent injunction against enforcement of Senate Bill 266 be granted. In October 2022, the U.S. District Court Judge accepted in full the magistrate judge's recommendation for a permanent injunction against enforcement of Senate Bill 266. The Court entered judgment and a permanent injunction in favor of PSE and the Colstrip owners on November 15, 2022. No party filed a notice of appeal.

Other Commitments and Contingencies

In addition to the contractual obligations and consolidated commercial commitments disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, during the six months ended June 30, 2023, the Company entered into new Electric Portfolio and Electric Wholesale Market Transaction contracts with estimated payment obligations totaling $4.0 billion through 2051.

For further information, see Part II, Item 8, Note 16, "Commitments and Contingencies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

(9)  Leases

As of June 30, 2023, there have been no material changes regarding the Company's leases. For further information, see Part II, Item 8, Note 9, "Leases" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

(10) Other

Long-Term Debt

In March 2022, Puget Energy issued $450.0 million of senior secured notes at an interest rate of 4.224%. The notes mature on March 15, 2032 and pay interest semi-annually on March 15 and September 15 of each year. Proceeds from the issuance of the notes were invested in short-term money market funds, and then used to repay Puget Energy's $450.0 million 5.625% notes that were originally scheduled to mature in July 2022.

In April 2022, Puget Energy redeemed the $450.0 million 5.625% senior secured notes due July 2022 and paid related expenses for a total redemption price of $457.2 million, which includes repayment of the $450.0 million principal amount and $7.2 million of accrued interest expense.

On May 18, 2023, PSE issued $400.0 million of green senior secured notes at an interest rate of 5.448%. The notes mature on June 1, 2053 and pay interest semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023. Net proceeds from the issuance of the notes were deposited into the Company's general account and will be earmarked for allocation to eligible projects, as defined in PSE's sustainable financing framework, which was published in May 2023. Eligible projects are expenditures incurred and investments made related to development and acquisition of some or all of the following types of projects: (i) renewable energy, (ii) energy efficiency, (iii) clean transportation, (iv) biodiversity conservation, (v) climate change adaptation, (vi) water and wastewater management, (vii) pollution prevention and control, and (viii) green innovation.

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Short-Term Debt

As of June 30, 2023, there was no amount outstanding under the commercial paper program at PSE. For further information, see Part II, Item 8, Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Credit Facilities

In May 2022, Puget Energy entered into an $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the Secured Overnight Financing Rate (SOFR), as the LIBOR was discontinued on June 30, 2023. The proceeds of the Puget Energy credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. As of June 30, 2023, $135.8 million was drawn and outstanding under the facility.

In September 2022, Puget Energy borrowed $50.0 million on the credit facility and contributed the proceeds to PSE as an equity contribution. The equity proceeds will be used for general corporate purposes.

In May 2022, PSE entered into an $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the SOFR, as the LIBOR was discontinued on June 30, 2023. The proceeds of the PSE credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. As of June 30, 2023, no amount was drawn under PSE's credit facility.

For further information, see Part II, Item 8, Note 7, "Long-Term Debt" and Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to promote understanding of the results of operations and financial condition, is provided as a supplement to, and should be read in conjunction with the financial statements and related notes thereto included elsewhere in this report on Form 10-Q. This section generally discusses the results of operations and changes in financial condition for the period ended June 30, 2023 compared to 2022. For discussion related to the results of operations and changes in financial condition for the period ended June 30, 2022 compared to 2021 refer to Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations in our period ended June 30, 2022, Form 10-Q, which was filed with the United States Securities and Exchange commission (SEC). The discussion contains forward-looking statements that involve risks and uncertainties, such as Puget Energy, Inc. (Puget Energy) and Puget Sound Energy, Inc. (PSE) objectives, expectations and intentions. Words or phrases such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “future,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” “projects,” “should,” “will likely result,” “will continue” and similar expressions are intended to identify certain of these forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Puget Energy's and PSE's actual results could differ materially from results that may be anticipated by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Forward-Looking Statements” included elsewhere in this report and in the section entitled "Risk Factors" included in Part I, Item 1A in Puget Energy's and PSE's Form 10-K for the period ended December 31, 2022. Except as required by law, neither Puget Energy nor PSE undertakes any obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in Puget Energy's and PSE's other reports filed with the SEC that attempt to advise interested parties of the risks and factors that may affect Puget Energy's and PSE's business, prospects and results of operations.

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Overview

Puget Energy is an energy services holding company and substantially all of its operations are conducted through its wholly-owned subsidiary PSE, a regulated electric and natural gas utility company. PSE is the largest electric and natural gas utility in the state of Washington, primarily engaged in the business of electric transmission, distribution and generation and natural gas distribution. Puget Energy's business strategy is to generate stable cash flows by offering reliable electric and natural gas service in a cost-effective manner through PSE. Puget Energy also has a wholly-owned non-regulated subsidiary, Puget LNG, LLC (Puget LNG), which has the sole purpose of owning, developing and financing the non-regulated activity of the Tacoma liquefied natural gas (LNG) facility. All of Puget Energy's common stock is indirectly owned by Puget Holdings, LLC (Puget Holdings). Puget Holdings is owned by a consortium of long-term infrastructure investors including the British Columbia Investment Management Corporation (BCIMC), the Alberta Investment Management Corporation (AIMCo), Ontario Municipal Employee Retirement System (OMERS), PGGM Vermogensbeheer B.V., Macquarie Washington Clean Energy Investment, L.P., and Ontario Teachers’ Pension Plan Board. Puget Energy and PSE are collectively referred to herein as “the Company.”

PSE generates revenue and cash flow primarily from the sale of electric and natural gas services to residential and commercial customers within a service territory covering approximately 6,000 square miles, principally in the Puget Sound region of the state of Washington. PSE continually balances its load requirements, generation resources, purchase power agreements, and market purchases to meet customer demand. The Company's external financing requirements principally reflect the cash needs of its construction program, its schedule of maturing debt and certain operational needs. PSE requires access to bank and capital markets to meet its financing needs.

Factors and Trends Affecting PSE's Performance

PSE’s ongoing regulatory requirements and operational needs necessitated the investment of substantial capital in 2023 and will continue to do so in future years.  Because PSE intends to seek recovery of such investments through the regulatory process, its financial results depend heavily upon favorable outcomes from that process.  The principal business, economic and other factors that affect PSE’s operations and financial performance include:

•The rates PSE is allowed to charge for its services;

•PSE’s ability to recover power costs that are included in rates which are based on volume;

•Weather conditions, including the impact of temperature on customer load; the impact of extreme weather events on budgeted maintenance costs; meteorological conditions such as snow-pack, stream-flow and wind-speed which affect power generation, supply and price;

•The effects of climate change, including changes in the environment that may affect energy costs or consumption, increase the Company’s costs, or adversely affect its operations;

•Regulatory decisions allowing PSE to recover purchased power and fuel costs, on a timely basis;

•PSE’s ability to supply electricity and natural gas, either through company-owned generation, purchase power contracts or by procuring natural gas or electricity in wholesale markets;

•Deferral of excess revenues if earnings exceed PSE's authorized rate of return (ROR) by more than 0.5%;

•Availability and access to capital and the cost of capital;

•Regulatory compliance costs, including those related to new and developing federal regulations of electric system reliability, state regulations of natural gas pipelines and federal, state and local environmental laws and regulations, such as the Climate Commitment Act (CCA);

•Wholesale commodity prices of electricity and natural gas;

•Increasing capital expenditures with additional depreciation and amortization;

•Failure to complete capital projects on schedule and within budget or the abandonment of capital projects, either of which could result in the Company’s inability to recover project costs;

•Tax reform, the effect of lower tax rates, and regulatory treatment of excess deferred tax balances on rate base and customer rates;

•General economic conditions, such as inflation, in PSE's service territory and its effects on customer growth and use-per-customer;

•Federal, state, and local taxes;

•Employee workforce factors, including potential strikes, work stoppages, transitions in senior management, and loss or retirement of key personnel and availability of qualified personnel;

•The effectiveness of PSE’s risk management policies and procedures;

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•Cyber security attacks, data security breaches, or other malicious acts that cause damage to the Company’s generation and transmission facilities or information technology systems, or result in the release of confidential customer, employee, or Company information;

•Acts of war or terrorism locally or abroad, or the impact of civil unrest to infrastructure or preventing access to infrastructure and its impact on the supply chain and prices of goods and services;

•Natural disasters such as wildfires, earthquakes, hurricanes, floods, landslides, and windstorms, and the rise in frequency and magnitude of these extreme temperature events, and possible accidents, explosions, fires or mechanical breakdowns affecting or caused by PSE’s facilities or infrastructure may increase the Company's costs, impact our generation, transmission, and distribution systems, subject the Company to increased liability, and/or adversely affect its operations;

•Risks due to pandemics, including supply shortages, rising costs, disruption to vendor or customer relationships, the potential for reputational harm, the impact of government, business and company closure of facilities, customer or contract defaults; concerns of safety to employees and customers, potential costs due to quarantining of employees and work-from-home policies, and the Company's and vendor staffing levels resulting from vaccination mandates; and

•Legislative, regulatory, code, and/or ordinance changes that impact natural gas availability, delivery systems, and/or restrictions.

Regulation of PSE Rates and Recovery of PSE Costs

PSE's regulatory requirements and operational needs require the investment of substantial capital in 2023 and future years. As PSE intends to seek recovery of these investments through the regulatory process, its financial results depend heavily upon outcomes from that process. The rates that PSE is allowed to charge for its services influence its financial condition, results of operations and liquidity. PSE is highly regulated and the rates that it charges its retail customers are approved by the Washington Utilities and Transportation Commission (Washington Commission). The Washington Commission has traditionally required these rates be determined based, to a large extent, on historic test year costs plus weather normalized assumptions about hydroelectric conditions and power costs in the relevant rate year. Incremental customer growth and sales typically have not provided sufficient revenue to cover general cost increases over time due to the combined effects of regulatory lag and attrition. Absent a resolution for the impact of lag and attrition, the Company will need to seek rate relief through a rate case with the Washington Commission. The Washington Commission determines whether the Company's expenses and capital investments are reasonable and prudent for the provision of cost-effective, reliable and safe electric and natural gas service. If the Washington Commission determines that a capital investment is not reasonable or prudent, the costs (including return on any resulting rate base) related to such capital investment may be disallowed, partially or entirely, and not recovered in rates.

Washington state law also requires PSE to pursue electric conservation that is cost-effective, reliable and feasible. PSE’s mandate to pursue electric conservation initiatives may have a negative impact on the electric business financial performance due to lost margins from lower sales volumes as variable power costs are not part of the decoupling mechanism. The Washington Commission and Washington state law also set natural gas conservation achievement standards for PSE. The effects of achieving these standards will, however, have only a slight negative impact on natural gas business financial performance due to the natural gas business being almost fully decoupled.

In May 2021, the Washington Governor signed legislation passed by the state legislature that would require investor-owned utilities to file a multiyear rate plan for two, three, or four years as part of a general rate case (GRC) filed with the Washington Commission on or after January 1, 2022. For the initial rate year, the legislation requires the Washington Commission to ascertain and determine the fair value for rate-making purposes of the property in service as of the date that rates go into effect. Utilities would be bound to the first and second year of a multiyear rate plan and can file for a new rate plan in years three or four. If a company earns greater than a half percent above its authorized rate of return on a regulated basis, revenues above the level must be deferred for refunds to customers or another determination by the Washington Commission in a subsequent adjudicative proceeding. The Washington Commission must also set performance measurements to assess a natural gas or electric company operating under a multiyear rate plan.

General Rate Case Filing

PSE filed a GRC which included a three-year multiyear rate plan, with the Washington Commission on January 31, 2022, requesting an overall increase in electric and natural gas rates of 13.6% and 13.0% respectively in 2023; 2.5% and 2.3%, respectively in 2024; and 1.2% and 1.8%, respectively, in 2025. PSE requested a return on equity of 9.9% in all three rate years. PSE requested an overall rate of return of 7.39% in 2023, 7.44% in 2024, and 7.49% in 2025. The filing requested recovery of forecasted plant additions through 2022 as required by RCW 80.28.425 as well as forecasted plant additions through 2025, the final year of the multiyear rate plan.

In August 2022, three separate partial multiparty settlement agreements were reached. On August 5, 2022, parties filed an

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unopposed partial multiparty settlement agreement relating to the Voluntary Long Term Renewable Energy Purchase rider, known as Green Direct, resolving the method for calculating the energy credit Green Direct customers receive, among other matters. On August 26, 2022, six of the sixteen parties, including PSE, filed a partial multiparty settlement agreement with the Washington Commission determining that the regulated portion of the Tacoma LNG Facility will be included in rates, as a tracker, beginning in November 2023. Also, on August 26, 2022, twelve of the sixteen parties, including PSE, filed a partial multiparty settlement agreement with the Washington Commission for the remaining items in the GRC. The GRC settlement agreement set a two-year rate plan instead of a three-year plan as originally filed, provided a capital structure of 49.0% equity and 51.0% debt, and a return on equity of 9.4% with an overall rate of return of 7.16%.

On December 22, 2022, the Washington Commission issued an order on PSE’s 2022 GRC, which approved with conditions, three settlement agreements which cover a two-year period beginning January 1, 2023. The ruling provided for a weighted cost of capital of 7.16%, or 6.62% after-tax, and a capital structure of 49.0% in common equity in 2023 and 2024, with a return on equity of 9.4%. The order also provided for an update to power costs in 2023 and 2024 and authorizes PSE to seek recovery of the costs related to the Tacoma LNG Facility concurrent with its 2023 purchased gas adjustment (PGA) filing. The LNG rate adjustment was filed with the Washington Commission on May 25, 2023 and is pending approval. PSE was also allowed to file two additional trackers that will request to recover all rate base, depreciation, and operations and maintenance (O&M) expenses related to investments under the Company’s Clean Energy Implementation Plan (CEIP) and Transportation Electrification Plan. The Transportation Electrification Plan tariff was approved with an effective date of March 1, 2023. On June 6, 2023, the Washington Commission approved PSE’s CEIP, subject to conditions. The CEIP tariff was filed with the Washington Commission on July 17, 2023 and is pending approval.

On December 27, 2022, PSE submitted compliance filings, including an update to power costs, and revised tariff sheets to comply with the order. On January 6, 2023, the Washington Commission rejected the compliance filing, in part, and required a revised compliance filing specific to electric rates to remove an additional $135.8 million related to PSE’s recovery of projected costs related to the modeling of the CCA impacts on PSE’s use of natural gas and coal-fired resources that had been included as part of PSE's update to power costs in the compliance filing.

Natural gas rates became effective on January 7, 2023, resulting in an overall net revenue change of $70.8 million in 2023 and $19.5 million in 2024, representing increases of 6.4% and 1.65%, respectively. On January 10, 2023, the Washington Commission accepted the revised compliance filing with electric rates going into effect on January 11, 2023. The revisions reflected an overall net revenue change of $247.0 million in 2023 and $33.1 million in 2024, which represents an increase of 10.75% and 1.33%, respectively. Per the 2022 GRC Final Order in Docket No. UE-220066, PCORC rates were set to zero as of January 11, 2023 and PSE agreed not to file a PCORC during 2023 and 2024, the two-year rate plan agreed to in the GRC settlement.

Prior rates were subject to the 2019 GRC and included a weighted cost of capital of 7.39% or 6.8% after-tax, a capital structure of 48.5% in common equity, and a return on equity of 9.4%. The annualized overall rate impacts were an electric revenue increase of $48.3 million, or 2.3%, and a natural gas increase of $4.9 million, or 0.6%, effective October 1, 2021. For further information, see Note 4, "Regulation and Rates" in the Combined Notes to Consolidated Financial Statements included in Item 8 of the Company's Form 10-K for the period ended December 31, 2022.

Climate Commitment Act Deferral

On December 29, 2022, PSE filed accounting petitions with the Washington Commission requesting authorization to defer costs and revenues associated with the Company’s compliance with the CCA codified in law within Revised Code of Washington (RCW) 70A.65. On February 28, 2023, in Order 01 under Docket No. UE-220974 and UG-220975, the Washington Commission granted PSE approval to defer the cost of emission allowances to comply with the CCA and the proceeds from no-cost allowances consigned to auction beginning January 1, 2023. This accounting treatment is necessary in order for PSE to defer and seek recovery of CCA costs that are not currently included in rates. As of June 30, 2023, PSE deferred $129.0 million and $69.9 million of CCA compliance costs for natural gas and electric liabilities, respectively. For further details, see Note 7, "Regulation and Rates," in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

Revenue Decoupling Adjustment Mechanism

While fluctuations in weather conditions will continue to affect PSE's billed revenue and energy supply expenses from month to month, PSE's decoupling mechanisms assist in mitigating the impact of weather on operating revenue and net income. The Washington Commission has allowed PSE to record a monthly adjustment to its electric and natural gas operating revenues related to electric transmission and distribution, natural gas operations and general administrative costs and fixed production costs from most residential, commercial and industrial customers to mitigate the effects of abnormal weather, conservation impacts and changes in usage patterns per customer. As a result, these electric and natural gas revenues are recovered on a per customer basis regardless of actual consumption levels. PSE's energy supply costs, which are part of the power cost adjustment

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(PCA) and PGA mechanisms, are not included in the decoupling mechanism. The revenue recorded under the decoupling mechanisms will be affected by customer growth and not actual consumption except for fixed production costs, which are held at the level of cost from the most recent rate proceeding and are not impacted by customer growth. Following each calendar year, PSE will recover from, or refund to, customers the difference between allowed decoupling revenue and the corresponding actual revenue during the following May to April time period.

On January 6, 2023, the Washington Commission approved the natural gas 2022 GRC filing. As part of this filing, the annual gas delivery allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 7, 2023.

On January 10, 2023, the Washington Commission approved the electric 2022 GRC filing. As part of this filing, the annual electric delivery and fixed power cost allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 11, 2023.

On June 30, 2023, PSE performed an analysis to determine if electric and natural gas decoupling revenue deferrals would be collected from customers within 24 months of the annual period, per ASC 980.  If not, for GAAP purposes only, PSE would need to record a reserve against the decoupling revenue and corresponding regulatory asset balance.  Once the reserve is probable of collection within 24 months from the end of the annual period, the reserve can be recognized as decoupling revenue. Based on the analyses, no reserve adjustment was recorded as of June 30, 2023 and 2022.

The Washington Commission approved the following PSE requests to change rates for prior deferrals under its electric and natural gas decoupling mechanisms:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)1
Electric:
May 1, 2023	(1.5)%	$(37.6)
May 1, 20222	(1.0)	(23.5)
May 1, 20213	1.0	21.4
January 1, 2021	(1.0)	(20.6)
October 15, 20204	(0.5)	(10.2)
Natural Gas:
May 1, 2023	(1.3)%	$(16.4)
May 1, 2022	(0.7)	(7.4)
May 1, 2021	1.5	15.0

__________________

1 For electric and natural gas rates effective May 1, 2023, May 1, 2022 and May 1, 2021, there were no excess earnings that impacted the approved revenue change.

2 For the electric rates effective May 1, 2022, there was $8.0 million of excess deferred revenues for delivery and fixed power costs which could not be set in rates until May 1, 2023 due to the 3% rate cap.

3 For the electric rates effective May 1, 2021, there was $24.1 million of excess deferred revenues for delivery and fixed power costs which could not be set in rates until May 1, 2022 due to the 3% rate cap.

4 The 2019 GRC final order lengthened the recovery period from the original one-year recovery to a two-year recovery of April 2022. The remaining decoupling amortization balances for delivery and fixed power costs of $1.7 million were included in electric decoupling mechanism tariff rates, effective May 1, 2022.

Electric Rates

The following electric rate schedules were filed with the Washington Commission or approved by the Washington Commission after the Form 10-K for the period ended December 31, 2022 was filed on February 23, 2023 along with the comparison period, if applicable. For further information on prior filings, see Management's Discussion and Analysis,

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"Regulation of PSE Rates and Recovery of PSE Costs" included in Item 7 of the Company's Form 10-K for the period ended December 31, 2022.

Conservation Service Rider

The electric conservation rider collects revenue to cover the costs incurred in providing services and programs for conservation. Rates change annually on May 1 to collect the annual budget that started the prior January and to true-up for actual compared to forecast conservation expenditures from the prior year, as well as actual compared to the forecasted load set in rates.

The following table sets forth conservation rider rate adjustments approved by the Washington Commission and the corresponding expected annual impact on PSE’s revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
May 1, 2023	(0.2)%	$(6.3)
May 1, 2022	1.0	21.6

Power Cost Adjustment Clause

PSE updated its Schedule 95 rates in the Power Cost Adjustment Clause tariff to reflect the transition fee as required by Section 12 of the Special Contract, a non-prescribed commercial/industrial rate contract. Additionally, Schedule 95 rates also include portions of fixed power cost adjustments per the allowed decoupling rate re-allocation resulting from a Special Contract customer becoming a transportation customer as well as small variable power cost adjustments.

PSE exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2022. During 2022, actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $110.1 million. Under the terms of the PCA’s sharing mechanism for under-recovered power costs, PSE absorbed $39.0 million of the under-recovered amount, and customers were responsible for the remaining $71.1 million, or $76.4 million including interest and adjusted for revenue sensitive items. On April 28, 2023, PSE filed the 2022 PCA report under Docket No. UE-230313 that proposed a recovery of the deferred balance, which included a revenue requirement increase of 0.9% in overall bill for all customers, with rates proposed to go into effect from December 1, 2023 through December 31, 2024.

PSE also exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2021, as actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $68.0 million. PSE absorbed $31.3 million of the under-recovered amount, and customers were responsible for the remaining $36.7 million, or $38.4 million including interest. In October 2022, the Washington Commission approved PSE's 2021 PCA report that proposes to recover the deferred balance for 2021 PCA period by keeping the current rates and allowing recovery from January 1, 2023 through November 30, 2023.

The following table sets forth power cost adjustment clause filing approved by the Washington Commission and the corresponding expected annual impact on PSE’s revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
December 1, 20201	2.1%	$43.9

______________

1 The Schedule 95 PCA mechanism rates from the prior year that recover the 2019 imbalance (effective December 1, 2020) have been extending through December 31, 2022 to recover the imbalance attributable to 2020. PSE filed the PCA imbalance rate extension with the Washington Commission to recover PCA imbalance attributable to 2021 from January 1, 2023 to November 30, 2023.

Power Cost Adjustment Mechanism

PSE currently has a PCA mechanism that provides for the deferral of power costs that vary from the “power cost baseline” level of power costs. The “power cost baseline” levels are set, in part, based on normalized assumptions about weather and hydroelectric conditions.  Excess power costs or savings are apportioned between PSE and its customers pursuant to the graduated scale set forth in the PCA mechanism and will trigger a surcharge or refund when the cumulative deferral trigger is reached.

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Effective January 1, 2017, the following graduated scale is used in the PCA mechanism:

	Company's Share		Customers’ Share
Annual Power Cost Variability	Over	Under	Over	Under
Over or under collected by up to $17 million	100%	100%	—%	—%
Over or under collected by between $17 million - $40 million	35	50	65	50
Over or under collected beyond $40 + million	10	10	90	90

For the six months ended June 30, 2023, in its PCA mechanism, PSE over recovered its allowable costs by $12.1 million of which zero was apportioned to customers and $2.4 million of interest was accrued on the deferred customer balance. This compares to an under recovery of allowable costs of $26.6 million for the six months ended June 30, 2022, of which $4.8 million was apportioned to customers and $0.6 million of interest was accrued on the total deferred customer balance.

Property Tax Tracker

The purpose of the property tax tracker is to pass through the cost of all property taxes incurred by the Company. The mechanism acts as a tracker rate schedule and collects the total amount of property taxes assessed. The tracker is adjusted each year in May based on that year's assessed property taxes and true-up from the prior year.

The following table sets forth property tax tracker mechanism rate adjustments approved by the Washington Commission and the corresponding expected annual impact on PSE’s revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
May 1, 2023	(0.2)%	$(4.4)
May 1, 2022	(0.3)	(5.8)

Natural Gas Rates

The following natural gas rate schedules were filed with the Washington Commission or approved by the Washington Commission after the Form 10-K for the period ended December 31, 2022 was filed on February 23, 2023 along with the comparison period, if applicable. For further information on prior filings, see Management's Discussion and Analysis, "Regulation of PSE Rates and Recovery of PSE Costs" included in Item 7 of the Company's Form 10-K for the period ended December 31, 2022.

Conservation Service Rider

The natural gas conservation rider collects revenue to cover the costs incurred in providing services and programs for conservation. Rates change annually on May 1 to collect the annual budget that started the prior January and to true-up for actual compared to forecast conservation expenditures from the prior year, as well as actual compared to the forecasted load set in rates.

The following table sets forth conservation rider rate adjustments approved by the Washington Commission and the corresponding expected annual impact on PSE's revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
May 1, 2023	0.4%	$4.7
May 1, 2022	0.3	3.2

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Climate Commitment Act - Greenhouse Gas Emissions Cap and Invest Adjustment

This schedule is to implement a surcharge to recover the costs and to provide benefits through credits to certain customers from the Company’s implementation of Washington State greenhouse gas (GHG) emission cap and invest program as prescribed by the CCA and codified in law within RCW 70A.65.

On June 9, 2023, PSE filed with the Washington Commission under Docket No. UG-230470 a proposal to recover the estimated ongoing allowance costs during the period of August through December 2023. Concurrently, PSE is proposing to pass back credits to customers from estimated auction proceeds to be received in 2023, proportionally over the same period. Overall, the proposal included a new revenue requirement of $104.7 million related to the Washington state carbon reduction charge, mitigated by a new revenue requirement decrease of $87.9 million related to the Washington state carbon reduction credit, with an effective date of August 1, 2023.

The following table sets forth the GHG emissions cap and invest adjustment approved by the Washington Commission and the corresponding expected annual impact on PSE's revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
October 1, 2023	3.2%	$16.8

Property Tax Tracker

The purpose of the property tax tracker mechanism is to pass through the cost of all property taxes incurred by the Company. The mechanism removed property taxes from general rates and included those costs for recovery in an adjusting tariff rate. After the implementation, the mechanism acts as a tracker rate schedule and collects the total amount of property taxes assessed. The tracker is adjusted each year in May based on that year's assessed property taxes and true-up from the prior year.

The following table sets forth property tax tracker mechanism rate adjustments approved by the Washington Commission and the corresponding impact on PSE's revenue based on the effective dates:

Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
May 1, 2023	(0.02)%	$(0.2)
May 1, 2022	0.02	0.2

Purchased Gas Adjustment

PSE has a PGA mechanism that allows PSE to recover expected natural gas supply and transportation costs and defer, as a receivable or liability, any natural gas supply and transportation costs that exceed or fall short of this expected natural gas cost amount in PGA mechanism rates, including accrued interest. PSE is authorized by the Washington Commission to accrue carrying costs on PGA receivable and payable balances. A receivable or payable balance in the PGA mechanism reflects an under recovery or over recovery, respectively, of natural gas cost through the PGA mechanism. Rates typically change annually on November 1, although out-of-cycle rate changes are allowed at other times of the year if needed.

In October 2021, the Washington Commission approved PSE's request for November 2021 PGA rates in Docket No. UG-210721, effective November 1, 2021. As part of that filing, PSE requested an annual revenue increase of $59.1 million; where PGA rates, under Schedule 101, increase annual revenue by $80.6 million, and the tracker rates under Schedule 106, decrease annual revenue by $21.5 million. The annual 2021 PGA rate increases were in addition to continuing the collection on the remaining balance of $69.4 million under Supplemental Schedule 106B, which were set, in effect, through September 30, 2023 per the 2019 GRC.

In October 2022, the Washington Commission approved PSE's request for PGA rates in Docket No. UG-220715, effective November 1, 2022. As part of that filing, PSE requested an annual revenue increase of $155.3 million; where PGA rates, under Schedule 101, increase annual revenue by $142.1 million, and the tracker rates under Schedule 106, increase annual revenue by $13.2 million.

In November 2022, the Federal Energy Regulatory Commission (FERC) approved a settlement of a counterparty, FERC Docket No. RP17-346. Under the terms, PSE was allocated $24.2 million related to PSE natural gas services, which was

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recorded on December 31, 2022 and included in the table below. The 2022 GRC order requires PSE to amortize the refund in 2023 as a credit against natural gas costs and therefore pass back the refund to customers through the PGA mechanism.

The following table presents the PGA mechanism balances and activity at June 30, 2023 and December 31, 2022:

(Dollars in Thousands)	June 30,		December 31,
PGA receivable balance and activity	2023		2022
PGA receivable beginning balance	$	(3,536)	$	57,935
Actual natural gas costs	218,066		457,950
Allowed PGA recovery	(347,969)		(496,879)
Interest	(2,220)		1,674
Refund/interest from counterparty settlement	(3,337)		(24,216)
PGA (liability)/ receivable ending balance	$	(138,996)	$	(3,536)

For additional information, see Note 7, "Regulation and Rates" in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

Access to Debt Capital

PSE relies on access to bank borrowings and short-term money markets as sources of liquidity and longer-term capital markets to fund its utility construction program, to meet maturing debt obligations and other capital expenditure requirements not satisfied by cash flow from its operations or equity investment from its parent, Puget Energy. Neither Puget Energy nor PSE have any debt outstanding whose maturity would accelerate upon a credit rating downgrade. However, a ratings downgrade could adversely affect the Company's ability to refinance existing or issue new long-term debt, obtain access to new or renew existing credit facilities and increase the cost of issuing long-term debt and maintaining credit facilities. For example, under Puget Energy's and PSE's credit facilities, the borrowing costs increase as their respective credit ratings decline due to increases in credit spreads and commitment fees. If PSE is unable to access debt capital on reasonable terms, its ability to pursue improvements or generating capacity acquisitions, which may be relied on for future growth and to otherwise implement its strategy, could be adversely affected. PSE monitors the credit environment and expects to continue to be able to access the capital markets to meet its short-term and long-term borrowing needs.

Regulatory Compliance Costs and Expenditures

PSE's operations are subject to extensive federal, state and local laws and regulations. These regulations cover electric system reliability, natural gas pipeline system safety and energy market transparency, among other areas. Environmental laws and regulations related to air and water quality, including climate change and endangered species protection, waste handling and disposal (including generation by-products such as coal ash), remediation of contamination and siting new facilities also impact the Company's operations. PSE must spend significant resources to fulfill requirements set by regulatory agencies, many of which have greatly expanded mandates on measures including resource planning, remediation, monitoring, pollution control equipment and emissions-related abatement and fees.

In 2021, the Washington Legislature adopted the CCA, which establishes a GHG emissions cap-and-invest program that caps GHG emissions beginning on January 1, 2023 and makes further reductions to the cap annually through 2050. The Washington Department of Ecology (WDOE) published final regulations to implement the program on September 29, 2022, which became effective on October 30, 2022. WDOE also indicated that it will have subsequent rulemakings that will build off initial rulemaking as program implementation gets underway and progress with Washington State carbon goals are evaluated. For further details on the CCA see Part I Item 1 "Recent and Future Environmental Law and Regulation" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Based on the rules passed in 2022, there is potential for PSE’s compliance with the CCA to result in increased costs to customers or amounts that PSE may not be able to recover through electric and natural gas rates. Potential risks associated with CCA compliance could include: the evolving nature of the CCA rulemaking as indicated by WDOE, market uncertainty based on rule interpretation during implementation, unresolved recovery methodology for CCA’s impact on energy costs, company costs, customer rate impacts, and cash, liquidity and credit volatility. Such risks associated with the CCA are evaluated by Management for potential impacts to the estimated liability to comply with the program as well as the likelihood that may make a loss contingency both probable and reasonably estimable. Management’s assessment to determine whether a loss is probable or reasonably possible and to whether a loss or range of losses is estimable often involves judgement.

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Compliance with these or other future regulations, such as those pertaining to climate change, could require significant capital expenditures by PSE and may adversely affect PSE's financial position, results of operations, cash flows and liquidity.

Other Challenges and Strategies

Competition

PSE’s electric and natural gas utility retail customers generally do not have the ability to choose their electric or natural gas supplier; therefore, PSE’s business has historically been recognized as a natural and regulated monopoly. However, PSE faces competition from public utility districts and municipalities or efforts by citizens organizing to form such entities that want to establish their own government-owned utility, as a result of which PSE may lose a number of customers. PSE also faces increasing competition for sales to its retail customers through alternative methods of electric energy generation, including solar and other self-generation methods. In addition, PSE’s natural gas customers may elect to use heating oil, propane or other fuels instead of using and purchasing natural gas from PSE.

Results of Operations

Puget Sound Energy

The following discussion should be read in conjunction with the unaudited consolidated financial statements and the related notes included elsewhere in this document. The following discussion provides the significant items that impacted PSE’s results of operations for the three months and six months ended June 30, 2023 and June 30, 2022.

Non-GAAP Financial Measures - Electric and Natural Gas Margins

The following discussion includes financial information prepared in accordance with GAAP, as well as two other financial measures, electric margin and natural gas margin, that are considered “non-GAAP financial measures.”  Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that includes adjustments that result in a presentation that is not defined by GAAP.  The presentation of electric margin and natural gas margin is intended to supplement an understanding of PSE’s operating performance.  Electric margin and natural gas margin are used by PSE to determine whether PSE is collecting the appropriate amount of revenue from its customers in order to provide adequate recovery of operating costs, including interest and equity returns.  PSE’s electric margin and natural gas margin measures may not be comparable to other companies’ electric margin and natural gas margin measures.  Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.

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The following table presents operating income and a reconciliation of utility electric and natural gas margins to the most directly comparable GAAP measure, operating income:

Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating income (loss)	$	51,737	$	49,612	$	132,713	$	423,750
Electric operating revenue	680,639		594,331		1,690,799		1,350,708
Purchased electricity	(227,539)		(212,391)		(567,355)		(450,594)
Electric generation fuel	(64,147)		(46,498)		(214,401)		(107,142)
Residential exchange	16,181		16,783		39,712		39,853
Electric margin (non-GAAP)	$	405,134	$	352,225	$	948,755	$	832,825
Natural gas operating revenue	270,140		236,054		787,398		662,402
Purchased natural gas	(114,917)		(92,452)		(350,399)		(269,785)
Natural gas margin (non-GAAP)	$	155,223	$	143,602	$	436,999	$	392,617
Other operating revenue	6,105		11,991		15,338		22,668
Unrealized gain (loss) on derivative instruments, net	(30,802)		(9,273)		(222,925)		122,648
Utility operation and maintenance	(174,497)		(160,933)		(369,488)		(331,233)
Non-utility expense and other	(6,720)		(11,842)		(14,734)		(24,656)
Depreciation and amortization	(212,074)		(189,915)		(437,336)		(383,760)
Taxes other than income taxes	(90,632)		(86,243)		(223,896)		(207,359)
Operating income (loss)	$	51,737	$	49,612	$	132,713	$	423,750

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Electric Margin

Electric margin represents electric sales to retail and transportation customers less the cost of generating and purchasing electric energy sold to customers, including transmission costs, to bring electric energy to PSE's service territory.

The following chart displays the details of PSE's electric margin changes for the three months ended June 30, 2023 and 2022:

______________

*    Includes decoupling cash collections, ROR excess earnings, and decoupling 24-month revenue reserve.

Three Months Ended June 30, 2023 Compared to 2022

Electric Operating Revenue

Electric operating revenues increased $86.3 million from the prior year primarily due to an increase in electric retail sales of $52.3 million, an increase in sales to other utilities of $38.7 million, an increase in decoupling revenue of $12.4 million, and an increase in other decoupling revenue of $7.1 million, partially offset by a decrease in transportation and other revenue of $24.3 million. These items are discussed in detail below.

•Electric retail sales increased $52.3 million due to an increase of $64.3 million in rates compared to the prior year and partially offset by $12.0 million from a decrease in retail electricity usage of 1.9%. The increase in rates is primarily due to the tariffs filed pursuant to the Company's most recent GRC effective January 11, 2023. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report and Part II, Item 7, Management's Discussion and Analysis, "Regulation of PSE Rates and Recovery of PSE Costs" included in the Company's Annual Report on Form 10-K for the period ended December 31, 2022 for electric rate changes. The decrease in retail usage was due to a decrease in residential and industrial usage of 3.6% and 6.5%, respectively. Customer usage decreased due to a decrease in heating degree days of 27.8% from higher temperatures in the three months ended June 30, 2023 as compared to 2022.

•Sales to other utilities increased $38.7 million primarily due to a 120.6% increase in wholesale sales volume and a 30.6% increase in electric wholesale sales price. Higher wholesale sales volumes were the result of increased volume from natural gas-fired generation, which increased 153.2% for the three months ended June 30, 2023 compared to

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2022. Higher wholesale market power prices combined with lower natural gas fuel prices made natural gas-fired generation more economic to dispatch for the three months ended June 30, 2023 compared to 2022.

•Decoupling revenue increased $12.4 million primarily attributable to $2.4 million and $10.0 million increases in delivery and fixed production cost (FPC) deferral revenues, respectively. This was driven primarily by decreased usage and higher allowed rates per customer in the current period compared to the same period in 2022. This resulted in actual electric revenues being higher than allowed decoupling deferral revenues by a smaller margin in the current period compared to the same period in the prior year.

•Other decoupling revenue increased $7.1 million primarily due to changes in amortization rates. In the current period, overcollections from residential customers were amortized at a higher rate compared to the same period in 2022. Decreased usage for certain non-residential schedules also decreased the rate at which prior-year undercollections were amortized.

•Transportation and other revenue decreased $24.3 million primarily due to a $27.7 million decrease in non-core natural gas financial hedging gains comprised of a $53.1 million decrease in wholesale sales driven by an average natural gas sales price that was 63.4% lower in 2023 compared to 2022. This was partially offset by a $46.5 million decrease in the cost of natural gas sold due to a lower average cost. Further, natural gas financial hedging costs increased $21.0 million. The decrease was partially offset by an increase of $3.8 million due to an Internal Revenue Service Private Letter Ruling in 2022, which included amortization to offset recovery through rates in 2022.

Electric Power Costs

Electric power costs increased $33.3 million primarily due to an increase of $15.1 million of purchased electricity costs and an increase of electric generation fuel costs of $17.6 million. These items are discussed in detail below.

•Purchased electricity expense increased $15.1 million primarily due to increased wholesale purchase prices, which were 13.8% higher than in the same period in 2022, driven by open market purchases as well as PPA contracts added after March 31, 2022. The increase from wholesale purchase prices were partially offset by a 5.9% decrease in wholesale electricity purchase volumes.

•Electric generation fuel increased $17.6 million primarily due to a $16.0 million increase in natural gas fuel costs as a result of increased production from PSE natural gas-fired generation. Higher costs from increased production were partially offset by lower natural gas prices, which drove a 43.1% decrease in lower average unit production costs.

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The following chart displays the details of PSE's electric margin changes for the six months ended June 30, 2023 and 2022:

______________

*    Includes decoupling cash collections, ROR excess earnings, and decoupling 24-month revenue reserve.

Six Months Ended June 30, 2023 Compared to 2022

Electric Operating Revenue

Electric operating revenues increased $340.1 million from the prior year primarily due to an increase in sales to other utilities of $166.6 million, an increase in electric retail sales of $145.9 million, an increase in transportation and other revenue of $22.2 million and an increase in other decoupling revenue of $11.9 million, partially offset by a decrease in decoupling revenue of $6.4 million. These items are discussed in detail below.

•Electric retail sales increased $145.9 million due to an increase of $144.6 million in rates compared to the prior year and an increase of $1.3 million due to load, as retail electricity usage was marginally higher in the six months ended June 30, 2023 compared to 2022. The increase in rates is primarily due to the tariffs filed pursuant to the Company's most recent GRC effective January 11, 2023. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report and Part II, Item 7, Management's Discussion and Analysis, "Regulation of PSE Rates and Recovery of PSE Costs" included in the Company's Annual Report on Form 10-K for the period ended December 31, 2022 for electric rate changes.

•Sales to other utilities increased $166.6 million primarily due to a 173.9% increase in wholesale sales volume and a 99.0% increase in the average electric wholesale sales price. Higher wholesale sales volumes were the result of increased volume from PSE natural gas-fired generation, which increased 158.2% in the six months ended June 30, 2023 compared to 2022. Higher wholesale market power prices combined with lower natural gas fuel prices made natural gas-fired generation more economic to dispatch in the six months ended June 30, 2023 compared to 2022.

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•Decoupling revenue decreased $6.4 million primarily attributable to a $13.7 million decrease and a $7.3 million increase in delivery and FPC deferral revenues, respectively. The decrease in delivery deferral revenue was primarily driven by higher actual rates, which outweighed the decreased usage that caused FPC deferral revenues to be higher. Higher actual rates caused actual delivery revenue to be higher than allowed revenue by a greater margin in the current period compared to the same period in 2022. Decreased usage caused actual FPC revenue to be higher than allowed revenue by a smaller margin in the current period compared to the same period in 2022.

•Other decoupling revenue increased $11.9 million primarily due to changes in amortization rates. In the current period, overcollections from residential customers were amortized at a higher rate compared to the same period in 2022. Decreased usage for certain non-residential schedules also decreased the rate at which prior-year undercollections were amortized. This was partially offset by a $3.0 million decrease related to GAAP alternative revenue program recognition guidelines. As of the period ended June 30, 2022, there were $3.0 million of deferred 2021 GAAP alternative decoupling revenues that were recognized. There were no such revenues recognized in 2023.

•Transportation and other revenue increased $22.2 million primarily due to a $12.1 million increase in non-core natural gas financial hedging gains comprised of a $5.7 million increase in wholesale sales driven by increased natural gas sales volume and a marginal increase in the average price of natural gas wholesale sales. Further, the cost of natural gas sold decreased $11.4 million due to a 9.8% decrease in the average cost in the six months ended June 30, 2023 compared to 2022. This was partially offset by a $5.0 million increase in natural gas financial hedging costs. Additionally, an increase of $8.6 million was due to an Internal Revenue Service Private Letter Ruling in 2022, which included amortization to offset recovery through rates in 2022. The increases were partially offset by a $2.5 million deferral for over recovery of 2023 Green Direct energy credits approved in the 2022 GRC.

Electric Power Costs

Electric power costs increased $224.2 million primarily due to an increase of $116.8 million of purchased electricity costs and an increase of electric generation fuel costs of $107.3 million. These items are discussed in detail below.

•Purchased electricity expense increased $116.8 million primarily due to increased wholesale purchase prices, which were 37.3% higher in the six months ended June 30, 2023 compared to the same period in 2022, driven by open market purchases as well as PPA contracts added after March 31, 2022. The increase from wholesale purchase prices were partially offset by an 8.3% decrease in wholesale electricity purchase volumes.

•Electric generation fuel increased $107.3 million primarily due to a $105.0 million increase in natural gas fuel costs as a result of a 158.2% increase in PSE natural gas-fired generation. Higher costs from increased production were partially offset by lower natural gas prices which drove an 11.4% decrease in average unit production costs.

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Natural Gas Margin

Natural gas margin is natural gas sales to retail and transportation customers less the cost of natural gas purchased, including transportation costs to bring natural gas to PSE’s service territory. The PGA mechanism passes through increases or decreases in the natural gas supply portion of the natural gas service rates to customers based upon changes in the price of natural gas purchased from producers and wholesale marketers or changes in natural gas pipeline transportation costs. PSE's margin or net income is not affected by changes under the PGA mechanism because over- and under-recoveries of natural gas costs included in baseline PGA rates are deferred and either refunded to or collected from customers in future periods.

The following chart displays the details of PSE's natural gas margin changes for the three months ended June 30, 2023 and 2022:

______________

*    Includes decoupling cash collections, ROR excess earnings, and decoupling 24-month revenue reserve.

Three Months Ended June 30, 2023 Compared to 2022

Natural Gas Operating Revenue

Natural gas operating revenue increased $34.0 million due to increases in retail sales of $22.2 million, decoupling revenue of $9.9 million, and other decoupling revenue of $2.5 million. These increases were partially offset by transportation and other revenue of $0.5 million. These items are discussed in detail below.

•Natural gas retail sales revenue increased $22.2 million primarily due to an increase in rates of $67.4 million partially offset by a decrease of $45.2 million driven by a decrease in natural gas load of 13.5%. The increase in rates is primarily due to the tariffs filed pursuant to the Company's most recent PGA and GRC effective November 1, 2022 and January 7, 2023, respectively. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report and Part II, Item 7, Management's Discussion and Analysis, "Regulation of PSE Rates and Recovery of PSE Costs" included in the Company's Annual Report on Form 10-K for the period ended December 31, 2022 for natural gas rate changes. The decrease in load is primarily driven by a 17.4% and 8.0% decrease in residential and commercial usage, respectively. Customer usage decreased due to a decrease in heating degree days of 27.8% from higher temperatures in the three months ended June 30, 2023 as compared to 2022.

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•Decoupling revenue increased $9.9 million primarily attributable to lower usage in the current period compared to the same period in 2022. This resulted in actual natural gas revenues being lower than allowed natural gas revenues in the current period, whereas in the same period in 2022, actual revenues were higher than allowed revenues.

•Other decoupling revenue increased $2.5 million due to a decrease in current period amortization of prior year decoupling revenues compared to the same period in 2022. This is attributable to decreased usage and decreased amortization rates, which decreases the rate at which deferral revenues are passed back to customers.

Natural Gas Energy Costs

•Purchased natural gas expense increased $22.5 million due to an increase in the PGA rates in November 2022 partially offset by a decrease in natural gas usage of 13.5% as stated in the natural gas retail sales section above. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report for natural gas rate changes and details on the PGA.

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Natural Gas Margin

The following chart displays the details of PSE's natural gas margin changes for the six months ended June 30, 2023 and 2022:

______________

*    Includes decoupling cash collections, ROR excess earnings, and decoupling 24-month revenue reserve.

Six Months Ended June 30, 2023 Compared to 2022

Natural Gas Operating Revenue

Natural gas operating revenue increased $125.0 million due to increases in retail sales of $113.8 million, other decoupling revenue of $5.3 million, decoupling revenue of $4.5 million and transportation and other revenue of $1.4 million. These items are discussed in detail below.

•Natural gas retail sales revenue increased $113.8 million primarily due to an increase in rates of $139.9 million partially offset by a decrease of $26.1 million due to a decrease in natural gas load of 3.0%. The increase in rates is primarily due to the tariffs filed pursuant to the Company's most recent PGA and GRC effective November 1, 2022 and January 7, 2023, respectively. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report and Part II, Item 7, Management's Discussion and Analysis, "Regulation of PSE Rates and Recovery of PSE Costs" included in the Company's Annual Report on Form 10-K for the period ended December 31, 2022 for natural gas rate changes. The decrease in load is primarily driven by a 4.5% and 1.1% decrease in residential and commercial usage, respectively. Customer usage decreased due to a decrease in heating degree days of 9.2% due to higher temperatures in the six months ended June 30, 2023 as compared to 2022.

•Decoupling revenue increased $4.5 million primarily due to decreased usage in the current period compared to the same period in 2022. This resulted in actual natural gas revenues being higher than allowed natural gas revenues by a smaller margin in the current period compared to 2022.

•Other decoupling revenue increased $5.3 million due to a decrease in current period amortization of prior year decoupling revenues compared to the same period in 2022. This is attributable to decreased usage and amortization rates, which decreases the rate at which deferral revenues are passed back to customers.

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Natural Gas Energy Costs

•Purchased natural gas expense increased $80.6 million due to an increase in the PGA rates in November 2022 partially offset by a decrease in natural gas usage of 3.0% as stated in the natural gas retail sales section above. See "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report for natural gas rate changes and details on the PGA.

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Other Operating Expenses and Other Income (Deductions)

The following chart displays the details of PSE's operating expenses and other income (deductions) for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023 Compared to 2022

•Net unrealized (gain) loss on derivative instruments increased $21.5 million to a net loss of $30.8 million for the three months ended June 30, 2023. The primary driver was the change in the weighted average forward prices for electric and natural gas. Specifically, electric prices decreased 23.2% resulting in a $36.7 million loss for electric. Natural gas prices decreased 9.6% resulting in a $22.7 million loss for natural gas. These losses were offset by the net settlements of electric trades previously recorded as $8.3 million in loss and settlements of natural gas trades previously recorded at a $29.6 million loss. For further details, see Note 4, "Accounting for Derivative Instruments and Hedging" in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

•Utility operations and maintenance expense increased $13.6 million primarily due to increases in the following: (i) $4.8 million in customer service expense due to increased low-income assistance, (ii) $2.8 million in outside consulting fees related to corporate strategic planning, (iii) $2.5 million in credit card processing fees and call center expenses, (iv) $1.8 million in pension related expenses and (v) $1.0 million in administrative and general expenses related to the CEIP and other strategic projects. These increases were partially offset by a decrease of $2.9 million in overhead line maintenance due to less storm activity in the three months ended June 30, 2023 as compared to 2022.

•Non-utility expense and other expense decreased $5.1 million primarily due to a decrease of $3.8 million in biogas purchase expense driven by a decrease in biogas volume purchased as well as the average biogas price in the three months ended June 30, 2023 compared to 2022.

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•Depreciation and amortization expense increased $22.2 million due to: (i) $11.4 million increase in electric amortization from 2022. This increase is primarily driven by a $4.9 million increase in the Lower Snake River treasury grant amortization and a $3.1 million increase from 2022 storm cost amortization, (ii) $6.8 million increase in natural gas distribution depreciation from 2022, which is driven by $219.5 million in net additions in natural gas distribution assets and (iii) $2.7 million increase in electric distribution depreciation from 2022, which is driven by $294.5 million in net additions of electric distribution assets and (iv) $2.3 million increase in electric production depreciation from 2022 due to $19.7 million in net additions of electric production assets.

•Taxes other than income taxes increased $4.4 million primarily due to an increase of $4.1 million in municipal taxes and an increase of $2.8 million in state excise tax, both of which were driven by the increase in retail revenue in the three months ended June 30, 2023 as compared to 2022. The increases were partially offset by a decrease of $2.4 million in property taxes.

Other Income, Interest Expense and Income Tax Expense

•Other income/expense increased $6.5 million from net other income of $6.4 million in 2022 to net other income of $12.9 million in 2023, due to an increase of $5.4 million in other income and a decrease of $1.1 million in other expense. The increase in other income was primarily due to: (i) $3.4 million increase in taxable interest and dividend income driven by increases to PCA customer interest and interest earned on short-term investments from the May 2023 PSE bond proceeds, (ii) $2.8 million increase in allowance for funds used during construction (AFUDC) due to an increase in eligible CWIP and (iii) $1.8 million in non-service cost component of the qualified pension net periodic benefit cost for the three months ended June 30, 2023 compared to 2022. The increase in other income was partially offset by a decrease of $2.7 million in Advanced Metering Infrastructure (AMI) due to a change in AMI return deferral per the 2022 GRC.

•Interest expense increased $5.4 million primarily due to: (i) an increase of $2.6 million in interest expense due to the May 2023 PSE bond issuance, (ii) an increase of $2.4 million related to interest expense recognized on the PGA liability and (iii) an increase of $1.3 million related to interest expense recognized in conjunction with PSE's deferred compensation liability.

•Income tax expense decreased $4.6 million primarily driven by a decrease in pre-tax book income.

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Other Operating Expenses and Other Income (Deductions)

The following chart displays the details of PSE's operating expenses and other income (deductions) for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30, 2023 Compared to 2022

•Net unrealized (gain) loss on derivative instruments decreased $345.6 million to a net loss of $222.9 million for the six months ended June 30, 2023. The primary driver was the change in the weighted average forward prices for electric and natural gas. Specifically, electric prices decreased 57.4% resulting in $120.9 million in loss for electric. Natural gas prices decreased 58.9% resulting in $153.1 million in loss for natural gas. Further, the net settlement of electric trades previously recorded as gains resulted in a $40.1 million decrease and the net settlement of natural gas trades previously recorded as gains resulted in a $31.5 million decrease. For further details, see Note 4, "Accounting for Derivative Instruments and Hedging" in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

•Utility operations and maintenance expense increased $38.3 million primarily due to increases in the following: (i) $11.7 million in customer service expense due to increased low-income assistance, (ii) $6.3 million in outside consulting fees related to corporate strategic planning, (iii) $3.7 million in pension related expenses, (iv) $3.3 million in electric safety, training, crew standby, and other administrative expenses, (v) $2.6 million related to injuries and damages expense, (vi) $2.5 million in credit card processing fees and call center expenses, (vii) $2.2 million in maintenance costs primarily at the Goldendale, Colstrip, and Ferndale generating stations and (viii) $2.1 million in administrative and general expenses related to the CEIP and other strategic projects in the six months ended June 30, 2023 as compared to 2022.

•Non-utility expense and other expense decreased $9.9 million primarily due to a decrease of $6.1 million in biogas purchase expense, driven by a decrease in both biogas volume purchased and average biogas price; and a decrease of $3.7 million in the long-term incentive plan, as compared to 2022, due to an increase in 2022 funding as of June 30, 2022.

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•Depreciation and amortization expense increased $53.6 million due to: (i) $23.9 million increase in electric amortization from 2022 driven by a $11.1 million increase in the Lower Snake River Treasury Grant amortization, a $5.9 million increase from 2022 storm cost amortization, and a $3.3 million increase in Get To Zero (GTZ) electric tranche amortization, (ii) $13.3 million increase in natural gas distribution depreciation, primarily due to $219.5 million in net additions in natural gas distribution assets, (iii) $8.4 million increase in conservation amortization due to an increase in conservation rider rates effective May 1, 2022, (see "Regulation of PSE Rates and Recovery of PSE Costs" included in this Item 2 of this report), (iv) $5.3 million increase in electric distribution depreciation due to $294.5 million in net additions of electric distribution assets, (v) $4.3 million increase in electric production depreciation, driven by an increase of $19.7 million in net additions of electric production assets and (vi) $2.7 million increase in natural gas amortization due to a $2.2 million increase in GTZ natural gas tranche amortization. These increases were partially offset by a $2.6 million decrease in electric general plant and other depreciation from 2022, due to $13.4 million in additions offset by $11.9 million in retirements and $2.5 million in asset retirement costs.

•Taxes other than income taxes increased $16.5 million primarily due to a $10.3 million increase in municipal taxes and an increase of $10.1 million in state excise taxes, both of which were driven by the increase in retail revenue in 2023 as compared to 2022. The increases were partially offset by a decrease of $3.8 million in property taxes.

Other Income, Interest Expense and Income Tax Expense

•Other income/expense increased $9.0 million from net other income of $14.3 million in 2022 to net other income of $23.3 million in 2023, due to an increase of $7.1 million in other income and a decrease of $1.8 million in other expense. The increase in other income was primarily due to (i) $5.6 million in taxable interest and dividend income due to an increase in PCA customer interest and interest earned on short-term investments from the May 2023 PSE bond proceeds, (ii) $3.7 million in the non-service cost component of the qualified pension net periodic benefit cost for 2023 compared to 2022, (iii) $3.4 million of AFUDC due to an increase in eligible CWIP and (iv) $2.3 million in gain on corporate life insurance policies. The increase in other income was partially offset by a decrease of $5.1 million in AMI due to a change in AMI return deferral per the 2022 GRC.

•Interest expense increased $7.7 million primarily due to: (i) an increase of $3.1 million related to interest expense recognized on the PGA liability, (ii) an increase of $2.6 million in interest expense due to the May 2023 PSE bond issuance, (iii) an increase of $2.5 million related to interest expense recognized in conjunction with PSE's deferred compensation liability and (iv) an increase of $2.0 million in common interest expense due to an increase in interest rates on commercial paper borrowings in the six months ended June 30, 2023 compared to 2022.

•Income tax expense decreased $37.0 million primarily driven by a decrease in pre-tax book income.

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Puget Energy

Primarily, all operations of Puget Energy are conducted through PSE. Puget Energy's net income (loss) for the three months ended June 30, 2023 and 2022 is as follows:

Three Months Ended June 30, 2023 compared to 2022

Summary Results of Operation

Puget Energy’s net income decreased by $3.4 million. This is primarily attributable to an increase in income tax expense of $11.9 million driven by changes in the effective tax rate. The 2023 effective tax rate was adversely impacted by an increase in pre-tax book income caused by changes in unrealized gains and losses from electric and natural gas trades, which decreased Puget Energy's effective tax rate more in 2022 compared to 2023. This decrease was partially offset by an increase in PSE's net income of $7.8 million.

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Puget Energy's net income (loss) for the six months ended June 30, 2023 and 2022 is as follows:

Six Months Ended June 30, 2023 compared to 2022

Summary Results of Operation

Puget Energy’s net income decreased by $281.7 million, which is primarily attributable to (i) a decrease in PSE's net income of $252.8 million, (ii) an increase in income tax expense of $27.9 million driven by an increase in pre-tax book income and the unrealized gains and losses of net settlements on electric and natural gas trades, which decreased Puget Energy's effective tax rate more in 2022 compared to 2023, and (iii) an increase in net loss of $4.7 million at Puget LNG due to additional operational expenses as Puget LNG commenced commercial operations in February 2022. These decreases were partially offset by a decrease in interest expense of $6.6 million due to an increase of $6.3 million of Puget LNG interest expense, which is eliminated in the consolidated results for Puget Energy.

Capital Requirements

Contractual Obligations and Commercial Commitments

In addition to the contractual obligations and consolidated commercial commitments disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, during the six months ended June 30, 2023, the Company entered into new Electric Portfolio and Electric Wholesale Market Transaction contracts with estimated payment obligations totaling $4.0 billion through 2051.

For further information, see Part II, Item 8, Note 16, "Commitments and Contingencies" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Off-Balance Sheet Arrangements

As of June 30, 2023, the Company had no off-balance sheet arrangements that have or are reasonably likely to have a material effect on the Company's financial condition.

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Utility Construction Program

The Company’s construction programs for generating facilities, the electric transmission system, the natural gas and electric distribution systems and the Tacoma LNG facility are designed to meet regulatory requirements, support customer growth and improve energy system reliability.  The Company had adjusted capital expenditures, resulting in a decrease of $56.1 million compared to forecasted amounts for the six months ended June 30, 2023. The decrease was primarily due to (i) permitting delays with the Energize Eastside substation and transmission upgrade project, (ii) timing of thermal and wind generation maintenance, and (iii) timing of technology expenditures offset by higher gas new customer construction and public improvement work. Construction expenditures, excluding equity AFUDC, totaled $536.8 million for the six months ended June 30, 2023. Presently planned utility construction expenditures, excluding equity AFUDC, are as follows:

Capital Expenditure Projections
(Dollars in Millions)	2023	2024	2025
Total energy delivery, technology and facilities expenditures	$1,146.7	$1,311.9	$1,304.2

The program is subject to change based upon general business, economic and regulatory conditions.  Utility construction expenditures and any new generation resource expenditures may be funded from a combination of sources, which may include cash from operations, short-term debt, long-term debt and/or equity.  PSE’s planned capital expenditures may result in a level of spending that will exceed its cash flow from operations.  As a result, execution of PSE’s strategy is dependent in part on continued access to capital markets.  

Capital Resources

Cash from Operations

Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		Change
Net income	$	29,000	$	281,763	$	(252,763)
Non-cash items1	546,459		233,641		312,818
Changes in cash flow resulting from working capital2	(45,228)		30,235		(75,463)
Regulatory assets and liabilities	19,201		9,939		9,262
Purchased gas adjustment	159,676		3,401		156,275
GHG emission allowances	(60,231)		—		(60,231)
Other non-current assets and liabilities3	(7,163)		(6,523)		(640)
Net cash provided by operating activities	$	641,714	$	552,456	$	89,258

_______________

1 Non-cash items include depreciation, amortization, deferred income taxes, net unrealized (gain) loss on derivative instruments, AFUDC-equity, production tax credits (PTCs) and other miscellaneous non-cash items.

2 Changes in working capital include receivables, unbilled revenue, materials/supplies, fuel/gas inventory, income taxes, prepayment, PGA, accounts payable and accrued expenses.

3 Other non-current assets and liabilities include funding of pension liability.

Six Months Ended June 30, 2023 compared to 2022

Cash generated from operations for the six months ended June 30, 2023 increased by $89.3 million including a net income decrease of $252.8 million. The following are significant factors that impacted PSE's cash flows from operations:

•Cash flow adjustments resulting from non-cash items increased $312.8 million primarily due to: (i) a $345.6 million change from a net unrealized gain on derivative instruments of $122.6 million to a net unrealized loss on derivative instruments of $222.9 million, (ii) an increase in depreciation and amortization of $45.1 million, (iii) an increase of $8.4 million in conservation amortization and (iv) a $2.6 million increase due to deferral of energy exchange cost. The increases were partially offset by a decrease in deferred income taxes of $89.5 million. For further details, see "Other Operating Expenses" in this Item 2 of this report.

•Cash flows resulting from changes in working capital decreased $75.5 million primarily due to: (i) accounts payable decreased faster than the same period last year that led to increased cash outflows of $308.9 million, (ii) an increased cash outflow of $9.6 million related to higher incentive payments, and (iii) cash flow associated with

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prepayments decreased primarily due to $10.6 million cash inflow in 2022 related to major inspections completed in 2022. Cash outflows were partially offset by: (i) an increase of $40.3 million due to higher tax payable balance, (ii) higher balances in fuel inventory added cash inflows of $40.5 million, and (iii) a cash inflow of $175.0 million due to the timing of accounts receivable collections, as the balance of account receivable decreased $336.0 million in the six months ended June 30, 2023 compared to a decrease of $161.0 million during the same period in 2022.

•Cash flows resulting from regulatory assets and liabilities increased $9.3 million, which was primarily related to major maintenance and major inspections at several generation stations in 2022 that led to higher cash outflow in the six months ended June 30, 2022 compared to the same period in 2023.

•Cash flow resulting from purchased gas adjustment increased $156.3 million, which was mainly driven by a decrease in actual natural gas cost and an increase in allowed PGA recovery in the six months ended June 30, 2023 compared to 2022. Decreased natural gas prices led to a $48.3 million, or 18.3%, decrease in actual natural gas costs in the six months ended June 30, 2023 compared to 2022. Meanwhile, the total amount of allowed PGA recovery in the six months ended June 30, 2023 increased $80.5 million, or 30.1%, compared to 2022. In addition, there was a $27.2 million refund and interest from a counterparty settlement received in January 2023.

•Cash flow resulting from GHG emission allowances decreased $60.2 million which was driven by obtaining Washington emission allowances for GHG emissions associated with the company's electric and gas business activities in compliance with the CCA. For further details, see Management's Discussion and Analysis, "Other" in Item 2 of this report.

Puget Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		Change
Net income	$	(65,941)	$	(36,964)	$	(28,977)
Non-cash items1	45,422		17,604		27,818
Changes in cash flow resulting from working capital2	(1,339)		4,200		(5,539)
Other non-current assets and liabilities3	(1,258)		(4,556)		3,298
Net cash provided by operating activities	$	(23,116)	$	(19,716)	$	(3,400)

_______________

1 Non-cash items include depreciation, amortization, deferred income taxes, net unrealized (gain) loss on derivative instruments, AFUDC-equity, PTCs and

other miscellaneous non-cash items.

2 Changes in working capital include receivables, unbilled revenue, materials/supplies, fuel/gas inventory, income taxes, prepayments, PGA, accounts payable and accrued expenses.

3 Other noncurrent assets and liabilities include funding of pension liability.

Six Months Ended June 30, 2023 compared to 2022

Cash generated from operations for the six months ended June 30, 2023, in addition to the changes discussed at PSE above, decreased by $3.4 million compared to the same period in 2022, which includes a net income decrease of $29.0 million.  The remaining change was primarily impacted by the factors explained below:

•Non-cash items increased $27.8 million primarily due to higher non-cash inflows of $27.2 million related to changes in deferred taxes.

•Changes in cash flow resulting from working capital decreased $5.5 million primarily due to a $6.1 million decrease related to the change in PSE's intercompany account receivable and account payable balances with Puget LNG and Puget Energy, which are eliminated upon consolidation of Puget Energy.

Financing Program

The Company’s external financing requirements principally reflect the cash needs of its construction program, its schedule of maturing debt and certain operational needs.  The Company anticipates refinancing the redemption of bonds or other long-term borrowings with its credit facilities and/or the issuance of new long-term debt.  Access to funds depends upon factors such as Puget Energy’s and PSE’s credit ratings, prevailing interest rates and investor receptivity to investing in the utility industry, Puget Energy and PSE. The Company believes it has sufficient liquidity through its credit facilities and access to capital markets to fund its needs over the next twelve months.

Proceeds from PSE’s short-term borrowings and sales of commercial paper are used to provide working capital and the interim funding of utility construction programs.  Puget Energy and PSE continue to have reasonable access to the capital and credit markets.

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As of June 30, 2023, both Puget Energy and PSE have stable outlooks from Moody’s, Fitch, and S&P. Although neither Puget Energy nor PSE have any debt whose maturity would be accelerated upon a ratings downgrade, Management continually monitors the credit rating environment for both Puget Energy and PSE as a credit rating downgrade may increase the cost of borrowing for Puget Energy and PSE in future long-term financings or under their existing credit facilities. Any increase in the cost of borrowing could negatively impact Puget Energy and PSE's future results of operations as well as future liquidity, access to debt capital resources and financial condition. Additionally, a ratings downgrade could impact the Company's ability to issue dividends. A downgrade to Puget Energy and PSE's credit ratings would not impact debt covenants under our existing credit facilities nor would it impact other contracts, as neither include credit rating triggering event clauses. A credit rating decrease for PSE could result in increased cash collateral required for commodity contracts, which would adversely affect PSE's liquidity. Management cannot predict with certainty the actions credit agencies may take, if any, in response to weaker near term credit metrics, regulatory and rate recovery uncertainties, and management's efforts to contain the growth of capital and operating expenditures. Containing the growth of capital and operating expenditures will be limited, over the near term, due to continuing strategic and risk mitigation imperatives and the necessity of providing safe, reliable and resilient service levels to customers.

Puget Sound Energy

Credit Facility

In May 2022, PSE entered into a new $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the Secured Overnight Financing Rate (SOFR), as the London Interbank Offered Rate (LIBOR) was discontinued on June 30, 2023. The proceeds of the PSE credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. The credit facility includes a swingline feature allowing same day availability on borrowings up to $75.0 million and has an expansion feature which, upon receipt of commitments from one or more lenders, could increase the total size of the facility up to $1.4 billion.

The credit agreement is syndicated among numerous lenders and contains usual and customary affirmative and negative covenants that, among other things, place limitations on PSE's ability to transact with affiliates, make asset dispositions and investments or permit liens to exist. The credit agreement also contains a leverage ratio that requires the ratio of (a) total funded indebtedness to (b) total capitalization to be 65.0% or less at all times. PSE certifies its compliance with such covenants to participating banks each quarter. As of June 30, 2023, PSE was in compliance with all applicable covenant ratios.

The credit agreement allows PSE to borrow at a prime based rate or to make floating rate advances at the SOFR, in either case, plus a spread that is based upon PSE's credit rating. PSE must pay a commitment fee on the unused portion of the credit facility. The spreads and the commitment fee depend on PSE's credit ratings. As of the date of this report, interest was calculated as SOFR plus 0.10% SOFR adjustment plus 1.25% spread over the adjusted SOFR rate and the commitment fee was 0.175%.

As of June 30, 2023, no amount was drawn under PSE's credit facility and no amount was outstanding under the commercial paper program. Outside of the credit agreement, PSE had a $2.3 million letter of credit in support of a long-term transmission contract and had $7.0 million issued under a standby letter of credit with TD Bank in support of gas purchases on the natural gas exchange (NGX) in Canada.

Demand Promissory Note

In May 2023, PSE amended and restated its revolving credit facility with Puget Energy, in the form of a credit agreement and a demand promissory note (Note) pursuant to which PSE may borrow up to $200.0 million from Puget Energy subject to approval by Puget Energy.  Under the terms of the Note, PSE pays interest based on PE's credit facility interest rate, which is SOFR plus 0.10% SOFR adjustment plus 1.75% spread over the adjusted SOFR rate. As of June 30, 2023, PSE had no outstanding balance under the Note.

Debt Restrictive Covenants

The type and amount of future long-term financings for PSE may be limited by provisions in PSE's electric and natural gas mortgage indentures.

PSE’s ability to issue additional secured debt may also be limited by certain restrictions contained in its electric and natural gas mortgage indentures.  Under the most restrictive tests at June 30, 2023, PSE could issue:

•Approximately $1.5 billion of additional first mortgage bonds under PSE’s electric mortgage indenture based on approximately $2.4 billion of electric bondable property available for issuance, subject to an interest coverage ratio limitation of 2.0 times net earnings available for interest (as defined in the electric utility mortgage), which PSE exceeded at June 30, 2023; and

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•Approximately $1.0 billion of additional first mortgage bonds under PSE’s natural gas mortgage indenture based on approximately $1.7 billion of natural gas bondable property available for issuance, subject to a combined natural gas and electric interest coverage test of 1.75 times net earnings available for interest and a natural gas interest coverage test of 2.0 times net earnings available for interest (as defined in the natural gas utility mortgage), both of which PSE exceeded at June 30, 2023.

At June 30, 2023, PSE had approximately $8.6 billion in electric and natural gas rate base to support the interest coverage ratio limitation test for net earnings available for interest.

Shelf Registrations

In August 2022, PSE filed an S-3 shelf registration statement under which it may issue up to $1.4 billion aggregate principal amount of senior notes secured by first mortgage bonds. As of the date of this report, $1.0 billion was available to be issued. The shelf registration will expire in August 2025.

Dividend Payment Restrictions

The payment of dividends by PSE to Puget Energy is restricted by provisions of certain covenants applicable to long-term debt contained in PSE’s electric and natural gas mortgage indentures.  At June 30, 2023, approximately $1.6 billion of unrestricted retained earnings was available for the payment of dividends under the most restrictive mortgage indenture covenant.

Beginning February 6, 2009, pursuant to the terms of the merger order by the Washington Commission, PSE may not declare or pay dividends if PSE’s common equity ratio, calculated on a regulatory basis, is 44.0% or below except to the extent a lower equity ratio is ordered by the Washington Commission.  Also, pursuant to the merger order, PSE may not declare or make any distribution unless on the date of distribution PSE’s corporate credit/issuer rating is investment grade, or, if its credit ratings are below investment grade, PSE’s ratio of earnings before interest, tax, depreciation and amortization (EBITDA) to interest expense for the most recently ended four fiscal quarter period prior to such date is equal to or greater than 3.0 to 1.0.  The common equity ratio, calculated on a regulatory basis, was 48.7% at June 30, 2023, and the EBITDA to interest expense ratio was 5.2 to 1.0 for the twelve months ended June 30, 2023.

PSE’s ability to pay dividends is also limited by the terms of its credit facilities, pursuant to which PSE is not permitted to pay dividends during any Event of Default (as defined in the facilities), or if the payment of dividends would result in an Event of Default, such as failure to comply with certain financial covenants. At June 30, 2023, the Company was in compliance with all applicable covenants, including those pertaining to the payment of dividends.

Long Term Debt

On May 18, 2023, PSE issued $400.0 million of green senior secured notes at an interest rate of 5.448%. The notes mature on June 1, 2053 and pay interest semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023. Net proceeds from the issuance of the notes were deposited into the Company's general account and will be earmarked for allocation to eligible projects, as defined in PSE's sustainable financing framework, which was published in May 2023. Eligible projects are expenditures incurred and investments made related to development and acquisition of some or all of the following types of projects: (i) renewable energy, (ii) energy efficiency, (iii) clean transportation, (iv) biodiversity conservation, (v) climate change adaptation, (vi) water and wastewater management, (vii) pollution prevention and control, and (viii) green innovation.

For more information on the Company's long term debt, see Part II, Item 8, Note 7, "Long-Term Debt" and Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Puget Energy

Credit Facility

In May 2022, Puget Energy entered into a new $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the SOFR, as the LIBOR was discontinued on June 30, 2023. The proceeds of the PE credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. The Puget Energy revolving senior secured credit facility also has an accordion feature, upon receipt of commitments from one or more lenders, could increase the size of the facility up to $1.3 billion.

The revolving senior secured credit facility provides Puget Energy the ability to borrow based on a prime based rate or SOFR, in either case, plus a spread based on Puget Energy's credit ratings. Puget Energy must pay a commitment fee on the

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unused portion of the facility. As of June 30, 2023, there was $135.8 million drawn and outstanding under the facility. As of the date of this report, interest was calculated as SOFR plus 0.10% SOFR adjustment plus 1.75% spread over the adjusted SOFR rate and the commitment fee was 0.275%.

The revolving senior secured credit facility contains usual and customary affirmative and negative covenants. The credit agreement also contains a leverage ratio that requires the ratio of (a) total funded indebtedness to (b) total capitalization to be 65.0% or less at all times. As of June 30, 2023, Puget Energy was in compliance with all applicable covenants.

In September 2022, PE borrowed $50.0 million on the credit facility and contributed the proceeds to PSE as an equity contribution. The equity proceeds were used for general corporate purposes.

Shelf Registrations

In March 2022, Puget Energy filed an S-3 Registration statement under which it may issue up to $1.0 billion aggregate principal amount of senior notes secured by Puget Energy's assets. As of the date of this report, $550.0 million was available to be issued. The shelf registration will expire in March 2025.

Long-Term Debt

In March 2022, Puget Energy issued $450.0 million of senior secured notes at an interest rate of 4.224%. The notes mature on March 15, 2032, and pay interest semi-annually on March 15 and September 15 of each year. Proceeds from the issuance of the notes were invested in short-term money market funds, and then used to repay Puget Energy's $450.0 million 5.625% notes that were originally scheduled to mature July 2022.

In April 2022, Puget Energy redeemed the $450.0 million 5.625% senior secured notes due July 2022 and paid related expenses for a total redemption price of $457.2 million, which includes repayment of the $450.0 million principal amount and $7.2 million of accrued interest expense.

For further information, see Part II, Item 8, Note 7, "Long-Term Debt" and Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Dividend Payment Restrictions

Puget Energy’s ability to pay dividends is also limited by the merger order issued by the Washington Commission in 2009.  Pursuant to the merger order, Puget Energy may not declare or make a distribution unless on such date Puget Energy’s ratio of consolidated EBITDA to consolidated interest expense for the four most recently ended fiscal quarters prior to such date is equal to or greater than 2.0 to 1.0.  Puget Energy's EBITDA to interest expense was 3.9 to 1.0 for the twelve months ended June 30, 2023.

At June 30, 2023, the Company was in compliance with all applicable covenants, including those pertaining to the payment of dividends.

Other

New Accounting Pronouncements

For the discussion of new accounting pronouncements, see Note 2, "New Accounting Pronouncements" in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

Washington Clean Energy Transformation Act

In May 2019, Washington State passed the Clean Energy Transformation Act (CETA), which supports Washington's clean energy economy and transitioning to a clean, affordable, and reliable energy future. The CETA requires all electric utilities to eliminate coal-fired generation from their allocation of electricity by December 31, 2025; to be carbon-neutral by January 1, 2030 through a combination of non-emitting electric generation, renewable generation, and/or alternative compliance options; and makes it the state policy that, by 2045, 100% of electric generation and retail electricity sales will come from renewable or non-emitting resources. Clean energy implementation plans are required every four years from each investor-owned utility (IOU). The plan must propose interim targets for meeting the 2045 standard between 2030 and 2045 and describe an actionable plan that the IOU intends to pursue to meet the standard. The Washington Commission may approve, reject or recommend alterations to an IOU’s plan. The Company intends to seek recovery of any costs associated with CETA through the regulatory process. On December 17, 2021, PSE filed its Final CEIP, which proposed a plan for the implementation of CETA for 2022-2025 and project costs associated with its implementation. On June 6, 2023, the Washington Commission approved PSE’s CEIP, subject to conditions. The CEIP tariff was filed with the Washington Commission on July 17, 2023 and is pending approval.

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Washington Climate Commitment Act

In 2021, the Washington Legislature adopted the CCA, which establishes a GHG emissions cap-and-invest program that caps GHG emissions beginning on January 1, 2023 and makes further reductions to the cap annually through 2050. The Washington Department of Ecology (WDOE) published final regulations to implement the program on September 29, 2022, which became effective on October 30, 2022. In general, the program will require covered entities to obtain emission allowances or offset credits for covered emissions and the WDOE provides the annual allowance budget based on the cap. Allowances can be obtained through quarterly auctions, or bought and sold on a secondary market.

The CCA regulates PSE both as an electric utility and as a natural gas distribution utility. PSE is required to obtain emission allowances or offset credits for GHG emissions associated with electricity generated in or imported into the state to serve Washington State load, and all electricity generated by Washington State PSE facilities with total annual emissions exceeding 25,000 metric tons of carbon dioxide equivalent per year. As an electric utility subject to Washington’s CETA, which is discussed below, PSE will receive emission allowances at no cost through 2050 for direct emissions associated with electricity used to serve Washington State load to mitigate impacts to ratepayers. PSE will also be required to obtain emission allowances for GHG emissions associated with natural gas supplied to customers and any facilities associated with its natural gas system with total facility emissions that exceed 25,000 metric tons of carbon dioxide equivalent per year. PSE will receive some emission allowances to cover its natural gas obligation at no cost to mitigate impacts to customers; the amount will be based on a percentage of baseline emissions (determined from 2015 - 2019 natural gas system related emissions) that will decline to mitigate rate impacts to certain natural gas customers. Offset credit use is limited and the WDOE will reduce the cap proportionally for any offsets used. In the first compliance period, 2023-2026, participating entities can cover up to 5% of their emissions with offset credits, and can cover an additional 3% with credits from projects on federally recognized Tribal lands. In the second compliance period, 2027-2030, the general limit drops to 4%, with an additional 2% from projects on Tribal lands.

Related Party Transactions

In August 2015, PSE filed a proposal with the Washington Commission to develop a LNG facility at the Port of Tacoma. The Tacoma LNG facility provides peak-shaving services to PSE’s natural gas customers, and provides LNG as fuel to transportation customers, particularly in the marine market. Following a mediation process and the filing of a settlement stipulation by PSE and all parties, the Washington Commission issued an order on October 31, 2016, that allowed PSE’s parent company, Puget Energy, to create a wholly-owned subsidiary, named Puget LNG, which was formed on November 29, 2016, for the sole purpose of owning, developing and financing the non-regulated activity of the Tacoma LNG facility. Puget LNG has entered into one fuel supply agreement with a maritime customer and is marketing the facility’s output to other potential customers.

In February 2022, the Tacoma LNG facility at the Port of Tacoma completed commissioning and commenced commercial operations. Pursuant to the Commission’s order, Puget LNG is allocated approximately 57.0% of the capital and operating costs of the Tacoma LNG facility and PSE will be allocated the remaining 43.0% of the capital and operating costs. PSE and Puget LNG are considered related parties with similar ownership by Puget Energy. Therefore, capital and operating costs that occur under PSE and are allocated to Puget LNG are related party transactions by nature. Per this allocation of costs, $243.3 million of non-utility plant and $14.1 million of operating costs related to Puget LNG's portion of the Tacoma LNG facility are reported in the Puget Energy "Other property and investments" and "Non-utility expense and other" financial statement line items, respectively, as of June 30, 2023. The portion of the Tacoma LNG facility allocated to PSE is subject to regulation by the Washington Commission.

Integrated Resource Plans, Resource Acquisition and Development

The 2021 Integrated Resource Plan marked a major departure from past Integrated Resource Plans (IRP) due in large part to the passage of CETA. The new electric progress report rules, Washington Administrative Code 480-100-625 Integrated Resource Plan Development and Timing, outlines the requirements for this report. The two-year progress report must be filed at least every two years after the utility files it’s IRP. The final 2023 Electric Progress Report and the Gas Utility IRP were filed on March 31, 2023.

On February 10, 2023 the FERC approved a voluntary regional resource adequacy program that PSE plans to participate in along with other utilities in the Western United States and Canada. The program is intended to help the region anticipate its future power supply needs as natural gas-fired and coal power plants retire and are replaced by variable renewable energy resources such as wind and solar.

For further information, see Part I, Item I “Integrated Resource Plans, Resource Acquisition and Development” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Environmental Remediation

The Company is subject to federal and state requirements for protection of the environment, including those for release of hazardous materials and remediation of contaminated sites. A potentially responsible party has joint and several liability under existing U.S. environmental laws. In instances where we have been designated a potentially responsible party by the Environmental Protection Agency or state environmental agency, we are potentially liable for the cost of remediating contamination at current work sites and former work sites. Such sites include former manufactured gas plants operated by PSE predecessors, such as Gas Works Park on the shore of Lake Union in Seattle, or contaminated facilities with other connections to PSE predecessors, such as the location of a long-defunct creosote manufacturer which had purchased waste products from PSE predecessors, the Quendall Terminals site on Lake Washington in Renton, Washington. In each case, PSE assesses, based on in-depth studies, expert analyses and legal reviews, our environmental remediation obligations related to contaminated sites, including assessments of ranges and probabilities of recoveries from other responsible parties and/or insurance carriers. PSE develops a range of reasonably estimable costs that includes a low and high end of a range for all remediation sites for which we have sufficient information. There are some potential remediation obligations where the costs of remediation cannot be reasonably estimated. Liabilities are recorded based on the best estimate or the low end of a range of reasonably possible costs expected to be incurred to remediate sites. It is possible that costs are incurred in excess of the recorded amounts because of changes in laws and/or regulations, higher than expected costs and/or the discovery of new or additional contamination. The Company believes a significant portion of its past and future environmental remediation costs are recoverable from insurance companies, from third parties or from customers under a Washington Commission order.

For additional information see Item 8, Note 4, "Regulation and Rates" to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Human Capital

Information regarding the Company’s human capital measures and objectives is contained in the Environmental, Social and Governance (ESG) report that can be found on the Company’s website, www.pse.com. The information on the Company’s website is not, and will not be deemed to be a part of this Quarterly Report on Form 10-Q or incorporated into the Company’s other filings with the SEC.

Other Legal Matters

On October 3, 2022, a putative class-action complaint was filed against PSE in the Pierce County Superior Court of Washington, alleging violations of state wage-and-hour laws. Subsequently, PSE removed the case from state court to the U.S. District Court for the Western District of Washington. Class has not been certified and the plaintiff currently seeks remand back to state court. The case is in early stages of discovery and due to the inherent difficult of predicting the course of legal action relating to this class-action allegation, such as eventual scope, duration or outcome, the Company is currently unable to estimate the amount or range of any potential loss that could result from an unfavorable outcome arising from this matter.

Item 3.     Quantitative and Qualitative Disclosure about Market Risk

The Company is exposed to various forms of market risk, consisting primarily of adverse changes in commodity prices, counterparty credit risk, as well as interest rate risk. PSE actively manages market risk and maintains risk policies and procedures designed to discourage unauthorized risk-taking, reduce commodity price volatility, and manage the various risks inherent to the energy portfolio. There have been no material changes to market risks affecting the Company from those set forth in Part II, Item 7A - "Quantitative and Qualitative Disclosures about Market Risk" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Commodity Price Risk

The nature of serving regulated electric and natural gas customers with its portfolio of owned and contracted electric generation resources exposes PSE and its customers to some volumetric and commodity price risks. PSE’s Energy Risk Management Committee establishes energy risk management policies and procedures to manage commodity and volatility risks and the related effects on credit, tax, accounting, financing and liquidity.    

PSE's objective is to minimize commodity price exposure and risks associated with volumetric variability in the natural gas and electric portfolios. It is not engaged in the business of assuming risk for the purpose of speculative trading.  PSE hedges open natural gas and electric positions to reduce both the portfolio risk and the volatility risk in prices.  

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Counterparty Credit Risk

PSE is exposed to credit risk primarily through buying and selling electricity and natural gas to serve customers. Credit risk is the potential loss resulting from a counterparty's non-performance under an agreement. PSE manages credit risk with policies and procedures for counterparty analysis and measurement, monitoring and mitigation of exposure. Additionally, PSE has entered into commodity master arrangements (i.e., WSPP, Inc. (WSPP), International Swaps and Derivatives Association (ISDA) or North American Energy Standards Board (NAESB)) with its counterparties to mitigate credit exposure.

Interest Rate Risk

The Company believes its interest rate risk primarily relates to the use of short-term debt instruments, variable-rate leases and anticipated long-term debt financing needed to fund capital requirements. The Company manages its interest rate risk through the issuance of mostly fixed-rate debt with varied maturities. The Company utilizes internal cash from operations and borrowings under its commercial paper program, and its credit facilities to meet short-term funding needs. During periods of financial market or interest rate volatility, the Company may utilize its credit facilities for short term funding needs instead of the commercial paper program. Credit facility borrowings are based on a more stable base rate and the credit spread is fixed. Short-term obligations are commonly refinanced with fixed-rate bonds or notes when needed and when interest rates are considered favorable. The Company may also enter into swaps or other financial hedge instruments to manage the interest rate risk associated with the debt.

Item 4.     Controls and Procedures

Puget Energy

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of Puget Energy’s management, including the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, Puget Energy has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2023, the end of the period covered by this report.  Based upon that evaluation, the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer of Puget Energy concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in Puget Energy’s internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, Puget Energy’s internal control over financial reporting.

Puget Sound Energy

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of PSE’s management, including the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, PSE has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2023, the end of the period covered by this report.  Based upon that evaluation, the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer of PSE concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in PSE’s internal control over financial reporting during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, PSE’s internal control over financial reporting.

PART II            OTHER INFORMATION

Item 1.         Legal Proceedings

Contingencies arising out of the Company's normal course of business existed as of June 30, 2023.  Litigation is subject to numerous uncertainties and the Company is unable to predict the ultimate outcome of these matters. For details on legal

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proceedings, see Note 8, "Commitments and Contingencies" in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report and see "Other Legal Matters" included in this Item 2 of this report.

Given the size of the Company's operations, we have elected to adopt a threshold of $1.0 million in expected sanctions related to required disclosures of environmental proceedings to which the government is a party. As of the date of this filing, we are not aware of any matters that exceed this threshold and meet the definition for disclosure.

Item 1A.     Risk Factors

There have been no material changes from the risk factors set forth in Part I, Item 1A, "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Although the Company has not been materially affected, the following represents an ongoing risk that the Company continues to monitor.

Natural disasters such as wildfires and catastrophic events, including terrorist acts, may adversely affect PSE's business and expose the Company to liability. Events such as wildfires, earthquakes, floods, tornadoes and other extreme weather events, explosions, vandalism, terrorist acts, and other similar occurrences, could damage PSE's operational assets, including utility facilities, information technology infrastructure, distributed generation assets and pipeline assets. Such events could likewise damage the operational assets of PSE's suppliers or customers. These events could disrupt PSE's ability to meet customer requirements, significantly increase PSE's response costs, cause reputational harm and significantly decrease PSE's revenues. Unanticipated events or a combination of events, failure in resources needed to respond to events, or a slow or inadequate response to events may have an adverse impact on PSE's operations, financial condition, and results of operations.

Wildfires and other natural disasters affecting PSE's infrastructure may expose PSE to liability for personal injury, loss of life, and property damage. The risk of catastrophic and severe wildfires has increased in the western U.S. giving rise to the potential for large damage claims against utilities for fire-related losses. Climate change may worsen hot and dry summer conditions, which increase the likelihood and magnitude of damages that may be caused by fires burning into or allegedly originating from PSE’s equipment. Wildfires alleged to have been caused by PSE's transmission, distribution, or generation infrastructure, or that allegedly result from PSE’s or its contractors’ operating or maintenance practices, could expose PSE to claims for fire suppression and clean-up costs, evacuation costs, fines and penalties, and liability for economic damages, personal injury, loss of life, property damage, and environmental pollution, whether based on claims of negligence, trespass, or otherwise.

PSE maintains insurance coverage for natural disasters and catastrophic events like wildfires, sabotage and terrorism, but insurance coverage is subject to the terms and limitations of the available policies and may not be sufficient in scope or amount to cover PSE’s ultimate liability. The availability of insurance coverage may be limited or may result in higher deductibles, higher premiums, and more restrictive policy terms. Coverage limits within insurance policies could result in material self-insured costs if there are events that are not covered by PSE’s insurance policies. PSE may be unable to fully recover costs in excess of insurance through customer rates or regulatory mechanisms and, even if such recovery is possible, it could take several years to collect. If the amount of insurance is insufficient or otherwise unavailable, and if PSE is unable to fully recover in rates the costs of uninsured losses, PSE’s financial condition, results of operations, or cash flows could be materially affected.

Item 5.         Other Information

During the three months ended June 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

Item 6.         Exhibits

Included in the Exhibit Index are a list of exhibits filed as part of this Quarterly Report on Form 10-Q.

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EXHIBIT INDEX

3(i).1	Amended Articles of Incorporation of Puget Energy, Inc. (incorporated herein by reference to Exhibit 3.1 to Puget Energy’s Current Report on Form 8-K, dated February 6, 2009, Commission File No. 1-16305).
3(i).2	Amended and Restated Articles of Incorporation of Puget Sound Energy, Inc. (incorporated herein by reference to Exhibit 3.2 to Puget Sound Energy’s Current Report on Form 8-K, dated February 6, 2009, Commission File No. 1-4393).
3(ii).1	Amended and Restated Bylaws of Puget Energy, Inc. (incorporated herein by reference to Exhibit 3.3 to Puget Energy's Annual Report on Form 10-K, dated February 25, 2022, Commission File No. 001-16305).
3(ii).2	Amended and Restated Bylaws of Puget Sound Energy, Inc. (incorporated herein by reference to Exhibit 3.4 to Puget Sound Energy's Annual Report on Form 10-K dated February 25, 2022, Commission File No. 001-04393).
22.1*	Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize Securities of the Registrant.
31.1*	Chief Executive Officer certification of Puget Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Principal Financial Officer certification of Puget Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*	Chief Executive Officer certification of Puget Sound Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*	Principal Financial Officer certification of Puget Sound Energy pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Principal Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial statements from the Quarterly Report on Form 10-Q of Puget Energy, Inc. and Puget Sound Energy, Inc. for the quarter ended June 30, 2023 filed on August 2, 2023 formatted in Inline XBRL: (i) the Consolidated Statement of Income (Unaudited), (ii) the Consolidated Statements of Comprehensive Income (Unaudited), (iii) the Consolidated Balance Sheets (Unaudited), (iv) the Consolidated Statements of Cash Flows (Unaudited), (v) the Consolidated Statements of Common Shareholder's Equity (Unaudited), and (vi) the Notes to Consolidated Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

__________________

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

		PUGET ENERGY, INC. PUGET SOUND ENERGY, INC.
		/s/ Stacy Smith
		Stacy Smith Controller & Principal Accounting Officer
Date:	August 2, 2023

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EX-22.1

EXHIBIT 22.1

Subsidiary Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize Securities of the Registrant

The following securities (collectively, the “Puget Energy Senior Secured Notes”) issued by Puget Energy, Inc., a Washington corporation, were outstanding as of June 30, 2023:

Name of Issuer	Description of Security
Puget Energy, Inc.	3.650% Senior Secured Notes due 2025
Puget Energy, Inc.	2.379% Senior Secured Notes due 2028
Puget Energy, Inc.	4.100% Senior Secured Notes due 2030
Puget Energy, Inc.	4.224% Senior Secured Notes due 2032

Pledged Security Collateral

As of June 30, 2023, the obligations under the Puget Energy Senior Secured Notes were secured by pledges of the capital stock of the following affiliates of Puget Energy, Inc.:

Name of Issuer	Issuer Jurisdiction of Organization	Number of Shares Owned	Percent of Interest Owned	Percent of Interest Pledged
Puget Sound Energy, Inc.	Washington	85,903,791	100%	100%

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Mary E. Kipp, certify that:

I have reviewed this report on Form 10-Q of Puget Energy, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023
/s/ Mary E. Kipp
Mary E. Kipp
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kazi Hasan, certify that:

I have reviewed this report on Form 10-Q of Puget Energy, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023
/s/ Kazi Hasan
Kazi Hasan
Executive Vice President and
Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Mary E. Kipp, certify that:

I have reviewed this report on Form 10-Q of Puget Sound Energy, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023
/s/ Mary E. Kipp
Mary E. Kipp
President and Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kazi Hasan, certify that:

I have reviewed this report on Form 10-Q of Puget Sound Energy, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2023
/s/ Kazi Hasan
Kazi Hasan
Executive Vice President and
Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Puget Energy, Inc. and Puget Sound Energy, Inc. (the “Companies”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Mary E. Kipp, the President and Chief Executive Officer of the Companies, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Companies.

Date:	August 2, 2023
/s/ Mary E. Kipp
Mary E. Kipp
President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Puget Energy, Inc. and Puget Sound Energy, Inc. (the “Companies”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Kazi Hasan, Executive Vice President and Chief Financial Officer of the Companies, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Companies.

Date:	August 2, 2023
/s/ Kazi Hasan
Kazi Hasan
Executive Vice President and Chief Financial Officer

XML

Cover	6 Months Ended
	Jun. 30, 2023 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-16305
Entity Tax Identification Number	91-1969407
Entity Incorporation, State or Country Code	WA
Entity Address, Address Line One	355 110th Ave NE
Entity Address, City or Town	Bellevue
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98004
City Area Code	(425)
Local Phone Number	454-6363
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Shell Company	false
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001085392
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	200
Document Fiscal Year Focus	2023
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Registrant Name	PUGET ENERGY INC /WA
Subsidiaries [Member]
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-4393
Entity Tax Identification Number	91-0374630
Entity Incorporation, State or Country Code	WA
Entity Address, Address Line One	355 110th Ave NE
Entity Address, City or Town	Bellevue
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98004
City Area Code	(425)
Local Phone Number	454-6363
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Shell Company	false
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000081100
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	85,903,791
Document Fiscal Year Focus	2023
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Registrant Name	PUGET SOUND ENERGY, INC.

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating revenue:
Electric	$ 680,639	$ 594,331	$ 1,690,799	$ 1,350,708
Natural gas	270,140	236,054	787,398	662,402
Other	12,849	11,991	26,618	22,703
Total operating revenue	963,628	842,376	2,504,815	2,035,813
Energy costs:
Purchased electricity	227,539	212,391	567,355	450,594
Electric generation fuel	64,147	46,498	214,401	107,142
Residential exchange	(16,181)	(16,783)	(39,712)	(39,853)
Purchased natural gas	114,917	92,452	350,399	269,785
Unrealized (gain) loss on derivative instruments, net	30,802	9,273	222,925	(122,648)
Utility operations and maintenance	174,497	160,933	369,488	331,233
Non-utility expense and other	13,858	15,299	29,904	30,718
Depreciation and amortization	187,491	165,676	376,208	330,252
Conservation amortization	26,259	25,906	64,478	56,047
Taxes other than income taxes	92,150	86,544	225,840	207,921
Total operating expenses	915,479	798,189	2,381,286	1,621,191
Operating income (loss)	48,149	44,187	123,529	414,622
Other income (expense):
Other income	17,294	13,231	30,992	26,395
Other expense	(3,427)	(4,538)	(5,904)	(7,692)
Interest charges:
AFUDC	5,874	3,974	11,482	8,103
Interest expense	(93,391)	(86,194)	(183,433)	(172,662)
Income (loss) before income taxes	(25,501)	(29,340)	(23,334)	268,766
Income tax (benefit) expense	11,409	4,156	13,607	23,967
Net income (loss)	(36,910)	(33,496)	(36,941)	244,799
Subsidiaries [Member]
Operating revenue:
Electric	680,639	594,331	1,690,799	1,350,708
Natural gas	270,140	236,054	787,398	662,402
Other	6,105	11,991	15,338	22,668
Total operating revenue	956,884	842,376	2,493,535	2,035,778
Energy costs:
Purchased electricity	227,539	212,391	567,355	450,594
Electric generation fuel	64,147	46,498	214,401	107,142
Residential exchange	(16,181)	(16,783)	(39,712)	(39,853)
Purchased natural gas	114,917	92,452	350,399	269,785
Unrealized (gain) loss on derivative instruments, net	30,802	9,273	222,925	(122,648)
Utility operations and maintenance	174,497	160,933	369,488	331,233
Non-utility expense and other	6,720	11,842	14,734	24,656
Depreciation and amortization	185,815	164,009	372,858	327,713
Conservation amortization	26,259	25,906	64,478	56,047
Taxes other than income taxes	90,632	86,243	223,896	207,359
Total operating expenses	905,147	792,764	2,360,822	1,612,028
Operating income (loss)	51,737	49,612	132,713	423,750
Other income (expense):
Other income	16,349	11,005	29,169	21,973
Other expense	(3,427)	(4,538)	(5,904)	(7,692)
Interest charges:
AFUDC	5,874	3,974	11,482	8,103
Interest expense	(69,928)	(62,663)	(136,911)	(125,807)
Income (loss) before income taxes	605	(2,610)	30,549	320,327
Income tax (benefit) expense	(860)	3,708	1,549	38,564
Net income (loss)	$ 1,465	$ (6,318)	$ 29,000	$ 281,763

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net Income (loss)	$ (36,910)	$ (33,496)	$ (36,941)	$ 244,799
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Net unrealized gain (loss) from pension and postretirement plans, net of tax of $(1,803), $953, $(1,793) and $1,906, respectively.	(7,085)	1,831	(7,743)	3,662
Other comprehensive income (loss)	(7,085)	1,831	(7,743)	3,662
Comprehensive income (loss)	(43,995)	(31,665)	(44,684)	248,461
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	(1,883)	488	(2,059)	975
Subsidiaries [Member]
Net Income (loss)	1,465	(6,318)	29,000	281,763
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent [Abstract]
Net unrealized gain (loss) from pension and postretirement plans, net of tax of $(1,803), $953, $(1,793) and $1,906, respectively.	(6,785)	3,587	(6,749)	7,175
Amortization of treasury interest rate swaps to earnings, net of tax of $26, $24, $52 and $50, respectively.	95	98	192	195
Other comprehensive income (loss)	(6,690)	3,685	(6,557)	7,370
Comprehensive income (loss)	(5,225)	(2,633)	22,443	289,133
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	(1,803)	953	(1,793)	1,906
Amortization of Financing Cash Flow Hedge Contracts to Earnings Tax	$ 26	$ 24	$ 52	$ 50

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	$ (1,883)	$ 488	$ (2,059)	$ 975
Subsidiaries [Member]
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	(1,803)	953	(1,793)	1,906
Amortization of Financing Cash Flow Hedge Contracts to Earnings Tax	$ 26	$ 24	$ 52	$ 50

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Utility Plant [Abstract]
Public Utilities Property Plant And Equipment Electric Plant	$ 10,585,124	$ 10,300,895
Public Utilities Property Plant And Equipment Gas Plant	4,837,939	4,721,982
Public Utilities Property Plant And Equipment Common Plant	1,013,304	1,103,783
Less: Accumulated depreciation and amortization	(4,414,522)	(4,341,789)
Net utility plant	12,021,845	11,784,871
Other property and investments:
Goodwill	1,656,513	1,656,513
Other property and investments	314,098	328,535
Total other property and investments	1,970,611	1,985,048
Current assets:
Cash and cash equivalents	253,144	105,740
Restricted cash	36,504	63,045
Accounts receivable, net of allowance for doubtful accounts of $42,666 and $41,962, respectively	408,215	673,236
Unbilled revenue	182,961	284,022
Materials and supplies, at average cost	141,268	132,172
Fuel and natural gas inventory, at average cost	83,849	94,075
Unrealized gain on derivative instruments	95,490	587,029
Prepaid expense and other	55,669	41,940
Power contract acquisition adjustment gain	17,033	16,736
Total current assets	1,274,133	1,997,995
Other long-term and regulatory assets:
Power cost adjustment mechanism	93,762	112,207
Regulatory assets related to power contracts	6,905	7,904
Other regulatory assets	930,731	784,231
Unrealized gain on derivative instruments	53,978	94,621
Power contract acquisition adjustment gain	39,555	46,924
Operating lease right-of-use asset	187,508	193,509
Other	171,456	180,204
Total other long-term and regulatory assets	1,483,895	1,419,600
Total assets	16,750,484	17,187,514
Common shareholder’s equity:
Common stock $0.01 par value, 1,000 shares authorized, 200 shares outstanding	0	0
Additional paid-in capital	3,523,532	3,523,532
Retained earnings	1,385,965	1,465,331
Accumulated other comprehensive income (loss), net of tax	(32,517)	(24,774)
Total common shareholder’s equity	4,876,980	4,964,089
Long-term debt:
First mortgage bonds and senior notes	5,062,000	4,662,000
Pollution control bonds	161,860	161,860
Long-term debt	2,000,000	2,034,300
Debt discount issuance costs and other	(193,332)	(194,787)
Total long-term debt	7,030,528	6,663,373
Total capitalization	11,907,508	11,627,462
Current liabilities:
Accounts payable	306,802	665,750
Short-term debt	135,800	441,300
Accrued expenses:
Taxes	131,616	116,098
Salaries and wages	52,035	60,537
Interest	64,812	62,148
Unrealized loss on derivative instruments	108,923	124,976
Power contract acquisition adjustment loss	1,536	1,638
Operating lease liabilities	20,654	20,342
Other	65,333	70,685
Total current liabilities	887,511	1,563,474
Other long-term and regulatory liabilities:
Deferred income taxes	945,267	985,947
Unrealized loss on derivative instruments	22,311	18,366
Purchased Gas Adjustment Liability, Long-term	138,996	3,536
Regulatory liabilities	906,593	1,147,143
Regulatory liability for deferred income taxes	784,844	811,161
Regulatory liabilities related to power contracts	56,588	63,660
Power contract acquisition adjustment loss	5,369	6,266
Operating lease liabilities	174,354	181,265
Finance lease liabilities	100,904	102,518
GHG emission allowances	138,676	0
Other deferred credits	681,563	676,716
Total long-term and regulatory liabilities	3,955,465	3,996,578
Commitments and contingencies (Note 8)
Total capitalization and liabilities	16,750,484	17,187,514
Subsidiaries [Member]
Utility Plant [Abstract]
Public Utilities Property Plant And Equipment Electric Plant	12,342,442	12,071,531
Public Utilities Property Plant And Equipment Gas Plant	5,390,844	5,276,156
Public Utilities Property Plant And Equipment Common Plant	1,034,170	1,125,217
Less: Accumulated depreciation and amortization	(6,745,611)	(6,688,033)
Net utility plant	12,021,845	11,784,871
Other property and investments:
Other property and investments	68,790	80,076
Total other property and investments	68,790	80,076
Current assets:
Cash and cash equivalents	248,718	102,840
Restricted cash	36,504	63,045
Accounts receivable, net of allowance for doubtful accounts of $42,666 and $41,962, respectively	407,569	671,071
Unbilled revenue	182,961	284,014
Materials and supplies, at average cost	141,268	132,172
Fuel and natural gas inventory, at average cost	82,453	91,783
Unrealized gain on derivative instruments	95,490	587,029
Prepaid expense and other	55,537	41,940
Total current assets	1,250,500	1,973,894
Other long-term and regulatory assets:
Power cost adjustment mechanism	93,762	112,207
Other regulatory assets	930,731	784,231
Unrealized gain on derivative instruments	53,978	94,621
Operating lease right-of-use asset	187,508	193,509
Other	168,433	176,833
Total other long-term and regulatory assets	1,434,412	1,361,401
Total assets	14,775,547	15,200,242
Common shareholder’s equity:
Common stock $0.01 par value, 1,000 shares authorized, 200 shares outstanding	859	859
Additional paid-in capital	3,535,105	3,535,105
Retained earnings	1,417,161	1,438,163
Accumulated other comprehensive income (loss), net of tax	(109,601)	(103,044)
Total common shareholder’s equity	4,843,524	4,871,083
Long-term debt:
First mortgage bonds and senior notes	5,062,000	4,662,000
Pollution control bonds	161,860	161,860
Debt discount issuance costs and other	(40,780)	(37,095)
Total long-term debt	5,183,080	4,786,765
Total capitalization	10,026,604	9,657,848
Current liabilities:
Accounts payable	306,943	664,457
Short-term debt	0	357,000
Accrued expenses:
Taxes	134,152	116,472
Salaries and wages	52,035	60,537
Interest	54,869	52,170
Unrealized loss on derivative instruments	108,923	124,976
Operating lease liabilities	20,654	20,342
Other	65,333	70,685
Total current liabilities	742,909	1,466,639
Other long-term and regulatory liabilities:
Deferred income taxes	1,062,421	1,139,600
Unrealized loss on derivative instruments	22,311	18,366
Purchased Gas Adjustment Liability, Long-term	138,996	3,536
Regulatory liabilities	905,329	1,145,879
Regulatory liability for deferred income taxes	785,401	811,724
Operating lease liabilities	174,354	181,265
Finance lease liabilities	100,904	102,518
GHG emission allowances	138,676	0
Other deferred credits	677,642	672,867
Total long-term and regulatory liabilities	4,006,034	4,075,755
Commitments and contingencies (Note 8)
Total capitalization and liabilities	14,775,547	$ 15,200,242
Electricity, US Regulated [Member] | Subsidiaries [Member]
Other long-term and regulatory liabilities:
GHG emission allowances	69,900
Natural Gas, US Regulated [Member] | Subsidiaries [Member]
Other long-term and regulatory liabilities:
GHG emission allowances	$ 129,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Construction work in progress	$ 1,068,267	$ 861,801
Current assets:
Allowance for doubtful accounts	42,666	41,962
Common shareholder’s equity:
Public Utilities, Property, Plant and Equipment, Construction Work in Progress	1,068,267	861,801
Allowance for doubtful accounts	$ 42,666	$ 41,962
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common Stock, Shares, Outstanding	200	200
Subsidiaries [Member]
ASSETS
Construction work in progress	$ 1,068,267	$ 861,801
Current assets:
Allowance for doubtful accounts	42,666	41,962
Common shareholder’s equity:
Public Utilities, Property, Plant and Equipment, Construction Work in Progress	1,068,267	861,801
Allowance for doubtful accounts	$ 42,666	$ 41,962
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common Stock, Shares, Outstanding	85,903,791	85,903,791

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CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Subsidiaries [Member]	Subsidiaries [Member] Common Stock [Member]	Subsidiaries [Member] Additional Paid-in Capital [Member]	Subsidiaries [Member] Retained Earnings [Member]	Subsidiaries [Member] AOCI Attributable to Parent [Member]
Beginning Balance (in shares) at Dec. 31, 2021		200					85,903,791
Beginning Balance at Dec. 31, 2021	$ 4,563,316	$ 0	$ 3,523,532	$ 1,067,216	$ (27,432)	$ 4,355,430	$ 859	$ 3,485,105	$ 982,607	$ (113,141)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	278,295			278,295		288,081			288,081
Dividends, Common Stock	(939)			(939)		(13,896)			(13,896)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	1,831				1,831	3,685				3,685
Ending Balance (in shares) at Mar. 31, 2022		200					85,903,791
Ending Balance at Mar. 31, 2022	4,842,503	$ 0	3,523,532	1,344,572	(25,601)	4,633,300	$ 859	3,485,105	1,256,792	(109,456)
Beginning Balance (in shares) at Dec. 31, 2021		200					85,903,791
Beginning Balance at Dec. 31, 2021	4,563,316	$ 0	3,523,532	1,067,216	(27,432)	4,355,430	$ 859	3,485,105	982,607	(113,141)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	244,799					281,763
Ending Balance (in shares) at Jun. 30, 2022		200					85,903,791
Ending Balance at Jun. 30, 2022	4,810,544	$ 0	3,523,532	1,310,782	(23,770)	4,628,630	$ 859	3,485,105	1,248,437	(105,771)
Beginning Balance (in shares) at Mar. 31, 2022		200					85,903,791
Beginning Balance at Mar. 31, 2022	4,842,503	$ 0	3,523,532	1,344,572	(25,601)	4,633,300	$ 859	3,485,105	1,256,792	(109,456)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	(33,496)			(33,496)		(6,318)			(6,318)
Dividends, Common Stock	(294)			(294)		(2,037)			(2,037)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	1,831				1,831	3,685				3,685
Ending Balance (in shares) at Jun. 30, 2022		200					85,903,791
Ending Balance at Jun. 30, 2022	$ 4,810,544	$ 0	3,523,532	1,310,782	(23,770)	$ 4,628,630	$ 859	3,485,105	1,248,437	(105,771)
Beginning Balance (in shares) at Dec. 31, 2022	200	200				85,903,791	85,903,791
Beginning Balance at Dec. 31, 2022	$ 4,964,089	$ 0	3,523,532	1,465,331	(24,774)	$ 4,871,083	$ 859	3,535,105	1,438,163	(103,044)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	(31)			(31)		27,535			27,535
Dividends, Common Stock	(28,133)			(28,133)		(28,002)			(28,002)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(658)				(658)	133				133
Ending Balance (in shares) at Mar. 31, 2023		200					85,903,791
Ending Balance at Mar. 31, 2023	$ 4,935,267	$ 0	3,523,532	1,437,167	(25,432)	$ 4,870,749	$ 859	3,535,105	1,437,696	(102,911)
Beginning Balance (in shares) at Dec. 31, 2022	200	200				85,903,791	85,903,791
Beginning Balance at Dec. 31, 2022	$ 4,964,089	$ 0	3,523,532	1,465,331	(24,774)	$ 4,871,083	$ 859	3,535,105	1,438,163	(103,044)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	$ (36,941)					$ 29,000
Ending Balance (in shares) at Jun. 30, 2023	200	200				85,903,791	85,903,791
Ending Balance at Jun. 30, 2023	$ 4,876,980	$ 0	3,523,532	1,385,965	(32,517)	$ 4,843,524	$ 859	3,535,105	1,417,161	(109,601)
Beginning Balance (in shares) at Mar. 31, 2023		200					85,903,791
Beginning Balance at Mar. 31, 2023	4,935,267	$ 0	3,523,532	1,437,167	(25,432)	4,870,749	$ 859	3,535,105	1,437,696	(102,911)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	(36,910)			(36,910)		1,465			1,465
Dividends, Common Stock	(14,292)			(14,292)		(22,000)			(22,000)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	$ (7,085)				(7,085)	$ (6,690)				(6,690)
Ending Balance (in shares) at Jun. 30, 2023	200	200				85,903,791	85,903,791
Ending Balance at Jun. 30, 2023	$ 4,876,980	$ 0	$ 3,523,532	$ 1,385,965	$ (32,517)	$ 4,843,524	$ 859	$ 3,535,105	$ 1,417,161	$ (109,601)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities:
Net Income (loss)	$ (36,941)	$ 244,799
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	376,208	330,252
Conservation amortization	64,478	56,047
Deferred income taxes and tax credits, net	(64,939)	(2,699)
Net unrealized (gain) loss on derivative instruments	222,925	(122,648)
AFUDC - equity	(17,270)	(13,887)
Other non-cash	10,479	4,180
Regulatory assets and liabilities	19,201	9,939
Purchased gas adjustment	159,676	3,401
Increase (decrease) in Emission compliance obligation	(60,231)	0
Other long term assets and liabilities	(8,421)	(11,079)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	337,513	158,608
Materials and supplies	(9,096)	(9,788)
Fuel and natural gas inventory	10,226	(31,502)
Prepayments and other	(13,729)	(5,757)
Accounts payable	(368,458)	(50,649)
Taxes payable	15,518	(16,963)
Other	(18,541)	(9,514)
Net cash provided by (used in) operating activities	618,598	532,740
Investing activities:
Construction expenditures - excluding equity AFUDC	(536,778)	(483,754)
Other	14,038	(566)
Net cash provided by (used in) investing activities	(522,740)	(484,320)
Financing activities:
Change in short-term debt, net	(339,800)	(76,000)
Dividends paid	(42,425)	(1,233)
Proceeds from long-term debt and bonds issued	396,488	448,075
Redemption of bonds and notes	0	(450,000)
Other	10,742	6,633
Net cash provided by (used in) financing activities	25,005	(72,525)
Net increase (decrease) in cash, cash equivalents, and restricted cash	120,863	(24,105)
Cash, cash equivalents, and restricted cash at beginning of period	168,785	103,150
Cash, cash equivalents, and restricted cash at end of period	289,648	79,045
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	155,933	163,329
Cash payments (refunds) for income taxes	39,392	25,244
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	69,685	67,845
Subsidiaries [Member]
Operating activities:
Net Income (loss)	29,000	281,763
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	372,858	327,713
Conservation amortization	64,478	56,047
Deferred income taxes and tax credits, net	(101,759)	(12,285)
Net unrealized (gain) loss on derivative instruments	222,925	(122,648)
AFUDC - equity	(17,270)	(13,887)
Other non-cash	5,227	(1,299)
Regulatory assets and liabilities	19,201	9,939
Purchased gas adjustment	159,676	3,401
Increase (decrease) in Emission compliance obligation	(60,231)	0
Other long term assets and liabilities	(7,163)	(6,523)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	335,986	160,983
Materials and supplies	(9,096)	(9,788)
Fuel and natural gas inventory	9,330	(31,142)
Prepayments and other	(13,597)	(5,757)
Accounts payable	(367,024)	(58,115)
Taxes payable	17,680	(22,667)
Other	(18,507)	(3,279)
Net cash provided by (used in) operating activities	641,714	552,456
Investing activities:
Construction expenditures - excluding equity AFUDC	(536,654)	(483,117)
Other	14,038	(566)
Net cash provided by (used in) investing activities	(522,616)	(483,683)
Financing activities:
Change in short-term debt, net	(357,000)	(85,000)
Dividends paid	(50,002)	(15,933)
Proceeds from long-term debt and bonds issued	396,488	0
Other	10,753	10,399
Net cash provided by (used in) financing activities	239	(90,534)
Net increase (decrease) in cash, cash equivalents, and restricted cash	119,337	(21,761)
Cash, cash equivalents, and restricted cash at beginning of period	165,885	96,247
Cash, cash equivalents, and restricted cash at end of period	285,222	74,486
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	119,815	115,192
Cash payments (refunds) for income taxes	61,995	55,131
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	$ 69,685	$ 67,845

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Summary of Consolidation and Significant Accounting Policy

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Summary of Consolidation and Significant Accounting Policy

Basis of Presentation

Puget Energy is an energy services holding company that owns PSE. PSE is a public utility incorporated in the state of Washington that furnishes electric and natural gas services in a territory covering approximately 6,000 square miles, primarily in the Puget Sound region. Puget Energy also has a wholly-owned non-regulated subsidiary, Puget LNG, LLC (Puget LNG), which has the sole purpose of owning, developing and financing the non-regulated activity of the Tacoma liquefied natural gas (LNG) facility. PSE and Puget LNG are considered related parties with similar ownership by Puget Energy. Therefore, capital and operating costs that are incurred by PSE and allocated to Puget LNG are related party transactions by nature.

In 2009, Puget Holdings, LLC (Puget Holdings), owned by a consortium of long-term infrastructure investors, completed its merger with Puget Energy (the merger). As a result of the merger, all of Puget Energy’s common stock is indirectly owned by Puget Holdings. The acquisition of Puget Energy was accounted for in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, “Business Combinations” (ASC 805) as of the date of the merger. ASC 805 requires the acquirer to recognize and measure identifiable assets acquired and liabilities assumed at fair value as of the merger date.

The consolidated financial statements of Puget Energy reflect the accounts of Puget Energy and its subsidiaries. PSE’s consolidated financial statements include the accounts of PSE and its subsidiary. Puget Energy and PSE are collectively referred to herein as “the Company”. The consolidated financial statements are presented after elimination of all significant intercompany items and transactions. PSE’s consolidated financial statements continue to be accounted for on a historical basis and do not include any ASC 805 purchase accounting adjustments. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Greenhouse Gas Emission Allowances

PSE is required to obtain emission allowances or offset credits for greenhouse gas (GHG) emissions associated with electricity it generates or imports into Washington State and natural gas supplied to customers in accordance with the cap-and- invest program included in the Climate Commitment Act (CCA). PSE records allocated and purchased emission allowances at cost, similar to an inventory method. PSE measures the compliance obligation at the weighted average cost of allowances held plus the fair value of additional allowances required to satisfy the obligation after adjustment for applicable no-cost allowances received. PSE includes the obligation in current liabilities and long-term liabilities reported in the "Compliance obligations" line item on the consolidated balance sheets based on the dates the allowances are to be surrendered. Consistent with ASC 980, PSE defers costs and revenues associated with the cap-and-invest program through regulatory assets and liabilities.

Allowance for Credit Losses

The Company measures expected credit losses on trade receivables on a collective basis by receivable type, which include electric retail receivables, gas retail receivables, and electric wholesale receivables. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

The following table presents the activity in the allowance for credit losses for accounts receivable for the six months ended June 30, 2023 and 2022:

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022
Allowance for credit losses:
Beginning balance	$	41,962	$	34,958
Provision for credit loss expense	17,334		15,727
Receivables charged-off	(16,630)		(8,343)
Total ending allowance balance	$	42,666	$	42,342

Tacoma LNG Facility

In February 2022, the Tacoma LNG facility at the Port of Tacoma completed commissioning and commenced commercial operations. The Tacoma LNG facility provides peak-shaving services to PSE's natural gas customers, and provides LNG as fuel to transportation customers, mainly the marine market. In 2019, the Puget Sound Clean Air Agency issued the air quality permit for the facility, and the Pollution Hearings Control Board of Washington State upheld the approval following extended litigation. This decision was appealed with the Pierce County Superior Court by the Puyallup Tribe of Indians and nonprofit law firm Earthjustice and the case was granted direct review by the Pierce County Court of Appeals Division II where it is currently pending.

Pursuant to an order by the Washington Commission, PSE will be allocated approximately 43.0% of common capital and operating costs, consistent with the regulated portion of the Tacoma LNG facility. The remaining 57.0% of common capital and operating costs of the Tacoma LNG facility will be allocated to Puget LNG. Per this allocation of costs, $243.3 million and $246.5 million of non-utility plant operating cost is reported in the Puget Energy "Other property and investments" line item as of June 30, 2023 and December 31, 2022, respectively. Additionally, $14.1 million and $5.4 million of operating costs are reported in the Puget Energy "Non-utility expense and other" financial statement line item for the six months ended June 30, 2023, and June 30, 2022, respectively. Further, $238.1 million and $245.7 million of natural gas plant related to PSE’s portion of the Tacoma LNG facility is reported in the PSE “Utility plant - Natural gas plant” financial statement line item as of June 30, 2023 and December 31, 2022, respectively, as PSE is a regulated entity.

Variable Interest Entities

In April 2017, PSE entered into a power purchase agreement (PPA) with Skookumchuck Wind Energy Project, LLC (Skookumchuck) pursuant to which Skookumchuck would develop a wind generation facility and sell bundled energy and associated attributes, namely renewable energy certificates (RECs), to PSE over a term of 20 years. Skookumchuck commenced commercial operation in November 2020. In May 2020, PSE entered into a PPA with Golden Hills Wind Farm, LLC (Golden Hills) pursuant to which Golden Hills would develop a wind generation facility and sell bundled energy and associated attributes, namely RECs, to PSE over a term of 20 years. On April 29, 2022, Golden Hills commenced commercial operations. In February 2021, PSE entered into a PPA with Clearwater Wind Project, LLC (Clearwater) in which Clearwater would develop a wind generation facility and sell energy and associated attributes to PSE over a term of 25 years. On November 8, 2022, Clearwater commenced commercial operations. For each of the aforementioned PPAs, PSE has no equity investment in the generation facilities, but is the only customer of each facility. PSE has concluded that Skookumchuck, Golden Hills, and Clearwater represent variable interest entities (VIE) and that PSE is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of the facilities. Additionally, PSE does not have the obligation to absorb losses or receive benefits. As a result, PSE does not consolidate the VIEs.

Purchased energy of $47.9 million and $11.7 million were recognized in purchased electricity on the Company's consolidated statements of income for the six months ended June 30, 2023 and June 30, 2022, respectively. Additionally, $0.9 million and $3.8 million were included in accounts payable on the Company's balance sheet as of June 30, 2023 and December 31, 2022, respectively.

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New Accounting Pronouncements	6 Months Ended
	Jun. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	New Accounting PronouncementsReference Rate ReformIn March 2020, the FASB issued Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848". ASU 2022-06 postpones the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. As of June 30, 2023, the Company is not aware of any current agreements that reference LIBOR and thus, has not utilized any practical expedients. The Company continues to assess other agreements to determine if LIBOR is included and if the expedients would be utilized through the allowed period of December 2024.

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Revenue

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the three months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	326,352	$	171,040	$	—	$	497,392
Commercial	248,204		81,825		—		330,029
Industrial	28,521		6,192		—		34,713
Other	5,219		—		—		5,219
Wholesale	59,892		—		—		59,892
Transmission and transportation	10,628		5,260		—		15,888
Miscellaneous	6,984		(50)		12,849		19,783
Total revenue from contracts with customers	$	685,800	$	264,267	$	12,849	$	962,916
Total other revenue2	(5,161)		5,873		—		712
Total operating revenue	$	680,639	$	270,140	$	12,849	$	963,628

_____________

1 Other includes $6.7 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other		Total
Retail
Residential	$	297,255	$	159,200	$	—	$	456,455
Commercial	226,570		72,275		—		298,845
Industrial	27,711		5,121		—		32,832
Other	4,496		—		—		4,496
Wholesale	24,061		—		—		24,061
Transmission and transportation	10,633		5,088		—		15,721
Miscellaneous	4,019		53		11,991		16,063
Total revenue from contracts with customers	$	594,745	$	241,737	$	11,991	$	848,473
Total other revenue1	(414)		(5,683)		—		(6,097)
Total operating revenue	$	594,331	$	236,054	$	11,991	$	842,376

_____________

1 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the six months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	797,207	$	521,064	$	—	$	1,318,271
Commercial	539,693		234,062		—		773,755
Industrial	62,368		17,283		—		79,651
Other	10,720		—		—		10,720
Wholesale	202,152		—		—		202,152
Transmission and transportation	25,114		10,954		—		36,068
Miscellaneous	10,975		(418)		26,618		37,175
Total revenue from contracts with customers	$	1,648,229	$	782,945	$	26,618	$	2,457,792
Total other revenue2	42,570		4,453		—		47,023
Total operating revenue	$	1,690,799	$	787,398	$	26,618	$	2,504,815

_____________

1 Other includes $11.3 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	713,515	$	451,796	$	—	$	1,165,311
Commercial	483,589		193,254		—		676,843
Industrial	57,784		13,206		—		70,990
Other	9,257		—		—		9,257
Wholesale	37,208		—		—		37,208
Transmission and transportation	21,855		10,534		—		32,389
Miscellaneous	5,169		362		22,703		28,234
Total revenue from contracts with customers	$	1,328,377	$	669,152	$	22,703	$	2,020,232
Total other revenue2	22,331		(6,750)		—		15,581
Total operating revenue	$	1,350,708	$	662,402	$	22,703	$	2,035,813

1 Other includes $0.1 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Transaction Price Allocated to Remaining Performance Obligations

In December 2020, Puget LNG entered into a contract with one customer where Puget LNG is selling LNG over a 10-year delivery period beginning April 2024. The contract requires the customer to purchase a minimum annual quantity even if the customer does not take delivery. The price of the LNG includes a fixed charge, a fuel charge that includes both a market index and fixed margin component and other variable consideration. The fixed transaction price is allocated to the remaining performance obligations which is determined by the fixed charge components multiplied by the outstanding minimum annual quantity. Based on management’s best estimate of commencement, the Company expects to recognize this revenue over the following time periods:

Puget Energy
(Dollars in Thousands)	2024		2025		2026		2027		2028		Thereafter		Total
Remaining performance obligations	$	15,359	$	19,710	$	19,454	$	19,454	$	19,454	$	102,135	$	195,566

The Company has elected the optional exemption in ASC 606, "Revenues from Contracts with Customers", under which the Company does not disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. The primary sources of variability are (a) fluctuations in market index prices of natural gas used to determine aspects of variable pricing and (b) variation in volumes that may be delivered to the customer. Both sources of variability are expected to be resolved at or shortly before delivery of each unit of LNG or natural gas. As each unit of LNG or natural gas represents a separate performance obligation, future volumes are wholly unsatisfied.

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Accounting for Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Accounting for Derivative Instruments and Hedging Activities

Accounting for Derivative Instruments and Hedging ActivitiesPSE employs various energy portfolio optimization strategies but is not in the business of assuming risk for the purpose of realizing speculative trading revenue. The nature of serving regulated electric customers with its portfolio of owned and contracted electric generation resources exposes PSE and its customers to some volumetric and commodity price risks within the sharing mechanism of the Power Cost Adjustment. Therefore, wholesale market transactions and PSE's related hedging strategies are focused on reducing costs and risks where feasible, thus reducing volatility in costs in the portfolio. In order to manage its exposure to the variability in future cash flows for forecasted energy transactions, PSE utilizes a programmatic hedging strategy, which extends out three years. PSE's hedging strategy includes a risk-responsive component for the core natural gas portfolio, which utilizes quantitative risk-based measures with defined objectives to balance both portfolio risk and hedge costs.

PSE's energy risk portfolio management function monitors and manages these risks using analytical models and tools. In order to manage risks effectively, PSE enters into forward physical electric and natural gas purchase and sale agreements, fixed-for-floating swap contracts, and commodity call/put options. Currently, the Company does not apply cash flow hedge accounting and therefore records all mark-to-market gains or losses through earnings.

The Company manages its interest rate risk through the issuance of mostly fixed-rate debt with varied maturities. The Company utilizes internal cash from operations, borrowings under its commercial paper program and its credit facilities to meet short-term funding needs. The Company may enter into swap instruments or other financial hedge instruments to manage the interest rate risk associated with these debts.

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
	June 30, 2023					December 31, 2022
(Dollars in Thousands)	Volumes (millions)	Assets1		Liabilities2		Volumes (millions)	Assets1		Liabilities2
Electric portfolio derivatives	*	$	114,282	$	86,623	*	$	337,703	$	87,120
Natural gas derivatives (MMBtus)3	256	35,186		44,611		322	343,947		56,222
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342
Current		$	95,490	$	108,923		$	587,029	$	124,976
Long-term		53,978		22,311			94,621		18,366
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342

_______________

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 purchased gas adjustment (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 230.3 million British Thermal Units (MMBtu) and purchased electricity of 3.1 million Megawatt hours (MWhs) at June 30, 2023, and 234.9 million MMBtus and 5.3 million MWhs at December 31, 2022.

It is the Company's policy to record all derivative transactions on a gross basis at the contract level without offsetting assets or liabilities. The Company generally enters into transactions using the following master agreements: WSPP, Inc. (WSPP) agreements, which standardize physical power contracts; International Swaps and Derivatives Association (ISDA) agreements, which standardize financial natural gas and electric contracts; and North American Energy Standards Board (NAESB) agreements, which standardize physical natural gas contracts. The Company believes that such agreements reduce credit risk exposure because such agreements provide for the netting and offsetting of monthly payments as well as the right of set-off in the event of counterparty default. The set-off provision can be used as a final settlement of accounts which extinguishes the mutual debts owed between the parties in exchange for a new net amount. For further details regarding the fair value of derivative instruments, see Note 5, "Fair Value Measurements," in the Combined Notes to Consolidated Financial Statements included in Item 1 of this report.

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
	At June 30, 2023
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	149,468	$	—	$	149,468	$	(72,861)	$	—	$	76,607
Liabilities:
Energy derivative contracts	$	131,234	$	—	$	131,234	$	(72,861)	$	(5,887)	$	52,486

Puget Energy and Puget Sound Energy	At December 31, 2022
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	681,650	$	—	$	681,650	$	(125,334)	$	—	$	556,316
Liabilities:
Energy derivative contracts	$	143,342	$	—	$	143,342	$	(125,334)	$	(5,661)	$	12,347

_______________

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

The following table presents the effect and classification of the realized and unrealized gains (losses) of the Company's derivatives recorded on the statements of income:

Puget Energy and Puget Sound Energy		Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in Thousands)	Classification	2023		2022		2023		2022
Gas for power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	$	(9,693)	$	(16,582)	$	(114,339)	$	70,291
Realized	Electric generation fuel	(13,572)		16,039		74,695		43,130
Power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	(21,109)		7,309		(108,586)		52,357
Realized	Purchased electricity	(3,885)		4,454		47,132		7,045
Total gain (loss) recognized in income on derivatives		$	(48,259)	$	11,220	$	(101,098)	$	172,823

The Company is exposed to credit risk primarily through buying and selling electricity and natural gas to serve its customers. Credit risk is the potential loss resulting from a counterparty's non-performance under an agreement. The Company manages credit risk with policies and procedures for, among other things, counterparty credit analysis, exposure measurement, and exposure monitoring and mitigation.

The Company monitors counterparties for significant swings in credit default swap rates, credit rating changes by external rating agencies, ownership changes or financial distress. Where deemed appropriate, the Company may request collateral or other security from its counterparties to mitigate potential credit default losses. Criteria employed in this decision include, among other things, the perceived creditworthiness of the counterparty and the expected credit exposure.

It is possible that volatility in energy commodity prices could cause the Company to have material credit risk exposure with one or more counterparties. If such counterparties fail to perform their obligations under one or more agreements, the Company could suffer a material financial loss. However, as of June 30, 2023, approximately 99.5% of the Company's energy portfolio exposure, excluding normal purchase normal sale (NPNS) transactions, is with counterparties that are rated investment grade by rating agencies and 0.5% are either rated below investment grade or not rated by rating agencies. The Company assesses credit risk internally for counterparties that are not rated by the major rating agencies.

The Company computes credit reserves at a master agreement level by counterparty. The Company considers external credit ratings and market factors in the determination of reserves, such as credit default swaps and bond spreads. The Company recognizes that external ratings may not always reflect how a market participant perceives a counterparty's risk of default. The Company uses both default factors published by Standard & Poor's and factors derived through analysis of market risk, which reflect the application of an industry standard recovery rate. The Company selects a default factor by counterparty at an aggregate master agreement level based on a weighted average default tenor for that counterparty's deals. The default tenor is determined by weighting the fair value and contract tenors for all deals for each counterparty to derive an average value. The default factor used is dependent upon whether the counterparty is in a net asset or a net liability position after applying the master agreement levels.

The Company applies the counterparty's default factor to compute credit reserves for counterparties that are in a net asset position. The Company calculates a non-performance risk on its derivative liabilities by using its estimated incremental borrowing rate over the risk-free rate. Credit reserves are netted against the unrealized gain (loss) positions. The majority of the Company's derivative contracts are with financial institutions and other utilities operating within the Western Electricity Coordinating Council. PSE also transacts power futures contracts on the Intercontinental Exchange (ICE), and natural gas contracts on the ICE natural gas exchange (NGX) platform. Execution of contracts on ICE requires the daily posting of margin calls as collateral through a futures and clearing agent. As of June 30, 2023, PSE had cash posted as collateral of $21.9 million related to contracts executed on the ICE platform. In August 2022, PSE entered into a standby letter of credit agreement with TD Bank allowing standby letter of credit postings of up to $50.0 million as a condition of transacting on the ICE NGX platform. As of June 30, 2023, PSE had no cash posted with ICE NGX and $7.0 million issued under the standby letter of credit agreement. PSE did not trigger any collateral requirements with any of its counterparties nor were any of PSE's counterparties required to post collateral resulting from credit rating downgrades during the three months ended June 30, 2023.

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
(Dollars in Thousands)	At June 30, 2023						At December 31, 2022
	Fair Value1		Posted		Contingent		Fair Value1		Posted		Contingent
Contingent Feature	Liability		Collateral		Collateral		Liability		Collateral		Collateral
Credit rating2	$	1,229	$	—	$	1,229	$	3,157	$	—	$	3,157
Requested credit for adequate assurance	27,424		—		—		4,157		—		—
Forward value of contract3	5,887		21,891		N/A		5,661		56,200		N/A
Total	$	34,540	$	21,891	$	1,229	$	12,975	$	56,200	$	3,157

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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.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820 established a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy categorizes the inputs into three levels with the highest priority given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority given to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Level 1 primarily consists of financial instruments such as exchange-traded derivatives and listed equities. Equity securities that are also classified as cash equivalents are considered Level 1 if there are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded derivatives such as over-the-counter forwards and options.

Level 3 - Pricing inputs include significant inputs that have little or no observability as of the reporting date. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

Financial assets and liabilities measured at fair value are classified in their entirety in the appropriate fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy. The Company primarily determines fair value measurements classified as Level 2 or Level 3 using a combination of the income and market valuation approaches. The process of determining the fair values is the responsibility of the derivative accounting department, which reports to the Controller and Principal Accounting Officer. Inputs used to estimate the fair value of forwards, swaps and options include market-price curves, contract terms and prices, credit-risk adjustments, and discount factors. Additionally, for options, the Black-Scholes option valuation model and implied market volatility curves are used. Inputs used to estimate fair value in industry-standard models are categorized as Level 2 inputs as substantially all assumptions and inputs are observable in active markets throughout the full term of the instruments. On a daily basis, the Company obtains quoted forward prices for the electric and natural gas markets from an independent external pricing service.

The Company considers its electric and natural gas contracts as Level 2 derivative instruments as such contracts are commonly traded as over-the-counter forwards with indirectly observable price quotes. However, certain energy derivative instruments with maturity dates falling outside the range of observable price quotes or that are transacted at illiquid delivery locations are classified as Level 3 in the fair value hierarchy. Management's assessment is based on the trading activity in real-time and forward electric and natural gas markets. Each quarter, the Company confirms the validity of pricing-service quoted prices used to value Level 2 commodity contracts with the actual prices of commodity contracts entered into during the most recent quarter. The Company’s environmental compliance obligation is categorized in Level 2 of the fair value hierarchy and is measured at fair value using a market approach based on quoted prices from an independent pricing service.

Assets and Liabilities with Estimated Fair Value

The carrying values of cash and cash equivalents, restricted cash, and short-term debt as reported on the balance sheet are reasonable estimates of their fair value due to the short-term nature of these instruments and are classified as Level 1 in the fair value hierarchy. The carrying value of other investments of $44.2 million and $55.0 million at June 30, 2023 and December 31, 2022 respectively, are included in "Other property and investments" on the balance sheet. These values are also reasonable estimates of their fair value and classified as Level 2 in the fair value hierarchy as they are valued based on market rates for similar transactions.

The fair value of the long-term notes was estimated using the discounted cash flow method with the U.S. Treasury yields and the Company's credit spreads as inputs, interpolating to the maturity date of each issue. The carrying values and estimated fair values were as follows:

Puget Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount1	2	$	7,030,528	$	6,601,133	$	6,629,073	$	6,149,797
Long-term debt (variable-rate)	2	—		—		34,300		34,300
Total liabilities		$	7,030,528	$	6,601,133	$	6,663,373	$	6,184,097

Puget Sound Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount2	2	$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010
Total liabilities		$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010

_______________

1 The carrying value includes debt issuances costs of $21.8 million and $21.5 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

2 The carrying value includes debt issuances costs of $21.9 million and $21.4 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company's financial assets and liabilities by level, within the fair value hierarchy, that were accounted for at fair value on a recurring basis:

Puget Energy and Puget Sound Energy	Fair Value At June 30, 2023						Fair Value At December 31, 2022
(Dollars in Thousands)	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Electric derivative instruments	$	39,846	$	74,436	$	114,282	$	218,610	$	119,093	$	337,703
Natural gas derivative instruments	34,502		684		35,186		342,988		959		343,947
Total assets	$	74,348	$	75,120	$	149,468	$	561,598	$	120,052	$	681,650
Liabilities:
Electric derivative instruments	$	70,094	$	16,529	$	86,623	$	84,105	$	3,015	$	87,120
Natural gas derivative instruments	44,031		580		44,611		55,136		1,086		56,222
Compliance obligations	138,676		—		138,676		—		—		—
Total liabilities	$	252,801	$	17,109	$	269,910	$	139,241	$	4,101	$	143,342

Puget Energy and Puget Sound Energy	Three Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	69,734	$	215	$	69,949	$	(6,010)	$	(1,212)	$	(7,222)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings1	(16,296)		—		(16,296)		4,814		—		4,814
Included in regulatory assets / liabilities	—		135		135		—		70		70
Settlements	4,469		(246)		4,223		7,018		271		7,289
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	—		—		—		94		154		248
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	116,078	$	(127)	$	115,951	$	(42,752)	$	(2,120)	$	(44,872)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings2	(35,063)		—		(35,063)		43,633		—		43,633
Included in regulatory assets / liabilities	—		44		44		—		485		485
Settlements	(23,325)		17		(23,308)		4,766		595		5,361
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	217		170		387		269		323		592
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

___________________

1 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(16.1) million and $4.6 million for the three months ended June 30, 2023 and 2022, respectively.

2 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(25.9) million and $40.8 million for the six months ended June 30, 2023 and 2022, respectively.

Realized gains and losses on energy derivatives for Level 3 recurring items are included in energy costs in the Company's consolidated statements of income under purchased electricity, electric generation fuel or purchased natural gas when settled. Unrealized gains and losses on energy derivatives for Level 3 recurring items are included in net unrealized (gain) loss on derivative instruments in the Company's consolidated statements of income.

The Company does not use internally developed models to make adjustments to significant unobservable pricing inputs. The only significant unobservable input into the fair value measurement of the Company's Level 3 assets and liabilities is the forward price for electric and natural gas contracts. The weighted average price is calculated as the total market value divided by the total volume of the Company's Level 3 electric and gas commodity contracts, respectively, as of the reporting date.

The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of June 30, 2023:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	74,436	$	16,529	Discounted cash flow	Power prices (per MWh)	$	58.45	$	198.55	$	113.50
Natural gas	$	684	$	580	Discounted cash flow	Natural gas prices (per MMBtu)	$	1.14	$	6.63	$	2.57

_______________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of December 31, 2022:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	119,093	$	3,015	Discounted cash flow	Power prices (per MWh)	$	55.79	$	291.03	$	131.51
Natural gas	$	959	$	1,086	Discounted cash flow	Natural gas prices (per MMBtu)	$	3.84	$	7.00	$	4.87

___________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

The significant unobservable inputs listed above would have a direct impact on the fair values of the above instruments if they were adjusted. Consequently, significant increases or decreases in the forward prices of electricity or natural gas in isolation would result in a significantly higher or lower fair value for Level 3 assets and liabilities. Generally, interrelationships exist between market prices of natural gas and power. As such, an increase in natural gas pricing would potentially have a similar impact on forward power markets. As of June 30, 2023 and December 31, 2022, a hypothetical 10% increase or decrease in market prices of natural gas and electricity would change the fair value of the Company's derivative portfolio, classified as Level 3 within the fair value hierarchy, by $26.5 million and $37.6 million, respectively.

Long-Lived Assets Measured at Fair Value on a Nonrecurring Basis

Puget Energy records the fair value of its intangible assets in accordance with ASC 360, “Property, Plant, and Equipment,” (ASC 360). The fair value assigned to the power contracts was determined using an income approach comparing the contract rate to the market rate for power over the remaining period of the contracts incorporating non-performance risk. Management also incorporated certain assumptions related to quantities and market presentation that it believes market participants would make in the valuation. The fair value of the power contracts is amortized as the contracts settle.

ASC 360 requires long-lived assets to be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. One such triggering event is a significant decrease in the forward market prices of power.

As of June 30, 2023, Puget Energy completed valuation and impairment testing of its power purchase contracts classified as intangible assets and determined that no impairment was needed. These intangible assets exist as a result of the merger in 2009, at which time the consolidated assets and liabilities were revalued in accordance with ASC 805, "Business Combinations."

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Retirement Benefits

6 Months Ended

Jun. 30, 2023

Subsidiaries [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Retirement BenefitsPSE has a defined benefit pension plan (Qualified Pension Benefits) covering a substantial majority of PSE employees. For employees hired prior to 2014, pension benefits earned are a function of age, salary, years of service and, in the case of employees in the cash balance formula plan, the applicable annual interest crediting rates. Effective January 1, 2014, all new UA represented employees hired or rehired receive annual pay credits of 4.0% of eligible pay each year in the cash balance

formula of the defined pension plan. Effective January 1, 2014 for non-represented employees, and December 12, 2014 for employees represented by the IBEW, newly hired or rehired employees receive annual employer contributions of 4.0% of eligible pay each year into the cash balance formula of the defined benefit pension or 401k plan account. PSE also has a non-qualified Supplemental Executive Retirement Plan (SERP) for certain key senior management employees that closed to new participants in 2019. Effective 2019, PSE has an officer restoration benefit for new officers who join PSE or are promoted, such that company contributions under PSE’s applicable tax-qualified plan, which otherwise would have been credited if not for the IRS limitations, are credited at 4.0% of earnings to an account with the Deferred Compensation Plan.

In addition to providing pension benefits, PSE provides legacy group health care and life insurance benefits (Plan) for certain retired employees. These benefits are provided principally through an insurance company. The insurance premiums, paid primarily by retirees, are based on the benefits provided during the prior year.

Puget Energy's retirement plans were remeasured as a result of the merger in 2009, which represents the difference between Puget Energy and PSE's retirement plans. The components of service cost are included within utility operations and maintenance for PSE and within non-utility expense and other for Puget Energy while all non-service cost components are included in other income.

For further information, see Note 13, "Retirement Benefits" in the Combined Notes to Consolidated Financial Statements included in Item 8 of the Company's Form 10-K for the period ended December 31, 2022.

The following tables summarize the Company’s net periodic benefit cost for the three and six months ended June 30, 2023 and 2022:

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(99)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	(360)		1,563		—		618		(51)		(4)
Net periodic benefit cost	$	(136)	$	1,255	$	567	$	1,142	$	39	$	39

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,507)		—		—		(159)		(198)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	(1,226)		3,191		—		1,236		(101)		(8)
Net periodic benefit cost	$	(1,093)	$	2,990	$	1,137	$	2,286	$	79	$	77

Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(98)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	—		3,734		22		662		(54)		(6)
Net periodic benefit cost	$	224	$	3,426	$	589	$	1,186	$	36	$	38

Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,508)		—		—		(159)		(197)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	—		7,540		42		1,324		(109)		(11)
Net periodic benefit cost	$	133	$	7,338	$	1,179	$	2,374	$	71	$	75

The following table summarizes the Company’s change in benefit obligation for the periods ended June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended		Year Ended		Six Months Ended		Year Ended		Six Months Ended		Year Ended
(Dollars in Thousands)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Change in benefit obligation:
Benefit obligation at beginning of period	$	589,278	$	834,960	$	32,046	$	43,155	$	9,015	$	11,654
Amendments	—		—		—		—		—		38
Service cost	9,265		26,351		143		557		94		217
Interest cost	16,188		24,263		849		1,253		231		311
Curtailment	—		—		(2,772)		—		—		—
Actuarial loss (gain)	11,301		(215,005)		251		(5,260)		—		(2,397)
Benefits paid	(22,760)		(80,226)		(2,507)		(7,659)		(639)		(808)
Administrative expense	—		(1,065)		—		—		—		—
Benefit obligation at end of period	$	603,272	$	589,278	$	28,010	$	32,046	$	8,701	$	9,015

The aggregate expected contributions by the Company to fund the qualified pension plan, SERP and the other postretirement plans for the year ending December 31, 2023, are expected to be at least $18.0 million, $3.5 million and $0.3 million, respectively. The Company contributed $2.5 million and $1.0 million to fund the SERP during each of the six months ended June 30, 2023 and the six months ended June 30, 2022, respectively. The Company contributed an immaterial amount to fund the other postretirement plans.

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Regulation and Rates

6 Months Ended

Jun. 30, 2023

Entity Information [Line Items]

Regulation and Rates Disclosure

Regulation and Rates

General Rate Case

On December 22, 2022, the Washington Commission issued an order on PSE’s 2022 general rate case (GRC), which was filed on January 31, 2022 that approved a weighted cost of capital of 7.16%, or 6.62% after-tax, a capital structure of 49.0% in common equity in 2023 and 2024, and a return on equity of 9.4%. On January 6, 2023, the Washington Commission approved PSE’s natural gas rates in its compliance filing with an overall net revenue change of $70.8 million or 6.4% in 2023 and $19.5 million or 1.7% in 2024, with an effective date of January 7, 2023. On January 10, 2023, the Washington Commission approved PSE’s electric rates in its compliance filing with an overall net revenue change of $247.0 million or 10.8% in 2023 and $33.1 million or 1.3% in 2024 with an effective date of January 11, 2023. Per the 2022 GRC Final Order in Docket No. UE-220066, power cost only rate case (PCORC) rates were set to zero as of January 11, 2023 and PSE agreed not to file a PCORC during 2023 and 2024, the two-year rate plan agreed to in the GRC settlement.

Prior rates were subject to the 2019 GRC and included a weighted cost of capital of 7.39% or 6.8% after-tax, a capital structure of 48.5% in common equity, and a return on equity of 9.4%. The annualized overall rate impacts were an electric revenue increase of $48.3 million, or 2.3%, and a natural gas increase of $4.9 million, or 0.6%, effective October 1, 2021. For further information, see Note 4, "Regulation and Rates" in the Combined Notes to Consolidated Financial Statements included in Item 8 of the Company's Form 10-K for the period ended December 31, 2022.

Climate Commitment Act Deferral

On December 29, 2022, PSE filed accounting petitions with the Washington Commission requesting authorization to defer costs and revenues associated with the Company’s compliance with the Climate Commitment Act (CCA) codified in law within Revised Code of Washington (RCW) 70A.65. On February 28, 2023, in Order 01 under Docket No. UE-220974 and UG-220975, the Washington Commission granted PSE approval to defer the cost of emission allowances to comply with the CCA and the proceeds from no-cost allowances consigned to auction beginning January 1, 2023. This accounting treatment is necessary in order for PSE to defer and seek recovery of CCA costs that are not currently included in rates. As of June 30,

2023, PSE deferred $129.0 million and $69.9 million of CCA compliance costs for natural gas and electric liabilities, respectively. Additionally, PSE will consign for auction at least the minimum amount of no-cost emission allowances allocated for natural gas operations in compliance with the CCA, the proceeds of which will be used for the benefit of natural gas customers, as determined by the Washington Commission. PSE will not record a regulatory liability to defer the proceeds until consigned allowances are sold at auction. As of June 30, 2023, PSE has no regulatory liability related to proceeds from the sale of consigned GHG emission allowances.

In October 2022, the Washington Department of Ecology (WDOE) published final regulations to implement the cap and invest program. The WDOE also indicated that they will have subsequent rulemakings that will build off initial rulemaking as program implementation gets underway and progress with Washington State carbon goals are evaluated. One component of the CCA rules stipulates the WDOE shall provide qualifying electric utilities, such as PSE, with no-cost allowances based on the cost burden of the program to electric customers, which is derived using a forecast of emissions. An additional component of the CCA rules stipulates that the allocation of no-cost allowances is adjusted over time to take into account the cumulative total of no-cost allowances an electric utility has been given relative to its reported GHG emissions. Such adjustments will be made through a WDOE adjustment in the fourth quarter of the following year. WDOE has indicated that such adjustment would take into account the cumulative total of allowances an electric utility has received relative to its reported GHG emissions. WDOE would add allowances to an electric utility's account if such account has an allowance deficit, and WDOE would add fewer allowances to an electric utility's account going forward if such account had previously allocated excess allowances. WDOE has not provided further guidance or rules specifying how such adjustments will be determined. As a result, the Company cannot predict the impact of such adjustments.

As of June 30, 2023, PSE's CCA electric compliance obligation is based upon the WDOE's initial allocation of no-cost allowances. However, qualifying electric utilities can submit revised emissions forecasts approved by the Washington Commission to WDOE by July 30, 2023, and the WDOE, if appropriate, may adjust the initial allocation schedule of no-cost allowances to reflect such revised 2023 emissions forecasts. PSE filed its revised forecast of 2023 emission under Docket No. UE 220797, which was approved by the Washington Commission on July 27, 2023 and then submitted to the WDOE on July 27, 2023. WDOE must approve any additional allowance allocation based on the July 2023 revised forecast no later than October 1, 2023 and this may result in the allocation of additional no-cost allowances to PSE for 2023, which may impact PSE's CCA compliance costs, and thus, the electric deferred CCA compliance costs consistent with Docket No. UE-220974.

Following the October 1, 2023 WDOE decision PSE's no-cost allowance allocation will be set for 2023 until the fourth quarter of 2024 when there is an opportunity to request a "true-up" of no-cost allowances under the aforementioned adjustment mechanism. However, as of June 30, 2023, due to the uncertainty around implementation of the adjustment mechanism PSE did not adjust the CCA electric compliance obligation anticipating an adjustment to no cost allowances to reported 2023 electric GHG emissions and does not plan to make such adjustment until a formal true-up allocation has been granted by the WDOE.

Revenue Decoupling Adjustment Mechanism

In June 2021, the Washington Commission approved the multi-party settlement agreement, which was filed within PSE’s PCORC filing. As part of this settlement agreement, the electric annual fixed power cost allowed revenue was updated to reflect changes in the approved revenue requirement and took effect on July 1, 2021.

In September 2021, the Washington Commission approved the 2019 GRC filing. As part of this filing, the annual electric and gas delivery cost allowed revenue was updated to reflect changes in the approved revenue requirement. The changes took effect on October 1, 2021.

On January 6, 2023, the Washington Commission approved the natural gas 2022 GRC filing. As part of this filing, the annual gas delivery allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 7, 2023.

On January 10, 2023, the Washington Commission approved the electric 2022 GRC filing. As part of this filing, the annual electric delivery and fixed power cost allowed revenue was updated to reflect changes in the approved revenue requirement. Additionally, the Commission approved the removal of the earnings test from the decoupling mechanism in accordance with RCW 80.28.425(6). The changes took effect on January 11, 2023.

On June 30, 2023, PSE performed an analysis to determine if electric and natural gas decoupling revenue deferrals would be collected from customers within 24 months of the annual period, per ASC 980.  If not, for GAAP purposes only, PSE would need to record a reserve against the decoupling revenue and corresponding regulatory asset balance.  Once the reserve is probable of collection within 24 months from the end of the annual period, the reserve can be recognized as decoupling revenue. Based on the analyses, no reserve adjustment was recorded as of June 30, 2023 and 2022.

Power Cost Adjustment Mechanism

PSE currently has a power cost adjustment (PCA) mechanism that provides for the deferral of power costs that vary from the “power cost baseline” level of power costs. The “power cost baseline” levels are set, in part, based on normalized assumptions about weather and hydroelectric conditions.  Excess power costs or savings are apportioned between PSE and its customers pursuant to the graduated scale set forth in the PCA mechanism and will trigger a surcharge or refund when the cumulative deferral trigger is reached.

Effective January 1, 2017, the following graduated scale is used in the PCA mechanism:

	Company’s Share				Customers' Share
Annual Power Cost Variability	Over		Under		Over		Under
Over or under collected by up to $17 million	100	%	100	%	—	%	—	%
Over or under collected by between $17 million - $40 million	35		50		65		50
Over or under collected beyond $40 + million	10		10		90		90

For the six months ended June 30, 2023, in its PCA mechanism, PSE over recovered its allowable costs by $12.1 million of which zero was apportioned to customers and $2.4 million of interest was accrued on the deferred customer balance. This compares to an under recovery of allowable costs of $26.6 million for the six months ended June 30, 2022, of which $4.8 million was apportioned to customers and accrued $0.6 million of interest on the total deferred customer balance.

Power Cost Adjustment Clause

PSE exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2022. During 2022, actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $110.1 million. Under the terms of the PCA’s sharing mechanism for under-recovered power costs, PSE absorbed $39.0 million of the under-recovered amount, and customers were responsible for the remaining $71.1 million, or $76.4 million including interest and adjusted for revenue sensitive items. On April 28, 2023, PSE filed the 2022 PCA report under Docket No. UE-230313 that proposed a recovery of the deferred balance, which included a revenue requirement increase of 0.9% in overall bill for all customers, with rates proposed to go into effect from December 1, 2023 through December 31, 2024.

PSE also exceeded the $20.0 million cumulative deferral balance in its PCA mechanism in 2021, as actual power costs were higher than baseline power costs, thereby, creating an under-recovery of $68.0 million. PSE absorbed $31.3 million of the under-recovered amount, and customers were responsible for the remaining $36.7 million, or $38.4 million including interest. In October 2022, the Washington Commission approved PSE's 2021 PCA report that proposed to recover the deferred balance for the 2021 PCA period by keeping the current rates and allowing recovery from January 1, 2023 through November 30, 2023.

Purchased Gas Adjustment Mechanism

In October 2021, the Washington Commission approved PSE's request for PGA rates in Docket UG-210721, effective November 1, 2021. As part of that filing, PSE requested an annual revenue increase of $59.1 million, where PGA rates, under Schedule 101, increase annual revenue by $80.6 million, and the tracker rates under Schedule 106, decrease annual revenue by $21.5 million. Those annual 2021 PGA rate increases will be set in addition to continuing the collection on the remaining balance of $69.4 million under Supplemental Schedule 106B, which were set, in effect, through September 30, 2023 per the 2019 GRC.

In October 2022, the Washington Commission approved PSE's request for PGA rates in Docket No. UG-220715, effective November 1, 2022. As part of that filing, PSE requested an annual revenue increase of $155.3 million, where PGA rates, under Schedule 101, increase annual revenue by $142.1 million, and the tracker rates under Schedule 106 increase annual revenue by $13.2 million.

In November 2022, the FERC approved a settlement of a counterparty, FERC Docket No. RP17-346. Under the terms, PSE was allocated $24.2 million related to PSE natural gas services, which was recorded on December 31, 2022 and included below. The 2022 GRC order requires PSE to amortize the refund in 2023 as a credit against natural gas costs and therefore pass back the refund to customers through the PGA mechanism.

The following table presents the PGA mechanism balances and activity at June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	At June 30,		At December 31,
PGA (liability)/receivable balance and activity	2023		2022
PGA (liability)/receivable beginning balance	$	(3,536)	$	57,935
Actual natural gas costs	218,066		457,950
Allowed PGA recovery	(347,969)		(496,879)
Interest	(2,220)		1,674
Refund/interest from counterparty settlement	(3,337)		(24,216)
PGA (liability)/receivable ending balance	$	(138,996)	$	(3,536)

Storm Loss Deferral Mechanism

The Washington Commission has defined deferrable weather-related events and provided that costs in excess of the annual cost threshold may be deferred for qualifying damage costs that meet the modified Institute of Electrical and Electronics Engineers outage criteria for system average interruption duration index. For the six months ended June 30, 2023, PSE incurred $6.1 million in weather-related electric transmission and distribution system restoration costs related to 2023 and 2022 storms, of which the company deferred zero and $2.1 million as regulatory assets related to storms that occurred in 2023 and 2022, respectively. This compares to $6.7 million incurred in weather-related electric transmission and distribution system restoration costs for the six months ended June 30, 2022, of which the Company deferred zero and $0.1 million as regulatory assets related to storms that occurred in 2022 and 2021, respectively. Under the 2017 GRC Order, the storm loss deferral mechanism approved the following: (i) the cumulative annual cost threshold for deferral of storms under the mechanism at $10.0 million; and (ii) qualifying events where the total qualifying cost is less than $0.5 million will not qualify for deferral and these costs will also not count toward the $10.0 million annual cost threshold.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure

Commitments and Contingencies

Legal Matters

Washington Climate Commitment Act

In 2021, the Washington Legislature adopted the CCA, which establishes a GHG emissions cap-and-invest program that caps GHG emissions beginning on January 1, 2023, and makes further reductions to the cap annually through 2050. The Washington Department of Ecology (WDOE) published final regulations to implement the program on September 29, 2022, which became effective on October 30, 2022. WDOE also indicated that there will be subsequent rulemakings and interpretations that will build off initial rulemaking as program implementation proceeds and Washington state carbon goals are evaluated. One component of the CCA rules stipulates GHG emissions associated with imported electricity are covered emissions and require an allowance offset for the first jurisdictional deliverer serving as the electricity importer for that electricity. Per RCW 70A.65.010(42)(d), imported electricity does not include electricity imports of unspecified electricity that are netted by exports of unspecified electricity to any jurisdiction not covered by a linked program by the same entity within the same hour. Under this definition, hourly power transmission data is required to determine PSE’s net imported electricity compliance obligation. Although the Company is actively engaged in determining the hourly net unspecified electricity imports and exports, it is uncertain whether netting unspecified imports and exports by hour will be the method required by the WDOE to calculate the compliance obligation, and PSE expects further rulemaking and interpretations to clarify this uncertainty in future periods. Due to the estimation uncertainty as of the date of this disclosure, the company considered a range of outcomes depending on whether all unspecified electricity imports and exports fully net on an hourly basis, none net, or a portion do. As of June 30, 2023, the Company's estimated the range of possible outcomes to be between $69.9 million and $110.1 million depending on the methodology applied in netting unspecified electricity imports and exports. Since no amount in the range represents a better estimate than any other amount, the Company accrued to the minimum amount in the range. As existing uncertainties are resolved in future periods, any change in compliance costs as a result of such estimated additional liabilities would be deferred under ASC 980 as a regulatory asset as an increase the electric compliance costs consistent with Docket No. UE-220974, as these amounts will be recoverable from customers in future utility rates.

Colstrip

PSE has a 50% ownership interest in Colstrip Units 1 and 2 and a 25% interest in each of Colstrip Units 3 and 4, which are coal-fired generating units located in Colstrip, Montana. PSE has accelerated the depreciation of Colstrip Units 3 and 4 to December 31, 2025 as part of the 2019 GRC. The 2017 GRC repurposed PTCs and hydro-related treasury grants to recover unrecovered plant costs and to fund and recover decommissioning and remediation costs for Colstrip Units 1 through 4. On September 2, 2022, PSE and Talen Energy reached an agreement to transfer PSE's ownership interest in Colstrip Units 3 and 4 to Talen Energy on December 31, 2025. Management evaluated Colstrip Units 3 and 4 and determined that the applicable held for sale accounting criteria were not met as of June 30, 2023 and December 31, 2022. As such, Colstrip Units 3 and 4 are classified as electric utility plant on the Company's balance sheet as of June 30, 2023 and December 31, 2022.

Consistent with a June 2019 announcement, Talen permanently shut down Units 1 and 2 at the end of 2019 due to operational losses associated with the Units. Colstrip Units 1 and 2 were retired effective December 31, 2019. The Washington Clean Energy Transformation Act requires the Washington Commission to provide recovery of the investment, decommissioning, and remediation costs associated with the facilities that are not recovered through the repurposed PTCs and hydro-related treasury grants. The full scope of decommissioning activities and costs may vary from the estimates that are available at this time.

In May 2021, PSE along with the Colstrip owners, Avista Corporation, PacifiCorp and Portland General Electric Company, filed a lawsuit against the Montana Attorney General challenging the constitutionality of Montana Senate Bill 266. On September 28, 2022, the magistrate judge in the District Court proceeding issued a recommendation to the presiding U.S. District Court Judge that a permanent injunction against enforcement of Senate Bill 266 be granted. In October 2022, the U.S. District Court Judge accepted in full the magistrate judge's recommendation for a permanent injunction against enforcement of Senate Bill 266. The Court entered judgment and a permanent injunction in favor of PSE and the Colstrip owners on November 15, 2022. No party filed a notice of appeal.

Other Commitments and Contingencies

In addition to the contractual obligations and consolidated commercial commitments disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, during the six months ended June 30, 2023, the Company entered into new Electric Portfolio and Electric Wholesale Market Transaction contracts with estimated payment obligations totaling $4.0 billion through 2051.

For further information, see Part II, Item 8, Note 16, "Commitments and Contingencies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Leases (Notes)	6 Months Ended
	Jun. 30, 2023
Leases [Abstract]
Leases	LeasesAs of June 30, 2023, there have been no material changes regarding the Company's leases. For further information, see Part II, Item 8, Note 9, "Leases" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Leases	LeasesAs of June 30, 2023, there have been no material changes regarding the Company's leases. For further information, see Part II, Item 8, Note 9, "Leases" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Other

6 Months Ended

Jun. 30, 2023

Other [Abstract]

Debt Disclosure

Other

Long-Term Debt

In March 2022, Puget Energy issued $450.0 million of senior secured notes at an interest rate of 4.224%. The notes mature on March 15, 2032 and pay interest semi-annually on March 15 and September 15 of each year. Proceeds from the issuance of the notes were invested in short-term money market funds, and then used to repay Puget Energy's $450.0 million 5.625% notes that were originally scheduled to mature in July 2022.

In April 2022, Puget Energy redeemed the $450.0 million 5.625% senior secured notes due July 2022 and paid related expenses for a total redemption price of $457.2 million, which includes repayment of the $450.0 million principal amount and $7.2 million of accrued interest expense.

On May 18, 2023, PSE issued $400.0 million of green senior secured notes at an interest rate of 5.448%. The notes mature on June 1, 2053 and pay interest semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023. Net proceeds from the issuance of the notes were deposited into the Company's general account and will be earmarked for allocation to eligible projects, as defined in PSE's sustainable financing framework, which was published in May 2023. Eligible projects are expenditures incurred and investments made related to development and acquisition of some or all of the following types of projects: (i) renewable energy, (ii) energy efficiency, (iii) clean transportation, (iv) biodiversity conservation, (v) climate change adaptation, (vi) water and wastewater management, (vii) pollution prevention and control, and (viii) green innovation.

Short-Term Debt

As of June 30, 2023, there was no amount outstanding under the commercial paper program at PSE. For further information, see Part II, Item 8, Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Credit Facilities

In May 2022, Puget Energy entered into an $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the Secured Overnight Financing Rate (SOFR), as the LIBOR was discontinued on June 30, 2023. The proceeds of the Puget Energy credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. As of June 30, 2023, $135.8 million was drawn and outstanding under the facility.

In September 2022, Puget Energy borrowed $50.0 million on the credit facility and contributed the proceeds to PSE as an equity contribution. The equity proceeds will be used for general corporate purposes.

In May 2022, PSE entered into an $800.0 million credit facility to replace the existing facility. The terms and conditions, including fees, financial covenant, expansion feature and credit spreads remain substantially the same. The base interest rate on loans has changed to the SOFR, as the LIBOR was discontinued on June 30, 2023. The proceeds of the PSE credit facility are to be used for general corporate purposes. The maturity date of the credit facility is May 14, 2027. As of June 30, 2023, no amount was drawn under PSE's credit facility.

For further information, see Part II, Item 8, Note 7, "Long-Term Debt" and Note 8, "Liquidity Facilities and Other Financing Arrangements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss) Attributable to Parent	$ (36,910)	$ (31)	$ (33,496)	$ 278,295	$ (36,941)	$ 244,799

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Summary of Consolidation and Significant Accounting Policy (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Accounts Receivable, Allowance for Credit Loss

The following table presents the activity in the allowance for credit losses for accounts receivable for the six months ended June 30, 2023 and 2022:

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022
Allowance for credit losses:
Beginning balance	$	41,962	$	34,958
Provision for credit loss expense	17,334		15,727
Receivables charged-off	(16,630)		(8,343)
Total ending allowance balance	$	42,666	$	42,342

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Revenue (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the three months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	326,352	$	171,040	$	—	$	497,392
Commercial	248,204		81,825		—		330,029
Industrial	28,521		6,192		—		34,713
Other	5,219		—		—		5,219
Wholesale	59,892		—		—		59,892
Transmission and transportation	10,628		5,260		—		15,888
Miscellaneous	6,984		(50)		12,849		19,783
Total revenue from contracts with customers	$	685,800	$	264,267	$	12,849	$	962,916
Total other revenue2	(5,161)		5,873		—		712
Total operating revenue	$	680,639	$	270,140	$	12,849	$	963,628

_____________

1 Other includes $6.7 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Three Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other		Total
Retail
Residential	$	297,255	$	159,200	$	—	$	456,455
Commercial	226,570		72,275		—		298,845
Industrial	27,711		5,121		—		32,832
Other	4,496		—		—		4,496
Wholesale	24,061		—		—		24,061
Transmission and transportation	10,633		5,088		—		15,721
Miscellaneous	4,019		53		11,991		16,063
Total revenue from contracts with customers	$	594,745	$	241,737	$	11,991	$	848,473
Total other revenue1	(414)		(5,683)		—		(6,097)
Total operating revenue	$	594,331	$	236,054	$	11,991	$	842,376

_____________

1 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

The following tables present disaggregated revenue from contracts with customers, and other revenue by major source for the six months ended June 30, 2023 and June 30, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2023
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	797,207	$	521,064	$	—	$	1,318,271
Commercial	539,693		234,062		—		773,755
Industrial	62,368		17,283		—		79,651
Other	10,720		—		—		10,720
Wholesale	202,152		—		—		202,152
Transmission and transportation	25,114		10,954		—		36,068
Miscellaneous	10,975		(418)		26,618		37,175
Total revenue from contracts with customers	$	1,648,229	$	782,945	$	26,618	$	2,457,792
Total other revenue2	42,570		4,453		—		47,023
Total operating revenue	$	1,690,799	$	787,398	$	26,618	$	2,504,815

_____________

1 Other includes $11.3 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	Six Months Ended June 30, 2022
Revenue from contracts with customers:	Electric		Natural Gas		Other1		Total
Retail
Residential	$	713,515	$	451,796	$	—	$	1,165,311
Commercial	483,589		193,254		—		676,843
Industrial	57,784		13,206		—		70,990
Other	9,257		—		—		9,257
Wholesale	37,208		—		—		37,208
Transmission and transportation	21,855		10,534		—		32,389
Miscellaneous	5,169		362		22,703		28,234
Total revenue from contracts with customers	$	1,328,377	$	669,152	$	22,703	$	2,020,232
Total other revenue2	22,331		(6,750)		—		15,581
Total operating revenue	$	1,350,708	$	662,402	$	22,703	$	2,035,813

1 Other includes $0.1 million of Puget LNG revenues recorded at Puget Energy.

2 Total other revenue includes revenues from derivatives and alternative revenue programs that are not considered revenues from contracts with customers.

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction

Based on management’s best estimate of commencement, the Company expects to recognize this revenue over the following time periods:

Puget Energy
(Dollars in Thousands)	2024		2025		2026		2027		2028		Thereafter		Total
Remaining performance obligations	$	15,359	$	19,710	$	19,454	$	19,454	$	19,454	$	102,135	$	195,566

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Accounting for Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2023

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
	June 30, 2023					December 31, 2022
(Dollars in Thousands)	Volumes (millions)	Assets1		Liabilities2		Volumes (millions)	Assets1		Liabilities2
Electric portfolio derivatives	*	$	114,282	$	86,623	*	$	337,703	$	87,120
Natural gas derivatives (MMBtus)3	256	35,186		44,611		322	343,947		56,222
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342
Current		$	95,490	$	108,923		$	587,029	$	124,976
Long-term		53,978		22,311			94,621		18,366
Total derivative contracts		$	149,468	$	131,234		$	681,650	$	143,342

_______________

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 purchased gas adjustment (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 230.3 million British Thermal Units (MMBtu) and purchased electricity of 3.1 million Megawatt hours (MWhs) at June 30, 2023, and 234.9 million MMBtus and 5.3 million MWhs at December 31, 2022.

Offsetting Assets and Liabilities

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
	At June 30, 2023
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	149,468	$	—	$	149,468	$	(72,861)	$	—	$	76,607
Liabilities:
Energy derivative contracts	$	131,234	$	—	$	131,234	$	(72,861)	$	(5,887)	$	52,486

Puget Energy and Puget Sound Energy	At December 31, 2022
	Gross Amount Recognized in the Statement of Financial Position1		Gross Amounts Offset in the Statement of Financial Position		Net of Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position
(Dollars in Thousands)							Commodity Contracts		Cash Collateral Received/Posted		Net Amount
Assets:
Energy derivative contracts	$	681,650	$	—	$	681,650	$	(125,334)	$	—	$	556,316
Liabilities:
Energy derivative contracts	$	143,342	$	—	$	143,342	$	(125,334)	$	(5,661)	$	12,347

_______________

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

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table presents the effect and classification of the realized and unrealized gains (losses) of the Company's derivatives recorded on the statements of income:

Puget Energy and Puget Sound Energy		Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in Thousands)	Classification	2023		2022		2023		2022
Gas for power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	$	(9,693)	$	(16,582)	$	(114,339)	$	70,291
Realized	Electric generation fuel	(13,572)		16,039		74,695		43,130
Power derivatives:
Unrealized	Unrealized gain (loss) on derivative instruments, net	(21,109)		7,309		(108,586)		52,357
Realized	Purchased electricity	(3,885)		4,454		47,132		7,045
Total gain (loss) recognized in income on derivatives		$	(48,259)	$	11,220	$	(101,098)	$	172,823

Schedule of Credit Risk Related Contingent Features

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
(Dollars in Thousands)	At June 30, 2023						At December 31, 2022
	Fair Value1		Posted		Contingent		Fair Value1		Posted		Contingent
Contingent Feature	Liability		Collateral		Collateral		Liability		Collateral		Collateral
Credit rating2	$	1,229	$	—	$	1,229	$	3,157	$	—	$	3,157
Requested credit for adequate assurance	27,424		—		—		4,157		—		—
Forward value of contract3	5,887		21,891		N/A		5,661		56,200		N/A
Total	$	34,540	$	21,891	$	1,229	$	12,975	$	56,200	$	3,157

_______________

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.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Inputs, Liabilities, Quantitative Information

The fair value of the long-term notes was estimated using the discounted cash flow method with the U.S. Treasury yields and the Company's credit spreads as inputs, interpolating to the maturity date of each issue. The carrying values and estimated fair values were as follows:

Puget Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount1	2	$	7,030,528	$	6,601,133	$	6,629,073	$	6,149,797
Long-term debt (variable-rate)	2	—		—		34,300		34,300
Total liabilities		$	7,030,528	$	6,601,133	$	6,663,373	$	6,184,097

Puget Sound Energy		June 30, 2023				December 31, 2022
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount2	2	$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010
Total liabilities		$	5,183,080	$	4,801,597	$	4,786,765	$	4,379,010

_______________

1 The carrying value includes debt issuances costs of $21.8 million and $21.5 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

2 The carrying value includes debt issuances costs of $21.9 million and $21.4 million for June 30, 2023 and December 31, 2022, respectively, which are not included in fair value.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents the Company's financial assets and liabilities by level, within the fair value hierarchy, that were accounted for at fair value on a recurring basis:

Puget Energy and Puget Sound Energy	Fair Value At June 30, 2023						Fair Value At December 31, 2022
(Dollars in Thousands)	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Electric derivative instruments	$	39,846	$	74,436	$	114,282	$	218,610	$	119,093	$	337,703
Natural gas derivative instruments	34,502		684		35,186		342,988		959		343,947
Total assets	$	74,348	$	75,120	$	149,468	$	561,598	$	120,052	$	681,650
Liabilities:
Electric derivative instruments	$	70,094	$	16,529	$	86,623	$	84,105	$	3,015	$	87,120
Natural gas derivative instruments	44,031		580		44,611		55,136		1,086		56,222
Compliance obligations	138,676		—		138,676		—		—		—
Total liabilities	$	252,801	$	17,109	$	269,910	$	139,241	$	4,101	$	143,342

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

Puget Energy and Puget Sound Energy	Three Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	69,734	$	215	$	69,949	$	(6,010)	$	(1,212)	$	(7,222)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings1	(16,296)		—		(16,296)		4,814		—		4,814
Included in regulatory assets / liabilities	—		135		135		—		70		70
Settlements	4,469		(246)		4,223		7,018		271		7,289
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	—		—		—		94		154		248
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2023						2022
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	116,078	$	(127)	$	115,951	$	(42,752)	$	(2,120)	$	(44,872)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings2	(35,063)		—		(35,063)		43,633		—		43,633
Included in regulatory assets / liabilities	—		44		44		—		485		485
Settlements	(23,325)		17		(23,308)		4,766		595		5,361
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	217		170		387		269		323		592
Balance at end of period	$	57,907	$	104	$	58,011	$	5,916	$	(717)	$	5,199

___________________

1 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(16.1) million and $4.6 million for the three months ended June 30, 2023 and 2022, respectively.

2 Income Statement locations: Unrealized gain (loss) on derivative instruments, net. Amounts include unrealized gains (losses) on derivatives still held in position as of the reporting date for electric derivatives of $(25.9) million and $40.8 million for the six months ended June 30, 2023 and 2022, respectively.

Fair Value Inputs, Assets and Liabilities, Quantitative Information

The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of June 30, 2023:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	74,436	$	16,529	Discounted cash flow	Power prices (per MWh)	$	58.45	$	198.55	$	113.50
Natural gas	$	684	$	580	Discounted cash flow	Natural gas prices (per MMBtu)	$	1.14	$	6.63	$	2.57

_______________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

The following table presents the forward price ranges for the Company's Level 3 commodity contracts as of December 31, 2022:

Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	119,093	$	3,015	Discounted cash flow	Power prices (per MWh)	$	55.79	$	291.03	$	131.51
Natural gas	$	959	$	1,086	Discounted cash flow	Natural gas prices (per MMBtu)	$	3.84	$	7.00	$	4.87

___________

1 The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.

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Retirement Benefits (Tables)

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The following tables summarize the Company’s net periodic benefit cost for the three and six months ended June 30, 2023 and 2022:

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(99)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	(360)		1,563		—		618		(51)		(4)
Net periodic benefit cost	$	(136)	$	1,255	$	567	$	1,142	$	39	$	39

Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,507)		—		—		(159)		(198)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	(1,226)		3,191		—		1,236		(101)		(8)
Net periodic benefit cost	$	(1,093)	$	2,990	$	1,137	$	2,286	$	79	$	77

Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	4,633	$	6,378	$	71	$	139	$	47	$	55
Interest cost	8,259		6,044		424		313		115		81
Expected return on plan assets	(12,668)		(12,730)		—		—		(79)		(98)
Amortization of prior service cost	—		—		72		72		7		6
Amortization of net loss (gain)	—		3,734		22		662		(54)		(6)
Net periodic benefit cost	$	224	$	3,426	$	589	$	1,186	$	36	$	38

Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended June 30,
(Dollars in Thousands)	2023		2022		2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	9,265	$	13,175	$	143	$	279	$	94	$	109
Interest cost	16,188		12,131		849		626		231		163
Expected return on plan assets	(25,320)		(25,508)		—		—		(159)		(197)
Amortization of prior service cost	—		—		145		145		14		11
Amortization of net loss (gain)	—		7,540		42		1,324		(109)		(11)
Net periodic benefit cost	$	133	$	7,338	$	1,179	$	2,374	$	71	$	75

Schedule of Changes in Projected Benefit Obligations

The following table summarizes the Company’s change in benefit obligation for the periods ended June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Six Months Ended		Year Ended		Six Months Ended		Year Ended		Six Months Ended		Year Ended
(Dollars in Thousands)	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Change in benefit obligation:
Benefit obligation at beginning of period	$	589,278	$	834,960	$	32,046	$	43,155	$	9,015	$	11,654
Amendments	—		—		—		—		—		38
Service cost	9,265		26,351		143		557		94		217
Interest cost	16,188		24,263		849		1,253		231		311
Curtailment	—		—		(2,772)		—		—		—
Actuarial loss (gain)	11,301		(215,005)		251		(5,260)		—		(2,397)
Benefits paid	(22,760)		(80,226)		(2,507)		(7,659)		(639)		(808)
Administrative expense	—		(1,065)		—		—		—		—
Benefit obligation at end of period	$	603,272	$	589,278	$	28,010	$	32,046	$	8,701	$	9,015

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Regulation and Rates Public Utilities, Regulatory Proceeding (Tables) - Subsidiaries [Member]

6 Months Ended

Jun. 30, 2023

Purchased Gas Adjustment [Member] | Natural Gas

Regulation and Rates [Line Items]

Schedule of PGA Receivable Payable

The following table presents the PGA mechanism balances and activity at June 30, 2023 and December 31, 2022:

Puget Energy and Puget Sound Energy
(Dollars in Thousands)	At June 30,		At December 31,
PGA (liability)/receivable balance and activity	2023		2022
PGA (liability)/receivable beginning balance	$	(3,536)	$	57,935
Actual natural gas costs	218,066		457,950
Allowed PGA recovery	(347,969)		(496,879)
Interest	(2,220)		1,674
Refund/interest from counterparty settlement	(3,337)		(24,216)
PGA (liability)/receivable ending balance	$	(138,996)	$	(3,536)

PCA Mechanism [Member] | Electricity

Regulation and Rates [Line Items]

Schedule of Graduated Scale of Rate Adjustment Mechanism

Effective January 1, 2017, the following graduated scale is used in the PCA mechanism:

	Company’s Share				Customers' Share
Annual Power Cost Variability	Over		Under		Over		Under
Over or under collected by up to $17 million	100	%	100	%	—	%	—	%
Over or under collected by between $17 million - $40 million	35		50		65		50
Over or under collected beyond $40 + million	10		10		90		90

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Summary of Consolidation and Significant Accounting Policy - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) mi²	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Puget LNG [Member]
Summary of Consolidation Policy
Operating Costs and Expenses	$ 14.1	$ 5.4
Subsidiaries [Member]
Summary of Consolidation Policy
Area of Service Territory (in sqmi) | mi²	6,000
Variable Interest Entity, Measure of Activity, Expense	$ 47.9	$ 11.7
Variable Interest Entity, Payable	$ 0.9		$ 3.8
Subsidiaries [Member] | Skookumchuck Wind Energy Project
Summary of Consolidation Policy
Contract Length, PPA	20 years
Subsidiaries [Member] | Golden Hills Wind Farm
Summary of Consolidation Policy
Contract Length, PPA	20 years
Subsidiaries [Member] | Clearwater Wind Project
Summary of Consolidation Policy
Contract Length, PPA	25 years
Subsidiaries [Member] | Natural Gas, US Regulated [Member] | Tacoma LNG [Member]
Summary of Consolidation Policy
Construction in Progress, Gross			245.7
Public Utilities, Property, Plant and Equipment, Generation or Processing	$ 238.1
Subsidiaries [Member] | Tacoma LNG [Member]
Summary of Consolidation Policy
Jointly Owned Non-Utility Plant Share	43.00%
Puget LNG [Member]
Summary of Consolidation Policy
Jointly Owned Non-Utility Plant Share	57.00%
Puget LNG [Member] | Natural Gas, US Regulated [Member] | Tacoma LNG [Member]
Summary of Consolidation Policy
Jointly Owned Non-Utility Plant, Ownership Amount of Other Assets	$ 243.3
Construction in Progress, Gross			$ 246.5
Variable Interest Entity, Not Primary Beneficiary
Summary of Consolidation Policy
Equity Method Investments	$ 0.0

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Summary of Consolidation and Significant Accounting Policy - Allowance for Credit Loss (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 41,962	$ 34,958
Provision for credit loss expense	17,334	15,727
Receivables charged-off	(16,630)	(8,343)
Total ending allowance balance	$ 42,666	$ 42,342

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Revenue (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		$ 962,916	$ 848,473	$ 2,457,792	$ 2,020,232
Total Other Revenue		712	(6,097)	47,023	15,581
Revenues		963,628	842,376	2,504,815	2,035,813
Non-utility expense and other		13,858	15,299	29,904	30,718
Electric		680,639	594,331	1,690,799	1,350,708
Natural gas		270,140	236,054	787,398	662,402
Other		12,849	11,991	26,618	22,703
Residential
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		497,392	456,455	1,318,271	1,165,311
Commercial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		330,029	298,845	773,755	676,843
Industrial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		34,713	32,832	79,651	70,990
Other Retail Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		5,219	4,496	10,720	9,257
Wholesale
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		59,892	24,061	202,152	37,208
Transmission and Transportation
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		15,888	15,721	36,068	32,389
Miscellaneous Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		19,783	16,063	37,175	28,234
Electricity, US Regulated [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		685,800	594,745	1,648,229	1,328,377
Total Other Revenue		(5,161)	(414)	42,570	22,331
Electricity, US Regulated [Member] | Residential
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		326,352	297,255	797,207	713,515
Electricity, US Regulated [Member] | Commercial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		248,204	226,570	539,693	483,589
Electricity, US Regulated [Member] | Industrial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		28,521	27,711	62,368	57,784
Electricity, US Regulated [Member] | Other Retail Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		5,219	4,496	10,720	9,257
Electricity, US Regulated [Member] | Wholesale
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		59,892	24,061	202,152	37,208
Electricity, US Regulated [Member] | Transmission and Transportation
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		10,628	10,633	25,114	21,855
Electricity, US Regulated [Member] | Miscellaneous Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		6,984	4,019	10,975	5,169
Natural Gas, US Regulated [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		264,267	241,737	782,945	669,152
Total Other Revenue		5,873	(5,683)	4,453	(6,750)
Natural Gas, US Regulated [Member] | Residential
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		171,040	159,200	521,064	451,796
Natural Gas, US Regulated [Member] | Commercial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		81,825	72,275	234,062	193,254
Natural Gas, US Regulated [Member] | Industrial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		6,192	5,121	17,283	13,206
Natural Gas, US Regulated [Member] | Other Retail Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Natural Gas, US Regulated [Member] | Wholesale
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Natural Gas, US Regulated [Member] | Transmission and Transportation
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		5,260	5,088	10,954	10,534
Natural Gas, US Regulated [Member] | Miscellaneous Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		(50)	53	(418)	362
Other Revenue From Contracts with Customers [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		12,849	11,991	26,618	22,703
Total Other Revenue		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Residential
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Commercial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Industrial
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Other Retail Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Wholesale
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Transmission and Transportation
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		0	0	0	0
Other Revenue From Contracts with Customers [Member] | Miscellaneous Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		12,849	11,991	26,618	22,703
Subsidiaries [Member]
Disaggregation of Revenue [Line Items]
Non-utility expense and other		6,720	11,842	14,734	24,656
Electric		680,639	594,331	1,690,799	1,350,708
Natural gas		270,140	$ 236,054	787,398	662,402
Puget LNG [Member]
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		195,566		195,566
Remaining Contract Term, PLNG	10 years
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 15,359		$ 15,359
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year		1 year
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 19,710		$ 19,710
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year		1 year
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 19,454		$ 19,454
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year		1 year
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 19,454		$ 19,454
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year		1 year
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 19,454		$ 19,454
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period		1 year		1 year
Puget LNG [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01
Disaggregation of Revenue [Line Items]
Revenue, Remaining Performance Obligation, Amount		$ 102,135		$ 102,135
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period
Puget LNG [Member] | Other Revenue From Contracts with Customers [Member] | Miscellaneous Customer
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax		$ 6,700		$ 11,300	$ 100

XML

Accounting for Derivative Instruments and Hedging Activities Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($)
Subsidiaries [Member]
Derivative [Line Items]
Hedging strategy number of years extended	3 years
Natural Gas Portfolio [Member]
Derivative [Line Items]
Posted Collateral	$ 0.0
External Credit Rating, Investment Grade [Member]
Derivative [Line Items]
Derivative, Credit Risk Exposure, Percentage	99.50%
External Credit Rating, Non Investment Grade [Member]
Derivative [Line Items]
Derivative, Credit Risk Exposure, Percentage	0.50%

XML

Accounting for Derivative Instruments and Hedging Activities Derivative Assets and Liabilities (Details) $ in Thousands, MMBTU in Millions		Jun. 30, 2023 USD ($) MMBTU	Dec. 31, 2022 USD ($) MMBTU
Derivative [Line Items]
Current, Assets		$ 95,490	$ 587,029
Long-term, Assets		53,978	94,621
Current, Liabilities		108,923	124,976
Long-term, Liabilities		22,311	18,366
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Current, Assets		95,490	587,029
Long-term, Assets		53,978	94,621
Assets	[1]	149,468	681,650
Current, Liabilities		108,923	124,976
Long-term, Liabilities		22,311	18,366
Derivative Liability	[2]	$ 131,234	$ 143,342
Not Designated as Hedging Instrument [Member] | Natural Gas Derivatives [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | MMBTU		256.0	322.0
Not Designated as Hedging Instrument [Member] | Electric Portfolio [Member]
Derivative [Line Items]
Assets		$ 114,282	$ 337,703
Derivative Liability		86,623	87,120
Not Designated as Hedging Instrument [Member] | Natural Gas Portfolio [Member]
Derivative [Line Items]
Assets		35,186	343,947
Derivative Liability		$ 44,611	$ 56,222
Not Designated as Hedging Instrument [Member] | Electric Generation Fuel [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | MMBTU		230.3	234.9
Not Designated as Hedging Instrument [Member] | Purchased Electricity [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount | MMBTU		3.1	5.3

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

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

XML

Accounting for Derivative Instruments and Hedging Activities Net Amount of Derivatives Reported in the Statement of Financial Position (Details) - Commodity Contract [Member] - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets:
Gross Amount Recognized in the Statement of Financial Position	$ 149,468	$ 681,650
Gross Amounts Offset in the Statement of Financial Position	0	0
Assets	149,468	681,650
Commodity Contracts	(72,861)	(125,334)
Cash Collateral Received	0	0
Net Amount	76,607	556,316
Liabilities:
Gross Amount Recognized in the Statement of Financial Position	131,234	143,342
Gross Amounts Offset in the Statement of Financial Position	0	0
Derivative Liability	131,234	143,342
Commodity Contracts	(72,861)	(125,334)
Cash Collateral Posted	(5,887)	(5,661)
Net Amount	$ 52,486	$ 12,347

XML

Accounting for Derivative Instruments and Hedging Activities Recognized in Statement of Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	$ (30,802)	$ (9,273)	$ (222,925)	$ 122,648
Not Designated as Hedging Instrument [Member]
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	(48,259)	11,220	(101,098)	172,823
Not Designated as Hedging Instrument [Member] | Electric Generation Fuel [Member] | Unrealized (Gain) Loss on Derivative Instruments, Net [Member]
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	(9,693)	(16,582)	(114,339)	70,291
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Electric Generation Fuel [Member]
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	(13,572)	16,039	74,695	43,130
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Purchased Electricity [Member]
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	(3,885)	4,454	47,132	7,045
Not Designated as Hedging Instrument [Member] | Electricity, US Regulated [Member] | Unrealized (Gain) Loss on Derivative Instruments, Net [Member]
Derivative Instruments, (Loss) Gain [Line Items]
Unrealized (gain) loss on derivative instruments	$ (21,109)	$ 7,309	$ (108,586)	$ 52,357

XML

Accounting for Derivative Instruments and Hedging Activities Contractual Contingent Liability (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Derivative [Line Items]
Line of Credit Facility, Maximum Amount Outstanding During Period	$ 135,800
Electric Portfolio [Member]
Derivative [Line Items]
Fair Value Liability	34,540	$ 12,975
Posted Collateral	21,891	56,200
Additional Collateral, Aggregate Fair Value	1,229	3,157
Natural Gas Portfolio [Member]
Derivative [Line Items]
Posted Collateral	0
Electricity, US Regulated [Member]
Derivative [Line Items]
Posted Collateral	21,900
Credit Rating [Member] | Electric Portfolio [Member]
Derivative [Line Items]
Fair Value Liability	1,229	3,157
Posted Collateral	0	0
Additional Collateral, Aggregate Fair Value	1,229	3,157
Credit Rating [Member] | Natural Gas Portfolio [Member] | Standby Letters of Credit
Derivative [Line Items]
Posted Collateral	7,000
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases	50,000
Requested Credit for Adequate Assurance [Member] | Electric Portfolio [Member]
Derivative [Line Items]
Fair Value Liability	27,424	4,157
Posted Collateral	0	0
Additional Collateral, Aggregate Fair Value	0	0
Forward Value of Contract [Member] | Electric Portfolio [Member]
Derivative [Line Items]
Fair Value Liability	5,887	5,661
Posted Collateral	$ 21,891	$ 56,200

XML

Fair Value Measurements Debt at at Carrying and Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Liabilities:
Total long-term debt	$ 7,030,528	$ 6,663,373
Carrying Value [Member] | Level 2 [Member]
Liabilities:
Notes Receivable, Fair Value Disclosure	44,200	55,000
Subsidiaries [Member]
Liabilities:
Total long-term debt	5,183,080	4,786,765
Discounted cash flow [Member] | Fair Value [Member]
Liabilities:
Long-term Debt, Excluding Current Maturities, Fair Value Disclosure	6,601,133	6,184,097
Discounted cash flow [Member] | Fair Value [Member] | Level 2 [Member]
Liabilities:
Long-term debt (fixed-rate), net of discount	6,601,133	6,149,797
Long-term debt (variable-rate)	0	34,300
Discounted cash flow [Member] | Carrying Value [Member]
Liabilities:
Long-term Debt, Excluding Current Maturities, Fair Value Disclosure	7,030,528	6,663,373
Discounted cash flow [Member] | Carrying Value [Member] | Level 2 [Member]
Liabilities:
Long-term debt (fixed-rate), net of discount	7,030,528	6,629,073
Long-term debt (variable-rate)	0	34,300
Debt issuance costs	21,800	21,500
Discounted cash flow [Member] | Subsidiaries [Member] | Fair Value [Member]
Liabilities:
Total long-term debt	4,801,597	4,379,010
Discounted cash flow [Member] | Subsidiaries [Member] | Fair Value [Member] | Level 2 [Member]
Liabilities:
Long-term debt (fixed-rate), net of discount	4,801,597	4,379,010
Discounted cash flow [Member] | Subsidiaries [Member] | Carrying Value [Member]
Liabilities:
Total long-term debt	5,183,080	4,786,765
Discounted cash flow [Member] | Subsidiaries [Member] | Carrying Value [Member] | Level 2 [Member]
Liabilities:
Long-term debt (fixed-rate), net of discount	5,183,080	4,786,765
Debt issuance costs	$ 21,900	$ 21,400

XML

Fair Value Measurements Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
GHG emission allowances	$ 138,676		$ 138,676			$ 0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	58,011	$ 5,199	58,011	$ 5,199	$ 69,949	115,951	$ (7,222)	$ (44,872)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings	(16,296)	4,814	(35,063)	43,633
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Regulatory Assets (Liabilities)	135	70	44	485
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	4,223	7,289	(23,308)	5,361
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers into Level 3	0	0	0	0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers out of Level 3	0	248	387	592
Electric Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	57,907	5,916	57,907	5,916	69,734	116,078	(6,010)	(42,752)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings	(16,296)	4,814	(35,063)	43,633
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Regulatory Assets (Liabilities)	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	4,469	7,018	(23,325)	4,766
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers into Level 3	0	0	0	0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers out of Level 3	0	94	217	269
Gain (loss) on derivatives	(16,100)	4,600	(25,900)	40,800
Natural Gas Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	104	(717)	104	(717)	$ 215	(127)	$ (1,212)	$ (2,120)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Regulatory Assets (Liabilities)	135	70	44	485
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	(246)	271	17	595
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers into Level 3	0	0	0	0
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers out of Level 3	0	$ 154	170	$ 323
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	149,468		149,468			681,650
GHG emission allowances	138,676		138,676			0
Liabilities, Fair Value Disclosure	269,910		269,910			143,342
Fair Value, Recurring [Member] | Electric Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	114,282		114,282			337,703
Derivative Liability	86,623		86,623			87,120
Fair Value, Recurring [Member] | Natural Gas Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	35,186		35,186			343,947
Derivative Liability	44,611		44,611			56,222
Fair Value, Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	74,348		74,348			561,598
GHG emission allowances	138,676		138,676			0
Liabilities, Fair Value Disclosure	252,801		252,801			139,241
Fair Value, Recurring [Member] | Level 2 [Member] | Electric Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	39,846		39,846			218,610
Derivative Liability	70,094		70,094			84,105
Fair Value, Recurring [Member] | Level 2 [Member] | Natural Gas Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	34,502		34,502			342,988
Derivative Liability	44,031		44,031			55,136
Fair Value, Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, Fair Value Disclosure	75,120		75,120			120,052
GHG emission allowances	0		0			0
Liabilities, Fair Value Disclosure	17,109		17,109			4,101
Fair Value, Recurring [Member] | Level 3 [Member] | Electric Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	74,436		74,436			119,093
Derivative Liability	16,529		16,529			3,015
Fair Value, Recurring [Member] | Level 3 [Member] | Natural Gas Portfolio [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets	684		684			959
Derivative Liability	$ 580		$ 580			$ 1,086

XML

Fair Value Measurements Valuation Techniques for Measurement with Unobservable Inputs (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) $ / MWh $ / MMBTU	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / MWh $ / MMBTU
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value measurement, sensitivity analysis, hypothetical increase or decrease of market prices, result on fair value	10.00%		10.00%		10.00%
Fair Value Measurements, Sensitivity Analysis, Hypothetical Increase or Decrease of Market Prices, Result on Fair Value	$ 26,500,000		$ 26,500,000		$ 37,600,000
Impairment of Intangible Assets, Finite-lived			0
Electric Portfolio [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Gain (loss) on derivatives	(16,100,000)	$ 4,600,000	$ (25,900,000)	$ 40,800,000
Electric Portfolio [Member] | Discounted cash flow [Member] | Low [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Price (per MWh) | $ / MWh			58.45		55.79
Electric Portfolio [Member] | Discounted cash flow [Member] | High [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Price (per MWh) | $ / MWh			198.55		291.03
Electric Portfolio [Member] | Discounted cash flow [Member] | Weighted Average [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Price (per MWh) | $ / MWh			113.50		131.51
Electric Portfolio [Member] | Fair Value, Recurring [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	114,282,000		$ 114,282,000		$ 337,703,000
Derivative Liability	86,623,000		86,623,000		87,120,000
Electric Portfolio [Member] | Fair Value, Recurring [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	74,436,000		74,436,000		119,093,000
Derivative Liability	16,529,000		16,529,000		3,015,000
Electric Portfolio [Member] | Fair Value, Recurring [Member] | Parent Company [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	74,436,000		74,436,000		119,093,000
Derivative Liability	16,529,000		$ 16,529,000		$ 3,015,000
Natural Gas Portfolio [Member] | Discounted cash flow [Member] | Low [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Millions of BTU | $ / MMBTU			1.14		3.84
Natural Gas Portfolio [Member] | Discounted cash flow [Member] | High [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Millions of BTU | $ / MMBTU			6.63		7.00
Natural Gas Portfolio [Member] | Discounted cash flow [Member] | Weighted Average [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Inputs, Price Per Millions of BTU | $ / MMBTU			2.57		4.87
Natural Gas Portfolio [Member] | Fair Value, Recurring [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	35,186,000		$ 35,186,000		$ 343,947,000
Derivative Liability	44,611,000		44,611,000		56,222,000
Natural Gas Portfolio [Member] | Fair Value, Recurring [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	684,000		684,000		959,000
Derivative Liability	580,000		580,000		1,086,000
Natural Gas Portfolio [Member] | Fair Value, Recurring [Member] | Parent Company [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative Assets	684,000		684,000		959,000
Derivative Liability	$ 580,000		$ 580,000		$ 1,086,000

XML

Retirement Benefits Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Qualified Pension Benefits [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost			$ 9,265	$ 26,351
Defined Benefit Plan, Interest Cost			16,188	24,263
Qualified Pension Benefits [Member] | Parent Company [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	$ 4,633	$ 6,378	9,265	13,175
Defined Benefit Plan, Interest Cost	8,259	6,044	16,188	12,131
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	(12,668)	(12,730)	(25,320)	(25,507)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	0	0	0	0
Defined Benefit Plan, Amortization of Gain (Loss)	(360)	1,563	(1,226)	3,191
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	(136)	1,255	(1,093)	2,990
Qualified Pension Benefits [Member] | Subsidiaries [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	4,633	6,378	9,265	13,175
Defined Benefit Plan, Interest Cost	8,259	6,044	16,188	12,131
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	(12,668)	(12,730)	(25,320)	(25,508)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	0	0	0	0
Defined Benefit Plan, Amortization of Gain (Loss)	0	3,734	0	7,540
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	224	3,426	133	7,338
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost			143	557
Defined Benefit Plan, Interest Cost			849	1,253
Supplemental Employee Retirement Plan [Member] | Parent Company [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	71	139	143	279
Defined Benefit Plan, Interest Cost	424	313	849	626
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	0	0	0	0
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	72	72	145	145
Defined Benefit Plan, Amortization of Gain (Loss)	0	618	0	1,236
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	567	1,142	1,137	2,286
Supplemental Employee Retirement Plan [Member] | Subsidiaries [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	71	139	143	279
Defined Benefit Plan, Interest Cost	424	313	849	626
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	0	0	0	0
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	72	72	145	145
Defined Benefit Plan, Amortization of Gain (Loss)	22	662	42	1,324
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	589	1,186	1,179	2,374
Other Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost			94	217
Defined Benefit Plan, Interest Cost			231	311
Other Benefit [Member] | Parent Company [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	47	55	94	109
Defined Benefit Plan, Interest Cost	115	81	231	163
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	(79)	(99)	(159)	(198)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	7	6	14	11
Defined Benefit Plan, Amortization of Gain (Loss)	(51)	(4)	(101)	(8)
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	39	39	79	77
Other Benefit [Member] | Subsidiaries [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Defined Benefit Plan, Service Cost	47	55	94	109
Defined Benefit Plan, Interest Cost	115	81	231	163
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	(79)	(98)	(159)	(197)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	7	6	14	11
Defined Benefit Plan, Amortization of Gain (Loss)	(54)	(6)	(109)	(11)
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total	$ 36	$ 38	$ 71	$ 75

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Retirement Benefits Change in Net Benefit Obligation (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Qualified Pension Benefits [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, Beginning Balance	$ 589,278	$ 834,960
Defined Benefit Plan, Service Cost	9,265	26,351
Defined Benefit Plan, Interest Cost	16,188	24,263
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss)	11,301	(215,005)
Defined Benefit Plan, Benefit Obligation, Benefits Paid	(22,760)	(80,226)
Administrative Expense	0	(1,065)
Defined Benefit Plan, Benefit Obligation, Ending Balance	603,272
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, Beginning Balance	32,046	43,155
Defined Benefit Plan, Service Cost	143	557
Defined Benefit Plan, Interest Cost	849	1,253
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss)	251	(5,260)
Defined Benefit Plan, Benefit Obligation, Benefits Paid	(2,507)	(7,659)
Administrative Expense	0	0
Defined Benefit Plan, Benefit Obligation, Ending Balance	28,010
Other Benefit [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, Beginning Balance	9,015	11,654
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Plan Amendment	0	38
Defined Benefit Plan, Service Cost	94	217
Defined Benefit Plan, Interest Cost	231	311
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Curtailment	0	0
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss)	0	(2,397)
Defined Benefit Plan, Benefit Obligation, Benefits Paid	(639)	(808)
Administrative Expense	0	0
Defined Benefit Plan, Benefit Obligation, Ending Balance	8,701
Qualified Plan [Member] | Qualified Pension Benefits [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Plan Amendment	0	0
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Curtailment	0	0
Nonqualified Plan [Member] | Qualified Pension Benefits [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Curtailment	(2,772)	0
Nonqualified Plan [Member] | Supplemental Employee Retirement Plan [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) for Plan Amendment	$ 0	$ 0

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Retirement Benefits Activity (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2023
Subsidiaries [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Contribution Plan, Interest Credit	4.00%
UA represented [Member] | employer contribution [Member] | Subsidiaries [Member] | Collective Bargaining Arrangement [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	4.00%
IBEW represented | employer contribution [Member] | Subsidiaries [Member] | Collective Bargaining Arrangement [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	4.00%
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contributions	$ 2.5	$ 1.0
Forecast [Member] | Qualified Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Aggregate expected contributions			$ 18.0
Forecast [Member] | Supplemental Employee Retirement Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Aggregate expected contributions			3.5
Forecast [Member] | Other Benefit [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Aggregate expected contributions			$ 0.3

XML

Regulation and Rates (Details) - USD ($) $ in Thousands								1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 28, 2023	Jan. 11, 2023	Dec. 22, 2022	Nov. 01, 2022	Nov. 01, 2021	Oct. 01, 2021	Jul. 08, 2020	Nov. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jan. 01, 2018
Regulatory Assets [Line Items]
Income tax (benefit) expense									$ 11,409	$ 4,156	$ 13,607	$ 23,967
Depreciation and amortization									187,491	165,676	376,208	330,252
Other regulatory assets									930,731		930,731				$ 784,231
Revenues									963,628	842,376	2,504,815	2,035,813
GHG emission allowances									138,676		138,676				0
Subsidiaries [Member]
Regulatory Assets [Line Items]
Income tax (benefit) expense									(860)	3,708	1,549	38,564
Annual Power Cost Variability, Interest											2,400	600
Depreciation and amortization									185,815	$ 164,009	372,858	327,713
Other regulatory assets									930,731		930,731				784,231
Purchased gas adjustment receivable									(138,996)		(138,996)				(3,536)	$ 57,935
Rate Plan, number of years		2 years
GHG emission allowances									138,676		138,676				0
Subsidiaries [Member] | Under-collection [Member]
Regulatory Assets [Line Items]
Annual Power Cost Variability, Amount											(12,100)	26,600			110,100	68,000
Subsidiaries [Member] | Under-collection [Member] | Companys share [Member]
Regulatory Assets [Line Items]
Annual Power Cost Variability, Amount															39,000	31,300
Subsidiaries [Member] | Under-collection [Member] | Customer's share [Member]
Regulatory Assets [Line Items]
Annual Power Cost Variability, Amount											0	4,800			71,100	36,700
Subsidiaries [Member] | Under-collection [Member] | Customer's share plus interest
Regulatory Assets [Line Items]
Annual Power Cost Variability, Amount															76,400	38,400
Subsidiaries [Member] | Maximum Power | Customer's share plus interest
Regulatory Assets [Line Items]
Annual Power Cost Variability, Amount															20,000	$ 20,000
Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Storm Damage Costs Incurred During Period											6,100	6,700
Public Utilities, Rate Case, Deferred Storm Costs Threshold																	$ 10,000
Public Utilities, Rate Case, Deferred Storm Qualifying Costs																	$ 500
GHG emission allowances									69,900		69,900
Subsidiaries [Member] | Natural Gas, US Regulated [Member]
Regulatory Assets [Line Items]
GHG emission allowances									$ 129,000		129,000
General Rate Case [Member] | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount						$ 48,300
Public Utilities, Approved Rate Increase (Decrease), Percentage						2.30%
Public Utilities, Approved Debt Capital Structure, Percentage			7.16%				7.39%
General Rate Case [Member] | Subsidiaries [Member] | Natural Gas, US Regulated [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount						$ 4,900
Public Utilities, Approved Rate Increase (Decrease), Percentage						0.60%
General Rate Case [Member] | Maximum [Member] | Subsidiaries [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Debt Capital Structure, Net of Tax, Percentage			6.62%				6.80%
Public Utilities, Approved Equity Capital Structure, Percentage			49.00%				48.50%
Public Utilities, Approved Return on Equity, Percentage			9.40%				9.40%
Decoupling Mechanism [Member] | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Contract with Customer, Liability, Revenue Recognized											0	0
Decoupling Mechanism [Member] | Subsidiaries [Member] | Natural Gas, US Regulated [Member]
Regulatory Assets [Line Items]
Contract with Customer, Liability, Revenue Recognized											0	0
Purchased Gas Adjustment [Member] | Subsidiaries [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount				$ 155,300	$ 59,100
Purchased natural gas costs											218,066				457,950
Purchased natural gas costs, recoverable											(347,969)				(496,879)
Purchased natural gas adjustment, interest											(2,220)				1,674
Out of Cycle PGA					69,400
Purchased natural gas costs, credit for CP settlement								$ (24,200)			(3,337)				$ (24,216)
Power Cost Only Rate Case | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Public Utilities, Requested Rate Increase (Decrease), Amount		$ 0
Purchased Gas Adjustment, Schedule 101 | Subsidiaries [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount				142,100	80,600
purchased gas adjustment, Schedule 106 106B | Subsidiaries [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount				$ 13,200	$ (21,500)
PCA Mechanism [Member] | Subsidiaries [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Percentage	0.90%
Storm that occurred in 2021 | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Storm Damage Costs Deferred During Period												100
Storm that occurred in 2022 | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Storm Damage Costs Deferred During Period											2,100	$ 0
Storm that occurred in 2023 | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Storm Damage Costs Deferred During Period											$ 0
Forecast [Member] | General Rate Case [Member] | Subsidiaries [Member] | Electricity, US Regulated [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount													$ 33,100	$ 247,000
Public Utilities, Approved Rate Increase (Decrease), Percentage													1.30%	10.80%
Forecast [Member] | General Rate Case [Member] | Subsidiaries [Member] | Natural Gas, US Regulated [Member]
Regulatory Assets [Line Items]
Public Utilities, Approved Rate Increase (Decrease), Amount													$ 19,500	$ 70,800
Public Utilities, Approved Rate Increase (Decrease), Percentage													1.70%	6.40%

XML

Schedule of Power Cost Adjustment Mechanism (Details) - Subsidiaries [Member] $ in Millions		6 Months Ended		12 Months Ended
	Jan. 01, 2017	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Interest		$ 2.4	$ 0.6
Under-collection [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Amount		(12.1)	26.6	$ 110.1	$ 68.0
Under-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Amount				39.0	31.3
Under-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Amount		$ 0.0	$ 4.8	71.1	36.7
Under-collection [Member] | Customer's share plus interest
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Amount				76.4	38.4
Maximum Power | Customer's share plus interest
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability, Amount				$ 20.0	$ 20.0
Range 1 [Member] | Over-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	1
Range 1 [Member] | Over-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0
Range 1 [Member] | Under-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	1
Range 1 [Member] | Under-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0
Range 2 [Member] | Over-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.35
Range 2 [Member] | Over-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.65
Range 2 [Member] | Under-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.50
Range 2 [Member] | Under-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.50
Range 3 [Member] | Over-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.10
Range 3 [Member] | Over-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.90
Range 3 [Member] | Under-collection [Member] | Companys share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.10
Range 3 [Member] | Under-collection [Member] | Customer's share [Member]
Regulatory Assets and Liabiliaties [Line Items]
Annual Power Cost Variability	0.90

XML

Commitments and Contingencies (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Subsidiaries [Member]
Loss Contingencies [Line Items]
Contractual Obligation	$ 4,000,000
Loss Contingency, Range of Possible Loss, Portion Not Accrued	110,100
Loss Contingency Accrual	$ 69,900
Colstrip Units 1 and 2 [Member] | Colstrip Units 1 and 2 [Member]
Loss Contingencies [Line Items]
Ownership interest (percent)	50.00%
Colstrip Units 3 and 4 [Member] | Colstrip Units 3 and 4 [Member]
Loss Contingencies [Line Items]
Ownership interest (percent)	25.00%

XML

Leases - Supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Lessee, Operating Lease, Description [Abstract]
Operating Lease, Right-of-Use Asset	$ 187,508	$ 193,509
Operating Lease, Liability, Current	20,654	20,342
Operating Lease, Liability, Noncurrent	$ 174,354	$ 181,265

XML

Other - Narrative (Details) - USD ($)	1 Months Ended		6 Months Ended
	Sep. 30, 2022	Apr. 30, 2022	Jun. 30, 2023	May 18, 2023	Dec. 31, 2022	May 31, 2022	Mar. 31, 2022
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity						$ 800,000,000
Line of Credit Facility, Maximum Amount Outstanding During Period			$ 135,800,000
Short-term debt			135,800,000		$ 441,300,000
Proceeds from Lines of Credit	$ 50,000,000
Subsidiaries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity						$ 800,000,000
Commercial Paper			0
Short-term debt			0		$ 357,000,000
Working Capital Needs [Member] | Subsidiaries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Amount Outstanding During Period			$ 0
4.224% Senior Secured Note Due 2032 | Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Face Amount							$ 450,000,000
Debt Instrument, Interest Rate, Stated Percentage							4.224%
5.625% Senior Secured Note Due 2022 | Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 450,000,000
Debt Instrument, Interest Rate, Stated Percentage		5.625%
Debt Instrument, Increase, Accrued Interest		$ 7,200,000
Extinguishment of Debt, Amount		$ 457,200,000
5.448% Senior Secured Note Due 2053 | Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 400,000,000
Debt Instrument, Interest Rate, Stated Percentage				5.448%