Estimated Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements [Abstract]

Estimated Fair Value of Financial Instruments

(5)   Estimated Fair Value of Financial Instruments

The following tables present the carrying amounts and estimated fair value of the Company's financial instruments at June 30, 2011 and December 31, 2010:

	June 30, 2011				December 31, 2010
Puget Energy (Dollars in Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	22,872	$	22,872	$	36,557	$	36,557
Restricted cash		4,452		4,452		5,470		5,470
Notes receivable and other		70,582		70,582		72,419		72,419
Electric derivatives		9,445		9,445		9,762		9,762
Gas derivatives		8,437		8,437		5,971		5,971
Liabilities:
Short-term debt	$	--	$	--	$	247,000	$	247,000
Junior subordinated notes		250,000		249,789		250,000		246,864
Current maturities of long-term debt (fixed-rate)		--		--		260,000		261,472
Long-term debt (fixed-rate), net of discount		3,924,904		4,633,191		3,119,660		3,718,303
Long-term debt (variable-rate), net of discount		826,728		887,421		1,013,053		1,083,117
Electric derivatives		202,361		202,361		242,581		242,581
Gas derivatives		106,938		106,938		155,651		155,651
Interest rate derivatives		53,816		53,816		58,003		58,003

	June 30, 2011				December 31, 2010
Puget Sound Energy (Dollars in Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	16,347	$	16,347	$	36,320	$	36,320
Restricted cash		4,452		4,452		5,470		5,470
Notes receivable and other		70,582		70,582		72,419		72,419
Electric derivatives		9,445		9,445		9,762		9,762
Gas derivatives		8,437		8,437		5,971		5,971
Liabilities:
Short-term debt	$	--	$	--	$	247,000	$	247,000
Short-term debt owed by PSE to Puget Energy 1		29,998		29,998		22,598		22,598
Junior subordinated notes		250,000		249,789		250,000		246,864
Current maturities of long-term debt (fixed-rate)		--		--		260,000		261,472
Non-current maturities of long-term debt (fixed-rate)		3,253,845		3,670,945		2,953,860		3,267,994
Electric derivatives		202,361		202,361		242,581		242,581
Gas derivatives		106,938		106,938		155,651		155,651

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1 Short-term debt owed by PSE to Puget Energy is eliminated upon consolidation of Puget Energy.

The fair value of the long-term notes was estimated using U.S. Treasury yields and related current market credit spreads, interpolating to the maturity date of each issue.  The carrying values of short-term debt and notes receivable are considered to be a reasonable estimate of fair value.  The carrying amount of cash, which includes temporary investments with original maturities of three months or less, is also considered to be a reasonable estimate of fair value.