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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Schedule of Impaired Intangible Assets
impairments totaling $80.3 million were recorded to the Company's intangible asset contracts.

The following table presents the impairments recorded to the Company's intangible asset contracts, with corresponding reductions to the regulatory liability:
Puget Energy
 
(Dollars in Thousands)
 
 
 
 
 
 
Valuation Date
Contract Name
Carrying Value
 
Fair Value
 
Write Down
September 30, 2017
Wells Hydro
$
10,621

 
$
9,609

 
$
1,012

 
 
 
 
 
 
 
March 31, 2017
Wells Hydro
$
14,879

 
$
13,067

 
$
1,812

 
Rocky Reach
235,331

 
159,818

 
75,513

 
Priest Rapids RP
5,665

 
2,657

 
3,008

Total year-to-date impairments
 

 

 
$
81,345
Fair Value Inputs, Liabilities, Quantitative Information
The fair value of the junior subordinated and 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
 
At September 30, 2017
 
At December 31, 2016
(Dollars in Thousands)
Level
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
Liabilities:
 
 
 
 
 
 
 
 
Junior subordinated notes
2
$
250,000

 
$
246,232

 
$
250,000

 
$
210,261

Long-term debt (fixed-rate), net of discount1
2
5,101,936

 
6,439,413

 
5,091,593

 
6,337,287

Long-term debt (variable-rate)
2
83,064

 
83,064

 
12,480

 
12,480

Total liabilities
 
$
5,435,000

 
$
6,768,709

 
$
5,354,073

 
$
6,560,028



Puget Sound Energy
 
At September 30, 2017
 
At December 31, 2016
(Dollars in Thousands)
Level
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
Liabilities:
 
 
 
 
 
 
 
 
Junior subordinated notes
2
$
250,000

 
$
246,232

 
$
250,000

 
$
210,261

Long-term debt (fixed-rate), net of discount2
2
3,499,229

 
4,465,126

 
3,497,298

 
4,360,783

Total liabilities
 
$
3,749,229

 
$
4,711,358

 
$
3,747,298

 
$
4,571,044

_______________
1 
The carrying value includes debt issuances costs of $29.1 million and $33.0 million for September 30, 2017 and December 31, 2016, respectively, which are not included in fair value.
2 
The carrying value includes debt issuances costs of $25.3 million and $27.2 million for September 30, 2017 and December 31, 2016, respectively, which are not included in fair value.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
Puget Energy and
Puget Sound Energy
Three Months Ended September 30,
(Dollars in Thousands)
2017
 
2016
Level 3 Roll-Forward Net Asset/(Liability)
Electric
 
Natural Gas
 
Total
 
Electric
 
Natural Gas
 
Total
Balance at beginning of period
$
643

 
$
1,456

 
$
2,099

 
$
(3,062
)
 
$
(484
)
 
$
(3,546
)
Changes during period:
 
 
 
 
 
 
 
 
 
 
 
Realized and unrealized energy derivatives:
 
 
 
 
 
 
 
 
 
 
 
Included in earnings1
2,458

 
—

 
2,458

 
574

 
—

 
574

Included in regulatory assets / liabilities
—

 
2,133

 
2,133

 
—

 
(212
)
 
(212
)
Settlements
(1,783
)
 
(1,301
)
 
(3,084
)
 
93

 
84

 
177

Transferred into Level 3
(1,668
)
 
—

 
(1,668
)
 
(727
)
 
—

 
(727
)
Transferred out of Level 3
1,760

 
(34
)
 
1,726

 
2,532

 
(331
)
 
2,201

Balance at end of period
$
1,410

 
$
2,254

 
$
3,664

 
$
(590
)
 
$
(943
)
 
$
(1,533
)

______________
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 $0.9 million for the three months ended September 30, 2017 and 2016.
The following table presents the Company's reconciliation of the changes in the fair value of Level 3 derivatives in the fair value hierarchy:

Puget Energy and
Puget Sound Energy
Nine Months Ended
September 30,
(Dollars in Thousands)
2017
 
2016
Level 3 Roll-Forward Net Asset/(Liability)
Electric
 
Natural Gas
 
Total
 
Electric
 
Natural Gas
 
Total
Balance at beginning of period
$
972

 
$
625

 
$
1,597

 
$
(7,345
)
 
$
(2,383
)
 
$
(9,728
)
Changes during period:
 
 
 
 
 
 
 
 
 
 
 
Realized and unrealized energy derivatives:
 
 
 
 
 
 
 
 
 
 
 
Included in earnings1
3,503

 
—

 
3,503

 
3,228

 
—

 
3,228

Included in regulatory assets / liabilities
—

 
5,715

 
5,715

 
—

 
2,869

 
2,869

Settlements
(5,622
)
 
(4,605
)
 
(10,227
)
 
(461
)
 
(1,731
)
 
(2,192
)
Transferred into Level 3
523

 
(553
)
 
(30
)
 
(2,807
)
 
—

 
(2,807
)
Transferred out of Level 3
2,034

 
1,072

 
3,106

 
6,795

 
302

 
7,097

Balance at end of period
$
1,410

 
$
2,254

 
$
3,664

 
$
(590
)
 
$
(943
)
 
$
(1,533
)
______________
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 $1.9 million and $4.0 million for the nine months ended September 30, 2017 and 2016, 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 September 30, 2017:
Puget Energy and
Puget Sound Energy
Fair Value
 
 
 
 
 
Range
 
 
(Dollars in Thousands)
Assets1
 
Liabilities1
 
Valuation Technique
 
Unobservable Input
 
Low
 
High
 
Weighted Average
Electric
$
4,550

 
$
3,140

 
Discounted cash flow
 
Power prices (per MWh)
 
$
8.54

 
$
28.98

 
$
17.99

Natural gas
$
4,032

 
$
1,778

 
Discounted cash flow
 
Natural gas prices (per MMBtu)
 
$
0.38

 
$
3.09

 
$
2.75

_______________
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, 2016:
Puget Energy and
Puget Sound Energy
Fair Value
 
 
 
 
 
Range
 
 
(Dollars in Thousands)
Assets1
 
Liabilities1
 
Valuation Technique
 
Unobservable Input
 
Low
 
High
 
Weighted Average
Electric
$
5,794

 
$
4,822

 
Discounted cash flow
 
Power prices (per MWh)
 
$
11.86

 
$
33.52

 
$
27.61

Natural gas
$
3,303

 
$
2,678

 
Discounted cash flow
 
Natural gas prices (per MMBtu)
 
$
2.00

 
$
3.24

 
$
2.42

_______________
1 
The valuation techniques, unobservable inputs and ranges are the same for asset and liability positions.
The following table presents the significant unobservable inputs used in estimating the impaired long-term power purchase contracts' fair value:
Puget Energy
 
 
 
 
 
 
Valuation Date
Unobservable Input
Low
 
High
 
Average
September 30, 2017
 
 
 
 
 
 
Wells Hydro
Power prices (per MWh)
$14.06
 
$26.86
 
$22.24
 
Power contract costs per quarter (in thousands)
4,126
 
4,126
 
4,126
 
 
 
 
 
 
 
March 31, 2017
 
 
 
 
 
 
Wells Hydro
Power prices (per MWh)
$8.76
 
$26.70
 
$20.86
 
Power contract costs per quarter (in thousands)
3,965
 
4,223
 
4,051
Rocky Reach
Power prices (per MWh)
$8.53
 
$48.21
 
$27.69
 
Power contract costs per quarter (in thousands)
5,827
 
6,780
 
6,150
Priest Rapids RP
Power prices (per MWh)
$13.70
 
$29.38
 
$23.14
 
Power contract costs per year (in thousands)
620
 
4,022
 
2,306
Parent Company [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
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:
Subsidiaries [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Puget Energy and
Fair Value
 
Fair Value
Puget Sound Energy
At September 30, 2017
 
At December 31, 2016
(Dollars in Thousands)
Level 2
 
Level 3
 
Total
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Electric derivative instruments
$
7,106

 
$
4,550

 
$
11,656

 
$
30,666

 
$
5,794

 
$
36,460

Natural gas derivative instruments
3,794

 
4,032

 
7,826

 
23,316

 
3,303

 
26,619

Total assets
$
10,900

 
$
8,582

 
$
19,482

 
$
53,982

 
$
9,097

 
$
63,079

Liabilities:
 

 
 

 
 

 
 

 
 

 
 

Interest rate derivative instruments1
$
—

 
$
—

 
$
—

 
$
141

 
$
—

 
$
141

Electric derivative instruments
36,482

 
3,140

 
39,622

 
36,507

 
4,822

 
41,329

Natural gas derivative instruments
23,998

 
1,778

 
25,776

 
16,423

 
2,678

 
19,101

Total liabilities
$
60,480

 
$
4,918

 
$
65,398

 
$
53,071

 
$
7,500

 
$
60,571