Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Components of Income Tax Expense (Benefit)

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



Puget Energy	Year Ended December 31,
(Dollars in Thousands)	2018			2017			2016
Charged to operating expenses:
Current:
Federal	$	10,382		$	1,127		$	—
State	263			17			20
Deferred:
Federal	19,451			254,420			140,315
State	(4		)	(421		)	(131		)
Total income tax expense	$	30,092		$	255,143		$	140,204

Schedule of Effective Income Tax Rate Reconciliation

The following reconciliation compares pre-tax book income at the federal statutory rate of 21.0% in 2018 and 35.0% in 2017 and 2016 to the actual income tax expense in the Statements of Income:



Puget Energy	Year Ended December 31,
(Dollars in Thousands)	2018			2017			2016
Income taxes at the statutory rate	$	55,800		$	148,847		$	158,586
Increase (decrease):
Production tax credit¹	—			—			(12,925		)
Utility plant differences²	(25,871		)	—			3,966
Executive compensation	4,439			—			—
Treasury grant amortization	(4,861		)	(9,537		)	(9,788		)
Tax reform	—			117,185			—
Other–net	585			(1,352		)	365
Total income tax expense	$	30,092		$	255,143		$	140,204
Effective tax rate	11.3		%	60.0		%	30.9		%

Schedule of Deferred Tax Assets and Liabilities

The Company’s net deferred tax liability at December 31, 2018 and 2017 is composed of amounts related to the following types of temporary differences:



Puget Energy	At December 31,
(Dollars in Thousands)	2018			2017
Utility plant and equipment	$	1,998,721		$	2,034,328
Other deferred tax liabilities	113,051			172,048
Subtotal deferred tax liabilities	2,111,772			2,206,376
Net operating loss carryforward	(224,885		)	(212,168		)
Net regulatory liability for income taxes	(975,974		)	(1,011,626		)
Production tax credit carryforward	(121,616		)	(187,617		)
Net other deferred tax assets	—			(48,097		)
Subtotal deferred tax assets	(1,322,475		)	(1,459,508		)
Total net deferred tax liabilities	$	789,297		$	746,868

Subsidiaries [Member]

Income Tax Disclosures [Line Items]

Schedule of Components of Income Tax Expense (Benefit)



Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	2018		2017		2016
Charged to operating expenses:
Current:
Federal	$	19,283	$	1,127	$	—
State	438		17		20
Deferred:
Federal	30,979		210,842		175,327
State	—		—		—
Total income tax expense	$	50,700	$	211,986	$	175,347

Schedule of Effective Income Tax Rate Reconciliation



Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	2018			2017			2016
Income taxes at the statutory rate	$	77,251		$	185,430		$	194,572
Increase (decrease):
Production tax credit¹	—			—			(12,925		)
Utility plant differences²	(25,871		)	—			3,966
Executive Compensation	4,439			—			—
Treasury grant amortization	(4,861		)	(9,537		)	(9,788		)
Tax reform	—			36,328			—
Other–net	(258		)	(235		)	(478		)
Total income tax expense	$	50,700		$	211,986		$	175,347
Effective tax rate	13.8		%	40.0		%	31.5		%

Schedule of Deferred Tax Assets and Liabilities



Puget Sound Energy	At December 31,
(Dollars in Thousands)	2018			2017
Utility plant and equipment	$	1,998,721		$	2,034,328
Other, net deferred tax liabilities	25,880			86,933
Subtotal deferred tax liabilities	2,024,601			2,121,261
Net regulatory liability for income taxes	(976,582		)	(1,012,260		)
Production tax credit carryforward	(121,616		)	(187,617		)
Net other deferred tax assets	—			(51,911		)
Subtotal deferred tax assets	(1,098,198		)	(1,251,788		)
Total net deferred tax liabilities	$	926,403		$	869,473