Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosures [Line Items]

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)	2022		2021		2020
Charged to operating expenses:
Current:
Federal	$	41,198	$	25,395	$	7,962
State	628		721		7
Deferred:
Federal	17,866		(1,759)		(6,414)
State	6		158		109
Total income tax expense	$	59,698	$	24,515	$	1,664

Schedule of Effective Income Tax Rate Reconciliation

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

Puget Energy	Year Ended December 31,
(Dollars in Thousands)	2022			2021			2020
Income taxes at the statutory rate	$	99,549		$	59,927		$	38,720
Increase (decrease):
Utility plant differences1	$	(23,028)		$	(22,325)		$	(22,991)
AFUDC, net	(3,567)			1,509			(6,095)
Executive compensation	1,821			1,386			2,440
Treasury grant amortization	(5,717)			(5,424)			(8,935)
Excess deferred tax amortization	(13,722)			(13,392)			(3,038)
Other–net	4,362			2,834			1,563
Total income tax expense	$	59,698		$	24,515		$	1,664
Effective tax rate	12.6		%	8.6		%	0.9		%

Puget Sound Energy	Year Ended December 31,
(Dollars in Thousands)	2022			2021			2020
Income taxes at the statutory rate	$	119,962		$	79,868		$	63,110
Increase (decrease):
Utility plant differences1	$	(23,028)		$	(22,325)		$	(22,991)
AFUDC, net	(3,567)			1,509			(6,095)
Executive compensation	1,821			1,386			2,440
Treasury grant amortization	(5,717)			(5,424)			(8,935)
Excess deferred tax amortization	(13,722)			(13,392)			(3,038)
Other–net	4,546			2,637			1,751
Total income tax expense	$	80,295		$	44,259		$	26,242
Effective tax rate	14.1		%	11.6		%	8.7		%

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1.Utility plant differences include the reversal of excess deferred taxes using the average rate assumption method in the amount of $27.2 million and $27.6 million in 2022 and 2021, respectively.

Schedule of Deferred Tax Assets and Liabilities

The Company’s net deferred tax liability at December 31, 2022, and 2021, is composed of amounts related to the following types of temporary differences:

Puget Energy	At December 31,
(Dollars in Thousands)	2022		2021
Utility plant and equipment	$	1,853,450	$	1,892,692
Unrealized gain on derivative instruments	158,175		50,971
Other deferred tax liabilities	365,035		313,270
Subtotal deferred tax liabilities	2,376,660		2,256,933
Net operating loss carryforward	(234,825)		(254,007)
Net regulatory liability for income taxes	(811,161)		(865,976)
Other deferred tax assets	(299,597)		(184,023)
Unrealized loss on derivative instruments	(45,130)		(40,443)
Subtotal deferred tax assets	(1,390,713)		(1,344,449)
Total net deferred tax liabilities	$	985,947	$	912,484

Puget Sound Energy	At December 31,
(Dollars in Thousands)	2022		2021
Utility plant and equipment	$	1,852,644	$	1,892,674
Unrealized gain on derivative instruments	143,147		31,940
Other deferred tax liabilities	279,612		225,753
Subtotal deferred tax liabilities	2,275,403		2,150,367
Net regulatory liability for income taxes	(811,724)		(866,541)
Other deferred tax assets	(293,977)		(178,211)
Unrealized loss on derivative instruments	(30,102)		(21,412)
Subtotal deferred tax assets	(1,135,803)		(1,066,164)
Total net deferred tax liabilities	$	1,139,600	$	1,084,203

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)	2022		2021		2020
Charged to operating expenses:
Current:
Federal	$	81,597	$	52,616	$	10,607
State	869		670		383
Deferred:
Federal	(2,171)		(9,027)		15,252
State	—		—		—
Total income tax expense	$	80,295	$	44,259	$	26,242