psd-20210630


●			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, fires, extreme weather conditions, landslides, 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 and impose extraordinary costs;
●			The impact of widespread health developments, including the recent global Coronavirus Disease 2019 (COVID-19) pandemic, and responses to such developments (such as voluntary and mandatory quarantines, including government stay at home orders, as well as shut downs and other restrictions on travel, commercial, social and other activities) could materially and adversely affect, among other things, electric and natural gas demand, customers’ ability to pay, supply chains, availability of skilled work-force, contract counterparties, liquidity and financial markets;
●			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;
●			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, 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; absences due to pandemics, accidents, natural disasters or other significant, unforeseeable events; availability of qualified employees or the loss of a key executive;
●			The ability to obtain insurance coverage, the availability of insurance for certain specific losses, and the cost of such insurance;
●			The ability to maintain effective internal controls over financial reporting and operational processes;
●			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.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating revenue:
Electric	$	563,822	$	468,366	$	1,322,414	$	1,137,456
Natural Gas	195,124		177,609		588,030		548,640
Other	10,444		5,704		19,032		11,713
Total operating revenue	769,390		651,679		1,929,476		1,697,809
Operating expenses:
Energy costs:
Purchased electricity	162,515		125,487		367,925		291,229
Electric generation fuel	56,448		32,974		116,866		96,598
Residential exchange	(17,592)		(16,167)		(43,394)		(40,801)
Purchased natural gas	62,829		61,257		217,844		216,133
Unrealized (gain) loss on derivative instruments, net	(61,276)		(12,162)		(84,278)		36,379
Utility operations and maintenance	150,167		148,120		310,707		303,042
Non-utility expense and other	9,566		15,841		19,472		28,803
Depreciation & Amortization	165,930		136,865		374,361		301,681
Conservation amortization	21,901		20,321		55,961		47,714
Taxes other than income taxes	76,837		68,793		187,147		174,297
Total operating expenses	627,325		581,329		1,522,611		1,455,075
Operating income (loss)	142,065		70,350		406,865		242,734
Other income (expense):
Other income	14,490		16,576		28,120		30,635
Other expense	(2,350)		(8,468)		(3,860)		(10,750)
Interest charges:
AFUDC	3,775		3,914		7,361		7,557
Interest expense	(90,407)		(106,793)		(179,767)		(195,677)
Income (loss) before income taxes	67,573		(24,421)		258,719		74,499
Income tax (benefit) expense	12,331		(1,188)		14,484		2,796
Net income (loss)	$	55,242	$	(23,233)	$	244,235	$	71,703

ASSETS


	June 30, 2021		December 31, 2020
Utility plant (at original cost, including construction work in progress of $824,264 and $712,204 respectively):
Electric plant	$	9,458,901	$	9,200,231
Natural gas plant	4,371,055		4,227,532
Common plant	1,092,878		1,116,524
Less: Accumulated depreciation and amortization	(3,852,938)		(3,671,094)
Net utility plant	11,069,896		10,873,193
Other property and investments:
Goodwill	1,656,513		1,656,513
Other property and investments	325,162		324,184
Total other property and investments	1,981,675		1,980,697
Current assets:
Cash and cash equivalents	531,056		52,307
Restricted cash	13,819		29,544
Accounts receivable, net of allowance for doubtful accounts of $33,441 and $20,080, respectively	294,820		352,132
Unbilled revenue	160,980		221,871

Materials and supplies, at average cost	120,852		118,333
Fuel and natural gas inventory, at average cost	63,620		48,795
Unrealized gain on derivative instruments	150,371		33,015
Prepaid expense and other	46,529		45,746
Power contract acquisition adjustment gain	16,864		14,874
Total current assets	1,398,911		916,617
Other long-term and regulatory assets:


Power cost adjustment mechanism	69,551		82,801
Purchased gas adjustment receivable	49,425		87,655
Regulatory assets related to power contracts	10,481		11,728
Other regulatory assets	768,459		747,651
Unrealized gain on derivative instruments	17,848		8,805
Power contract acquisition adjustment gain	74,114		80,900
Operating lease right-of-use asset	191,498		172,167
Other	93,426		80,751
Total other long-term and regulatory assets	1,274,802		1,272,458
Total assets	$	15,725,284	$	15,042,965

CAPITALIZATION AND LIABILITIES


	June 30, 2021		December 31, 2020
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		3,313,532
Retained earnings	1,110,869		912,787
Accumulated other comprehensive income (loss), net of tax	(81,666)		(86,437)
Total common shareholder’s equity	4,552,735		4,139,882
Long-term debt:
First mortgage bonds and senior notes	4,212,000		4,212,000
Pollution control bonds	161,860		161,860

Long-term debt	2,032,700		1,724,700
Debt discount issuance costs and other	(203,378)		(206,120)
Total long-term debt	6,203,182		5,892,440
Total capitalization	10,755,917		10,032,322
Current liabilities:
Accounts payable	311,304		342,404
Short-term debt	231,300		373,800
Current maturities of long-term debt	526,345		526,412

Accrued expenses:
Taxes	101,153		110,752
Salaries and wages	37,314		42,530
Interest	74,304		73,647
Unrealized loss on derivative instruments	37,491		31,441
Power contract acquisition adjustment loss	1,893		2,039
Operating lease liabilities	19,041		19,204
Other	72,747		73,385
Total current liabilities	1,412,892		1,595,614
Other long-term and regulatory liabilities:
Deferred income taxes	883,127		810,729
Unrealized loss on derivative instruments	18,566		29,833
Regulatory liabilities	801,161		732,498
Regulatory liability for deferred income taxes	905,522		953,274
Regulatory liabilities related to power contracts	90,978		95,774
Power contract acquisition adjustment loss	8,588		9,689
Operating lease liabilities	180,110		160,980
Other deferred credits	668,423		622,252
Total long-term and regulatory liabilities	3,556,475		3,415,029
Commitments and contingencies (Note 8)
Total capitalization and liabilities	$	15,725,284	$	15,042,965

(Unaudited)


	Six Months Ended June 30,
	2021		2020
Operating activities:
Net Income (loss)	$	244,235	$	71,703
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	374,361		301,681
Conservation amortization	55,961		47,714
Deferred income taxes and tax credits, net	23,377		1,741
Net unrealized (gain) loss on derivative instruments	(84,278)		36,379
(Gain) or loss on extinguishment of debt	—		13,546
AFUDC - equity	(12,139)		(11,668)
Production tax credit utilization	(45,562)		(14,470)
Other non-cash	(12,759)		696

Regulatory assets and liabilities	(50,120)		(71,268)
Purchased gas adjustment	38,230		45,833
Other long term assets and liabilities	(13,087)		(11,114)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	118,203		189,072
Materials and supplies	(2,519)		(15,837)
Fuel and natural gas inventory	(14,825)		793
Prepayments and other	(783)		(171)

Accounts payable	(24,775)		(54,136)
Taxes payable	(9,599)		(6,006)
Other	(15,114)		(28,226)
Net cash provided by (used in) operating activities	568,807		496,262
Investing activities:
Construction expenditures - excluding equity AFUDC	(442,981)		(438,477)
Other	60		104
Net cash provided by (used in) investing activities	(442,921)		(438,373)
Financing activities:
Change in short-term debt, net	(142,500)		(36,000)
Dividends paid	(46,153)		(45,064)
Investment from Parent	210,000		—
Proceeds from long-term debt and bonds issued	514,875		644,690
Redemption of bonds and notes	(66)		(450,000)
Repayment of term loan and revolving credit	(210,000)		(174,100)
Other	10,982		(7,350)
Net cash provided by (used in) financing activities	337,138		(67,824)
Net increase (decrease) in cash, cash equivalents, and restricted cash	463,024		(9,935)
Cash, cash equivalents, and restricted cash at beginning of period	81,851		66,146
Cash, cash equivalents, and restricted cash at end of period	$	544,875	$	56,211
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	$	160,986	$	169,832
Cash payments (refunds) for income taxes	13,151		—
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	$	54,078	$	57,498


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating revenue:
Electric	$	563,822	$	468,366	$	1,322,414	$	1,137,456
Natural Gas	195,124		177,609		588,030		548,640
Other	10,444		5,704		19,032		11,713
Total operating revenue	769,390		651,679		1,929,476		1,697,809
Operating expenses:
Energy costs:
Purchased electricity	162,515		125,487		367,925		291,229
Electric generation fuel	56,448		32,974		116,866		96,598
Residential exchange	(17,592)		(16,167)		(43,394)		(40,801)
Purchased natural gas	62,829		61,257		217,844		216,133
Unrealized (gain) loss on derivative instruments, net	(61,276)		(12,162)		(84,278)		36,379
Utility operations and maintenance	150,167		148,120		310,707		303,042
Non-utility expense and other	8,952		15,048		18,370		27,783
Depreciation & Amortization	165,803		136,816		374,165		301,587
Conservation amortization	21,901		20,321		55,961		47,714
Taxes other than income taxes	76,837		68,793		187,147		174,297
Total operating expenses	626,584		580,487		1,521,313		1,453,961
Operating income (loss)	142,806		71,192		408,163		243,848
Other income (expense):
Other income	11,427		12,862		22,461		24,145
Other expense	(2,350)		(8,468)		(3,860)		(10,750)
Interest charges:
AFUDC	3,775		3,914		7,361		7,557
Interest expense	(62,869)		(62,464)		(125,240)		(123,178)
Income (loss) before income taxes	92,789		17,036		308,885		141,622
Income tax (benefit) expense	14,425		1,999		31,051		15,264
Net income (loss)	$	78,364	$	15,037	$	277,834	$	126,358


	June 30, 2021		December 31, 2020
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	3,485,105		3,485,105
Retained earnings	1,057,560		876,401
Accumulated other comprehensive income (loss), net of tax	(171,847)		(180,956)
Total common shareholder’s equity	4,371,677		4,181,409
Long-term debt:
First mortgage bonds and senior notes	4,212,000		4,212,000
Pollution control bonds	161,860		161,860


Debt discount, issuance costs and other	(34,857)		(35,816)
Total long-term debt	4,339,003		4,338,044
Total capitalization	8,710,680		8,519,453
Current liabilities:
Accounts payable	325,314		342,504
Short-term debt	231,300		373,800
Current maturities of long-term debt	2,345		2,412

Accrued expenses:
Taxes	101,522		107,254
Salaries and wages	37,314		42,530
Interest	48,835		48,189
Unrealized loss on derivative instruments	37,491		31,441

Operating lease liabilities	19,041		19,204
Other	72,747		73,385
Total current liabilities	875,909		1,040,719
Other long-term and regulatory liabilities:
Deferred income taxes	1,064,975		987,382
Unrealized loss on derivative instruments	18,566		29,833
Regulatory liabilities	799,897		731,234
Regulatory liabilities for deferred income tax	906,228		953,987


Operating lease liabilities	180,110		160,980
Other deferred credits	664,785		614,837
Total long-term and regulatory liabilities	3,634,561		3,478,253
Commitments and contingencies (Note 8)
Total capitalization and liabilities	$	13,221,150	$	13,038,425

(Unaudited)


	Six Months Ended June 30,
	2021		2020
Operating activities:
Net Income (loss)	$	277,834	$	126,358
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	374,165		301,587
Conservation amortization	55,961		47,714
Deferred income taxes and tax credits, net	27,413		10,267
Net unrealized (gain) loss on derivative instruments	(84,278)		36,379
AFUDC - equity	(12,139)		(11,668)
Production tax credit utilization	(45,562)		(14,470)
Other non-cash	(18,068)		(4,582)

Regulatory assets and liabilities	(50,120)		(71,204)
Purchased gas adjustment	38,230		45,833
Other long term assets and liabilities	(7,850)		(5,073)
Change in certain current assets and liabilities:
Accounts receivable and unbilled revenue	120,026		186,425
Materials and supplies	(2,519)		(15,837)
Fuel and natural gas inventory	(14,825)		729
Prepayments and other	(783)		(171)

Accounts payable	(10,865)		(52,580)
Taxes payable	(5,732)		(2,060)
Other	(15,122)		(28,724)
Net cash provided by (used in) operating activities	625,766		548,923
Investing activities:
Construction expenditures - excluding equity AFUDC	(439,374)		(428,775)
Other	60		104
Net cash provided by (used in) investing activities	(439,314)		(428,671)
Financing activities:
Change in short-term debt, net	(142,500)		(36,000)
Dividends paid	(96,675)		(99,809)

Redemption of bonds and notes	(66)		—
Other	11,359		6,373
Net cash provided by (used in) financing activities	(227,882)		(129,436)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(41,430)		(9,184)
Cash, cash equivalents, and restricted cash at beginning of period	80,721		64,891
Cash, cash equivalents, and restricted cash at end of period	$	39,291	$	55,707
Supplemental cash flow information:
Cash payments for interest (net of capitalized interest)	$	114,854	$	114,027
Cash payments (refunds) for income taxes	21,816		—
Non-cash financing and investing activities:
Accounts payable for capital expenditures eliminated from cash flows	$	54,078	$	57,498

The following discussion and analysis should be read in conjunction with the financial statements and related notes thereto included elsewhere in this report on Form 10-Q. 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 Puget Sound Energy's Form 10-K for the period ended December 31, 2020. 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 U.S. Securities and Exchange Commission (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, including the COVID-19 pandemic.

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 which is under construction. 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 Canada Pension Plan Investment Board (CPPIB), the British Columbia Investment Management Corporation (BCIMC), the Alberta Investment Management Corporation (AIMCo), Ontario Municipal Employee Retirement System (OMERS) and PGGM Vermogensbeheer B.V. In July 2021, CPPIB entered into an agreement to sell its shares to Macquarie Asset Management and Ontario Teachers’ Pension Plan Board. The sale is conditioned upon the approval of various federal and state agencies, including that of the Washington Commission. Puget Energy and PSE are collectively referred to herein as “the Company.”

PSE's regulatory requirements and operational needs require the investment of substantial capital in 2021 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 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 on a regular and frequent basis in the foreseeable future. In addition, 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.

PSE filed a GRC with the Washington Commission on June 20, 2019, requesting an overall increase in electric and natural gas rates of 6.9% and 7.9% respectively. PSE requested a return on equity of 9.8% with an overall rate of return of 7.62%. In addition to the traditional areas of focus (revenue requirements, cost allocation, rate design and cost of capital), the Company completed an attrition study and included a portion of the attrition revenue requirement in the overall request in order to address the expected regulatory lag in the rate year. Additionally, as the non-plant related excess deferred taxes that resulted from the Tax Cuts and Jobs Act (TCJA) remained outstanding from PSE’s Expedited Rate Filing (ERF) as discussed below, PSE requested in its GRC to pass back the amounts over four years. On September 17, 2019, PSE filed supplemental testimony, which provided certain updates to the original filing, but did not impact the requested overall electric and natural gas rate increases, return on equity or overall rate of return as originally filed. On January 15, 2020, PSE filed rebuttal testimony that included a reduction to the requested return on equity to 9.5%, which decreased the rate of return to 7.48%. The requested rate increase for both electric and natural gas remained at 6.9% and 7.9%, respectively. For both electric and natural gas PSE did not originally request its full attrition adjustment; therefore, the decrease in return on equity led to a reduction in the electric rate increase of only $1.5 million and did not have an impact on the natural gas rate increase.

On July 8, 2020, the Washington Commission issued its order on PSE’s GRC. The ruling provided for a weighted cost of capital of 7.39% or 6.80% after-tax, and a capital structure of 48.5% in common equity with a return on equity of 9.4%. The order also resulted in a combined net increase to electric of $29.5 million, or 1.6%, and to natural gas of $36.5 million, or 4.0%. However, the Washington Commission extended the amortization of certain regulatory assets, PSE’s electric decoupling deferral, and PSE’s purchased gas adjustment (PGA) deferral to mitigate the impact of the rate increase in response to the economic instability created by the COVID-19 pandemic, which reduced the electric revenue increase to approximately $0.9 million, or 0.05%, and the natural gas increase to $1.3 million, or 0.15%. The Washington Commission also determined that the Company’s proposed attrition adjustment of $23.9 million for electric and $16.2 million for natural gas was not in the public interest at this time. The order also effectively ends the deferral of PSE’s advanced metering infrastructure (AMI) investment while allowing the deferral on the return on AMI investments through December 31, 2019. Additional AMI investments will be evaluated in future proceedings for deferrals of return until the AMI project is complete. On July 17, 2020, PSE filed a motion for clarification with the Washington Commission seeking clarification on several items. On July 31, 2020, the Washington Commission issued an order granting PSE’s motion for clarification. The ruling adjusted certain items from the final order issued on July 8, 2020, which led to a combined net increase to electric of $59.6 million, or 2.9%, an increase of $30.1 million above the $29.5 million granted in the final order. The order also led to a combined net increase to natural gas of $42.9 million, or 5.6%, an increase of $6.4 million above the $36.5 million granted in the final order. The Washington Commission maintained adjustments which mitigated the impacts of the rate increases in response to the economic instability created by the COVID-19 pandemic, which reduced the electric revenue increase to approximately $27.7 million, or 1.3%, and the natural gas increase to $0.2 million, or 0.02%.

On August 6, 2020, PSE filed a petition for judicial review with the Superior Court of the State of Washington for King County (Superior Court) challenging the portion of the final order that requires PSE to pass back to customers the reversal of plant-related excess deferred income taxes in a manner that may deviate from the IRS normalization and consistency rules. On August 7, 2020, PSE filed a motion to stay with the Superior Court related to the portions of the final order under judicial review. On September 14, 2020, the Superior Court denied PSE's motion to stay. PSE reviewed the original Washington Commission order including the ramifications of certain tax issues and requested a Private Letter Ruling (PLR) with the IRS regarding this matter. PSE will continue to utilize the average rate assumption method (ARAM) in the turnaround of certain accelerated tax depreciation benefits on PSE assets. On September 23, 2020, PSE filed a compliance filing with the Washington Commission. The natural gas tariffs became effective October 1, 2020 and the electric tariffs on October 15, 2020. On October 7, 2020, PSE, the Washington Commission and interveners agreed to dismiss the petition for judicial review. The agreement is based on a commitment from the Washington Commission that if the IRS ruling finds that the Washington Commission’s methodology for reversing plant-related excess deferred income taxes is impermissible, the Washington Commission will open a proceeding to review and enact the changes required by the IRS ruling. There is approximately $25.6 million in annual revenue requirement related to the 2019 GRC which PSE has requested it be allowed to track and, if appropriate, recover, pending the outcome of the IRS ruling. On July 30, 2021, the IRS issued a PLR to PSE which concludes that the Washington Commission’s methodology for reversing plant-related excess deferred income taxes is an impermissible methodology under the IRS normalization and consistency rules. The PLR requires that PSE request the Washington Commission allow adjustments to its rates to bring PSE back in to compliance with IRS rules. To reflect the impact of the PLR, PSE recorded a regulatory asset and additional revenues of $20.1 million in its operating results through June 30, 2021.

On December 5, 2017, the Washington Commission approved PSE’s request within the 2017 GRC to extend the decoupling mechanism with several changes to the methodology that took effect on December 19, 2017. Electric and natural gas delivery revenues continue to be recovered on a per customer basis and electric fixed production energy costs are now decoupled and recovered on the basis of a fixed monthly amount. The allowed decoupling revenue for electric and natural gas customers will no longer increase annually each January 1 as occurred prior to December 19, 2017. Approved revenue per customer costs can only be changed in a GRC or ERF. Approved electric fixed production energy costs can only be changed in a GRC or a power cost only rate case. Other changes to the decoupling methodology approved by the Washington Commission include regrouping of electric and natural gas non-residential customers and the exclusion of certain electric schedules from the decoupling mechanism going forward. The rate test, which limits the amount of revenues PSE can collect in its annual filings, increased from 3.0% to 5.0% for natural gas customers but will remain at 3.0% for electric customers. The decoupling mechanism is to be reviewed again in PSE's first GRC filed in or after 2021, or in a separate proceeding, if appropriate. PSE’s decoupling mechanism over- and under- collections will still be collectible or refundable after this effective date even if the decoupling mechanism is not extended.

On October 24, 2019, the Washington Commission approved PSE’s request for PGA rates, with the rate change taking effect on November 1, 2019. As part of that filing, PSE requested an annual revenue increase of $118.4 million; where PGA rates, under Schedule 101, increased annual revenue by $17.8 million, and the tracker rates, under Schedule 106 and Supplemental Schedule 106B, increased by annual revenue of $100.6 million. Those rate increases were set in addition to continuing the collection on the remaining balance of $54.0 million from the out-of-cycle PGA, under Schedule 106A. The tracker rates include deferral balances for the three separate amounts: (i) $114.4 million of under collected commodity balances deferred in February and March; (ii) a $10.8 million balance of over-collected commodity costs for the 2018 PGA, and (iii) a $4.1 million remaining balance from the $54.7 million credit to customers, caused by the 2017 over-collection, established in the 2018 tracker. The high commodity deferral balances for winter months through March 2019 were the result of three noteworthy events last winter experienced by PSE: the rupture of a pipeline owned by Enbridge in October 2018, unusually low temperatures in February and March, and a compressor failure in February at the Jackson Prairie storage facility. Additionally, to reduce customer impact, as part of the approved PGA filing, PSE will be collecting $114.4 million commodity deferrals and related interest over a two year period, instead of the historic one year period, from November 2019 through October 2021.

•Transportation and other revenue increased $56.7 million primarily due the following: (i) an increase in PTC deferral revenue of $31.1 million for the re-purpose of the PTCs driven by an increase in current period taxable income; (ii) recognition of a regulatory asset as a result of the IRS PLR which concluded the EDIT methodology that was included in rates following the 2019 GRC order was impermissible. $16.0 million of the regulatory asset represents recovery through future electric rates, which is the amount that should have been included in rates from the 2019 GRC order through June 30, 2021, see Management's Discussion and Analysis, "Regulation and Rates" included in Item 2 of this report. for more information; and (iii) an increase in net wholesale non-core gas sales of $12.7 million. The change in net wholesale non-core gas sales was due to a $14.1 million increase in sales dollars driven by an 81% increase in the average price of the non-core gas sold in 2021 compared to 2020, although sales volumes decreased by 23%. Natural gas prices were higher in 2021 due to a cold weather event and Texas power and gas crisis in February 2021 compared to lower natural gas prices in 2020 due to high gas production, mild weather, surplus storage, and a decrease in demand due to the effects of COVID-19. These increases were partially offset by an increase in tax reform deferrals in 2021 for revenue subject to refunds of $7.5 million

•Utility operations and maintenance expense increased $7.7 million primarily due to an increase of (i) $3.0 million of distribution maintenance overhead from increased outage work, vegetation management and pole inspections; (ii) $2.8 million of injuries and damages expense due to a $1.0 million decrease to the loss reserve in the first quarter of 2020; (iii) $2.8 million of outside services for increased legal and audit work; (iv) $2.7 million of uncollectible accounts driven by COVID-19 disconnect suspension; (v) $2.3 million of CACAP expense related to the PSE's policies to reduce the impact to customers from COVID-19; (vi) $1.6 million of distribution operating mains and services expense for locating, mains repair and sewer cross bore work; (vii) $1.6 million of distribution maintenance underground lines from additional billed customer work; and (viii) $1.4 million of distribution operation supervision and engineering expense due to increased engineering and support labor; partially offset by a decrease in (i) customer records and collection expense of $2.9 million due to reduced billing, collection, disconnects and field work; (ii) $2.9 million of distribution operations miscellaneous expenses driven by service providers unable to perform normal duties during 2020; (iii) $2.9 million of power generation maintenance expense due to lower wind turbine maintenance; and (iv) $2.4 million of administrative and general expenses due to business disruptions during 2020;

As a result of the 2019 GRC outcome and the continuing negative impacts of tax reform on the Company's cash flows, Puget Energy and PSE's credit rating metrics were negatively impacted. In response to the 2019 GRC order, Moody's released an issuer comment stating the GRC outcome was credit negative but took no formal credit rating action. On July 23, 2020, S&P placed Puget Energy and PSE on CreditWatch with negative implications due the rate case outcome, but later revised to negative outlook. Fitch affirmed Puget Energy and PSE ratings but changed its outlook from stable to negative. On May 27, 2021, S&P revised Puget Energy’s and PSE’s ratings from negative to stable outlook. On June 1, 2021, Fitch also revised its outlook for PE and PSE to stable. Both actions were a result of the passage and signing into law of Washington Senate Bill 5295 which allows for multi-year rate plans and reduction of regulatory lag, as well as other actions taken by management to increase revenue via available rate recovery methods and management of internal expenses. Despite these actions, the rating agencies noted that a lack of sufficient regulatory rate relief over the relative near term could result in negative ratings implications. Although neither Puget Energy nor PSE have any debt whose maturity would be accelerated upon a ratings downgrade, a credit rating downgrade may increase the cost of borrowing for Puget Energy and PSE in future long-term

In September 2016, PSE, along with Avista Corporation, Cascade Natural Gas Corporation and NW Natural, filed a lawsuit in the U.S. District Court for the Eastern District of Washington challenging the CAR. In September 2016, the four companies filed a similar challenge to the CAR in Superior Court of the State of Washington for Thurston County. In March 2018, the Superior Court of the State of Washington for Thurston County invalidated the CAR. The Department of Ecology appealed the Superior Court decision in May 2018. As a result of the appeal, direct review to the Washington State Supreme Court was granted and oral argument was held on March 16, 2019. In January 2020, the Washington Supreme Court affirmed that CAR is not valid for “indirect emitters” meaning it does not apply to the sale of natural gas for use by customers. The court ruled, however, that the rule can be severed and is valid for direct emitters including electric utilities with permitted air emission sources, but remanded the case back to the Superior Court in Thurston County to determine which parts of the rule survive. The Washington State Department of Ecology and the four parties asked Superior Court to stay this case until the 2020 Washington State legislative session concluded and now the Washington State Department of Ecology plans to ask the court to extend the stay until the COVID-19 pandemic is over. Meanwhile, the four companies moved to voluntarily dismiss the federal court litigation without prejudice in March 2020.


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


		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 3 0 , 2021 and 2020	5
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 3 0 , 2021 and 2020	6
	Consolidated Balance Sheets – June 3 0 , 2021 and December 31, 2020	7
	Consolidated Statements of Common Shareholder's Equity - June 3 0 , 2021, and December 31, 2020	9
	Consolidated Statements of Cash Flows – Three and Six Months Ended June 3 0 , 2021 and 2020	10

	Puget Sound Energy, Inc.
	Consolidated Statements of Income – Three and Six Months Ended June 3 0 , 2021 and 2020	12
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 3 0 , 2021 and 2020	12
	Consolidated Balance Sheets – June 3 0 , 2021 and December 31, 2020	13
	Consolidated Statements of Common Shareholder's Equity - June 3 0 , 2021, and December 31, 2020	15
	Consolidated Statements of Cash Flows – Three and Six Months Ended June 3 0 , 2021 and 2020	16

	Notes
	Combined Notes to Consolidated Financial Statements	17

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	71

Item 4.	Controls and Procedures	72

Part II.	Other Information	72

Item 1.	Legal Proceedings	72

Item 1A.	Risk Factors	73

Item 6.	Exhibits	73

Exhibit Index		74

Signatures		75


ARO			Asset Retirement and Environmental Obligations
ASU			Accounting Standards Update
ASC			Accounting Standards Codification
EBITDA			Earnings Before Interest, Tax, Depreciation and Amortization
EIM			Energy Imbalance Market
ERF			Expedited Rate Filing
FASB			Financial Accounting Standards Board
GAAP			U.S. Generally Accepted Accounting Principles
GRC			General Rate Case
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
PTC			Production Tax Credit
PSE			Puget Sound Energy, Inc.
Puget Energy			Puget Energy, Inc.
Puget Holdings			Puget Holdings LLC
Puget LNG			Puget LNG, LLC
REP			Residential Exchange Program
SERP			Supplemental Executive Retirement Plan
TCJA			Tax Cuts and Jobs Act
Washington Commission			Washington Utilities and Transportation Commission
WSPP			WSPP, Inc.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	55,242	$	(23,233)	$	244,235	$	71,703
Other comprehensive income (loss):
Net unrealized gain (loss) from pension and postretirement plans, net of tax of $634, $433, $1,268 and $1,806, respectively	2,386		1,630		4,771		6,800



Other comprehensive income (loss)	2,386		1,630		4,771		6,800
Comprehensive income (loss)	$	57,628	$	(21,603)	$	249,006	$	78,503


Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2021		2020
Allowance for credit losses:
Beginning balance	$	20,080	$	8,294
Provision for credit loss expense 1	18,421		9,762
Receivables charged-off	(5,060)		(7,157)

Total ending allowance balance	$	33,441	$	10,899


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


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


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


	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)
	Shares	Amount				Retained Earnings				Total Equity
Balance at December 31, 2019	200	$	—	$	3,308,957	$	775,491	$	(84,149)	$	4,000,299
Net income (loss)	—	—		—		94,936		—		94,936
Common stock dividend paid	—	—		—		(22,645)		—		(22,645)
Other comprehensive income (loss)	—	—		—		—		5,170		5,170
Balance at March 31, 2020	200	$	—	$	3,308,957	$	847,782	$	(78,979)	$	4,077,760
Net income (loss)	—	—		—		(23,233)		—		(23,233)
Common stock dividend paid	—	—		—		(22,419)		—		(22,419)
Other comprehensive Income (loss)	—	—		—		—		1,630		1,630
Balance at June 30, 2020	200	$	—	$	3,308,957	$	802,130	$	(77,349)	$	4,033,738
Balance at December 31, 2020	200	$	—	$	3,313,532	$	912,787	$	(86,437)	$	4,139,882
Net income (loss)	—	—		—		188,993		—		188,993
Common stock dividend paid	—	—		—		(22,939)		—		(22,939)
Other comprehensive income (loss)	—	—		—		—		2,385		2,385
Balance at March 31, 2021	200	$	—	$	3,313,532	$	1,078,841	$	(84,052)	$	4,308,321
Net income (loss)	—	—		—		55,242		—		55,242
Common stock dividend paid	—	—		—		(23,214)		—		(23,214)
Capital contribution	—	—		210,000		—		—		210,000
Other comprehensive income (loss)	—	—		—		—		2,386		2,386
Balance at June 30, 2021	200	$	—	$	3,523,532	$	1,110,869	$	(81,666)	$	4,552,735


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


Puget Energy and Puget Sound Energy
	June 30, 2021					December 31, 2020
(Dollars in Thousands)	Volumes (millions)	Assets1		Liabilities2		Volumes	Assets1		Liabilities2
Electric portfolio derivatives	*	$	104,938	$	45,039	*	$	22,544	$	46,922
Natural gas derivatives (MMBtus)3	308	63,281		11,018		320	19,276		14,352
Total derivative contracts		$	168,219	$	56,057		$	41,820	$	61,274
Current		$	150,371	$	37,491		$	33,015	$	31,441
Long-term		17,848		18,566			8,805		29,833
Total derivative contracts		$	168,219	$	56,057		$	41,820	$	61,274


Puget Energy and Puget Sound Energy
	At June 30, 2021
	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	$	168,219	$	—	$	168,219	$	(36,898)	$	—	$	131,321
Liabilities:
Energy derivative contracts	$	56,057	$	—	$	56,057	$	(36,898)	$	(216)	$	18,943



Puget Energy and Puget Sound Energy	At December 31, 2020
	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	$	41,820	$	—	$	41,820	$	(21,696)	$	—	$	20,124
Liabilities:
Energy derivative contracts	$	61,274	$	—	$	61,274	$	(21,696)	$	(9,343)	$	30,235


Puget Energy and Puget Sound Energy
(Dollars in Thousands)	At June 30, 2021						At December 31, 2020
	Fair Value1		Posted		Contingent		Fair Value1		Posted		Contingent
Contingent Feature	Liability		Collateral		Collateral		Liability		Collateral		Collateral
Credit rating2	$	21,600	$	—	$	21,600	$	26,966	$	—	$	26,966
Requested credit for adequate assurance	6,875		—		—		6,576		—		—
Forward value of contract3	216		3,993		N/A		9,343		20,903		N/A
Total	$	28,691	$	3,993	$	21,600	$	42,885	$	20,903	$	26,966


Puget Energy		June 30, 2021				December 31, 2020
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount1	2	$	6,170,482	$	7,975,400	$	5,667,740	$	7,755,946
Long-term debt (variable-rate)	2	32,700		32,700		224,700		224,700
Total liabilities		$	6,203,182	$	8,008,100	$	5,892,440	$	7,980,646


Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	4,950	$	11,298	Discounted cash flow	Power prices (per MWh)	$	29.15	$	58.58	$	40.99
Natural gas	$	66	$	1,928	Discounted cash flow	Natural gas prices (per MMBtu)	$	2.98	$	4.50	$	3.93


Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	597	$	24,315	Discounted cash flow	Power prices (per MWh)	$	22.82	$	41.66	$	31.54
Natural gas	$	137	$	1,272	Discounted cash flow	Natural gas prices (per MMBtu)	$	1.89	$	3.42	$	2.47


Puget Sound Energy		June 30, 2021				December 31, 2020
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount2	2	$	4,339,003	$	5,833,823	$	4,338,044	$	6,086,358
Total liabilities		$	4,339,003	$	5,833,823	$	4,338,044	$	6,086,358


Puget Energy and Puget Sound Energy	Fair Value At June 30. 2021						Fair Value At December 31, 2020
(Dollars in Thousands)	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Electric derivative instruments	$	99,988	$	4,950	$	104,938	$	21,947	$	597	$	22,544
Natural gas derivative instruments	63,215		66		63,281		19,139		137		19,276
Total assets	$	163,203	$	5,016	$	168,219	$	41,086	$	734	$	41,820
Liabilities:
Electric derivative instruments	$	33,741	$	11,298	$	45,039	$	22,607	$	24,315	$	46,922
Natural gas derivative instruments	9,090		1,928		11,018		13,080		1,272		14,352
Total liabilities	$	42,831	$	13,226	$	56,057	$	35,687	$	25,587	$	61,274


Puget Energy and Puget Sound Energy	Three Months Ended June 30,
(Dollars in Thousands)	2021						2020
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	(21,170)	$	(1,834)	$	(23,004)	$	(26,305)	$	1,092	$	(25,213)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings1	14,690		—		14,690		(2,284)		—		(2,284)
Included in regulatory assets / liabilities	—		(195)		(195)		—		(39)		(39)
Settlements	132		167		299		(20)		(711)		(731)
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	—		—		—		—		—		—
Balance at end of period	$	(6,348)	$	(1,862)	$	(8,210)	$	(28,609)	$	342	$	(28,267)


Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2021						2020
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	(23,718)	$	(1,135)	(24,853)		$	(3,378)	$	1,282	$	(2,096)
Changes during period:
Realized and unrealized energy derivatives:
Included in earnings2	15,510		—		15,510		(26,837)		—		(26,837)
Included in regulatory assets / liabilities	—		(1,083)		(1,083)		—		284		284
Settlements	1,860		356		2,216		1,606		(1,224)		382
Transferred into Level 3	—		—		—		—		—		—
Transferred out of Level 3	—		—		—		—		—		—
Balance at end of period	$	(6,348)	$	(1,862)	$	(8,210)	$	(28,609)	$	342	$	(28,267)


Puget Energy
Valuation Date	Unobservable Input	Low	High	Average


March 31, 2020	Power prices (per MWh)	$10.23	$38.84	$24.43
	Power contract costs per quarter (in thousands)	$6,308	$7,085	$6,468


Puget Energy	Qualified Pension Benefits				SERP Pension Benefits				Other Benefits
	Three Months Ended June 30,
(Dollars in Thousands)	2021		2020		2021		2020		2021		2020
Components of net periodic benefit cost:
Service cost	$	6,733	$	6,172	$	115	$	176	$	41	$	46
Interest cost	5,613		6,292		293		362		77		93
Expected return on plan assets	(12,039)		(12,449)		—		—		(91)		(98)
Amortization of prior service cost	(476)		(292)		87		87		2		—
Amortization of net loss (gain)	3,072		2,099		588		512		(10)		(19)
Net periodic benefit cost	$	2,903	$	1,822	$	1,083	$	1,137	$	19	$	22


	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


Puget Sound Energy
(Dollars in Thousands)	At June 30,		At December 31,
PGA receivable balance and activity	2021		2020
PGA receivable beginning balance	$	87,655	$	132,766
Actual natural gas costs	177,547		314,792
Allowed PGA recovery	(216,677)		(363,886)
Interest	900		3,983
PGA receivable ending balance	$	49,425	$	87,655


Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)1
Electric:
May 1, 20211	1.0%	$21.4
January 1. 2021	(1.0)	(20.6)
October 15, 20202	(0.5)	(10.2)
May 1, 2020	0.2	2.0
May 1, 2019	0.9	20.6
Natural Gas:
May 1, 2021	1.5%	$15.0
May 1, 2020	(0.5)	(4.8)
May 1, 2019	(5.3)	(45.9)


	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


Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
December 1, 2020	2.1%	$43.9
October 15, 2020	(0.2)	(3.3)
July 3, 2020	1.2	23.9
July 1, 20191	(1.2)	(24.9)
May 1, 2019	0.1	3.3


Effective Date	Average Percentage Increase (Decrease) in Rates from prior year	Total credit to be passed back to eligible customers (Dollars in Millions)
January 1, 2021	0.3%	$(29.5)
January 1, 2020	(0.04)	(37.8)
January 1, 2019	0.1	(38.7)


Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)
May 1, 2021	0.3%	$3.2
May 1, 2020	(0.3)	(2.8)
May 1, 2019	(0.2)	(1.6)


Puget Energy and Puget Sound Energy	Amount of Available Commitments Expiration Per Period
(Dollars in Thousands)	Total		Less than 1 Year		1-3 Years		3-5 Years		Thereafter
Commercial commitments:
PSE revolving credit facility	$	800,000	$	—	$	800,000	$	—	$	—
Inter-company short-term debt	30,000		—		—		—		30,000
Total PSE commercial commitments	830,000		—		800,000		—		30,000
Puget Energy revolving credit facility	767,300		—		767,300		—		—
Less: Inter-company short-term debt elimination	(30,000)		—		—		—		(30,000)
Total Puget Energy commercial commitments	$	1,567,300	$	—	$	1,567,300	$	—	$	—


Capital Expenditure Projections
(Dollars in Millions)	2021	2022	2023
Total energy delivery, technology and facilities expenditures	$953.9	$974.4	$1,135.1


3(i).1			Amended Articles of Incorporation of Puget Energy (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 dated February 6, 2009 (incorporated herein by reference to Exhibit 3.3 to Puget Energy’s Current Report on Form 8-K, Commission File No. 1-16305).
3(ii).2			Amended and Restated Bylaws of Puget Sound Energy, Inc. dated February 6, 2009 (incorporated herein by reference to Exhibit 3.4 to Puget Sound Energy’s Current Report on Form 8-K, Commission File No. 1-4393).
4.1			Sixth Supplemental Indenture dated June 14, 2021 relating to Puget Energy's 2.379% Senior Secured Notes due 2028 (incorporated herein by reference to Exhibit 4.1 to Puget Energy's Current Report on Form 8-K, Commission File No. 1-6305
4.2			Registration Rights Agreement, dated as of June 14, 2021 among Puget Energy, Inc., BofA Securities, Inc., Scotia Capital (USA) Inc., and U.S. Bancorp Investments, Inc., as representatives of the several initial purchasers party thereto (incorporated herein by reference to Exhibit 4.1 to Puget Energy's Current Report on Form 8-K, Commission File No. 1-6305.
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, 2021 filed on August 3, 2021 formatted in 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), and (v) the Notes to Consolidated Financial Statements (submitted electronically herewith).


		PUGET ENERGY, INC. PUGET SOUND ENERGY, INC.
		/s/ Stephen King
		Stephen King Controller & Principal Accounting Officer
Date:	August 3, 2021


Date:			August 3, 2021

/s/ Mary E. Kipp
Mary E. Kipp
President and Chief Executive Officer


Date:			August 3, 2021

/s/ Kazi Hasan
Kazi Hasan
Senior Vice President and
Chief Financial Officer

Cover	6 Months Ended
Cover	Jun. 30, 2021 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
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	2021
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, 2021
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	2021
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Registrant Name	PUGET SOUND ENERGY, INC.