Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2026

Fair Value Inputs, Liabilities, Quantitative Information

The fair value of the 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 June 30, 2026				At December 31, 2025
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount1	2	$	9,419,233	$	9,175,662	$	8,525,032	$	8,199,785


Puget Sound Energy		At June 30, 2026				At December 31, 2025
(Dollars in Thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities:
Long-term debt (fixed-rate), net of discount2	2	$	6,459,069	$	6,052,126	$	6,457,684	$	6,054,647

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1 The carrying value includes debt issuances costs of $25.7 million and $23.2 million for June 30, 2026 and December 31, 2025, respectively, which are not included in fair value.

2 The carrying value includes debt issuances costs of $21.4 million and $22.2 million for June 30, 2026 and December 31, 2025, respectively, which are not included in fair value.

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:


Puget Energy and Puget Sound Energy	Fair Value At June 30, 2026						Fair Value At December 31, 2025
(Dollars in Thousands)	Level 2		Level 3		Total		Level 2		Level 3		Total
Assets:
Electric derivative instruments	$	34,190	$	3,611	$	37,801	$	38,930	$	3,044	$	41,974
Natural gas derivative instruments	2,851		2,829		5,680		2,262		4,473		6,735
Total assets	$	37,041	$	6,440	$	43,481	$	41,192	$	7,517	$	48,709
Liabilities:
Electric derivative instruments	$	246,876	$	218,639	$	465,515	$	281,007	$	212,327	$	493,334
Natural gas derivative instruments	62,461		1,121		63,582		78,945		1,142		80,087
Compliance obligations	73,822		—		73,822		96,490		—		96,490
Total liabilities	$	383,159	$	219,760	$	602,919	$	456,442	$	213,469	$	669,911

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables present 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	Three Months Ended June 30,
(Dollars in Thousands)	2026						2025
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	(227,299)	$	2,447	$	(224,852)	$	(203,718)	$	1,585	$	(202,133)
Changes during period:
Realized and unrealized energy derivatives:
Included in regulatory assets / liabilities	(9,684)		308		(9,376)		102,904		3,407		106,311
Settlements	21,955		(1,047)		20,908		7,450		(454)		6,996


Balance at end of period	$	(215,028)	$	1,708	$	(213,320)	$	(93,364)	$	4,538	$	(88,826)


Puget Energy and Puget Sound Energy	Six Months Ended June 30,
(Dollars in Thousands)	2026						2025
Level 3 Roll-Forward Net Asset/(Liability)	Electric		Natural Gas		Total		Electric		Natural Gas		Total
Balance at beginning of period	$	(209,283)	$	3,330	$	(205,953)	$	(175,110)	$	1,391	$	(173,719)
Changes during period:
Realized and unrealized energy derivatives:
Included in regulatory assets / liabilities	(63,389)		925		(62,464)		44,419		4,024		48,443
Settlements	57,644		(2,547)		55,097		37,327		(877)		36,450


Balance at end of period	$	(215,028)	$	1,708	$	(213,320)	$	(93,364)	$	4,538	$	(88,826)

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 June 30, 2026:


Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	3,611	$	218,639	Discounted cash flow	Power prices (per MWh)	$	19.16	$	115.77	$	54.94
Natural gas	$	2,829	$	1,121	Discounted cash flow	Natural gas prices (per MMBtu)	$	0.95	$	4.27	$	1.73

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1 The valuation techniques and unobservable inputs 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, 2025:


Puget Energy and Puget Sound Energy	Fair Value						Range
(Dollars in Thousands)	Assets1		Liabilities1		Valuation Technique	Unobservable Input	Low		High		Weighted Average
Electric	$	3,044	$	212,327	Discounted cash flow	Power prices (per MWh)	$	18.40	$	126.87	$	57.64
Natural gas	$	4,473	$	1,142	Discounted cash flow	Natural gas prices (per MMBtu)	$	1.53	$	4.46	$	2.30

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1 The valuation techniques and unobservable inputs are the same for asset and liability positions.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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