ITEM 9A. CONTROLS AND PROCEDURES

Puget Energy

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of Puget Energy’s management, including the President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, Puget Energy has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, ~~2019,~~2022, the end of the period covered by this report. Based upon that evaluation, the President and Chief Executive Officer and Senior Vice President and Chief Financial Officer of Puget Energy concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

~~During 2018, Puget Energy implemented internal controls covering the evaluation and assessment of leasing contracts related to the adoption of the new leasing standard as of January 1, 2019.~~

There have been no changes in Puget Energy’s internal control over financial reporting during the quarter ended December 31, ~~2019,~~2022, that have materially affected, or are reasonably likely to materially affect, Puget Energy’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Puget Energy’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Under the supervision and with the participation of Puget Energy’s President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, Puget Energy’s management assessed the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, Puget Energy’s management concluded that its internal control over financial reporting was effective as of December 31, ~~2019.~~

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2022.

Puget Energy’s effectiveness of internal control over financial reporting as of December 31, ~~2019,~~2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Puget Sound Energy

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of PSE’s management, including the President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, PSE has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of December 31, ~~2019,~~2022, the end of the period covered by this report. Based upon that evaluation, the President and Chief Executive Officer and Senior Vice President and Chief Financial Officer of PSE concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

~~During 2018, PSE implemented internal controls covering the evaluation and assessment of leasing contracts related to the adoption of the new leasing standard as of January 1, 2019.~~

There have been no changes in PSE’s internal control over financial reporting during the quarter ended December 31, ~~2019,~~2022, that have materially affected, or are reasonably likely to materially affect, PSE’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

PSE’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Under the supervision and with the participation of PSE’s President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, PSE’s management assessed the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, PSE’s management concluded that its internal control over financial reporting was effective as of December 31, ~~2019~~2022.

PSE’s effectiveness of internal control over financial reporting as of December 31, ~~2019,~~2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

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ITEM 9B. OTHER INFORMATION

None.

~~135~~ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Board of Directors

As of February ~~21, 2020,~~23, 2023, twelve directors constitute Puget Energy’s Board of Directors and thirteen directors currently constitute PSE’s Board of Directors, as set forth below. The directors are selected in accordance with the Amended and Restated Bylaws of each of Puget Energy and PSE, pursuant to which, the investor-owners of Puget Holdings (the indirect parent company of both Puget Energy and PSE) are entitled to select individuals to serve on the boards of Puget Energy and PSE.

Scott Armstrong, age ~~60,~~63, has been a director on the boards of PSE since June of 2015 and on the board of Puget Energy since November 2017. Mr. Armstrong previously served as Chief Executive Officer of Concure Oncology from March 2020 to November 2021. Prior to that Mr. Armstrong was President and CEO of Group Health Cooperative of Seattle, Washington, a health insurance and medical care provider, positions he had held since January 2005, until its acquisition by Kaiser Permanente on February 1, 2017. An independent director not affiliated with any of the Company’s investors, Mr. Armstrong’s executive leadership experience in a heavily regulated industry that has undergone extensive change, along with his involvement in civic affairs in the Pacific Northwest, are among the reasons for his appointment to the Puget Energy and PSE ~~board.~~boards.

~~Kenton Bradbury~~Richard Dinneny, age ~~50,~~60, has been a director on the boards of both Puget Energy and PSE ~~effective April 17, 2019. He is currently the Managing Director of OMERS Infrastructure Management Inc. a position he has held~~ since 2015. Prior to that, Mr. Bradbury served as a director of Infracapital, the infrastructure investment arm of M&G Investments, and served as Senior Vice President of Infrastructure and Regulation at E.ON in Germany. Mr. Bradbury will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

~~Richard Dinneny, age 57, has been a director on the boards of both Puget Energy and PSE effective~~ April 17, 2019. Mr. Dinneny ~~is currently the~~previously served as Senior Portfolio Manager, Infrastructure and Renewable Resources for British Columbia Investment Management Corporation (BCI) where he ~~has~~had the responsibility for all aspects of investing in infrastructure ~~transactions.~~transactions from 2015 to May 31, 2021. Mr. Dinneny ~~is a director of Vier Gas Services GmbH & Co. KG, Essen, the owner of Open Grid Europe, German’s leading natural gas transport company. Mr. Dinneny served~~serves on the ~~board~~boards of ~~Cleco Group LLC, Cleco Corporate Holdings LLC,~~Puget Energy and ~~Cleco Power LLC. Mr. Dinneny will not receive any director compensation from~~PSE as a representative of BCI’s ownership interests, pursuant to the ~~Companies for his service as an Owner Director on~~terms of the ~~Boards, but will be reimbursed for out-of-pocket expenses.~~Puget Energy and PSE bylaws.

Barbara Gordon, age ~~61,~~64, has been a director on the board of PSE since November ~~2017. Ms. Gordon currently serves~~2017 and on the ~~Woodland Park Zoo~~ board of ~~directors and as the Vice Chair of the Animal Care Committee.~~Puget Energy since August 2022. Ms. Gordon previously served as a Vice President of the board of directors for Seattle-King County Habitat for Humanity, a non-profit organization (2016-2018). Prior to that time, Ms. Gordon served as Executive Vice President and Chief Customer Officer of Bellevue-based Apptio, a developer of technology business management software (2016-2017), Senior Vice President and Chief Operating Officer of Isilon/EMC, a digital storage systems company (2013-2016), and as Corporate Vice President of Worldwide Customer Service and Support at Microsoft (2003-2013). An independent director not affiliated with any of the Company's investors, Ms. Gordon brings to the Board her expertise in customer-facing technology initiatives and enterprise level management of customer service and support.

~~Christopher Hind~~Chris Parker, age ~~50,~~52, has been a director of both Puget Energy and PSE since February 22, 2022. Mr. Parker is currently a member of the Ontario Teachers’ Pension Plan North America Infrastructure team where he focuses on origination, execution and management of infrastructure investments. He joined Ontario Teachers’ Pension Plan in 2011 and has served on the board of directors of Northern Star Generation, Intergen, Express Pipeline, Ontario Teachers' New Zealand Forest Investments and Sydney Desalination Plant. He currently serves on the board of directors of Chicago Skyway. Prior to joining Ontario Teachers', Chris worked on power and utility investments at Brookfield Asset Management. Mr. Parker was selected by Clean Energy JV Sub 2, LP and pursuant to the Amended and Restated Bylaws of each of the Companies, will serve as an Owner

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Director on their respective Boards of Directors. Mr. Parker will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

Grant Hodgkins, age 47, has been a director on the boards of both Puget Energy and PSE since ~~February 28, 2018. He~~December 31, 2020. Mr. Hodgkins is currently the ~~Senior Principal, Private~~Portfolio Manager, Infrastructure ~~with Canada Pension Plan~~and Renewable Resources Group, for British Columbia Investment ~~Board (CPPIB)~~Management Corporation (BCI), ~~an investment management organization,~~ which position he has held since ~~January 2016. Prior to that,~~September 2017, where he has responsibility for all aspects of investing in infrastructure transactions. Mr. ~~Hind served as~~Hodgkins is a ~~Managing Director, Investment Banking, at CIBC,~~director of Corix Infrastructure Inc., a ~~financial institution, from October 1997 to January 2016.~~water and wastewater utility and contract energy company based in Vancouver, British Columbia. Mr. ~~Hind also currently serves on the board of directors of Transportadora de Gas del Peru S.A., the largest transporter of natural gas and natural gas liquids in Peru. Mr. Hind~~Hodgkins was selected by ~~CPPIB~~BCI and pursuant to the Amended and Restated Bylaws of each of the Companies, will serve as an Owner Director on their respective Boards of Directors. Mr. ~~Hind~~Hodgkins will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

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~~Steven W. Hooper~~Tom King, age ~~66,~~61, has been a director on the boards of both Puget Energy and PSE since January 2015. Mr. Hooper is currently co-founder and partner of Ignition Partners, a venture capital firm that focuses on technology based in Bellevue, Washington, which position he has held since 2000. Previously, Mr. Hooper was the co-CEO of Teledesic (1998-2000) and CEO of Nextlink (1997-1998) and AT&T Wireless (1994-1997). Mr. Hooper also currently serves on the boards of directors of Recreational Equipment, Inc. (REI), an outdoor equipment company, and Airbiquity, Inc., an automotive telematics company, as well as on the boards of various Ignition Partners portfolio companies. An independent director not affiliated with any of the Company’s investors, Mr. Hooper’s leadership skills, experience with the challenges facing regulated businesses, and involvement with regional educational and civic organizations are some of the reasons that led to his appointment to the Puget Energy and PSE boards.

~~Tom King, age 58, has been a director on the boards of both Puget Energy and PSE effective~~ April 17, 2019. Mr. King is currently the Interim CEO of Woodway Energy Infrastructure, an Intra State Pipeline, which position he has held since December 2022. He is also an Operating Executive with AEA investors, a middle market private equity firm, which position he has held since 2017. Mr. King served as Chairman and President of National Grid U.S. from 2007-2015. Prior to that, he was president of PG&E Corporation and Chairman and CEO of Pacific Gas and Electric from 2003-2007. Mr. King serves on the board of Entregado Group and Allied Power ~~Group and served on the board of Peak Reliability and EnergySavvy, Inc.~~Group. Mr. King serves on the boards of Puget Energy and PSE as a joint representative of ~~CPPIB’s~~Macquarie Washington Clean Energy Investment, L.P. and Ontario Teachers’ Pension Plan ownership interests, pursuant to the terms of the Puget Energy and PSE bylaws. Mr. King’s experience as an executive officer of regulated utilities and his extensive familiarity with managing operational change are among the reasons for his continuing service as a member of the Puget Energy and PSE boards.

Mary Kipp, age ~~52,~~55, has been a director on the boards of both Puget Energy and PSE ~~effective~~since January 3, 2020. Ms. Kipp has ~~also been elected~~served as President and Chief Executive officer since January 3, 2020, and was President of Puget Energy and PSE from August 2019 to December 2019. Prior to that time Ms. Kipp served as President, Chief Executive Officer and Director of El Paso Electric Company (El Paso) from May 2017 to August 2019. ~~Prior to that she served as Chief Executive Officer and director of El Paso from December 2015 to May 2017, and President of El Paso from 2014 to 2015.~~ Ms. Kipp also serves on the board of Hawaiian Electric Industries, Inc., owner of a provider of electric utility services in Hawaii, and Boston Properties, Inc., a publicly traded developer, owner and manager of Class A office properties.

Jean-Paul Marmoreo, age 47, has been a director on the boards of both Puget Energy and PSE since September 3, 2021. Mr. Marmoreo is currently the Director Asset Management of OMERS Infrastructure Management Inc., since January 2019. He is currently on the boards of Calumet Concession Partners Inc., CannAmm GP Inc., and Commodore US Holding Corporation. Mr. Marmoreo previously served as ~~Senior Vice President, General Counsel~~Director of OMERS Infrastructure Management Inc. from February 2018 to January 2019 and ~~Chief Compliance Officer at El Paso~~Secretary of Airports Worldwide from ~~2010~~April 2017 to ~~2014.~~August 2018. Mr. Marmoreo was selected by OMERS and pursuant to the Amended and Restated Bylaws of each of the Companies, will serve as an Owner Director on their respective Boards of Directors. Mr. Marmoreo will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

Paul McMillan, age ~~65,~~68, has been a director on the boards of both Puget Energy and PSE since April 23, 2015. Mr. McMillan is currently principal of Tidal Shift Capital Inc., of Toronto, Ontario, Canada, which provides consulting and project development services to energy and infrastructure clients, ~~of Toronto, Ontario, Canada, which position~~ he has held the position since July 2009. He served as Senior Vice President of EPCOR Energy Division of Edmonton, Alberta, Canada, from May 2005 to July 2009 and President of EPCOR Merchant and Capital LP from September 2000 to May 2005. Mr. McMillan serves on the boards of Puget Energy and PSE as a representative of Aimco’s ownership interests, pursuant to the terms of the Puget Energy and PSE bylaws, and brings to this service his experience in energy and gas operations and trading as well as renewable and gas project development.

~~Mary McWilliams~~Diana Birkett Rakow, age ~~71,~~45, has been a director on the board of PSE since May 5, 2022. Ms. Rakow is currently the Senior Vice President of Public Affairs and Sustainability of Alaska Air Group, Inc., since November 2021. She previously served as Vice President of External Relations at Alaska Airlines from September 2017 to February 2021. Ms. Rakow also currently services as the current board chair for the Alaska Airlines Foundation, and serves on the boards of Philanthropy Northwest, the Bay Area Council, and the Pacific Science Center. An independent director not affiliated with any of the Company's investors, Ms. Rakow brings to the Board her expertise in ESG and climate strategy, governance and regulation.

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Aaron Rubin, age 45, has been a director on the boards of both Puget Energy and PSE since ~~March~~February 22, 2022. Mr. Rubin is currently responsible for Macquarie Asset Management’s Real Assets investment team that focuses on sustainable energy investments in the Americas. Since joining Macquarie in 2008, Mr. Rubin has had responsibility for investment origination and execution and the management of portfolio companies. Mr. Rubin currently serves on the board of directors of Cyrq Energy, Cleco Corporation and Lordstown Energy Center. Mr. Rubin was selected by Clean Energy JV Sub 1, ~~2011. Ms. McWilliams was most recently~~LP and pursuant to the ~~Executive Director at Washington Health Alliance, a health care organization, which position she held from 2008 to 2014. She also served as President~~Amended and ~~Chief Executive Officer at Regence BlueShield from 2000 to 2008. In addition, Ms. McWilliams serves as a Board member~~Restated Bylaws of each of the ~~Virginia Mason Health System, a health care services organization. Her civic commitments have included Seattle Rotary, Seattle Symphony, YWCA and~~Companies, will serve as an Owner Director on their respective Boards of Directors. Mr. Rubin will not receive any director compensation from the ~~Greater Seattle Chamber of Commerce. Ms. McWilliams’ significant experience managing consumer-focused organizations with challenging regulatory and compliance regimes, her civic involvement in~~Companies for his service as an Owner Director on the community, as well as her extensive knowledge of the western Washington economy, generally, are some of the reasons that led to her appointment to the Puget Energy and PSE boards on behalf of the CPPIB.Boards, but will be reimbursed for out-of-pocket expenses.

~~Christopher Trumpy~~Martijn Verwoest, age ~~65,~~46, has been a director on the boards of both Puget Energy and PSE since January 12, 2010. Mr. Trumpy is currently a consultant at Circle Square Solutions, a policy and governance consulting firm, which position he has held since 2013. He served as the Chairman of the Pacific Carbon Trust from 2008 to 2013. He also served as Chairman of the British Columbia Investment Management Corporation (or BCI) from 2000 to 2008. In addition, Mr. Trumpy served as Deputy Minister at Ministries of Finance, Environment and Provincial Revenue from 1998 to 2009. Mr. Trumpy represents the ownership stake in the Company of BCI, in accordance with the terms of the Puget Energy and PSE bylaws, and provides the boards the benefit of his significant leadership roles in government and policy-making, among other attributes.

~~Martijn Verwoest, age 43, has been a director on the boards of both Puget Energy and PSE effective~~ April 17, 2019. Mr. Verwoest is currently the Head of Energy & Utilities at Stichting Pensioenfonds Zorg en Welzijn (PGGM), and is a member of their Infrastructure Investment Committee since 2007. From 2001 to 2007, he worked in PGGM’s public equity department. Mr. Verwoest will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

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Steven Zucchet, age ~~54,~~57, has been a director on the boards of both Puget Energy and PSE ~~effective~~since April 17, 2019. Mr. Zucchet is currently the Managing Director at Ontario Municipal Employees Retirement System Infrastructure Management (OMERS)., which position he has held since January 2019. Since joining OMERS in 2003, Mr. Zucchet has led numerous transactions and had asset management responsibilities at a number of utility and generation companies in Canada and the United States. He is currently on the board of Oncor and Bruce Power Inc. Mr. Zucchet will not receive any director compensation from the Companies for his service as an Owner Director on the Boards, but will be reimbursed for out-of-pocket expenses.

Executive Officers

The information required by this item with respect to Puget Energy and PSE is incorporated herein by reference to the material under “Executive Officers of the Registrants” in Part I of this report.

Audit Committee

The Puget Energy and PSE Boards of Directors have both established an Audit Committee. Directors ~~Kenton Bradbury,~~ Richard Dinneny, ~~Steven Hooper,~~ Paul McMillan, ~~and~~ Tom King, Jean-Paul Marmoreo and Diana Rakow are the members of the Audit Committee. The Board has determined that Paul McMillan meets the definition of “Audit Committee Financial Expert” under United States Securities and Exchange Commission (SEC) rules. Puget Energy and PSE currently do not have any outstanding stock listed on a national securities exchange and, therefore, there are no independence standards applicable to either company in connection with the independence of its Audit Committee members.

Procedures by which Shareholders may recommend Nominees to the Board of Directors

There have been no material changes to the procedures by which shareholders may recommend nominees to the Boards of Directors of Puget Energy and PSE. Members of the Boards of Directors of Puget Energy and PSE are nominated and elected in accordance with the provisions of their respective Amended and Restated Bylaws.

Code of Conduct

Puget Energy and PSE have adopted a Corporate Ethics and Compliance Code applicable to all directors, officers and employees and a Code of Ethics applicable to the Chief Executive Officer and senior financial officers, which are available on the website www.pugetenergy.com. If any material provisions of the Corporate Ethics and Compliance Code or the Code of Ethics are waived for the Chief Executive Officer or senior financial officers, or if any substantive changes are made to either code as they relate to any director or executive officer, we will disclose that fact on our website within four business days. In addition, any other material amendments of these codes will be disclosed.

Communications with the Board

Interested parties may communicate with an individual director or the Board of Directors as a group via U.S. Postal mail directed to: Chairman of the Board of Directors, c/o Corporate Secretary, Puget Energy, Inc., P.O. Box 97034, EST-11, Bellevue, Washington 98009-9734. Please clearly specify in each communication the applicable addressee or addressees you wish to contact. All such communications will be forwarded to the intended director or Board as a whole, as applicable.

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ITEM 11. EXECUTIVE COMPENSATION

~~Puget Energy~~

Puget Sound Energy

Executive Compensation

Compensation and Leadership Development Committee Interlocks and Insider Participation

The members of the Compensation and Leadership Development Committee (referred to as the Committee) of the Boards of Directors (referred to as the Board) of Puget Energy and PSE (referred to as the Company) are named in the Compensation and Leadership Development Committee Report. No members of the Committee were officers or employees of the Company or any of its subsidiaries during ~~2019,~~2022, nor were they formerly Company officers or had any relationship otherwise requiring disclosure. Each member meets the independence requirements of the SEC and the New York Stock Exchange (NYSE).

Compensation Discussion and Analysis

This section provides information about the compensation program for the Company’s ~~Named~~named executive officers (Named Executive ~~Officers~~Officers) who are included in the Summary Compensation Table below. For ~~2019,~~2022, the Company’s Named Executive Officers and titles were:

•~~Kimberly J. Harris,~~Mary E. Kipp, President and Chief Executive Officer (CEO) ~~until August 30, 2019, and CEO until her retirement effective January 2, 2020;~~;

•~~Mary E. Kipp, President, effective August 30, 2019, and President and CEO, effective January 3, 2020;~~

•~~Daniel A. Doyle, Senior~~Kazi Hasan, Executive Vice President and Chief Financial Officer (CFO);

•Allan (Wade) Smith, Executive Vice President and Chief Operating Officer, effective July 18, 2022;

•Margaret F. Hopkins, Senior Vice President Shared Services and Chief Information Officer;

•Andy Wappler, Senior Vice President and Chief Customer Officer; and

•Steve R. Secrist, former Senior Vice President, General Counsel, Chief Ethics and Compliance ~~Officer; and~~

•~~Marla D. Mellies, Senior Vice President, Chief Administrative Officer.~~Officer who retired effective December 1, 2022.

This section also includes a discussion and analysis of the overall objectives of our compensation program and each element of compensation the Company provides to its Named Executive Officers.

Compensation Program Objectives

The Company’s executive compensation program has two main objectives:

•Support sustained Company performance by attracting, retaining and motivating talented people to run the business.

•Align incentive compensation payments with the achievement of short and long-term Company goals.

The Committee is responsible for developing and monitoring an executive compensation program and philosophy that achieves the foregoing objectives. In performing its duties, the Committee obtains information and advice on various aspects of the executive compensation program from its independent executive compensation consultant, Meridian Compensation Partners, LLC (Meridian). The Committee recommends to the Board for approval both the salary level for our CEO, based on information provided by Meridian and other relevant factors described below, and the salary levels for the other executives, based on recommendations from our CEO. The Committee also recommends to the Board for approval the annual and long-term incentive compensation plans for the executives, the setting of performance goals and the determination of target and actual awards under those plans, based on the compensation ~~philosophy and taking into consideration~~ information provided by Meridian and other relevant factors.

In ~~2019,~~2022, the Company used the following strategies to achieve the objectives of our executive compensation program:

•Design and deliver a competitive total compensation opportunity. To attract, retain and motivate a talented executive team, the Company believes that total pay opportunity should be competitive with companies of similar size, revenue, industry and scope of operations. As described below in the discussion of ~~Compensation Program Elements (Review~~Role of ~~Pay Element Competitiveness),~~Market Data, the Committee, with the support of Meridian, annually compares executive compensation levels to external market data from similar companies in our industry and generally targets each element of target total direct compensation (base salary and target annual and long-term incentive award opportunities) to the 50th percentile of the market data with variations by individual executive, as appropriate. ~~During 2019, the Committee worked with Meridian to develop a compensation package for the new President, and now President and CEO, Mary Kipp, who succeeded Ms. Harris.~~ ~~The terms of Ms. Kipp’s compensation are described below.~~The Company also

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recognizes the importance of providing retirement income. As such, the Committee reviews our retirement programs and provides benefits that are competitive with our peers.

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•Place a significant portion of each executive’s target incentive compensation at risk to align executive compensation with Company financial and operating performance. Under its “pay for performance” philosophy, the Company maintains an incentive compensation program that supports the Company’s business strategy and aligns executive interests with those of investors and customers. The Committee believes that a significant portion of each executive’s compensation should be “at risk” and earned based on achievement relative to annual and long-term performance goals. For example, 77% of the target 2022 compensation of our CEO, Ms. ~~Harris, CEO in 2019, had a mix of 2019 cash compensation comprised of 22% base salary and 78% at-risk target~~Kipp, was considered “at risk” compensation. By establishing goals, monitoring results, and rewarding achievement of goals, the Company seeks to focus executives on actions that will improve ~~the~~ Company performance and enhance investor value, while also retaining key talent. The Committee annually evaluates and establishes the performance goals and targets for our annual and long-term incentive ~~programs~~programs.

•Oversee the Company’s talent management process to ensure that executive leadership continues uninterrupted by executive retirements or other personnel changes. The CEO leads talent reviews for leadership succession planning through meetings and discussions with her executive team. Each executive conducts talent reviews of senior employees that report to him or her and who have high potential for assuming greater responsibility in the Company. Utilizing evaluations and assessments, the Committee and the Board annually review these assessments of executive readiness, the plans for development of the Company’s key executives, and progress made on these succession plans. The Committee and the Board directly participate in discussion of succession plans for the position of CEO. ~~As part of its ongoing succession planning efforts, during 2019, the Committee and the Board executed a CEO succession plan pursuant to which Ms. Kipp became CEO effective January 2020.~~

Compensation Philosophy

The target total compensation package is designed to provide ~~participants~~executives with appropriate incentives that are competitive with the comparator ~~group~~groups described below and motivate the achievement of current operational performance and customer service goals as well as the long-term objective of enhancing investor value. The Company does not have a specific policy regarding the mix of compensation elements, although long-term incentive awards consistently comprise the largest portion of each executive’s incentive pay. The Company arrives at a mix of pay by setting each compensation element relative to market comparators. The Company delivered cash compensation to the Named Executive Officers in 2019 through base salary to provide liquidity for the executives and through incentive programs to focus performance on important Company goals and to increase the alignment with investors.

As a matter of philosophy, all three components of target total direct compensation are generally targeted atwithin a competitive range of the 50th percentile of industry practice, ~~with deviations~~recognizing that the Company operates in a highly competitive regional market. Individual executive pay position may vary from the 50th percentile as influenced by ~~individual~~the factors below. Actual executive ~~as described below. If~~compensation depends significantly on Company performance results, ~~are~~and can result in below ~~expectations, actual compensation is expected to be below this~~or above targeted ~~level. If Company performance exceeds target, actual compensation is expected to be above this targeted level.~~levels.

Individual pay adjustments are reviewed annually ~~to see how they position the executive~~ relative to the 50th percentile of national peer market pay, while also considering other factors, such as the executive’s recent performance, experience level, company performance, competitive pay in our region, retention of top talent and internal pay equity. Notwithstanding the median philosophy, the Company may choose to target an executive’s compensation above or below the 50th percentile of national peer market pay when that individual has a role with greater or lesser responsibility than the best comparison job, in response to regional market pressures, or when our executive’s experience ~~and performance differ~~differs from ~~those~~that typically found in the market.

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Role of Market Data

The Company uses market data compiled by Meridian to inform its pay decisions on base salary, target annual incentives and target long-term incentive awards. Market data is obtained from both industry-specific surveys and proxy statements of public companies selected for inclusion in the Company’s custom executive compensation ~~benchmarking~~ peer group. The market survey data were sourced from a select cut from the Willis Towers Watson ~~2018~~2021 Energy Services Survey, comprised of utility and other companies similar in size and scope of operations to PSE. Based on Meridian's evaluation and its discussion with the Committee, five companies of similar scope were added to the 2021 peer group, while one was removed to ensure a broad comparison group. The 2226 companies in the custom market survey cut ~~used to inform target compensation~~for 2022 pay decisions ~~for 2019~~ are shown below:

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Custom Survey Peer Group
1.	Allete*	10.	Evergy	19.	PNM Resources
2.	Alliant Energy	11.	Eversource Energy	20.	Portland General Electric
3.	Ameren	12.	Hawaiian Electric Industries, Inc.	21.	PPL*
4.	Atmos Energy	13.	NiSource	22.	South Jersey Industries
5.	Avista	14.	Northwestern Energy*	23.	Southwest Gas
6.	Black Hills*	15.	Oncor	24.	Spire
7	CenterPoint*	16.	OGE Energy	25.	UGI
8	Cleco	17.	ONE Gas	26.	WEC Energy Group
9.	CMS Energy	18.	Pinnacle West Capital

Custom Survey Peer Group

1. Alliant Energy

10.

Hawaiian Electric Industries, Inc.

19.

Spire, Inc.
2. Ameren

11.

NiSource

20.

Vectren
3. Atmos Energy

12.

OGE Energy

21.

WEC Energy Group
4. Avangrid

13.

ONE Gas, Inc

22.

Westar Energy
5. Avista

14.

Pinnacle West Capital

6. Black Hills

15.

PNM Resources

7 CMS Energy

16.

Portland General Electric

8 Eversource Energy

17.

SCANA

9. Great Plains Energy

18.

Southwest Gas

*Added to the 2021 peer group. Avangrid was removed from the 2021 peer group.

The market survey data from the companies above were supplemented with proxy statement data for select positions in the Company’s executive compensation peer group, which was comprised of 1615 companies, all but one of which overlapped with companies included in the market survey data. ~~The 2018~~At the time of the benchmarking study, the median revenue of the executive compensation peers was ~~$3.6~~$3.5 billion, which was comparable to PSE’s annual revenues of ~~$3.4 billion at the time the~~$3.5 billion. The proxy peer group was ~~developed. The peer~~reviewed by Meridian to assess the continued relevancy of the companies ~~included in the Company’s executive compensation benchmarking peer group to inform 2019 compensation decisions are the same as those used for 2018~~ and ~~are shown below:~~did not change from last year.


Proxy Peer Group	Proxy Peer Group								Proxy Peer Group
1.	1.	Alliant Energy	7.	Great Plains Energy	13.	SCANA	1.	Alliant Energy		7.	Eversource Energy	13.	Portland General Electric
2.	2.	Ameren	8.	MDU Resources Group	14.	Vectren	2.	Ameren		8.	Idacorp	14.	Spire
3.	3.	Avista	9.	NiSource	15.	WEC Energy	3.	Atmos Energy		9.	NiSource	15.	WEC Energy Group
4.	4.	Black Hills	10.	OGE Energy	16.	Westar Energy	4.	Avista		10.	ONE Gas
5.	5.	CMS Energy	11.	Pinnacle West Capital			5.	CMS Energy		11.	Pinnacle West Capital
6.	6.	Eversource Energy	12.	Portland General Electric			6.	Evergy		12.	PNM Resources

Compensation Program Elements

The Company’s executive compensation program encompasses a mix of base salary, annual and long-term incentive compensation, retirement programs, health and welfare benefits and a limited number of perquisites. ~~The Company also provides certain post-termination and change in control benefits to executives who were employed by the Company prior to March 2009 under certain legacy arrangements.~~ Since the Company is not publicly listed and does not grant equity awards to its executives, it relies on a mix of fixed and variable cash-based compensation elements to achieve its compensation ~~objectives, including a performance unit plan, which helps align the interests of the Named Executive Officers with those of investors.~~objectives.

Base Salary

We recognize that it is necessary to provide executives with a fixed amount of regularly paid compensation that provides a balance to other at-risk pay ~~elements that are at risk.~~elements. Base salaries are reviewed annually by the Committee based on its ~~median~~compensation philosophy, internal pay equity considerations and considerations specific to an individual such as an executive’s expertise, level of performance, ~~achievement,~~ experience in the role and contribution relative to others in the organization.

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Base Salary Adjustments for ~~2019~~2022

The Committee reviewed the base salaries of the Named Executive Officers in early ~~2019~~2022 and recommended base salary adjustments to the ~~Board.~~Board, except for Mr. Smith, whose salary was approved at hire in July 2022. The Committee also reviewed salaries during 2022 based on market pressures and the promotion of Mr. Hasan to Executive Vice President and recommended base salary increases. The Board approved the Committee’s salary recommendations as shown in the table below. The adjustments were effective March 1, ~~2019.~~2022 except for Ms. Kipp’s and Mr. Hasan’s who also received additional adjustments effective August 2022. Base salaries for ~~2019~~2022 generally remained at the 50th percentile of market among the comparator group. The annual salary for Ms. Harris aligns with the market median. The salary increase percentages approved by the Board for Mr. Doyle and Mr. Secrist were similar to salary increases for other non-represented employees, and Ms. Mellies received an adjustment to better align with the market level. For Ms. Kipp, who joined the Company as President in August 2019, the Committee recommended and the Board approved a base salary consistent with the market level for her position.

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Name

2018 Base Salary

2019 Base Salary

% Change
Kimberly J. Harris

$950,000

$1,000,000

5%
Mary E. Kipp n/a 860,000 n/a
Daniel A. Doyle

521,000

531,420

2
Steve R. Secrist

445,000

462,800

4
Marla D. Mellies

360,000

392,400

9

~~2019~~


Name	2021 Base Salary	2022 Base Salary	% Change1
Mary E. Kipp	$930,000	$1,043,250	12%
Kazi Hasan	510,000	570,257	12
Allan (Wade) Smith	N/A	630,000	—
Margaret F. Hopkins	414,000	426,482	3
Andrew Wappler	390,326	402,036	3
Steve R. Secrist	500,553	515,570	3

1.Percentages are rounded.

2022 Annual Incentive Compensation

All PSE employees, including the Named Executive Officers, are eligible to participate in an annual incentive program referred to as the “Goals and Incentive ~~Plan.”~~Plan”. The plan is designed to incent our employees to achieve both (i) desired annual ~~operating~~financial results, measured by EBITDA, and ~~meet the Company’s~~(ii) pre-established goals based on both a service quality commitment to customers ~~a reliability measure (non-storm outage duration—System Average Interruption Disruption Index-- or “SAIDI”)~~ and an employee safety measure. EBITDA was selected as a performance goal because it provides a financial measure of cash flows generated from the Company’s annual operating performance.~~Target incentive opportunities under the plan are based on a percentage of an employee’s base salary.~~

For ~~2019,~~2022, the Company’s service quality commitment was measured by performance against ~~eight~~nine Service Quality Indicators (SQIs) covering three broad categories, set forth below. These are the same SQIs for which the Company is accountable to the Washington Commission. The Company's annual report to the Washington Commission and our customers describes each SQI, how it is measured, the Company’s required level of achievement, and performance results. The Company’s service quality report cards are available at ~~http://~~www.PSE.com/PerformanceReportCards.

The SQIs for ~~2019~~2022 were the same as those in ~~2018~~2021 and were as follows:

•Customer Satisfaction (3 SQIs) - Customer satisfaction with the customer care center, natural gas field services and number of Washington Commission complaints.

•Customer Service (1 SQI) - Calls answered “live” within 60 seconds by the customer care center.

•Operations Services (4(5 SQIs) - Gas emergency response, electric emergency response, non-storm outage duration as measured by the System Average Interruption Disruption Index (SAIDI), non-storm outage frequency, and on-time appointments.

~~In 2019, the Company began measuring SAIDI according to a scale based on improvement compared to a five-year average, with the measure for 2019 being 159 minutes.~~

The employee safety performance measure ~~in the annual incentive plan funding~~ reflects the Company’s continued commitment to employee safety. The safety performance measure contains three targets which must all be satisfied for the safety measure to be treated as met. The three employee safety targets for ~~2019~~2022 were:

•All employees attend a monthly safety “meeting in a box” presentation, or complete the same content ~~online.~~online, featuring employees from across PSE discussing their jobs and efforts to ensure the health and safety of themselves, their coworkers and our customers. The target completion rate is no less than 95%.

•All employees complete training videos to help reduce musculoskeletal injuries in the field, officer and at home.The ~~Company DART (~~D~~ays~~ A~~way from Work, days of~~ R~~estricted Work, or Job~~ T~~ransfer) not to exceed a~~target completion rate ~~of 0.49~~is no less than 95%.

•All employees complete ~~two modules of a PSE Athlete~~an online mental health training ~~program.~~course. The target completion rate is no less than 95%.

Annual incentive funding is decreased if a SQI is not achieved. The employee safety measure ~~and SAIDI function~~functions similarly to the ~~eight~~nine SQIs in determining the funding of the annual incentive plan. That is, if the safety measure ~~or SAIDI~~ is not achieved, annual incentive funding will be decreased by 10%, in the same way as a missed SQI.

In ~~2019,~~2022, 100% funding for the annual incentive plan required (i) achievement of 10 out of 10 customer service and safety measures (all ~~eight~~nine SQIs ~~SAIDI~~ and achievement of the safety measure) and (ii) target EBITDA performance. Eight of the ten

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~~All~~

customer service and safety measures were ~~met for 2019, but the safety measure was not~~ met, and EBITDA finished at ~~96.4%~~98.4% of target, so funding was less than 100%, as described further below.

Individual awards may be adjusted upward or downward based on an evaluation of an executive officer’s performance against individual and team goals that align with the corporate goals described below.

~~2019 Corporate Goals~~

In 2019, the Company continued using the Integrated Strategic Plan (ISP) to summarize for employees the direction and overall goals of the Company. The plan has five objectives which capture our 2019 corporate goals and which have been

~~142~~

communicated to our employees. Each employee, including the Named Executive Officers, has specific individual and team goals linked to driving strategies that meet one or more of the following ISP objectives:

•~~Safety~~ - ~~Our safety objective is our foundation: If nobody gets hurt today, we will feel safe and secure and be able to perform at our best.~~

•~~People~~ - When we’re safe, we can achieve our people objective of being a great place to work, with engaged employees who live our values, embrace an ownership culture and are motivated to drive results for our company and our customers.

•~~Process and Tools~~ - Engaged employees take us to our process and tools objective where results start with achieving operational excellence, with continuous improvement of our internal processes and tools so that we can increase efficiency, eliminate waste, improve reliability and enhance customer service.

•~~Customer- We now have the fundamentals to achieve our customer objective of delivering greater value and being our customer’s energy partner of choice in a competitive marketplace.~~

•~~Financial~~ - ~~Being our customer’s energy partner of choice takes us to our financial objective of increasing our financial strength, allowing us to sustain further improvement.~~

~~2019~~2022 Annual Incentive Plan Results

For ~~2019,~~2022, achievement of the corporate goals under the annual incentive plan was at ~~96.4%~~98.4% of target for ~~EBITDA, and 9/10 measures met for SQI, safety, and SAIDI achievement.~~EBITDA. PSE EBITDA was ~~$1,293.2~~$1,293.6 million, and SQI ~~SAIDI~~ and safety achievement was 98 out of 10, leading to a funding level for ~~2019~~2022 of ~~74.0%~~73.5% for the annual incentive plan for the ~~named executive officers.~~Named Executive Officers.

Funding levels for ~~2019~~2022 at maximum, target, and threshold are shown in the table below:

Annual Incentive Performance Payout Scale and Actual Performance
Performance Measure (Dollars in Millions)
2019 EBITDA

SQI, SAIDI& Safety*

Funding Level
Maximum $ 1,810.4

10/10

200%
Target 1,341.0

10/10

100
Threshold 1,206.9

6/10

30
2019 Actual Performance $ 1,293.2

9/10

74.0%


Annual Incentive Performance Payout Scale and Actual Performance
Performance Measure (Dollars in Millions)	2022 EBITDA			SQI, SAIDI& Safety*	Funding Level
Maximum		$	1,775.3	10/10	200%
Target		1,315.0		10/10	100
Threshold		1,183.5		6/10	30
2022 Actual Performance		1,293.6		8/10	73.5

_______________

* Combined SQI ~~SAIDI &~~and Safety results of 6/10 or better and minimum EBITDA of ~~$1,206.9~~$1,183.5 million are required for any annual incentive pay out funding

SQI and Safety results below 10/10 reduce funding (e.g., 9/10=90%, 8/10=80%, 7/10=70%)

For 2019, individual target incentive levels for the annual incentive plan varied by executive officer as a percentage of 2019 base salary as shown in the table below, based on the executive’s level of responsibility within the Company and informed by market data. Target annual incentive opportunities as a percentage of base salary for the Named Executive Officers were unchanged from 2018 levels, except for Ms. Kipp who joined the Company in 2019 and whose target annual incentive opportunity was set at 90% of base salary. No bonus is earned unless at least the threshold EBITDA and SQI and safety goals are achieved. The achievement of threshold performance results in a 30% of target bonus payout. The maximum incentive payable for exceptional performance in this plan is two times each Named Executive Officer's target incentive.

An executive’s individual award amount can be increased or decreased based on an assessment by the CEO (or the Board in the case of the CEO) of the executive’s individual and team performance results. After considering performance on individual and team goals, adjustments were made by the CEO for individual performance of certain Named Executive Officers below CEO in ~~2019.~~2022. The adjustments for individual performance are noted in the "Bonus" column onof the Summary Compensation table and did not materially change the amounts resulting from ~~2019~~2022 achievement of the corporate goals. The Board approved the incentive amounts shown below (inclusive of adjustments for performance for each Ms. Kipp and Mr. Hasan), which will be paid in March ~~2020:~~2023:


Name	Target Incentive (% of Base Salary)	2022 Actual Incentive Paid		2022 Actual Incentive (% of Base Salary)
Mary E. Kipp	115%	$	1,058,168	101.0%
Kazi Hasan*	80	352,109		62
Allan (Wade) Smith*	80	179,895		29
Margaret F. Hopkins	65	193,565		45
Andrew Wappler	65	182,469		45
Steve R. Secrist	65	246,314		48

~~143~~

Name

Target Incentive
(% of Base Salary)

2019 Actual
Incentive Paid

2019 Actual Incentive (% of Base Salary)
Kimberly J. Harris

100%

$ 740,000

74%
Mary E. Kipp 90* 190,920 67*
Daniel A. Doyle 65

255,613

48

Steve R. Secrist 65

222,607

48

Marla D. Mellies 65

226,493

58

~~_____________~~

* TargetMr. Hasan’s annual incentive ~~of 90%~~is based on time as Senior Vice President (65%) and time as Executive Vice President (80%); Mr. Smith’s annual incentive is prorated for time worked in 2022 since his hire. His target annual incentive is 80% of base ~~salary, prorated and payable based on 4 months of service in 2019; actual % of base shown as annual value.~~salary.

Long-Term Incentive Compensation

Long-term incentive compensation opportunities are designed to align the interests of executives with those of our investors, provide competitive pay opportunities, support a customer-focused utility, reward long-term performance and promote retention. ~~Long-term~~Long term incentive plan (LTI Plan) ~~awards~~grants are denominated ~~in units~~ and ~~are settled~~paid in cash, if at least threshold performance measures are ~~met. Performance measures have typically been based on two financial goals, each weighted equally and measured~~met over a three-year performance ~~cycle:~~cycle.

•~~Total return (Total Return) and~~

•~~ROE~~

~~The 2019-2021 grant cycle was focused exclusively~~Long-term incentive payments are based on ~~the ROE~~achievement of a Return on Equity (ROE) metric, ~~as described below. Total Return reflects the change in the value~~subject to achievement of ~~the Company~~a threshold EBITDA goal. Under this goal, EBITDA during the applicable three-year performance cycle ~~plus any distributions made~~must meet or exceed 90% of target EBITDA for a payment to ~~investors.~~occur. Assuming the EBITDA threshold is met, the grant cycles are funded based on

149

the three-year average ROE metric. ROE reflects the income earned on our equity investment. ~~Achievement~~The LTI Plan payments ultimately paid may range from 0% to 200% of ~~each performance measure during the performance cycle is evaluated independently of the other.~~target, depending on performance.

The Committee recommends for Board approval a targeted LTI grant value in dollars for each ~~executive, which is expressed as a percentage of base salary.~~executive. The ~~recommended and~~ targeted LTI grant value is determined by evaluating LTI grant values provided to similarly situated executives at comparable companies (using the previously discussed survey and peer group data) as well as other relevant executive-specific factors. The Company generally does not consider previously granted awards or the level of accrued value from prior or other programs when making new LTI Plan grants.

The target LTI grant value is then converted into a target number of units, allocated equally among the two financial goals, based on the unit value on the grant date. The initial per-unit value is measured at the Puget Holdings level and is calculated annually by an independent auditing firm or based on market transactions. The number of units ultimately earned may range from 0% to 200% of target depending on performance, with the payout being made in cash based on the number of units earned and the per-unit value at the end of the performance period. Executives generally must be employed on the ~~payment date~~last day of the performance cycle to receive a cash payment under the LTI Plan, except in the event of retirement, disability or death.

~~2019-2021~~2022-2024 Long-Term Incentive Plan Target Awards

Consistent with prior years, target LTI Plan awards for the ~~2019-2021~~2022-2024 performance cycle were ~~calculated based on a percentage of an executive's annual base salary,~~denominated in dollars, taking into account the executive's level of responsibility within the Company and the corresponding market data. ~~For~~ Ms. ~~Kipp, a~~Kipp’s target LTI Plan ~~level of 220% of base salary for the 2019-2021 performance cycle~~grant was ~~approved by the Board~~increased to ~~provide immediate alignment~~$3,700,000 to align with ~~PSE and other executives.~~market pay levels. Target LTI Plan award amounts for the ~~2019-2021~~2022-2024 performance cycle are shown in the following table.


Name						Target Long Term Incentive ~~(% of Base Salary)~~
~~Kimberly J. Harris~~						~~265%~~ ($)
Mary E. Kipp						~~220~~$3,700,000
~~Daniel A. Doyle~~Kazi Hasan						951,000,000
Allan (Wade) Smith						1,260,000
Margaret F. Hopkins						405,000
Andrew Wappler						380,000
Steve R. Secrist						95
~~Marla D. Mellies~~						95490,000

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These percentages were unchanged from amounts established for the 2018-2020 performance cycle, with the exception of Ms. Kipp who joined the Company in 2019. The total number of target LTI Plan units granted to a Named Executive Officer for the 2019-2021 performance cycle is equal to the applicable percentage of salary (converted to dollars) divided by the per unit value at the beginning of the performance cycle, including for Ms. Kipp, which was $81.86. Details of the ~~number of units granted~~target grants and expected values at target, threshold and maximum performance levels can be found in the ~~“2019~~“2022 Grants of Plan-Based Awards” table below. ~~Prior outstanding LTI Plan grants continue to have the performance targets and payout scales in effect at the time of grant.~~

In connection with Mr. Kipp’s appointment as President in 2019 and anticipated appointment as CEO in 2020, in July 2019, the Board, upon the recommendation of the Committee, also approved Ms. Kipp’s participation in the 2017-2019 performance cycle at a target amount of 110% of 2019 base salary and in the 2018-2020 performance cycle at a target amount of 165% of 2019 base salary. Ms. Kipp’s target amounts reflected her reduced participation in these performance cycles that began prior to her commencement of employment and are intended to incentivize performance in such performance cycles following commencement of employment

Long-Term Incentive Plan Performance ~~2017-2019~~2020-2022 Performance Cycle Results and Payouts

The ~~2017-2019~~2020-2022 performance cycle has now ended. Amounts payable as a result of award vesting are shown in the following table:

•Performance on ~~Total Return in 2019 was -1.2%, which was significantly lower than Total Return growth in 2018.~~

•Performance on the Total Return component for the three-year performance cycle was a compounded annual rate of 19.9%, above target and at the maximum of the funding scale. The Total Return Component funded at 200% of target units.

•~~Performance on~~ the ROE component of the grant ~~was an average of 110.7% of target. The ROE component funded~~finished at ~~160.7%~~80% of target, ~~units.~~which was below the plan’s threshold for funding. The Committee recommended and the Board approved a payment at 110% of target funding level, in recognition of the initial targets being set prior to the COVID global pandemic and the impact that had on business and regulatory conditions.

Name

Target Incentive
(% of Base Salary)¹

Total Return Component
Units Granted/Paid

ROE Component
Units Granted/Paid
2017-2019
Actual LTIP Paid²
Kimberly J. Harris

200%

22,770.5/45,541

22,770.5/36,592.2 $ 6,642,111
Mary E. Kipp 110 5,778.2/11,556.3 5,778.2/9,285.5 1,685,478
Daniel A. Doyle

95

4,638.5/9,277

4,638.5/7,454.1 1,353,042
Steve R. Secrist

95

3,663.0/7,326

3,663.0/5,886.4 1,068,490
Marla D. Mellies

95

2,884.5/5,769

2,884.5/4,635.4 841,403


Name	Target Incentive ($)1	2020-2022 LTIP Paid2
Mary E. Kipp	$2,385,000	$2,623,500
Kazi Hasan2	375,000	412,500
Allan (Wade) Smith2	—	—
Margaret F. Hopkins	293,125	322,438
Andrew Wappler	169,178	186,096

______________

¹Target LTI Plan incentive is ~~a percentage of 2017 base salary when~~ the ~~grants were made~~dollar target level set in ~~2017 with a unit price of $52.37, except that Ms. Kipp’s target is a percentage of 2019 base salary equal to 50% of target LTI % of 220% with a per unit price of $81.86.~~2020.

²~~2017-2019 actual~~In connection with Mr. Hasan's commencement of employment in 2021, he was eligible to participate in the 2020-2022 performance cycle at a target amount that reflected reduced participation during the performance cycle but was intended to incentivize performance following commencement of employment. In connection with Mr. Smith’s commencement of employment in 2022, he was granted retention incentives described in the “Other Compensation” section below. He did not receive a grant in the 2020-2022 LTIP performance cycle.

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In connection with Mr. Secrist’s retirement, he was eligible to receive a pro-rated portion of his LTI grants for the 2020-2022, 2021-2023 and 2022-2024 performance cycles in accordance with the LTI Plan ~~amount payable is equal to~~in the ~~unit price~~amounts of ~~$80.87 multiplied by earned Total Return~~$505,389, $233,641 and ~~ROE component units.~~$134,260, respectively, paid in March 2023.

Retirement Plans –– Executive Retirement Plans and Retirement Plan

The Company maintains executive retirement plans to attract and retain executives by providing a benefit that is coordinated with the tax-qualified Retirement Plan for Employees of Puget Sound Energy, Inc. (Retirement Plan). Without the addition of the executive retirement plans, these executives would receive lower percentages of replacement income during retirement than other employees. All the Named Executive Officers ~~participate~~participated in executive retirement ~~plans—~~plans during 2022, Ms. ~~Harris,~~Hopkins and Mr. ~~Doyle, Mr. Secrist and Ms. Mellies~~Wappler participate in the SERP and Ms. Kipp, Mr. Hasan and Mr. Smith participate in the Officer Restoration Benefit, as part of the Deferred Compensation Plan for Key Employees. Mr. Secrist participated in the SERP until his departure in 2022. Additional information regarding the SERP, Officer Restoration Benefit and the Retirement Plan is shown in the ~~“2019~~“2022 Pension Benefits” table.

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Deferred Compensation Plan

The Named Executive Officers are eligible to participate in the Deferred Compensation Plan for Key Employees (Deferred Compensation Plan). The Deferred Compensation Plan provides eligible executives an opportunity to defer up to 100% of base salary, annual incentive bonuses and earned LTI Plan awards, plus receive additional Company contributions made by PSE into an account that has three investment tracking fund choices. The funds mirror performance in major asset classes of bonds, stocks, and an interest crediting fund that changes rates quarterly. The Deferred Compensation Plan is intended to allow the executives to defer current income, without being limited by the Internal Revenue Code contribution limitations for 401(k) plans and therefore have a deferral opportunity similar to other employees as a percentage of eligible compensation. The Company contributions are also intended to restore benefits not available to executives under PSE’s tax-qualified plans due to Internal Revenue Code limitations on compensation and benefits applicable to those plans. Additional information regarding the Deferred Compensation Plan is shown in the ~~“2019~~“2022 Nonqualified Deferred Compensation” table.

Post-Termination Benefits

Effective March 30, 2009, the Company entered into Executive Employment Agreements with the Named Executive Officers at the time, including Ms. Harris and Ms. Mellies. The Executive Employment Agreements provide for an employment period of two years following a change in control and provide severance benefits in the event of a qualifying termination of employment within two years of a change in control. Since 2009, the Company has ceased entering into these agreements with new executive officers and, during 2019 only the agreements for Ms. Harris and Ms. Mellies remained in effect. The agreement with Ms. Harris terminated upon her retirement on January 2, 2020.

The Committee periodically reviews existing change in control and severance arrangements for the peer group companies. Based on this information, the Committee ~~believes that the~~has determined not to extend such arrangements to current ~~arrangements generally provide benefits that are similar to those of the comparator group for longer tenured executives, but is not extending them to~~and newly hired executives. No executive officers have employment agreements that would provide severance benefits. Certain compensation programs, such as the LTI Plan, have provisions that would apply in the event of a change in control.

The “Potential Payments Upon Termination or Change in Control” section describes the current post-termination arrangements with the Named Executive Officers as well as other plans and arrangements that would provide benefits on termination of employment or a change in control, and the estimated potential incremental payments upon a termination of employment or change in control based on an assumed termination or change in control date of December 31, ~~2019.~~2022.

Other Compensation

The Company also provides the Named Executive Officers with benefits and limited perquisites. ~~The~~To attract qualified candidates, the Company may provide certain payments ~~upon hiring a new executive~~ to ~~help~~executives in connection with an offer of employment, including payments to offset ~~the executive’s~~their relocation ~~expenses, a practice needed to attract qualified candidates from other areas of the country.~~ expenses.

In connection with ~~Ms. Kipp’s commencement~~his offer of employment ~~she received~~in 2021, Mr. Hasan is eligible to receive a ~~hiring~~retention bonus of $250,000 in ~~the amount~~each of ~~$800,000. Ms. Kipp is required~~March 2022 and March 2023, subject to ~~reimburse the Company~~continued employment.

In connection with his offer of employment, Mr. Smith was eligible to receive a signing bonus of $900,000 and a relocation payment of $150,000, grossed up for ~~this bonus~~taxes, to assist with moving expenses. Both amounts must be repaid if ~~she~~Mr. Smith resigns or ~~terminates~~is terminated for cause ~~(as defined in her employment offer letter)~~ within ~~twelve~~24 months of ~~payment. Ms. Kipp~~employment. Subject to continued employment, Mr. Smith is eligible to receive a retention bonus of $630,000 in March 2023, $150,000 in July 2023 (after one year of service) and $1,260,000 in December 2026. Mr. Smith is also eligible to ~~receive an additional bonus of $1,500,000~~participate in the ~~event~~2021-2023 performance cycle under the ~~previously announced acquisition~~LTI Plan based on a target grant of ~~El Paso by~~$945,000 in addition to participation in the ~~Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Incentive Management Inc.~~2022-2024 performance cycle for which disclosure is ~~completed in 2020.~~provided above.

The current executives participate in the same group health and welfare plans as other employees. Company vice presidents and above, including the Named Executive Officers, are eligible for additional disability and life insurance benefits. The executives are also eligible to receive reimbursement for financial planning, tax preparation and legal services up to an annual limit. The reimbursement for financial planning, tax preparation and legal services is provided to allow executives to concentrate on their business responsibilities. These perquisites generally do not make up a significant portion of executive

151

compensation and did not exceed $10,000 in total for each Named Executive Officer in ~~2019.~~2022. Executives are taxed on the value of the perquisites received, with no corresponding gross-up by the Company.

Relationship among Compensation Elements

A number of compensation elements increase in absolute dollar value as a result of increases to other elements. Base salary increases translate into higher dollar value opportunities for ~~both~~ annual ~~and long-term~~ incentives, because ~~each~~the plan operates with a target award set as a percentage of base salary. Base salary increases also increase the level of retirement benefits, as do actual annual incentive plan payments. Some key compensation elements are excluded from consideration when determining other elements of pay. Retirement benefits exclude LTI Plan payments in the calculation of qualified retirement (pension and 401(k)) and SERP benefits.

Impact of ~~Tax~~Accounting and ~~Accounting~~Tax Treatment of Compensation

The accounting treatment of compensation generally has not been a significant factor in determining the amounts of compensation for our executive officers. However, the Company considers the ~~accounting~~tax impact of various program designs

~~146~~

to balance the potential cost to the Company with the benefit/value to the executive. As a result of changes in federal tax law effective in 2018, the Company is now subject to IRS section 162(m). Section 162(m) limits the tax deductibility of compensation paid to certain executive officers, including the Named Executive Officers, to $1 million per year. Notwithstanding the new tax law, the Company does not expect to make changes in its executive compensation program ~~designs.~~designs and retains the discretion to pay compensation that may not qualify for a tax deduction.

Risk Assessment

A portion of each executive’s total direct compensation is variable, at risk and tied to the Company’s financial and operational performance to motivate and reward executives for the achievement of Company goals. The Company’s variable pay program helps executives focus ~~executives~~ on interests important to the Company and its investors and customers and creates a record of their results. In structuring its incentive programs, the Company also strives to balance and moderate risk to the Company from such programs: individual award opportunities are defined and subject to limits, goal funding is based on collective company performance, annual incentive awards are balanced by long-term incentive awards that measure performance over three years, performance targets are based on management’s operating plan (which includes providing good customer service), and all incentive awards to individual executives are subject to discretionary review by management, the Committee and/or the Board. As a result, the Committee and the Board believe that the programs’ design do not have risks that are reasonably likely to have a material adverse effect on the Company and also provide appropriate incentive opportunities for executives to achieve Company goals that support the interests of our investors and customers.

Compensation and Leadership Development Committee Report

The Board delegates responsibility to the Compensation and Leadership Development Committee to establish and oversee the Company’s executive compensation program. Each member of the Committee served during all of ~~2019,~~2022, except ~~as noted below.~~Mr. Rubin who joined February 22, 2022.

The Committee members listed below have reviewed and discussed the “Compensation Discussion and Analysis” with the Company’s management. Based on this review and discussion, the Committee recommended to the Board, and the Board has approved, that the “Compensation Discussion and Analysis” be included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2022, for filing with the SEC.

Compensation and Leadership

Development Committee of

Puget Energy, Inc.

Puget Sound Energy, Inc.

Steven Zucchet, chair, ~~joined Committee May 1, 2019~~

Scott Armstrong

Barbara Gordon

~~Mary McWilliams~~

~~Christopher Trumpy~~Aaron Rubin, effective February 22, 2022

Martijn Verwoest ~~joined Committee May 1, 2019~~

~~147~~152

Summary Compensation Table

The following information is provided for the year ended December 31, ~~2019,~~2022, (and for prior years where applicable) with respect to the Named Executive Officers during ~~2019.~~2022. The positions listed below are at Puget Energy and PSE, except that Ms. ~~Mellies is an executive~~Hopkins and Mr. Wappler are executives of PSE only. Positions listed are those held by the Named Executive Officers as of December 31, ~~2019.~~2022. Salary and incentive compensation includes amounts deferred at the executive’s election.

Name and Principal Position Year Salary
Bonus¹
Stock Awards Option Awards
Non-Equity Incentive Plan Compensation²
Change in Pension Value and Nonqualified Deferred Compensation³
All Other Compensation⁴
Total
Kimberly J. Harris 2019 $ 989,799 $ — $ — $ — $ 7,382,111 $ 3,373,594 $ 28,864 $ 11,774,368
President and Chief 2018 939,823 45,220 — — 6,593,310 445,343 20,888 8,044,584
Executive Officer⁵
2017 900,001 50,940 — — 5,293,105 1,523,783 20,338 7,788,167
Mary E. Kipp, President⁶
2019 252,540 — — — 1,876,398 — 813,893 2,942,831
Daniel A. Doyle 2019 521,399 — — — 1,608,655 964,614 63,555 3,158,223
Senior Vice President 2018 519,039 — — — 1,718,288 489,180 60,657 2,787,164
Chief Financial Officer⁷
2017 511,396 — — — 1,406,575 483,109 56,801 2,457,881
Steve R. Secrist 2019 459,165 — — — 1,291,097 786,634 53,517 2,590,413
Senior Vice President 2018 436,600 — — — 1,335,367 273,059 46,850 2,091,876
General Counsel, Chief Ethics & Compliance Officer⁸
2017 400,690 — — — 1,024,487 576,802 46,033 2,048,012
Marla D. Mellies 2019 382,671 37,749 — — 1,030,148 866,607 44,728 2,361,903
Senior Vice President 2018 351,428 33,415 — — 1,065,467 378,398 38,778 1,867,486
Chief Administrative Officer⁹
2017 316,128 — — — 838,219 478,905 34,531 1,667,783


Name and Principal Position	Year	Salary		Bonus1		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation2		Change in Pension Value and Nonqualified Deferred Compensation Earnings3		All Other Compensation4		Total
Mary E. Kipp	2022	$	991,585	$	176,361	$	—	$	—	$	3,505,307	$	—	$	87,678	$	4,760,931
President and,	2021	$	923,923	$	—	$	—	$	—	$	3,388,708	$	—	$	101,614	$	4,414,245
Chief Executive Officer5	2020	891,667		—		—		—		2,847,229		—		1,557,670		5,296,566
Kazi Hasan, Executive Vice	2022	542,348		308,685		—		—		705,924		—		54,849		1,611,806
President and Chief Financial Officer6	2021	243,409		262,736		—		—		294,118		—		315,817		1,116,080
Allan (Wade) Smith, Executive Vice President and Chief Operating Officer7	2022	262,500		900,000		—		—		179,895		—		223,747		1,566,142
Margaret F. Hopkins	2022	423,946		—		—		—		516,002		60,088		42,761		1,042,797
Senior Vice President Shared	2021	400,984		—		—		—		381,070		505,621		37,694		1,325,369
Services and CIO8	2020	345,328		—		—		—		461,260		499,683		39,064		1,345,335
Andrew Wappler
Senior Vice President and Chief Customer Officer9	2022	399,645		—		—		—		368,565		—		29,104		797,314
Steve R. Secrist	2022	491,021								246,314		343,636		923,664		2,004,635
Former Senior Vice President	2021	497,096		—		—		—		828,788		524,937		49,050		1,899,871
General Counsel, Chief Ethics & Compliance Officer10	2020	479,287		—		—		—		1,105,450		658,689		51,325		2,294,751

_______________

^1.~~For 2019, reflects~~Reflects individual performance above target as described in the "Compensation Discussion and Analysis," section titled ~~"2019~~"2022 Annual Incentive Plan Results" for each of Ms. Kipp and Mr. Hasan. For Mr. Hasan, also reflects a retention bonus of $250,000 paid in 2022 in connection with the terms of his 2021 offer of employment.. For Mr. Smith also reflects a signing bonus paid in connection with commencement of employment in 2022, in the amount ~~of: $37,749 for Ms. Mellies.~~of $900,000.

^2.For ~~2019,~~2022, reflects annual cash incentive compensation paid under the ~~2019~~2022 Goals and Incentive Plan and cash incentive compensation paid under the LTI Plan for the ~~2017-2019~~2020-2022 performance cycle. Cash incentive amounts were paid in early ~~2020~~2023 or deferred at the executive's election. The ~~2019~~2022 Goals and Incentive Plan and the LTI Plan are described in further detail under “Compensation Discussion and Analysis,” including the individual amounts paid to each Named Executive Officer in early ~~2020.~~2023.

^3.Reflects the aggregate increase in the actuarial present value of the executive’s accumulated benefit under all pension plans during the year. The amounts are determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements and include amounts ~~which~~that the executive may not currently be entitled to receive because such amounts are not vested. In ~~2019,~~2022, updated interest rates relative to those used for ~~2018~~2021 have generally resulted in ~~larger~~smaller increases in value than in prior years. Information regarding these pension plans is set forth in further detail under ~~“2019~~“2022 Pension Benefits.” The change in pension value amounts for ~~2019~~2022 are: ~~Ms. Harris, $3,371,078;~~ Ms. Kipp, $0; Mr. ~~Doyle, $964,614;~~Hasan, $0; Mr. Smith, $0; Ms. Hopkins, $60,088; Mr. Wappler, $0; and Mr. Secrist, $786,634, and Ms. Mellies, $866,255. Also included in this column are the portions of Deferred Compensation Plan earnings that are considered above market. These amounts for 2019 are: Ms. Harris, $2,516, Ms. Kipp, $0, Mr. Doyle, $0; Mr. Secrist, $0; and Ms. Mellies, $352. See the “2019 Nonqualified Deferred Compensation” table for all Deferred Compensation Plan earnings.$343,636.

^4.All Other Compensation for ~~2019~~2022 is shown in detail in the table below.

^5.~~Ms. Harris was promoted to President and CEO from President on March 1, 2011, became CEO effective August 31, 2019, and retired on January 3, 2020.~~

^6.Ms. Kipp joined PSE and Puget Energy as President on August 31, 2019, and became President and CEO on January 3, ~~2020, with the retirement of Ms. Harris.~~2020.

^7.6.Mr. ~~Doyle~~Hasan joined PSE and Puget Energy as Senior Vice President and Chief Financial Officer on ~~November 28, 2011.~~June 24, 2021.

^{7.Mr. Smith joined PSE and Puget Energy as Executive Vice President and Chief Operating Officer on July 18, 2022.}

8.Ms. Hopkins has worked at PSE since 2009.

9.Mr. Wappler has worked at PSE since February 2008.

10.Mr. Secrist has worked at PSE since May ~~1989.~~

^9.~~Ms. Mellies has worked at PSE since October 2005.~~1989 and retired effective December 1, 2022.

~~148~~153

Detail of All Other Compensation

Name

Perquisites and Other
Personal Benefits¹

Registrant Contributions
to Defined Contribution
and Deferred Compensation
Plans²

Other³
Kimberly J. Harris

$ 5,000

$ 15,416

$ 8,448

Mary E. Kipp 5,000 6,773 802,121
Daniel A. Doyle

2,500

53,851

7,204
Steve R. Secrist

1,370

46,822

5,325
Marla D. Mellies

493

39,097

5,138


Name	Perquisites and Other Personal Benefits1			Registrant Contributions to Defined Contribution and Deferred Compensation Plans2			Other3
Mary E. Kipp		$	5,000		$	70,381		$	12,297
Kazi Hasan		—			45,804			9,045
Allan (Wade) Smith		150,000			11,025			62,722
Margaret F. Hopkins		—			36,585			6,176
Andrew Wappler		—			21,200			7,904
Steve R. Secrist		2,500			41,569			879,596

_______________

^1.Reimbursement for financial planning, tax planning, and/or legal planning, with the initial plan up to a maximum of $5,000, and then annual reimbursement up to a maximum of $5,000 for Ms. ~~Harris and Ms.~~ Kipp, and $2,500 for the other Named Executive Officers. For Mr. Smith, also includes a relocation payment of $150,000, as described in "Other Compensation" of the "Compensation Discussion and Analysis."

^2.Includes Company contributions during ~~2019~~2022 to PSE’s Investment Plan (a tax qualified 401(k) plan) and the Deferred Compensation Plan. Company 401(k) contributions are as follows: Ms. ~~Harris, $15,416;~~Kipp, $25,325; Mr. Hasan, $23,376; Mr. Smith, $11,025; Ms. ~~Kipp, $6,773;~~Hopkins $17,205; Mr. ~~Doyle, $19,550;~~Wappler, $21,200; and Mr. Secrist, ~~$19,550; and Ms. Mellies, $19,550.~~$18,402. Company contributions to the Deferred Compensation Plan are as follows: Ms. ~~Harris,~~Kipp, $45,056; Mr. Hasan, $22,428; Mr. Smith, $0; Ms. ~~Kipp,~~Hopkins, $19,3802; Mr. Wappler, $0; ~~Mr. Doyle, $34,301;~~and Mr. Secrist, ~~$27,272; and Ms. Mellies, $19,547.~~$23,167.

^3.Reflects the value of imputed income for life insurance and Company paid premiums on supplemental disability insurance for all Named Executive Officers. For ~~Ms. Kipp~~Mr. Smith, also includes the amount of a ~~signing bonus~~tax gross-up on relocation payments of ~~$800,000~~$58,548, as described in the ~~Compensation~~"Compensation Discussion and Analysis," “Other ~~Compensation.”~~Compensation". For Mr. Secrist also includes pro-rated payment of LTI Plan grants at retirement, per the LTI Plan terms: 2020-2022 $505,389; 2021-2023, $233,641; and 2022-2024, $134,260.

~~2019~~

154

2022 Grants of Plan-Based Awards

The following table presents information regarding ~~2019~~2022 grants of non-equity annual incentive awards and LTI Plan awards, including, as applicable, the range of potential payouts for the awards.

Estimated Future Payouts under Non-Equity
Incentive Plan Awards

Name

Grant Date

Number
Of Units
Granted

Threshold

Target

Maximum
Kimberly J. Harris

Annual Incentive¹

1/1/2019

$ 300,000

$ 1,000,000

$ 2,000,000
LTI Plan 2019-2021²

2/21/2019

32,372

640,189

3,200,943

6,401,887
Mary E. Kipp

Annual Incentive¹
8/31/2019 $ 77,400 $ 258,000 $ 516,000
LTI Plan 2019-2021³
23,113 457,075 2,285,377 4,570,754
LTI Plan 2018-2020³

17,334

321,893

1,609,465

3,218,930
LTIP Plan 2017-2019³

11,556

201,498

1,007,490

2,014,981
Daniel A. Doyle

Annual Incentive¹

1/1/2019

$ 103,627

$ 345,423

$ 690,846
LTI Plan 2019-2021²

2/21/2019

6,167

121,959

609,793

1,219,586
Steve R. Secrist

Annual Incentive¹

1/1/2019

$ 90,246 $ 300,820

$ 601,640
LTI Plan 2019-2021²

2/21/2019

5,371

106,217

531,084

1,062,169
Marla D. Mellies

Annual Incentive¹

1/1/2019

$ 76,518

$ 255,060 $ 510,120
LTI Plan 2019-2021²

2/21/2019

4,554

90,060

450,300

900,599


		Estimated Future Payouts under Non-Equity Incentive Plan Awards
Name	Grant Date	Grant Target Value	Threshold		Target		Maximum
Mary E. Kipp
Annual Incentive1	1/1/2022		$	359,921	$	1,199,738	$	2,399,475
LTI Plan 2022-20242	2/24/2022	3,700,000	1,850,000		3,700,000		7,400,000
Kazi Hasan
Annual Incentive1	1/1/2022		$	119,765	$	399,217	$	798,434
LTI Plan 2022-20242	2/24/2022	1,000,000	500,000		1,000,000		2,000,000
Allan (Wade) Smith
Annual Incentive1	7/18/2022		$	69,930	$	233,100	$	466,200
LTI Plan 2021-20233	7/18/2022	945,000	472,500		945,000		1,890,000
LTI Plan 2022-20242	7/18/2022	1,260,000	630,000		1,260,000		2,520,000
Margaret F. Hopkins
Annual Incentive1	1/25/2022		$	83,164	$	277,214	$	554,428
LTI Plan 2022-20242	2/24/2022	405,000	202,500		405,000		810,000
Andrew Wappler
Annual Incentive1	1/1/2022		$	78,397	$	261,323	$	522,647
LTI Plan 2022-20242	2/24/2022	380,000	190,000		380,000		760,000
Steve R. Secrist
Annual Incentive1,4	1/1/2022		$	100,536	$	335,121	$	670,241
LTI Plan 2022-20244	2/24/2022	490,000	245,000		490,000		980,000

_______________

^1.As described in the “Compensation Discussion and Analysis,” the ~~2019~~2022 Goals and Incentive Plan had dual funding triggers in ~~2019~~2022 of ~~$1,206.9~~$1,183.5 million EBITDA and SQI performance of 6/10. Payment would be $0 if either trigger is not met. The threshold estimate assumes ~~$1,206.9~~$1,183.5 million EBITDA and SQI/Safety measure performance at 6/10. The target estimate assumes ~~$1,341~~$1,315.0 million EBITDA and SQI/Safety measure performance at 10/10. The maximum estimate assumes ~~$1,810.4~~$1,775.3 million EBITDA or higher and SQI/Safety measure performance at 10/10. The award for Mr. Smith was pro-rated for time worked in 2022 per the plan.

^2.As described in the “Compensation Discussion and Analysis,” LTI Plan grants for the ~~2019-2021~~2022-2024 performance cycle were allocated 100% to a ROE component subject to achievement of an EBITDA threshold goal.

3.In connection with Mr. Smith’s commencement of employment, he was eligible to participate in the ~~ROE component. Payments are calculated based on the average three-year performance of ROE and a unit value at the end of~~LTI Plan for the performance cycle ~~equal to $98.88, representing an increase~~indicated, but at a reduced participation level, as described in ~~Total Return of 6.5% per year.~~

^3.~~Upon her hire on August 31, 2019, Ms. Kipp received LTIP grants of~~ the ~~units shown for the 2019-2021, 2018-2020,~~"Compensation Discussion and ~~2017-2019 LTIP cycles.~~Analysis.".

4.Mr. Secrist received full grants on the grant dates in the amounts shown, but upon retirement had earned pro-rate portions per the plans, in the amounts shown in the Summary Compensation Table for 2022.

~~149~~155

~~2019~~2022 Pension Benefits

The Company and its affiliates maintain two pension plans: the Retirement Plan and the SERP, in addition to an Officer Restoration Benefit as part of the Deferred Compensation Plan. The following table provides information for ~~each of~~ the participating Named Executive Officers regarding the actuarial present value of the executive’s accumulated benefit and years of credited service under the Retirement Plan and the SERP. The present value of accumulated benefits was determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Each of the Named Executive Officers participates in both ~~plans.~~plans, except Ms. Kipp and Mr. Hasan, who participate just in the Officer Restoration Benefit (which is reported separately below) and Mr. Smith who participates in the Retirement Plan and the Officer Restoration Benefit.

Name

Plan Name

Number of Years
Credited Service

Present Value
of Accumulated
Benefit ^{1,2, 3}

Payments
During Last
Fiscal Year
Kimberly J. Harris

Retirement Plan

20.7

$ 588,937

$ —

SERP

20.7

13,144,354

—

Mary E. Kipp

Retirement Plan

0.3

—

—

Restoration Plan

0.3

—

—

Daniel A. Doyle

Retirement Plan

8.1

269,865

—

SERP

8.1

3,133,936

—

Steve R. Secrist

Retirement Plan

30.6

672,138

—

SERP

30.6

3,635,745

—

Marla D. Mellies

Retirement Plan

14.2

436,224

—

SERP

14.2

3,088,940

—


Name	Plan Name	Number of Years Credited Service	Present Value of Accumulated Benefit 1,2			Payments During Last Fiscal Year
Mary E. Kipp3	Retirement Contribution	3.3		$	—		$	—
	Restoration Benefit	3.3		—		—
Kazi Hasan3	Retirement Contribution	1.5		—		—
	Restoration Benefit	1.5		—		—
Allan (Wade) Smith	Retirement Plan	4		—		—
	Restoration Benefit	4		—		—
Margaret F. Hopkins	Retirement Plan	13.3		373,812		—
	SERP	13.3		2,520,357		—
Andrew Wappler	Retirement Plan	14.8		512,011		—
	SERP	14.8		2,513,830		—
Steve R. Secrist	Retirement Plan	33.5		979,620			—
	SERP	33.5		—			4,855,525

_______________

^1.The amounts reported in this column for each executive were calculated assuming no future service or pay increases. Present values were calculated assuming no pre-retirement mortality or termination. The values under the Retirement Plan and the SERP are the actuarial present values as of December 31, ~~2019,~~2022, of the benefits earned as of that date and payable at normal retirement age (age 65 for the Retirement Plan and age 62 for the SERP). Future cash balance interest credits are assumed to be 4.0% annually. The discount assumption is ~~3.35%~~5.60%, and the post-retirement mortality assumption is based on the ~~2020~~2023 417(e) unisex mortality table. Annuity benefits are converted to lump sum amounts at retirement based on assumed future 417(e) segment rates of ~~2.79%~~1.41%, ~~3.92%~~3.09%, and ~~4.38%~~3.58% (the 24-month average of the underlying rates as of September ~~2019)~~2022), except that payments assumed to occur during ~~2020~~2023 use segment rates in effect for ~~2020~~2023 (this ~~includes Ms. Harris' and Mr. Doyle's SERP present values)~~does not apply to any Named Executive Officers this year). These assumptions are consistent with the ones used for the Retirement Plan and the SERP for financial reporting purposes for ~~2019.~~2022. In order to determine the change in pension values for the Summary Compensation Table, the values of the Retirement Plan and the SERP benefits were also calculated as of December 31, ~~2018,~~2021, for the benefits earned as of that date using the assumptions used for financial reporting purposes for ~~2018.~~2021. These assumptions included assumed cash balance interest credits of 4.0%, a discount assumption of ~~4.40%~~3.00% and post-retirement mortality assumption based on the ~~2019~~2022 417(e) unisex mortality table. Annuity benefits were converted to lump sum amounts at retirement based on assumed future 417(e) segment rates of ~~2.28%~~1.07%, ~~3.81%~~2.68%, and ~~4.46%~~3.36% (the 24-month average of the underlying rates as of September ~~2018)~~2021). Other assumptions used to determine the value as of December 31, ~~2018,~~2021, were the same as those used for December 31, ~~2019.~~2022.

^2.As described in footnote 1 above, the amounts reported for the SERP in this column are actuarial present values, calculated using the actuarial assumptions used for financial reporting purposes. These assumptions are different from those used to calculate the actual amount of benefit payments under the SERP (see text below for a discussion of the actuarial assumptions used to calculate actual payment amounts). The following table shows the estimated lump sum amount that would be paid under the SERP to each SERP-eligible Named Executive Officer ~~except Ms. Harris,~~ at age 62 (without discounting to the present), calculated as if such Named Executive Officer had terminated employment on December 31, ~~2019.~~2022. Each SERP-eligible Named Executive Officer was vested in his or her SERP benefits as of December 31, ~~2019.~~

^3.Ms. Kipp does not have a SERP benefit as that plan was closed prior to her joining PSE. Upon hire, Ms. Kipp elected to have her 4% company retirement contribution made to her 401(k) account. Ms. Kipp also participates in an Officer Restoration Benefit Plan as described below, with vesting after three years of service. Values of accumulated benefit will be shown after Ms. Kipp attains one year of service.2022.

156

Name

Estimated Lump Sum

~~Daniel A. Doyle~~Margaret F. Hopkins

3,162,728

~~3,194,757~~

~~Steve R. Secrist~~Andrew Wappler

3,126,019

~~4,159,373~~

~~Marla D. Mellies~~

~~3,326,658~~

^{_______________________}

^{3.Ms. Kipp, Mr. Hasan and Mr. Smith do not have SERP benefits as that plan was closed prior to their joining PSE. Ms. Kipp and Mr. Hasan do not have a Retirement Plan benefit, as upon hire, each elected to have their 4% company retirement contribution made to their 401(k) accounts. Based on service through December 31, 2022 these 401(k) accounts had values of: Ms. Kipp, $40,932; Mr. Hasan, $20,105; and Mr. Smith, $10,500. Ms. Kipp, Mr. Hasan and Mr. Smith also participate in the Officer Restoration Benefit Plan as described below, with vesting after three years of service. The value of these Officer Restoration accounts based on service through December 31, 2022 are: Ms. Kipp, $127,426; and Mr. Hasan, $20,294, Mr. Smith's first Officer Restoration account contribution will be made in 2023.}

4.As a result of retirement on ~~January 2, 2020, Ms. Harris~~December 1, 2022, Mr. Secrist received a SERP lump sum in the amount of ~~$13,144,354,~~$4,855,525, calculated per the plan and paid according to ~~Ms. Harris’ election of~~Mr. Secrist's payment ~~format.~~election.

~~150~~

Retirement Plan

Under the Retirement Plan, the Company's eligible employees hired prior to January 1, 2014 (prior to December 12, 2014, in the case of IBEW-represented employees), including the participating Named Executive Officers, accrue benefits in accordance with a cash balance formula, beginning on the later of their date of hire or March 1, 1997. Under this formula, for each calendar year after 1996, age-weighted pay credits are allocated to a bookkeeping account (a Cash Balance Account) for each participant. The pay credits range from 3% to 8% of eligible compensation. Non-represented and UA-represented employees hired on or after January 1, 2014, and IBEW-represented employees hired on or after December 12, 2014, will receive pay credits equal to 4% (rather than the age-based pay credit described above), which non-represented and IBEW-represented employees may choose to have contributed to the Company’s 401(k) plan, rather than credited under the Retirement Plan. Eligible compensation generally includes base salary and bonuses (other than bonuses paid under the LTI Plan and signing, retention and similar bonuses), up to the limit imposed by the Internal Revenue Code. For ~~2019,~~2022, the limit was ~~$280,000.~~$305,000. For ~~2020,~~2023, the limit is ~~$285,000.~~$330,000. In addition, as of March 1, 1997, the Cash Balance Account of each participant who was participating in the Retirement Plan on March 1, 1997, was credited with an amount based on the actuarial present value of that participant’s accrued benefit, as of February 28, 1997, under the Retirement Plan’s previous formula. Amounts in the Cash Balance Accounts are also credited with interest. The interest crediting rate is 4% per year or such higher amount as PSE may determine. For ~~2019~~2022 and ~~2020,~~2023, the annual interest crediting rate was 4%.

A participant’s Retirement Plan benefit generally vests upon the earlier of the participant’s completion of three years of active service with Puget Energy, PSE or their affiliates or attainment of age 65 (the Retirement Plan’s normal retirement age) while employed by the Company or one of its affiliates. Normal retirement benefit payments begin to a vested participant as of the first day of the month following the later of the participant’s termination of employment or attainment of age ~~65.~~65 (employees designated as casual employees by PSE and who have reached age 65 or employees who have applied for long-term disability and have reached age 65 may commence benefits without terminating employment). However, a vested participant may elect to have his or her benefit under the Retirement Plan paid, or commence to be paid, as of the first day of any month commencing after the date on which his or her employment with Puget Energy, PSE and their affiliates terminates. If benefit payments commence prior to the participant’s attainment of age 65, then the amount of the monthly payments will be reduced for early commencement to reflect the fact that payments will be made over a longer period of time. This reduction is subsidized - that is, it is less than a pure actuarial reduction. The amount of this reduction is, on average, 0.30% for each of the first 60 months, 0.33% for each of the second 60 months, 0.23% for each of the third 60 months and 0.17% for each of the fourth 60 months that the payment commencement date precedes the participant’s 65th birthday. Further reductions apply for each additional month that the payment commencement date precedes the participant’s 65th birthday. As of December 31, ~~2019,~~2022, all the Named Executive Officers, except Ms. Kipp, Mr. Hasan and Mr. Smith were vested in their benefits under the Retirement Plan and, hence, would be eligible to commence benefit payments upon termination.

The normal form of benefit payment for unmarried participants is a straight life annuity providing monthly payments for the remainder of the participant’s life, with no death benefits. The straight life annuity payable on or after the participant's normal retirement age is actuarially equivalent to the balance in the participant’s Cash Balance Account as of the date of distribution. For married participants, the normal form of benefit payment is an actuarially equivalent joint and 50% survivor annuity with a “pop-up” feature providing reduced monthly payments (as compared to the straight life annuity) for the remainder of the participant’s life and, upon the participant’s death, monthly payments to the participant’s surviving spouse for the remainder of the spouse’s life in an amount equal to 50% of the amount being paid to the participant. Under the pop-up feature, if the participant’s spouse predeceases the participant, the participant’s monthly payments increase to the level that would have been provided under the straight life annuity. In addition, the Retirement Plan provides several other annuity payment options and a lump sum payment option that can be elected by participants. All payment options are actuarially equivalent to the straight life annuity. However, in no event will the amount of the lump sum payment be less than the balance in the participant’s Cash Balance Account as of the date of distribution (in some instances the amount of the lump sum

157

distribution may be greater than the balance in the Cash Balance Account due to differences in the mortality table and interest rates used to calculate actuarial equivalency).

If a vested participant dies before his or her Retirement Plan benefit is paid, or commences to be paid, then the participant’s Retirement Plan benefit will be paid to his or her beneficiary(ies). If a participant dies after his or her Retirement Plan benefit has commenced to be paid, then any death benefit will be governed by the form of payment elected by the participant.

Supplemental Executive Retirement Plan

The SERP provides a benefit to participating Named Executive Officers that supplements the retirement income provided to the executives by the Retirement Plan. The Company closed the SERP plan to new participants as of August 1, 2019, but existing officer participants continue to accrue benefits in the plan. All the Named Executive Officers hired (or promoted to officer) prior to 2019 participate in the SERP. A participating Named Executive Officer’s SERP benefit generally vests upon the executive’s completion of five years of participation in the SERP and attainment of age 55 while employed by the Company or any of its affiliates. However, SERP participants as of December 31, 2012 who have not yet attained age 55, ~~including Ms. Harris,~~ have been exempted from the age 55 vesting requirement. All the participating Named Executive Officers with SERP eligibility are vested in their SERP benefits.

~~151~~

The monthly benefit payable under the SERP to a Named Executive Officer (calculated in the form of a straight life annuity payable for the executive’s lifetime commencing at the later of the executive’s date of termination or attainment of age 62) is equal to (i) below minus the sum of (ii) and (iii) below:

i.One-twelfth (1/12) of the executive’s highest average earnings times the executive’s years of credited service (not in excess of 15) times 3-1/3%. For purposes of the SERP, “highest average earnings” means the average of the executive’s highest three consecutive calendar years of earnings. The three consecutive calendar years must be among the last ten calendar years completed by the executive prior to his or her termination. Prior to December 31, 2012, a participant's highest average earnings was not required to be calculated based on a three consecutive year basis. Executives participating in the SERP as of December 31, 2012 will have their highest average earnings on that date preserved as a minimum value for highest average earnings in the future. “Earnings” for this purpose include base salary and annual bonus, but do not include long-term incentive compensation. An executive will receive one “year of credited service” for each consecutive 12-month period he or she is employed by the Company or its affiliates. If an executive becomes entitled to disability benefits under PSE’s long-term disability plan, then the executive’s highest average earnings will be determined as of the date the executive became disabled, but the executive will continue to accrue years of credited service until he or she begins to receive SERP benefits.

ii.The monthly amount payable (or that would be payable) under the Retirement Plan to the executive in the form of a straight life annuity commencing as of the first day of the month following the later of the executive’s date of termination or attainment of age 62, including amounts previously paid or segregated pursuant to a qualified domestic relations order.

iii.The actuarially equivalent monthly amount payable (or that would be payable) to the executive as of the first day of the month following the later of the executive’s date of termination or attainment of age 62 from any pension-type rollover accounts within the Deferred Compensation Plan (including the annual cash balance restoration account). These accounts are described in more detail in the ~~“2019~~“2022 Nonqualified Deferred Compensation” section.

Normal retirement benefits under the SERP generally are paid or commence to be paid within 90 days following the later of the Named Executive Officer’s termination of employment or attainment of age 62. Except as provided below, SERP benefits are normally paid in a lump sum that is equal to the actuarial present value of the monthly straight life annuity benefit. In lieu of the normal form of payment, an executive may elect to receive his or her SERP benefit in the form of monthly installment payments over a period of two to 20 years, in a straight life annuity or in a joint and survivor annuity with a 100%, 75%, 50% or 25% survivor benefit. All payment options are actuarially equivalent to the straight life annuity. An executive may also elect to have his or her SERP benefit transferred to the Deferred Compensation Plan and paid in accordance with his or her elections under that plan.

An executive may elect to have his or her SERP benefit paid, or commence to be paid, upon termination of employment after attaining age 55 but prior to attaining age 62. The SERP benefit of any executive who receives such early retirement benefits will be reduced by 1/3% for each month that the early commencement date precedes the beginning of the month coincident with or next following the date on which the executive attains age 62.

If a participating Named Executive Officer dies while employed by Puget Energy, PSE or any of their affiliates or after becoming vested in his or her SERP benefit, but before his or her SERP benefit has commenced to be paid, then the executive’s surviving spouse will receive a lump sum benefit equal to the actuarial equivalent of the survivor benefit such spouse would have received under the joint and 50% survivor annuity option. This amount will be calculated assuming the executive would have commenced benefit payments in that form on the first day of the month following the later of his or her death or attainment of age 62, with any applicable reductions for early commencement if the executive dies before age 62. If the

158

executive is not married, then no death benefit will be paid. If an executive dies after his or her SERP benefit has commenced to be paid, then any death benefit will be governed by the form of payment elected by the executive.

Officer Restoration Benefit

The Officer Restoration Benefit provides a benefit to participating ~~Officers~~officers that supplements the retirement income provided to the executives. Executives participating in the SERP are not ~~eligible.~~eligible for this benefit. Ms. Kipp, ~~participates~~Mr. Hasan and Mr. Smith participate in the benefit and those Company contributions under PSE’s applicable tax-qualified plan that would otherwise have been earned, if not for IRS limitations, are credited by the Company to an account for each within the Deferred Compensation Plan.

~~152~~

~~2019~~2022 Nonqualified Deferred Compensation

The following table provides information for each of the Named Executive Officers regarding aggregate executive and Company contributions and aggregate earnings for ~~2019~~2022 and year-end account balances under the Deferred Compensation Plan.

Name

Executive Contributions
in 2019¹

Registrant Contributions in 2019²

Aggregate Earnings
in 2019³

Aggregate Withdrawals/
Distributions

Aggregate Balance at December 31, 2019⁴
Kimberly J. Harris

$ —

$ —

$ 13,694

$ —

$ 351,927

Mary E. Kipp 64,500 — 870 — 65,370
Daniel A. Doyle

32,101

34,301

167,665

—

1,219,744

Steve R. Secrist

39,762

27,272

24,361

—

245,900

Marla D. Mellies

19,518

19,547

41,881

—

272,177


Name	Executive Contributions in 20221			Registrant Contributions in 20222			Aggregate Earnings in 20223			Aggregate Withdrawals/ Distributions			Aggregate Balance at December 31, 20224
Mary E. Kipp		$	1,016,624		$	45,056		$	—		$	—		$	2,370,392
Kazi Hasan		46,452			22,428			—			—			66,433
Allan (Wade) Smith		—			—			—			—			—
Margaret F. Hopkins		30,028			19,380			—			—			871,753
Andrew Wappler		—			—			—			—			—
Steve R. Secrist		31,058			23,167			—			(292,308)			133,943

_______________

^1.The amount in this column reflects elective deferrals by the executive of salary, annual incentive compensation or LTI Plan awards paid in ~~2019.~~2022. Deferred salary amounts are: Ms. ~~Harris, $0; Ms. Kipp, $64,500; Mr. Doyle, $32,101; Mr. Secrist, $39,762; and Ms. Mellies, $19,518. Deferred incentive compensation amounts are: Ms. Harris, $0; Ms.~~ Kipp, $0; Mr. ~~Doyle,~~Hasan, $46,452; Mr. Smith, $0; Ms. Hopkins, $30,028; Mr. Wappler, $0; and Mr. Secrist, ~~$0;~~$30,889. Deferred annual incentive compensation and LTI Plan award amounts are $0 for all Named Executives, except for Ms. ~~Mellies, $0.~~Kipp who deferred $172,524 in incentive compensation and $844,100 in LTI Plan awards and Mr. Secrist who deferred $169 in annual incentive compensation.. The amounts are also included in the applicable column of the Summary Compensation Table for ~~2019.~~2022.

^2.The amount reported in this column reflects contributions by PSE consisting of the annual investment plan restoration amount and annual cash balance restoration amount described below. These amounts are also included in the total amounts shown in the All Other Compensation column of the Summary Compensation Table for ~~2019.~~2022.

^3.The amount in this column for each executive reflects the change in value of investment tracking funds. Amounts of zero indicate no change in value or a decrease in value. ~~Above~~None of the executives received above market earnings on these ~~amounts are included in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table for 2019.~~amounts.

^4.Of the amounts in this column, the amounts in the table below have also been reported in the Summary Compensation Table for ~~2019, 2018,~~2022, 2021, and ~~2017.~~2020.


Name	Name	Reported for 2019					Reported for 2018				Reported for 2017			Name			Reported for 2022			Reported for 2021	Reported for 2020
Kimberly J. Harris			$	2,516	$	2,154		$	3,165
Mary E. Kipp	Mary E. Kipp		—		—			—		Mary E. Kipp		$	1,016,624		$	1,084,486		$	242,609
Daniel A. Doyle			66,403		61,671			57,531
Kazi Hasan										Kazi Hasan		46,452			2,125			—
Allan (Wade) Smith										Allan (Wade) Smith		—			—			—
Margaret F. Hopkins										Margaret F. Hopkins		30,028			138,978			156,861
Andrew Wappler										Andrew Wappler		—			—			—
Steve R. Secrist	Steve R. Secrist		67,034		55,044			53,922		Steve R. Secrist		31,058			32,883			61,665
Marla D. Mellies			39,417		25,207			22,280

Deferred Compensation Plan

The Named Executive Officers are eligible to participate in the Deferred Compensation Plan and may defer up to 100% of base salary, annual incentive compensation and LTI Plan payments. In addition, each year, executives are eligible to receive Company contributions under the Deferred Compensation Plan to restore benefits not available to them under the Company's tax-qualified plans due to limitations imposed by the Internal Revenue Code. The annual investment plan restoration amount equals the additional matching and any other employer contribution under the 401(k) plan that would have been credited to an electing executive’s 401(k) plan account if the Internal Revenue Code limitations were not in place and if deferrals under the Deferred Compensation Plan were instead made to the 401(k) plan. The annual cash balance restoration amount equals the

159

actuarial equivalent of any reductions in an executive’s accrued benefit under the Retirement Plan due to Internal Revenue Code limitations or as a result of deferrals under the Deferred Compensation Plan. An executive must generally be employed on the last day of the year to receive these Company contributions, unless he or she retires or dies during the year in which case the Company will contribute a prorated amount.

The Named Executive Officers choose how to credit deferred amounts among three investment tracking funds. The tracking funds mirror performance in major asset classes of bonds, stocks, and a money market index. For participants with deferrals prior to 2012, an interest crediting fund was ~~available.~~available; however this does not apply to any of 2022’s Named Executive Officers. The tracking funds differ from the investment funds offered in the 401(k) plan. The ~~2019~~2022 calendar year returns of these tracking funds were:


Vanguard Total Bond Market Index		~~8.73%~~(13.15)	%
Vanguard 500 Index		~~31.46~~(18.15)
Vanguard Money Market Index		~~2.14~~
~~Interest Crediting Fund (pre-2012 deferrals)~~1.55	~~4.12~~

~~153~~

The Named Executive Officers may change how deferrals are allocated to the tracking funds at any time. Changes generally become effective as of the first trading day of the following calendar quarter.

The Named Executive Officers generally may choose how and when to receive payments under the Deferred Compensation ~~Plan.~~Plan from available alternatives. There are three types of in-service withdrawals. First, an executive may choose an interim payment of deferred amounts by designating a plan year for payment at the time of his or her deferral election. The interim payment is made in a lump sum within 60 days after the last day of the designated plan year, which must be at least two years following the plan year of the deferral. Second, an in-service withdrawal may also be made to an executive upon a qualifying hardship event and demonstrated need. Third, only with respect to amounts deferred and vested prior to 2005, the executive may elect an in-service withdrawal for any reason by paying a 10% penalty. Payments upon termination of employment depend on whether the executive is then eligible for retirement. If the executive's termination occurs prior to his or her retirement date (generally the earlier of attaining age 62 or age 55 with five years of credited service), the executive will receive a lump sum payment of his or her account balance. If the executive’s termination occurs after his or her retirement date, the executive may choose to receive payments in a lump sum or via one of several installment options (fixed amount, specified amount, annual or monthly installments, of up to 20 years).

Potential Payments ~~Upon~~upon Termination or Change in Control

The Estimated Potential Incremental Payments Upon Termination or Change in Control table below reflects the estimated amount of incremental compensation payable to each of the Named Executive Officers in the event of (i) a change in control; (ii) an involuntary termination without cause or for good reason in connection with a change in control; (iii) retirement; (iv) disability; or (v) death.

Certain Company benefit plans provide incremental benefits or payments in the event of certain terminations of employment. In addition, Ms. Harris and Ms. Mellies are each parties to an Executive Employment Agreement with the Company, dated March 2009. The agreements provide for benefits or payments upon certain qualifying terminations of employment from the Company following a change in control. The only benefit payable to the Named Executive Officers solely upon a change in control is accelerated vesting of LTI Plan awards, under certain conditions, as described below.

Disability and Life Insurance Plans

If a Named Executive Officer’s employment terminates due to disability or death, the executive or his or her estate will receive benefits under the PSE disability plan or life insurance plan available generally to all salaried employees. These disability and life insurance amounts are not reflected in the table below. The Named Executive Officer is also eligible to receive supplemental disability and life insurance. The supplemental monthly disability coverage is 65% of monthly base salary and target annual incentive pay, reduced by (i) amounts receivable under the PSE disability plan generally available to salaried employees and (ii) certain other income benefits. The supplemental life insurance benefit is provided at two times base salary and target annual incentive bonus if the executive dies while employed by PSE with a reduction for amounts payable under the applicable group life insurance policy.

LTI Plan Awards

If a Named Executive Officer’s employment terminates due to disability or death, the executive or his or her estate will be paid a pro-rata portion of LTI Plan awards that were granted in a prior year. In the case of retirement at normal retirement age or approved early retirement, pro-rata LTI Plan awards will be paid in the first quarter following the year of retirement, based on performance through the prior year. In the event of a change in control in which awards are not assumed or substituted,

160

outstanding LTI Plan awards will be paid on a pro-rata basis at the higher of (i) target performance or (ii) actual performance achieved during the performance cycle ending with the fiscal quarter that precedes the change in control.

Employment Agreements

PSE has no employment agreements with ~~Certain~~any executive officers, including the Named Executive ~~Officers~~

In March 2009, PSE entered into Executive Employment Agreements (Employment Agreements) with each of Ms. Harris and Ms. Mellies (the Covered Executives). The Employment Agreements provide for an employment period of two years following a change in control. In the event of a termination of employment within two years of a change in control (a Covered Termination), a Covered Executive is eligible to receive the payments described below. A change in control generally means a person (or group of persons) (with certain exceptions set forth in the Employment Agreements) acquires (i) beneficial ownership of more than 55% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition (other than through a registered public offering) or (ii) all or substantially all of the Company’s assets.Officers.

~~154~~

~~Payments upon Involuntary Termination without Cause or for Good Reason~~

If a Covered Executive’s employment is terminated without cause by the Company or is terminated by the Covered Executive for good reason within two years of a change in control, the Covered Executive is eligible to receive the following compensation and benefits:

•~~Lump sum payment of three times the sum of annual base salary and annual incentive bonus for the year in which termination occurs;~~

•~~Pro-rated annual incentive bonus for the year in which termination occurs (Annual Bonus). Since this amount was earned for 2019, no amount is shown in the table below;~~

•Supplemental retirement benefit equal to the difference between (x) the actuarial equivalent of the amount the Covered Executive would have received under the Retirement Plan and the SERP had his or her employment continued until the end of two years following the change in control, and (y) the actuarial equivalent of the amount the Covered Executive actually receives or is entitled to receive under the Retirement Plan and SERP; and

•Continued group medical, dental, disability and life insurance benefits to the Covered Executive and his or her family for the remainder of the two-year protection period. Benefits will be paid by the Company while the Covered Executive is eligible for COBRA and thereafter by reimbursement of payments made by the Covered Executive for such coverage (including related tax amounts), except that if the Covered Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits under the Employment Agreement will become secondary to those provided by the other employer (the foregoing benefit is referred to as Health and Welfare Benefit Continuation).

~~Under the Employment Agreements, “cause” and “good reason” have the following meanings:~~

~~Cause~~ generally means (i) the willful and continued failure by the Covered Executive to substantially perform the Covered Executive’s duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness) for a period of 30 days after written notice of demand for substantial performance has been delivered to the Covered Executive or (ii) the Covered Executive’s willfully engaging in gross misconduct materially and demonstrably injurious to the Company, as determined by the Board after notice to the executive and opportunity for a hearing. No act or failure to act on the Covered Executive’s part is considered “willful” unless the Covered Executive has acted or failed to act with an absence of good faith and without a reasonable belief that the Covered Executive’s action or failure to act was in the best interests of the Company.

~~Good Reason~~ generally means (i) the assignment of the Covered Executive to a non-officer position with the Company, which the parties agree would constitute a material reduction in the Covered Executive’s authority, duties or responsibilities; (ii) a material diminution in the Covered Executive’s total compensation opportunities under the Employment Agreement; (iii) the Company’s requiring the Covered Executive to be based at any location that represents a material change from the Covered Executive’s location in the Seattle/Bellevue metropolitan area, unless the Covered Executive consents to the relocation; or (iv) a material breach of the Employment Agreement by the Company, provided that, in any of the foregoing, the Company has not remedied the alleged violation(s) within 60 days of notice from the Covered Executive.

~~Payments upon Retirement, Disability or Death~~

In the event of a Covered Termination due to voluntary retirement after having attained age 55 with a minimum of five years of service to the Company, a pro-rated Annual Bonus is payable to the Covered Executive. The bonus is payable at the time the Covered Executive otherwise would have received the payment had employment continued, based on the Company’s actual achievement of performance goals.

~~In the event of a Covered Termination due to disability or death, the Covered Executive is eligible to receive the following compensation and benefits:~~

•~~Pro-rated Annual Bonus; and~~

•~~Health and Welfare Benefit Continuation.~~

~~In addition, upon termination for any of the foregoing reasons, other than by reason of retirement, the Covered Executive is eligible to receive the perquisite of financial planning.~~

Except as otherwise described above, payments of salary and bonus will be paid after the date of termination, subject to the Covered Executive’s timely execution (and non-revocation) of a general waiver and release of claims.

~~155~~

The Employment Agreements also contain noncompetition and anti-solicitation provisions that restrict the Covered Executive for twelve months after termination from, respectively, engaging in activities related to selling or distributing electric power or natural gas in Washington or soliciting others to leave the Company or causing them to be hired from the Company by another entity. The Employment Agreements contain a non-disparagement clause and a confidentiality clause pursuant to which the Covered Executives must keep confidential all secret or confidential information, knowledge or data relating to the Company and its affiliates obtained during their employment. The Covered Executives may not disclose any such information, knowledge or data after their respective terminations of employment unless PSE consents in writing or as required by law.

If any payments paid or payable in connection with a change in control while the Company's stock is not traded on an established securities market or otherwise immediately before such change in control, then the Covered Executive will agree to execute a waiver of any “excess parachute payments” (within the meaning of Section 280G of the Internal Revenue Code), provided that the Company agrees to seek, but is not required to obtain, shareholder approval of the amount payable in connection with termination of employment, in which case the waived amounts will be restored to the Covered Executive.

~~156~~

Estimated Potential Incremental Payments ~~Upon~~upon Termination or Change in Control

The amounts shown in the table below assume that the termination of employment of a Named Executive Officer or a change in control was effective as of December 31, ~~2019.~~2022. The amounts below are estimates of the incremental amounts that would be paid out to the Named Executive Officer upon a termination of employment or a change in control. Actual amounts payable can only be determined at the time of a termination of employment or a change in control.

Upon Change in Control (and awards not assumed or substituted)

After Change in Control Involuntary Termination w/o Cause or for Good Reason

Retirement

Disability

Death
Kimberly J. Harris

$ —

$ —

$ — $ —

$ —
Cash Severance (salary and/or annual incentive)

—

6,000,000

—

—

—
Long Term Incentive Plan

12,000,606

12,000,606

—

12,000,606

12,000,606
SERP (additional years of credited service)¹

—

—

—

—

—
Benefits (continuation)²

—

30,700

—

30,700

30,700
Supplemental Life Insurance

—

—

—

—

3,400,000
Total Estimated Incremental Value

$ 12,000,606

$ 18,031,306

$ —

$ 12,031,306

$ 15,431,306
Mary E. Kipp $ — $ — $ — $ — $ —
Long Term Incentive Plan 4,089,968 4,089,968 4,089,968 4,089,968 4,089,968
Benefits (continuation)¹
— — — — —
Supplemental Life Insurance — — — — 2,805,200
Total Estimated Incremental Value $ 4,089,968 $ 4,089,968 $ 4,089,968 $ 4,089,968 $ 6,895,168
Daniel A. Doyle

$ —

$ —

$ —

$ —

$ —
Long Term Incentive Plan

2,430,151

2,430,151

—

2,430,151

2,430,151
SERP (additional years of credited service)¹

—

—

—

—

—
Benefits (continuation)²

—

—

—

—

—
Supplemental Life Insurance

—

—

—

—

1,222,266
Total Estimated Incremental Value

$ 2,430,151

$ 2,430,151

$ —

$ 2,430,151

$ 3,652,417
Steve R. Secrist

$ —

$ —

$ —

$ —

$ —
Long Term Incentive Plan

1,908,392

1,908,392

—

1,908,392

1,908,392
SERP (additional years of credited service)¹

—

—

—

—

—
Benefits (continuation)²

—

—

—

—

—
Supplemental Life Insurance

—

—

—

—

1,064,440
Total Estimated Incremental Value

$ 1,908,392

$ 1,908,392

$ —

$ 1,908,392

$ 2,972,832
Marla D. Mellies

$ —

$ —

$ — $ —

$ —
Cash Severance (salary and/or annual incentive)

—

1,942,380

—

—

—
Long Term Incentive Plan

1,563,151

1,563,151

—

1,563,151

1,563,151
SERP (additional years of credited service)¹

—

430,688

—

—

—
Benefits (continuation)²

—

48,853

—

48,853

48,853
Supplemental Life Insurance

—

—

—

0

902,520
Total Estimated Incremental Value

$ 1,563,151

$ 3,985,072

$ —

$ 1,612,004

$ 2,514,524

~~_______________~~

^1.~~SERP values are shown~~ Mr. Secrist was not employed as ~~the estimated incremental value that the Named Executive Officer would receive at age 62 as a result~~ of ~~the termination event shown in the column, relative to the vested benefit~~ as of December 31, ~~2019. These values are based on interest rate~~2022 and ~~mortality rate assumptions consistent with those used~~is not included in the ~~Company’s financial statements.~~

^2.~~Benefits (continuation) reflects~~table. The pro-rated LTI Plan amounts payable to him in connection with his retirement pursuant to the ~~value~~terms of ~~continued medical, dental, disability and life insurance benefits as well as financial planning benefit~~the LTI Plan are disclosed in the “Details of All Other Compensation” section of the Summary Compensation Table, which aggregate amount ~~of $5,000 for Ms. Harris and $2,500 for all the other Named Executive Officers eligible for benefits continuation.~~was $873,290.


	Upon Change in Control (and awards not assumed or substituted)		After Change in Control Involuntary Termination w/o Cause or for Good Reason		Retirement		Disability		Death
Mary E. Kipp	$	—	$	—	$	—	$	—	$	—
Long Term Incentive Plan	5,313,294		5,313,294		—		4,885,438		4,885,438
Supplemental Life Insurance	—		—		—		—		3,885,975
Total Estimated Incremental Value	$	5,313,294	$	5,313,294	$	—	$	4,885,438	$	8,771,413
Kazi Hasan	$	—	$	—	$	—	$	—	$	—
Long Term Incentive Plan	1,207,500		1,207,500		—		1,054,103		1,053,103
Supplemental Life Insurance	—		—		—		—		1,482,806
Total Estimated Incremental Value	$	1,207,500	$	1,207,500	$	—	$	1,054,103	$	2,535,909
Allan (Wade) Smith	$	—	$	—	$	—	$	—	$	—
Long Term Incentive Plan	1,048,950		1,048,950		—		808,419		808419
Supplemental Life Insurance	—		—		—		—		1,668,000
Total Estimated Incremental Value	$	1,048,950	$	1,048,950	$	—	$	808,419	$	2,476,419
Margaret F. Hopkins	$	—	$	—	$	—	$	—	$	—
Long Term Incentive Plan	690,318		690,318		—		626,529		626,529
Supplemental Life Insurance	—		—		—		—		980,911
Total Estimated Incremental Value	$	690,318	$	690,318	$	—	$	626,529	$	1,607,440
Andrew Wappler	$	—	$	—	$	—	$	—	$	—
Long Term Incentive Plan	411,328		411,328		—		375,219		375,219
Supplemental Life Insurance	—		—		—		—		924,683
Total Estimated Incremental Value	$	411,328	$	411,328	$	—	$	375,219	$	1,299,902

^3.Ms. Harris retired January 2, 2020, and per the LTIP plan is eligible for pro rata payments of LTIP grants for the 2018-2020 cycle of $3,871,077 and the 2019-2021 cycle of $1,105,636 to be paid in March 2020.

~~157~~161

Chief Executive Officer Pay Ratio

We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation for our Chief Executive Officer in accordance with SEC Item 402(u) of Regulation S-K.

For ~~2019,~~2022, our last completed fiscal year:

•The annual total compensation of our CEO as reported in the ~~2019~~2022 Summary Compensation Table, was ~~$11,774,369.~~$4,760,931.

•The median of the annual total compensation of all our employees (excluding our CEO) was ~~$125,510.~~$126,400.

As a result, for ~~2019~~2022 the ratio of annual total compensation of our Chief Executive Officer to the median of our annual total compensation of all employees was ~~94:~~38:1. ~~CEO total compensation was higher in 2019 than previous years due to the valuation of the CEO’s SERP benefit.Without SERP valuation impact, the CEO pay ratio would have been similar to 2018’s ratio of 65:1.~~

We identified our median employee by examining the total cash compensation we paid during ~~2019~~2022 to all individuals, excluding our CEO, who were employed by us on December 31, ~~2019,~~2022, which totaled approximately ~~3,148~~3,250 individuals, all located in the United States (as reported in Item 1. Business), including employees, whether employed on a full-time, part-time or seasonal basis. Total cash compensation consisted of base salary, overtime, paid time off and annual incentives as reflected in our payroll records. We consistently applied this compensation measure and did not make any assumptions, adjustments, or estimates with respect to total cash compensation. We believe that the use of total cash compensation for all employees is a consistently applied compensation measure because it includes all major compensation elements available to employees. ~~Pay for all non-represented employees in the organization is benchmarked periodically to ensure alignment with our compensation philosophy of paying at the market median.~~

After identifying the median employee based on total cash compensation for ~~2019,~~2022, we calculated annual total compensation for such employee for ~~2019~~2022 using the same methodology we use for our named executive officers as set forth in the ~~2019~~2022 Summary Compensation Table in accordance with the requirements of Item 402 (c)(2)(x) of Regulation S-K. Annual total compensation for ~~2019~~2022 for our median employee included annual salary, annual incentives, and company contributions towards benefits including retirement. Annual total compensation for ~~2019~~2022 for our CEO consists of the amount reported in the "Total" column of our ~~2019~~2022 Summary Compensation Table.

Director Compensation for Fiscal Year ~~2019~~2022

The following table sets forth information regarding compensation paid by the Company to the directors named in the table who received compensation from the Company in ~~2019~~2022 for service as directors. We refer to these directors as non-employee directors. Directors who are employed by the Company or by the Company’s investor-owners are not paid separately for their service and thus are not named in the table below. The directors who are employed by the Company’s investor-owners are: ~~Kenton Bradbury, Richard Dinneny,~~Grant Hodgkins, Jean-Paul Marmoreo, Chris ~~Hind,~~Parker, Aaron Rubin, Martijn Verwoest, and Steven Zucchet.

As described in further detail below, the Company’s non-employee director compensation program in ~~2019~~2022 consisted of quarterly retainer cash fees of ~~$35,000.~~$42,500. Additional quarterly retainer amounts associated with serving as Chair of the Board, chairing Board committees, serving on the Audit Committee and meeting fees were also paid in cash.


Name	Name	Fees Earned		Nonqualified Deferred Compensation Earnings¹		Total		Name	Fees Earned		Nonqualified Deferred Compensation Earnings1		Total
Scott Armstrong	Scott Armstrong	$	192,500	$	—	$	192,500	Scott Armstrong	$	235,534	$	—	$	235,534
Richard Dinneny								Richard Dinneny	177,200		—		177,200
Barbara Gordon	Barbara Gordon	170,000		—		170,000		Barbara Gordon	192,200		—		192,200
Steve Hooper		—		231,400		231,400
Thomas King	Thomas King	87,000		—		87,000		Thomas King	177,200		—		177,200
Paul McMillan	Paul McMillan	185,000		—		185,000		Paul McMillan	188,200		—		188,200
Mary O. McWilliams		170,000		—		170,000
Christopher Trumpy		185,800		—		185,800
Diana Rakow								Diana Rakow	114,000		—		114,000


			Page
Definitions			4
Forward-Looking Statements			5
Part I
1. Business			7
General			97
Regulation and Rates			98
Electric Utility Operating Statistics			13
Electric Supply			15
Natural Gas Utility Operating Statistics			19
Natural Gas Supply for Natural Gas Customers			2 121
Energy Efficiency			2322
Environment			23
Recent and Future Environmental Law and Regulation			24
Human Capital Resources			27
Executive Officers of the Registrants			2728
1A. Risk Factors			2729
1B. Unresolved Staff Comments			3436
2. Properties			3436
3. Legal Proceedings			3436
4. Mine Safety Disclosures			3436

Part II
5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities			34 36
6. ~~Selected Financial Data~~[Reserved]			35 37
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3 637
7A. Quantitative and Qualitative Disclosures about Market Risk			6068
8. Financial Statements and Supplementary Data			6372
Report of Management and Statement of Responsibility			6473
Report of Independent Registered Public Accounting Firm – Puget Energy			6574
Report of Independent Registered Public Accounting Firm – Puget Sound Energy			6776
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			~~134~~140
9A. Controls and Procedures			~~134~~1 41
9B. Other Information			~~135~~1 42
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			142

Part III
10. Directors, Executive Officers and Corporate Governance			~~136~~14 2
11. Executive Compensation			~~139~~14 5
12. Security Ownership of Certain Beneficial Owners and Management and Related			~~160~~164
Shareholder Matters
13. Certain Relationships and Related Transactions, and Director Independence			~~161~~165
14. Principal Accountant Fees and Services			~~162~~166

Part IV
15. Exhibits and Financial Statement Schedules			16 3167
16. Form 10-K Summary			~~163~~167
Exhibit Index			~~164~~168
Signatures			~~170~~174


AFUDC			Allowance for Funds Used During Construction
AOCI			Accumulated Other Comprehensive Income
ARO			Asset Retirement and Environmental Obligations
aMW			Average Megawatt
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
BPA			Bonneville Power Administration
Colstrip			Colstrip, Montana coal-fired steam electric generation facility
Dth			Dekatherm (one Dth is equal to one MMBtu)
EBITDA			Earnings Before Interest, Tax, Depreciation and Amortization
EPA			Environmental Protection Agency
~~ERF~~			~~Expedited Rate Filing~~
FASB			Financial Accounting Standards Board
FERC			Federal Energy Regulatory Commission
GAAP			U.S. Generally Accepted Accounting Principles
GHG			Greenhouse Gases
GRC			General Rate Case
IRP			Integrated Resource Plan
IRS			Internal Revenue Service
ISDA			International Swaps and Derivatives Association
kW			Kilowatt (one kW equals one thousand watts)
kWh			Kilowatt Hour (one kWh equals one thousand watt hours)
LIBOR			London Interbank Offered Rate
LNG			Liquefied Natural Gas
LTI Plan			Long-Term Incentive Plan
MMBtus			One Million British Thermal Units
MW			Megawatt (one MW equals one thousand kW)
MWh			Megawatt Hour (one MWh equals one thousand kWh)
NAESB			North American Energy Standards Board
NOAA			National Oceanic and Atmospheric Administration
NPNS			Normal Purchase Normal Sale
NWP			Northwest Pipeline, LLC
NYSE			New York Stock Exchange
OCI			Other Comprehensive Income
PCA			Power Cost Adjustment
PCORC			Power Cost Only Rate Case
PGA			Purchased Gas Adjustment
PLR			Private Letter Ruling
PSE			Puget Sound Energy, Inc.
PTC			Production Tax Credit
PUDs			Washington Public Utility Districts
Puget Energy			Puget Energy, Inc.
Puget Equico			Puget Equico, LLC
Puget Holdings			Puget Holdings, LLC
~~REC~~			~~Renewable Energy Credit~~
~~REP~~			~~Residential Exchange Program~~
SEC			United States Securities and Exchange Commission
SERP			Supplemental Executive Retirement Plan
~~TCJA~~SOFR			~~Tax Cuts and Jobs Act~~Secured Overnight Financing Rate
VIE			Variable Interest Entity
Washington Commission			Washington Utilities and Transportation Commission
WSPP			WSPP, Inc.


	December 31,				December 31,
Customer Count by Class	2019	2018	Percent	2019	2018	Percent
(in thousands)	Electric			Change	Natural Gas		Change
Residential	1,033	1,018	1.5%	788	778	1.2%
Commercial	130	129	1.0%	57	56	0.5%
Industrial	3	3	(0.7)%	2	2	(0.2)%
Other	8	7	6.6%	—	—	(3.4)%
Total¹	1,174	1,157	1.5%	847	836	1.3%


	December 31,							December 31,
Retail Revenue by Class	2019		2018		Percent	2019		2018		Percent
(Dollars in Thousands)	Electric					Change		Natural Gas			Change
Residential	$	1,139,356	$	1,147,260	(0.7)%	$	613,617	$	598,923	2.5%
Commercial	854,910		885,457		(3.4)%	236,059		239,552		(1.5)%
Industrial	105,020		110,607		(5.1)%	16,322		18,198		(10.3)%
Other	37,920		32,596		16.3%	20,283		19,984		1.5%
Total	$	2,137,206	$	2,175,920	(1.8)%	$	886,281	$	876,657	1.1%


Utility Plant Additions/Retirements 5-Year Total	Utility Plant Additions/Retirements 5-Year Total	2015 - 2019											Utility Plant Additions/Retirements 5-Year Total	2018 - 2022
(Dollars in Thousands)	(Dollars in Thousands)	Electric		Natural Gas		Common		(Dollars in Thousands)	Electric		Natural Gas			Common
Additions	Additions	$	1,804,920	$	1,083,353	$	763,244	Additions	$	1,876,770	$	1,237,089		$	696,279
Retirements	Retirements	(826,478)		(112,983)		(204,220)		Retirements	(883,625)		(99,768)			(357,513)
Net Utility Plant		$	978,442	$	970,370	$	559,024
Net utility plant								Net utility plant	$	993,145	$	1,137,321		$	338,766


/X/			ANNUAL 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, zip code telephone number			I.R.S. Employer Identification Number


1-16305			PUGET ENERGY, ~~INC.~~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


•			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), or distribution of natural gas, 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, ~~including as a result of the Tax Cuts and Jobs Act (TCJA),~~ or enforcement of applicable law by the Internal Revenue ~~Services~~Service (IRS) or other taxing ~~jurisdiction~~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, ~~and~~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 global Coronavirus Disease 2019 (COVID-19) pandemic, and responses to such developments (such as voluntary and mandatory quarantines, government stay at home orders, restrictions on travel, commercial, social and other activities, and the impact of vaccination mandates on employee and vendor staffing levels) 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;
•			PSE's resource adequacy needs to meet the Clean Energy Transformation Act (CETA) and the Climate Commitment Act (CCA) requirements, through a combination of owned or contracted resources, may significantly increase purchased power and gas costs if pricing pressures and supply constraints on resource acquisitions increase;
•			Changes in climate, or 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 the 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, such as inflation, 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,~~strikes; work ~~stoppages,~~stoppages; retirements; 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; ~~and~~
•			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.~~thereunder; and
•			Recent laws proposed or passed by various municipalities in PSE's service territory, including Seattle, which 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, which in turn may impact operations due to costs and delays from incremental permitting and other requirements that are outside PSE's control.


Utility Plant Balance	December 31, 2022
(Dollars in Thousands)	Electric			Natural Gas			Common
Distribution	$	4,760,017	41.9%	$	4,719,214	91.3%	$	—	—%
Generation	4,060,463		35.8	3,239		0.1	—		—
Transmission	1,683,737		14.8	—		—	—		—
General plant & other	851,760		7.5	444,746		8.6	1,087,927		100.0
Total (excluding CWIP)	$	11,355,977	100.0%	$	5,167,199	100.0%	$	1,087,927	100.0%


Utility Plant Balance	December 31, 2019
(Dollars in Thousands)	Electric					Natural Gas				Common
Distribution	$	4,187,582	39.2%	$	3,998,120	89.3%	$	—	—%
Generation	3,740,762		35.1	2,731		0.1	—		—
Transmission	1,571,186		14.7	—		—	—		—
General Plant & Other	1,171,798		11.0	477,197		10.7	1,121,568		100
Total	$	10,671,328	100.0%	$	4,478,048	100.0%	$	1,121,568	100%


	Year Ended December 31,
	2019		2018		2017
Generation and purchased power, MWh
Company-controlled resources	13,420,043		11,168,286		10,825,778
Contracted resources	6,752,261		7,654,872		8,337,348
Non-firm energy purchased	5,707,102		6,490,602		6,147,778
Total generation and purchased power	25,879,406		25,313,760		25,310,904
Less: losses and Company use	(1,298,854)		(1,513,451)		(1,568,599)
Total energy sales, MWh	24,580,552		23,800,309		23,742,305
Electric energy sales, MWh
Residential	10,756,628		10,497,389		10,931,999
Commercial	8,837,457		8,932,681		9,089,842
Industrial	1,161,149		1,189,828		1,214,818
Other customers	85,302		84,382		87,230
Total energy sales to customers	20,840,536		20,704,280		21,323,889
Sales to other utilities and marketers	3,740,016		3,096,029		2,418,416
Total energy sales, MWh	24,580,552		23,800,309		23,742,305
Transportation, including unbilled	2,322,021		2,028,727		2,001,244
Electric energy sales and transportation, MWh	26,902,573		25,829,036		25,743,549
Electric operating revenue by classes
(Dollars in Thousands)
Residential	$	1,139,356	$	1,147,260	$	1,232,075
Commercial	854,910		885,457		892,360
Industrial	105,020		110,607		112,817
Other customers	18,408		18,718		19,729
Total operating revenue from customers	2,117,694		2,162,042		2,256,981
Transportation, including unbilled	19,512		13,878		12,584
Sales to other utilities and marketers	109,105		89,324		53,789
Decoupling revenue	15,673		13,530		9,975
Other decoupling revenue¹	(6,866)		(5,475)		(27,706)
Miscellaneous operating revenue	241,923		182,620		115,040
Total electric operating revenue	$	2,497,041	$	2,455,919	$	2,420,663
Number of customers served (average):
Residential	1,025,024		1,010,574		998,078
Commercial	129,944		128,845		126,829
Industrial	3,328		3,362		3,399
Other	7,323		6,992		6,722
Transportation	80		16		16
Total customers	1,165,699		1,149,789		1,135,044


	Year Ended December 31,
	2022		2021		2020
Generation and purchased power, MWh
Company-controlled resources	11,198,936		12,949,384		11,700,918
Contracted resources	10,422,069		8,624,183		8,237,394
Non-firm energy purchased	4,922,194		4,491,714		4,916,761
Total generation and purchased power	26,543,199		26,065,281		24,855,073
Less: losses and Company use	(1,318,609)		(1,481,152)		(1,611,563)
Total energy sales, MWh	25,224,590		24,584,129		23,243,510
Electric energy sales, MWh
Residential	11,753,057		11,479,045		10,976,068
Commercial	8,677,178		8,402,057		7,942,292
Industrial	1,113,909		1,082,718		1,095,916
Other customers	76,407		79,998		81,261
Total energy sales to customers	21,620,551		21,043,818		20,095,537
Sales to other utilities and marketers	3,604,039		3,540,311		3,147,973
Total energy sales, MWh	25,224,590		24,584,129		23,243,510
Transportation, including unbilled	2,300,711		2,246,244		2,220,372
Electric energy sales and transportation, MWh	27,525,301		26,830,373		25,463,882
Electric operating revenue by classes
(Dollars in Thousands)
Residential	$	1,381,858	$	1,318,320	$	1,186,013
Commercial	981,170		902,928		791,898
Industrial	116,712		108,267		101,567
Other customers	18,734		18,067		18,182
Total operating revenue from customers	2,498,474		2,347,582		2,097,660
Transportation, including unbilled	22,353		19,987		19,682
Sales to other utilities and marketers	329,589		154,533		68,198
Decoupling revenue	(37,423)		(12,452)		49,632
Other decoupling revenue1	(12,067)		(17,506)		(27,053)
Miscellaneous operating revenue	160,531		179,479		111,297
Total electric operating revenue	$	2,961,457	$	2,671,623	$	2,319,416
Number of customers served (average):
Residential	1,065,508		1,053,027		1,039,596
Commercial	133,521		132,581		130,924
Industrial	3,222		3,267		3,289
Other	8,047		7,886		7,668
Transportation	104		98		100
Total customers	1,210,402		1,196,859		1,181,577


	Year Ended December 31,
	2019			2018			2017
Average kWh used per customer:
Residential	10,494			10,388			10,953
Commercial	68,010			69,329			71,670
Industrial	348,903			353,905			357,404
Other	11,649			12,068			12,977
Average revenue per customer:
Residential	$	1,112		$	1,135		$	1,234
Commercial	6,579			6,872			7,036
Industrial	31,556			32,899			33,191
Other	2,514			2,677			2,935
Average retail revenue per kWh sold:
Residential	$	0.1059		$	0.1093		$	0.1127
Commercial	0.0967			0.0991			0.0982
Industrial	0.0904			0.0930			0.0929
Other	0.2158			0.2218			0.2262
Average retail revenue per kWh sold	$	0.1016		$	0.1044		$	0.1058
Heating degree days	4,208			4,065			4,584
Percent of normal - NOAA² 30-year average	89.6		%	86.2		%	97.2		%
Load factor³	61.6		%	64.2		%	51.6		%


	Year Ended December 31,
	2022			2021			2020
Average kWh used per customer:
Residential	11,030			10,901			10,558
Commercial	64,987			63,373			60,663
Industrial	345,720			331,410			333,206
Other	9,495			10,144			10,597
Average revenue per customer:
Residential	$	1,297		$	1,252		$	1,141
Commercial	7,348			6,810			6,049
Industrial	36,223			33,140			30,881
Other	2,328			2,291			2,371
Average retail revenue per kWh sold:
Residential	$	0.1176		$	0.1148		$	0.1081
Commercial	0.1131			0.1075			0.0997
Industrial	0.1048			0.1000			0.0927
Other	0.2452			0.2258			0.2237
Average retail revenue per kWh sold	$	0.1156		$	0.1116		$	0.1044
Heating degree days	4,715			4,471			4,122
Percent of normal - NOAA1 30-year average	105.2		%	99.2		%	87.8		%
Load factor2	58.7		%	59.7		%	62.1		%


Rate Filings	Electric	Natural Gas
Baseline rates	Yes	Yes
Expedited rate filing rider	Yes	Yes
Power cost only rates mechanism	No	N/A
Federal incentive tracker	No	N/A
Low income rates tracker	No	No
Pipeline cost recovery mechanism tracker	N/A	No
Prior year decoupling deferral tracker	No	No
Property tax tracker	No	No
Renewable energy credit tracker	No	N/A
Residential exchange credits tracker	No	N/A
Conservation costs rider	No	No
~~PGA~~Purchased gas adjustment rider	N/A	No


	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


`	Peak Power Resources At December 31,							Energy Production At December 31,
	2019			2018			2019		2018
	MW	%	MW	%	MWh	%	MWh	%
Purchased resources:
Columbia River PUD contracts¹	687	14.5%	674	14.3%	2,642,177	10.2%	3,468,702	13.7%
Other hydroelectric	72	1.5	72	1.5	272,653	1.0	315,948	1.2
Other producers	285	6.0	284	6.2	3,276,502	12.7	3,406,627	13.6
Wind	56	1.2	56	1.2	123,368	0.5	131,270	0.5
Short-term wholesale energy purchases	N/A	—	N/A	N/A	6,144,663	23.7	6,822,927	26.9
Total purchased	1,100	23.2%	1,086	23.2%	12,459,363	48.1%	14,145,474	55.9%
Company-controlled resources:
Hydroelectric	250	5.3%	250	5.3%	712,727	2.8%	914,540	3.6%
Coal³	677	14.3	677	14.4	4,347,639	16.8	4,184,950	16.5
Natural gas/oil	1,931	40.8	1,908	40.6	6,692,188	25.9	4,152,359	16.4
Wind	773	16.3	773	16.5	1,667,489	6.4	1,932,378	7.6
Other²	2	—	2	—	—	—	—	—
Total company-controlled	3,633	76.8%	3,610	76.8%	13,420,043	51.9%	11,184,227	44.1%
Total resources	4,733	100.0%	4,696	100.0%	25,879,406	100.0%	25,329,701	100.0%


			Company’s Annual Share (Approximate)
Project	Contract Expiration Year	License Expiration Year	Percent of Output		MW Capacity
Chelan County PUD:
Rock Island Project	2031	2029	25.0	%	156
Rocky Reach Project	2031	2052	25.0		325
Douglas County PUD:
Wells Project	2028	2052	27.1		228
Grant County PUD:
Priest Rapids Development	2052	2052	0.6		6
Wanapum Development	2052	2052	0.6		7
Total					722


	At December 31,
	2022	2021
Natural gas volumes for power in storage at year end, therms (thousands):
Jackson Prairie	5,450	5,237
Plymouth LNG (in LNG form)	1,223	1,552


	2023	2024	2025	2026	2027
Projected MW shortfall/(surplus)	(200)	174	465	1,336	1,848


Puget Energy
Summary of Operations	Year Ended December 31,
(Dollars in Thousands)	2019		2018		2017		2016		2015
Operating revenue	$	3,401,130	$	3,346,496	$	3,460,276	$	3,164,301	$	3,092,700
Operating income	519,008		554,058		739,106		765,474		671,925
Net income	210,708		235,622		175,194		312,899		241,179

Total assets at year-end	$	14,659,863	$	14,098,861	$	13,690,789	$	13,266,380	$	12,814,254
Long-term debt	5,920,325		5,672,491		5,207,929		5,104,073		5,077,518
Junior subordinated notes	—		—		250,000		250,000		250,000
Finance lease obligations	1,480		1,315		1,129		645		378
Operating lease obligations	190,189		—		—		—		—


Effective Date	Average Percentage Increase (Decrease) in Rates	Increase (Decrease) in Revenue (Dollars in Millions)¹
Electric:
May 1, 2019	0.9%	$20.6
May 1, 2018	(1.1)	(25.2)
May 1, 2017	2.0	41.9
Natural Gas:
May 1, 2019	(5.3)%	$(45.9)
May 1, 2018	1.7	15.9
May 1, 2017	2.4	22.4


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, 20231	1.3%	$1.0
January 1, 2022	0.1	(28.2)
January 1, 2021	0.3	(29.5)
January 1, 2020	(0.04)	(37.8)


	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 Energy and Puget Sound Energy
(Dollars in Thousands)	December 31,		December 31,
PGA receivable balance and activity	2022		2021
PGA receivable beginning balance	$	57,935	$	87,655
Actual natural gas costs	457,950		364,775
Allowed PGA recovery	(496,879)		(396,236)
Interest	1,674		1,741
Refund from counterparty settlement	(24,216)		—
PGA (liability)/receivable ending balance	$	(3,536)	$	57,935


		Payments Due Per Period																			Payments Due Per Period
(Dollars in Thousands)	(Dollars in Thousands)	Total		2020		2021-2022		2023-2024		Thereafter		(Dollars in Thousands)	Total		2023		2024-2025		2026-2027		Thereafter
Contractual obligations:	Contractual obligations:											Contractual obligations:
Energy purchase obligations¹	Energy purchase obligations¹	$	6,355,478	$	1,033,400	$	1,574,582	$	1,339,851	$	2,407,645	Energy purchase obligations1	$	8,193,734	$	2,184,488	$	2,180,363	$	1,084,780	$	2,744,103
Long-term debt including interest²	Long-term debt including interest²	8,874,206		229,109		453,394		453,394		7,738,309		Long-term debt including interest2	9,014,396		239,716		496,376		774,979		7,503,325
Short-term debt including interest	Short-term debt including interest	176,000		176,000		—		—		—		Short-term debt including interest	357,000		357,000		—		—		—
Service contract obligations	Service contract obligations	615,117		72,445		149,517		155,189		237,966		Service contract obligations	416,055		84,095		165,553		86,752		79,655
Non-cancelable operating leases³	Non-cancelable operating leases³	269,398		22,500		44,383		42,105		160,410		Non-cancelable operating leases3	284,283		23,676		45,119		42,519		172,969
PSE finance leases³	PSE finance leases³	1,528		643		787		98		—		PSE finance leases3	142,468		6,383		12,942		13,261		109,882
Pension and other benefits funding and payments	Pension and other benefits funding and payments	82,967		41,659		8,316		10,495		22,497		Pension and other benefits funding and payments	59,961		22,444		11,249		14,960		11,308
Total PSE contractual cash obligations	Total PSE contractual cash obligations	16,374,694		1,575,756		2,230,979		2,001,132		10,566,827		Total PSE contractual cash obligations	18,467,897		2,917,802		2,911,602		2,017,251		10,621,242
Long-term debt including interest²	Long-term debt including interest²	2,428,548		547,880		1,422,008		53,300		405,360		Long-term debt including interest2	2,591,430		156,453		535,066		149,406		1,750,505
Total Puget Energy contractual cash obligations	Total Puget Energy contractual cash obligations	$	18,803,242	$	2,123,636	$	3,652,987	$	2,054,432	$	10,972,187	Total Puget Energy contractual cash obligations	$	21,059,327	$	3,074,255	$	3,446,668	$	2,166,657	$	12,371,747


	Amount of Available Commitments Expiration Per Period
(Dollars in Thousands)	Total	2020	2021-2022	2022-2023	Thereafter
Commercial commitments:
PSE revolving credit facility¹	$800,000	$—	$—	$800,000	$—
Inter-company short-term debt²	30,000	—	—	—	30,000
Total PSE commercial commitments	830,000	—	—	800,000	30,000
Puget Energy revolving credit facility³	775,900	—	—	775,900	—
Less: Inter-company short-term debt elimination²	(30,000)	—	—	—	(30,000)
Total Puget Energy commercial commitments	$1,575,900	$—	$—	$1,575,900	$—


Capital Expenditure Projections
(Dollars in Millions)	2020	2021	2022
Total energy delivery, technology and facilities expenditures	$965.5	$1,031.1	$1,023.7


Puget Energy and Puget Sound Energy	Puget Energy and Puget Sound Energy	Change in Assumption	Impact on Projected Benefit Obligation Increase /(Decrease)										Puget Energy and Puget Sound Energy	Change in Assumption		Impact on Projected Benefit Obligation Increase /(Decrease)
(Dollars in Thousands)	(Dollars in Thousands)		Pension Benefits		SERP		Other Benefits		(Dollars in Thousands)		Pension Benefits			SERP		Other Benefits
Increase in discount rate	Increase in discount rate	50 basis points	$	(44,028)	$	(1,440)	$	(528)	Increase in discount rate	50 basis points	$	(29,451)		$	(795)	$	(306)
Decrease in discount rate	Decrease in discount rate	50 basis points	48,863		1,536		576		Decrease in discount rate	50 basis points	32,186			840		330


Puget Energy	Change in Assumption	Impact on 2019 Pension Expense Increase /(Decrease)
(Dollars in Thousands)		Pension Benefits				SERP			Other Benefits
Increase in discount rate	50 basis points	$	(3,170)	$	(126)		$	7
Decrease in discount rate	50 basis points	3,479		137			(24)
Increase in return on plan assets	50 basis points	$	(3,498)	*			$	(28)
Decrease in return on plan assets	50 basis points	3,498		*			28


Puget Sound Energy	Change in Assumption	Impact on 2022 Pension Expense Increase /(Decrease)
(Dollars in Thousands)		Pension Benefits		SERP		Other Benefits
Increase in discount rate	50 basis points	$	(3,672)	$	(241)	$	3
Decrease in discount rate	50 basis points	3,942		256		(16)
Increase in return on plan assets	50 basis points	$	(3,926)	*		$	(27)
Decrease in return on plan assets	50 basis points	3,926		*		27


Puget Energy and Puget Sound Energy	December 31, 2019						December 31, 2018
(Dollars in Thousands)	Assets		Liabilities		Assets		Liabilities
Electric portfolio:
Current	$	15,399	$	9,273	$	32,041	$	22,804
Long-term	4,534		8,231		1,246		4,480
Total Electric Portfolio	19,933		17,504		33,287		27,284
Natural gas portfolio:
Current	$	8,227	$	4,155	$	14,466	$	23,857
Long-term	3,148		4,462		1,266		6,615
Total Natural Gas Portfolio	11,375		8,617		15,732		30,472
Total derivatives	$	31,308	$	26,121	$	49,019	$	57,756


Puget Energy and Puget Sound Energy	December 31, 2022				December 31, 2021
(Dollars in Thousands)	Assets		Liabilities		Assets		Liabilities
Electric portfolio:
Current	$	267,811	$	79,668	$	61,291	$	50,979
Long-term	69,892		7,452		13,538		34,445
Total Electric Portfolio	$	337,703	$	87,120	$	74,829	$	85,424
Natural gas portfolio:
Current	319,218		45,308		66,919		12,330
Long-term	24,729		10,914		12,659		6,520
Total Natural Gas Portfolio	$	343,947	$	56,222	$	79,578	$	18,850
Total derivatives	$	681,650	$	143,342	$	154,407	$	104,274


Puget Energy and Puget Sound Energy
Energy Derivative Contracts Gain (Loss)
(Dollars in Thousands)	December 31, ~~2019~~2022
Fair value of contracts outstanding at December 31, ~~2018~~2021	$	~~(8,737)~~50,133
Contracts realized or otherwise settled during ~~2019~~2022	~~(67,161)~~(357,980)
Change in fair value of derivatives	~~81,084~~846,155
Fair value of contracts outstanding at December 31, ~~2019~~2022	$	~~5,186~~538,308