Exhibit
10.41














PUGET
SOUND ENERGY, INC.




DEFERRED
COMPENSATION PLAN




FOR
NON-EMPLOYEE DIRECTORS





























As
Amended and Restated




Effective
January 1, 2009










TABLE
OF CONTENTS


PURPOSE




1.
            DEFINITIONS




2.
            ENROLLMENT,
      PARTICIPATION




2.1
            Enrollment
      Requirements




2.2
            Participation




3.
            DEFERRAL ELECTIONS; COMPANY
      CONTRIBUTIONS




3.1
            Election to
      Defer




3.2
            Withholding of Annual Deferral
      Amounts




4.
            VESTING; CREDITING;
      TAXES




4.1
            Vesting




4.2
            Crediting or Debiting of Account
      Balances




(a)
            Selection of Measurement
      Funds




(b)
            Measurement
      Funds




(c)
            Crediting or Debiting Method;
      Form and Amount of Payment




(d)
            No Actual
      Investment




4.3
            Self-Employment and Other
      Taxes




4.4
            Withholding




5.
            INTERIM PAYMENTS; UNFORESEEABLE
      FINANCIAL EMERGENCIES




5.1
            Interim
      Payments




5.2
            Other Benefits Take Precedence
      over Interim Payments




5.3
            Payments and Cancellations for
      Unforeseeable Financial Emergencies




6.
            RETIREMENT
      BENEFIT




6.1
            Retirement
      Benefit




6.2
            Payment of Retirement
      Benefit




6.3
            Death Prior to Completion of
      Retirement Benefit




7.
            DEATH PRIOR TO
      RETIREMENT




7.1
            Pre-Retirement Survivor
      Benefit




7.2
            Payment of Pre-Retirement
      Survivor Benefit




8.
            DISABILITY




9.
            DIRECTOR STOCK PLAN DEFERRAL
      ACCOUNT BENEFIT




9.1
            Director Stock Plan Deferral
      Account Benefit




9.2
            Payment of Director Stock Plan
      Deferral Account Benefit




9.3
            Death Prior to Completion of
      Director Stock Plan Deferral Account Benefit




10.
            BENEFICIARY
      DESIGNATION




10.1
            Beneficiary




10.2
            Change; Spousal
      Consent




10.3
            No Beneficiary
      Designation




10.4
            Doubt as to
      Beneficiary




10.5
            Discharge of
      Obligations




11.
            TERMINATION, AMENDMENT OR
      MODIFICATION




11.1
            Termination




11.2
            Amendment




11.3
            Effect of
      Payment




12.
            ADMINISTRATION




12.1
            Committee
      Duties




12.2
            Administrative
      Committee; Agents




12.3
            Binding Effect of
      Decisions




12.4
            Indemnity of
      Committee and Administrative
  Committee




13.
            CLAIMS
      PROCEDURES




13.1
            Presentation of
      Claim




13.2
            Notification of
      Decision




13.3
            Legal
      Action




14.
            TRUST




14.1
            Establishment of
      the Trust




14.2
            Relationship of the
      Plan and the Trust




14.3
            Distributions from
      the Trust




15.
            MISCELLANEOUS




15.1
            Status of
      Plan




15.2
            Unsecured General
      Creditor




15.3
            Company's
      Liability




15.4
            Nonassignability




15.5
            Furnishing
      Information




15.6
            Captions




15.7
            Governing
      Law




15.8
            Notice




15.9
            Successors




15.10
            Validity




15.11
            Incompetence




15.12
            Court
      Order




15.13
            Insurance




15.14
            Compliance with Code Section
      409A

















PUGET
SOUND ENERGY, INC.




DEFERRED
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS




As
Amended and Restated Effective January 1, 2009




PURPOSE




The
growth and success of Puget Sound Energy, Inc. (the "Company") depends on its
ability to attract and retain the services of Directors of the highest
competence, and to provide incentives that motivate the continued and effective
service and contributions of such Directors.  The purpose of this Plan
is to advance the interests of the Company and its shareholders through a
deferred compensation program designed to attract, motivate and retain such
non-employee Directors.  This Plan shall be unfunded for tax
purposes.




This Plan
was originally effective June 16, 1997 and was most recently amended and
restated effective October 1, 2000.  This amendment and restatement is
effective for all amounts deferred on or after January 1, 2005 that remain
unpaid as of January 1, 2009.  All amounts earned and vested as of
December 31, 2004 (including with respect to the Director Stock Plan Deferral
Account) shall continue to be governed by the terms of the Plan in place as of
December 31, 2004 or any earlier date, as applicable, in accordance with then
applicable IRS guidance.  All amounts earned or vested from January 1,
2005 through December 31, 2008 (including with respect to the Director Stock
Plan Deferral Account) shall be governed by this amendment and restatement, as
modified by the operations of the Plan during such period in accordance with
Code Section 409A and then applicable IRS guidance (including transition
relief).  No amendment to this Plan on and after January 1, 2005 is
intended to, nor shall it be deemed to, apply to other than the terms and
conditions of this Plan in effect prior to January 1, 2005 unless expressly
provided by such amendment.




1.           DEFINITIONS




For
purposes of this Plan the following words and phrases shall have the meanings
indicated, unless a different meaning is clearly indicated by the
context:




1.1.
            Account
      Balance




"Account
Balance" shall mean a credit on the records of the Company equal to the sum of
the balances in a Participant's Deferral Account.  The Account
Balance, and each other specified account balance, shall be a bookkeeping entry
only and shall be utilized solely for the determination of the amounts due to a
Participant or Beneficiary under this Plan.




1.2.
            Annual
      Deferral Amount




"Annual
Deferral Amount" shall mean that portion of Directors Fees that the Participant
elects to defer, in accordance with Article 3, for any Plan
Year.  In the event a Participant dies, Retires, or suffers a
Disability during a Plan Year, the Annual Deferral Amount for the year shall be
the amount actually deferred prior to such event.




1.3.
            Beneficiary




"Beneficiary"
shall mean one or more individuals, trusts, estates or other entities designated
in accordance with Article 9 to receive benefits under this Plan upon the
death of a Participant.




1.4.
            Board




"Board"
shall mean the board of directors of the Company.




1.5.
            Code




"Code"
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time.




1.6.
            Committee




"Committee"
shall mean the committee described in Article 11, and if an Administrative
Committee has been appointed pursuant to Article 11 shall include such
Administrative Committee.




1.7.
            Company




"Company"
shall mean Puget Sound Energy, Inc., a Washington corporation, and any successor
to all or substantially all of the Company’s assets or business.




1.8.                 
Company Stock Fund




"Company
Stock Fund" shall mean the Measurement Fund that corresponds to the fair market
value of Stock.  Reallocation of a Participant's existing Account
Balance and balance in the Director Stock Plan Deferral Account to, and
investment of new contributions in, the Company Stock Fund shall cease as of
such date preceding the Exchange as is designated by the
Committee.  Immediately following the reallocation contemplated by
Section 4.2(e), the Company Stock Fund shall cease to be offered as a
Measurement Fund under the Plan.




1.9.
            Deferral
      Account




"Deferral
Account" shall mean an account on the books of the Company that reflects
(i)  the sum of the Participant's Annual Deferral Amounts, plus
(ii) amounts credited to the Participant’s Deferral Account in accordance
with the applicable crediting provisions of this Plan, less (iii) all
distributions made to the Participant or the Participant's Beneficiary from the
Participant's Deferral Account.




1.10.
            Director




"Director"
shall mean any member of the Board who is not an employee of the
Company.




1.11.
            Directors
      Fees




"Directors
Fees" shall mean cash amounts payable to a Director as compensation (but not as
reimbursement of expenses) for serving on the Board, including retainer fees and
meeting fees.




1.12.
            Director
      Stock Plan Deferral Account




"Director
Stock Plan Deferral Account" shall mean the amount that reflects (i) the
value of a Participant's deferred stock accounts transferred to this Plan from
the Puget Energy, Inc. Nonemployee Director Stock Plan immediately prior to the
Exchange, plus (ii) amounts credited to the Participant's Director Stock
Plan Deferral Account in accordance with the applicable crediting provisions of
this Plan, less (iii) all distributions made to the Participant or the
Participant's Beneficiary from the Participant's Director Stock Plan Deferral
Account."





1.13.                Disabled
or Disability




"Disabled"
shall mean a Participant who is "disabled" within the meaning of Code Section
409A and meets one of the following requirements:




(a)
            He
      or she is unable to engage in any substantial gainful activity by reason
      of any medically determinable physical or mental impairment that can be
      expected to result in death or can be expected to last for a continuous
      period of not less than 12 months;
or




(b)
            He
      or she has been determined to be totally disabled by the Social Security
      Administration or the Railroad Retirement
Board.




1.14.
            Disability
      Benefit




"Disability
Benefit" shall mean the benefit set forth in Article 8.




1.15.
            ERISA




"ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.




1.16.
            Exchange




"Exchange"
means the exchange of shares of Puget Energy, Inc. for cash, as contemplated in
that Agreement and Plan of Merger by and among Puget Energy, Inc., Padua
Holdings LLC, Padua Intermediate Holdings Inc. and Padua Merger Sub Inc. dated
as of October 25, 2007.




1.17.
            Exchange
      Act




"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.




1.18.
            First
      Plan Year




“First
Plan Year” shall mean the period beginning June 16, 1997 and ending
December 31, 1997.




1.19.
            Interim
      Payment




"Interim
Payment" shall mean the payment described in Section 5.1.




1.20.
            Measurement
      Funds




"Measurement
Funds" shall mean the funds described in Section 4.2.




1.21.
            Monthly
      Installment Method




"Monthly
Installment Method" shall mean a monthly installment payment over the number of
months selected by the Participant in accordance with this Plan, calculated as
provided in this Section.  The monthly installment shall be calculated
by multiplying this balance by a fraction, the numerator of which is one, and
the denominator of which is the remaining number of monthly payments due the
Participant.  By way of example, if the Participant elects a 120-month
Monthly Installment Method, the first payment shall be 1/120 of the Account
Balance, calculated as described in this definition.  The following
month, the payment shall be 1/119 of the Account Balance, calculated as
described in this definition.




1.22.
            Participant




"Participant"
shall mean any Director who elects to participate in the Plan in accordance with
Section 2.  Status as a Participant shall continue for as long as
the individual has an Account Balance under the Plan, even if he or she is no
longer a Director.  A spouse or former spouse of a Participant shall
not be treated as a Participant even if such spouse has an interest in the
Participant's benefits under the Plan.




1.23.
            Plan




"Plan"
shall mean this Deferred Compensation Plan for Non-Employee Directors, as it may
be amended from time to time.




1.24.
            Plan
      Year




"Plan
Year" shall mean, except for the First Plan Year, a period beginning on January
1 of each year and continuing through December 31 of such
year.




1.25.
            Pre-Retirement
      Survivor Benefit




"Pre-Retirement
Survivor Benefit" shall mean the benefit set forth in
Article 7.




1.26.
            Retirement
      or Retire




"Retirement",
"Retire(s)" or "Retired" shall mean, with respect to a Director, "separation
from service," within the meaning of Code Section 409A, as a Director for any
reason other than death or Disability.




1.27.
            Section
      16 Insider




"Section
16 Insider" shall mean any participant who is, with respect to the Company,
subject to Section 16 of the Exchange Act.




1.28.
            Stock




"Stock"
shall mean the common stock of Puget Energy, Inc., that is traded on the New
York Stock Exchange or the common stock of any successor to Puget Energy, Inc.,
that is publicly traded.  All references in the Plan to "Puget Energy,
Inc." shall be deemed to include its successor.  To the extent such
successor's stock is traded on an exchange other than the New York Stock
Exchange, all references in the Plan to the "New York Stock Exchange" shall be
deemed to include such other exchange.




1.29.
            Stock
      Fund




"Stock
Fund" shall mean the Measurement Fund that corresponds to the fair market value
of Stock.




1.30.
            Trust




"Trust"
shall mean one or more trusts established pursuant to that certain Master Trust
Agreement, dated as of June 16, 1997 between the Company and the trustee named
therein, as amended from time to time.




1.31.
            Trustee




"Trustee"
shall mean the financial institution acting at the time as trustee of the
Trust.





1.32.
            Unforeseeable
      Financial Emergency




"Unforeseeable
Financial Emergency" shall mean, as defined by Code Section 409A, a severe
financial hardship of the Participant resulting from an illness or accident of
the Participant, the Participant's spouse or dependent (as defined in Code
Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss
of the Participant's property due to casualty (including the need to rebuild a
home following damage to a home not otherwise covered by insurance, for example,
as a result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.  For example: (a) imminent foreclosure of or eviction
from the Participant's primary residence may constitute an Unforeseeable
Emergency; (b) the need to pay for medical expenses, including nonrefundable
deductibles, as well as for the costs of prescription drug medication, may
constitute an Unforeseeable Emergency; (c) the need to pay for the funeral
expenses of a spouse, a Beneficiary, or a dependent (as defined in Code Section
152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) may also
constitute an Unforeseeable Emergency; and (d) the purchase of a home and the
payment of college tuition are not Unforeseeable Emergencies.




1.33.
            WNG
      Plan




"WNG
Plan" shall mean the Washington Natural Gas Company Deferred Compensation Plan,
as amended and restated effective September 1, 1995, adopted by Washington
Natural Gas Company, a Washington corporation, and as subsequently
amended.




2.           ENROLLMENT,
PARTICIPATION




2.1
            Enrollment Requirements




A
Director wishing to participate in the Plan shall complete and return to the
Committee an election form and a beneficiary designation form, and such other
materials as the Committee may request, within 30 days after election to the
Board.




2.2
            Participation




A
Director shall commence participation in the Plan on the first day of the month
following the month in which the Director properly completes all enrollment
requirements.  A Director who does not meet the requirements within
the time specified in Section 2.1 shall not be eligible to participate in the
Plan until the first day of the Plan Year following delivery to and acceptance
by the Committee of the required forms.




3.           DEFERRAL
ELECTIONS; COMPANY CONTRIBUTIONS




3.1
            Election to Defer




A
Director may annually make an irrevocable election to defer all or a designated
portion of the Directors Fees that may be payable for a Plan
Year.  The Director shall deliver the Election Form to the Committee
by December 31 of the Plan Year, or such earlier deadline set by the
Committee, preceding the Plan Year for which the election is made.  If
no election form is timely delivered, the Director's Annual Deferral Amount for
that Plan Year shall be zero.




3.2
            Withholding of Annual Deferral
Amounts




Directors
Fees deferred under this Plan shall be withheld at the time they otherwise would
be paid to the Participant, whether or not this occurs during the Plan Year
itself.





4.           VESTING;
CREDITING; TAXES




4.1
            Vesting




A
Participant shall at all times be fully vested in his or her Account
Balance.




4.2
            Crediting or Debiting of Account
Balances




Amounts
shall be credited or debited to a Participant's Account Balance in accordance
with the following rules and such other rules and procedures as the Committee
may establish in its discretion:




(a)
            Selection
      of Measurement Funds




In
connection with an initial deferral election, a Participant shall select one or
more Measurement Funds to be used to determine the amounts to be credited to the
Account Balance.  A Participant may change a selection by submitting a
new election to the Committee on a form approved by the
Committee.  Any such selection shall take effect in the calendar
quarter next succeeding the quarter in which the election form is received by
the Committee, and shall continue in effect thereafter until changed in
accordance with this subsection.  The Participant shall specify, in
increments of ten percentage points (10%), the percentage of the Account Balance
to be allocated to any Measurement Fund.  However, if a Participant is
in payment status under the Monthly Installment Method or the Annual Installment
Method, he or she shall only be allowed to reallocate funds to or from the
Company Stock Fund account by December 31 of any Plan Year, to be effective the
following January 1.  Participants who are Section 16 Insiders may
reallocate funds to or from their Company Stock Fund account only in accordance
with Company policies on insider trading and in compliance with the rules for
"Discretionary Transactions" as defined in Rule 16b-3 (or any successor
provision) under the Exchange Act.




Notwithstanding
the foregoing to the contrary, a Participant's direction to credit future
contributions in the Company Stock Fund shall become ineffective as of the date
specified by the Committee in connection with the Exchange and the portion of
future contributions to which such direction applies shall thereafter be
credited in such Measurement Funds as the Committee shall specify until such
time as the Participant changes such direction with respect to future
contributions.




(b)
            Measurement
      Funds




The
Committee may, in its sole discretion, discontinue, substitute or add any
Measurement Funds, but at least two Measurement Funds will always be
available.  Any change in available Measurement Funds will take effect
no later than the first day of the calendar quarter that follows by thirty (30)
days the day on which the Committee gives Participants written notice of such
action, unless the Committee in its sole discretion, designates an alternate
change period.  With respect to Participants who are Section 16
Insiders, transfers to or from the Company Stock Fund will be allowed only
pursuant to Company policies on insider trading and in compliance with the rules
for Discretionary Transactions as defined in Rule 16b-3 (or any successor
provisions) under the Exchange Act.




(c)
            Crediting
      or Debiting Method; Form and Amount of
Payment




A
Participant's Account Balance, other than amounts allocated to the Company Stock
Fund, shall be credited or debited on a daily basis based on the performance of
each Measurement Fund selected by the Participant.  Performance shall
be determined by the Committee in its sole discretion as if (i) the
Participant's Account Balance were invested in the Measurement Fund(s) selected
by the Participant, in the percentages applicable during such calendar quarter,
as of the close of business on the first business day of such calendar quarter,
at the closing price on such date; (ii) the portion of the Annual Deferral
Amount that was actually deferred during any calendar quarter was invested in
the Measurement Funds selected by the Participant, in the percentages applicable
to such calendar quarter, no later than the close of business on the tenth
business day after the day on which such amounts are actually deferred from the
Participant's Directors Fees, at the closing price on such date; and
(iii) any distribution made to a Participant that decreases such
Participant's Account Balance was withdrawn from the Measurement Funds, in the
percentages applicable to such calendar quarter, no earlier than the valuation
date described in this Section 4.2(c), at the closing price on such
date.  The Participant's Director Stock Plan Deferral Account shall be
credited as of the date such Account is transferred to this Plan and allocated
to the Company Stock Fund.




Prior to
the Exchange, a Participant's Account Balance and balance in the Director Stock
Plan Deferral Account that is allocated to the Company Stock Fund shall be
credited with stock units at the time they would have been paid if the shares
would have been held by the Participant, with additional stock units equal in
number to the number of shares of Stock that could be purchased with the amount
of any cash dividends or other distributions that would be payable on the number
of shares of Stock that equals the number of stock units in such
account.  The number of stock units credited to a Participant's
Account Balance and balance in the Director Stock Plan Deferral Account shall be
appropriately adjusted to reflect (i) Stock splits, Stock dividends and
other like adjustments in such Account Balance and balance in the Director Stock
Plan Deferral Account that were allocated to the Company Stock Fund, and
(ii) any distributions made to a Participant that decrease the portion of
such Account Balance or balance in the Director Stock Plan Deferral Account, as
applicable, allocated to the Company Stock Fund.  Following the
Exchange, the provisions of Section 4.2(e) shall apply.




Prior to
the Exchange, a Participant's Account Balance and Director Stock Plan Deferral
Account that is allocated to the Company Stock Fund shall be payable only in
Stock, plus cash for any fractional shares.  After the Exchange, the
Participant's Account Balance and balance in the Director Stock Plan Deferral
Account shall be paid only in cash, including with respect to the future payment
of any Retirement Benefits or other distributions that commenced prior to the
Exchange.




Lump sum
payments are valued as of the valuation date immediately preceding the
following: (i) the Participant's date of Retirement, death or Disability,
(ii) as of the first business day for the appropriate Plan Year for
deferrals designated as Interim Payments, or (iii) when approved by the
Committee for Payments due to Unforeseeable Financial Emergencies as defined in
Section 5.3.  All other payments are valued as of the valuation date
immediately preceding the date on which the payment is processed.




(d)
            No
      Actual Investment




The
Measurement Funds are to be used for measurement purposes only.  A
Participant's selection of a Measurement Fund and the crediting or debiting of
amounts to a Participant's Account Balance based on such selection shall not be
considered or construed as an actual investment in any such Measurement
Fund.  If the Company or the Trustee, in its discretion, invests
assets in any or all of the Measurement Funds, no Participant shall have any
rights in or to such investments.  Without limiting the foregoing, a
Participant's Account Balance shall at all times be a bookkeeping entry only and
shall not represent any investment made on his or her behalf by the Company or
the Trust.  With respect to Account Balances and other rights under
this Plan, the Participant shall at all times be and remain an unsecured general
creditor of the Company.




(e)        Crediting
of Company Stock Fund After the Exchange




Notwithstanding
Section 4.2(b) or any other provision herein to the contrary, reallocation of a
Participant's Account Balance and balance in the Director Stock Plan Deferral
Account to, and investment of new contributions in, the Company Stock Fund shall
cease as of such date preceding the Exchange as is designated by the
Committee.  Immediately following the reallocation contemplated by
this Section 4.2(e), the Company Stock Fund shall cease to be offered as a
Measurement Fund under the Plan.




As soon
as administratively practicable after the Exchange, the portion of a
Participant's Account Balance and balance in the Director Stock Plan Deferral
Account that is invested in the Company Stock Fund (including any Stock
dividends credited after the Exchange) shall be reallocated among the remaining
Measurement Funds in accordance with investment directions provided by the
Participant expressly for such purpose or, to the extent such investment
directions are not received by the Committee (or its delegate) by the date
specified by the Committee, to the fund or funds specified by the
Committee.




4.3
            Self-Employment and Other Taxes




The
Company shall withhold from a Participant’s Directors Fees or Annual Deferral
Amount, in a manner determined by the Company, the Participant’s share of
self-employment and other taxes that may be required to be
withheld.




4.4
            Withholding




The
Company or the Trustee shall withhold from any payments made to a Participant or
Beneficiary all federal, state and local income, employment and other taxes
required to be withheld from such payments, in amounts and in a manner
determined in the discretion of the Company or the Trustee.




5.           INTERIM
PAYMENTS; UNFORESEEABLE FINANCIAL EMERGENCIES




5.1
            Interim Payments




A
Participant may irrevocably elect, by December 31st of the year preceding the
Plan Year covered by this election, to receive an Interim Payment from the Plan
with respect to any Annual Deferral Amount for such Plan Year.  The
Interim Payment shall be an amount that is equal to the Annual Deferral Amount
plus amounts credited or debited to that amount in the manner provided in
Section 4.2, determined at the time that the Interim Payment becomes
payable.  Each such Interim Payment shall be paid in a lump sum within
60 days after the last day of any Plan Year designated by the Participant
that is at least two Plan Years after the Plan Year in which the Annual Deferral
Amount is deferred.  For example, if a two-year Interim Payment is
elected for Annual Deferral Amounts that are deferred in the Plan Year
commencing January 1, 2009, the two-year Interim Payment would become payable
during a 60-day period commencing January 1, 2012.




5.2
            Other Benefits Take Precedence over Interim
  Payments




Payments
for reason of Retirement, death, Disability or an Unforeseeable Financial
Emergency take precedence over Interim Payments.  Payments under those
circumstances may be made from Annual Deferral Amounts that otherwise would be
payable as Interim Payments.




5.3
            Payments and Cancellations for Unforeseeable Financial
      Emergencies




If a
Participant experiences an Unforeseeable Financial Emergency, the Participant
may request a partial or full payment from the Plan.  Such payment
shall not exceed the lesser of the Participant's Account Balance or the amount
reasonably necessary to satisfy the Unforeseeable Financial Emergency (which may
include amounts necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated from the distribution).  A payment on
account of an Unforeseeable Financial Emergency will not be made to the extent
that such emergency is or may be relieved through reimbursement or compensation
from insurance or otherwise, by liquidation of the Participant's assets, to the
extent the liquidation of such assets would not cause severe financial hardship,
or by cancellation of deferrals under this Plan.  If the Committee
approves such a request, the Participant's deferral election then in place shall
be cancelled for the remainder of the Plan Year effective on the date of
approval and any payment shall be made within 60 days of the date of
approval.







6.           RETIREMENT
BENEFIT




6.1
            Retirement Benefit




A
Participant who Retires shall receive his or her Account Balance as a Retirement
Benefit.




6.2
            Payment of Retirement Benefit




(a)
            Timing
      and Form




A
Participant may elect at the same time as his or her initial deferral election,
in a manner determined by the Committee, to receive Retirement Benefits in a
lump sum or under a Monthly Installment Method of not more than 20 years
(240 months); provided, however, that to the extent a Participant receives
Retirement Benefits in Stock from the Company Stock Fund, a Participant may
elect to receive such Retirement Benefits only in a lump sum or under the
Monthly Installment Method for the same period that benefits from the other
Measurement Funds are elected and paid.  The election may be changed
in accordance with subsection (b) below.  The election form most
recently accepted by the Committee shall govern the payment of the Retirement
Benefit.  If a Participant does not make any election with respect to
the payment of the Retirement Benefit, then such benefit shall be payable in a
lump sum.  The lump sum payment shall be made no later than
60 days after the date the Participant Retires.  Monthly
Installment Method payments shall commence no later than 60 days after the
Participant Retires; however, any annual distributions from the Company Stock
Fund shall be distributed in the subsequent year in
January.  Notwithstanding the foregoing sentence or any other
provision of the Plan to the contrary, to the extent the payment of Retirement
Benefits or Director Stock Plan Deferral Account benefits commenced prior to the
Exchange and remain outstanding at the time of the Exchange, future payments of
the Participant's Account Balance and balance in the Director Stock Plan
Deferral Account converted from the Company Stock Fund to another Measurement
Fund in accordance with Section 4.2(a) shall thereafter be paid in cash on a
monthly basis throughout the year in which payment would otherwise have been
made in Company Stock in January of such year.




(b)
            Subsequent
      Payment Elections




A
Participant may elect to delay a payment or to change the form of payment of his
or her vested Account Balance only under the following conditions:




(1)
            The
      election does not take effect until as least 12 months after the date on
      which the election is made; and




(2)
            With
      respect to elections related to payments made for reasons other than on
      account of death, Disability or an Unforeseeable Financial Emergency, the
      payment with respect to which such election is made shall be deferred for
      a period of not less than five years from the date such payment would
      otherwise have been paid (or in the case of installment payments, five
      years from the date the first amount was scheduled to be
      paid).  Any such election may be made only two times by the
      Participant covering each specific class year of
  deferrals.




6.3
            Death Prior to Completion of Retirement
Benefit




If a
Participant dies after Retirement but before the Retire­ment Benefit is paid
in full, the unpaid Retirement Benefit payments shall be paid to the
Participant's Beneficiary within 60 days after the date of the Participant's
death.  Payment shall be made in the same manner, at the same time,
and in the same amounts as the benefit that would have been paid to the
Participant had the Participant survived.





7.           DEATH
PRIOR TO RETIREMENT




7.1
            Pre-Retirement Survivor Benefit




The
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
to the Participant's Account Balance, if the Participant dies before
Retirement.




7.2
            Payment of Pre-Retirement Survivor
Benefit




A
Participant may elect at the same time as his or her initial election, in a
manner determined by the Committee, whether the Pre-Retirement Survivor Benefit
shall be paid to his or her Beneficiary in a lump sum or pursuant to a Monthly
Installment Method of no more than 20 years (240 months).  The
Participant may change this election to any allowable alternative payment period
by submitting a new election to the Committee, in a form approved by the
Committee; provided that the election complies with Section
6.2(b).  The election most recently accepted by the Committee prior to
the Participant's death shall govern the payment of the Participant's
Pre-Retirement Survivor Benefit.  If a Participant does not make any
election with respect to the payment of the Pre-Retirement Survivor Benefit,
then such benefit shall be paid in a lump sum.  Payment of a
Participant's Pre-Retirement Survivor Benefit shall be made or commence no later
than 60 days after the date of the Participant's death.




8.           DISABILITY




The
Participant may submit a request for the Committee to determine, in its
discretion, that such Participant is Disabled.  If the Committee
determines that a Participant is Disabled, he or she shall receive a Disability
Benefit equal to his or her Account Balance at the time of the Committee's
determination.  The Disability Benefit shall be paid in a lump sum
within 60 days of the Committee's determination.




9.           DIRECTOR
STOCK PLAN DEFERRAL ACCOUNT BENEFIT




9.1
            Director Stock Plan Deferral Account
Benefit




A
Participant who Retires shall receive his or her balance in the Director Stock
Plan Deferral Account as a benefit.




9.2
            Payment of Director Stock Plan Deferral Account
  Benefit




To the
extent a Participant properly elected to receive the shares of Stock issuable to
him or her from the deferred stock account under the Puget Energy, Inc.
Nonemployee Director Stock Plan in a lump sum payment or in substantially equal
annual installments of not more than 20 years (five years for stock
payments deferred before January 1, 2005), such election shall be recognized for
purposes of this Plan.  Any changes to such election shall be allowed
only in accordance with the conditions set forth in Section 6.2 for similar
election changes with respect to the Retirement Benefit.  If a
Participant has not made a proper payment election, then payment shall be made
in a single lump sum.  The lump sum payment shall be made, or
installment payments shall commence, in January of the calendar year following
the calendar year in which the Participant Retires.  Subsequent
installments shall be paid each year in January.




9.3
            Death Prior to Completion of Director Stock Plan Deferral Account
      Benefit




If a
Participant dies after Retirement but before the Director Stock Plan Deferral
Account is paid in full, the unpaid benefits shall be paid to the Participant's
estate within 60 days after the date of the Participant's death.





10.           BENEFICIARY
DESIGNATION




10.1
            Beneficiary




Each
Participant shall have the right to designate one or more Beneficiaries
(including primary and contingent Beneficiaries) to receive any benefits payable
under the Plan.  The Beneficiary may be the same as or different from
the Beneficiary designated under any other plan in which the Participant
participates.




10.2
            Change;
      Spousal Consent




A
Participant shall have the right to change a Beneficiary by completing a new
beneficiary designation on a form approved by the Committee.  If the
Participant designates someone other than his or her spouse as a Beneficiary,
the spouse must consent to the designation in writing on a form approved by the
Committee, and the signed consent form must be returned to the
Committee.  The Committee shall be entitled to rely on the last
Beneficiary designation filed by the Participant and accepted by the Committee
prior to the Participant's death.




10.3
            No
      Beneficiary Designation




If a
Participant fails to designate a Beneficiary or if all designated Beneficiaries
predecease the Participant or die prior to distribution of the Participant's
benefits, then the Participant's designated Beneficiary shall be deemed to be
his or her surviving spouse.  If the Participant has no surviving
spouse, the Participant's benefits remaining under the Plan shall be payable to
the executor or personal representative of the Participant's
estate.




10.4
            Doubt
      as to Beneficiary




If the
Committee has any doubt as to the proper Beneficiary to receive payments
pursuant to the Plan, it shall have the right to withhold payments until the
matter is resolved to its satisfaction.




10.5
            Discharge
      of Obligations




The
payment of benefits under the Plan to a Beneficiary shall fully and completely
discharge the Company and the Committee from all further obligations under the
Plan with respect to the Participant and any other Beneficiary.




11.           TERMINATION,
AMENDMENT OR MODIFICATION




11.1
            Termination




Although
the Company anticipates that it will continue the Plan for an indefinite period
of time, it reserves the right to terminate the Plan at any
time.  Upon termination, the Account Balances of the Participants
shall be paid to the extent permissible under Code Section 409A.




11.2
            Amendment




The
Company may, at any time, amend or modify the Plan in whole or in part;
provided, that no amendment or modification shall decrease or restrict the value
of a Participant's Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had Retired on the
effective date of the amendment or modification or, if (i) the amendment or
modification occurs after the date upon which the Participant was eligible to
Retire, or (ii) the Participant is a Consultant, as if the Participant had
Retired as of the date of the amendment or modification.  The
amendment or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under this Plan
as of the date of the amendment or modification.




11.3
            Effect
      of Payment




The full
payment of the applicable benefit under Articles 5, 6, 7 or 8 of the Plan
shall completely discharge all obligations of the Company and the Committee to a
Participant and his or her designated Beneficiaries under this
Plan.




12.           ADMINISTRATION




12.1
            Committee
      Duties




This Plan
shall be administered by a Committee, which shall consist of the Board or such
committee as the Board may appoint.  Members of the Committee may be
Participants.  The Committee shall have the discretion and authority,
subject to Section 11.2, to make amendments to the Plan or in its discretion it
may recommend amendments to the Board for its action.  The Committee
shall have the discretion and authority to make, amend, interpret, and enforce
appropriate rules and regulations for the administration of this Plan
and to decide or resolve, in its discretion, any and all questions
involving interpretation of this Plan.  Any individual serving on the
Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself.  When making a determination or
calculation, the Committee shall be entitled to rely on information furnished by
a Participant or the Company.




12.2
            Administrative
      Committee; Agents




The
Committee may, from time to time, appoint an administrative Committee and
delegate to the administrative Committee such duties and responsibilities (but
not the authority to amend the Plan) with respect to the Plan as the Committee
may determine.  The Committee and the administrative Committee may
employ agents and delegate to them such duties as either Committee sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may be counsel to the Company.




12.3
            Binding
      Effect of Decisions




The
decisions or actions of the Committee, and of the Administrative Committee, with
respect to the administration, interpretation and application of the Plan and
the rules and regulations hereunder shall be final and conclusive and shall be
binding upon all persons having any interest in the Plan.




12.4
            Indemnity
      of Committee and Administrative
Committee




The
Company shall indemnify and hold harmless the members of the Committee, the
Administrative Committee, and any agent or employee to whom the duties of the
Committee or the Administrative Committee may be delegated, against any and all
claims, losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of willful
misconduct by the Committee, the Administrative Committee or any of their
members or any such agent or employee.




13.           CLAIMS
PROCEDURES




13.1
            Presentation
      of Claim




Any
Participant or Beneficiary (such Participant or Beneficiary being referred to in
this Article as a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant from
the Plan.  If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after the
Claimant received such notice.  All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred.  The claim must state with particularity the determination
desired by the Claimant.




13.2
            Notification
      of Decision




The
Committee shall consider a Claimant's claim within a reasonable time, and shall
notify the Claimant in writing:




(a)
            That
      the Claimant's requested determination has been made, and that the claim
      has been allowed in full; or




(b)
            That
      the Committee has reached a conclusion contrary, in whole or in part, to
      the Claimant's requested determination, in which case such notice shall
      state:




(i)
            The
      specific reason(s) for the denial of the claim, or any part of
      it;




(ii)
            Specific
      reference(s) to pertinent provisions of the Plan upon which such denial
      was based.




13.3
            Legal
      Action




Compliance
with the foregoing provisions of this Article 13 is a mandatory prerequisite to
a Claimant's right to commence any legal action with respect to any claim for
benefits under the Plan.




14.           TRUST




14.1
            Establishment
      of the Trust




The
Company shall at least annually transfer to the Trust such assets as it
determines, in its sole discretion, are necessary to provide, on a present value
basis, for its liabilities under this Plan.




14.2
            Relationship
      of the Plan and the Trust




The
provisions of the Plan shall govern the rights of a Participant to receive
distributions pursuant to the Plan.  The provisions of the Trust shall
govern the rights of the Company, the Participants and the creditors of the
Company to the assets transferred to the Trust.  The Company shall
remain liable to carry out its obligations under the Plan.




14.3
            Distributions
      from the Trust




The
Company's obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust, and any such distribution shall
reduce pro tanto the Company's obligations under the Plan.




15.           MISCELLANEOUS




15.1
            Status
      of Plan




The Plan
is intended to be a plan that is not qualified within the meaning of Code
Section 401(a).  The Plan shall be administered and interpreted in a
manner consistent with that intent.




15.2
            Unsecured
      General Creditor




Participants
and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the Company
or of the Trust.  For purposes of the payment of benefits under this
Plan, any and all of the Company's assets including assets of the Trust shall
be, and remain, the general, unpledged unrestricted assets of the
Company.  The Company's obligation under the Plan shall consist solely
of an unfunded and unsecured promise to pay money in the future.




15.3
            Company's
      Liability




The
Company's liability for the payment of benefits shall be defined only by the
Plan.  The Company shall have no obligation to a Participant under the
Plan except as expressly provided in the Plan.




15.4
            Nonassignability




Neither a
Participant nor a Beneficiary nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate, alienate or convey in advance of actual
receipt, the amounts, if any, payable hereunder, or any part
thereof.  All of such rights are expressly declared to be,
unassignable and non-transferable.  None of the amounts payable under
the Plan shall, prior to actual payment, be subject to seizure, attachment,
garnishment or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, or be
transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency, or be transferable to a spouse as a result of
a property settlement or otherwise, except to the extent required by a court
order as described in Section 15.12 of this Plan.




15.5
            Furnishing
      Information




A
Participant or Beneficiary shall cooperate with the Committee by furnishing any
and all information requested by the Committee and shall take such other actions
as may be requested in order to facilitate the administration of the Plan and
the payment of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.




15.6
            Captions




The
captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.




15.7
            Governing
      Law




The
provisions of this Plan shall be construed and interpreted according to the
internal laws of the State of Washington without regard to its conflicts of laws
principles.




15.8
            Notice




Any
notice or filing required or permitted to be given to the Committee under this
Plan shall be sufficient if in writing and hand-delivered, or sent by registered
or certified mail, to the address below:




Director
of Human Resources




Puget
Sound Energy, Inc.




Post
Office Box 90868




Bellevue,
WA  98009-0868




Any such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.  Any notice or filing required or permitted to be given
to a Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Participant or
Beneficiary.




15.9
            Successors




The
provisions of this Plan shall bind and inure to the benefit of the Company and
its successors and assigns and the Participant and the Participant's designated
Beneficiaries.




15.10
            Validity




If any
provision of this Plan shall be found to be illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts hereof, but
this Plan shall be construed and enforced as if such illegal or invalid
provision had never been inserted herein.




15.11
            Incompetence




If the
Committee determines in its discretion that a benefit under this Plan is to be
paid to a minor, a person declared incompetent or a person incapable of handling
the disposition of that person's property, the Committee may direct payment of
such benefit to the guardian, legal representative or person having the care and
custody of such minor, incompetent or incapable person.  The Committee
may require proof of minority, incompetence, incapacity or guardianship, as it
may deem appropriate prior to distribution of the benefit.  Any
payment of a benefit shall be a payment for the account of the Participant and
the Participant's Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.




15.12
            Court
      Order




The
Committee is authorized to make any payments directed by court
order.  If a court determines that a spouse or former spouse of a
Participant has an interest in the Participant’s benefits under the Plan in
connection with a property settlement or otherwise, the Committee, in its sole
discretion, shall have the right, notwithstanding any election made by a
Participant, to immediately distribute the spouse's or former spouse's interest
in the Participant’s benefits under the Plan to that spouse or former
spouse.




15.13
            Insurance




The
Company, on its own behalf or on behalf of the trustee of the Trust, and in its
sole discretion may apply for and procure insurance on the life of any
Participant, in such amounts and in such forms as the Company may
choose.  The Company or the trustee of the Trust and, as the case may
be, shall be the sole owner and beneficiary of any such
insurance.  The Participant shall have no interest whatsoever in any
such policy or policies, and at the request of the Company shall submit to
medical examinations and supply such information and execute such documents as
may be required by the insurance company or companies to which the Company has
applied for insurance.




15.14
            Compliance
      with Code Section 409A




This Plan
is intended to comply with the requirements of Code Section 409A (including
current IRS guidance) and to conform to the current operation of the
Plan.  Notwithstanding any provision to the contrary, the Plan shall
be interpreted, operated and administered in a manner consistent with this
intention, so as to avoid the predistribution inclusion in income of amounts
deferred under the Plan and the imposition of any additional tax or interest
thereon.  In addition, the Plan shall be deemed to be amended, and any
deferrals and distributions hereunder shall be deemed to be modified, to the
extent permitted by and necessary to comply with Code Section 409A and to avoid
or mitigate the imposition of additional taxes under Code Section
409A.  Notwithstanding the foregoing, no provision of the Plan shall
be interpreted or construed to transfer any liability for failure to comply with
Code Section 409A from a Participant or any other individual to the Company
or any of its affiliates, employees or agents.




[Signature
appears on following page.]












IN
WITNESS WHEREOF, the Company has signed this Plan document as of the date
indicated below.




PUGET
SOUND ENERGY, INC.








By: /s/Jennifer L.
O’Connor




Title:  Senior
Vice President, General Counsel, Corporate Secretary, and Chief Ethics &
Compliance Officer




Dated:  December
19, 2008