Exhibit 10.152

May 27, 1997

Mr. Steven A McKeon
1130 Grand Avenue
Seattle, WA 98122

Dear Steve:

         In accord  with our  earlier  discussions  and the Board of  Directors'
actions at its  meeting on May 19, 1 would  like to offer you  employment  as an
executive of Puget Sound Energy commencing June 2, 1997, as follows:

1.       Your position would be Vice President and General Counsel.  If we later
         differentiate-among  levels of vice presidents,  you will have a senior
         officer position --Senior Vice President or the like.

2.       Your annual base salary would be $260,000. Salary will be reviewed from
         time to time by the Board. You will participate in the annual executive
         incentive  plan  with a target  award  of 35% of  salary.  Your  annual
         objective  from our long term  incentive  plan will also be 35% of base
         salary.

3.       You will  receive a full  performance  share  grant for the 1997 - 2000
         cycle of the long term  incentive plan at the time you join us. For the
         1995 - 1998 cycle,  your target  award will be $50,138 and your maximum
         award will be $93,803. For the 1996 - 1999 cycle, the comparable awards
         will be $92,458 and  $147,610.  Of course,  the actual  payout of these
         grants will be dependent on corporate  performance as determined by the
         plan provisions.

4.       You will vest in our Supplemental  Executive Retirement Plan at 20%
         each year commencing June 1, 1997, with 100% vesting on June 1, 2002.

5.       We will  pay you  $20,000  as an  allowance  to cover  your  transition
         expenses  and will grant you twenty days of paid time off  effective on
         your date of hire.

6.       We will enter into an  employment  agreement  with you for a three-year
         term  that  will  contain  protection   against   termination  of  your
         employment  without  cause and  protection  in the event of a change of
         control  as well as other  terms and  conditions  consistent  with this
         letter.  This  agreement is attached to this letter for your review and
         signature.


<PAGE>



7.  This  offer is fully  contingent  on the  following  conditions  and will be
withdrawn if the following conditions are not met:

                  .you must take and  successfully  pass a  pre-employment  drug
                  screen  examination prior to your first day of employment at a
                  company-designated  facility (please contact Dorothy Graham at
                  462-3875 to schedule this appointment);

                  .you must complete other required employment applications
                  which are included;

                  .all parties must execute the Employment Agreement.

         Steve, I want to tell you how pleased I am that you will be joining our
team and how much I look forward to working  with you in meeting the  challenges
ahead for Puget Sound Energy.



                                                     Sincerely,

                                                     /s/ Richard R. Sonstelie

                                                     Richard R. Sonstelie
                                                     Chairman and Chief 
                                                     Executive Officer



Accepted by Steve A McKeon on June 1, 1997.


          /s/ Steve McKeon
         --------------------------------

attach.
<PAGE>
                                    AGREEMENT

         This Agreement (the "Agreement") is made and entered into as of June 2,
1997 between Puget Sound Energy, Inc., a Washington corporation (the "Company"),
and Steve A. McKeon (the  "Employee").  The term "Parties" refers to the Company
and the Employee.

         A. The  Company  wishes to employ  Employee as its Vice  President  and
General Counsel, and Employee wishes to accept such employment,  effective as of
June 1, 1997.

         B. The Company  wishes to be  reasonably  assured  that  Employee  will
continue  with the Company and desires to retain his  services and to provide an
incentive  for Employee to devote his  abilities  and industry to the success of
the Company's business.

         C. The Parties have reached  agreement on certain terms and  conditions
applicable  to such  employment  and  believe  that it is in their  mutual  best
interests  to enter into a written  agreement  that  specifies  those  terms and
conditions.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained  herein,  and for other good and valuable  consideration,  the Parties
agree as follows:

1.       Employment

         The Company hereby agrees to employ  Employee as its Vice President and
General  Counsel  and to  perform  the  obligations  of the  Company  under this
Agreement.  Employee  hereby  accepts  employment  by the  Company and agrees to
perform the  obligations  of Employee under this  Agreement.  The Company agrees
that,  when and if the  Company  makes a  differentiation  among  levels of vice
presidents, Employee will have a senior officer position and title (e.g., senior
vice president or the like).

2.         Term

           This Agreement  shall commence on the date hereof and shall terminate
on the third anniversary hereof (the "Term") unless extended prior to such third
anniversary  by mutual  written  agreement  of the  parties,  subject to earlier
termination  as  provided  in  Section 10  (Termination  Prior to the End of the
Term).  The term shall  automatically  be extended for two  successive  one-year
periods  following  the third  anniversary  hereof,  unless  either  Party gives
written notice of  termination  not less than six months prior to the applicable
anniversary date.

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<PAGE>

3.       Duties

         Employee shall fairly and  diligently  perform such duties and exercise
such  powers as are  customarily  expected  of the Vice  President  and  General
Counsel of business  organizations which are similar to the Company,  and as may
from time to time be properly  assigned to him by the Chief  Executive  Officer,
the President or the Board of Directors of the Company.

4.       Extent of Services

         Employee shall devote his full working time, attention and skill to the
duties and  responsibilities set forth in Section 3. Employee may participate in
other  businesses  as an outside  director or investor,  provided  that Employee
shall  not  actively   participate  in  the  operation  or  management  of  such
businesses.

5.       Salary

         In consideration  for the performance of Employee's  obligations  under
this  Agreement,  the Company  shall pay Employee an annual  salary of $260,000,
which salary shall be subject to prospective adjustment from time to time by the
Board of  Directors  of the Company,  in its sole  discretion,  but shall not be
reduced during the term of this  Agreement.  Employee's  salary shall be paid in
installments  in  accordance  with  the  Company's   payroll  policy  for  other
employees.

6.       Incentive Compensation

         The Employee shall  participate  in the Company's  annual and long-term
incentive  compensation  programs which at present  include an annual  incentive
program,  a long term incentive award and performance  share grants.  The annual
incentive target and the annual portion of long term incentive  targets shall be
at least 35% of base salary.  Employee shall be granted performance share grants
of 2375 shares for the 1995-1998 cycle, 3358 shares for the 1996-1999 cycle, and
5240 shares for the 1997-2000 cycle.

7.       Benefits

         Employee shall be entitled to  participate in the Company's  Retirement
Benefit Plan, Investment Plan and Deferred Compensation Plan, in accordance with
their  terms,  each of which may be  amended  from  time to time,  and any other
benefit plans now or hereafter  available to the Company's  executive  officers.
The Company shall provide Employee with medical,  life and disability  insurance
benefits, and other executive benefits, with terms and provisions  substantially
as favorable to Employee as those  provided to other  executive  officers of the
Company. The



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<PAGE>

Company may prospectively  amend,  eliminate or add to the insurance and benefit
programs at any time, in its sole discretion. Employee shall be entitled to paid
time off in  accordance  with Company  policies,  shall start with a PTO account
balance of 20 days and shall  annually have at least 20 days credited to his PTO
account

8.       Supplemental Retirement Benefit

         Employee  shall  accrue a  supplemental  retirement  benefit  under the
Company's  Supplemental  Executive  Retirement Plan effective as of February 11,
1997 (the  "SERP"),  as  modified  by the terms of this  Agreement.  If Employee
completes  five years of  service  to the  Company,  he shall be  entitled  to a
monthly benefit upon retirement at age 62 equal to one-twelfth of 50% of (a) the
annual average of his highest 36  consecutive  months of salary paid or payable,
plus (b) the  average  of his  highest  three  annual  bonuses  paid or  payable
(collectively,  "Earnings"). This monthly amount shall be reduced by the monthly
amount  payable as of the  retirement  date for the life of  Employee  under the
Company's  Retirement  Benefit  Plan (or,  if payable as of another  date and/or
payable in another form,  the Actuarial  Equivalent  (as defined in the SERP) of
the  monthly  amount  payable  under  the  Retirement  Benefit  Plan  as of  the
retirement  date for the life of  Employee).  Employee  may elect to take  early
retirement  after  attaining  age 55, in which case the monthly  benefit will be
reduced  one-third of one percent for each month that benefits commence prior to
the month in which Employee would attain age 62. If Employee's  employment  with
the Company  terminates  for any reason prior to the completion of five years of
service to the Company,  the supplemental  retirement benefits shall vest at the
rate of 20% for each full 12 month period of employment  commencing with June 1,
1997.  For example,  if Employee's  employment  terminates on June 30, 2000, the
benefit  otherwise  payable  at age 62 would be 30% of  Earnings  (60% times 50%
equals 30%).  If Employee's  employment  terminates  prior to the  completion of
three years of service,  the average  Earnings will be determined based upon the
period of time actually served. Employee's supplemental retirement benefits will
become  100% vested  upon the  occurrence  of a Change of Control (as defined in
Section 11),  without  regard to Employee's  number of years of service.  Vested
benefits  shall not be  forfeitable  for any reason,  including  the  subsequent
termination  of  Employee's  employment  by the Company  with or without  cause.
Except as  specifically  set forth herein,  Employee's  supplemental  retirement
benefit  shall be subject to the terms and  conditions of the SERP. In the event
of conflict between the terms of the SERP and the terms of this Agreement,  this
Agreement shall be controlling.  For purposes of determining the benefit payable
under the SERP in the event of Employee's Disability (as defined in the SERP) or
death, Employee shall be credited with three Years of Service (as defined in the


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                                       3
<PAGE>

SERP) under the SERP for each 12 months of service after June 1, 1997.  Employee
may elect any  alternate  form of payment of  supplemental  retirement  benefits
permitted by the SERP. No amendment or  termination  of the SERP shall alter the
terms  of this  Agreement  or  diminish  the  benefits  payable  hereunder.  The
provisions  of this Section 8 shall  survive the  expiration of the Term and any
termination of this Agreement.

9.       Expenses

         The Company shall reimburse  Employee for reasonable  expenses incurred
by Employee in promoting  the business of the Company,  subject to the Company's
expense reimbursement policies, which may be amended from time to time.

10.      Termination Prior to the End of the Term

     10.1 The Company may terminate this Agreement for cause prior to the end of
the Term. For the purposes of this Agreement  "cause" shall mean (a) the willful
and continued  failure by Employee to substantially  perform his 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 Employee by the Board of Directors
which  specifically  identifies  the  manner in which the  Board  believes  that
Employee has not substantially performed his duties, or (b) the willful engaging
by Employee in gross  misconduct  materially and  demonstrably  injurious to the
Company, as determined by the Board of Directors after notice to Employee and an
opportunity for a hearing.  No act, nor failure to act, on Employee's part shall
be considered  "willful" unless he has acted or failed to act with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best  interests of the Company.  If the Board of Directors of the Company
terminates  Employee's employment for "cause," the Company shall be obligated to
pay to  Employee  under this  Agreement  his current  base  salary plus  accrued
vacation as well as any other compensation  actually accrued through the date of
termination,  and Employee shall remain entitled to any supplemental  retirement
benefit which has become vested pursuant to this Agreement

     10.2 The  Company  may,  at its  option  and at any  time,  terminate  this
Agreement  prior to the end of the Term,  without  cause.  In the event that the
Company  exercises  this  right,  Employee  shall be entitled to receive (a) all
compensation and benefits earned through the date of termination, (b) a pro rata
portion  (based  on the  portion  of the  year  elapsed  prior  to the  date  of
termination)  of the annual  target bonus for the year in which the  termination
occurs,  (c) a pro rate portion (based on the portion of the award cycle elapsed
prior to the date of termination and the

[00000@/SB971260. 100]

                                       4
<PAGE>

performance of the Company against the target  benchmarks during that period) of
the target award under long-term incentive compensation programs (whether or not
then fully vested),  and (d) continuation of his salary,  at the level in effect
as of the date of  termination,  for two  years.  In the event of a  termination
without cause before  Employee's  supplemental  retirement  benefits have become
fully vested under the terms of this Agreement,  Employee shall be credited with
two  additional  years of service for purposes of determining  the  supplemental
retirement benefit payable pursuant to Section 8 of this Agreement.

         10.3 The Term shall  terminate in the event Employee dies, or is unable
to perform his duties as a result of "Disability." In the event of a termination
under this subsection, Employee or his estate shall be paid all compensation and
benefits earned through date of such termination,  including  pro-rated payments
under  annual  and  long-term  incentive  compensation  programs,  and  shall be
entitled to receive benefits under any salary continuation plan that the Company
may have in effect  as of the date of such  termination  and under the SERP,  as
modified by this Agreement.  "Disability"  means a physical or mental  condition
that  entitles  Employee to benefits  under the Company's  long-term  disability
plan.

11.      Change in Control

         11.1 The Board of Directors,  in the exercise of its  responsibility to
serve the best  interests of the  shareholders  of the Company,  may at any time
consider  a merger or  acquisition  proposal  that  could  result in a Change of
Control  of the  Company.  In order to avoid any  adverse  affect on  Employee's
performance   under  this  Agreement  that  might  be  caused  by  uncertainties
concerning his tenure and treatment by the Company in the event of such a Change
in Control  the Company  has agreed to provide  certain  benefits to Employee in
certain circumstances involving a Change of Control of the Company in accordance
with the provisions of this Section. For purposes of this Agreement, a Change in
Control shall mean the occurrence of any one of the following actions or events:

(a) The acquisition by any person (which, for purposes of this Agreement,  shall
include a natural person,  corporation,  partnership,  association,  joint stock
company,  trust fund other entity or  organized  group of persons) of the power,
directly or indirectly,  to exercise a controlling influence over the management
or policies  of the Company  (either  alone or  pursuant  to an  arrangement  or
understanding with one or more other persons),  whether through the ownership of
voting  securities,  through one or more  intermediary  persons,  by contract or
otherwise; or

[00000-MO/SB971260. 100]

                                       5
<PAGE>

(b) The  acquisition by a person (whether alone or pursuant to an arrangement or
understanding  with one or more other persons) of the ownership or power to vote
25% or more of the outstanding voting securities of the Company; or

(c) During a period of six years after the  acquisition by any person,  directly
or indirectly,  of the ownership or power to vote 10% or more of the outstanding
voting  securities of the Company,  the ceasing of the  individuals who prior to
such  acquisition  were  directors  of the Company  (the "Prior  Directors")  to
constitute a majority of the Board of Directors,  unless the  nomination of each
new director was approved by a vote of a majority of the Prior Directors.

         11.2 In the event that a Change in Control  occurs,  whether  during or
after the term of this Agreement,  and Employee's employment is terminated prior
to the  expiration  of three years  following the date of the Change of Control,
whether by the  Company  or its  successor  or by  Employee,  Employee  shall be
entitled to receive the benefits  described  in  Subsection  11.3.  These are in
substitution  for, and not in addition to, the benefits  described in Subsection
10.2.

         11.3  In  the  event  of a  termination  of  Employee's  employment  as
described  in  Subsection  11.2,  the  Company  shall  provide to  Employee  the
following benefits:

(a)  Employee's  full base salary  earned  through the  termination  date,  plus
payment for all accrued vacation and any deferred compensation to which Employee
is  entitled  for the  fiscal  year  most  recently  ended  prior  to  Employees
termination, any annual or long-term incentive payment which has been earned but
not yet paid, a pro rata portion (based on the portion of the year elapsed prior
to the date of termination) of the annual target bonus for the year in which the
termination  occurs, a pro rate portion (based on the portion of the award cycle
elapsed  prior to the date of  termination  and the  performance  of the Company
against  the target  benchmarks  during that  period) of the target  award under
long-term  incentive  compensation  programs (whether or not then fully vested);
plus

(b) Within 30 days following the date of  termination,  an amount equal to three
times the sum of  Employee's  annual base salary and his annual  target bonus at
the rates in effect as of the date of  termination  (or the rates in effect  for
the prior fiscal year, if higher).  However,  if Employee's  would attain age 62
within  three  years  after  the  date of  termination,  the  multiplier  in the
preceding  sentence  shall  be  reduced  from  three to that  fraction  of three
representing  the number of months  remaining to the date Employee  would attain
age 62,  divided  by 36.  For  example,  if 18  months  remain  to age  62,  the
multiplier would be 18/36 x three = 1.5.

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                                       6
<PAGE>

(c) The  Company  shall  maintain  in full  force and  effect  for  three  years
following the date of termination all employee health and welfare benefit plans,
programs and  policies,  including any life or health  insurance  plans in which
Employee was entitled to participate  immediately prior to termination  provided
that Employee is qualified to participate under the general terms and provisions
of such plans, programs and policies. In the event that Employee's participation
in any such  plan,  program  or  policy  is not  possible  under  its  terms and
conditions,  the Company  shall at its option  either  arrange  for  Employee to
receive benefits  substantially  similar to those which Employee would have been
entitled to receive  under each plan,  program or policy,  or pay to employee an
amount equal to the premiums that the Company would pay on Employee's behalf for
participation  in such  plan,  program  or  policy.  At the end of the period of
coverage,  Employee will have the option to receive an assignment at no cost and
with no apportionment of prepaid  premiums,  any assignable  insurance  policies
owned by the Company and  relating to  Employee,  and to take  advantage  of any
conversion   privileges  pertinent  to  the  benefits  available  under  Company
policies.

(d) In addition to the regular payment of benefits to which Employee is entitled
under the  retirement  plans or  programs  in  effect on the date of  Employee's
termination,  which shall not be affected by such termination, the Company shall
pay to Employee  in cash when  Employee  attains  age 62 an amount  equal to the
actuarial equivalent of the additional retirement compensation to which Employee
would have been entitled  under the terms of such  retirement  plans or programs
(without regard to vesting) had Employee  continued in the employ of the Company
for three years following the date of termination at Employee's base salary rate
as of the date of termination, provided that payment shall not extend beyond the
date Employee  attains age 62. For purposes of this  calculation,  the actuarial
equivalent shall be determined by assuming survival to age 80.

(e)  Employee  shall waive all rights to receive  shares of common  stock of the
Company  issuable  upon  exercise  of  options  or  other  equity-based   awards
(including  performance  share grants)  granted to employee  under the Company's
long-term  incentive  compensation  plans.  In return for that waiver,  Employee
shall be entitled to receive,  within 30 days following the date of termination,
a payment  equal to the  difference  between  the  amount  (if any)  payable  by
Employee to acquire such stock or other equity award,  whether or not then fully
vested, and the higher of (1) the average of the high and low sale prices of the
Company's  stock on the New York Stock  Exchange in each of the twenty  business
days  preceding  the date of  termination  or (2) the  highest  price  per share
actually  paid for any of the Company  shares in  connection  with any Change in
Control of the Company.

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<PAGE>

(f)  Notwithstanding  any other  provisions of this Agreement,  if any severance
benefits under Section 11 of this  Agreement,  together with any other Parachute
Payments (as defined under  Internal  Revenue Code Section  280(G)(b)(2)  or any
successor provision) made by the Company to Employee,  if any, are characterized
as Excess  Parachute  Payments  (as defined in Internal  Revenue  Code,  Section
280(G)(b)(1)  or  any  successor  provision),  then  the  Company  shall  pay to
Employee,  in addition to the  payments to be received  under this  Section,  an
amount  equal to the excise  taxes  imposed  by Section  4999 of the Code or any
successor  provision on Employee's  Excess  Parachute  Payments,  plus an amount
equal to the  federal  and,  if  applicable,  state  income  taxes which will be
payable to Employee as a result of this additional payment.

         Employee  shall not be required  to mitigate  the amount of any payment
due hereunder by seeking other  employment  and,  except as provided in the next
sentence,  the  payments  due  hereunder  shall  not be  affected  by any  other
employment  which  Employee  may  obtain.  If Employee  accepts a position  with
another  employer  during the period for  payment  of  employee  benefits  under
Section  11.3(c),  then the Company's  obligation to pay such employee  benefits
will cease as of the date of Employee's new employment,  provided, however, that
the Company will  continue  such benefits for the full period to the extent that
they exceed the comparable benefits from such other employment.

         The  provisions of this Section 11 shall survive the  expiration of the
Term any termination of this Agreement.

12.      Indemnification

         The Company shall defend, indemnify and hold Employee harmless from and
all liabilities,  obligations, claims or expenses which arise in connection with
or as a result of  Employee's  service as an officer or employee (or director if
Employee is elected and serves as a director)  of the Company  and/or any of its
affiliates  and  subsidiaries  to the fullest extent allowed by law. The Company
shall  assure  that  Employee  remains  covered  by the  Company's  policies  of
directors' and officers' liability insurance for six years following the date of
termination.

13.      Confidentiality

         Employee shall not during the term of this Agreement or thereafter, use
for his own purposes or disclose to any other person or entity any  confidential
information  concerning the Company,  its affiliates or subsidiaries,  or any of
their business operations, except as may be

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                                       8
<PAGE>

consistent  with his duties  hereunder or as may be required by order of a court
of competent  jurisdiction.  Confidential  information  shall  include,  without
limitation,  any information,  formula, pattern,  compilation,  program, device,
method,  technique or process that derives independent economic value, actual or
potential,   from  not  being   generally   known  to,  and  not  being  readily
ascertainable by proper means by, other persons or entities.

14.      Noncompetition

         14.1  During  the term of his  employment  with the  Company  and for a
period of two years  following any voluntary  termination by Employee,  Employee
shall not without the prior  written  consent of the Company  which shall not be
unreasonably withheld,  perform services for any person or entity engaged in the
business of selling or distributing  electric power or natural gas in the states
of Washington, Oregon or Idaho in competition with the Company.

         14.2 Employee agrees that damages for breach of the covenants contained
in this Section would be difficult to determine and therefore  agrees that these
provisions  may be enforced by temporary or permanent  injunction.  The right to
such  injunctive  relief  shall be in  addition to and not in place of any other
remedies to which the Company may be entitled.

     14.3 Employee  agrees that the  provisions of this Section are  reasonable.
However,  if any court of competent  jurisdiction  determines that any provision
within this Section is unreasonable in any respect, the Parties intend that this
Section should be enforced to the fullest extent allowed by such court.

15.      Payments and Disputes

         For purposes of this  Agreement,  the date of  termination  will be the
date written  notice of  termination  is given by Employee or the  Company.  The
amounts  specified in Sections 11.3(a) and 11.3(b) will be paid no more than ten
business days after the date of termination.  In the event that any payments due
hereunder  shall be delayed for any reason for more than ten business  days from
the date due,  the amounts due shall bear  interest at the rate of 12% per annum
until paid.

         Any  dispute  between the  Parties  hereto  with  respect to any of the
matters set forth herein shall be  submitted to binding  arbitration  in city of
Seattle,  state of  Washington.  Either Party may commence  the  arbitration  by
delivery of a written  notice to the other,  describing the issue in dispute and
its position with regard to the issue.  If the Parties are unable to agree on an
arbitrator  within 30 days  following  delivery of such notice,  the  arbitrator
shall be selected by a Judge of the

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                                       9
<PAGE>

Superior  Court of the State of  Washington  for King  County  upon three  days'
notice.  Discovery shall be allowed in connection  with any such  arbitration to
the same extent  permitted by the Washington Rules of Civil Procedure but either
Party may petition the arbitrator to limit the scope of such discovery, in which
event the  arbitrator  shall  determine  the extent of  discovery  allowable  in
connection with the dispute in question.  Except as otherwise  provided  herein,
the arbitration  shall be conducted in accordance with the rules of the American
Arbitration  Association then in effect for expedited proceedings.  The award of
the  arbitrator  shall be final and binding,  and judgment  upon an award may be
entered in any court of  competent  jurisdiction.  The  arbitrator  shall hold a
hearing, at which the Parties may present evidence and argument,  within 30 days
of his or her  appointment  and shall issue an award within 15 days of the close
of the hearing. The Company will pay all fees and expenses, including attorneys'
fees and the cost of the  arbitrator,  incurred  by  Employee  in good  faith in
contesting  or disputing  any  termination  for cause or in seeking to obtain or
enforce any right or benefit provided by this Agreement.

16.      Notices

         All notices or other communications required or permitted by this shall
be in writing and shall be sufficiently  given if sent by certified mail postage
prepaid, addressed as follows:

         If to Employee, to:

                  Steve A. McKeon
                  1130 Grand Avenue
                  Seattle, WA 98122


         If to Company:

                  Puget Sound Energy, Inc.
                  P.O. Box 97034
                  Bellevue, WA 98009-9734
                  Attention:  Corporate Secretary
                  Facsimile:  (206) 462-3300

         Any such notice or communication  shall be deemed to have been given as
of the date mailed.  Any address may be changed by giving written notice of such
change in the manner provided herein for giving notice.


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<PAGE>

17.      Waiver of Breach

         The waiver by a Party of a breach of any  provision  of this  Agreement
shall not operate or be construed as a waiver of any subsequent breach.

18.      Binding Effect

         This  Agreement  shall be binding  upon and inure to the benefit of the
Parties, and their successors,  legal  representatives and heirs,  including any
successor to the Company's business or assets by merger, consolidation,  sale of
assets or otherwise.

19.      Entire Agreement

This Agreement  contains the entire  understanding of the Parties with regard to
the  subject  matter  of this  Agreement  and may  only be  changed  by  written
agreement signed by both Parties.  Any and all prior discussions,  negotiations,
commitments and understandings related thereto are merged herein.

20.      Governing Law

         This  Agreement  shall  be  governed  by,  construed  and  enforced  in
accordance  with the laws of the state of  Washington,  without giving effect to
principles  and  provisions  thereof  relating to conflict or choice of laws and
irrespective  of the fact  that any one of the  Parties  is now or may  become a
resident of a different state.

21.      Validity

In case any term of this Agreement shall be invalid,  illegal or  unenforceable,
in whole or in part,  the  validity of any of the other terms of this  Agreement
shall not in any way be affected thereby.

22.      Counterparts

         This Agreement may be executed in counterparts,  each of which shall be
deemed to be an original.



[00000-0000/SB971260.100]

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<PAGE>

         IN WITNESS WHEREOF,  the Parties have executed this Agreement as of the
date first written above.



                                PUGET SOUND ENERGY, INC.



                               By:    /s/ R. R. Sonstelie
                               --------------------------
                                 R. R. Sonstelie




                                /s/ Steve A. McKeon   
                               --------------------------
                                 STEVE A. MCKEON


[00000-0000/SB971260.100]


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