Exhibit 10.153
                                    AGREEMENT

        This  Agreement (the  "Agreement")  is made and entered into as of March
16, 1998  between  Puget Sound  Energy,  Inc.,  a  Washington  corporation  (the
"Company"), and Richard L. Hawley (the "Employee"). The term "Parties" refers to
the Company and the Employee.

         A. The  Company  wishes to employ  Employee as its Vice  President  and
Chief  Financial  Officer,  and  Employee  wishes  to  accept  such  employment,
effective as of March 16, 1998.

         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
Chief Financial Officer 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
fifth  anniversary  hereof  (the  "Term")  unless  extended  prior to such fifth
anniversary by written agreement,  subject to earlier termination as provided in
Section 10 (Termination Prior to the End of the Term).

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3.       Duties

         Employee  shall  faithfully  and  diligently  perform  such  duties and
exercise such powers as are customarily expected of the Vice President and Chief
Financial  Officer 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 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 $300,000,
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 shall be at least 35% of base salary and the annual portion of
long term incentive targets shall be at least 40% of base salary. Employee shall
be granted performance share grants of 1200 shares for the 1995-1998 cycle, 2800
shares for the 1996-1999  cycle,  4400 shares for the  1997-2000  cycle and 6400
shares  for  the  1998-2001  cycle.  If the  value  received  by  Employee  upon
settlement of each of the long term incentive  award payments for the 1995-1998,
1996-1999  and 1997-2000  cycles is less than $50,000,  the Company will make an
additional cash payment to Employee so that the minimum settlement of each award
cycle will be valued at $50,000.

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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 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 25 days  and  shall  annually  have at least 25 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 June 1,
1997 (the  "SERP"),  as  modified  by the terms of this  Agreement.  If Employee
completes five year 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").  (The minimum  $50,000 annual award for the three LTIP award cycles
referred to in Section 6 shall be deemed to be salary for  purposes of this SERP
calculation). 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 qualified
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 March 16 1998. For
example,  if Employee's  employment  terminates  on March 16, 2001,  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,  unless  applying the terms of the SERP would result in a
greater  benefit to Employee.  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
SERP)  under the SERP for each 12  months  of  service  after  March  16.  1998.
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 in a manner that would  diminish the benefits
payable hereunder. The provisions of this Section 8 shall survive the expiration
of the Term and any termination of this Agreement.

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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.

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         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 rata 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),  and (d)
continuation  of his  base  salary  at the  level  in  effect  as of the date of
termination, plus $50,000 per year, 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  the  date of  such  termination,  including  prorated
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:

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         (a) The  acquisition by any  individual,  entity or group of beneficial
ownership  (within the meaning of Rule 13d-3  promulgated  under the  Securities
Exchange Act) of (i) 20% or more of either (A) the  outstanding  Company  Common
Stock or (B) the outstanding Company voting securities;  provided, however, that
the following  acquisitions  shall not  constitute a Change of Control:  (x) any
acquisition by the Company, (y) any acquisition by any employee benefit plan (or
related  trust)  sponsored  or  maintained  by the  Company  or any  corporation
controlled by the Company, or (z) any acquisition by any corporation pursuant to
a business combination,  if, following such business combination, the conditions
described in clauses (i), (ii) and (iii) of subsection  (c) of this Section 11.1
are satisfied; or

     (b) A "Board  Change"  which,  for purposes of this  Agreement,  shall have
occurred if a majority of the seats on the Board are occupied by individuals who
were neither (i)  nominated by a majority of the  Incumbent  Directors  nor (ii)
appointed by directors so nominated  ("Incumbent Director" means a member of the
Board who has been either (i)  nominated  by a majority of the  directors of the
Company  then in  office  or (ii)  appointed  by  directors  so  nominated,  but
excluding,  for this purpose,  any such individual  whose initial  assumption of
office occurs as a result of either an actual or threatened election contest (as
such  terms are used in Rule  14a-11 of  Regulation  14A  promulgated  under the
Securities  Exchange Act) or other actual or threatened  solicitation of proxies
or consents by or on behalf of a Person other than the Board); or

         (c)  Approval  by  the  shareholders  of  the  Company  of  a  complete
liquidation or dissolution of the Company or a Business  Combination (which
means (A) a reorganization,  exchange of securities,  merger or consolidation of
the Company or (B) the sale or other disposition of all or substantially all the
assets  of  the  Company)  unless,  in  the  case  of  a  Business  Combination,
immediately  following  such  Business  Combination,   (i)  more  than  50%  of,
respectively,  the then  outstanding  shares of common stock of the  corporation
resulting from or effecting such Business  Combination  and the combined  voting
power of the then outstanding voting securities of such corporation  entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the outstanding Company Common Stock and
outstanding  Company  voting  securities  immediately  prior  to  such  Business
Combination in substantially the same proportion as their ownership, immediately
prior to such Business Combination,  of the outstanding Company Common Stock and
outstanding  Company  voting  securities,  as the  case may be,  (ii) no  Person
(excluding  the Company and any employee  benefit plan (or related trust) of the
Company)   beneficially   owns,   directly  or  indirectly,   20%  or  more  of,
respectively,  the then  outstanding  shares of common stock of the  corporation
resulting  from or effecting such Business  Combination  or the combined  voting
power of the then outstanding voting securities of such corporation  entitled to
vote  generally in the election of  directors,  and (iii) at least a majority of
the  members of the board of  directors  of the  corporation  resulting  from or
effecting such Business Combination were (or were approved by a majority of) the
Incumbent  Directors at the time of the  execution  of the initial  agreement or
action of the Board providing for such Business Combination.

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         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
Employee's termination, any annual or long-term incentive payment which has been
earned but not yet paid,  and 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 ; 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
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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                  (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, or such
earlier  retirement date as Employee may elect, 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 (but not beyond age 62)  following the date of  termination  at Employee's
base  salary  rate  as  of  the  date  of  termination.  For  purposes  of  this
calculation,  the actuarial  equivalent shall be determined by assuming survival
to age 80.  Employee  shall have the option to elect to receive  within 120 days
following the date of termination  the present value  equivalent,  discounted at
seven percent,  of this additional payment assuming retirement at Employee's age
on the date of termination.  If Employee has not yet attained age 55 by the date
of termination,  the present value equivalent of the additional payment shall be
calculated assuming retirement at age 55.

                  (e)  Employee  shall  waive all  rights to  receive  shares of
common stock of the Company  issuable upon  exercise of options  granted to
employee under the Company's  stock option plans. In return for that waiver with
respect to any stock options,  Employee shall be entitled to receive,  within 30
days  following  the date of  termination,  a  payment  equal to the  difference
between the amount  payable by Employee  to acquire  such stock,  whether or not
then fully vested,  and the higher of (1) the average of the last sale prices of
the Company's (or its  successor's)  Common 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  Common Stock in
connection with any Change in Control of the Company.

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                  (f) with  respect  to all  performance  awards  granted to the
Executive  pursuant to the Company's  Long-Term  Incentive Plan or any successor
plan that are  outstanding  immediately  prior to the date of  termination,  the
Company  shall  also  issue to the  Executive  within 30 days  after the date of
termination:

                         (i) cash equal to the higher of (1) the  average of the
last sale prices of the Company's (or its  successor's)  Common 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  Common Stock in  connection  with the Change in Control,  multiplied by
aggregate  number of shares of the Company's Common Stock (or, if the event that
triggered the Effective Date is a Business Combination, the equivalent number of
shares of the then outstanding common stock of the corporation resulting from or
effecting such Business  Combination into which such shares of Common Stock have
been  converted)  equal to the  greater  of (x) the total  number of the  shares
payable at the target  award  level upon full  vesting of each such  performance
award and (y) such higher  number of shares  payable  upon full  vesting of each
such award if the Company achieved for each four-year award cycle the percentile
ranking  against the comparable  universe of EEI companies which the Company had
achieved for the applicable cycle during the period commencing upon the starting
year of such cycle and ending with the fiscal quarter immediately  preceding the
date of termination; and

                           (ii)  cash  equal  to  the  amount  of  the  dividend
equivalents associated with the shares issuable under subparagraph (i) above, in
accordance with the Incentive Plan.

               (g)  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.

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                  (h) the Executive may, by giving written notice to the Company
at least 120 days prior to receipt of regulatory  approval  from the  Washington
Utilities  and  Transportation  Commission  for the Change of Control,  elect to
receive the Actuarial  Equivalent (as defined in the SERP) lump sum value of the
normal form of payment of SERP  benefits,  or to have the  Actuarial  Equivalent
lump sum value  transferred to the Company's  Deferred  Compensation Plan or any
successor  deferred  compensation  plan.  If the  Executive  is younger than the
minimum age for eligibility  for payment of SERP benefits,  the Executive in his
notice to the Company may elect to receive the discounted present value, using a
seven percent  discount rate, of the Actuarial  Equivalent lump sum value of the
SERP benefits to which the Executive would be entitled at the minimum age.

         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 1 1.3 (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.

         If the Company adopts new or revised  change of control  agreements for
its  executives  after  the date of this  Agreement  which  contain  terms  more
favorable to Company executives than the terms contained in this Agreement,  the
provisions of this Section shall be amended to reflect such terms. The amendment
shall  not,  however,   diminish  Employee's  rights  and  benefits  under  this
Agreement.

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

12.     Indemnification

        The Company shall defend,  indemnify and hold Employee harmless from any
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.

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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 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.

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<PAGE>

         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  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
Agreement  shall  be in  writing  and  shall  be  sufficiently  given if sent by
certified mail, postage prepaid, addressed as follows:

         If to Employee, to:

                  Richard L. Hawley
                  6134 147th Place SE
                  Bellevue, WA 98006_

         If to Company:



[07770-0016/RH.doc]


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<PAGE>
 
                  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.

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.

[07770-0016/RH.doc]

                                       13
<PAGE>

22.      Counterparts

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



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



                                                   PUGET SOUND ENERGY, INC.



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


                                                   /s/ Richard L. Hawley
                                                   ------------------------
                                                   RICHARD L HAWLEY




[07770-0016/RH.doc]


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