Exhibit 10.89

# AGREEMENT AND GENERAL
RELEASE

THIS
AGREEMENT AND GENERAL RELEASE (the Agreement) is entered into by Timothy J.
Hogan (hereinafter referred to as Hogan) and Puget Sound Energy, Inc.
(hereinafter referred to as PSE).

# RECITALS

A.       
          Hogan has been employed by PSE as Senior Vice President Regional Services and
          Community Affairs and his duties in that position ended effective July 31, 2003,
          by mutual agreement.

B.       
          Hogan and PSE wish to enter into an agreement to clarify and resolve any
          disputes that may exist between them arising out of the employment relationship
          and its termination, and any continuing obligations of the parties to one
          another following the end of the employment relationship.

C.       
          PSE has advised Hogan of his right to consult an attorney prior to signing this
          Agreement and has provided him reasonable time to consider its offer and to seek
          legal assistance. Hogan has either consulted an attorney of his choice or has
          voluntarily elected not to consult legal counsel, and understands that he is
          waiving all potential claims against PSE, except as specifically reserved
          herein.

D.       
          This Agreement is not and should not be construed as an admission or statement
          by either party that it or any other party has acted wrongfully or unlawfully.
          Both parties expressly deny any wrongful or unlawful action.

# AGREEMENTS

NOW,
THEREFORE, in consideration of the following recitals and the mutual promises contained
below, it is agreed as follows:

1.     EMPLOYMENT:
ENDING DATE AND RESPONSIBILITIES

Hogan
will have no further active employment responsibilities after July 31, 2003 (the
Paid Leave Initiation Date). Upon the Effective Date of this Agreement (as
defined below), Hogan will be placed on a paid administrative leave through March 31,
2004 (the Paid Leave Period), at which point his employment with PSE will end.
If this Agreement does not become effective, Hogans employment with PSE will
terminate retroactive to July 31, 2003.

2.     PAID
LEAVE AND BENEFITS

| | A. | Salary
and Insurance Benefits
| | -- | -----------------------------

Commencing
with the Effective Date of this Agreement and through the Paid Leave Period, PSE will
continue to pay Hogan a monthly salary of $21,250.00, less required and authorized
withholding. During the Paid Leave Period, Hogan also will be eligible to continue
participation in PSEs officer-level benefit programs, except for short and long term
disability and workers compensation programs.

Through
March 31, 2006, PSE will continue Hogans medical and dental group insurance
through its group plans on the same basis as during his active employment unless he sooner
obtains similar coverage under another employer-sponsored plan, in which case Hogan is to
promptly advise PSE of his new insurance coverage. If Hogan has not secured other medical
and dental insurance coverage by March 31, 2006, he will then be entitled to continue
his PSE medical and dental insurance coverage at his own expense, to the extent permitted
by and subject to applicable provisions of COBRA. PSEs obligation will cease if its
medical and dental group insurance carriers at any date before March 31, 2006 no
longer permit group coverage for Hogan; in that event, Hogan will be entitled to continue
his PSE medical and dental insurance coverage at his own expense, to the extent permitted
by and subject to applicable provisions of COBRA.

| | B. | Incentive Payments
| | -- | ------------------

No
later than March 1, 2004, PSE will pay Hogan (a) a lump sum equal to the value
of the 2000  2003 grant, measured as of June 30, 2003, as defined in the Puget
Energy 1995 Long Term Incentive Plan (i.e., $211,088), and (b) a lump sum equal to
the value, if any, of the result of his assigned goals under the terms of the 2003 Annual
Incentive Plan. PSE agrees that Hogan has elected to defer these payments into his
Deferred Compensation Plan Account for payment as defined in Section D of this document.
The Annual Incentive Plan payment will be based on PSEs December 31, 2003 results,
and both payments will be subject to any required or authorized withholding.

| | C. | Supplemental Executive Retirement Plan
| | -- | --------------------------------------

Hogan
is entitled to benefit payments under PSEs Supplemental Executive Retirement Plan
(SERP). PSE agrees that Hogan may commence actuarially reduced SERP benefit
payments as early as age 55. If Hogan commences receipt of SERP benefits and then obtains
employment that would otherwise require suspension of such benefits, PSE agrees to waive
suspension of benefits under Section 3.6 of the SERP. Attached hereto as Exhibit A is
a copy of a letter from PSE to Hogan, transmitting an estimate by Milliman USA of
Hogans SERP benefits (identified as New PSE SERP in Exhibit A).

| | D. | Deferred Compensation Plan
| | -- | --------------------------

Hogan
is a participant in PSEs Deferred Compensation Plan. No later than 60 days after
March 31, 2004, PSE will commence paying Hogans Account Balance in the Deferred
Compensation Plan in 60 monthly payments as defined as a Monthly Installment Method in the
Plan. These payments will be subject to authorized and required withholding.

| | E. | Stock Options
| | -- | -------------

Following
the Effective Date of this Agreement, Hogan may exercise any unexpired stock options
available to him during the Paid Leave Period.

| | F. | Outplacement Services
| | -- | ---------------------

PSE will
provide Hogan with services through Waldron & Companys Flagship Program for
Senior ExecutivesResident.

| | G. | Club Membership
| | -- | ---------------

PSE will
continue to pay Hogans dues for his membership at the Rainier Club through March 31,
2004.

| | H. | Laptop Computer
| | -- | ---------------

Hogan
may retain the laptop computer that was provided to him by PSE for use during his
employment; provided that Hogan agrees that he will not download from the laptop computer
any proprietary information of PSE and that he will submit his laptop computer to
PSEs information systems department so that PSE files and material may be deleted.

3.     VALID
CONSIDERATION

Hogan
agrees that certain of the payments and other benefits described in the preceding
paragraph are not required by PSE policies or procedures or by any other contractual
obligation of PSE, and are offered by PSE solely as consideration for this Agreement.
Hogan acknowledges that these payments represent a substantial benefit to him.

4.     CONFIDENTIALITY
OF SEPARATION AGREEMENT

Hogan
agrees that, except as otherwise required by law, he will keep the terms of this Agreement
(including but not limited to the salary continuation amounts) completely confidential,
and that he will not disclose any information concerning this Agreement or its terms to
anyone other than him immediate family, legal counsel, and/or financial advisors, who he
will first inform of and from whom he will obtain agreement to be bound by this
confidentiality clause.

5.     GENERAL
RELEASE OF CLAIMS

Hogan
expressly waives any claims against PSE and releases PSE (including its officers,
directors, stockholders, managers, agents and representatives) from any claims that he may
have in any way connected with his employment and/or the termination of his employment
with PSE; provided that, this waiver and release does not waive or release claims
for Hogans vested retirement benefits or his vested benefits in the Deferred
Compensation Plan. It is understood that this release includes, but is not limited to, any
claims for wages, bonuses, employment benefits, or damages of any kind whatsoever, arising
out of any contracts, express or implied, any covenant of good faith and fair dealing,
express or implied, any theory of wrongful discharge, any legal restriction on PSEs
right to terminate employment, or any federal, state or other governmental statute or
ordinance, including without limitation, Title VII of the Civil Rights Act of 1964, the
federal Age Discrimination in Employment Act, the American with Disabilities Act, the
Family and Medical Leave Act, the Washington Law Against Discrimination, or any other
legal limitation on the employment relationship.

Hogan
represents that he has not filed any complaints, charges or lawsuits against PSE with any
governmental agency or any court, and agrees that he will not initiate or encourage any
such actions.

This
waiver and release shall not waive or release claims where the events in dispute first
arise after the execution of this Agreement, nor shall it preclude Hogan from filing a
lawsuit for the exclusive purpose of enforcing his rights under this Agreement.

6.     REVIEW
AND REVOCATION PERIOD; EFFECTIVE DATE

Hogan
and PSE agree that he shall have 21 days to review this Agreement and consult legal
counsel if he so chooses, during which time the proposed terms of this Agreement shall not
be amended, modified or revoked by PSE. Hogan may revoke this Agreement if he so chooses
by providing written notice of his decision to revoke the Agreement to PSE (ATTN: Stephen
Reynolds) within seven days following the date he signs this Agreement. This Agreement
shall become effective and enforceable upon expiration of this seven-day revocation
period, and the Effective Date shall be the first day following the expiration of the
revocation period.

7.     NONDISPARAGEMENT

Hogan
agrees that, unless required by law, he will not make disparaging or derogatory statements
about PSE, its officers, managers, employees and/or agents or engage in conduct
detrimental to PSEs business or reputation. Any violation of this obligation by
Hogan during the Paid Leave Period will cancel PSEs obligation to make any further
salary continuation payments still due.

PSE
agrees that, unless required by law, its officers, directors and managers who have
knowledge of this Agreement will not make disparaging or derogatory statements about Hogan
or engage in conduct detrimental to Hogans business or reputation.

8.     D&O
COVERAGE; LITIGATION

Hogan
will continue to be covered by PSEs Director and Officer liability insurance for
actions arising based on his conduct as an Officer of PSE. In case of litigation that
arises involving PSE matters about which Hogan has knowledge or expertise, Hogan agrees
that he will cooperate with PSE and make himself reasonably available to work with PSE in
the pursuit or defense, as applicable, of such litigation. PSE will pay Hogan for any such
consultation or other services he renders in connection with such litigation at an hourly
rate computed based on his final earnings level at PSE (i.e., annual salary divided by
2,080).

8.     SEVERABILITY

The
provisions of this Agreement are severable, and if any part of it is found to be unlawful
or unenforceable, the other provisions of this Agreement shall remain fully valid and
enforceable to the maximum extent consistent with applicable law.

9.     KNOWING
AND VOLUNTARY AGREEMENT

Hogan
represents and agrees that he has read this Agreement, understands its terms and the fact
that it releases any claim he might have not expressly reserved against PSE and its
agents, understands that he has the right to consult counsel of choice and has either done
so or knowingly waived the right to do so, and enters into this Agreement without duress
or coercion from any source.

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the dates indicated below:

|PUGET SOUND ENERGY, INC.                     |  |                       
|-------------------------------------------- |  | ----------------------
|                                             |  |                       
|/s/ Stephen P. Reynolds                      |  | /s/ Timothy J. Hogan  
|Stephen P. Reynolds                          |  | Timothy J. Hogan      
|                                             |  |                       
|Title: President and Chief Executive Officer |  | Dated: August 25, 2003
|                                             |  |                       
|Dated: August 25, 2003                       |  |