**Exhibit
      10.1**




EXECUTION
      VERSION




**FIRST
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT**





**THIS
      FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT** (this
      “ Amendment ”),
      dated
      as of April 4, 2006, is by and among **PUGET
      SOUND ENERGY, INC.** ,
      a
      Washington corporation (the “ Borrower ”),
      the
      financial institutions party hereto as lenders (the “ Lenders ”)
      and **WACHOVIA
      BANK, NATIONAL ASSOCIATION** ,
      as
      administrative agent under the Credit Agreement (defined below) (in such
      capacity, the “ Administrative
      Agent ”).




**W
      I T N E S S E T H**





**WHEREAS** ,
      the
      Borrower, the Lenders and the Administrative Agent are parties to that certain
      Amended and Restated Credit Agreement dated as of March 24, 2005 (as previously
      amended, modified or supplemented and as further amended, modified,
      supplemented, restated or amended and restated from time to time, the
“ Credit
      Agreement ”;
      capitalized terms used herein shall have the meanings ascribed thereto in the
      Credit Agreement as amended hereby); and





**WHEREAS** ,
      the
      Borrower and the Lenders have agreed to amend the Credit Agreement on the terms
      and conditions set forth herein;





**NOW,
      THEREFORE** ,
      in
      consideration of the agreements hereinafter set forth, and for other good and
      valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, the parties hereto agree as follows:




**ARTICLE
      I**


**AMENDMENTS
      TO CREDIT AGREEMENT**





**1.1**  **Amendments
      to Section 1.1** **.**





( a )  The
      definition of “Facility Termination Date” in Section 1.1 of the Credit Agreement
      is hereby deleted in its entirety and replaced with the following:





*“* ***Facility
      Termination Date*** *”
      means April 4, 2011, any later date as may be specified as the Facility
      Termination Date in accordance with Section 2.17 or any earlier date on
      which the Aggregate Commitment is reduced to zero or otherwise terminated
      pursuant to the terms hereof.*





( b )  The
      definition of “Trust Preferred Securities” in Section 1.1 of the Credit
      Agreement is hereby deleted in its entirety and replaced with the
      following:




*“* ***Trust
      Preferred Securities”*** *means (a) the outstanding principal amount of 8.4% subordinated debentures
      due June 30, 2041 issued by the Borrower on May 24, 2001 and purchased
      with the proceeds of trust preferred securities, (b) the outstanding
      principal amount of 8.231% subordinated debentures due June 1, 2027 issued
      by the Borrower on June 6, 1997 and purchased with the proceeds of trust
      preferred securities, (c) the outstanding principal amount of other
      subordinated debentures issued by the Borrower and purchased with the proceeds
      of trust preferred securities that are similar in structure to those described
      in clauses (a) and (b), and (d) the outstanding principal amount of
      other subordinated debentures of the Borrower and purchased with the proceeds
      of
      trust preferred securities that are (i) subordinated to the Obligations to
      a degree not less favorable to the Lenders than the subordinated debentures
      described in clauses (a) and (b) and (ii) deemed by one or more nationally
      recognized credit rating agencies to contain equity-like
      characteristics.*





**1.2**  **Amendment
      to Pricing Schedule** .





Schedule
      1 to the Credit Agreement is hereby deleted in its entirety and replaced by
      Schedule 1 attached to this Amendment.




**1.3****Amendment
      to Commitment Schedule**.




Schedule
      2 to the Credit Agreement is hereby deleted
      in its entirety and replaced by Schedule 2 attached to this
      Amendment.







**ARTICLE
      II**


**CONDITIONS
      TO EFFECTIVENESS**





**2.1**  **Closing
      Conditions** **.**





This
      Amendment shall become effective as of the date hereof (the “ First
      Amendment Effective Date ”)
      upon
      satisfaction of the following conditions (in form and substance reasonably
      acceptable to the Administrative Agent):





( a )  Executed
      Amendment .
      The
      Administrative Agent shall have received a copy of this Amendment duly executed
      by each of the Borrower, the Lenders and the Administrative Agent.





( b )  Fees .
      The
      Administrative Agent shall have received the fees set forth in the Fee Letter,
      dated April 4, 2006, addressed to the Borrower from the Administrative Agent
      and
      Wachovia Capital Markets, LLC.





( c )  Authority
      Documents . The
      Administrative Agent shall have received:





( i )  Resolutions .
      Copies
      of resolutions of the Board of Directors of the Borrower approving and adopting
      this Amendment, the transactions contemplated herein and authorizing execution
      and delivery thereof, certified by an officer to be true and correct and in
      force and effect as of the First Amendment Effective Date.





( ii )  Good
      Standing .
      Copies
      of certificates of good standing, existence or its equivalent with respect
      to
      the Borrower certified as of a recent date by the appropriate governmental
      authorities of the state of incorporation and each other jurisdiction in which
      the failure to so qualify and be in good standing could reasonably be expected
      to have a Material Adverse Effect.





( iii )  Incumbency .
      An
      incumbency certificate of the Borrower certified by the secretary of the
      Borrower to be true and correct as of the First Amendment Effective Date.





( d )  Legal
      Opinion .
      The
      Administrative Agent shall have received an opinion
      satisfactory to the Administrative Agent,
      addressed to the Administrative Agent
      and
      the Lenders, from legal counsel to the Borrower .





( e )  No
      Change .
      Since
      the Closing Date, there shall not have occurred any change in the business,
      Property, condition (financial or otherwise), operations or prospects of the
      Borrower and its Subsidiaries, taken as a whole, that could reasonably be
      expected to have a Material Adverse Effect.




( f )  Expenses . The
      Administrative Agent shall have received all fees
      and
      expenses of the Administrative Agent in connection with the preparation,
      execution and delivery of this Amendment for which an invoice has been presented
      to the Borrower prior to the First Amendment Effective Date.





( g )  Other .
      The
      Administrative Agent shall have received such other documents, agreements or
      information which it may reasonably request relating
      to the Borrower and the transactions contemplated by this
      Amendment and any other matters relevant hereto or thereto, all in form and
      substance satisfactory to the Administrative Agent in its sole good faith
      discretion.








**ARTICLE
      III**


**MISCELLANEOUS**





**3.1**  **Amended
      Terms** .
      All
      references to the Credit Agreement in each of the Loan Documents shall hereafter
      mean the Credit Agreement as amended by this Amendment. Except as specifically
      amended hereby or otherwise agreed, the Credit Agreement is hereby ratified
      and
      confirmed and shall remain in full force and effect according to its
      terms.





**3.2**  **Representations
      and Warranties of the Borrower** . **** The
      Borrower represents and warrants as follows as of the date hereof:




(a)  It
      has
      taken all necessary action to authorize the execution, delivery and performance
      of this Amendment.





(b)  This
      Amendment has been duly executed and delivered by the Borrower and constitutes
      the Borrower’s valid and legally binding obligations, enforceable in accordance
      with its terms, except as such enforceability may be subject to
      (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
      transfer, moratorium or similar laws affecting creditors’ rights generally and
      (ii) general principles of equity (regardless of whether such
      enforceability is considered in a proceeding at law or in equity).





(c)  No
      consent, approval, authorization or order of, or filing, registration or
      qualification with, any governmental authority or third party is required in
      connection with the execution, delivery or performance by the Borrower of this
      Amendment.





(d)  The representations
      and warranties set forth in Article 5 of the Credit Agreement are true and
      correct in all material respects as of the date hereof (except for those which
      expressly relate to an earlier date).





(e)  Immediately
      after giving effect to this Amendment and all the transactions contemplated
      hereby to occur on the First Amendment Effective Date, (1) no Default or
      Unmatured Default exists; and (2) the Borrower is in compliance with the
      financial covenant set forth in Section 6.11 of the Credit
      Agreement.




(f)  There
      have been no changes to the articles of incorporation or bylaws of the Borrower
      since the Closing Date.





**3.3**  **Loan
      Document** **.** This
      Amendment shall constitute a Loan Document under the terms of the Credit
      Agreement.





**3.4**  **Entirety** .
      This
      Amendment and the other Loan Documents embody the entire agreement between
      the
      parties hereto and supersede all prior agreements and understandings, oral
      or
      written, if any, relating to the subject matter hereof.





**3.5**  **Counterparts;
      Telecopy** .
      This
      Amendment may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be an original, but all of which shall constitute
      one and the same instrument. Delivery of an executed counterpart to this
      Amendment by telecopy shall be effective as an original and shall constitute
      a
      representation that an original will be delivered.





**3.6**  **GOVERNING
      LAW** **.
      THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
      AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH, THE LAW OF THE STATE OF NEW YORK.**





**3.8**  **Consent
      to Jurisdiction; Waiver of Jury Trial** **.** The
      jurisdiction and waiver of jury trial provisions set forth in Sections 14.2
      and
      14.3 of the Credit Agreement are hereby incorporated by reference, *mutatis
      mutandis* .





**3.9**  **Fees** **.** The
      Borrower agrees to pay all fees
      and
      expenses of the Administrative Agent in connection with the preparation,
      execution and delivery of this Amendment, including, without limitation, the
      fees and expenses of Moore & Van Allen PLLC.





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      of page intentionally left blank]












PUGET
      SOUND ENERGY, INC.


FIRST
      AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT


IN
      WITNESS WHEREOF the Borrower, the Lenders, and the Administrative Agent have
      caused this Amendment to be duly executed on the date first above
      written.







**BORROWER:**
            **PUGET
              SOUND ENERGY, INC.**,
              a
              Washington corporationBy:/s/
                Donald E. GainesName:
                Donald E. GainesTitle:
                Vice President Finance & Treasurer





**ADMINISTRATIVE
              AGENT****AND
              LENDERS:**
            **WACHOVIA
              BANK,****NATIONAL
              ASSOCIATION**,as Administrative
              Agent and as a LenderBy:/s/
                Frederick W. PriceName:
                Frederick W. PriceTitle:
                Managing Director




**CITIBANK,
              N.A.**,as a
              LenderBy:/s/
                Dhaya RanganathanName:
                Dhaya RanganathanTitle:
                Director




**JPMORGAN
              CHASE BANK**,as a
              LenderBy:/s/ Michael J. DeForgeName:
                Michael J. DeForgeTitle:
                Vice President






**UNION
              BANK OF CALIFORNIA, N.A.**,as a
              LenderBy:/s/ Kristin IsleibName:
                Kristin IsleibTitle:
                Assistant Vice President




**KEYBANK
              NATIONAL ASSOCIATION**,as a
              LenderBy:/s/ Keven D. SmithName:
                Keven D. SmithTitle:
                Senior Vice President






**THE
              BANK
              OF NEW YORK**,as a
              LenderBy:/s/ Jesus WilliamsName:
                Jesus WilliamsTitle:
                Vice President








**LEHMAN
              BROTHERS BANK, FSB**,as a
              LenderBy:/s/ Janine M. ShuganName:
                Janine M. ShuganTitle:
                Authorized Signatory




**MORGAN
              STANLEY BANK**,as a
              LenderBy:/s/ Daniel TwengeName:
                Daniel TwengeTitle:
                Vice President




**THE
              BANK
              OF NOVA SCOTIA**,as a
              LenderBy:/s/
                Thane RattewName:
                Thane RattewTitle:
                Managing Director




**UBS
              LOAN
              FINANCE LLC**,as
              a LenderBy:/s/
                Richard L. TavrowName:
                Richard L. TavrowTitle:
                Director




By:/s/
                Irja R. OtsaName:
                Irja R. OtsaTitle:
                Associate Director




**U.S.
              BANK
              NATIONAL ASSOCIATION**,as a
              LenderBy:/s/
                Wilfred JackName:
                Wilfred JackTitle:
                Vice President




**WELLS
              FARGO BANK, N.A.,**as a
              LenderBy:/s/
                Deborah S. WatsonName:
                Deborah S. WatsonTitle:
                Vice President