<PAGE>     
                                                                  Exhibit 4.3






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                SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT



                           Dated as of June 6, 1997





                                  BETWEEN



                           PUGET SOUND ENERGY, INC.

                                    AND

                      THE FIRST NATIONAL BANK OF CHICAGO














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                                  CONTENTS

ARTICLE    I - DEFINITIONS AND INTERPRETATION
     1.1       Definitions and Interpretation

ARTICLE   II - TRUST INDENTURE ACT
     2.1       Trust Indenture Act; Application
     2.2       Lists of Holders of Securities
     2.3       Reports by the Capital Securities Guarantee Trustee
     2.4       Periodic Reports to Capital Securities Guarantee Trustee
     2.5       Evidence of Compliance with Conditions Precedent
     2.6       Events of Default; Waiver
     2.7       Event of Default; Notice
     2.8       Conflicting Interests

ARTICLE  III - POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES GUARANTEE
               TRUSTEE
     3.1       Powers and Duties of the Capital Securities Guarantee Trustee
     3.2       Certain Rights of Capital Securities Guarantee Trustee
     3.3       Not Responsible for Recitals or Issuance of Series A  Capital
               Securities Guarantee

ARTICLE   IV - CAPITAL SECURITIES GUARANTEE TRUSTEE
     4.1       Capital Securities Guarantee Trustee; Eligibility
     4.2       Appointment, Removal and Resignation of Capital Securities
               Guarantee Trustee

ARTICLE    V - GUARANTEE
     5.1       Guarantee
     5.2       Waiver of Notice and Demand
     5.3       Obligations Not Affected
     5.4       Rights of Holders
     5.5       Guarantee of Payment
     5.6       Subrogation
     5.7       Independent Obligations

ARTICLE   VI - LIMITATION OF TRANSACTIONS; SUBORDINATION
     6.1       Limitation of Transactions
     6.2       Ranking

ARTICLE  VII - TERMINATION
     7.1       Termination

ARTICLE VIII - COMPENSATION AND EXPENSES OF CAPITAL SECURITIES GUARANTEE
               TRUSTEE

ARTICLE   IX - INDEMNIFICATION
     9.1       Exculpation
     9.2       Indemnification

ARTICLE    X - MISCELLANEOUS
     10.1      Successors and Assigns
     10.2      Amendments
     10.3      Notices
     10.4      Exchange Offer
     10.5      Benefit
     
          10.6      Governing Law

               SERIES A CAPITAL SECURITIES GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Series A Capital Securities Guarantee"),
dated as of June 6, 1997, is executed and delivered by Puget Sound Energy,
Inc., a Washington corporation (the "Guarantor"), and The First National Bank
of Chicago, a national banking association, as trustee (the "Capital
Securities Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Series A Capital Securities (as defined
herein) of Puget Sound Energy Capital Trust I, a Delaware statutory business
trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 6, 1997, among the trustees of the Issuer,
the Guarantor, as sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing on
the date hereof 100,000 capital securities, having an aggregate liquidation
amount of $100,000,000, such capital securities being designated the 8.231%
Series A Capital Securities (collectively the "Series A Capital Securities")
and, in connection with an Exchange Offer (as defined in the Declaration) has
agreed to execute and deliver the Series B Capital Securities Guarantee (as
defined in the Declaration) for the benefit of holders of the Series B
Capital Securities (as defined in the Declaration).

     WHEREAS, as incentive for the Holders to purchase the Series A Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Series A Capital Securities Guarantee, to pay
to the Holders the Guarantee Payments (as defined below).  The Guarantor
agrees to make certain other payments on the terms and conditions set forth
herein.

     WHEREAS, the Guarantor is executing and delivering a guarantee agreement
(the "Common Securities Guarantee"), with substantially identical terms to
this Series A Capital Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the
Common Securities Guarantee are subordinated, to the extent and in the manner
set forth in the Common Securities Guarantee, to the rights of holders of
Series A Capital Securities and the Series B Capital Securities to receive
Guarantee Payments under this Series A Capital Securities Guarantee and the
Series B Capital Securities Guarantee, as the case may be.

     NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby acknowledges shall benefit the Guarantor, the
Guarantor executes and delivers this Series A Capital Securities Guarantee
for the benefit of the Holders.

           ARTICLE I - DEFINITIONS AND INTERPRETATION

1.1     Definitions and Interpretation

     In this Series A Capital Securities Guarantee, unless the context
otherwise requires:

          (a)     Capitalized terms used in this Series A Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
          (b)     Terms defined in the Declaration as at the date of
execution of this Series A Capital Securities Guarantee have the same meaning
when used in this Series A Capital Securities Guarantee unless otherwise
defined in this Series A Capital Securities Guarantee;

          (c)     a term defined anywhere in this Series A Capital Securities
Guarantee has the same meaning throughout;

          (d)     all references to "the Series A Capital Securities
Guarantee" or "this Series A Capital Securities Guarantee" are to this Series
A Capital Securities Guarantee as modified, supplemented or amended from time
to time;

          (e)     all references in this Series A Capital Securities
Guarantee to Articles and Sections are to Articles and Sections of this
Series A Capital Securities Guarantee, unless otherwise specified;

          (f)     a term defined in the Trust Indenture Act has the same
meaning when used in this Series A Capital Securities Guarantee, unless
otherwise defined in this Series A Capital Securities Guarantee or unless the
context otherwise requires; and

          (g)     a reference to the singular includes the plural and vice
versa.

     "Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.

     "Business Day" means any day other than a Saturday or a Sunday, or a day
on which banking institutions in The City of New York or The City of Chicago,
Illinois are authorized or required by law or executive order to close.

     "Capital Securities Guarantee Trustee" means The First National Bank of
Chicago, a national banking association, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Series A Capital Securities Guarantee and
thereafter means each such Successor Capital Securities Guarantee Trustee.

     "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

     "Corporate Trust Office" means the office of the Capital Securities
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is
located at One First National Plaza, Suite 0126, Chicago, IL  60670-0126.

     "Covered Person" means any Holder or beneficial owner of Series A
Capital Securities.

     "Debentures" means the series of subordinated debt securities of the
Guarantor designated the 8.231% Series A Junior Subordinated Deferrable
Interest Debentures due June 1, 2027 held by the Property Trustee (as defined
in the Declaration) of the Issuer.

     "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Series A Capital Securities
Guarantee.

     "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Series A Capital Securities, to the
extent not paid or made by the Issuer:  (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Series A Capital Securities to the extent the Issuer has funds on hand
legally available therefor at such time, (ii) the redemption price, including
all accumulated and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer has funds on hand legally
available therefor at such time, with respect to any Series A Capital
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary termination and liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Series A Capital Securities as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Series A Capital Securities to the date of payment, to
the extent the Issuer has funds on hand legally available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer.  If an Event of Default has occurred
and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities or any guarantee payment
under any Other Common Securities Guarantees shall be made until the Holders
shall be paid in full the Guarantee Payments to which they are entitled under
this Series A Capital Securities Guarantee.

     "Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Series A Capital Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Series A
Capital Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.

     "Indemnified Person" means the Capital Securities Guarantee Trustee, any
Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Securities Guarantee Trustee.

     "Indenture" means the Indenture dated as of June 6, 1997, among the
Guarantor (the "Debenture Issuer") and The First National Bank of Chicago, as
trustee (the "Debenture Trustee"), pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.

     "Indenture Event of Default" shall mean any event specified in Section
5.01 of the Indenture.

     "Majority in liquidation amount of the Series A Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
more than 50% of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all Series A Capital Securities.

     "Officers' Certificate" means, with respect to any person, a certificate
signed by any two of the following officers of such person: the Chairman, a
Vice Chairman, the Chief Executive Officer, the President, a Vice President,
the Controller or an Assistant Controller, the Secretary or an Assistant
Secretary, the Treasurer or an Assistant Treasurer.  Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Series A Capital Securities Guarantee (other than
pursuant to Section 314(d)(4) of the Trust Indenture Act) shall include:

          (a)     a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;

          (b)     a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

          (c)     a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

     "Other Common Securities Guarantees" shall have the same meaning as
"Other Guarantees" in the Common Securities Guarantee.

     "Other Debentures" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.

     "Other Guarantees" means all guarantees to be issued by the Guarantor
with respect to capital securities (if any) similar to the Series A Capital
Securities issued by other trusts to be established by the Guarantor (if
any), in each case similar to the Issuer.

     "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.

     "Registration Rights Agreement"  means the Registration Rights
Agreement, dated as of June 6, 1997, by and among the Guarantor, the Issuer
and the Initial Purchasers named therein as such agreement may be amended,
modified or supplemented from time to time.

     "Responsible Officer" means, with respect to the Capital Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Capital Securities Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer, any senior trust officer or other
officer in the Corporate Trust Office of the Capital Securities Guarantee

Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.

     "Successor Capital Securities Guarantee Trustee" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

     "Trust Securities" means the Common Securities and the Series A Capital
Securities and Series B Capital Securities, collectively.
                      ARTICLE II - TRUST INDENTURE ACT

2.1     Trust Indenture Act; Application

          (a)     This Series A Capital Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be part of
this Series A Capital Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and

          (b)     if and to the extent that any provision of this Series A
Capital Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.

2.2     Lists of Holders of Securities

          (a)     The Guarantor shall provide the Capital Securities
Guarantee Trustee (unless the Capital Securities Guarantee Trustee is
otherwise the registrar of the Capital Securities) with a list, in such form
as the Capital Securities Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of such date, (i)
within 14 days after each record date for payment of Distributions, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Capital Securities Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Capital Securities Guarantee Trustee by the
Guarantor.  The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

          (b)     The Capital Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.

2.3     Reports by the Capital Securities Guarantee Trustee

     Within 60 days after December 31 of each year, commencing December 31,
1997, the Capital Securities Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313(a) of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act.  The Capital Securities Guarantee Trustee shall also comply
with the other requirements of Section 313 of the Trust Indenture Act.

2.4     Periodic Reports to Capital Securities Guarantee Trustee

     The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 of the
Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act provided that such
compliance certificate shall be delivered on or before 120 days after the end
of each fiscal year of the Guarantor.  Delivery of such reports, information
and documents to the Capital Securities Guarantee Trustee is for
informational purposes only and the Capital Securities Guarantee Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Guarantor's compliance with any of its covenants hereunder (as
to which the Capital Securities Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).

2.5     Evidence of Compliance with Conditions Precedent

     The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided
for in this Series A Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act.  Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.

2.6     Events of Default; Waiver

     The Holders of a Majority in liquidation amount of Series A Capital
Securities may, by vote, on behalf of all the Holders, waive any past Event
of Default and its consequences.  Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Series A Capital
Securities Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

2.7     Event of Default; Notice

          (a)     The Capital Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Capital
Securities Guarantee actually known to a Responsible Officer of the Capital
Securities Guarantee Trustee, mail by first class postage prepaid, to all
Holders, notices of all such defaults, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of
default in the payment of any Guarantee Payment, the Capital Securities
Guarantee Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers of the Capital Securities Guarantee
Trustee in good faith determines that the withholding of such notice is in
the interests of the holders of the Series A Capital Securities.

          (b)     The Capital Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Capital
Securities Guarantee Trustee shall have received written notice from the
Guarantor or a Holder, or a Responsible Officer of the Capital Securities
Guarantee Trustee charged with the administration of the Declaration shall
have obtained actual knowledge, of such Event of Default.

2.8     Conflicting Interests

     The Declaration shall be deemed to be specifically described in this
Series A Capital Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

           ARTICLE III - POWERS, DUTIES AND RIGHTS OF CAPITAL
                     SECURITIES GUARANTEE TRUSTEE

3.1     Powers and Duties of the Capital Securities Guarantee Trustee

          (a)     This Series A Capital Securities Guarantee shall be held by
the Capital Securities Guarantee Trustee for the benefit of the Holders, and
the Capital Securities Guarantee Trustee shall not transfer this Series A
Capital Securities Guarantee to any Person except a Holder exercising his or
her rights pursuant to Section 5.4(b) below or to a Successor Capital
Securities Guarantee Trustee on acceptance by such Successor Capital
Securities Guarantee Trustee of its appointment to act as Successor Capital
Securities Guarantee Trustee.  The right, title and interest of the Capital
Securities Guarantee Trustee shall automatically vest in any Successor
Capital Securities Guarantee Trustee, and such vesting and succession of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Capital
Securities Guarantee Trustee.

          (b)     If an Event of Default actually known to a Responsible
Officer of the Capital Securities Guarantee Trustee has occurred and is
continuing, the Capital Securities Guarantee Trustee shall enforce this
Series A Capital Securities Guarantee for the benefit of the Holders.

          (c)     The Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties
as are specifically set forth in this Series A Capital Securities Guarantee,
and no implied covenants shall be read into this Series A Capital Securities
Guarantee against the Capital Securities Guarantee Trustee.  In case an Event
of Default has occurred (that has not been cured or waived pursuant to
Section 2.6 above) and is actually known to a Responsible Officer of the
Capital Securities Guarantee Trustee, the Capital Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Series A Capital Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.

          (d)     No provision of this Series A Capital Securities Guarantee
shall be construed to relieve the Capital Securities Guarantee Trustee from
liability for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:

               (i)     prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:

                    (A)     the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely by the express
provisions of this Series A Capital Securities Guarantee, and the Capital
Securities Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this Series A
Capital Securities Guarantee, and no implied covenants or obligations shall
be read into this Series A Capital Securities Guarantee against the Capital
Securities Guarantee Trustee; and

                    (B)     in the absence of bad faith on the part of the
Capital Securities Guarantee Trustee, the Capital Securities Guarantee
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Capital Securities Guarantee Trustee and conforming
to the requirements of this Series A Capital Securities Guarantee; but in the
case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Series A Capital Securities Guarantee;

               (ii)     the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible Officer
of the Capital Securities Guarantee Trustee, unless it shall be proved that
the Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;

               (iii)     the Capital Securities Guarantee Trustee shall not
be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of a Majority in
liquidation amount of the Series A Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to the
Capital Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Series A
Capital Securities Guarantee; and

               (iv)     no provision of this Series A Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Capital Securities Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Series A Capital Securities
Guarantee or indemnity, reasonably satisfactory to the Capital Securities
Guarantee Trustee, against such risk or liability is not reasonably assured
to it.

3.2     Certain Rights of Capital Securities Guarantee Trustee
     
          (a)     Subject to the provisions of Section 3.1:

               (i)     The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by the proper party or
parties.

               (ii)    Any direction or act of the Guarantor contemplated by
this Series A Capital Securities Guarantee may be sufficiently evidenced by
an Officers' Certificate.

              (iii)     Whenever, in the administration of this Series A
Capital Securities Guarantee, the Capital Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.

               (iv)    The Capital Securities Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof).

               (v)     The Capital Securities Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the Capital
Securities Guarantee Trustee hereunder in good faith and in accordance with
such advice or opinion.  Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees.  The Capital
Securities Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Series A Capital
Securities Guarantee from any court of competent jurisdiction.

              (vi)    The Capital Securities Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Series A Capital Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Capital Securities
Guarantee Trustee such security and indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the Capital Securities
Guarantee Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Capital
Securities Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Capital Securities Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Series A Capital
Securities Guarantee.

             (vii)    The Capital Securities Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.

            (viii)    The Capital Securities Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and the
Capital Securities Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.

              (ix)    Any action taken by the Capital Securities Guarantee
Trustee or its agents hereunder shall bind the Holders, and the signature of
the Capital Securities Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action.  No third party shall be
required to inquire as to the authority of the Capital Securities Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Series A Capital Securities Guarantee, both of which shall
be conclusively evidenced by the Capital Securities Guarantee Trustee's or
its agent's taking such action.

               (x)    Whenever in the administration of this Series A Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Series A Capital Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.

              (xi)    The Capital Securities Guarantee Trustee shall not be
liable for any action taken, suffered or omitted to be taken by it in good
faith, without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Series A
Capital Securities Guarantee.

          (b)    No provision of this Series A Capital Securities Guarantee
shall be deemed to impose any duty or obligation on the Capital Securities
Guarantee Trustee to perform any act or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall
be illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Capital Securities
Guarantee Trustee shall be construed to be a duty.

3.3     Not Responsible for Recitals or Issuance of Series A Capital
Securities Guarantee

     The recitals contained in this Series A Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness.
The Capital Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Series A Capital Securities Guarantee.

             ARTICLE IV - CAPITAL SECURITIES GUARANTEE TRUSTEE

4.1     Capital Securities Guarantee Trustee; Eligibility

          (a)     There shall at all times be a Capital Securities Guarantee
Trustee which shall:

               (i)     not be an Affiliate of the Guarantor; and

               (ii)     be a corporation organized and doing business under
the laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority.  If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes
of this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.

          (b)     If at any time the Capital Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and with
the effect set out in Section 4.2(c).

          (c)     If the Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Capital Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act, subject to the penultimate paragraph thereof.

4.2     Appointment, Removal and Resignation of Capital Securities Guarantee
        Trustee

          (a)     Subject to Section 4.2(b), the Capital Securities Guarantee
Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.

          (b)     The Capital Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Capital
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Capital
Securities Guarantee Trustee and delivered to the Guarantor.

          (c)     The Capital Securities Guarantee Trustee shall hold office
until a Successor Capital Securities Guarantee Trustee shall have been
appointed or until its removal or resignation.  The Capital Securities
Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Capital
Securities Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Capital Securities Guarantee
Trustee and delivered to the Guarantor and the resigning Capital Securities
Guarantee Trustee.

          (d)     If no Successor Capital Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Capital Securities Guarantee Trustee resigning or being removed may petition
any court of competent jurisdiction for appointment of a Successor Capital
Securities Guarantee Trustee.  Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Capital
Securities Guarantee Trustee.

          (e)     No Capital Securities Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Capital Securities Guarantee
Trustee.

          (f)     Upon termination of this Series A Capital Securities
Guarantee or removal or resignation of the Capital Securities Guarantee
Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Capital
Securities Guarantee Trustee all amounts due to the Capital Securities
Guarantee Trustee accrued to the date of such termination, removal or
resignation.

                        ARTICLE V - GUARANTEE

5.1     Guarantee

     The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert.  The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
5.2     Waiver of Notice and Demand

     The Guarantor hereby waives notice of acceptance of this Series A
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

5.3     Obligations Not Affected

     The obligations, covenants, agreements and duties of the Guarantor under
this Series A Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:

          (a)     the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Series A Capital
Securities to be performed or observed by the Issuer;

          (b)     the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Series A
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Series A Capital
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Debentures permitted
by the Indenture);

          (c)     any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Series
A Capital Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;

          (d)     the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;

          (e)     any invalidity of, or defect or deficiency in, the Series A
Capital Securities;

          (f)     the settlement or compromise of any obligation guaranteed
hereby or hereby incurred;

          (g)     the consummation of the Exchange Offer; or

          (h)     any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.

5.4     Rights of Holders

          (a)     The Holders of a Majority in liquidation amount of the
Series A Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Capital
Securities Guarantee Trustee in respect of this Series A Capital Securities
Guarantee or exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Series A Capital Securities
Guarantee; provided, however, that, subject to the duties and
responsibilities of the Trustee pursuant to the Indenture, the Capital
Securities Guarantee Trustee shall have the right to decline to follow any
such direction if the Capital Securities Guarantee Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Capital Securities Guarantee Trustee
being advised by counsel determines that the action or proceeding so directed
may not lawfully be taken or if the Capital Securities Guarantee Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed would involve the
Capital Securities Guarantee Trustee in personal liability.

          (b)     If the Capital Securities Guarantee Trustee fails to
enforce such Series A Capital Securities Guarantee, any Holder may institute
a legal proceeding directly against the Guarantor to enforce the Capital
Securities Guarantee Trustee's rights under this Series A Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer,
the Capital Securities Guarantee Trustee or any other person or entity.  The
Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other person or entity before proceeding
directly against the Guarantor.

5.5     Guarantee of Payment

     This Series A Capital Securities Guarantee creates a guarantee of
payment and not of collection.

5.6     Subrogation

     The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Series A Capital Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Series A
Capital Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Series A Capital Securities Guarantee.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders
and to pay over such amount to the Holders.

5.7     Independent Obligations

     The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Series A
Capital Securities, and that the Guarantor shall be liable as principal and
as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Series A Capital Securities Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (h), inclusive, of Section 5.3
hereof.

           ARTICLE VI - LIMITATION OF TRANSACTIONS; SUBORDINATION

6.1     Limitation of Transactions

     So long as any Capital Securities remain outstanding, the Guarantor
shall not (I) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Guarantor's capital stock (which includes common and preferred stock) or (ii)
make any payment of principal of or premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Guarantor (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee
by the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Debentures (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a shareholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, c payments
under the Series A Capital Securities Guarantee, (d) the purchase of
fractional shares resulting from a reclassification of the Guarantor's
capital stock, (e) the exchange or the conversion of one class, or series of
the Guarantor's capital stock for another class or series of the Guarantor's
capital stock, and (f) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged) if at
such time (1) there shall have occurred and be continuing an event of default
under the Declaration, (2) there shall have occurred and be continuing an
Event of Default under the Indenture, (3) there shall have occurred and be
continuing a payment default under the Declaration or the Indenture, (4) if
the Debentures are held by the Issuer, the Guarantor shall be in default with
respect to its payment of any obligations under this Agreement, or (5) the
Guarantor shall have given notice of its election of an Extension Period as
provided in the Indenture and shall not have rescinded such notice, and such
Extension Period, or any extension thereof, shall have commenced.

6.2     Ranking

     This Series A Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to Senior Indebtedness (as defined in the Indenture), to the same
extent and in the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Series A Capital Securities Guarantee as if (x) such Article XV
were set forth herein in full and (y) such obligations were substituted for
the term "Securities" appearing in such Article XV, (ii) pari passu with the
Debentures, the Other Debentures and with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any Other
Guarantee (as defined herein) and any Other Common Securities Guarantee and
any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.

                          ARTICLE VII - TERMINATION

7.1     Termination

     This Series A Capital Securities Guarantee shall terminate (i) upon full
payment of the Redemption Price (as defined in the Declaration) of all Series
A Capital Securities, (ii) upon liquidation of the Issuer, the full payment
of the amounts payable in accordance with the Declaration or the distribution
of the Debentures to the Holders of all of the Series A Capital Securities or
(iii) upon exchange of all the Series A Capital Securities for the Series B
Capital Securities in the Exchange Offer.  Notwithstanding the foregoing,
this Series A Capital Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must
restore payment of any sums paid under the Series A Capital Securities or
under this Series A Capital Securities Guarantee.

                  ARTICLE VIII - COMPENSATION AND EXPENSES OF
                      CAPITAL SECURITIES GUARANTEE TRUSTEE

     The Guarantor covenants and agrees to pay to the Capital Securities
Guarantee Trustee from time to time, and the Capital Securities Guarantee
Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Guarantor and the Capital Securities Guarantee Trustee
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Guarantor will pay or
reimburse the Capital Securities Guarantee Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Capital Securities Guarantee Trustee in accordance with any of the provisions
of this Capital Securities Guarantee (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith.  The Guarantor also covenants to
indemnify each of the Capital Securities Guarantee Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any
and all loss, damage, claim, liability or expense including taxes (other than
taxes based on the income of the Capital Securities Guarantee Trustee)
incurred without negligence or bad faith on the part of the Capital
Securities Guarantee Trustee and arising out of or in connection with the
acceptance or administration of this guarantee, including the costs and
expenses of defending itself against any claim of liability in the premises.
The obligations of the Guarantor under this Article VIII to compensate and
indemnify the Capital Securities Guarantee Trustee and to pay or reimburse
the Capital Securities Guarantee Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Series A Capital
Securities upon all property and funds held or collected by the Capital
Securities Guarantee Trustee as such, except funds held in trust for the
benefit of the holders of particular Series A Capital Securities.
The provisions of this Article shall survive the termination of this Capital
Securities Guarantee or the resignation or removal of the Capital Securities
Guarantee Trustee.

                       ARTICLE IX - INDEMNIFICATION

9.1     Exculpation

          (a)     No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Series A Capital Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Series A Capital
Securities Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.

          (b)     An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders might properly be
paid.

9.2     Indemnification

     The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.  The obligation to
indemnify as set forth in this Section 9.2 shall survive the termination of
this Series A Capital Securities Guarantee or the resignation or removal of
the Capital Securities Guarantee Trustee.

                         ARTICLE X - MISCELLANEOUS

10.1     Successors and Assigns
     All guarantees and agreements contained in this Series A Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders then outstanding.

10.2     Amendments

     Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Series A Capital Securities Guarantee may only be amended
with the prior approval of the Holders of a Majority in liquidation amount of
the Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined).  The provisions of the
Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.

10.3     Notices

     All notices provided for in this Series A Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by first class mail, as follows:

          (a)     If given to the Issuer, in care of the Administrative
Trustee at the Issuer's mailing address set forth below (or such other
address as the Issuer may give notice of to the Holders and the Capital
Securities Guarantee Trustee):

          Puget Sound Energy Capital Trust I
          c/o Puget Sound Energy, Inc.
          411 - 108th Avenue N.E.
          Bellevue, Washington  98004-5515
          Attention:  James P. Torgerson, Administrative Trustee
          Telecopy:  (425) 462-3300

          (b)     If given to the Capital Securities Guarantee Trustee, at
the Capital Securities Guarantee Trustee's mailing address set forth below
(or such other address as the Capital Securities Guarantee Trustee may give
notice of to the Holders and the Issuer):

          The First National Bank of Chicago
          One First National Plaza, Suite 0126
          Chicago, IL  60670-0126
          Attention:  Corporate Trust Services Division
          Telecopy:

          (c)     If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Series A Capital Securities and the Capital
Securities Guarantee Trustee):

          Puget Sound Energy, Inc.
          411 - 108th Avenue N.E.
          Bellevue, Washington  98004-5515
          Attention:  Treasurer
          Telecopy:  (425) 462-3300

          (d)     If given to any Holder of Series A Capital Securities, at
the address set forth on the books and records of the Issuer.

     All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

10.4     Exchange Offer

     In the event an Exchange Offer Registration Statement (as defined in the
Registration Rights Agreement) becomes effective and the Issuer issues any
Series B Capital Securities in the Exchange Offer, the Guarantor will enter
into a new capital Securities Guarantee agreement, in substantially the same
form as this Series A Capital Securities Guarantee, with respect to the
Series B Capital Securities.

10.5     Benefit

     This Series A Capital Securities Guarantee is solely for the benefit of
the Holders and subject to Section 3.1(a), is not separately transferable
from the Series A Capital Securities.

10.6     Governing Law

     THIS SERIES A CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.


THIS SERIES A CAPITAL SECURITIES GUARANTEE is executed as of the day and year
first above written.
                             PUGET SOUND ENERGY, INC.,
                             as Guarantor



                             By:     /s/ Tommy G. Leong
                             Name:   Tommy G. Leong
                             Title:  Assistant Treasurer
     
                             THE FIRST NATIONAL BANK OF CHICAGO,
                             as Capital Securities Guarantee Trustee



                             By:     /s/ Richard D. Manella
                             Name:   Richard D. Manella
                             Title:  Vice President