Merger News

BUSINESS AS USUAL, ONLY BETTER

A letter to our community

Living in Puget Sound, we are all continually challenged to find balance between the security of a thriving economy and the reality of congested roads, challenged services and quality of life. Maintaining balance requires rethinking old ways and finding new opportunities.

Puget Sound Energy (and its predecessor companies) has lived this challenge for more than a century. Today, the stakes have never been greater. We need to invest $5 billion over the next five years to update our aging power generating and delivery infrastructure and to increase our focus on energy efficiency and renewable energy.

We believe we have the solution. As you may have heard, we have announced merger plans with infrastructure fund partners who are focused on the long term. This merger will provide access to the capital we need to continue providing safe and reliable service and to meet the growing energy needs of our region.

What does this mean for you? It means business as usual, only better. Our employees' focus on customer service and commitment to the local community will remain unchanged on a day-to-day basis. In the future, we will be able to meet the constantly expanding regional need for energy and do so in a way that will preserve our commitment to customers, communities and the environment. We can move faster and with greater confidence for your benefit.

Over the coming months you can expect to hear more about this. Please take a look at the news releases, fact sheets and other materials. Be assured that the same people you've come to know and trust will be here to serve you in the future.

Sincerely,

Stephen P. Reynolds
Chairman, President and CEO
Puget Sound Energy

ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the proposed transaction, Puget Energy filed a definitive  proxy statement on February 16, 2008, with the Securities and Exchange Commission (SEC). Before making any voting or investment decision, investors and security holders of Puget Energy are urged to carefully read the entire proxy statement and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed transaction. The definitive proxy statement was also sent to the shareholders of Puget Energy in connection with the proposed transaction. Investors and security holders may obtain a free copy of the proxy statement and other documents filed by Puget Energy at the SEC's Web site at www.sec.gov . The proxy statement and such other documents may also be obtained at no cost from Puget Energy by directing the request to Puget Energy, 10885 NE 4th Street, PSE-08, Bellevue, WA 98004, Attention: Sue Gladfelter.

PARTICIPANTS IN THE SOLICITATION

Puget Energy, its directors, executive officers and other members of its management, employees, and certain other persons may be deemed to be participants in the solicitation of proxies from Puget Energy shareholders in connection with the proposed transaction. Information about the interests of Puget Energy's participants in the solicitation is set forth in Puget Energy's proxy statements and Annual Reports on Form 10-K, previously filed with the SEC, and in the proxy statement relating to the transaction.

Email comments to: merger@pse.com

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