8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 16, 2002

	Exact name of registrant as specified	I.R.S.
	in its charter, state of incorporation,	Employer
Commission	address of principal executive offices,	Identification
File Number	Telephone	Number

1-16305	PUGET ENERGY, INC.	91-1969407
	A Washington Corporation.
	411 - 108th Avenue N.E.
	Bellevue, Washington 98004-5515
	(425) 454-6363

1-4393	PUGET SOUND ENERGY, INC.	91-0374630
	A Washington Corporation
	411 - 108th Avenue N.E.
	Bellevue, Washington 98004-5515.

ITEM 5. Other Events

On August 15, 2002, Puget Energy’s utility subsidiary, Puget Sound Energy (PSE) announced a negotiated settlement of the remaining gas general rate case issues with key customer groups, the Washington Utilities and Transportation Commission (Washington Commission) Staff and the Attorney General’s Public Counsel Section.

As a result of resolving gas and electric cost allocations, collecting certain costs through a rider rather than through general rates, reflecting the 8.76% allowed rate of return, adjusting revenues to more appropriately recover certain costs, and a $4 million revenue reduction, the Company has agreed to a negotiated settlement that, if approved by the Washington Commission, is expected to result in a gas general rate increase of 5.8% or $35.6 million.

The settlement is expected to produce financial results consistent with Puget Energy’s previously announced earnings guidance of $1.15 to $1.20 per share for 2002 and $1.75 to $1.90 per share in 2003. The Washington Commission is expected to rule on the settlement agreement by the end of August 2002 with an effective date of September 1, 2002. Attached, as Exhibit 99.1, is the press release announcing the settlement.

On March 20, 2002, Puget Energy and PSE jointly filed a Form 8-K disclosing a settlement agreement that resolved three of the four significant financial issues in the Company’s electric and gas general rate case filings of November 26, 2001. The two important gas general rate case financial issues resolved by the settlement at that time were the equity capital ratio and the return on equity. The March 20, 2002 stipulation included a revised gas general rate increase of 9.14% or $56.2 million.

On June 20, 2002, the Company also jointly filed a Form 8-K disclosing the approval of the electric and gas allocation issues and the establishment of an 8.76% overall return on capital.

ITEM 7. Exhibits

Exhibit 99.1 — Puget Sound Energy’s press release announcing the settlement of the gas general rate case.

Cautionary Statement: Certain statements contained in this Current Report on Form 8-K are “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, among which include statements regarding estimates of earnings per share and revenue, and the expected impact on the Company of the settlement agreement. In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will likely result,” “will continue” or similar expressions. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect actual results include, among others; the timing of the approval of the gas general rate case; governmental policies and regulatory actions, including those of the FERC and the Washington Commission, financings, industry and rate structures, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased energy and other capital investments, and present or prospective wholesale and retail competition; the recent bankruptcy filing by Enron Corporation and related events, which may affect the regulatory and legislative process in unpredictable ways; weather, which can have a serious impact on PSE’s ability to procure adequate supplies of gas, fuel or purchased power to serve its customers and on the cost of procuring such supplies; hydroelectric conditions, which can have a serious impact on electric capacity and PSE's ability to generate electricity; wholesale energy prices; industrial, commercial and residential growth and demographic patterns in the service territories of PSE; and the ability of Puget Energy and PSE to access the capital markets to support requirements for working capital, construction costs and the repayment of maturing debt. More information about these and other factors that potentially could affect Puget Energy's and PSE's financial results is included in the companies' Annual Report on Form 10-K for the fiscal year ended December 31, 2001, Form 10-Q for the first quarter of 2002 and in their other public filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Puget Energy and PSE undertake no obligation to update any forward-looking statements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PUGET ENERGY, INC.

PUGET SOUND ENERGY, INC.

/s/ Donald E. Gaines

Donald E. Gaines

Vice President Finance & Treasurer

Date: August 16, 2002

EX-99

Exhibit 99.1

NEWS RELEASE

For Immediate Release: Media Contact:

Aug. 16, 2002	Roger Thompson, 1-888-831-7250
	Analyst Contact:
	Don Gaines, 425-462-3870

Settlement reached on Puget Sound Energy natural-gas rate plan

Customers should see lower bills from pending proposal, while PSE gets revenue boost

        BELLEVUE, Wash. – Puget Sound Energy, the utility subsidiary of Puget Energy (NYSE: PSD), today announced it has reached an agreement with state regulatory agencies and key customer groups on a 5.8 percent increase in PSE’s natural-gas revenues. The utility, however, said it will ask regulators for a separate rate adjustment within the week in response to lower wholesale prices for natural gas – an action expected to offset the requested revenue increase and actually reduce customers’ gas bills.

        The anticipated bill reduction would come on the heels of a 22 percent cut in PSE natural-gas rates in June. The June action lowered the average residential gas bill by about $12 per month.

        The collaborative agreement filed today with the Washington Utilities and Transportation Commission (WUTC) would generate an estimated $35.6 million in additional revenue annually for PSE. A typical residential customer (with 80 therms of natural-gas usage monthly) would pay about $3.85 more per month for gas service under this proposal. The company is seeking the revenue boost to cover increased costs for gas-distribution service. The utility’s last hike in general rates for gas-delivery service was in 1995.

        "We are grateful for the productive contributions of all the parties to this case," said Puget Energy President and CEO Stephen P. Reynolds. "The gas base-rate increase will allow us to continue providing high-quality service at one of the lowest gas rates in the state. And with a further reduction in wholesale natural-gas costs, it will result in an overall rate decrease for our customers."

        The negotiating parties are asking the WUTC to implement the gas-rate increase by Sept. 1. PSE said it also will ask the WUTC to initiate the offsetting rate reduction – propelled by lower wholesale gas prices – on the same day.

        The collaborative settlement filed today marks the second phase of a comprehensive, multiparty process for reviewing PSE’s rates and service. In the first phase, the WUTC ultimately authorized a 4.6 percent average increase in PSE electric rates, effective July 1. It was one of the region’s lowest rate increases, by far, in the wake of the 2000-2001 energy crisis.

        Among the state’s four large natural-gas utilities, PSE currently has the lowest retail rates, according to WUTC figures. Under the pass-through rate reduction the utility plans to seek from the WUTC, the company’s gas rates should go even lower.

        Besides PSE, parties to the negotiated natural-gas rate plan filed today include WUTC staff, the consumer branch of the state Attorney General’s Office, the Northwest Industrial Gas Users, Seattle Steam Co., and Cost Management Services, Inc.

        The revenue increase recommended in today’s filing is less than the amount originally sought by PSE, Reynolds noted, primarily because of lower capital costs, changes in how certain PSE operating costs are allocated between electric and gas service, and adjustments in revenue to more appropriately recover certain utility costs. Two other key factors, he added, involve the collection of certain costs through a special billing rider rather than from general rates, and the effect of implementing the rate plan sooner than originally expected.

        PSE serves approximately 613,000 natural-gas customers, primarily in central and southern Puget Sound, including the cities of Everett, Seattle, Bellevue, Tacoma, Gig Harbor, and Olympia.