Puget Sound Energy, Inc.

Original Volume No. 1

Effective Date: 11/01/1998, Docket: CP98-250-002, Status: Effective

Original Sheet No. 26 Original Sheet No. 26 : Effective

rights and obligations under this Agreement without the prior

written consent of each Owner, except as specifically set forth in

this Agreement. No prior written consent under this Section 2.3

or Section 11.5 shall be required with respect to the transfer or

assignment of an Ownership Interest in the event of an acquisition

or merger of an Owner by or with an Unrelated Person. Nothing in

this Agreement shall limit the ability of any Owner to assign or

dispose of all or any portion of its Storage Service Rights under

this Agreement.

2.3.1 Transfer to Affiliates

Any Owner may transfer all or any portion of its Ownership

Interest to any of its Affiliates; provided, that all of such

Owner's rights and obligations under this Agreement are assumed by

said Affiliate in writing. Notwithstanding such assumption, the

transferring Owner will not be relieved of any liability or

responsibility for the performance of any obligations under this

Agreement unless each non-transferring Owner has agreed in writing

to release the transferring Owner from such obligations. Upon

such transfer, all references to Affiliates of the transferring

Owner will be deemed references to Affiliates of the transferee

Owner. If less than an Owner's full Ownership Interest is

conveyed to an Affiliate, such Owner, its transferee(s), and its

subsequent successors and assigns will be treated as a single

Owner for all purposes of this Agreement, including the

calculation of Ownership Percentages. An Affiliate, or its

transferee, receiving less than the Owner's full Ownership

Interest is not eligible to vote or to have a representative on

the Committee; representation, if any, shall be through the Owner

from which the interest was received.

2.3.2 Transfer to Unrelated Persons or Any Owner

Any Owner or Affiliate with an Ownership Interest may transfer its

Ownership Interest or a portion of its Ownership Interest to an

Unrelated Person or any Owner (the "Offeror") subject to the

following.

2.3.2.1 Any assignment, pledge, or transfer of an Owner's or

Affiliate's (Owner or Affiliate is defined as Transferring Owner