Puget Sound Energy, Inc.

Original Volume No. 1

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

Original Sheet No. 27 Original Sheet No. 27 : Effective

for purpose of Section 2.3.2 only) Ownership Interest, or any

portion thereof, to an Unrelated Person of such Owner will be

subject to 75% majority agreement of the Owners as set forth in

Section 5.4. In granting or withholding such approval, the Owners

will consider whether the assignment, pledge, or transfer will

maintain the financial and operating integrity of the Storage

Project. Such approval by the Owners shall not be unreasonably

withheld.

2.3.2.2 Each non-transferring Owner shall have the right of first

refusal to purchase the Ownership Interest offered for sale by the

Transferring Owner ("Offered Interest").

2.3.2.3 Each Transferring Owner shall promptly deliver in

writing, to the non-Transferring Owner(s) (a) notice of such sale

of Ownership Interest, (b) a statement of the terms and

conditions of the bona fide offer intended to be accepted by such

Transferring Owner for the Ownership Interest ("Qualifying

Offer"), and (c) the name of the Offeror submitting such offer

("Notice").

2.3.2.4 Before the Qualifying Offer is presented to the non-

transferring Owners, the Transferring Owner will disclose in

writing to the Offeror the non-transferring Owner's Option as

defined in Section 2.3.2.5. If the Transferring Owner fails to

make such disclosure, any purported sale or transfer shall be null

and void and have no binding effect with respect to this Agreement

and Offeror shall not be admitted as an Owner. In addition, the

Transferring Owner will defend and indemnify and protect the non-

transferring Owners from and against any and all actions, claims,

demands, costs (including attorneys' fees), and liabilities

arising out of or in any way related to the acts of non-

transferring Owners in exercising their rights under Section 2.3.2

or claims brought by the Offeror.

2.3.2.5 Each non-transferring Owner will have thirty (30) days

from the receipt of such Notice from the Transferring Owner to

submit to such Transferring Owner a written offer to purchase the

Offered