Puget Sound Energy`s Updated Long-Range Energy StrategyStays Focused on Energy Efficiency, Wind Power, and Natural Gas

Despite Current Economic Downturn, Region`s Long-Term Energy Need Still Expected
to Rise
BELLEVUE, Wash.--(Business Wire)--
Expanded energy conservation and renewable-power development, augmented by more
natural gas-fired power generation, continue to anchor Puget Sound Energy`s
strategy for meeting customers` growing energy needs, according to the company`s
newly updated long-range resource plan.

Despite the current downturn in the economy, the draft 2009 Integrated Resource
Plan forecasts long-term growth in the 11 Washington counties PSE serves. By
2029, the population within PSE`s service area is expected to increase by
approximately 1 million. This growth continues a trend for PSE, which over the
past five years has added 92,000 new electric customers and 99,000 new natural
gas customers.

PSE updates its 20-year Integrated Resource Plan (IRP) every two years in
consultation with customer representatives, consumer advocates, industry
regulators, and others. The plan estimates the expected energy requirements of
PSE customers 20 years into the future, analyzes the variables and options for
meeting customer needs, and guides the company`s strategies for acquiring new
energy resources in the most cost-effective and environmentally responsible
manner.

PSE`s already ambitious energy-efficiency programs should be expanded even
further, the draft 2009 IRPsays, since achievable conservation measures in Puget
Sound homes and businesses remain a cost-effective way to essentially "generate"
new energy supplies.

"As our plan notes, energy efficiency is still the best strategy for avoiding
the costs and the risks of a volatile energy market," said Kimberly Harris,
executive vice president and chief resource officer for PSE. "For us,
conservation is still our first choice for providing the new energy resources
this region needs."

The updated IRP also confirms PSE`s long-standing goal to develop more
renewable-energy resources, primarily wind power. Today, PSE`s Hopkins Ridge
Wind Facility, in Southeast Washington, and Wild Horse Wind Facility, in Central
Washington, make the company the Pacific Northwest`s top utility producer of
wind power. The wind facilities` 386 megawatts of generating capacity is enough
to serve 100,000 homes.

The IRP suggests that PSE develop another 1,200 MWs of wind power by 2029. The
expansion would ensure PSE compliance Washington`s Energy Independence and
Security Act (Initiative 937). The voter-approved law requires large utilities
to obtain 15 percent of their power supply from renewable resources by 2020.

Other forms of renewable energy, such as solar, biomass and geothermal, may have
long-term potential if they can be developed cost-effectively on a utility
scale, the draft plan notes.

Aggressive conservation measures and increased renewable-power resources could
provide 41 percent of the 5,500 MWs of additional power capacity PSE projects it
must acquire over the next two decades to serve its customers, according to the
draft IRP. Nearly all of the company`s remaining power-supply acquisitions will
involve natural gas-fired power, the plan states. That is because economic,
political and environmental considerations virtually preclude the development of
new hydro, nuclear or coal-fired power resources in the region.

"As we`ve been saying for several years now, our energy future is looking
windier and gassier," Harris said. "And with our stepped-up conservation
efforts, you might say the future is looking cozier too."

Growth, the expiration of purchased-power contracts, and the potential
retirement of aging PSE power-generating facilities are the primary factors
driving the utility`s need for new power supplies.

The draft IRP cites more than 530 average-MWs of achievable power savings for
PSE over the next 20 years through energy-efficiency services to customers.
Those savings, sufficient to meet the entire electricity requirement of 400,000
households, would forestall the need to build four average-sized natural
gas-fired power plants. The plan also identifies 90 million therms of achievable
natural-gas savings by PSE customers, enough to satisfy the total gas needs of
108,000 households.

In comparison to the utility`s 2007 IRP, the 2009 plan`s conservation targets
represent 22 percent and 30 percent increases, respectively, in PSE`s
electricity and natural gas efficiency goals.

Since 2003, PSE`s biennial resource plans have forecasted increasing long-term
costs to acquire the new power supplies required to serve customers. The 2009
IRP points to an extremely wide range of potential power-supply costs. The "most
expensive" 20-year outlook for incremental additions to PSE`s current power
portfolio carries a $28 billion price tag - nearly double the cost predicted in
the 2007 IRP. On the other hand, the 2009 IRP`s "least expensive" scenario sees
long-term power-supply costs dropping slightly below the 2007 IRP`s forecast.

The widely differing cost estimates are largely attributable to uncertainty over
future wholesale prices for natural gas and the unknown effect that expected
cap-and-trade carbon regulation will have on energy costs and market prices. The
2009 IRP`s analysis does not reflect carbon-cost offsets for utilities; the
inclusion of such offsets in pending climate-change legislation would lower any
long-term increase PSE sees in power costs.

The updated IRP also projects a significant increase in demand for natural gas,
both to generate electricity and to serve gas customers` direct energy needs.
PSE customers` peak wintertime use of natural gas is expected to jump by more
than 38 percent over the next 20 years, while peak gas usage for wintertime
power generation is predicted to rise by 108 percent.

To address the long-range need for more natural gas, the 2009 IRP recommends
that PSE secure more natural gas pipeline capacity into the Northwest and more
natural gas storage resources. In support of that aim, the IRP calls for a
detailed PSE study of the best options for boosting pipeline capacity.

PSE`s draft 2009 IRP is now being reviewed by outside parties. A copy of the
plan`s Executive Summary can be viewed at PSE.com. PSE is scheduled to file the
resource plan with the state Utilities and Transportation Commission on July 31.

About Puget Sound Energy

Washington state`s oldest and largest energy utility, with a 6,000-square-mile
service area stretching across 11 counties, Puget Sound Energy serves more than
1 million electric customers and nearly 750,000 natural gas customers.PSE meets
the energy needs of its growing customer base, primarily in Western Washington,
through incremental, cost-effective energy conservation, procurement of
sustainable energy resources, and far-sighted investment in the energy-delivery
infrastructure. PSE employees are dedicated to providing great customer service
to deliver energy that is safe, reliable, reasonably priced, and environmentally
responsible. For more information, visit PSE.com.

Puget Sound Energy
Roger Thompson, 888-831-7250

Copyright Business Wire 2009