Puget Energy1101 LAKE WASHINGTON BLVD N RENTON, Washington, United States

Puget Energy, a subsidiary of Puget Holdings LLC, is a Bellevue, Washington-based company whose core business is Puget Sound Energy, a regulated utility, providing electric and natural gas service to Western Washington.

Puget Energy's focus is to concentrate on its core business: retail electric and natural gas utility service within a regulated environment. The company's strategy emphasizes meeting the energy needs of the growing PSE customer base through incremental, cost-effective energy conservation, low-cost procurement of traditional energy resources (including by producing and generating electricity and natural gas), and far-sighted investment in energy-delivery infrastructure.

As Washington state's oldest local energy company, with a 6,000-square-mile service area stretching across 10 Washington counties, primarily in the Puget Sound region, PSE serves 1.1 million electric customers and 790,000 natural gas customers.

Puget Energy is a privately-held company with ongoing financial disclosure and regulatory oversight of it and utility subsidiary, Puget Sound Energy.

Under the ownership of Puget Holdings LLC, a group of long-term infrastructure investors, we are able to guide corporate governance with an independent and local chairman, Bill Ayer, chairman and CEO of Alaska Air Group, detailed principles and specified committee charters. Other governance strengths include:

• Various ownership and local interests are represented on the boards of Puget Energy and PSE. Along with Bill Ayer, Kimberly Harris, president and CEO of PSE, and Mary McWilliams, executive director of the Puget Sound Health Alliance, serve on both boards; and Herb Simon, a member of Simon Johnson LLC in Tacoma, serves on the PSE board.
• The boards hold regular executive sessions without the PSE president and CEO present.
• The boards have regular access to PSE employees.
• All committees of the boards have charters to guide their activities.

PSE has a rich tradition in Washington state, with corporate roots going back more than 135 years. The service provided by PSE has literally fueled the region’s economic and population growth. Our history and commitment to the communities we serve is a great source of pride for PSE employees. 

Our compliance program and ethics code seek to bolster our continued success as a valued company. This program is more than simply fulfilling a legal requirement. It is an important tool for preserving our corporate culture and core values.

While our code covers a number of topics, it really can be summarized in one simple sentence: Do what is right. PSE employees help ensure that we uphold the code, company policies and the law by working in an honest and ethical manner.

We look forward to continue serving our customers with hard work, dedication, and integrity at the forefront of all our efforts.

Merger overview

Puget Holdings LLC, a group of long-term infrastructure investors, completed its merger transaction with Puget Energy on Feb. 6, 2009 (the “merger closing date”). 

Therefore, under the terms of the Agreement and Plan of Merger dated as of Oct. 25, 2007, upon the closing, each share of common stock of Puget Energy was converted into the right to receive $30 per share in cash, without interest. Trading of Puget Energy common stock on the New York Stock Exchange ended on the merger closing date. 

If you physically possess common stock certificates, instructions for exchanging those shares for the cash payment will be mailed shortly, under a separate cover. 

Additionally, a special pro rata dividend of $0.04448 per share will be paid to shareholders of record on Feb. 5, 2009, the day immediately prior to the merger closing date. If you were a shareholder of record on Feb. 5, 2009, the special pro rata dividend will be mailed to you on a separate check. 

Payment of this special pro rata dividend is in addition to payment of the current quarterly dividend of 25 cents per share, declared Jan. 6, 2009, on Puget Energy's common stock, payable on Feb. 15, 2009, to shareholders of record as of the close of business Jan. 21, 2009. 

Shareholders are urged to consult a tax advisor to determine the particular tax consequences of the receipt of cash in exchange for common stock relating to the merger, including the application and effect of any state, local or foreign income and other tax laws.