Common use of Regulation as a Utility Clause in Contracts

Regulation as a Utility. Except for regulation by FERC under the FPA, the Public Utility Holding Company Act of 2005 (as an exempt holding company), the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”) or, in the case of Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., regulation by the NYPSC, neither the Company nor any of its Subsidiaries or “affiliates” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunder) is subject to regulation as a public utility holding company, public utility or public service company (or similar designation) by any Governmental Entity. Each Subsidiary or “affiliate” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunder) of the Company (other than any such Subsidiary of the Company that owns one or more facilities that constitute a “qualifying facility” as such term is defined under PURPA and the rules and regulations of FERC as of the date hereof and that are entitled to exemption from regulation under Section 205 of the FPA (an “Exempt Qualifying Facility”)) selling electric energy, capacity and/or certain ancillary services at wholesale has been authorized by FERC to make wholesale sales of electric energy, capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, and, as of the date hereof, has been granted customary waivers and other blanket authority (including with respect to the issuance of securities and assumption of liabilities pursuant to Section 204 of the FPA), which, as of the date hereof, blanket authority and waivers have not been limited or its rates subject to refund, in each case in any material respect, other than through (i) rate caps and mitigation measures generally applicable to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale at market-based rates in the geographic market where such of its Subsidiaries conducts its business, and (ii) restrictions imposed through “reliability must run” agreements and/or other agreements/arrangements with independent system operators or regional transmission organizations.

Regulation as a Utility. Except for regulation by FERC under the FPA, the Public Utility Holding Company Act of 2005 (as an exempt holding company), or PURPA, none of the Public Utility Regulatory Policies Act of 1978Guarantor, as amended (“PURPA”) or, in the case of Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., regulation by the NYPSC, neither the Company nor Parent or any of its their Subsidiaries or “affiliates” (under and as defined in the FPA and the rules and regulations of FERC promulgated thereunder) is subject to regulation as a public utility holding company, public utility or public service company (or similar designation) by any Governmental Entity. Each Subsidiary or “affiliate” (under and as defined in under the FPA and the rules and regulations of FERC promulgated thereunder) of the Company Guarantor or Parent (other than any such Subsidiary of the Company Guarantor or Parent that owns one or more facilities that constitute a “qualifying facility” as such term is defined under PURPA and the rules and regulations of FERC as of the date hereof and that are entitled to exemption from regulation under Section 205 of the FPA (an “Exempt Qualifying Facility”)Facilities) selling electric energy, capacity and/or certain ancillary services at wholesale has been authorized by FERC to make wholesale sales of electric energy, capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, FPA and, as of the date hereof, has been granted customary waivers and other blanket authority (including with respect to the issuance of securities and assumption of liabilities pursuant to Section 204 of the FPA), which, as of the date hereof, blanket authority and waivers have not been limited or its rates subject to refund, in each case in any material respect, other than through (i) rate caps and mitigation measures generally applicable to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale at market-based rates in the geographic market where such of its Subsidiaries conducts its business, and (ii) restrictions imposed through “reliability must run” agreements and/or other agreements/arrangements with independent system operators or regional transmission organizations.

Regulation as a Utility. Except for regulation by FERC (a) The Company together with its subsidiary companies is a "single state holding company system" under the FPA, the Public Utility Holding Company Act of 2005 ("PUHCA 2005"). Puget Sound Energy and its indirect wholly-owned exempt wholesale generator subsidiary Black Creek Hydro, Inc. ("BCH") are each a "public utility" within the meaning of Section 201(e) of the FPA. Puget Sound Energy is not regulated as an exempt holding a "natural gas company)" under the Natural Gas Act, except in two limited aspects of its business which subject it only to limited jurisdiction of the Public Utility Federal Energy Regulatory Policies Act of 1978Commission ("FERC"): (i) to the extent that Puget Sound Energy makes natural gas sales for resale in interstate commerce, it has a limited jurisdiction blanket marketing certificate as amended (“PURPA”) or, contained in the case regulations of Dynegy Danskammerthe FERC; and (ii) in its capacity as Project Operator of the Xxxxxxx Prairie Storage Project (which otherwise does not subject it to regulation as a "natural gas company"). Puget Sound Energy is also regulated as a "public service company," "gas company" and "electrical company" under Washington state law. Except for regulation of BCH, L.L.C. Hydro Energy Development Corp. ("HEDC") and Dynegy Roseton, L.L.C., regulation Puget Sound Energy by the NYPSCFERC under the FPA, PUHCA 2005 and regulation of Puget Sound Energy by the Washington Utilities and Transportation Commission, neither the Company nor any of its Subsidiaries or “affiliates” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunder) Company Subsidiary is subject to regulation as a public utility holding company, public utility or public service company (or similar designation) by the FERC, any Governmental Entity. Each Subsidiary or “affiliate” (under and as defined state in the FPA and rules and regulations of FERC promulgated thereunder) of the Company (other than United States or in any such Subsidiary of the Company that owns one or more facilities that constitute a “qualifying facility” as such term is defined under PURPA and the rules and regulations of FERC as of the date hereof and that are entitled to exemption from regulation under Section 205 of the FPA (an “Exempt Qualifying Facility”)) selling electric energy, capacity and/or certain ancillary services at wholesale foreign nation. Puget Sound Energy has been authorized by FERC to make wholesale sales of electric energy, energy and capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, and, as of the date hereof, has been granted customary waivers and other which blanket authority (including has not been limited in any material respect through a Puget Sound Energy-specific rate cap or mitigation measure. All sales of energy and/or capacity by BCH are made pursuant to power sale agreements or tariffs filed with respect to the issuance of securities and assumption of liabilities accepted by FERC pursuant to Section 204 205 of the FPA). (b) Neither the Company nor any Company Subsidiary owns, which, as holds or controls nuclear materials or nuclear related facilities that are subject to the regulation of the date hereof, blanket authority and waivers have not been limited or its rates subject to refund, in each case in any material respect, other than through (i) rate caps and mitigation measures generally applicable to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale at market-based rates in Nuclear Regulatory Commission under the geographic market where such of its Subsidiaries conducts its business, and (ii) restrictions imposed through “reliability must run” agreements and/or other agreements/arrangements with independent system operators or regional transmission organizationsAtomic Energy Act.

Regulation as a Utility. Except for regulation by FERC under the FPA, the Public Utility Holding Company Act of 2005 (as an exempt holding company), the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”a) or, in the case of Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., regulation by the NYPSC, neither Neither the Company nor any of its Subsidiaries or “affiliates” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunderFPA) is subject to regulation as a public utility holding company, public utility or public service company (or similar designation) by any Governmental EntityEntity (except for such Subsidiaries or “affiliates” of the Company that are regulated as public utilities, public-utility companies or holding companies under the FPA or PUHCA). (b) The Company and its Subsidiaries and “affiliates” (under and as defined in PUHCA) are not subject to, or are exempt from, FERC’s books, records and accounting requirements under PUHCA. The Company and any of its Subsidiaries and “affiliates” (under and as defined in PUHCA) that are “holding companies” (under and as defined under PUHCA) are holding companies solely with respect to exempt wholesale generators, qualifying facilities and/or foreign utility companies. (c) Each Subsidiary or “affiliate” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunderFPA) of the Company (other than any such Company Subsidiary of the Company or affiliate that owns one or more facilities that constitute a “qualifying facility” as such term is defined under PURPA and the rules and regulations Public Utility Regulatory Policies Act of FERC as of the date hereof 1978 and that are entitled to exemption from regulation under Section 205 of the FPA (an “Exempt Qualifying Facility”)FPA) selling electric energy, capacity and/or certain ancillary services at wholesale (a) has been authorized by FERC to make wholesale sales of electric energy, capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, and, (b) as of the date hereof, has been granted customary waivers and other blanket authority (including with respect to the issuance of securities and assumption of liabilities pursuant to Section 204 of the FPA)) customarily granted to similarly situated market-based rate sellers, which, as of the date hereof, such blanket authority and waivers have not been limited and (c) except as, individually or its in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect, has rates which are not subject to refund, in each case in any material respect, refund other than through (i) rate caps and mitigation measures generally applicable to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale or at market-based rates in the geographic market where such of its Subsidiaries Company Subsidiary conducts its business, and (ii) restrictions imposed through “reliability must run” agreements Contracts and/or other agreements/arrangements Contracts with independent system operators or regional transmission organizations.

Regulation as a Utility. Except for regulation by FERC (a) Each of TEP and UNS ----------------------- Electric, Inc. ("UNS ELECTRIC") is a "public utility company" (as such term is defined under PUHCA) and is regulated as a "public utility" under the FPAPower Act, and each of TEP, UNS Electric and UNS Gas, Inc. ("UNS GAS" and, together with TEP and UNS Electric, the Public Utility Holding Company Act of 2005 (as an exempt holding company), the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”) or, in the case of Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., regulation by the NYPSC, neither the Company nor any of its Subsidiaries or “affiliates” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunder"UTILITY SUBSIDIARIES") is subject to regulation regulated as a public utility by the State of Arizona, but not by any other state. Other than as described in the preceding sentence and in Section 3.13(b), none of the Company or any "subsidiary company" or "affiliate" (such terms having the meaning ascribed to such terms in PUHCA) of the Company is (i) (A) a "holding company" or a "public-utility company" under PUHCA, (B) a "public utility" under the Power Act, (C) a "natural gas company" under the Natural Gas Act, as amended, and the rules and regulations promulgated thereunder (the "NATURAL GAS ACT") or (D) a public utility or public service company (or similar designation) under any other federal or state Law (including Title 40, Public Utilities and Carriers, of the Arizona Revised Statutes) or (ii) otherwise franchised or authorized to provide any utility services by any Governmental Entity. Each Subsidiary Authority or “affiliate” (certified as an exempt wholesale generator under and PUHCA or as defined in the FPA and rules and regulations of FERC promulgated thereunder) of the Company (other than any such Subsidiary of the Company that owns one or more facilities that constitute a “"qualifying facility” " under the Public Utility Regulatory Policies Act of 1978, as such term is defined under PURPA amended, and the rules and regulations promulgated thereunder. (b) Each of FERC as the Company and UniSource Energy Services, Inc. ("UES ") is a "holding company" within the meaning of PUHCA but is exempt from all provisions of PUHCA (other than Section 9(a)(2) thereof) by an Order of the SEC issued pursuant to Section 3(a)(1) of PUHCA. (c) As of the date hereof and that are entitled to exemption from regulation under Section 205 of this Agreement, none of the FPA (an “Exempt Qualifying Facility”)) selling electric energyUtility Subsidiaries or the Company or any of its other subsidiaries, capacity and/or certain ancillary all or part of whose rates or services at wholesale has been authorized are regulated by FERC to make wholesale sales of electric energy, capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, and, as of the date hereofa Governmental Authority, has rates which have been granted customary waivers and other blanket authority (including with respect to the issuance of securities and assumption of liabilities pursuant to Section 204 of the FPA), which, as of the date hereof, blanket authority and waivers have not been limited or its rates are being collected subject to refund, in each case in pending final resolution of any material respect, other than through (i) rate caps and mitigation measures generally applicable Action pending before a Governmental Authority or on appeal to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale at market-based rates in the geographic market where such of its Subsidiaries conducts its business, and (ii) restrictions imposed through “reliability must run” agreements and/or other agreements/arrangements with independent system operators or regional transmission organizationscourts.

Regulation as a Utility. Except for regulation by FERC (a) The Company together with its subsidiary companies is a "single state holding company system" under the FPA, the Public Utility Holding Company Act of 2005 ("PUHCA 2005"). Puget Sound Energy and its indirect wholly-owned exempt wholesale generator subsidiary Black Creek Hydro, Inc. ("BCH") are each a "public utility" within the meaning of Section 201(e) of the FPA. Puget Sound Energy is not regulated as an exempt holding a "natural gas company)" under the Natural Gas Act, except in two limited aspects of its business which subject it only to limited jurisdiction of the Public Utility Federal Energy Regulatory Policies Act of 1978, as amended Commission (“PURPA”FERC"): (i) orto the extent that Puget Sound Energy makes natural gas sales for resale in interstate commerce, it has a limited jurisdiction blanket marketing certificate as contained in the case regulations of Dynegy Danskammerthe FERC; and (ii) in its capacity as Project Operator of the Xxxxxxx Prairie Storage Project (which otherwise does not subject it to regulation as a "natural gas company"). Puget Sound Energy is also regulated as a "public service company," "gas company" and "electrical company" under Washington state law. Except for regulation of BCH, L.L.C. Hydro Energy Development Corp. ("HEDC") and Dynegy Roseton, L.L.C., regulation Puget Sound Energy by the NYPSCFERC under the FPA, PUHCA 2005 and regulation of Puget Sound Energy by the Washington Utilities and Transportation Commission, neither the Company nor any of its Subsidiaries or “affiliates” (under and as defined in the FPA and rules and regulations of FERC promulgated thereunder) Company Subsidiary is subject to regulation as a public utility holding company, public utility or public service company (or similar designation) by the FERC, any Governmental Entity. Each Subsidiary or “affiliate” (under and as defined state in the FPA and rules and regulations of FERC promulgated thereunder) of the Company (other than United States or in any such Subsidiary of the Company that owns one or more facilities that constitute a “qualifying facility” as such term is defined under PURPA and the rules and regulations of FERC as of the date hereof and that are entitled to exemption from regulation under Section 205 of the FPA (an “Exempt Qualifying Facility”)) selling electric energy, capacity and/or certain ancillary services at wholesale foreign nation. Puget Sound Energy has been authorized by FERC to make wholesale sales of electric energy, energy and capacity and/or certain ancillary services at market-based rates pursuant to Section 205 of the FPA, which blanket authority has not been limited in any material respect through a Puget Sound Energy-specific rate cap or mitigation measure. All sales of energy and/or capacity by BCH are made pursuant to power sale agreements or tariffs filed with and accepted by FERC pursuant to Section 205 of the FPA. Neither the Company nor any Company Subsidiary owns, holds or controls nuclear materials or nuclear related facilities that are subject to the regulation of the Nuclear Regulatory Commission under the Atomic Energy Act. (i) The Company and Puget Sound Energy have been duly incorporated and are validly existing under the laws of the State of Washington, except any failure to be so qualified or have such power or authority as would not, individually or in the aggregate, have a Company Material Adverse Effect. (ii) The Company has the corporate power and authority to execute and deliver the Agreement and to consummate the transactions contemplated thereby. (iii) The Shares have been duly authorized and when delivered and paid for in accordance with the terms of the Stock Purchase Agreement will be validly issued, fully paid and non-assessable; and the issuance of the Shares will not be subject to any preemptive or similar rights under the Company’s charter or bylaws or under Washington law. (iv) The Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent enforcement thereof may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (regardless whether such enforcement is sought in equity or at law). (v) The execution, delivery and performance by the Company of the Agreement will not (i) constitute a violation of, or breach or default under, or result in the creation or imposition of any lien upon any property or assets of the Company or Puget Sound Energy under, the terms of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject and, in each case, that is filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2006, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or Puget Sound Energy or (iii) result in the violation of any Washington State or Federal law, statute, rule or regulation or any judgment or order of any court or governmental or regulatory authority having jurisdiction over the Company that, in each case, in the experience of such counsel, is normally applicable to transactions of the type contemplated by the Agreement and that, in the case of orders and judgments, are known to such counsel, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Company Material Adverse Effect. We do not express any opinion, however, on whether the execution, delivery or performance by the Company of the Agreement will constitute a violation of, or constitute a default under, any covenant, restriction or provision with respect to financial ratios or tests or any aspect of the financial condition or results of operations of the Company or any of its subsidiaries. (vi) No consent, approval, authorization, filings, order, registration or qualification of or with any Washington State or Federal court or governmental or regulatory authority is required for the execution, delivery and performance by the Company of the Agreement and the consummation of the transactions contemplated thereby, except for such consents, approvals, authorizations, orders and registrations or qualifications as have been obtained. The foregoing opinion may be subject to customary assumptions, qualifications and exclusions and shall be rendered by outside counsel for the Company reasonably acceptable to the Purchasers. I, ______________, [Chief Executive Officer][President] of Puget Energy, Inc., a Washington corporation (the “Company”), pursuant to Section 6.8 of the Stock Purchase Agreement, dated October 25, 2007 (the “Stock Purchase Agreement”), among the Company and the purchasers named therein, hereby certify that: 1. The representations and warranties made by the Company in Article III of the Stock Purchase Agreement and Exhibit B thereof were true and correct as of the date of the Stock Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation or warranty expressly speaks as of an earlier date), except for such failures of representations or warranties to be true and correct (without giving effect to any materiality qualification or standard contained in any such representations and warranties) which, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a Company Material Adverse Effect. 2. All covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the date hereof have been performed or complied with in all material respects. 3. All notices, reports and other filings required to be made prior to the date hereof by the Company or any of the Company Subsidiaries with, and all consents, registrations, approvals, permits and authorizations required to be obtained prior to the date hereof by the Company or any of the Company Subsidiaries from, any Governmental Authority in connection with the execution and delivery of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby by the Company have been made or obtained and are effective on and as of the date hereof. 4. No Company Material Adverse Effect shall have occurred that is continuing. 5. The number of shares of Company Common Stock outstanding as of the day immediately preceding the Closing Date is [ ]. Capitalized terms used but not defined herein shall have the meanings set forth in the Stock Purchase Agreement. IN WITNESS WHEREOF, has been granted customary waivers and other blanket authority I have hereunto signed my name on behalf of the Company. Dated: _________________________ By:____________________________ Name:__________________________ Title:___________________________ I, ______________, [INSERT TITLE] of [INSERT NAME OF PURCHASER], a [INSERT JURISDICTION] [corporation] (including with respect to the issuance of securities and assumption of liabilities “Purchaser”), pursuant to Section 204 7.5 of the FPAStock Purchase Agreement, dated October 25, 2007 (the “Stock Purchase Agreement”), among Puget Energy, Inc. (the “Company”) and the purchasers named therein, hereby certify that: 1. The representations and warranties made by the Purchasers in Article IV of the Stock Purchase Agreement were true and correct as of the date of the Stock Purchase Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent any such representation or warranty expressly speaks as of an earlier date) except for such failures of representations or warranties to be true and correct (without giving effect to any materiality qualification or standard contained in any such representations and warranties) which, individually or in the aggregate, have not resulted in and would not reasonably be expected to result in a any material adverse effect on the ability of the Purchaser to consummate the transaction contemplated by this Agreement. 2. All covenants, agreements and conditions contained in the Stock Purchase Agreement to be performed or complied with by the Purchaser on or prior to the date hereof have been performed or complied with in all material respects. 3. All notices, reports and other filings required to be made prior to the date hereof by the Purchaser or any of its subsidiaries with, and all consents, registrations, approvals, permits and authorizations required to be obtained prior to the date hereof by the Purchaser or any of its subsidiaries from, any Governmental Authority in connection with the execution and delivery of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby by the Purchaser have been made or obtained and are effective on and as of the date hereof, blanket authority and waivers . Capitalized terms used but not defined herein shall have not been limited or its rates subject to refund, in each case in any material respect, other than through (i) rate caps and mitigation measures generally applicable to similarly situated marketers or generators selling electricity, capacity, and certain ancillary services or other products or services at wholesale at market-based rates the meanings set forth in the geographic market where such Stock Purchase Agreement. IN WITNESS WHEREOF, I have hereunto signed my name on behalf of its Subsidiaries conducts its business, and (ii) restrictions imposed through “reliability must run” agreements and/or other agreements/arrangements with independent system operators or regional transmission organizations.the Purchaser. Dated:______________________________ By: ________________________________ Name: ______________________________ Title: _______________________________