FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * REYNOLDS STEPHEN P   2. Issuer Name and Ticker or Trading Symbol PUGET ENERGY INC /WA [PSD] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Chairman, President and CEO (Last) (First) (Middle) 10885 NE 4TH STREET, PSE-12 3. Date of Earliest Transaction (Month/Day/Year) 01/08/2007 (Street) BELLEVUE, WA 980045591 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common 01/08/2007   F   2,116 D $ 24.76 103,321 D   Common 01/08/2007   M   2,000 A $ 24.76 105,321 D   Common 01/08/2007   D   2,000 D $ 24.76 103,321 D   Common 01/08/2007   M   2,833 A $ 24.76 106,154 D   Common 01/08/2007   D   904 D $ 24.76 105,250 D   Common               24,196 I By Brokerage Account Common               950 I By spouse through brokerage account

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

PSE Deferred Compensation Plan

(1) (2)

01/08/2007

A

9,476 (3)

(2)

(2)

Common

9,476

$ 24.69

68,876

D

PSE Deferred Compensation Plan

(1) (2)

01/08/2007

M

2,833 (4)

(2)

(2)

Common

2,833

$ 24.76

66,043

D

Restricted Stock Units

(5)

01/08/2007

M

2,000

(6)

(6)

Common

2,000

$ 24.76

8,000

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
REYNOLDS STEPHEN P 10885 NE 4TH STREET, PSE-12 BELLEVUE, WA 980045591	X		Chairman, President and CEO

Signatures

By: James W. Eldredge		01/08/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	One common share will be received for each stock unit.
(2)	Phantom share units deferred in the Puget Sound Energy Deferred Compensation Plan.
(3)	Grant of performance based retirement equivalent stock units per Mr. Reynolds' employment agreement.
(4)	Distribution of 2,883 phantom share units in Puget Energy common stock per prior distribution election, with 904 shares surrendered to pay taxes due.
(5)	Cash settlement of performance based restricted stock units on vesting date.
(6)	January 8, 2004 grant of 10,000 shares of restricted stock units to be settled in cash, with dividend equivalent rights. The restrictions on the shares will lapse over a period of five years from January 8, 2004, with 0% vesting after the first year, 0% vesting after the second year, 20% vesting after the third year, an additional 30% vesting after the fourth year and an additional 50% vesting after the date of the 2008 Annual Shareholders Meeting.

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