Puget Power was an outgrowth of Puget Sound Traction, Light & Power Company, through which the national Stone & Webster cartel consolidated its control of a tangle of local utilities, streetcar lines, and interurban railways beginning in 1900. Fear of a potential private monopoly spurred development of the municipal-owned City Light two years later. The the two utilities battled for customers and dominance over the next 48 years.
Puget Power sold its streetcar lines to the City of Seattle in 1918 at an inflated price that bankrupted the service. It offered to forgive the debt in exchange for City Light, but the government declined. Federal regulators broke up the Stone & Webster cartel in 1934, and Puget Power reorganized under a local board of directors. It closed its last interurban railway in 1938, but operated the North Coast bus line for another 10 years.
City Light's development of relatively cheap hydroelectric sources on the Skagit River gave it a competitive edge. Puget Power finally agreed to dispose of its remaining Seattle customers and facilities in order to focus on the burgeoning postwar suburban market. Puget Power reorganized in the 1990s and merged with Washington Natural Gas to create Puget Sound Energy and Washington Energy companies.