<PAGE>

                                                                    EXHIBIT 2(d)

                                                                  CONFORMED COPY


                            SUPPLEMENTAL AGREEMENT


                            DATED 12th March, 1999

                                 relating to a

                             (pound)2,600,000,000
                          REVOLVING CREDIT AGREEMENT
                             dated 24th June, 1996

                                      for

                              SCOTTISH POWER PLC


                                     with


                        THE ROYAL BANK OF SCOTLAND PLC
                                   as Agent


                                 ALLEN & OVERY
                                     London
<PAGE>

                                      INDEX

Clause                                                                      Page

1.     Interpretation .......................................................  1
2.     Conditions precedent .................................................  2
3.     Amendments to the Credit Agreement ...................................  2
4.     Approval .............................................................  9
5.     Representations and warranties .......................................  9
6.     Expenses .............................................................  9
7.     Fees .................................................................  9
8.     Miscellaneous ........................................................ 10
9.     Governing law ........................................................ 10

Schedule

1.     Part 1 - Conditions precedent to the Approval Date ................... 11
       Part 2 - Conditions precedent to be provided in respect of Holdco
       on the Guarantee Date ................................................ 13
2.     Calculation of the Mandatory Cost .................................... 14
3.     Form of Guarantee .................................................... 16

Signatories ................................................................. 31
<PAGE>

THIS SUPPLEMENTAL AGREEMENT is dated 12th March, 1999 and made between:-

(1)   SCOTTISH POWER PLC (to be renamed "Scottish Power UK plc" on the Scheme
      Date) (Registered No: SC11712OP) (the "Company"); and

(2)   THE ROYAL BANK OF SCOTLAND PLC as agent acting on behalf of the Finance
      Parties (as defined in the Credit Agreement referred to below) (the
      "Agent").

BACKGROUND:-

(A)   This Supplemental Agreement is supplemental to a credit agreement dated
      24th June, 1996 as amended by a letter dated 29th January, 1998, between,
      amongst others, the Company and the Agent (the "Credit Agreement") whereby
      the Banks (as defined therein) agreed to provide a loan facility of up to
      (pound)2,600,000,000 to the Company.

(B)   The Majority Banks have approved the terms of this Supplemental Agreement
      and provided their consent to the Agent to enter into this Supplemental
      Agreement on their behalf.

(C)   The parties to this Supplemental Agreement have agreed to amend the Credit
      Agreement on the terms set out below in accordance with clause 23
      (Amendments and waivers) of the Credit Agreement.

IT IS AGREED as follows:-

1.    INTERPRETATION

1.1   Definitions

      In this Supplemental Agreement, unless the contrary intention appears, a
      term or expression defined in the Credit Agreement has the same meaning in
      this Supplemental Agreement and in addition:

      "Approval Date"

      means the date upon which the Agent has issued the notification referred
      to in Clause 2 (Conditions precedent).

      "Guarantee"

      means a guarantee executed or to be executed by Holdco in favour of the
      Agent on behalf of the Finance Parties substantially in the form of
      Schedule 3.

      "Guarantee Date"

      means the date (falling on or after the Scheme Date) upon which Holdco
      gives any guarantee, Security Interest, indemnity or enters into any other
      similar arrangement in respect of any of the obligations of any of its
      Subsidiaries in the Ring Fenced Group.
<PAGE>

                                       2


      "Holdco"

      means New Scottish Power plc (to be renamed "Scottish Power plc" on the
      Scheme Date) (Registered No. SC193794) which shall, following the Scheme
      Date, be the Holding Company of the Company.

      "Holdco Group"

      means at any time Holdco and its Subsidiaries at that time.

      "Obligor"

      means the Company and, on or after the Guarantee Date, the Company or
      Holdco.

      "Ring Fenced Group"

      means Holdco and any Affiliate of Holdco that is not also a member of the
      Group.

      "Scheme"

      means the proposed scheme of arrangement pursuant to which (amongst other
      things) the Company will become a Subsidiary of Holdco.

      "Scheme Date"

      means the date on which the Scheme becomes effective.

1.2   Construction

(a)   In this Supplemental Agreement, unless the contrary intention appears, the
      provisions of clause 1.2 (Construction) of the Credit Agreement will apply
      with all necessary modifications as if they were set out in full.

(b)   References in the Credit Agreement to "this Agreement", "hereof",
      "hereunder" and expressions of similar import shall be deemed to be
      references to the Credit Agreement (as amended by this Supplemental
      Agreement) and to this Supplemental Agreement.

2.    CONDITIONS PRECEDENT

      The approval of the Scheme set out in Clause 4 (Approval) is subject to
      receipt by the Agent of all the documents and other matters set out in
      Part 1 of Schedule 1 in form and substance satisfactory to it and the
      Agent shall notify the Company and the Banks when it has received those
      documents and other matters.

3.    AMENDMENTS TO THE CREDIT AGREEMENT

3.1   Amendments

      With effect on and from the date of this Supplemental Agreement the Credit
      Agreement shall be amended by:

      (a)   in clause 1.1 (Definitions):
<PAGE>

                                       3


            (i)   inserting the following definitions in alphabetical order:

                  (A)   ""Consolidated EBITDA"

                        means in respect of any financial year of the Group, the
                        consolidated profits of the Group before:

                        (i)   Net Interest Payable;

                        (ii)  tax;

                        (iii) depreciation;

                        (iv)  amortisation (including, for the avoidance of
                              doubt, of goodwill); and

                        (v)   extraordinary and exceptional items,

                        but adjusted by deducting any amount attributable to
                        minority interests.";

                  (B)   ""Guarantee"

                        means a guarantee executed or to be executed by Holdco
                        substantially in the form of Schedule 3 to the
                        Supplemental Agreement.";

                  (C)   ""Guarantee Date"

                        means the date (falling on or after the Scheme Date)
                        upon which Holdco guarantees any of the obligations of
                        any of its Subsidiaries in the Ring Fenced Group";

                  (D)   ""Holdco"

                        means New Scottish Power plc (to be renamed "Scottish
                        Power plc" on the Scheme Date) (Registered No.
                        SC193794) which shall, following the Scheme Date, be the
                        Holding Company of the Company";

                  (E)   ""Holdco Group"

                        means at any time Holdco and its Subsidiaries at that
                        time";

                  (F)   ""Obligor"

                        means the Company and, on or after the Guarantee Date,
                        the Company or Holdco.";
<PAGE>

                                       4


                  (G)   ""Relevant Group"

                        means:

                        (a)   in the case of the Company, the Group; or

                        (b)   in the case of Holdco, the Holdco Group;"

                  (H)   ""Ring Fenced Group"

                        means Holdco and any Affiliate of Holdco that is not
                        also a member of the Group.";

                  (I)   ""Scheme"

                        means the scheme of arrangement pursuant to which
                        (amongst other things) Holdco is to acquire all of the
                        share capital of the Company.";

                  (J)   ""Scheme Date"

                        means the date on which the Scheme becomes effective.";

                  (K)   ""Supplemental Agreement"

                        means an agreement dated 12th March, 1999 between the
                        Agent and the Company amending certain provisions of
                        this Agreement.";

            (ii)  deleting:

                  (A)   the definition of "MLA Cost" and replacing it with:

                        ""Mandatory Cost"

                        means the cost imputed to the Banks of compliance with
                        the regulations of the Bank of England and the Financial
                        Services Authority or other reserve or mandatory liquid
                        assets costs or special deposit costs during the Term of
                        a Loan expressed as a rate per annum and determined in
                        accordance with Schedule 3.

                  (B)   the definition of "Margin" and replacing it with:

                        "Margin"

                        means on and from the date of the Supplemental
                        Agreement, 0.45 per cent. per annum.";

            (iii) inserting ", the Guarantee" in the definition of "Finance
                  Document" after the words "a Novation Certificate" and before
                  the words "or any other document";
<PAGE>

                                       5


      (b)   replacing each reference to "MLA Cost" in the Credit Agreement by a
            reference to "Mandatory Cost";

      (c)   in clause 1.2(c)(i) (Construction), inserting "Consolidated EBITDA"
            after "Borrowings" in the first line;

      (d)   inserting the following clause after clause 2.3 (Nature of a Finance
            Party's rights and obligations):

            "2.4  Change of currency

                  If a change in the currency of the United Kingdom occurs, this
                  Agreement will be amended to the extent the Agent (acting
                  reasonably and in consultation with the Company) specifies to
                  be necessary to reflect the change in currency and to put the
                  Banks in the same position, so far as possible, that they
                  would have been in if no change in currency had occurred.";

      (e)   deleting clause 5.2(e) (Completion of Requests) and replacing ";
            and" in clause 5.2(d) with a full stop;

      (f)   deleting clause 8.2(a), (b) and (c) (Calculation of Margin), moving
            the existing clause 8.2(d) to be inserted as a clause 15.20 under
            the heading of "Certificates" and renumbering clauses 8.3 to 8.5
            accordingly;

      (g)   deleting clause 14.9 (Accounts) and inserting the following in its
            place:

            "14.9 Accounts

                  The audited consolidated accounts of the Relevant Group most
                  recently delivered to the Agent (which in respect of the
                  Company only, at the date of this Agreement, are the Original
                  Group Accounts):

                  (a)   have been prepared in accordance with accounting
                        principles and practices generally accepted in the
                        United Kingdom consistently applied; and

                  (b)   fairly represent the consolidated financial condition of
                        the Relevant Group as at the date to which they were
                        drawn up.

      (h)   deleting clause 15.2 (Financial information) and inserting the
            following in its place:

            "15.2 Financial information

                  The Company shall supply, and procure that Holdco will supply,
                  to the Agent in sufficient copies for all the Banks:

                  (a)   as soon as the same are available (and in any event
                        within 180 days from the end of each of its financial
                        years) the audited financial statements and the audited
                        consolidated accounts of the Relevant Group for that
                        financial year;
<PAGE>

                                       6


                  (b)   as soon as the same are available (and in any event
                        within 90 days of the end of the first half-year of each
                        of its financial years) the unaudited consolidated
                        accounts of the Relevant Group for that half-year;

                  (c)   (in respect of the Company only), together with the
                        accounts specified in:

                        (i)   paragraph (a) above, a certificate signed by one
                              of its senior officers on its behalf setting out
                              in reasonable detail computations establishing
                              compliance with Clause 15.16 (Financial covenants)
                              as at the date to which those accounts were drawn
                              up;

                        (ii)  paragraph (b) above, a certificate signed by one
                              of its senior officers on its behalf setting out
                              in reasonable detail computations establishing
                              compliance with Clause 15.16 (a) (Financial
                              covenants) as at the date to which those accounts
                              were drawn up; and

                  (d)   as soon as the same are available (and in any event
                        within 90 days from the end of the period for which
                        they are produced) the quarterly unaudited consolidated
                        accounts of the Relevant Group.

      (i)   deleting clause 15.16(a) (Financial covenants) and inserting the
            following in its place:

            "The Company shall procure that, as at the last day of each period
            of twelve months ending on the last day of each financial year and
            each financial half-year of the Company, the ratio of Total
            Consolidated Net Borrowings to Consolidated EBITDA does not exceed
            4.0:1.";

      (j)   inserting the following clauses after clause 15.17 (Restriction on
            Borrowings of Subsidiaries):

            "15.18 Distributions

            (a)   Subject to paragraph (b) and Clause 15.19(a) (Lending and
                  guarantees) below, the Company shall not make any loans,
                  provide any form of credit, or pay or make any dividends or
                  distributions in respect of any class of equity or preference
                  shares in cash or in kind (a "Distribution") to any member of
                  the Ring Fenced Group.

            (b)   Notwithstanding paragraph (a) above and subject to Clause
                  15.19(b) to (e) (inclusive) (Lending and guarantees) below,
                  the Company may make the following Distributions to Holdco:

                  (i)   prior to completion of the acquisition by Holdco of the
                        shares in PacifiCorp (pursuant to the merger announced
                        on 7th December, 1998), Distributions in an amount not
                        exceeding the aggregate of:
<PAGE>

                                       7


                        (A)   (pound)500,000,000 made on terms that the proceeds
                              of any such Distribution may only be used by
                              Holdco for the sole purposes of financing a share
                              buy-back of its shares in an equivalent amount;
                              and

                        (B)   payment of any initial establishment expenses
                              incurred by it in connection with its acquisition
                              of the shares in PacifiCorp; and

                  (ii)  in any six-month period Distributions in an aggregate
                        amount not exceeding an amount equal to the consolidated
                        post-taxation profits of the Company for that six month
                        period and, after the Scheme Date, Distributions in an
                        aggregate amount not exceeding an amount equal to the
                        lower of:

                        (A)   100 per cent. of dividends on ordinary share
                              capital made in respect of that six month period
                              by Holdco to its shareholders; and

                        (B)   the consolidated post-taxation profits of the
                              Company for that six-month period.

            15.19 Lending and guarantees

                  The Company shall not, and shall procure that no member of the
                  Group shall:

                  (a)   subject to clause 15.18(b) (Distributions), make any
                        loans or provide any form of credit to members of the
                        Ring Fenced Group;

                  (b)   give any guarantee or indemnity to or for the benefit of
                        members of the Ring Fenced Group or for the benefit of
                        any person in respect of any obligation or enter into
                        any document under which any member of the Group assumes
                        the liability of members of the Ring Fenced Group;

                  (c)   either in a single transaction or in a series of
                        transactions, whether related or not and whether
                        voluntarily or involuntarily, sell, transfer, grant or
                        lease or otherwise dispose of all or any part of its
                        assets to members of the Ring Fenced Group;

                  (d)   create or permit to subsist any Security Interest on any
                        of its assets in respect of any indebtedness owed by
                        members of the Ring Fenced Group;

                  (e)   enter into any agreement with members of the Ring Fenced
                        Group unless it is on arm's length terms in the ordinary
                        course of business.";

      (k)   in clause 16.1 (Events of Default), deleting "16.16 (Change of
            control of Target and Appointee)" and inserting "16.18
            (Enforceability)" in its place;
<PAGE>

                                       8


      (l)   deleting all references to "the Company" in clauses 16.2
            (Non-payment) to 16.14(a) (Revocation and Modification of Licences
            or Appointment etc.) and 16.15 (Cessation of business) (inclusive)
            and replacing them with references to "an Obligor";

      (m)   deleting clause 16.16 (Change of control of Target and Appointee)
            and inserting the following in its place:

            "16.16 Change of control of Target, Appointee or the Company

            (a)   The Target is not or ceases to be a Subsidiary of the Company;
                  or

            (b)   the Appointee is not or at any time ceases to be a wholly
                  owned Subsidiary of the Target; or

            (c)   at any time after the Scheme Date, the Company ceases to be a
                  Subsidiary of Holdco";

      (n)   inserting the following new clauses and renumbering the existing
            clause 16.17 to 16.19:

            "16.17 Guarantee

            On the Guarantee Date, Holdco does not execute the Guarantee or the
            documents set out in part 2 of schedule 1 of the Supplemental
            Agreement are either not provided or are not in form or substance
            satisfactory to the Agent (acting reasonably) on the Guarantee
            Date";

            "16.18 Enforceability

            On or after the Guarantee Date the Guarantee is not, or is alleged
            by Holdco not to be, binding on or enforceable against Holdco";

      (o)   deleting all references to "16.16 (Change of control of Target and
            Appointee)" and replacing them with:

            "16.16 (Change of control of Target, Appointee or the Company)";

      (p)   replacing all references to "Clause 16.17 (Acceleration)" with
            references to "Clause 16.19 (Acceleration)";

      (q)   in clause 18.2(a) (Commitment fee):

            (i)   deleting the words "the lower of (a) 0.125 per cent. per annum
                  and (b) one half of the applicable Margin from time to time,"
                  and inserting "0.20 per cent. per annum" in its place; and

            (ii)  deleting "this Agreement" (in the last line) and inserting
                  "the Supplemental Agreement" in its place;

      (r)   in the last line of clause 21.2(c) (Other indemnities) deleting
            "Clause 8.4" and replacing it with "Clause 8.3"; and
<PAGE>

                                       9


      (s)   replacing schedule 3 to the Credit Agreement with Schedule 2 to this
            Supplemental Agreement.

3.2   Commitments

      On the date of this Supplemental Agreement:

      (a)   the Total Commitments shall be reduced to (pound)2,000,000,000;

      (b)   the Commitment of each Bank shall be reduced proportionately; and

      (c)   as a result of the amendments in sub paragraphs (a) and (b) above,
            the automatic reduction of the Total Commitments contemplated by
            clause 7.2 (Interim reduction) of the Credit Agreement shall be
            deemed to have occurred.

4.    APPROVAL

      On and from the Approval Date, the Agent on behalf of the Majority Banks
      confirms that for the purposes of clause 16.8 (Compositions etc.) of the
      Credit Agreement the Majority Banks have approved the Scheme.

5.    REPRESENTATIONS AND WARRANTIES

      The Company makes the representations and warranties set out in clauses
      14.2 (Status) to 14.10 (Litigation) of the Credit Agreement to the Finance
      Parties on the date of this Supplemental Agreement, the Approval Date and
      on the Guarantee Date.

6.    EXPENSES

      The Company shall forthwith on demand pay to the Agent the amount of all
      reasonable and proper out-of-pocket costs and expenses (including legal
      fees) incurred by it in connection with the negotiation, preparation,
      printing and execution of this Supplemental Agreement.

7.    FEES

7.1   Amendment fee

      The Company shall pay to the Agent an amendment fee of (pound)1,500,000
      (which is equal to 0.075 per cent. of the Total Commitments as reduced by
      this Supplemental Agreement) on the date of this Supplemental Agreement
      which the Agent shall distribute to the Banks in the manner agreed between
      the Agent and the Banks.

7.2   Additional amendment fee

      The Company shall pay to the Agent for the account of each Bank which has
      provided approval in writing to the Agent of the amendments set out in the
      letter from the Company to the Agent dated 5th February, 1999 by 3.00 p.m.
      on 25th February, 1999, a further fee in an amount equal to 0.025 per
      cent. of that Bank's Commitment (as reduced by this Supplemental
      Agreement). Such fee shall be payable on the date of this Supplemental
      Agreement.
<PAGE>

                                       10


7.3   Arrangement fee

      The Company shall pay to the Agent, on the date of this Supplemental
      Agreement, an additional fee for arranging the amendments contemplated by
      this Supplemental Agreement in the amount set out in a letter between the
      Company and the Agent dated on or about the date of this Supplemental
      Agreement.

7.4   VAT

      Any fee referred to in this Clause 7 is exclusive of any value added tax
      or any other tax which might be chargeable in connection with that fee. If
      any value added tax or other tax is so chargeable, it shall be paid by the
      Company at the same time as it pays the relevant fee.

8.    MISCELLANEOUS

(a)   The provisions of clauses 9 (Payments), 10 (Taxes), 20 (Stamp duties) and
      28 (Severability) to 32 (Jurisdiction) (both inclusive) of the Credit
      Agreement shall apply to this Supplemental Agreement as if set out in this
      Supplemental Agreement, but as if references in those clauses to the
      Credit Agreement were references to this Supplemental Agreement.

(b)   This Supplemental Agreement is a Finance Document.

(c)   Except insofar as amended or supplemented by this Supplemental Agreement,
      the Credit Agreement will remain in full force and effect.

9.    GOVERNING LAW

      This Supplemental Agreement is governed by English law.

This Supplemental Agreement has been entered into on the date stated at the
beginning of this Supplemental Agreement.
<PAGE>

                                       11


                                   SCHEDULE 1

                                     PART 1

                    CONDITIONS PRECEDENT TO THE APPROVAL DATE

Authorisations

1.    Certificates signed by an authorised signatory of the Company certifying:

      (a)   that there has been no change to its memorandum and articles of
            association, certificate of incorporation and certificate of
            incorporation on change of name (if any) since the date these
            documents were delivered in accordance with clause 4.1 (Documentary
            conditions precedent) of the Credit Agreement, or if there has been
            any change, giving details of the same;

      (b)   the specimen signatures of its authorised signatories; and

      (c)   that the documents delivered under Part 1 of this Schedule 1 are
            correct, complete and in full force and effect.

2.    A copy of a resolution of the board of directors of the Company
      authorising the entry into, execution and performance of this Supplemental
      Agreement and authorising specified persons to execute the Supplemental
      Agreement and related documents on its behalf.

3.    A copy of the memorandum and articles of association and a certificate of
      incorporation of Holdco.

Legal Opinion

4.    A legal opinion of Allen & Overy, English legal advisers to the Agent,
      addressed to the Finance Parties.

5.    A legal opinion of Maclay Murray & Spens, legal advisers to the Agent in
      Scotland, addressed to the Finance Parties.

Scheme

6.    A copy of the circular sent to shareholders of the Company setting out
      details of the Scheme.

7.    A copy of the interlocutor of the Court sanctioning the Scheme under
      section 425 of the Companies Act 1985 (the "Act") and confirming that in
      accordance with section 137 of the Act, the reduction of capital proposed
      under the Scheme has been delivered to the Registrar of Companies for
      registration and that the order and relevant minute have been registered
      by him.

Miscellaneous

8.    A copy of any other authorisation or other document, opinion or assurance
      which the Agent considers to be necessary in connection with the entry
      into and performance of, and the
<PAGE>

                                       12


transactions contemplated by, this Supplemental Agreement or for the validity
and enforceability of any Finance Document.
<PAGE>

                                       13


                                     PART 2

                  DOCUMENTS TO BE PROVIDED IN RESPECT OF HOLDCO
                              ON THE GUARANTEE DATE

Authorisations

1.    A copy of a resolution of the board of directors of Holdco:

      (a)   approving the terms of, and the transactions contemplated by, the
            Guarantee and resolving that it executes the Guarantee;

      (b)   authorising a specified person or persons to execute the Guarantee
            on its behalf; and

      (c)   authorising a specified person or persons, on its behalf, to sign
            and/or despatch all other documents and notices to be signed and/or
            despatched by it under or in connection with the Guarantee.

2.    A certificate of an authorised signatory of Holdco certifying:

      (a)   that there has been no change to its memorandum and articles of
            association or certificate of incorporation since the date that
            these documents were delivered in accordance with Clause 2
            (Conditions precedent) of the Supplemental Agreement, or if there
            has been any change giving details of the same;

      (b)   that each copy document specified in Part 2 of this Schedule 1 is
            correct, complete and in full force and effect as at a date no
            earlier than the date of the Guarantee; and

      (c)   the identity and specimen signatures of the directors and secretary
            of Holdco.

3.    A certificate of a director of Holdco certifying that the execution of the
      Guarantee will not result in any breach of any restriction binding on
      Holdco.

Legal Opinions

4.    A legal opinion of Allen & Overy, legal advisers to the Agent, addressed
      to the Finance Parties.

5.    A legal opinion of Maclay Murray & Spens, legal advisers to the Agent in
      Scotland, addressed to the Finance Parties.

Miscellaneous

6.    The Guarantee duly executed by Holdco.

7.    A pro forma balance sheet of Holdco.

8.    A copy of any other authorisation or other document, opinion or assurance
      which the Agent considers to be necessary in connection with the entry
      into and performance of the transactions contemplated by, the Guarantee or
      for the validity and enforceability of the Guarantee.
<PAGE>

                                       14


                                   SCHEDULE 2

                        CALCULATION OF THE MANDATORY COST

(a)   The Mandatory Cost for each Loan for each period in respect of which
      interest is payable is the rate determined by the Agent to be equal to the
      rate notified by the Agent and calculated in accordance with the following
      formulae:

      BY + S(Y-Z) + F x 0.01 % per annum = Mandatory Cost
      ----------------------
            100-(B + S)

      where on the day of application of the formula:

      B     is the percentage of the Agent's eligible liabilities which the Bank
            of England requires the Agent to hold on a non-interest-bearing
            deposit account in accordance with its cash ratio requirements;

      Y     is the rate at which Sterling deposits are offered by the Agent to
            leading banks in the London interbank market at or about 11.00 a.m.
            on that day for the relevant period;

      S     is the percentage of the Agent's eligible liabilities which the Bank
            of England requires the Agent to place as a special deposit;

      Z     is the interest rate per annum allowed by the Bank of England on
            special deposits; and

      F     is the charge payable by the Agent to the Financial Services
            Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees
            Regulations (but where for this purpose, the figure in paragraph
            2.02b and 2.03b will be deemed to be zero) expressed in pounds per
            (pound)1 million of the fee base of the Agent.

(b)   For the purposes of this Schedule 2:

      (i)   "eligible liabilities" and "special deposits" have the meanings
            given to them at the time of application of the formula by the Bank
            of England;

      (ii)  "fee base" has the meaning given to it in the Fees Regulations;

      (iii) "Fees Regulations" means:

            (A)   prior to 31st March, 1999, the Banking Supervision (Fees)
                  Regulations 1998; and

            (B)   on and after 31st March, 1999, any regulations governing the
                  payment of fees for banking supervision; and

      (iv)  "relevant period" in relation to each Term, means:

            (A)   if it is three months or less, that Term; or
<PAGE>

                                       15


            (B)   if it is more than three months, three months.

(c)   In the application of the formula, B, Y, S and Z are included in the
      formula as figures and not as percentages, e.g. if B=0.5% and Y=15%, BY is
      calculated as 0.5 x 15.

(d)   (i)   The formula is applied on the first day of each relevant period
            comprised in the relevant Term.

      (ii)  Each rate calculated in accordance with the formula is, if
            necessary, rounded upward to the nearest four decimal places.

(e)   If the Agent determines (after consultation with the Banks) that a change
      in circumstances has rendered, or will render, the formula inappropriate,
      the Agent shall notify the Company of the manner in which the Mandatory
      Cost will subsequently be calculated. The manner of calculation so
      notified by the Agent shall, in the absence of manifest error, be binding
      on all the parties to this Agreement.
<PAGE>

                                       16


                                   SCHEDULE 3

                                FORM OF GUARANTEE

                            DATED [                 ]

                                  RELATING TO A
                              (pound)2,600,000,000

                            REVOLVING CREDIT FACILITY

                                 as amended by a
                             SUPPLEMENTAL AGREEMENT

                             dated 12th March, 1999

                                       for

                               SCOTTISH POWER PLC

                                  GUARANTEED BY

                                    [HOLDCO]

                                  IN FAVOUR OF

                         THE ROYAL BANK OF SCOTLAND PLC
                                    as Agent

                      ------------------------------------

                                    GUARANTEE

                      ------------------------------------


                                 ALLEN & OVERY
                                     London
<PAGE>

                                       17


                                      INDEX

Clause                                                                  Page No.

1.     Interpretation ....................................................... 18
2.     Guarantee ............................................................ 18
3.     Default interest ..................................................... 21
4.     Payments ............................................................. 21
5.     Taxes ................................................................ 22
6.     Representations and warranties ....................................... 23
7.     Undertakings ......................................................... 24
8.     Currency indemnity ................................................... 26
9.     Evidence and calculations and expenses ............................... 26
10.    Waivers and remedies cumulative ...................................... 26
11.    Changes to the parties ............................................... 27
12.    Disclosure of information ............................................ 27
13.    Set-off .............................................................. 27
14.    Severability ......................................................... 28
15.    Counterparts ......................................................... 28
16.    Notices .............................................................. 28
17.    Jurisdiction ......................................................... 29
18.    Governing law ........................................................ 29

Signatories ................................................................. 30
<PAGE>

                                       18


THIS GUARANTEE is dated [                 ] between:

(1)   [HOLDCO] (Registered No. SC193794) ("Holdco"); and

(2)   THE ROYAL BANK OF SCOTLAND PLC as agent acting on behalf of the Finance
      Parties (the "Agent").

BACKGROUND

On and subject to the terms of a credit agreement dated 24th June, 1996, as
amended by a letter dated 29th January, 1998, between, amongst others, Scottish
Power plc (the "Company") and the Agent (the "Credit Agreement") (as amended by
a supplemental agreement dated 12th March, 1999 between the Company and the
Agent (the "Supplemental Agreement")) the Banks (as defined therein) agreed to
make the Facility available to the Company.

IT IS AGREED as follows:

1.    INTERPRETATION

(a)   Capitalised terms defined in the Credit Agreement have, unless expressly
      defined in this Guarantee, the same meaning in this Guarantee.

(b)   The provisions of clause 1.2 of the Credit Agreement apply to this
      Guarantee as though they were set out in full in this Guarantee except
      that references to the Credit Agreement are to be construed as references
      to this Guarantee.

2.    GUARANTEE

2.1   Guarantee

      In consideration of the Finance Parties, at any time making or continuing
      advances under the Credit Agreement or for other sufficient consideration
      (receipt of which Holdco acknowledges), Holdco irrevocably and
      unconditionally:

      (a)   as principal obligor guarantees to each Finance Party prompt
            performance by the Company of all its obligations under the Finance
            Documents;

      (b)   undertakes with each Finance Party that, whenever the Company does
            not pay any amount when due under or in connection with any Finance
            Document, Holdco shall forthwith on demand by the Agent pay that
            amount as if it instead of the Company were expressed to be the
            principal obligor; and

      (c)   indemnifies each Finance Party on demand against any loss or
            liability suffered by such Finance Party if any obligation of the
            Company guaranteed by Holdco is or becomes unenforceable, invalid or
            illegal.

2.2   Continuing guarantee

      This Guarantee is a continuing guarantee, will extend to the ultimate
      balance of all sums payable by the Company under the Finance Documents and
      shall not be discharged by any intermediate payment or discharge in whole
      or in part.
<PAGE>

                                       19


2.3   Reinstatement

(a)   Where any discharge (whether in respect of the obligations of the Company
      or any security for those obligations or otherwise) is made in whole or
      in part or any arrangement is made on the faith of any payment, security
      or other disposition which is avoided or must be restored on insolvency,
      liquidation or otherwise without limitation, the liability of Holdco under
      this Guarantee shall continue as if the discharge or arrangement had not
      occurred.

(b)   Each Finance Party may concede or compromise any claim that any payment,
      security or other disposition is liable to avoidance or restoration.

2.4   Waiver of defences

      The obligations of Holdco under this Guarantee will not be affected by any
      act, omission, matter or thing which, but for this provision, would
      reduce, release or prejudice any of its obligations under this Guarantee
      or prejudice or diminish those obligations in whole or in part, including
      (whether or not known to it or any Finance Party):

      (a)   any time or waiver granted to, or composition with, the Company or
            other person;

      (b)   the taking, variation, compromise, exchange, renewal or release of,
            or refusal or neglect to perfect, take up or enforce, any rights
            against, or security over assets of, the Company or other person or
            any non-presentation or non-observance of any formality or other
            requirement in respect of any instrument or any failure to realise
            the full value of any security;

      (c)   any incapacity or lack of powers, authority or legal personality of
            or dissolution or change in the members or status of the Company or
            any other person;

      (d)   any variation (however fundamental) or replacement of a Finance
            Document or any other document or security so that references to
            that Finance Document in this Guarantee shall include each variation
            or replacement;

      (e)   any unenforceability, illegality or invalidity of any obligation of
            any person under any Finance Document or any other document or
            security, to the intent that the obligations of Holdco under this
            Guarantee shall remain in full force and its guarantee be construed
            accordingly, as if there were no unenforceability, illegality or
            invalidity;

      (f)   any postponement, discharge, reduction, non-provability or other
            similar circumstance affecting any obligation of any Obligor under a
            Finance Document resulting from any insolvency, liquidation or
            dissolution proceedings or from any law, regulation or order so that
            each such obligation shall for the purposes of the obligations of
            Holdco under this Guarantee be construed as if there were no such
            circumstance; or

      (g)   the release of the Company or any other person under the terms of
            any composition or arrangement with any creditor of any member of
            the Group.
<PAGE>

                                       20


2.5   Immediate recourse

      Holdco waives any right it may have of first requiring any Finance Party
      (or any trustee or agent on its behalf) to proceed against or enforce any
      other rights or security or claim payment from any person before claiming
      from it under this Guarantee.

2.6   Appropriations

      Until all amounts which may be or become payable by the Obligors under or
      in connection with the Finance Documents have been irrevocably paid in
      full, each Finance Party (or any trustee or agent on its behalf) may:

      (a)   refrain from applying or enforcing any other moneys, security or
            rights held or received by that Finance Party (or any trustee or
            agent on its behalf) in respect of those amounts, or apply and
            enforce the same in such manner and order as it sees fit (whether
            against those amounts or otherwise) and Holdco shall not be entitled
            to the benefit of the same; and

      (b)   hold in a suspense account bearing interest at a commercial rate any
            moneys received from Holdco or on account of the liability of Holdco
            under this Guarantee.

2.7   Non-competition

      Until all amounts which may be or become payable by the Obligors under or
      in connection with the Finance Documents have been irrevocably paid in
      full, Holdco shall not, after a claim has been made or by virtue of any
      payment or performance by it under this Guarantee:

      (a)   be subrogated to any rights, security or moneys held, received or
            receivable by any Finance Party (or any trustee or agent on its
            behalf) or be entitled to any right of contribution or indemnity in
            respect of any payment made or moneys received on account of
            Holdco's liability under this Guarantee;

      (b)   claim, rank, prove or vote as a creditor of the Company or its
            estate in competition with any Finance Party (or any trustee or
            agent on its behalf) unless otherwise required by law; or

      (c)   receive, claim or have the benefit of any payment, distribution or
            security from or on account of the Company, or exercise any right of
            set-off as against the Company.

      Holdco shall hold in trust for and forthwith pay or transfer to the Agent
      for the Finance Parties any payment or distribution or benefit of
      security received by it contrary to this Clause 2.7 (Non-competition) or
      if required by law as contemplated by paragraph (b) above or as directed
      by the Agent.

2.8   Additional security

      This Guarantee is in addition to and is not in any way prejudiced by any
      other security now or subsequently held by any Finance Party.
<PAGE>

                                       21


3.    DEFAULT INTEREST

(a)   If Holdco fails to pay any amount payable by it under this Guarantee, it
      shall forthwith on demand by the Agent pay interest on the overdue amount
      from the due date up to the date of actual payment, as well as before
      judgment, at a rate (the "default rate") determined by the Agent to be one
      per cent. per annum above the higher of:

      (i)   the rate payable on the overdue amount under clause 8.1 (Interest
            rate) of the Credit Agreement immediately before the due date (if of
            principal); and

      (ii)  the rate which would have been payable if the overdue amount had,
            during the period of non-payment, constituted a Loan in Sterling for
            such successive Terms of such duration as the Agent may determine
            (each a "Designated Term").

(b)   The default rate will be determined by the Agent on each Business Day or
      the first day of the relevant Designated Term, as appropriate.

(c)   If the Agent determines that deposits in Sterling are not at the relevant
      time being made available by the Reference Banks to leading banks in the
      London interbank market, the default rate will be determined by reference
      to the cost of funds to the Agent from whatever sources it reasonably
      selects, after consultation with the Reference Banks.

(d)   Default interest will be compounded monthly (where paragraph (a)(i)
      applies) and at the end of each Designated Term (in each other case).

(e)   The Agent shall promptly notify Holdco of the determination of a rate of
      interest under this Guarantee.

4.    PAYMENTS

4.1   Place

      All payments by Holdco under this Guarantee shall be made to the Agent at
      its account at such office or bank as it may notify to Holdco for this
      purpose.

4.2   Funds

      Payments under this Guarantee to the Agent shall be made in Sterling for
      value on the due date.

4.3   Currency

      All amounts payable under this Guarantee are payable in Sterling.

4.4   Set-off and counterclaim

      All payments made by Holdco under this Guarantee shall be made without
      set-off or counterclaim.
<PAGE>

                                       22


4.5   Non-Business Days

(a)   If a payment under this Guarantee is due on a day which is not a Business
      Day, the due date for that payment shall instead be the next Business Day
      in the same calendar month (if there is one) or the preceding Business Day
      (if there is not).

(b)   During any extension of the due date for payment of any principal under
      this Guarantee interest is payable on that principal at the rate payable
      on the original due date.

4.6   Partial payments

      If the Agent receives a payment insufficient to discharge all the amounts
      then due and payable by Holdco under this Guarantee, the Agent shall apply
      that payment towards the obligations of Holdco under this Guarantee in
      such order as the Agent, in its absolute discretion, considers
      appropriate, and that application shall override any application made by
      Holdco.

5.    TAXES

5.1   Gross-up

      All payments by Holdco under this Guarantee shall be made free and clear
      of and without deduction for or on account of any taxes levied or imposed
      by or on behalf of the United Kingdom or any taxing authority thereof,
      except to the extent that Holdco is required by law to make payment
      subject to any taxes. If any tax or amounts in respect of tax must be
      deducted, or any other deductions must be made, from any amounts payable
      or paid by Holdco, or paid or payable by the Agent to a Bank under the
      Finance Documents, Holdco shall pay such additional amounts as may be
      necessary to ensure that the relevant Bank receives a net amount equal to
      the full amount which it would have received had payment not been made
      subject to tax.

5.2   Tax receipts

      All taxes required by law to be deducted or withheld by Holdco from any
      amounts paid or payable under this Guarantee shall be paid by Holdco when
      due and Holdco shall, within 30 days of the payment being made, deliver to
      the Agent for the relevant Bank an original or certified copy of an
      official receipt or such other evidence, if any, as is then customary,
      evidencing that such deduction or withholding has been made and has been
      accounted for to the appropriate authorities.

5.3   Qualifying Bank

      If, otherwise than as a result of the introduction of, change in, or any
      change in the interpretation, administration or application of, any law or
      regulation or any practice or concession of the United Kingdom Inland
      Revenue occurring after the date of this Guarantee, a Bank is not or
      ceases to be a Qualifying Bank, Holdco will not be liable to pay to that
      Bank under Clause 5.1 (Gross-up) any amount in respect of taxes levied or
      imposed by the United Kingdom or any taxing authority of or in the United
      Kingdom in excess of the amount it would have been obliged to pay if that
      Bank had been, or had not ceased to be a Qualifying Bank.
<PAGE>

                                       23


5.4   Tax Credits

      If:

      (a)   Holdco makes a payment under Clause 5.1 (Gross-up) (a "Tax Payment")
            in respect of a payment to any Bank under this Guarantee; and

      (b)   that Bank determines that it has obtained a refund of tax or
            obtained and used a credit against, or relief or remission or
            repayment of tax on its overall net income (a "Tax Credit") which in
            that Bank's opinion is reasonably determined to be attributable to
            that Tax Payment,

      then, if in its absolute discretion it can do so without any adverse
      consequences for that Bank, that Bank shall reimburse Holdco such amount
      as it reasonably determines to be such proportion of that Tax Credit as
      will leave it (after that reimbursement) in no better or worse position
      than it would have been in if no Tax Payment had been required. A Bank
      shall have an absolute discretion as to whether to claim any Tax Credit
      (and, if it does claim, the extent, order and manner in which it does so)
      and whether any amount is due from it under this Clause 5.4 (Tax Credits)
      (and, if so, what amount and when). A Bank shall not be obliged to
      disclose any information regarding its tax affairs and computations.

6.    REPRESENTATIONS AND WARRANTIES

6.1   Representations and warranties

      Holdco makes the representations and warranties set out in this Clause 6
      (Representations and warranties) to each Finance Party.

6.2   Status

(a)   It is a limited liability company, duly incorporated and validly existing
      under the laws of the jurisdiction of its incorporation; and

(b)   it has the power to own its assets and carry on its business, as it is
      being conducted.

6.3   Powers and authority

      It has the power to enter into, perform and deliver, and has taken all
      necessary action to authorise the entry into, performance and delivery of,
      this Guarantee and the transactions contemplated by this Guarantee.

6.4   Legal validity

      This Guarantee constitutes, or when executed in accordance with its terms
      will constitute, its legal, valid and binding obligation enforceable in
      accordance with its terms.

6.5   Non-conflict

      The entry into and performance by it of, and the transactions contemplated
      by, this Guarantee does not and will not:

      (a)   conflict with any law or regulation or judicial or official order;
            or
<PAGE>

                                       24


      (b)   conflict with its constitutional documents; or

      (c)   conflict with any document which is binding upon it or any of its
            assets.

6.6   Authorisations

      So far as Holdco is aware (after due enquiry), all authorisations required
      or desirable in connection with the entry into, performance, validity and
      enforceability of, and the transactions contemplated by, this Guarantee
      have been obtained or effected (as appropriate) and are in full force and
      effect.

6.7   Litigation

      No litigation, arbitration or administrative proceedings are current or,
      to its knowledge, pending or threatened, which might, if adversely
      determined, be likely to have a material adverse effect on its ability to
      perform its obligations under this Guarantee.

6.8   Ownership

      It holds 100 per cent. of the issued share capital of the Company.

6.9   Times for making representations and warranties

      The representations and warranties set out in this Clause 6
      (Representations and warranties):

      (a)   are made on the date of this Guarantee; and

      (b)   are deemed to be repeated by Holdco on the date of each Request and
            each Drawdown Date with reference to the facts and circumstances
            then existing.

7.    UNDERTAKINGS

7.1   Duration

      The undertakings in this Clause 7 (Undertakings) shall remain in force
      from the date of this Guarantee for so long as any amount is or may be
      outstanding under the Credit Agreement or any Commitment is in force, or,
      if earlier, until the maximum amount payable by Holdco under this
      Guarantee has been paid.

7.2   Financial information

(a)   Holdco shall supply to the Agent in sufficient copies for all the Banks:

      (i)   as soon as the same are available (and in any event within 180 days
            of the end of each of its financial years), its audited financial
            statements and the audited consolidated accounts of the Holdco Group
            for that financial year;

      (ii)  as soon as the same are available (and in any event within 90 days
            of the end of the first half year of each of its financial years)
            the unaudited consolidated accounts of the Holdco Group for that
            half year; and
<PAGE>

                                       25


      (iii) as soon as the same are available (and in any event within 90 days
            from the end of the period for which they are produced) the
            quarterly unaudited consolidated accounts of the Holdco Group.

(b)   Holdco shall ensure that the financial statements delivered by it under
      this Clause 7 (Undertakings) are prepared on a consistent basis and in
      accordance with accounting principles generally accepted in the relevant
      jurisdiction and consistently applied.

7.3   Information - Miscellaneous

      Holdco shall supply to the Agent:

      (a)   all documents despatched by it to its shareholders (or any class of
            them) or its creditors generally at the same time as they are
            despatched;

      (b)   promptly upon becoming aware of them, details of any litigation,
            arbitration or administrative proceedings which are current,
            threatened or pending, and which might, if adversely determined,
            have a material adverse effect on its ability to perform its
            obligations under this Guarantee; and

      (c)   promptly, such further information in its possession or control
            regarding its financial condition and operations as the Agent may
            reasonably request.

7.4   Notification of Default

      Holdco shall notify the Agent of any Default (and the steps, if any, being
      taken to remedy it) promptly upon becoming aware of it.

7.5   Authorisations

      Holdco shall promptly:

      (a)   obtain, maintain and comply with the terms of; and

      (b)   if requested, supply certified copies to the Agent of,

      any authorisation required under any law or regulation to enable it to
      perform its obligations under, or for the validity or enforceability of,
      this Guarantee.

7.6   Pari passu ranking

      Holdco shall procure that its obligations under this Guarantee do and will
      rank at least pari passu with all its other present and future unsecured
      obligations, except for taxes, national insurance contributions, employee
      remuneration and benefits and any other obligations which are mandatorily
      preferred by law applying to companies generally.

7.7   Mergers and acquisitions

      Holdco shall not, without the prior written consent of the Agent enter
      into any amalgamation, demerger, merger or reconstruction.
<PAGE>

                                       26


7.8   Negative Pledge

      Holdco will not create or permit to subsist any Security Interest on any
      of its assets.

8.    CURRENCY INDEMNITY

(a)   If a Finance Party receives an amount in respect of Holdco's liability
      under the Finance Documents or if that liability is converted into a
      claim, proof, judgment or order in a currency other than the currency (the
      "contractual currency") in which the amount is expressed to be payable
      under the relevant Finance Document:

      (i)   Holdco shall indemnify that Finance Party as an independent
            obligation against any loss or liability arising out of or as a
            result of the conversion;

      (ii)  if the amount received by that Finance Party, when converted into
            the contractual currency at a market rate in the usual course of its
            business, is less than the amount owed in the contractual currency,
            Holdco shall forthwith on demand pay to that Finance Party an amount
            in the contractual currency equal to the deficit; and

      (iii) Holdco shall pay to the Finance Party concerned on demand any
            exchange costs and taxes payable in connection with any such
            conversion.

(b)   Holdco waives any right it may have in any jurisdiction to pay any amount
      under the Finance Documents in a currency other than that in which it is
      expressed to be payable.

9.    EVIDENCE AND CALCULATIONS AND EXPENSES

9.1   Accounts

      Accounts maintained by the Agent in connection with this Guarantee are
      prima facie evidence of the matters to which they relate.

9.2   Certificates and determinations

      Any certification or determination by the Agent of a rate or amount under
      this Guarantee is, in the absence of manifest error, conclusive evidence
      of the matters to which it relates.

9.3   Calculations

      Interest accrues from day to day and is calculated on the basis of the
      actual number of days elapsed and a year of 365 days.

9.4   Enforcement Costs

      Subject to Clause 2.1(b) (Guarantee), Holdco shall forthwith on demand pay
      (or procure payment) to the Agent the amount of all costs and expenses
      (including legal fees) incurred by it in connection with the enforcement
      of or the preservation of any rights under this Guarantee.

10.   WAIVERS AND REMEDIES CUMULATIVE

      The rights of each Finance Party under this Guarantee:
<PAGE>

                                       27


      (a)   may be exercised as often as necessary;

      (b)   are cumulative and not exclusive of its rights under the general
            law; and

      (c)   may be waived only in writing and specifically.

      Delay in exercising or non-exercise of any such right is not a waiver of
      that right.

11.   CHANGES TO THE PARTIES

11.1  Transfers by Holdco

      Holdco may not assign, transfer, novate or dispose of any of, or any
      interest in, its rights and/or obligations under this Guarantee.

11.2  Transfers by the Banks

      A Bank may assign or transfer all or any part of its rights and/or
      obligations under this Guarantee to another bank or financial institution
      to which it has transferred any part of its rights and obligations under
      the Credit Agreement.

12.   DISCLOSURE OF INFORMATION

      A Bank may disclose to its professional advisers, any of its Affiliates
      or, subject (other than if a Default is outstanding) to the Company's
      prior written consent (which shall not be unreasonably withheld or
      delayed), any person with whom it is proposing to enter, or has entered
      into, any kind of transfer, participation or other agreement in relation
      to this Guarantee:

      (a)   a copy of this Guarantee; and

      (b)   any information which that Bank has acquired under or in connection
            with this Guarantee or any Finance Document,

      provided that any such person to whom the disclosure is made has agreed in
      writing to keep that information confidential.

13.   SET-OFF

      A Finance Party may set off any matured obligation owed by Holdco under
      this Guarantee (to the extent beneficially owned by that Finance Party)
      against any obligation (whether or not matured) owed by that Finance Party
      to Holdco, regardless of the place of payment, booking branch or currency
      of either obligation. If the obligations are in different currencies, the
      Finance Party may convert either obligation at a market rate of exchange
      in its usual course of business for the purpose of the set-off. If either
      obligation is unliquidated or unascertained, the Finance Party may set off
      in an amount estimated by it in good faith to be the amount of that
      obligation.
<PAGE>

                                       28


14.   SEVERABILITY

      If a provision of this Guarantee is or becomes illegal, invalid or
      unenforceable in any jurisdiction, that shall not affect:

      (a)   the validity or enforceability in that jurisdiction of any other
            provision of this Guarantee; or

      (b)   the validity or enforceability in other jurisdictions of that or any
            other provision of this Guarantee.

15.   COUNTERPARTS

      This Guarantee may be executed in any number of counterparts, and this has
      the same effect as if the signatures on the counterparts were on a single
      copy of this Guarantee.

16.   NOTICES

16.1  Giving of notices

      All notices or other communications under or in connection with this
      Guarantee shall be given in writing or by facsimile. Any such notice will
      be deemed to be given as follows:

      (a)   if in writing, when delivered; and

      (b)   if by facsimile, when received.

      However, a notice given in accordance with the above but received on a
      non-working day or after business hours in the place of receipt will only
      be deemed to be given on the next working day in that place.

16.2  Addresses for notices

(a)   Holdco's address and facsimile number for notices as at the date of this
      Guarantee is:

      1 Atlantic Quay
      Glasgow G2 8SP

      Facsimile no:     0141 566 4742

      or such other as Holdco may notify to the Agent by not less than 5
      Business Days' notice.

(b)   The Agent's address and facsimile number for notices as at the date of
      this Guarantee is:

      The Royal Bank of Scotland plc
      Loans Administration
      Corporate Banking Office
      5-10 Great Tower Street
      London EC3P 3HX

      Facsimile no:     0171 220 7370
<PAGE>

                                       29


      or such other as the Agent may notify to Holdco by not less than 5
      Business Days' notice.

17.   JURISDICTION

(a)   Holdco irrevocably agrees, for the benefit of the Agent and the Banks,
      that the courts of England shall have jurisdiction to hear and determine
      any suit, action or proceeding, and to settle any disputes, which may
      arise out of or in connection with this Guarantee and, for such purposes,
      irrevocably submits to the jurisdiction of such courts.

(b)   Holdco irrevocably waives any objection which it might now or hereafter
      have to the courts referred to in paragraph (a) above being nominated as
      the forum to hear and determine any suit, action or proceeding, and to
      settle any disputes, which may arise out of or in connection with this
      Guarantee and agrees not to claim that any such court is not a convenient
      or appropriate forum.

(c)   The submission to the jurisdiction of the courts referred to in paragraph
      (a) above shall not (and shall not be construed so as to) limit the right
      of the Agent or the Banks to take proceedings in any other court of
      competent jurisdiction nor shall the taking of proceedings in any one or
      more jurisdictions preclude the taking of proceedings in any other
      jurisdiction, whether concurrently or not.

18.   GOVERNING LAW

      This Guarantee is governed by English law.

This Guarantee has been entered into as a deed on the date stated at the
beginning of this Guarantee.
<PAGE>

                                       30


                          SIGNATORIES TO THE GUARANTEE

Holdco

The common seal of                  )
[                           ]       )
was affixed to this deed in         )
the presence of:


------------------------------------
director


------------------------------------
director / secretary


Agent

THE ROYAL BANK OF SCOTLAND PLC

By:
<PAGE>

                                       31


                    SIGNATORIES TO THE SUPPLEMENTAL AGREEMENT

Company

SCOTTISH POWER PLC

By:   A.J.M. COATS


Agent

THE ROYAL BANK OF SCOTLAND PLC

By:   J.H.M. HARE