##### Table of Contents

**Exhibit 15.1**

**Cross-reference to Form 20-F**

 

**PART I**

 

 

 

 

Table of Contents
ScottishPower is an international energy company listed on both the London andNew York Stock Exchanges. 

 

Through its operating subsidiaries the company provides inexcess of 6.7 million electricity or gas services to homes and businesses across the UK and in the western US. 

 

This Annual Report & Accounts examines our performance in 2004/05 and assesses the issues and opportunities ahead. 

 

 

 

 

 

 

 

Contents 

 

 

**Report of the Directors**

12    Ø     Business Review 

37    Ø     Financial Review 

73    Ø     Risk Factors 

81    Ø     Board of Directors and Executive Team 

84    Ø     Corporate Governance 

95    Ø     Remuneration Report of the Directors 

106  Ø     Safe Harbor Statement 

 

**Accounts 2004/05**

107  Ø     Accounting Policies and Definitions 

112  Ø     Group Profit and Loss Account 

113  Ø     Statement of Total Recognised 

                Gains and Losses 

114  Ø     Group Cash Flow Statement 

115  Ø     Group Balance Sheet 
  
116  Ø     Notes to the Group Accounts 

167  Ø     Company Balance Sheet 

168  Ø     Notes to the Company Balance Sheet 

169  Ø     Principal Subsidiary Undertakings 

                and Other Investments 

170  Ø     Independent Auditors’ Report 

171  Ø     Five Year Summary 

172  Ø     Glossary of Financial Terms and US Equivalents 

 

**Investor Information**

192  Ø     Investor Information 

198  Ø     Financial Calendar 

199  Ø     Shareholder Services 

 

**Index**

 

**Glossary of Terms**

 

ScottishPower Annual Report & Accounts **2004/05    ********1**

Table of Contents
**Business Review**

 

 

1

2

3

4

5

6

7

8

9
  
Ø     Description of Business

Ø     PacifiCorp

Ø     Infrastructure Division

Ø     UK Division

Ø     PPM Energy

Ø     Group Employees

Ø     Group Environmental Policy

Ø     Community Impact

Ø     Description of the Company’s

        Property
 
10

   

11

12

13

   

14

15

16

17
  
Ø     Description of Legislative and

        Regulatory Background

Ø     US Business Regulation

Ø     Regulation of PacifiCorp

Ø     Regulation of the Electricity

        and Gas Industries in theUK

Ø     Environmental Regulation

Ø     Employment Regulation

Ø     Litigation

Ø     Summary of Key Operating Statistics

 
  
**1    Description ofBusiness**

Scottish Power plc (“ScottishPower”), a public limited company registered in Scotland, is an international energy company listed on boththe London and New York Stock Exchanges. Through its operating subsidiaries, the company provides in excess of 6.7 million electricity or gas services to homes and businesses across the UK and in the western US. It provides electricity generation,transmission, distribution and supply services in both countries. In addition, the company’s North American activities extend to coal mining and gas storage, including gas facilities in western Canada, Texas and New Mexico. In Great Britain,ScottishPower also stores and supplies gas. In the year to 31 March 2005, the sales revenues of the group were £6.8 billion ($12.9 billion).

ScottishPower was created upon privatisation in 1991 and then developed by both organic growth and strategic acquisitions in the British electricity, gas and telephony markets-and through its November 1999 merger with PacifiCorp in the US.Following the group’s redefinition as an energy business in 2001, it exited or disposed of non-strategic activities in the US and UK and demerged its UK telecommunications and internet business, Thus, to the company’sshareholders.

Since 2002, ScottishPower has focused on investing for growth and improving operational performance in its energy businesses.Following a strategic review of the scale and timing of capital investment requirements, opportunities for growth and improving operational performance and the likely profile of returns from the group’s businesses, ScottishPower has enteredinto a binding agreement for the sale of PacifiCorp to MidAmerican for $9.4 billion. Regulatory approvals of the sale are expected to be forthcoming within 12 to 18 months. Prior to sale, it is envisaged that PacifiCorp will be managedand
 
developed with no material changes to its current operating plans, management structures or boards.

 

**Strategic Context**

 

ScottishPower’s strategy is to focus its management and capital on the further development of the three continuing businesses, which the groupjudges to have attractive opportunities for continued growth through capital investment and improved operational performance. The regulated UK wires business provides a base for steady growth through consistent investment and proven skills inoperational and regulatory management. In the competitive businesses where the group’s management believes that it can deploy local market knowledge and employee skill advantages, it seeks to grow its market share and to enhance margins throughthe integration of generation, energy management and customer services, underpinned by strong operational performance. The aim is consistently to improve operational performance whilst investing to support the organic growth and development of thebusinesses. The group expects growth to arise from investment in new generation, networks and gas storage assets. ScottishPower will also seek to accelerate its organic growth through competitive market share gains and selective acquisitions ofsmaller operations that complement the group’s business. Shareholder value is expected to be created through an investment programme assessed on a risk-adjusted returns basis and aiming to retain an A category credit rating for the group’sprincipal operating subsidiaries. Individual investments in the continuing regulated business are expected to achieve at least the allowed rate of regulatory returns, whilst those in the competitive businesses are targeted to achieve returns of atleast 300 basis points above each division’s weighted average cost of capital.

 

******12**    ScottishPower Annual Report & Accounts**2004/05**

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