SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

____________FORM 20-F

|o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)

OF THE SECURITIES EXCHANGE ACT OF 1934

OR                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                     
|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2001                                                                                                     
|  |                                                                                                                                                                                                                                     
|  | OR                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                     
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ______________________SCOTTISH POWER plc(Exact name of Registrant as specified in its charter)
|  |                                                                                                                                                                                                                                     
|  | SCOTLAND(Jurisdiction of incorporation or organization)                                                                                                                                                                             
|  |                                                                                                                                                                                                                                     
|  | 1Atlantic Quay, Glasgow G2 8SP, Scotland
(Address of principal executive offices)                                                                                                                                                   
|  |                                                                                                                                                                                                                                     
|  | Securities registered or to be registered pursuant to Section 12(b) of the Act:                                                                                                                                                     

|Title of each class                                                             | Name of each exchangeon which registered
|------------------------------------------------------------------------------- | ----------------------------------------
|                                                                                |                                         
|Ordinary shares of 50p each ("Ordinary Shares")                                 | New York Stock Exchange*                
|                                                                                |                                         
|American Depositary Shares ("ADSs")

Each of which represents 4 Ordinary Shares | New York Stock Exchange                 
|_____                                                                           |                                         

|*Not for trading but only in connection with the registration of ADSs pursuant to the requirements of the Securities and Exchange
Commission.                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                
|________________

Securities registered or to be registered pursuant to Section 12(g) of the Act: None                                                          
|                                                                                                                                                                
|Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None                                                                 
|                                                                                                                                                                
|Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the
close of the period covered by the annual report.

|                                                                                                                                                                                                                                                                                                                                                         |                                                              |                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | -------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                         | Ordinary Shares of 50p each                                  | 1,849,025,792 shares (as of March 31, 2001)
|                                                                                                                                                                                                                                                                                                                                                         |                                                              |                                            
|                                                                                                                                                                                                                                                                                                                                                         | Special rights non-voting redeemable preference

share of £1 | 1share (as of March 31, 2001)              
|                                                                                                                                                                                                                                                                                                                                                         |                                                              |                                            
|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|                                                                                                                                                                                                                                                                                                                                                         |                                                              |                                            
|                                                                                                                                                                                                                                                                                                                                                         | Yes x                                                        | No o                                       
|                                                                                                                                                                                                                                                                                                                                                        
|Indicate by check mark which financial statement item the registrant has elected to follow.                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                         |                                                              |                                            
|                                                                                                                                                                                                                                                                                                                                                         | Item 17 o                                                    | Item 18 x                                  
|                                                                                                                                                                                                                                                                                                                                                        





PART I


|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1.  |  | Identity of Directors, Senior Management and Advisers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 2.  |  | Offer Statistics and Expected Timetable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 3.  |  | Key Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Exchange Rates
" on page 70, "
Five Year Summary
" on page 116 and "
Dividends
" on pages 119-120 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                                                                                                                                              
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 4.  |  | Information on the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Business Review
" on pages 4-40, "
Notes to the Group Profit and Loss Account
" on pages 74-77 and "
Agent for US Federal Securities Laws
" on page 125 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 5.  |  | Operating and Financial Review and Prospects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Group Research and Development
" on page 16 and "
Financial Review
" on pages 41-53 of the Company's 2000-01 Annual Report and Accounts contained in Exhibit 10.2 is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 6.  |  | Directors, Senior Management and Employees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Group Employees
" on pages 13-14, "
Board of Directors
" on pages 54-55, "
Corporate Governance
" on pages 56-57, "
Remuneration Report of the Directors
" on pages 58-65 and "
Employee Information
" on pages 74-75 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 7.  |  | Major Shareholders and Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Remuneration Report of the Directors
" on pages 62-65, "
Related Party Transactions
" on page 104, "
Nature of Trading Market
" on page 118, "
Substantial Shareholdings
" on page 119 and "
Control of Company
" on page 119 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                  
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 8.  |  | Financial Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Litigation
" on page 34, "
Accounting Developments
" on page 52, "
UK GAAP to US GAAP Reconciliation
" on pages 52-53, "
Accounts
" on pages 66-115 and "
Dividends
" on pages 119-120 of the Company's 2000-01 Annual Report and Accounts contained inits Report on Form 6-K dated June 21, 2001is
incorporated herein by reference.                                                                                                                                                                                                           
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 9.  |  | The Offer and Listing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the heading "
Nature of the Trading Market
" on page 118 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                      
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 10. |  | Additional Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information contained in Exhibit 10.1 and the information set forth under the headings "
Business Review
" on pages 4-34, "
Quantitative and Qualitative Disclosures About Market Risk
" on pages 50-52, "
Independent Auditors' Report
" on page 115, "
Dividends
" on pages 119-120, "
Exchange Controls and Other Limitations Affecting Security Holders
" on page 120, "
Taxation
" on page 120 and "
Financial Calendar
" on page 124 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 11. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The information set forth under the headings "
Treasury
" on pages 49-50 and "
Quantitative and Qualitative Disclosures About Market Risk
" on pages 50-52 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                                                                                                                                                                                                                    
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Item 12. |  | Description of the Securities Other than Equity Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                













PART II

|Item 13. |  | Defaults, Dividends Arrearages and Delinquencies                                                                                                                                                                                                                                    
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                                                                                                                                     
|         |  | Not applicable.                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                     
|Item 14. |  | Material Modifications to the Rights of Security Holders and Use of Proceeds                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                     
|         |  | The information contained in Exhibit 10.1 and the information set forth under the heading "
Investor Information
" on pages 118-123 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.
|         |  |                                                                                                                                                                                                                                                                                     
|Item 15. |  | (Reserved)                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                     
|         |  | Not applicable.                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                     
|Item 16. |  | (Reserved)                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                     
|         |  | Not applicable.                                                                                                                                                                                                                                                                     

PART IV

|Item 17. |  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |  | The Company has responded to Item 18 in lieu of this Item.                                                                                                                                                                                                                                                                                                                                                                                           
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Item 18. |  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |  | The information set forth under the headings "
Litigation
" on page 34, "
Accounting Developments
" on page 52, "
UK GAAP to US GAAP Reconciliation
" on pages 52-55 and "
Accounts
" on pages 66-115 of the Company's 2000-01 Annual Report and Accounts contained in its Report on Form 6-K dated June 21, 2001 is incorporated herein by reference.                                                                                               
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Item 19. |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |  | The Company's responses to the requirements of Form 20-F have been incorporated by reference to the information referred to above that is in the Company's Report on Form 6-K that contains its
2000-01 Annual Report and Accounts which was filed on July 5, 2000. Pursuant to Rule 12b-23(a) of the Commission, attached hereto as an exhibit is the information incorporated into this Report by reference to such Form 6-K Report of the
Company.

| |      |                                                                                                                                                                                                                                                                                                                                                                
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.1. | Amended Memorandum of Association of Scottish Power plc. previously filed as an Exhibit to Scottish Power plc's Annual Report and Accounts on Form 20-F on September 28, 2000                                                                                                                                                                                  
| | 1.2  | Articles of Association of Scottish Power plc.                                                                                                                                                                                                                                                                                                                 
| | 4.1  | Contract of Employment between Scottish Power plc and Ian Russell                                                                                                                                                                                                                                                                                              
| | 4.2  | Contract of Employment between Scottish Power plc and Charles Berry                                                                                                                                                                                                                                                                                            
| | 4.3  | Contract of Employment between Scottish Power plc and David Nish                                                                                                                                                                                                                                                                                               
| | 4.4  | Contract of Employment between Scottish Power plc and Alan Richardson                                                                                                                                                                                                                                                                                          
| | 4.5  | Contract of Employment between Scottish Power plc and Ken Vowles                                                                                                                                                                                                                                                                                               
| | 4.6  | £1 billion multi-currency revolving credit facility dated June 5, 2001 arranged by The Bank of Tokyo-Mitsubishi, Ltd., Commerzbank Aktiengesellschaft, London Branch J.P. Morgan plc and The
Royal Bank of Scotland plc                                                                                                                                        
| | 4.7  | Revised Scottish Power UK plc - Generation, Transmission and Public Electricity Supply License document dated September 2000, as amended and modified                                                                                                                                                                                                          
| | 4.8  | Amended and Restated Trust Deed dated December 1, 2000 related to the Scottish Power UK plc $4 billion debt issuance programme                                                                                                                                                                                                                                 
| | 4.9  | Instrument of Appointment (Operating License) dated September 5, 2000 by the Secretary of State for the Environment of Southern Water Services Limited as a water and sewerage undertaker under the
Water Act of 1989 including amendments previously filed as an Exhibit to Scottish Power plc's Annual Report and Accounts on Form 20-F on September 28, 2000
| | 8.1  | List of Subsidiaries                                                                                                                                                                                                                                                                                                                                           
| | 10.1 | Summary of Memorandum and Articles of Association                                                                                                                                                                                                                                                                                                              



Pursuant to the requirements of Section 12 of the Securities Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F
and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                         | Scottish Power plc,

Registrant
By:/s/ David Nish
      Director
|------------------------ | ----------------------------------------------------------------
|Dated September 28, 2001 |                                                                 



|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|EXHIBIT INDEX
|             
|Description   |                                                                                                                                                                                                                                                                                                                                                                 | 
|1.1           | Amended Memorandum of Association of Scottish Power plc. previously filed as an Exhibit to Scottish Power plc's Annual Report and Accounts on Form 20-F on September 28, 2000                                                                                                                                                                                   | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|1.2           | Articles of Association of Scottish Power plc.                                                                                                                                                                                                                                                                                                                  | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.1           | Contract of Employment between Scottish Power plc and Ian Russell                                                                                                                                                                                                                                                                                               | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.2           | Contract of Employment between Scottish Power plc and Charles Berry                                                                                                                                                                                                                                                                                             | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.3           | Contract of Employment between Scottish Power plc and David Nish                                                                                                                                                                                                                                                                                                | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.4           | Contract of Employment between Scottish Power plc and Alan Richardson                                                                                                                                                                                                                                                                                           | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.5           | Contract of Employment between Scottish Power plc and Ken Vowles                                                                                                                                                                                                                                                                                                | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.6           | £1 billion multi-currency revolving credit facility dated June 5, 2001 arranged by The Bank of Tokyo-Mitsubishi, Ltd., Commerzbank Aktiengesellschaft, London Branch J.P. Morgan plc and The
Royal Bank of Scotland plc                                                                                                                                         | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.7           | Revised Scottish Power UK plc - Generation, Transmission and Public Electricity Supply License document dated September 2000, as amended and modified                                                                                                                                                                                                           | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.8           | Amended and Restated Trust Deed dated December 1, 2000 related to the Scottish Power UK plc $4 billion debt issuance programme                                                                                                                                                                                                                                  | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|4.9           | Instrument of Appointment (Operating License) dated September 5, 2000 by the Secretary of State for the Environment of Southern Water Services Limited as a water and sewerage undertaker under
the Water Act of 1989 including amendments previously filed as an Exhibit to Scottish Power plc's Annual Report and Accounts on Form 20-F on September 28, 2000 | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|8.1           | List of Subsidiaries                                                                                                                                                                                                                                                                                                                                            | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|10.1          | Summary of Memorandum and Articles of Association                                                                                                                                                                                                                                                                                                               | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 
|              |                                                                                                                                                                                                                                                                                                                                                                 | 

| |                                               | logo
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 Cross Reference to Form 20-F (US) |     

| | Main Menu (UK)
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Report of the Directors
Financial Highlights
Business Review
Summary of Key Operating Statistics
Financial Review
Board of Directors
Corporate Governance
Remuneration Report of the Directors
Annual Accounts
Accounting Policies and Definitions
Group Profit and Loss Account
Notes to the Group Profit and Loss Account
Group Cash Flow Statement
Notes to the Group Cash Flow Statement
Group Balance Sheet
Notes to the Group Balance Sheet
Company Balance Sheet
Notes to the Company Balance Sheet
Principal Subsidiary Undertakings and Other Investments
Independent Auditors Report
Five Year Summary
Glossary of Financial Terms and US Equivalents
Investor Information
Historical Share Prices
Exchange Rates
DividendsTaxation of Dividends
Financial Calendar
Shareholder Services
Glossary of Terms
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Cross Reference to Form 20-F (US)
| | ---------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Item 1Identity of Directors, Senior Management and Advisersn/a
Item 2Offer Statistics and Expected Timetablen/a
Item 3Key InformationFive Year SummaryExchange RatesDividends
Item 4Information on the CompanyBusiness ReviewNotes to the Group Profit and Loss AccountAgent for US Federal Securities Laws
Item 5Operating and Financial Review and ProspectsGroup Research and DevelopmentFinancial Review
Item 6Directors, Senior Management and EmployeesGroup EmployeesBoard of DirectorsCorporate GovernanceRemuneration Report of the DirectorsEmployee Information
Item 7Major Shareholders and Related Party TransactionsRemuneration Report of the DirectorsRelated Party TransactionsNature of Trading MarketSubstantial ShareholdingsControl of Company
Item 8Financial InformationLitigationAccounting DevelopmentsUK GAAP to US GAAP ReconciliationAccountsDividends
Item 9The Offer and ListingNature of Trading Market | Item 10Additional InformationBusiness Review  Description of Business  Wholesale Sales and Purchased PowerBusiness Review  Description of Legislative and Regulatory Background  Regional Transmission Organisation ("RTO")Independent Auditors' ReportDividendsMemorandum and Articles of AssociationExchange Controls and Other Limitations Affecting Security HoldersTaxation of DividendsFinancial Calendar
Item 11Quantitative and Qualitative Disclosures about Market RiskTreasuryQuantitative and Qualitative Disclosures about Market Risk
Item 12Description of Securities Other than Equity Securitiesn/a
Item 13Defaults, Dividend Arrearages andDelinquencies n/a
Item 14Material Modifications to the Rights of Security Holders and Use of ProceedsInvestor Information
Item 15 (Reserved)n/a
Item 16 (Reserved)n/a
Item 17

Financial Statements n/a
Item 18Financial StatementsLitigationAccounting DevelopmentsUK GAAP to US GAAP ReconciliationAccounts
Item 19

Exhibits n/a
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| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Financial Highlights
| | --------------------
| |                     

| |                          |                                                                                                                                
| | ------------------------ | -------------------------------------------------------------------------------------------------------------------------------
| | Turnover £m              | Operating Profit* £m                                                                                                           
| |                          |                                                                                                                                
| |                         
| | Earnings per share*pence | Total shareholder returnpenceCapital appreciation plus dividend reinvestment for £1 invested on 1 April 1996 Source: Datastream
| |                          |                                                                                                                                
| |                         

| |  |                                                      | 2001   |   | 2000   |  
| |  | ---------------------------------------------------- | ------ | - | ------ | -
| |  |                                                      |       
| |  | Turnover                                             | £6,349 | m | £4,115 | m
| |  | Operating profit *                                   | £970   | m | £961   | m
| |  | Profit before tax *                                  | £628   | m | £736   | m
| |  | Earnings per share *                                 | 27.9   | p | 38.0   | p
| |  | Dividends per share                                  | 26.0   | p | 24.8   | p
| |  |                                                      |       
| |  | * before exceptional items and goodwill amortisation
| |  |                                                     

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| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
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| | Business Review
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| 
|Description of Business

Scottish Power plc ("ScottishPower") is a major, international energy group listed on both the New York and London Stock Exchanges. It had a turnover of £6.3 ($9.0) billion
in 200001 and, during the year, market capitalisation reached a high of £10.6 ($15.1) billion. ScottishPower and its subsidiaries serve approaching seven million homes and businesses in the northwest US and across the UK providing
electricity generation, transmission, distribution and supply services in both countries. The company's US activities extend to coal mining. In Great Britain, ScottishPower also supplies gas, provides water and wastewater, telephony and Internet
services and retails electrical, gas and home entertainment appliances.

Since its creation upon privatisation in 1991, ScottishPower has grown rapidly both by organic growth in the (now fully competitive) British electricity, gas and telephony markets
and through strategic acquisitions in the UK and the merger with PacifiCorp in the US. ScottishPower now holds substantial positions in both the US and UK energy markets having, during 2000-01, successfully disposed of non-strategic holdings in
Australia and the UK.

Strategic Context
ScottishPower is committed to delivering value for shareholders through reshaping and improving the performance of its existing businesses: cutting out duplication and withdrawing
from marginal activities, such as the sale of financial services and telecoms to UK households, in order to recycle capital and management effort into profitable, growing businesses. In both the US and the UK, the group intends to expand its
integrated, international energy business by focusing on the value chain connecting fuel, generation, commercial and trading, and energy supply. The aim is to capture opportunities for earnings growth by looking right along the whole of the energy
value chain. In addition, the group has proven expertise in acquiring, transforming and operating large energy businesses and intends to evaluate selective acquisitions that build upon the integrated energy value chain and enable the group to deploy its skills in transforming wires businesses.

To provide a sharper focus on further developing the business, the group has been restructured into three divisions. The US Division includes PacifiCorp's regulated and
unregulated energy businesses and will concentrate on the growth in US energy needs and the opportunities in the western US power markets. The UK Division consists of the UK generation assets, the commercial and trading activities and the energy
supply business, all of which have been integrated to capture opportunities for growth throughout the energy value chain. The Infrastructure Division, which includes Power Systems and Southern Water in the UK, will focus on improving business
performance, transforming new businesses and will also seek benefits between the US and UK infrastructure businesses. All three divisions have a clear focus on value creation and earnings growth.

US Division
On 29 November 1999, PacifiCorp and ScottishPower completed a merger under which PacifiCorp became an indirect subsidiary of ScottishPower. PacifiCorp continues to operate under its
established name, and its headquarters remain in Portland, Oregon, but as a result of the merger, its operations are now subject to the requirements and restrictions of the Public Utility Holding Company Act of 1935.

Also as a result of the merger, PacifiCorp developed and commenced its Transition Plan to implement significant organisational and operational changes arising from the strategic
decision to focus on its electricity businesses in the western US. PacifiCorp has terminated all business development activities outside the US and completed the sale of its indirect ownership of Powercor and its indirect interest in Hazelwood, both
in Australia. PacifiCorp's wholly owned subsidiary, PacifiCorp Group Holdings Company, owns the stock of subsidiaries conducting businesses not regulated as domestic electricity providers and continues to liquidate portions of the loan and leasing portfolio of PacifiCorp Financial Services, Inc. ("PFS"). PFS presently expects to retain only its tax-advantaged investments in leveraged lease assets and to limit its
pursuit of new tax-advantaged investment opportunities.

Principal Business Activities
PacifiCorp conducts its retail electricity supply operations as Pacific Power and Utah Power and engages in power production and sales on a wholesale basis under the name
PacifiCorp.

Power Production and Fuel Supply
PacifiCorp's generating facilities are interconnected through its own transmission lines or by contract through the lines of others. Substantially all generating facilities and
reservoirs located within the western states are managed on a co-ordinated basis to obtain maximum load carrying capability and efficiency.

During the third quarter of 2000-01 and continuing into the fourth quarter of 2000-01, the demand for electricity in the western US exceeded the available generation resources. As
a result, supply shortages occurred, particularly affecting electricity availability in California. None of PacifiCorp's service territory has experienced such severe supply shortages, however, resources and demand in the region are in a tightly
balanced condition. A substantial portion of the power provided to the Californian market from the Pacific Northwest has come from hydro-electricity generation facilities. Those resources are now reduced due to the low snow pack and precipitation,
resulting in low stream flow being experienced over the past six months. The outlook for improvement in the availability of electricity supply for the next year is poor. In part, this is due to the continuation of high demand, low hydro resource
availability in the water year ending September 2001, demands on hydro resources for irrigation and migrating fish protection and lead time needed to place new generation facilities into production. PacifiCorp is accelerating its efforts to bring
new generation on-line.

|PacifiCorp owns or has interests in generating plants with an aggregate nameplate rating of 8,280 megawatts ("MW") and plant net capability of 7,832 MW (see
Table 1
). With its present generating facilities, under average water conditions, PacifiCorp would expect that approximately 5% of its energy requirements for 2001-02 would be supplied by its hydro-electricity plants and 67% by its thermal plants. The
balance of 28% would be obtained under long-term purchase contracts, interchange and other purchase arrangements. The period of decreased rainfall in the Pacific Northwest may cause the hydro-electricity expectations not to be met, as the needs of
fish migration and irrigation could use water that otherwise would be used to produce electricity. During 2000-01, approximately 4% and 60% of PacifiCorp's energy requirements were supplied by its hydro-electricity and thermal generation plants,
respectively, and the remaining 36% by purchased power. The thermal generation percentage contribution was reduced by the sale of the Centralia plant in May 2000 and the Hunter unit outage. This outage occurred on 24 November 2000 and continued
until the generation unit began re-commissioning on 30 April 2001 in line with the estimated restoration timetable of four to six months.

As at 31 March 2001, PacifiCorp had 229 million tons of recoverable coal reserves that are mined by PacifiCorp or its affiliates and are dedicated to nearby PacifiCorp operated
generating plants (see
Table 2
). During 2000-01, these mines supplied approximately half of PacifiCorp's total coal requirements. Coal is also acquired through long-term and short-term contracts. PacifiCorp has also entered into long-term and short-term natural gas contracts to
supply its generating plants that use natural gas with the fuel needed for operations.

Wholesale Sales and Purchased Power
Wholesale sales of power contribute significantly to total revenues, even though PacifiCorp has scaled back wholesale sales from 1998 levels. PacifiCorp's wholesale sales complement
its retail business and enhance the efficient use of its generating capacity over the long-term. PacifiCorp's transmission system connects with power providers in the Pacific
Northwest having low-cost hydro-electric generation and with others in California and the southwestern US having higher-cost, fossil-fuel generation. Historically, during the winter, PacifiCorp was able to purchase power from plants in the
southwestern US, either for its own peak requirements or for resale to other regional energy retailers. During the summer, PacifiCorp was historically able to sell excess power to the southwestern US, to assist in meeting the region's peak
requirements. If PacifiCorp is in a surplus power position, it is able to sell excess generation into the wholesale market.

The supply of power has not kept pace with the growing demand in the western US, and PacifiCorp is experiencing the effect of high market prices associated with this shortage.
Prices paid by PacifiCorp to provide certain load balancing resources may continue to exceed the amounts it receives through retail rates and wholesale prices, although many of PacifiCorp's purchased power contracts have fixed price components,
which provide some protection against the current price volatility. In addition to its base of thermal and hydro-electricity generation assets, PacifiCorp uses a mix of long-term and short-term firm power purchases and non-firm purchases to meet its
load obligations and to make sales to other energy providers. Long-term firm power purchases supplied 13% of PacifiCorp's total energy requirements in 2000-01. Short-term firm and non-firm power purchases supplied 23% of PacifiCorp's total energy
requirements in 2000-01.

PacifiCorp currently purchases, annually, 925 MW of firm capacity from the federal Bonneville Power Administration ("BPA") pursuant to a long-term agreement. The purchase amount
declines to 750 MW annually in July 2003 and again to 575 MW in July 2004 until August 2011. PacifiCorp's annual payment under this agreement for the period ended 31 March 2001 was $65 million. The price for this capacity is a per MW charge,
therefore, the costs associated with this agreement will decline as the MW purchase declines. The price is adjusted by the rate of change in the BPA's Average System Cost.
The next scheduled price change will be on 1 October 2001, when a slight decline in price is expected. Under the requirements of the Public Utility Regulatory Policies Act of 1978, PacifiCorp purchases the output of qualifying facilities constructed
and operated by entities that are not public utilities. During 2000-01, PacifiCorp purchased an average of 109 MW from qualifying facilities, compared to an average of 112 MW in 1999-00.

The Energy Policy Act, passed in 1992, opened wholesale competition to energy brokers, independent power producers and power marketers. In 1996, the Federal Energy Regulatory
Commission ("FERC") ordered all investor-owned power companies to allow other power wholesalers access to their transmission systems at the same price and terms the companies would apply to their own wholesale customers. Competition is also
influenced by availability and price of alternate energy sources and the general demand for electrical power. PacifiCorp has formulated strategies to meet these challenges and is marketing power supply services to other power providers in the
western US, including dispatch assistance, daily system load monitoring, backup power, power storage and power marketing.

Retail Electricity Sales
PacifiCorp serves approximately 1.5 million retail customers in service territories aggregating about 135,800 square miles in portions of six western states: Utah, Oregon, Wyoming,
Washington, Idaho and California. On 1 December 2000, PacifiCorp filed requests with the utility commissions in Utah, Oregon, Wyoming, Washington and Idaho to change the way PacifiCorp is regulated. A similar filing is planned for California. The
proposed plan would change PacifiCorp's legal and regulatory structure and result in the creation of six state electricity distribution companies, a generation company and a service company, all subsidiaries of a new holding company. The proposal is
designed to allow each state to pursue the regulatory policies it deems appropriate, without affecting customers in other states or treating shareholders unfairly. Approval for these proposals must be obtained from the utility commissions in Utah,
Oregon, Wyoming, Washington, Idaho and California, as well as from FERC and the Securities and Exchange Commission ("SEC"). This process is expected to take more than a year.
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|The PacifiCorp service area's diverse regional economies range from rural, agricultural and mining areas to urban manufacturing and government service centres. No one segment of
the economy dominates, which mitigates exposure to economic swings. In the eastern portion of the service area, Wyoming and eastern Utah, the main industrial activities are mining and extracting coal, oil, natural gas, uranium, and oil shale. In the
western part of the service territory, mainly consisting of Oregon and southeastern Washington, the economy generally revolves around agriculture and manufacturing, with pulp and paper, lumber and wood products, food processing, high technology and
primary metals being the largest industrial sectors. The geographical distribution of PacifiCorp's retail electricity operating revenues for the year ended 31 March 2001 was Utah, 38%; Oregon, 33%; Wyoming, 13%; Washington, 8%; Idaho, 6%; and
California, 2%. (PacifiCorp is currently seeking to exit operations in California. See "
Proposed Asset Additions and Dispositions
").

As a result of the geographically diversified area of operations, PacifiCorp's service territory has historically had complementary seasonal load patterns. In the western sector,
customer demand peaks in the winter months due to space heating requirements. In the eastern sector, customer demand peaks in the summer when irrigation and cooling systems are heavily used. Many factors affect per customer consumption of
electricity. For residential customers, within a given year, weather conditions are the dominant cause of usage variations from normal seasonal patterns. However, the price
of electricity is also considered a significant factor. In response to recent region-wide electricity supply shortages, PacifiCorp is actively promoting electricity conservation programmes, which may cause usage variations. During 2000-01, no single
retail customer accounted for more than 2% of PacifiCorp's retail electricity revenues and the 20 largest retail customers accounted for 15% of total retail electricity revenues. Trends in energy sales by class of customer are set out in
Table 3
,
Table 4
and
Table 5
 .

PacifiCorp continues to experience economic growth in several portions of its service territory, and retail energy sales for PacifiCorp have grown at a compound annual rate of
2.1% since 1995. This increase in demand is happening throughout the Western System Coordinating Council ("WSCC") area, due in large part to economic growth. This increase in demand may not continue depending upon several factors, including the
impact of demand side management programmes and higher prices. PacifiCorp plans for resources to meet its current and expected retail and wholesale load obligations: resource availability, price volatility and load volatility may materially impact
power costs. PacifiCorp is pursuing price increases in jurisdictions where it does not earn an appropriate rate of return and will seek operating efficiencies as outlined in the Transition Plan.

For the periods 2002 to 2005, the average annual growth in retail megawatt hour ("MWh") sales in PacifiCorp's franchise service territories is estimated to be about 1.7%,
excluding the potential effects of decreased demand resulting from conservation efforts and higher prices. Because of price increases throughout the region, PacifiCorp anticipates that demand growth will slow or may even reverse. During this period,
PacifiCorp may lose retail energy sales to other suppliers in connection with deregulation of the electricity industry. As the electricity industry evolves towards deregulation, PacifiCorp expects to have opportunities to sell any excess power in wholesale markets. PacifiCorp's actual results will be determined by a variety of factors, including the outcome of deregulation in the electricity industry, economic and
demographic growth and competition.

In many cases, customers have the option to switch energy sources for heating and air conditioning. In addition, some of PacifiCorp's industrial customers are seeking choice of
suppliers, options to build their own generation or co-generation, or the use of alternative energy sources such as natural gas. During 2000-01, PacifiCorp continued to operate its electricity distribution and retail sales business as a regulated
monopoly throughout most of its franchise service territories. However, PacifiCorp anticipates increasing competition, principally as a result of industry restructuring, deregulation and increased marketing by alternative energy suppliers. When a
competitive marketplace exists, customers will make their energy purchasing decision based upon many factors, including price, service and system reliability. PacifiCorp supports increased customer choice under terms and conditions that are
equitable to all stakeholders.

With effect from 1 January 1998, the California Public Utilities Commission ("CPUC") adopted rules regulating the non-tariffed sale of energy and energy products and services by
power companies and their affiliates. The rules also mandated a 10% rate reduction in tariffed electricity prices in California, which resulted in a $3.5 million annual reduction in PacifiCorp's revenues. PacifiCorp has decided to refrain from
marketing non-tariffed energy products and services to retail customers in California but intends to continue limited purchases and sales in the wholesale business, selling to utilities in California and marketers elsewhere in the western
US.

Deregulation in Oregon has been moving forward, but caution is being taken to avoid the problems that have been encountered in California. It is expected that regulators will act prudently to protect the state's energy supplies from the potential hazards of deregulation. Four other states, Utah, Wyoming, Washington and Idaho, have been slow
in deregulating their electricity markets. See "
US Business Regulation
".
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|Proposed Asset Additions and Dispositions
In July 1998, PacifiCorp announced its intention to sell its California electricity distribution assets. This action was in response to the continued decline in earnings on the
assets and the changes in the legislative and regulatory environments in California. PacifiCorp had an agreement with Nor-Cal Electric Authority ("Nor-Cal") for the sale of its California electricity assets for $178 million. On 21 December 2000, the
CPUC approved an Administrative Law Judge's decision to dismiss the application for approval of the sale. PacifiCorp is currently in discussion with Nor-Cal to evaluate its options with respect to this sale.

On 12 April 2000, PacifiCorp announced the closure of the Trail Mountain Mine in the autumn of 2001 after the lease is mined out. The mine is located in Central Utah and supplied
fuel to the Hunter Plant. The fuel for the Hunter Plant will be provided by PacifiCorp's Deer Creek Mine and other Utah mines. PacifiCorp filed applications with the Utah, Oregon, Wyoming and Idaho utility commissions to defer $27 million in
unrecovered costs associated with the mine and, in April 2001, the Wyoming and Idaho commissions approved deferred accounting treatment.

PFS has four plants in the Birmingham, Alabama area that produce a synthetic coal fuel using technology licensed from Covol Technologies, Inc., which is designed to qualify for
tax credits under Section 29 of the Internal Revenue Code. PacifiCorp does not currently have sufficient income tax liability to make use of all of these tax credits and is actively seeking a buyer for its synthetic coal producing plants.
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 Cross Reference to Form 20-F (US)
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| | Business Review
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|UK Division

Principal Business Activities
The group's UK Division operates ScottishPower's generating stations, deals in the wholesale trading of electricity and gas and is responsible for the sales and marketing of
electricity, gas and related services to customers throughout Great Britain and for billing, receipting and handling enquiries in respect of these services. The business objective is to create competitive advantage for ScottishPower by optimising
the energy value chain.

Generation Portfolio

ScottishPower's owned generation capacity comprises coal, gas, hydro and wind power and has available 4,500 MW, see
Table 7
, after taking into account the impact of contractual obligations to supply Scottish & Southern with a proportion of its coal-fired capacity. Generation capacity in England & Wales is now approximately 1,000 MW following the purchase of the
Rye House combined-cycle gas turbine ("CCGT") station from Powergen and the start of commercial operation of the newly constructed 400 MW CCGT station near Brighton in which ScottishPower has a 50% economic and voting interest (with the balance
being held by American Electric Power, the US parent company of SEEBOARD). Acquisition of additional thermal generation capacity is kept under continuing review, the Rye House purchase being an example of the pursuit of viable commercial
opportunities.

ScottishPower's windfarm business continues to expand with two new windfarms being commissioned during 2000-01: Dun Law (17 MW) in the Scottish Borders and Hare Hill (13 MW) in
East Ayrshire. Hare Hill operates without a Scottish Renewables Obligation contract and, as such, is the first fully commercial windfarm in the UK. The group now has interests in ten windfarms in the UK and Ireland with a total owned capacity of 98
MW, producing sufficient power for some 100,000 typical homes. Infrastructure works are largely completed and turbine erection is due to commence in August 2001 at Beinn an
Tuirc windfarm in Kintyre, a high wind speed site with 30 MW peak output, which will be the most productive windfarm in the UK when it becomes fully operational, planned for December 2001. A number of other windfarms are under development to ensure
that the company target of 10% generation from renewables by 2010 is met. Dialogue with key stakeholders including local authorities, Scottish Natural Heritage, The Royal Society for the Protection of Birds and local communities is well
advanced.

In addition to its own capacity, ScottishPower has access to nuclear energy, from British Energy, and gas-fired, oil-fired and hydro-electricity from Scottish & Southern under
contracts established in connection with the restructuring of the UK electricity industry in 1990 and 1991. Additional information concerning the group's generating capacity available under contract is shown in
Table 8
 . These resources combine to give ScottishPower a flexible fuel portfolio and result in total available capacity of some 7,300 MW.

Station Performance
The Generation business aims to achieve best practice in terms of generation performance and costs, while at the same time maintaining the flexibility to optimise energy trading, and
has undertaken extensive benchmarking of all its activities against an international peer group. Investment programmes to implement the findings continue in Longannet and Cockenzie power stations, consolidating business efficiency improvements
through the use of key performance indicators and further benchmarking. However, it is the intention of the business to drive costs down further through continued reductions in fixed costs, plus improved engineering and operational efficiencies and
enhanced environmental performance. The group has a detailed engineering strategy to upgrade its existing coal stations. Management believes that, as a result of its ongoing maintenance programme, ScottishPower's portfolio of UK power stations is in a condition to support current and expected generation output.



|Fuel Strategy and Sourcing
ScottishPower's fuel purchasing strategy is based upon the objective of achieving competitive fuel prices while balancing the need for security and flexibility of supply. The major
components of the fuel portfolio are coal, gas and oil.

Coal ScottishPower currently purchases the majority of its coal from Scottish suppliers under two
long-term contracts (with remaining terms of two and three years), with the principal supplier being The Scottish Coal (Deep Mine) Company Limited. These purchase commitments secure the major part of ScottishPower's coal requirements from local
sources. In 2000-01, ScottishPower coal consumption was some 36% up on the previous year. This equated to an increase of some 1.62 million tonnes in marginal coal requirements which was purchased from a mixture of indigenous and imported coal
suppliers.

Gas ScottishPower purchases gas to meet the needs of the group's generation and supply businesses
using a combination of long, medium and short-term contracts with gas producers for the supply of gas on a non-interruptible basis. The group has three long-term contracts (with remaining terms of 7, 13 and 16 years) for supply from major gas
fields. For the latter two, these contracts can terminate earlier if the reserves of the fields have been fully depleted. In addition, ScottishPower is party to agreements which require Scottish & Southern to purchase and accept delivery of gas
at Peterhead power station from the Miller gas field. This agreement also continues in force until the reserves of the field have been fully depleted.

The development of Hatfield Moors as a gas storage site was completed during the winter of 1999-00 with use of it from the latter part of that winter. During the 2000-01 winter,
the storage facility was extensively used to meet the peak demands of some 450,000 customers, as well as fully exploiting the sales opportunities both when market prices rose
to the highest sustained levels experienced since the market opened to competition in 1996 and arising from the volatility of gas prices between mid-week and weekends. In light of the experience gained, a feasibility study is underway aimed at
substantially upgrading the daily delivery rates and incorporating an additional reservoir to increase capacity. In addition, ScottishPower has entered into a development agreement with Ineos Chlor which, subject to receipt of Planning Approval,
will result in the development of a salt cavern gas storage facility at Byley in Cheshire. Planning approval is anticipated during the second half of this year which would permit partial operation for the 2004-05 winter.

Oil From time-to-time, ScottishPower purchases heavy fuel oil on the international spot market
when favourable prices are available. Heavy fuel oil is therefore an opportunity purchase rather than a firm fuel source.

Sewage Sludge Operating under the Private Finance Initiative, but managed through the Generation
Business, ScottishPower subsidiary SMW Limited is building a facility at Daldowie sewage treatment plant which will produce pelletised sludge for use, under a back-to-back contract with ScottishPower, at Longannet. Reception, storage and co-burning
facilities are under construction at Longannet which will allow the pellets to be blended with the coal used at the station in either of two modified boilers. The facilities could handle up to 100,000 tonnes of pellets per year and are expected to
commission in late 2001.

Generation Sales
Generation sales totalled 28,959 gigawatt hours ("GWh") in 2000-01, comfortably the highest ever generation flow in total from ScottishPower owned plant, as the group's low-cost
coal-fired capacity substituted for nuclear plant shortfall. Approximately 18,830 GWh were attributable to ScottishPower's energy business, with the remaining 10,129 GWh
either being sold to other suppliers or exported via the interconnector to England & Wales.

The average utilisation of ScottishPower's two largest coal-fired stations, Longannet and Cockenzie, in 2000-01 was approximately 62% and 43%, respectively, boosted by the
stations' ability to take advantage of market conditions. Strong representations are being made to the Office of Gas and Electricity Markets ("Ofgem") to protect ScottishPower's access to the growing interconnector capacity both in the interim
arrangements for interconnector access and in the formal outcome of the current review of British Electricity Trading and Transmission Arrangements ("BETTA") which is expected to become effective during 2002-03.

Electricity Trading
Electricity trading, within the Energy Trading Centre, secures competitive advantage for the group through trading and optimising its position across the electricity value chain,
continuously evaluating and managing risk exposure. Since privatisation in 1990, the major electricity trading risk was price volatility arising in the wholesale Pool market in England & Wales through the group's exposure as a generator (seller)
and as a supplier (purchaser) of electricity, for which prices vary over time. Such exposure was managed through trading in contracts for differences with willing parties such as other generators, suppliers or intermediaries. From 27 March 2001, New
Electricity Trading Arrangements ("NETA") were introduced in England & Wales moving from the compulsory Pool trading system to a bilateral market in which a more proactive approach to trading is now developing. New transitional trading
arrangements are also in place to enable generators and suppliers operating in Scotland to trade with their counterparts in England & Wales and increase competition on a cross-border basis. This materially reduces the differences between the two
markets, leading to a more liquid market throughout Great Britain.

As with the introduction of competition to the domestic electricity market in 1998, ScottishPower was at the forefront of system developments for NETA, being one of the first NETA
participants to complete successful qualification testing in January 2001 and participating fully in the new market from its go-live date of 27 March 2001. Implementation of a number of systems took place in advance of the NETA go-live date, for
example, the short- term demand forecasting system was deployed operationally well in advance of NETA. The electricity trading platform delivered is sufficiently flexible to allow for full integration of the gas and electricity trading systems,
should this be required in the future.
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|NETA represents a radical change to the way in which electricity is traded and introduces penal imbalance charges, designed to promote highly efficient forecasting, trading and
risk management on the part of all participants.

The Interconnector in England & Wales
ScottishPower has the ability to sell, or purchase, electricity in England & Wales via the interconnector which is shared by Scottish & Southern and British Nuclear Fuels
Limited ("BNFL") under formal agreement. The current maximum capacity of the interconnector is 1,950 MW with an average capability in 2000-01 of 1,367 MW. An agreement has been made with the National Grid Company and Scottish & Southern to
upgrade the maximum capacity of the interconnector to 2,200 MW. Planning approval has been granted by HM Government and completion of work on the upgrade of the Scotland-England transmission link to 2,200 MW is currently scheduled for Autumn 2002.
ScottishPower's generation business will provide 75% of the capital cost of the upgrade and Scottish & Southern the other 25%. Pursuant to an agreement with Scottish & Southern, ScottishPower has the contractual right to 54% of the
pre-upgrade capacity and up to 75% of the additional upgrade capacity of the interconnector.

ScottishPower's Licence only entitles it to reserve capacity to itself with the consent of Ofgem and obliges it to offer to enter into an agreement with any third party applicant
for use of the interconnector. Following a determination and proposed determination by the Director General of Electricity Supply ("DGES") in December 1998 and April 2000 respectively, ScottishPower has made 196 MW from its share of the
interconnector capacity available to BNFL, for the period from 1 January 1999 to 31 March 2002 and has made a robust response to an Ofgem proposal not to approve a reservation of any additional interconnector capacity for ScottishPower's own
generation business. However, Ofgem is reviewing the arrangements for access to the interconnector as part of BETTA, the wider review of the transmission and wholesale trading arrangements in Britain as a whole, which will also ensure compliance and
consistency with the EU Directive on electricity market liberalisation. ScottishPower broadly supports such reform, so long as it forms part of a package which addresses all aspects of the present Scottish wholesale market, and the company is
actively engaged in the review.

Trading with Northern Ireland Electricity
ScottishPower has entered into an agreement with Northern Ireland Electricity ("NIE"), a subsidiary of Viridian Group plc, for the construction of a Scotland-Northern Ireland
interconnector with a transfer capability of 250 MW; and an agreement for the supply by ScottishPower of around 1,095 GWh of electricity per year over a period of 70 months from the date of commissioning. These agreements amend and restate
agreements originally entered into in 1994. Once completed, the Northern Ireland and marine sections of the Scotland-Northern Ireland interconnector will be owned by NIE, and the section from the Scottish converter station will be owned by
ScottishPower. NIE will provide the full capital cost of this interconnector. It is anticipated that the Scotland-Northern Ireland interconnector will commence commercial operation in winter 2001-02.

Energy Supply
Since September 1998, when competition was extended to residential electricity customers, the strategic focus of the ScottishPower energy supply business has been defence of its
existing markets, particularly residential and small business customers in the ScottishPower and Manweb home areas, whilst seeking profitable additional business outside these historical regional boundaries. Retention of home area (formerly
franchise area) residential customers remains at 75%. Significant progress has been made in establishing the systems, organisation and skills to achieve the necessary scale and margin performance in energy supply through incremental sales, strategic
marketing alliances, such as those with J Sainsbury and Union Energy, and by bulk purchases where shareholder value is present, for example, in the acquisition of some 70,000 customers of the Gas Supply Company. Customer Sales & Services
("CS&S") remains strongly committed to developing the energy customer business with a focus on profitability, scale and customer service quality.

At 31 March 2001, ScottishPower held 3.5 million energy accounts, 800,000 being supplied with gas of which some 560,000 customers are supplied with both gas and electricity.
CS&S is investing to provide ScottishPower with a strong platform from which to capitalise on a larger customer base. The priorities are accelerating the reduction of servicing costs to benchmark levels and enabling automated referral of
customers to sales and retention channels suited to an increasingly competitive market.

Many British businesses are exploring the potential of multi-product bundles but, although CS&S has established that it has the skills to evaluate, develop and launch such
offers, the group does not believe that shareholder value can be built on a sufficient scale to justify competing in the present stages of development of this broader market for home services. Both the Internet-based joint venture with The Royal
Bank of Scotland and a trial offering of residential telephony have been discontinued by mutual agreement with the business partners involved.
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|Since the launch of the ScottishPower on-line energy enquiry site, CS&S has steadily developed its e-business capability, retaining a strictly practical focus on gas and
electricity sales. The e-business capability is growing significantly as a channel to market and, in mid-2001, the site will be upgraded to allow customers to manage their own accounts on-line if they wish. Customers will then be able to enter meter
readings, view previous bills, create and pay new ones and switch to new Internet tariffs through which they can share in the savings generated by the low costs of managing accounts on-line.

Customer Service
The business' customer service Guaranteed Standards were maintained in the year ended 31 March 2001 at the high level set in the previous year, with over 99.99% of all electricity
services provided currently matching or exceeding regulatory standards. Complaints regarding traditional home area electricity service in 2000-01 remained at the very low level of 955, representing only 4.1 complaints per 10,000 customers. Even in
the more vigorously competitive gas and out of area electricity markets, with their unfamiliar new processes, complaint levels in the year to 31 March 2001 fell by 29% compared with the previous 12 months, contributing materially to an overall
reduction in regulatory complaints of 19%.

Metering and Data ManagementAccurate and timely customer registration, metering and settlement are crucial to delivering high-quality customer service and, recognising the importance of the extension
of competition to metering, the ScottishPower Metering operation was established as a standalone business on 1 April 2000. Meter reading and operation is characterised by a large regional field force, working from home, which carries out over 12
million customer visits a year and fulfils most of ScottishPower's data management activities, from meter installation to data collection for gas, electricity and water customers.

In the competitive energy market, meter reading and operation form parts of an integrated data management process also covering customer registration, billing record set-up and
agent registration. From 15 November 2000, ScottishPower has operated end-to-end process management for the provision and control of registration and billing data, in order to maximise efficiencies through streamlining the operation of these
processes. The significant improvements in data quality are already leading to real improvements in customer service and operational cost savings are positioning the newly integrated data management business to retain market share, whilst exploiting
opportunities to grow its data management activities across the UK.
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Business Review
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|Infrastructure Division

Principal Business Activities  Power SystemsScottishPower owns and manages a substantial electricity network, comprising both the distribution system to customers in its two authorised areas and, in Scotland, its
high voltage transmission system (132 kV and above). The latter includes all the assets of the England-Scotland interconnector which are in its Scottish authorised area. The main functions of the Power Systems business are to develop and maintain
efficient, co-ordinated and economical networks, to facilitate competition in generation and supply and to adhere to approved standards of safety and reliability.

Within Power Systems, the focus continues to be on reducing costs and improving service. Its principal business activities involve the provision of new connections, construction
and refurbishment of the system, maintenance and fault repair, setting tariffs and collecting revenues for the use of its authorised networks. Power Systems continues to focus strongly on the efficient delivery of electricity to customers in its
service areas via its overhead and underground network. Investment in the business has included significant upgrade and refurbishment of the transmission and distribution
systems. Power Systems has a distribution/transmission network which extends to 115,103 km, with 65,230 km of underground cables and some 49,873 km of overhead lines.
Table 9
shows key information with respect to the group's UK transmission and distribution services in 2000-01.

Electricity Distribution
ScottishPower and Manweb each hold a Public Electricity Distributor ("PED") licence, allowing each company to undertake electricity distribution activities within its authorised
area. The income derived from the distribution business is dependent on changes in the demand for electricity by customers in the home area. Demand for electricity is affected by such factors as growth and movements in population, social trends,
economic and business growth or decline, changes in the mix of energy sources used by customers, weather conditions and energy efficiency measures.
Table 10
and
Table 11
set out the changes in GWh by customer type within the broadly stable levels of electricity distributed over ScottishPower and Manweb's distribution systems during the five most recent financial years.

The group is committed to providing its customers with an electricity supply which is safe and reliable. Both ScottishPower and Manweb operate networks to provide supplies within
the guidelines for reliable electricity supplies set forth in the European Standard EN50160 entitled "Voltage Characteristics          of Electricity Supplied by Public Distribution Systems". On 1 April 2000 the first phase of the new Asset
Manager/Service Provider model organisation came into effect. Designed to focus on the key business processes, separating strategy and policy from their delivery, the new model enhances the focus of the business. The "Asset Manager" takes
responsibility for extracting maximum value from the regulatory contract, whilst commercial pressures ensure that the "Service Providers" deliver the required service at market rates.

RuralCareThe focus of this two-year project has been to protect strategic overhead powerlines from the risk of falling trees.

|Over 4,000 km, 8% of the total overhead network, has been cleared entailing the removal of approximately 300,000 trees, of which 85% were commercial softwoods. To compensate for
the loss of trees, landowners were offered the replanting of two trees for every tree removed. In addition, the £1million RuralCare Grant Scheme was launched in October 2000 to encourage and support the creation of new native woodlands and the
enhanced management of existing native and other woods for maximum public benefit. During blizzard weather conditions as experienced during the major storm on 26 February 2001, it is not unusual to lose power to thousands of customers due to fallen
trees. The absence of tree-fall incidents in this emergency demonstrates that the RuralCare Project prevented a considerable number of customer interruptions and reduced the time to restore power supplies on this occasion alone.

Planning for Emergencies
Heavy snowfalls driven by a northerly wind struck the south of Scotland on the evening of 26 February 2001. This led to heavy ice accretion on the overhead line conductors which, in
combination with the strong winds, caused conductors and poles (and in a few cases steel lattice towers) to fail. The transmission system experienced around 140 automatic re-close operations due to transient faults and five damage incidents. Across
the distribution system some 1,100 faults were experienced of which almost 450 were major incidents. These failures were most pronounced in the Borders area where, at certain locations, groups of up to 30 poles on the same circuit required
replacement. Emergency plans and procedures worked well and ensured a structured response to the emergency. Over 1,300 repair and generator installation staff from ScottishPower, other PEDs and contractors were mobilised following the declaration of
the emergency. At the peak, on 27 February 2001, over 102,000 customers were without supply. The call handling systems and associated telecommunication equipment operated effectively for the duration of the storm.

Competition in ConnectionsOfgem has released its proposals for increasing the competitive provision of connections to distribution networks, mainly through compliance measures designed to ensure
that PEDs treat their own New Connections businesses in the same way that they would an external connections contractor. The ScottishPower New Connections business has been set up in anticipation of this regulatory development to ensure that it is
in the best position to take advantage of the opportunities presented. Streamlined New Connections processes have been implemented covering design, estimation, payment, work scheduling and the issuing of confirmation letters  and significantly
reducing the process time for design and estimation for multiple service projects.

Principal Business Activities  Southern Water
The region in which Southern Water operates occupies an area of approximately 10,450 km2
in the counties of Kent, East and West Sussex, Hampshire and the Isle of Wight, and small parts of Wiltshire, Berkshire and Surrey. The region's coastline stretches 1,250 km from Swanscombe on the Thames Estuary to just beyond the Solent at Barton
on Sea, including the Isle of Wight. The region has an estimated population of approximately 4.4 million. The portion of the region to which Southern Water supplies water covers a total area of some 4,450 km2
, contains approximately 1 million premises and has a resident population of some 2.2 million. Local water companies supply the rest of the region's water requirements. Southern Water provides wastewater services to virtually all of the region,
collecting wastewater from almost 1.8 million premises. In addition to the residential population, the businesses in Southern Water's region discharge industrial effluent having the equivalent strength of an additional population of about 465,000.
Table 12
sets out key information with respect to Southern Water's activities in 2000-01.

Water Supply BusinessSouthern Water supplies, on average, 585 million litres of water per day, which is distributed through 13,302 km of water main. Southern Water's 104 water treatment works
treat water from 132 water sources in the region with 70% of water supplied coming from underground sources. Water is pumped through the water mains by 541 pumping stations. Southern Water is also responsible for the operation and maintenance of
four impounding reservoirs which have a total storage capacity of 42,390 million litres. The volume of water put into supply exhibits a pronounced seasonal variation between summer and winter. Typically, the peak seven-day demand in the summer is up
to 40% higher than the annual average, and stems from increased residential usage and the influx of tourists to resort towns along the south coast and on the Isle of Wight.

The bulk of Southern Water's underground sources are located in chalk, with a small number of abstractions being made from sandstone aquifers. The water is of high quality and
receives various forms of treatment appropriate to each source. These provide reductions in the level of pesticides, iron and manganese; the reduction of plumbosolvency; and in all cases protection against bacteria and other micro-organisms
throughout the distribution system to the point of use at the customers' taps by a residual level of chlorine. A single source has treatment to reduce the amount of nitrates, which is elsewhere kept within acceptable limits by blending output from
various sources where necessary. The smaller proportion of water from rivers and reservoirs has a more complex form of treatment. In addition to the processes used for underground supplies, clarification and filtration processes provide a similar
high quality drinking water. Again, in all cases disinfection is maintained by a residual level of chlorine.

A leakage control initiative was introduced following privatisation in 1989 which has reduced water loss by 147 million litres per day. Since privatisation, Southern Water has had
one of the best records with respect to water supply leakage among the Water and Sewerage Companies ("WaSCs"). Losses through leaks in its distribution system stood at 11.0% in 1999-00, compared to 26.0% just before the time of privatisation, with a
target to achieve 10.9% by 2000-01. Southern Water monitors water quality through a programme in which samples are analysed regularly for both microbiological and chemical parameters. In 2000, 99.89% of water sampled passed the EU performance
criteria.
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|Wastewater Business
Southern Water has 390 wastewater treatment works ("WTWs"), which treat wastewater pumped through 20,812 km of sewer by 1,975 pumping stations. WTWs provide various treatment types:
primary, enhanced primary, secondary biological and tertiary. Under the Water Resources Act 1991, WTWs are granted consent by the Environment Agency ("EA") to discharge wastewater effluent to controlled waters. The conditions attached to each
consent can cover quality, quantity and operational parameters as laid down in the "Standard Clauses" of the Discharge Consents Manual issued by the EA. The basis of the EA's policy is to maintain and improve water quality and the aquatic
environment.
The disposal of sludge produced by WTWs is strictly controlled. Disposal to landfill is becoming restricted due to the lack of available local sites and all sludge disposed in
this way is subject to a Landfill Tax. Disposal at sea ceased by December 1998. It is intended that the majority of the sludge produced at Southern Water's WTWs will be further processed to produce a soil conditioner which can be recycled and sold
to the agricultural industry. The recycling of treated sludge to agricultural land is controlled by an EU directive. The sludge produced by Southern Water's WTWs amounts to 82,200 tonnes of dry solids per year.
As part of the treatment process to meet current bathing water standards, Southern Water has 20 marine treatment works and 30 long sea outfalls around the coastline of its region.
In the 2000 bathing season, under the EU Bathing Water Directive, the EA tested 79 beaches in the Southern Water region. Under the directive, the EA takes at least 20 samples
during the bathing water season (1 May to 30 September) at each identified bathing beach and compliance is assessed on the basis of tests for bacteria. In addition, tests are carried out for 19 other parameters. At least two samples are analysed for
enteroviruses at those bathing waters that failed the mandatory coliform standards during 1999 (i.e. the previous year) or that failed coliform standards in 2000. Results may be published and posted by district councils on the beaches concerned. In
the 2000 bathing season, only two beaches out of 79 failed the compliance tests. Capital schemes are in progress to reduce the likelihood of failures in future.
Investment Programme
In common with other WaSCs, Southern Water is managing a substantial investment programme for the period 2000 to 2005, estimated to be some £1.1 billion. This programme is
largely driven by the EU Bathing Water Directive, the Urban Waste Water Treatment Directive ("UWWTD"), the increase in the volume of sludge due to implementation of the UWWTD, and the expectation of more stringent environmental constraints relating
to sludge disposal on land.
The programme is dominated by completing the construction of 13 coastal WTWs as required by the EU Directives. There is also a substantial programme of improvements to a larger
number of small inland wastewater treatment works. In addition, there are required regulations set by the Office of Water Services ("OFWAT"), the Drinking Water Inspectorate and the EA to maintain and improve the security and quality of service
provided. These outputs include projects to address:
above and below ground asset maintenance;
water resources and security of water supply;
reduced leakage and improved water pressure;
drinking water quality;
removal of flooding risk; and
improvement of storm overflows on combined sewers.Southern Water was granted implicit funding in the price determination, settled in 1999, via an allowed annual rate of return on the OFWAT estimate of investment of £1.1
billion. Southern Water's investment programme has therefore essentially been 'funded' up front. A key aspect of the group's business strategy is to seek to deliver all of the required regulatory outputs of the capital programme as efficiently as
possible.
Competition
Following the Competition Act 1998, an opportunity exists to develop competition in the industry yet further, however, the procedures proposed for companies to use each other's
infrastructure to supply water and wastewater services remain complex. Southern Water welcomes the further opening of the industry to competition and has taken an active role in developing a commercial framework for competition. A robust framework
is essential to enable the benefits of competition to be realised, as has been demonstrated by the experience of the ScottishPower group in other deregulated markets, such as electricity and gas. Southern Water continues to promote the involvement
of all market players, including the regulators, at an early stage in the belief that, under a properly developed fair competitive scenario, only initiatives that add value will prosper and that this provides the best chance of overall benefits
exceeding costs. Southern Water is already looking at ways in which it might be able to expand its own customer base and business. Specifically, in 2000-01 it has established a Sales & Service Team to deliver such opportunities.
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| | Other UK Businesses
Telecommunications The ScottishPower group retains a controlling interest in its telecommunications subsidiary, Thus plc, following its flotation on the London Stock Exchange in November
1999. The group has supported Thus' investment in further network development, the integration of its business divisions and the reinforcement of its core management to complete the transition from a regional to a UK national operator, with a
UK-wide network. As a customer focused and service driven company, Thus continues to focus on business markets where the greatest opportunities for growth lie and is now delivering accelerating revenues reflecting the concentration on key business
sectors where it has a distinct advantage. Reflecting this focus on the business market, Thus has made arrangements for the disposal of non-core assets, principally its Interactive services division, which provides information and competition
services to the consumer market.
The core of the Thus business is the supply of telecoms, Internet and call centre technologies. Thus now has the essential building blocks in place  national coverage, broad
product range, innovation, quality and high calibre individuals capable of delivering results. With 5,779 km of optical fibre now in the ground, Thus has expanded its traditional Scottish and London base to include major commercial centres
throughout the UK including Liverpool, Chester, Manchester, Warrington, Newcastle, Birmingham, Gloucester, Bristol, Reading, Swindon, Leeds and Middlesbrough. To gear up for increasing volumes and enhance quality and resilience, the network has been
expanded to an additional three key US Internet Exchange points  Mae East, Mae West and Ameritech  giving the Internet services full East/West US connectivity. The international network both to the US and to Europe via Demon Netherlands
maintains the Thus position as a tier 1 Internet Service Provider ("ISP") in this international network.
Already one of the UK's largest web hosts, Thus expanded the services offered in this area. Demon Server Hosting offers customers a dedicated server that can be administered
remotely and is aimed at small and medium sized customers ("SMEs") that have outgrown services provided by virtual hosting and corporate customers looking for a stable, reliable and robust platform for hosting their intranets and extranets. With
SMEs particularly in mind, Demon Powertrader, an e-commerce product, allows even inexperienced users to start trading on-line within hours. Managed Customer Premise Equipment ("CPE") enables SMEs and large corporates to pass responsibility for the
installation, configuration, monitoring and management of routing equipment to Thus and will be developed to see CPE used in conjunction with new Internet Protocol ("IP") services such as IP virtual private networks and 'voice over data'.
The expansion of the network and the development of new capabilities has allowed Thus to expand the service provided to many existing customers and given enhanced capacity to bid
for and win contracts.
Appliance Retailing
At 31 March 2001, the Appliance Retailing business sold domestic appliances and consumer electronics through 171 ScottishPower stores throughout the UK; 112 of these are located on
out of town retail parks. Home delivery, in-home servicing and replacement of appliances for customers of selected insurance companies are among the additional services provided. Appliance retailing remains intensely competitive with established
leaders, Dixons and Comet, joined by new entrants such as Tesco, Wal-Mart and emerging European-wide players, wielding increased supply-chain power. Consequently, the year ended 31 March 2001 was a challenging one for the appliance retailing sector
with price deflation, price competition and rental cost growth impacting on profitability. A major programme to improve the quality of the property portfolio and involving the disposal of the majority of High Street stores is well advanced, leaving
a more focused network of superstores. New store openings of nine have been at a lower rate than initially planned due to more rigorous assessment of opportunities.
Information Technology
Calanais, established in May 2000 as a 50:50 joint venture between ScottishPower and leading US computer services group SAIC, traded profitably through its first year, adding some
100 new staff to cope with developing business commitments. It is well ahead of target in delivering IT cost savings to the ScottishPower group. As a reflection of the intention to focus on core business activities, all of ScottishPower's shares in
Calanais were sold to SAIC on 23 March 2001. The basic contract mechanisms under which services are provided to ScottishPower remain intact.
Contracting Services and Technology
In line with the outcome of the extensive business review of 1999, these non-core activities were successfully sold as going concerns during 2000-01.
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| | Group Employees
US BusinessPacifiCorp and its subsidiaries had 6,668 employees on 31 March 2001. Of these, 6,595 were employed by PacifiCorp and its mining affiliates and 73 were employed by PFS and
other subsidiaries. As a result of the merger with ScottishPower, PacifiCorp developed and commenced a Transition Plan to implement significant organisational and operational changes. As part of this Transition Plan, PacifiCorp expects to reduce its
work force company-wide by approximately 1,600 over a five year period, mainly through early retirement, voluntary severance and attrition.
Approximately 62% of the employees of PacifiCorp and its mining affiliates are covered by union contracts, principally with the International Brotherhood of Electrical Workers,
the Utility Workers Union of America and the United Mine Workers of America.

|In the company's judgement, employee relations in PacifiCorp are satisfactory.

UK Business
ScottishPower and its UK subsidiaries had 15,313 employees, as at 31 March 2001. A breakdown of the number of employees employed in the group's main businesses is shown in
Note 3b to the Group Profit and Loss Account
 .

In the infrastructure businesses, ongoing integration of Scottish and Manweb operations has been effectively completed and, in Southern Water, manpower efficiencies have been
achieved. The group continues to benchmark for further efficiencies and reduced costs, which will include ongoing reduction in manpower numbers. However, such reductions were partly offset in 2000-01 by manpower growth within customer-facing
businesses to gain new customers in the fully competitive market place. This growth has now peaked and is expected to reverse as the business continues to focus on core activities, achieving operating improvements and taking further advantage of
technological advancements. Corporate services have remained relatively stable in manpower numbers since 1997-98 but the disposal of non-core businesses and outsourcing of certain functions have reduced overall UK employee numbers outside the energy
businesses.

Approximately 46% of employees in the UK are union members, and 74% are covered by collective bargaining arrangements. There are a number of different collective agreements in
place throughout the group, reflecting differing market conditions in which the group's businesses operate.

In the company's judgement, employee relations in the UK businesses are satisfactory.
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|Group Environmental Policy

Environmental Governance It is now widely accepted that any responsible business with aspirations of continued growth and leadership must balance economic goals with the needs of the society in
which it operates and the natural resources on which it depends. Climate change has emerged as a dominant sustainability challenge for all businesses, and is particularly acute for the energy sector. ScottishPower faces the task of developing an
international vision within which the group can flourish and meet the business goal of creating sustainable value, despite widely differing stakeholder opinions on which environmental issues really matter.

For example, in the UK, policies to combat global climate change are paramount. The UK is committed to a voluntary target of 20% reduction in carbon dioxide ("CO2") emissions by 2010. Fiscal and regulatory          incentives such as a Climate Change Levy and the new Energy Efficiency          Commitment form key components of the UK Climate Change Programme to back          up CO2 reduction targets. Although President Bush has rejected the Kyoto Protocol, the US remains concerned about global climate change and has indicated that it will bring forward alternative proposals. However, at a state level, much is
actually being achieved to reduce CO2 emissions.

There are similar approaches to reducing emissions to air from fossil-fuel generation with tighter controls on air pollution driven by the continued implementation of the US Clean
Air Act and, in the UK, by regulations such as the EU Ceilings Directive, the Large Combustion Plants Directive and the Directive on Integrated Pollution Prevention and Control. In the US issues of biodiversity and conservation are more prominent
than in the UK, with the impact of hydro dams on migratory fish runs being of broad concern to western US stakeholders.

Achieving the right balance is a significant business challenge which has been met by organising the skills and resources deployed in these different marketplaces within a common
framework: but one which takes account of essential differences between the US and UK situations. The group's international environmental governance approach is based on
arrangements which have worked well in the UK and which have been refined and tailored using the environmental management systems and mature operational controls within PacifiCorp. The company is committed to the highest standards of corporate
governance. ScottishPower's structures and controls have been commended and recognised in awards such as the recent Utility Week Award for environmental management and the group's ranking as top utility and second place overall in the Financial
Times/Business in the Environment corporate engagement survey of the FTSE 350 companies.

The main components of the group's international approach to environmental governance are as follows:
the adoption of a common set of environmental principles and a consistent governance approach to ensure compliance with those principles;
pro-active stakeholder engagement, including research, consultation and the work of the Environment Forum, which introduces expert external opinion through independently
facilitated meetings that promote understanding of the views of key opinion formers in the sector;
assessment of cross business risk through the group Environmental Policy Advisory Committee, which advises on the development of environmental policy and strategy, often through
issue-focused working groups;
annual business risk assessments, conducted this year by independent consultants OXERA;
active environmental management and operational control by means of environmental management systems;
measurement of Key Performance Indicators linked to significant sustainability parameters;
accounting for performance to stakeholders in the annual Corporate Environment Report; and an independent third party review of environmental governance arrangements.
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|All group businesses are required to implement an environmental management system equivalent to the international standard ISO 14001 in order to develop management controls
appropriate to the level of risk faced by any particular business area. Some of those systems are certified to ISO 14001 or, in Europe, registered as compliant with the EU's Eco-Management and Audit Scheme.

The Safety and Environmental Management Rating Agency ("SERM") operates an industry benchmarking scheme which uses a mathematical model to assess the cost of potential incidents
and ScottishPower's measures for risk reduction. The results of this exercise are presented in a similar format to a credit rating. ScottishPower's SERM rating is AAA, where AAA+ is the highest possible and C- is the lowest. ScottishPower has
a robust process of risk assessment operating comprehensively across the business and subject to internal review and external scrutiny. The most recent external review was conducted by OXERA and concluded that the group had an excellent knowledge of
environmental risk and managed such risks with a high level of care and prudence.

ScottishPower's vision and framework for action involves achieving lower levels of CO2/kWh across the generation portfolio to combat global climate change,
backed up by a range of measures to achieve this overarching goal. Demanding aspirational targets have been set in both the US and the UK to drive the achievement of this vision and a range of specific initiatives and investments with measurable
outcomes, aimed at improving group environmental performance, have been implemented.

In both the US and the UK, energy and environmental policy and regulation are inextricably linked. Fiscal instruments will drive moves towards more sustainable forms of
generation. The opening up of markets to competition will also play an increasing role in providing opportunities for new renewable technologies, balanced against the social
requirement of security of supply through diversity of fuel mix. The ScottishPower group has responded to these policy drivers and market forces by developing an international vision which focuses on investing heavily in renewables (in particular,
wind generation) reducing both the CO2 and clean air impact of its generation plants and working with customers to implement energy efficiency programmes. The Green Energy and Green Sources tariffs allow UK domestic and
business customers to support investment in renewables. During 2000-01, similar environmentally friendly options were introduced under the Blue Sky Energy tariff launched by PacifiCorp.

Climate Change
Climate change has become the single most important environmental issue in the UK, which has prompted the Government formally to adopt the Climate Change Programme. This is a basket
of various tax and financial incentives aimed at meeting the Government's commitment to reduce emissions of CO2 to below 1990 levels by 2010. These measures include the Climate Change Levy, an industrial and commercial energy
tax, the new Energy Efficiency Commitment contained in the Utilities Act and the proposed introduction of a UK carbon trading regime later in 2001. There is therefore a comprehensive range of instruments in place which will drive reductions in
CO2 in the UK electricity sector.

In the US, there is awareness of the issue of global climate change. However, there is some concern about the measures proposed in the Kyoto Protocol and about its rejection by
the Bush administration. The approach to carbon reduction has focused on the appropriate use of carbon sinks and offsets, such as new forestry planting and reducing CO2 through a trading programme. Differences in approach to
international trading led to the collapse of the November 2000 summit in The Hague. However, the State of Oregon is actively funding energy conservation and investment in renewables through the Public Benefits Charge, and some direct state requirements make it necessary for new developments to offset part of their emissions as a siting condition. It is clear that long term CO2 reductions
will be supported in the US, providing they are allowed through rate recovery or via market instruments such as emissions trading or green tariffs.

The group's commitment to renewables will increasingly help to improve financial performance and meet environmental obligations. In the US, PacifiCorp is about to bring on-stream
the world's largest windfarm. It is on the Oregon-Washington State border and has 450 turbines generating an output of 300 MW, enough power for 70,000 homes. An overall ScottishPower investment of £100 million, combined with a strategy of
developing a further 480 MW has made the group one of the leading UK operators. PacifiCorp aims to build or purchase 1,000 MW of new renewables by 2005, becoming the leading supplier of new renewables in the western US.

Recent acquisitions of gas-fired plant, combined with windfarms coming on stream, will help meet the goal of reducing CO2/kWh across the generation portfolio
in the UK. Major commitments to renewables in the US will have a similar effect. PacifiCorp has developed the innovative 484 MW Klamath Falls co-generation plant, due on-line in July 2001. This award winning plant will be one of the cleanest plants
in the US in terms of net greenhouse gas emissions, backed up by a programme of carbon offsets including methane recovery, US reforestation and solar electrification in developing countries.

Air Quality
In both the US and UK, concern to improve local air quality, soil and water acidification and improve visibility, particularly in wilderness areas, is driving tightening controls on
air emissions from fossil-fuelled power plants. Therefore, the trend in both the US and UK is for increasingly strict air emission requirements to be enforced, driving investment in abatement technology to clean up coal-fired generation.
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|In the US, the sulphur dioxide ("SO2") trading allowed          for by the Clean Air Amendments has led to cost-effective reductions in          emissions.
However, other issues such as photochemical smog and visibility          have led to new requirements for further reductions in oxides of nitrogen          ("NOx") and SO2. In response primarily to urban smog issues, generators
in the eastern US are now being compelled by air regulators to install controls which go beyond low NOx burners, such as Selective Catalytic Reduction.

PacifiCorp is reliant on low-sulphur coal and, with the further addition of scrubbers, PacifiCorp plants (both owned and/or operated) have emissions rates 70% below the national
SO2 average and 18% below the national NOx average. Additional reductions in SO2 of up to 40% (or approximately 45,000 tons) will be required over the next 15 to 20 years to address possible impairment of
visibility at National Parks. NOx requirements to address visibility are in the process of being defined. While aggressive emissions reductions are planned, PacifiCorp is working with stakeholders to define a path forward that will provide more
comprehensive reductions. Uncertainty regarding future air quality requirements stalls investment in emissions controls and hinders the development of new plants. Beyond compliance, PacifiCorp will pursue permitting changes that lead to
cost-effective emission reductions with clear environmental benefits, while allowing for the on-going efficient operation of its thermal generating plants for the next 15 to 20 years.

The UK will tighten SO2 emissions significantly by 2010 in response to the EU Ceilings Directive, driving investment in flue gas desulphurisation ("FGD") and
scrubbing. The combined effects of the revised Large Combustion Plants Directive and the Integrated Pollution Prevention and Control Directive will tighten emission levels considerably from 2007 onwards, although the final position on NOx emissions
is not determined.

ScottishPower has gradually implemented a programme to optimise the thermal efficiency of Longannet and
Cockenzie coal-fired power stations and invested in technology to reduce the emissions of SO2 and NOx. It will continue to look for opportunities to invest in increased thermal efficiency in both plants, if cost- effective, and
has now agreed a programme for FGD at Longannet which should significantly reduce SO2 further. The gas re-burn technology introduced at Longannet has won both a Queen's Award for Enterprise (in Sustainable Development) and an
Institute of Chemical Engineers' prize.

Energy Saving
Energy efficiency programmes are essential tools in avoiding the use of peaking plants and the over development of new supply. In the western US, demand side management measures are
crucial to help cope with immediate shortages of generating capacity. In addition to longer term energy savings, PacifiCorp is actively managing customer demand during summer and winter peak periods to limit market exposure to high prices and to
protect customers from higher costs. In the UK all PES Licence Holders, such as ScottishPower, are obliged to comply with levels of domestic energy saving under the Energy Efficiency Standards of Performance regime. ScottishPower has regarded this
obligation positively and has performed consistently ahead of targets, both saving energy and targeting low income groups in particular for support.
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| | Group Research and Development
The group supports research into development of the generation, transmission, distribution and supply of electricity and continually seeks more innovative and cost effective
methods of carrying out its water and wastewater activities. It also continues to contribute, on an industry-wide basis, towards the cost of research into electricity utilisation, distribution developments and water purification and wastewater
treatment. In financial years 2000-01, 1999-00 and 1998-99, the group's expenditure on research and development was £4.2 million, £5.5 million and £5.3 million, respectively.
The group's policy is to charge research and development expenditure to the profit and loss account as it is incurred.
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| | Description of the Group's Property
US BusinessThe group's US properties consist of generating stations, electricity transmission and distribution facilities, coal mines and a number of non-operational office
facilities. Substantially all of PacifiCorp's electricity plants are subject to the lien of PacifiCorp's Mortgage and Deed of Trust.
PacifiCorp owns 52 hydro-electricity generating plants and has an interest in one additional plant. These have an aggregate nameplate rating of 1,078 MW and plant net capability
of 1,137 MW. It also owns or has interests in 17 thermal-electricity generating plants. With an aggregate nameplate rating of 7,169 MW and plant net capability of 6,663 MW. PacifiCorp also jointly owns one wind- power generating plant with an
aggregate nameplate rating of 33 MW and plant net capability of 33 MW.
Table 1
sets out key aspects of PacifiCorp's existing generating facilities.

These generating facilities are interconnected through PacifiCorp's own transmission lines (see
Table 6
) or by contract through the lines of others. Substantially all generating facilities and reservoirs located within the Pacific Northwest region are managed on a co-ordinated basis to obtain maximum load carrying capability and efficiency. Portions
of PacifiCorp's transmission and distribution systems are located, by franchise or permit, upon public lands, roads and streets and, by easement or licence, upon the lands of other third parties.

PacifiCorp's coal reserves are described in
Table 2
 . Most are held pursuant to leases from the federal government through the Bureau of Land Management and from certain states and private parties. The leases generally have multi-year terms that may be renewed or extended and require payment of
rentalsand royalties. In addition, federal and state regulations require that comprehensive environmental protection and reclamation standards be met during the course of
mining operations and upon completion of mining activities.

|UK BusinessesThe properties consist of generating stations, transmission and distribution facilities, water supply and wastewater treatment facilities, appliance retailing facilities
and certain non-operational properties in which the group holds freehold or leasehold interests.

The group owns seven power stations in Scotland, five of which are operational, and two in England. The group also owns three windfarms in Northern Ireland, three in Scotland, and
one in the Republic of Ireland. In addition, the company has joint venture interests in one power station in England and three windfarms, two of which are in England and one in Wales. All generation plant is owned by the group, with the exception of
the Methil power station, which is held on a ground lease that expires in 2012 and the windfarms which are generally held on ground leases of at least 25 years' duration. See
Table 7
for further details of generation assets.

As of 31 March 2001, the group's UK transmission facilities included approximately 3,850 circuit km of overhead lines and 250 circuit km of underground cable operated at 400 kV,
275 kV and 132 kV. In addition, the group's distribution facilities included approximately 24,500 circuit km of overhead lines and 41,000 circuit km of underground cable at voltages operating from 33 kV to 0.23 kV in Scotland and approximately
21,500 km of overhead lines and 24,000 km of underground cable at voltages operating from 132 kV to 0.23 kV in England & Wales. The group holds either permanent rights or wayleaves which entitle it to run these lines and cables through private
land. See
Table 9
for further details.

Southern Water has freehold and leasehold interest covering a total of approximately 10,000 acres of land. Of such land, an aggregate of approximately 9,800 acres are specialised
properties, consisting chiefly of the raw water storage reservoirs with surrounding land, water and wastewater treatment works and pumping stations listed in
Table 13
,
Table 14
and
Table 15
 . Approximately 95% of the above-ground water supply and wastewater assets are on land in Southern Water's freehold ownership including the assets listed in
Table 13
,
Table 14
and
Table 15
, with the remainder being located on land subject to long-leasehold.
As at 31 March 2001, the group operated 171 Appliance Retailing outlets, 162 of which were leased, and nine group owned. The business also leases three large distribution depots,
Castleford, Mossend and Rugby together with two smaller outbases and these properties are generally held on 20 to 25 year leases.
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|Group Charitable and Political Donations

During 2000-01, donations made for charitable purposes by the ScottishPower group totalled £2.5 million. £10.9 million of community support activity comprising
charitable donations, community investment and commercial initiatives given in cash, through staff time and in-kind donations was undertaken by the group's US and UK operations.

It has been the company's practice to make statements in its Annual Report that no money has been given by the company for political purposes, and such a statement is again made
in relation to the year ended 31 March 2001. Such statements have been made in compliance with rules contained in the Companies Act 1985 relating to the relevant financial years. However, with effect from 27 July 2001, the date of the company's
Annual General Meeting in 2001, the company will be subject to new rules governing donations to political parties and organisations and other political expenditure by reason of the Political Parties, Elections and Referendums Act 2000, which came
into force on 16 February 2001. The foregoing statement does not relate to donations made or expenditure incurred within the meanings set out in this Act. A resolution will be put to shareholders at the Annual General Meeting seeking approval for
such donations and expenditure, as now defined by this Act; further details may be found in the Notice of Meeting.
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| | Description of Legislative and Regulatory Background
As a public limited company ("plc"), Scottish Power plc is subject to the UK Companies Acts and, following the acquisition of PacifiCorp, Scottish Power plc also registered as a
holding company under the US federal Public Utility Holding Company Act of 1935 ("1935 Act"), which is administered by the US federal Securities and Exchange Commission ("SEC"). Bills have been introduced to repeal this legislation in each of the
last several Congresses, but to date have failed to pass. Until the 1935 Act is repealed, Scottish Power plc and PacifiCorp and other subsidiaries will be subject to regulation unless specific subsidiaries or transactions are otherwise exempt by SEC
rules or orders. Scottish Power UK plc, and its subsidiaries (including Manweb, Southern Water and Thus) are exempt because Scottish Power UK plc is an exempt foreign utility as defined in the 1935 Act. While there are increased administrative
burdens imposed by 1935 Act regulation, ScottishPower does not believe this regulation will have a harmful effect on ScottishPower or its subsidiaries.
Whereas US state regulatory commissions generally have jurisdiction over mergers, acquisitions and the sale of utility assets, the UK government, as a way to maintain control over
ScottishPower and certain of its subsidiaries, required the issuance of a "Special Share". The Special Share only affects the corporate control transactions at the registered holding company level and has no effect on PacifiCorp.
ScottishPower's UK operations are subject to such European Union ("EU") Directives as HM Government brings into effect, specifically, the EU (energy) Liberalisation Directive and
EU prohibitions on anti-competitive agreements and the abuse of a dominant position (implemented through the Competition Act 1998, which came into effect from 1 March 2000) and also to the provisions of the Utilities Act 2000 ("Utilities Act"). The
Utilities Act requires a new legal framework for utility licences based on standard, UK-wide conditions and, taken together with requirements of the Department of Trade and Industry ("DTI") and licence changes introduced by the Regulators, obliges
the group to restructure its UK operations into a series of separate limited companies, each a wholly owned subsidiary of ScottishPower UK plc. This process is being implemented in line with a DTI timetable and is due to be completed by April 2002.
Whilst the group has to make these changes to its structure to comply with statutory and regulatory pressures, the UK business of ScottishPower continues in the ordinary course and the restructure will not interfere with the day-to-day conduct of
employees' duties, nor will it alter their terms, conditions and benefits.
A summary of the more specific legislative and regulatory background to the operations of the group's businesses is set out below.
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| | US Business RegulationPacifiCorp is subject to the jurisdiction of the public utility regulatory authorities of each of the states in which it conducts retail electricity operations as to
prices, services, accounting, issuance of securities and other matters. Commissioners are appointed by the individual state's governor for varying terms. PacifiCorp is a "licensee" and a "public utility" as those terms are used in the Federal Power
Act ("FPA") and is, therefore, subject to regulation by the Federal Energy Regulatory Commission ("FERC") as to accounting policies and practices, certain prices and other matters.
Relicensing of hydro-electric projectsPacifiCorp's hydro-electric portfolio consists of 53 plants that include 87 generating units with a total capacity of nearly 1,100 megawatts ("MW"). Of the installed
capacity, 97% is regulated by FERC through 20 individual licences. These projects account for about 14% of PacifiCorp's total generating capacity and provide operational benefits such as peaking capacity, generation, spinning reserves and voltage
control. Nearly all of PacifiCorp's hydro-electric projects are in some stage of relicensing under the FPA. The relicensing process is an extremely political and public
regulatory process that involves controversial resource issues. In the new licences, FERC is expected to impose conditions designed to address the impact of the projects on fish and other environmental concerns. In addition, under the FPA and other
laws, the state and federal agencies and tribes have mandatory conditioning authorities that give them significant influence and control in the relicensing process. It is extremely difficult to determine the economic impact of these mandates, but
capital expenditure and operating costs are expected to increase in future periods while generation losses may result due to environmental and fish concerns. As a result of these issues, PacifiCorp has analysed the costs and benefits of relicensing
the Condit dam and has agreed to remove it.
Recovery of the Excess Costs of the Hunter Outage
Subsequent to filings made on 1 November 2000, seeking deferred accounting treatment for net power costs that varied from costs included in determining retail rates in Utah, Oregon,
Wyoming and Idaho, PacifiCorp's Hunter power plant in Utah experienced a failure of a 430 MW generation unit. Since the commencement of the outage, the cost of power purchases to replace the output of the Hunter unit exceeded that unit's costs
included in current rates. The Oregon, Wyoming and Idaho deferred accounting filings encompassed all power cost variances from the level assumed in rates since 1 November 2000, including costs to replace lost generation resulting from the Hunter
outage, and the Utah filing was effectively amended by stipulation to include only the variances associated with the Hunter outage. Hunter deferred accounting was adopted by the Utah Public Services Commission ("PSC") effective 24 November 2000 and
by the Wyoming PSC on 30 November 2000. Deferrals were also agreed in Oregon and Idaho on 23 January 2001 and 12 February 2001, respectively. PacifiCorp is reviewing its options in Washington, where it agreed to a five-year rate plan in June 2000,
before purchased power costs significantly increased, and is looking at ways to reopen that rate plan and either defer, or obtain rate inclusion of, power costs that vary from the level in current Washington rates.



| | Regional Transmission Organisation ("RTO")
PacifiCorp, in conjunction with eight other companies, is involved in a voluntary effort to form an RTO, named RTO West, in support of FERC Order 2000, which requires all public
utilities that own, operate or control interstate electricity transmission to file a proposal for an RTO. The nine members of RTO West will be Avista Corporation, BPA, Idaho Power Company, Montana Power Company, Nevada Power Company, PacifiCorp,
Portland General Electric Company, Puget Sound Energy, Inc. and Sierra Pacific Power Company. Creation of RTO West is subject to regulatory approvals from FERC and the states served by these entities. RTO West plans to operate all transmission
facilities needed for bulk power transfers and control about 30,000 miles of the 50,000 miles of transmission line owned by the entities. On 16 and 23 October and on 1 December 2000, the members made filings addressing structural, operational and
contractual issues associated with the RTO formation. On 25 April 2001, FERC accepted the key components of these filings, including the governance structure, scope and configuration. FERC suggested that RTO West could serve as an anchor for the
ultimate formation of an RTO encompassing the entire Western System Coordinating Council ("WSCC"). Because of the continuing development, PacifiCorp cannot currently quantify the impact that the RTO formation will have on its future
operations.
Demand Side Management
In December 2000 and January 2001, PacifiCorp filed for Pilot Energy Exchange Service programmes in Utah, Oregon, Wyoming, Washington and Idaho. These programmes are an optional,
supplemental service that allows participating customers an opportunity to reduce voluntarily electricity usage in exchange for a payment at times and at prices determined by PacifiCorp. The customer must execute an agreement prior to being allowed to receive service under the programme. PacifiCorp expects these programmes to be an economic alternative to paying higher market prices, by
reducing the system-wide demand for electricity. In March 2001, PacifiCorp submitted proposals to expand the programmes to all customers of 1 MW and greater in Utah, Oregon, Wyoming, Washington, and Idaho. The exchange had achieved over 9,500
megawatt hours ("MWh") of load curtailment by 31 March 2001 and is expected to grow as the customer base expands. In March 2001, PacifiCorp also filed and received regulatory approval to implement voluntary curtailment programmes for irrigation
customers in Oregon and Washington. Similar filings were submitted in Utah and Idaho and are under regulatory review. PacifiCorp filed for approval of Residential Usage Incentives in all states it serves in April 2001. If approved, the incentives
would provide a 20% credit on monthly bills in June, July, August and September 2001 for residential customers who reduce their monthly power usage from the corresponding month one year ago by 20%. PacifiCorp believes this programme will set clear
and simple targets for customers to receive benefits if they conserve energy.

Proposed Restructuring
On 1 December 2000, PacifiCorp filed requests with the utility commissions in Utah, Oregon, Wyoming, Washington and Idaho to change the way in which PacifiCorp is regulated. A
similar filing is planned for California. The proposed plan would change PacifiCorp's legal and regulatory structure and result in the creation of six state electricity distribution companies, a generation company and a service company, all
subsidiaries of a new holding company. The proposal is designed to provide a permanent allocation of generation benefits and costs among states that will allow each to pursue the regulatory policies they deem appropriate without affecting customers
in other states or treating shareholders unfairly. Approval for these proposals must be obtained from the utility commissions in Utah, Oregon, Wyoming, Washington, Idaho and
California, as well as from FERC and the SEC. This process is expected to take more than a year.
Competition
PacifiCorp believes that the regulatory initiatives that are underway in each of the states it serves may eventually bring competition for electricity generation services. This
change in the regulatory structure may significantly affect PacifiCorp's future financial position, results of operations and cash flows. PacifiCorp intends to seek regular price increases to the extent it earns less than its allowed rate of return.
A summary of the outcomes and the most significant further regulatory and legislative developments in the states concerned is set out below.
Utah
PacifiCorp received an order from the Utah Public Service Commission ("UPSC"), effective on 25 May 2000, authorising increased prices in Utah resulting in additional annual revenues
of $17 million. On 12 January 2001, PacifiCorp filed a request with the UPSC for an increase in electricity prices for its customers in Utah. This request encompasses normalised power costs that varied from the level assumed in Utah rates based on
the 12 months ended 30 September 2000 test year and did not include those power variances associated with the Hunter outage. If approved, the request would increase prices by approximately 19.1% overall, or $142 million. Concurrently, PacifiCorp
filed a separate emergency petition for interim relief asking that the increase become effective on 22 January 2001. On 2 February 2001, the Commission granted an interim rate increase of $70 million, effective on 2 February 2001, subject to refund
if the final rate order does not provide for at least this level of recovery.
The 2001 Utah legislative session passed a bill that repealed a 2000 Utah legislative session bill that could have significantly changed the way in which power providers are
regulated in the state. However, the legislature also passed a bill extending the
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| | life of a legislative task force created in 1997 to study restructuring issues. The bill authorises this task force to meet as often as twice a month to prepare legislation to
implement an electricity restructuring plan for presentation and consideration in the 2002 legislative session, unless it is not in Utah's best interest to do so. PacifiCorp intends to seek recovery of all its prudent costs, including stranded
costs, in the event of deregulation. However, due to the current lack of definitive legislation, PacifiCorp cannot predict whether it will be successful.
Oregon
Under an order from the Oregon Public Utilities Commission ("OPUC") effective on 1 October 2000, PacifiCorp increased prices in Oregon resulting in annual additional revenues of $14
million. In addition, new rates which took effect from 1 July 2000 through an annual adjustment as part of the alternative form of regulation process previously authorised in Oregon, increased annual revenues by approximately $3.7 million net of
costs mandated by the OPUC.
On 23 March 2001, PacifiCorp filed a request with the OPUC for approval of a $43 million, or 24.5%, increase to recover higher power costs for the months of May, June and July
2001. The $43 million increase is the difference between net power costs currently included in rates and what PacifiCorp expects to incur in the period 1 May to 31 July 2001. The increase would be applied to all customer bills on a cents per kWh
used basis, and would remain in effect until 1 August 2001, when new power costs are expected to be set as part of a previously filed rate case. PacifiCorp also requested permission to implement a power cost adjustment mechanism to track changes in
net power costs.
During 1999, legislation ("SB 1149") was enacted in Oregon that requires competition for industrial and large commercial customers of both PacifiCorp and Portland General Electric
Company by 1 October 2001. Under the legislation, PacifiCorp is required to unbundle rates for generation, transmission, distribution, and other retail services, and offer
residential customers a cost-of-service rate option, and a portfolio of rate options that includes new renewable energy resources and market-based generation. SB 1149 authorises the OPUC to make decisions on a variety of important issues, including
the method for valuation of stranded costs/benefits. The OPUC may provide incentives for divestiture of generation assets or the functional separation of such assets. Generation asset divestiture is not mandated and is solely at PacifiCorp's
discretion. Transition charges may be included in the direct access, portfolio rate option, and cost-of-service rates. SB 1149 requires the OPUC to report to the Oregon state legislature by 1 January 2003 as to whether residential electricity
customers would benefit from direct access.
On 2 October 2000, PacifiCorp filed its plans to implement the requirements outlined by SB 1149 and subsequent commission rules. On 1 November 2000, PacifiCorp filed the
unbundling information required under SB 1149 rules and requested a related $160 million in increased revenues. On 1 December 2000, PacifiCorp filed a resource plan to address the manner in which it proposes to use its generation resources under SB
1149. This Resource Plan presents the estimate of the value of PacifiCorp's generating facilities. This valuation is based on various assumptions, including future electricity prices and cost estimates for compliance with existing and anticipated
air quality regulations impacting PacifiCorp's thermal generation, as well as the estimated costs associated with relicensing PacifiCorp's hydro-electric facilities. PacifiCorp's preliminary analyses indicate that the after-tax present value of the
air quality and hydro-electric costs over the projected useful life of the thermal plants, and the term of the licences in the case of the hydro-electric licences, could exceed $1 billion, predominantly in increased capital expenditure. The final
outcome is dependent on a variety of factors, including the actual terms and applicability of existing and anticipated environmental laws and regulations, the costs associated with lost generation, developments in pollution control technologies, and the actual terms and conditions of any new hydro-electric licences. The ultimate impact of these compliance costs on PacifiCorp will depend on the
regulatory treatment of such costs, whether PacifiCorp elects to sell or abandon facilities rather than make the required capital expenditure, and numerous other factors, many of which are beyond PacifiCorp's control.
In February 2001, PacifiCorp made its Oregon Resource Plan Supplemental Filing. This filing addressed the potential rate impacts and transition charges and credits associated with
implementation of the resource plan options and also proposed that the preferred plan for implementing direct retail access in Oregon would involve the restructuring proposals discussed above under "
Proposed Restructuring
" (see page 21). The Commission has adopted a temporary rule  extending the decision date on the Resource Plan from 1 April 2001 to 1 September  2001.
On 3 January 2001, the OPUC adopted public purpose rules as required by SB 1149. The rules require electricity utilities and suppliers that provide electricity services to direct
access consumers to collect public purpose charges equal to 3% of the total revenues for electricity services, distribution, ancillary services, metering and billing, transition charges, and other types of costs that were included in electricity
rates on 23 January 1999. PacifiCorp will continue to participate in the OPUC proceedings to establish the rules and procedures that will implement the new law.
Wyoming
On 25 May 2000, PacifiCorp received an order from the Wyoming Public Service Commission ("WPSC") authorising an increase in prices resulting in increased annual revenues of $11
million, subsequently adjusted to $12 million under WPSC approval effective 19 July 2000. On 18 December 2000, PacifiCorp filed a request with the WPSC for an increase in electricity prices of about 3.4% overall, or $9 million to be effective no sooner than 12 months after the date of the order of the previous case, that is, from 25 May 2000.
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| | Washington
On 9 August 2000, PacifiCorp received an order from the Washington Utilities & Transportation Commission ("WUTC") which authorised PacifiCorp to increase rates by 3% on 1
September 2000, 3% on 1 January 2002 and 1% on 1 January 2003. On 25 October 2000, the WUTC approved PacifiCorp's application for a system benefits charge to recover costs associated with funding energy efficiency programmes: PacifiCorp will collect
approximately $2.8 million per year until 31 December 2002.
Idaho
The 1980 Pacific Northwest Electric Power Planning and Conservation Act provided for, among other things, the Residential Exchange Program to provide the residential and small farm
customers of northwest investor-owned utilities with a share of the benefits associated with the Federal Columbia River Power System. The Residential Exchange Program will expire on 30 September 2001. It will be replaced by a new programme
established by the Bonneville Power Administration ("BPA") under its Power Subscript Strategy. On 30 October 2000, PacifiCorp and the BPA executed a 10-year settlement agreement that replaced the Residential Exchange Program. This settlement will be
effective from 1 October 2001 and is expected to provide PacifiCorp's residential and irrigation customers in Oregon, Washington and Idaho with annual benefits equalling $76 million during the first five years of the agreement. These benefits pass
through to customers and do not impact PacifiCorp's earnings.
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| | Structure of the Electricity Industry in the UK
The UK electricity industry, which was restructured in March 1990 to introduce competition into the generation and supply of electricity, consists of the following:
Generation
The production of electricity at power stations.
Transmission
The bulk transfer of electricity across a high voltage transmission system.
Distribution
The transfer of electricity from the high voltage transmission system and its delivery, across local low voltage distribution systems, to customers.
Supply
The bulk purchase of electricity by suppliers and its sale to customers, with the associated customer service activities, including sales and marketing, billing and income
collection.
The UK has three distinct geographical systems: Scotland, England & Wales and Northern Ireland, each with a different commercial framework. The systems of Scotland and England
& Wales are interconnected, and construction of a link between Scotland and Northern Ireland has commenced with commercial operation anticipated from winter 2001-02. A series of regulatory reviews and licence modifications is in progress which
will, over a period of years starting in summer 2001, introduce a more standardised, UK-wide structure of licence conditions and trading arrangements to which all companies will have to conform.
In each of Scotland and England & Wales, the electricity industry is regulated under the Electricity Act 1989 ("Electricity Act") and the Utilities Act by the Secretary of
State for Scotland or the Secretary of State for Trade and Industry, as applicable (collectively, "Secretary of State"), and by the Gas and Electricity Markets Authority ("Authority"). See "
Regulation of the Electricity Industry in the UK
". Electricity Industry Structure in Scotland
The electricity industry in Scotland is principally composed of two vertically integrated companies, ScottishPower and Scottish & Southern, each generating, transmitting,
distributing and supplying electricity within their respective authorised areas. A third, British Energy, is primarily a generator, selling all the electricity it generates at its two nuclear power stations in Scotland to ScottishPower and Scottish
& Southern under the Nuclear Energy Agreement ("NEA"). In addition, there are a number of other companies supplying electricity competitively to customers in Scotland, of which the most significant is British Gas Trading.
Throughout the bulk of 2000-01, the two integrated companies were also obliged to sell wholesale electricity on request to second-tier suppliers in Scotland at a price capped at
the England & Wales Pool price. Since the introduction of the New Electricity Trading Arrangements ("NETA") for England & Wales on 27 March 2001, interim arrangements have been put in place pending completion of the current review by the
Authority of longer term Scottish trading arrangements, together with the arrangements for access to the interconnector, the restructuring contracts, and other aspects of the market in Scotland. This review of British Electricity Trading and
Transmission Arrangements ("BETTA") has the objective of promoting competition and aligning the trading arrangements in Scotland with the new arrangements in England & Wales. See "
Electricity Industry Structure in England & Wales
 Generation and Trading".
Generation ScottishPower and Scottish & Southern generate electricity from their own
portfolios of power stations. In addition, the companies are obliged, under the NEA, to purchase the entire output from British Energy. A number of further contractual relationships exist between the two companies, which involve the sharing of
coal-fired, dual oil and gas-fired, and conventional hydro generating capacity, by allocating part of the capacity of certain generating stationsoperated by one company to
the other company. See "
UK Division  Generation Portfolio
" for further discussion of these contractual arrangements.  Currently, there exists a surplus of generating capacity in Scotland which enables  the companies to sell electricity to England & Wales through the interconnector.  Subject to the
outcome of the BETTA review, the quantity of these sales is expected  to increase as the capacity of the interconnector is enhanced.



| | Transmission The transmission systems of ScottishPower and Scottish & Southern are each made
up of a network comprised of overhead lines, underground cables and associated equipment, operating at either 275kV or 132 kV and, in the case of ScottishPower, 400 kV. This network connects the generating stations and distribution entry points
operating at, or below, 33 kV. ScottishPower's transmission system is connected to the National Grid in England & Wales by the interconnector. Both companies have access to this link which enables the companies to export and import electricity
from England & Wales. The available capacity of the interconnector at any time depends on a number of variable factors (e.g. the secure thermal rating of the interconnector circuits and the pattern of scheduled generation on either side of the
border). In 2000-01, the average capability of the interconnector was 1,367 MW. The Authority is currently reviewing BETTA, which appears likely to lead to inclusion of the present interconnector circuits into the relevant price controlled
transmission asset bases and the application of harmonised transmission access principles across Great Britain.
Distribution The distribution systems are each made up of a network of overhead lines and
underground cables, operating at voltages ranging from 33 kV to 0.23 kV. The distribution voltages and equipment used are determined by end users' requirements and their location and by the relative economics of transferring electricity at different
voltages. To ensure competition in generation and supply activities, the companies are required to provide open access to their transmission and distribution networks on a
non-discriminatory basis.
Supply The supply businesses of ScottishPower and Scottish & Southern purchase electricity,
primarily from their own respective generation businesses, for sale to customers both within their first-tier home areas and in each other's area. Other second-tier suppliers (see "
The Licensing Regime
") generally  purchase their electricity either from ScottishPower or Scottish & Southern  at a price which is capped at the England & Wales price, but may also purchase  electricity from independent generators or across the interconnector
from England  & Wales.


Electricity Industry Structure in England & Wales
In England & Wales, electricity is produced by generators, the largest of which are British Energy, PowerGen, Innogy, AES, EdF and TXU Europe. Electricity is transmitted through
the National Grid transmission system by National Grid Company ("NGC") and distributed by the 12 Public Electricity Distributors ("PEDs"), one of which is Manweb, in their respective authorised areas. Most customers are currently supplied with
electricity by their local Public Electricity Supplier ("PES"), of which Manweb is one, although there are other suppliers holding second-tier supply licences, including other generators and PESs, who can also compete to supply customers.
Generation and Trading Since privatisation, virtually all electricity generated in England &
Wales has been sold by generators and bought by suppliers through the Pool, a mechanism established on industry privatisation in 1990 for bulk trading of electricity in England & Wales, in which ScottishPower and Scottish & Southern
participated by exporting or importing via the interconnector. Wholesale electricity prices were set by the Pool daily for each half hour of the following day, based on the bids of the generators and a complex set of calculations matching supply and demand and taking account of system stability, security and other costs. Because Pool prices tended to be volatile and difficult to predict, generators and suppliers often
entered into bilateral arrangements, such as contracts for differences, to provide a degree of protection against such fluctuations.
These arrangements applied throughout the bulk of 2000-01 but, following consultation and industry-wide system development, NETA took effect (some 18 weeks later than originally
intended) on 27 March 2001. NETA replaced the Pool market established at privatisation with market-based arrangements more akin to those in commodity markets and comprising a three-tier trading system: a forward and futures market, a short term
bilateral market and a balancing mechanism with a settlement process for imbalances. The new arrangements remove the single Pool price at which all generation in any half-hour was previously bought and sold. Instead, all generators now have to find
buyers for their output, by offering them competitive prices, and all suppliers have to contract with generators to purchase sufficient electricity to meet their customers' demand. Imbalances between actual and contracted positions are settled
through the balancing mechanism. The pay-as-bid and balancing process exposes market participants to the costs and consequences of their actions, and thus leads to more cost-reflective prices and more effective management of risk.
Transmission NGC owns and operates the high voltage 275 kV and 400 kV electricity transmission
system in England & Wales, also known as the National Grid. NGC has a statutory duty to operate a non-discriminatory policy, both in the day-to-day administration of the system and in the provision of access to the transmission network.
DistributionThe distribution businesses of the PEDs operate and maintain the assets which carry
power from grid supply points to individual customers within their service areas. This involves a network of overhead lines, underground cables, switches and transformers operating at voltages ranging from 132 kV down to 0.23 kV in residential premises. To ensure competition in supply and generation of electricity, the PEDs are required to provide open access to their distribution networks on a non-discriminatory basis.
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| | Supply The supply
business covers the bulk purchase of electricity and its selling on to customers. PESs can supply customers within their home areas and holders of second-tier licences, subject to meeting certain requirements, can supply any customer. Second-tier
licences are held by all the PESs, Innogy, PowerGen, British Energy, ScottishPower, Scottish & Southern, British Gas Trading and some 12 other new suppliers.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| | Regulation of the Electricity Industry in the UK
The UK electricity industry is regulated under the provisions of the Electricity Act and the Utilities Act. The Electricity Act provided the basis for the restructuring of the
electricity supply industry ("ESI") in England & Wales and in Scotland in 1990, including the introduction of price regulation for transmission and distribution and of competition in supply and generation. The Utilities Act introduced a new
principal objective for regulators to protect the interest of customers, wherever appropriate by promoting effective competition, having regard to the need to ensure that licence holders are able to finance their functions. The Utilities Act also
required electricity distribution and supply to be separately licensed and provided the legal framework to facilitate the introduction of new electricity trading and transmission arrangements. It also enabled the electricity and gas regulators to be
merged as the Gas and Electricity Markets Authority, established new independent consumer councils and provided powers for Government Ministers to give statutory guidance on social and environmental issues and set energy efficiency targets and
renewables obligations.
Regulation of the ESI
The Electricity Act provided for the appointment of the Director General of Electricity Supply ("DGES") by the Secretary of State. The Utilities Act transferred the functions of the DGES to the Authority and provided for the appointment of a Chairman and other members of the Authority by the Secretary of State. The Chairman of the Authority holds
office for renewable periods of five years and is the Managing Director of Ofgem (Office of Gas and Electricity Markets). Under the Utilities Act, the principal objective of the Secretary of State and the Authority is to protect the interest of
customers, wherever appropriate by promoting effective competition. In carrying out those functions, they are required to have regard to the need to secure that all reasonable demands for electricity are met; the need to ensure that licence holders
are able to finance their functions; the interests of individuals who are disabled or chronically sick, of pensionable age, with low incomes or residing in rural areas.
The Authority exercises, concurrently with the Director General of Fair Trading, certain functions relating to monopoly situations in the generation, transmission, distribution or
supply of electricity under the Fair Trading Act 1973 and certain functions relating to anti-competitive conduct under the Competition Act 1980 and the Competition Act 1998 ("Competition Act"). The Authority also manages UK compliance with the
European Community Liberalisation Directive, which is concerned with introducing competition in generation and supply and non-discriminatory access to transmission and distribution across the EU.
The Licensing Regime
The Electricity Act prohibits the generation, transmission or supply of electricity to any premises unless authorised by a licence or exemption. Licences were granted for generation,
transmission, public electricity supply and second-tier supply. Under the electricity privatisation regime, England & Wales was divided into 12 PES franchise areas, and Scotland into two additional PES franchise areas, for the purposes of
electricity supply and distribution. Each of the 14 PES licences permits its holder to supply electricity to any premises within its home area (first-tier licence).
Electricity suppliers which are not the PES licence holder for that home area are known as second-tier suppliers and have second-tier supply licences (second-tier licence).
In order for a second-tier licence holder to supply a "designated customer" (being a residential customer or a customer requiring less than 12,000 kWh per year) in the home area
of a PES, the second-tier licence holder must issue a designated supply notice to Ofgem, and have its codes of practice (statements of intent about how the supplier will interact with customers) approved by Ofgem. Both ScottishPower and Manweb
comply with this requirement.
The Utilities Act requires separate licensing of the 14 PESs' distribution businesses, introducing PEDs which, in order to ensure competition in the supply and generation of
electricity, are required to provide open access to their distribution networks on a non-discriminatory basis. In order to implement the European Community Liberalisation Directive, Ofgem has drafted licence changes designed to ensure the managerial
and operational independence of the ScottishPower and Scottish & Southern transmission businesses and to ensure confidentiality of information in both the transmission and the distribution businesses.
Under the draft PED licences, each PED licensee will distribute electricity for second-tier suppliers whose customers are within that PED's authorised area, as well as for the PES
supply business serving the area. Charges for distribution will be made to the PES licensee or to second-tier suppliers as appropriate. Each PED licensee will be required, among other duties, to develop and maintain an efficient, co-ordinated and
economical system of electricity distribution and to offer terms for connection to, and use of, its distribution system on a non-discriminatory basis. Each PED licence will require the PED licensee to plan and develop its distribution system to a
standard not less than that previously applicable within the nationalised electricity supply industry and to report annually to the Authority giving details of the
performance of the licensee in maintaining distribution security, availability and quality of service during the previous financial year.



| | ScottishPower is licensed under the Electricity Act to generate electricity, transmit electricity within its authorised transmission area, and distribute and supply electricity
within its authorised distribution and supply area. This licence (a "Composite  Licence") regulates each of its generation, transmission, distribution and supply businesses and certain other related aspects of its activities. In addition, it has
second-tier licences which authorise it to supply electricity to customers located outside its authorised supply area. Manweb is licensed under the Electricity Act to distribute and supply electricity within its authorised distribution and supply
area pursuant to its PED/PES licences. Manweb also holds second-tier licences which authorise it to supply electricity to users located outside its authorised area.
Separation of Businesses Following the passage of the Utilities Act and in line with licence
modifications proposed by the DGES in December 1999, modifications to the group's PES licences came into force on 1 April 2000. These start the implementation of the new legal framework for electricity licences based on standard, UK-wide conditions
provided for by the Utilities Act. This means that the current composite licensing situation, which has enabled Scottish Power UK plc to operate as a single company owning each of the separate registered businesses, will come to an end and will be
replaced by individual licences for Generation, Transmission, Distribution and Supply. As a result of the stringent nature of the new licence requirements on confidentiality of information and independence, Ofgem has granted temporary relief on a
number of obligations, subject to the implementation of a Business Separation Plan. Actions taken to fulfil the obligations set out in the Business Separation Plan include:
appointing an external Compliance Officer;
establishing a high level Compliance Steering Group;
developing implementation project teams within the businesses to deliver the plan; and
establishing a separate Distribution Call Centre.

Progress of the Business Separation Plan is monitored by the Compliance Officer. In conjunction with the Steering Group, regular updates are reported to Ofgem and it is
anticipated that the plan will be fully implemented before April 2002, the expiry date of the derogations granted to ScottishPower and Manweb for these requirements to be met. A further derogation, which will lapse only in certain limited
circumstances, allows the two distribution businesses of ScottishPower and Manweb to be managed and operated jointly.


Modification of Licences The Authority is responsible for monitoring compliance with the
conditions of licences and, where necessary, enforcing them through procedures laid down in the Electricity Act. Licence conditions may be modified, either in accordance with the terms of the relevant licences or in accordance with the procedures
laid down in the Electricity Act.
Under the Electricity Act, as amended by the Utilities Act, the Authority may modify a licence condition with the agreement of the licence holders after due notice, public
consultation, and consideration of any representations or objections. In the absence of agreement, the only means by which the Authority can secure a modification is following a modification reference to the Competition Commission and in the
circumstances set out below. A modification reference requires the Competition Commission to investigate and report on whether matters specified in the reference relating to the generation, transmission or supply of electricity in pursuance of a
licence operate, or may be expected to operate, against the public interest; and, if so, whether the adverse public interest effect of these factors could be remedied or prevented by modification of the conditions of the licence. In determining whether any particular matter operates, or may be expected to operate, against the public interest, the Competition Commission is to have regard to the matters in relation to
which duties are imposed on the Secretary of State and the Authority.
If there is an adverse finding, the Competition Commission's report will state whether any adverse effects on the public interest could be remedied or prevented by modification of
the licence conditions. If the Competition Commission so concludes, the Authority must then make such modifications to the licence as appear to it requisite for the purpose of remedying or preventing the adverse effects specified in the report,
after giving due notice and consideration to any representations and objections. The Secretary of State has the power to veto any modification reference.
Modifications to licence conditions may also be made in consequence of a monopoly or merger reference under the Fair Trading Act 1973 or a reference under the Competition Act.
ScottishPower's acquisition of Manweb in 1995 and of Southern Water in 1996 involved ScottishPower giving assurances to the Secretary of State to modify Manweb's PES Licence and ScottishPower's Composite Licence (and Southern Water Services' Water
Appointment). ScottishPower's merger with PacifiCorp in 1999 also involved ScottishPower giving undertakings to the Secretary of State to agree to modifications to its Composite Licence.

Term and Revocation of Licences ScottishPower's Composite Licence and Manweb's PES Licence
continue until terminated by not less than 25 years' notice given by the Secretary of State. ScottishPower's and Manweb's second-tier licences for England & Wales continue until terminated by not less than 25 years' notice given by the Secretary
of State on or after 19 November 2000 and 1 April 2001 respectively. ScottishPower's and Manweb's second-tier licences for Scotland continue until terminated by not less than 25 years' notice given by the Secretary of State on or after 30 March 2000 and 1 July 2004 respectively. Licences under the Electricity Act, as amended by the Utilities Act, may be revoked in certain circumstances specified in the
licences, such as the insolvency of the licensee or the licensee's failure to comply with an enforcement order made by the Authority. In addition, the Secretary of State may revoke each of ScottishPower's generation, transmission and PES licences if
ScottishPower ceases to carry on the activities authorised by the respective licence.
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| | Principal Conditions of ScottishPower's Composite Licence and Manweb's PES Licence ScottishPower's Composite Licence and Manweb's PES Licence require ScottishPower and Manweb respectively to prepare and publish separate accounts for each of ScottishPower's
generation, transmission, distribution and supply businesses (first and second-tier and wholesaling business) and Manweb's distribution business. It is a further licence requirement that none of ScottishPower's nor of Manweb's businesses gives any
cross-subsidy to, or receives any cross-subsidy from, any of ScottishPower's or Manweb's other businesses, whether regulated by the Composite Licence or not.
A number of Composite Licence, PED and PES licence conditions require ScottishPower and Manweb, respectively, to be party to certain agreements or codes which affect their
operational activities: for example, the Grid Code, which includes provisions governing the technical aspects of connections to, and the operation of, the transmission systems. Each PED licensee must also draw up, implement and comply with a
Distribution Code, which interacts with the Grid Code and specifies technical requirements for connection to, and the operation and use of, its distribution system; and Codes of Practice on customer relations, which require the approval of the
Authority. There are also Electricity Supply Regulations and certain performance standards determined by the Authority which must be complied with.
The modifications made upon the acquisition of Manweb were designed to address the fact that, as a result of the acquisition, Manweb became a subsidiary of ScottishPower. Broadly,
the modifications were designed to ring-fence Manweb's regulated businesses (distribution, supply and second-tier supply) from its non-regulated businesses and from ScottishPower's other businesses; to impose certain information reporting
requirements on Manweb and ScottishPower to assist the DGES to carry out regulatory functions; and to address the fact that ScottishPower and Manweb are both electricity companies.
As a condition for regulatory clearance of ScottishPower's acquisition of Southern Water, ScottishPower gave assurances to the Secretary of State that it would not operate any new
business which is not regulated under the Electricity Act and whose annual turnover accounts for more than 5% of ScottishPower's aggregate annual turnover excluding all subsidiaries, other than as a subsidiary company; ensure that ScottishPower had
sufficient management and financial resources to fulfil its obligations to enable the introduction of competition in supply for all customers in its home area; and agree to appropriate modifications to Southern Water's licence.
The undertakings given to the Secretary of State by ScottishPower as a condition for regulatory clearance for its merger with PacifiCorp were aimed principally at ensuring that
ScottishPower's UK businesses would not be impacted financially by the merger. The principal undertakings were therefore that the holding company established as a result of the merger would restructure its business in Great Britain as soon as is
reasonably practicable, and in any event before April 2002, so as to place generation and any non-electricity activities in separate group companies from the remaining electricity activities; that following restructuring a financial ring-fence would
be placed around the PES and transmission businesses of ScottishPower, on similar terms to the standard ring-fence developed by the DGES; and that ScottishPower would ensure
that the DGES would continue to have access to the information needed to carry out the duties of the office.
Price Controls
The primary objective of the regulation of the UK electricity industry is the promotion of competition while ensuring that demand can be met and companies are able to finance their
regulated activities. However, it is recognised that the development of competitive markets is not appropriate in some areas, such as in the transmission and distribution of electricity, and that in other areas it will take time to develop, as in
the supply of electricity. In these areas, regulatory controls are deemed necessary to protect customers in a monopoly market (by determining inflation-limited price caps) and to encourage efficiency.
ScottishPower and Manweb's businesses are subject to price controls (or revenue controls in the case of the transmission business) which restrict the average amount, or total
amount, charged for a bundle of services. Since 1995, regulation has tended to restrict price increases to customers to levels below the increase in the retail price index ("RPI"), through a formula expressed as RPI  X. The rationale behind
the use of the RPI  X formula is that companies are motivated, during the period of the price control, to maximise efficiencies, knowing that they can retain any element of overperformance for their shareholders. The price caps are expressed
in terms of an RPI  X constraint on charges, where RPI represents the annual percentage change in the UK's retail price index, and X may be any number determined by the Authority. The X factor is used to reflect expected efficiency gains and
investment requirements. For example, where RPI is running at 3% and X is 2%, a company would be able to increase the average charge for a bundle of services by 1% per annum.
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| | Since the controls are forward looking (i.e are based on forecasts), and are designed to achieve an allowed rate of return (equal to the cost of capital) for the business,
correction factors are also required to adjust tariffs in subsequent years to allow for any over or under recovery of revenues and ensure that the allowed revenue is achieved
over the period of the control. The Authority fromtime to time reviews the price cap formulae applicable to the transmission, distribution and supply businesses.
ScottishPower and Manweb participate in reviews of price caps applicable to them by submitting to Ofgem their view of what reasonable efficiency gains and future investment requirements should be built into the determination of the revised price
control.
As with any modification to licence conditions, the Authority must undertake a consultation exercise, inviting comments from PES licensees and third parties, before modifying
licences to incorporate new price controls. As described above under "
The Licensing Regime Modification of Licences
", licence conditions may be modified, either          with the consent of the licensee or, in the absence of consent, following          a modification reference to the Competition Commission. The Competition          Commission is an independent
body whose statutory duty is to determine          whether the matters specified in a reference to it operate, or may be          expected to operate, against the public interest; and, if so, whether          the adverse public interest effect of
those factors could be remedied          or prevented by modification of the conditions of the licence. Through          participation in, and the submission of evidence to, these price control          reviews and, where necessary, through the
Competition Commission modification          process described above, companies have the opportunity to comment on          and seek to influence the final outcome of any price control review.
ScottishPower Transmission Price Control and British Electricity Trading and Transmission Arrangements
In December 1999, the DGES announced a revised transmission price control for ScottishPower, to take effect from 1 April 2000 and to run for five years. The DGES also instituted
BETTA, which envisages a Great Britain wholesale market for electricity and revised arrangements in respect of the interconnector between Scotland and England & Wales.
This is likely to involve the inclusion of the present interconnector circuits into the relevant price controlled transmission asset bases and the application of harmonised transmission access principles across Great Britain. The new arrangements
are currently the subject of continuing consultation and are expected to result in changes becoming effective during 2002-03.
Distribution Price Control
The maximum distribution revenue is calculated from a formula that is based on customer numbers as well as units distributed. In December 1999, the DGES announced revised
distribution price controls for ScottishPower and Manweb, to take effect from 1 April 2000 and to run for five years. During the period of the revised distribution price control, the Authority will be carrying out a project aimed at ensuring that
revenues and outputs of the business are more closely matched and meet customers' expectations. This will require an examination of the appropriate information and incentives, and is expected to lead to a refinement of the price controls to place
less emphasis on periodic reviews and more emphasis on continuous performance comparisons between companies. From April 2002, following completion of the project, it is anticipated that companies' revenues could be adjusted by up to 2% to reflect
better or worse than average performance.
Supply Price Control
All customers are now subject to competitive supply, although certain smaller customers remain protected by supply price controls, effective from 1 April 2000 and running for two
years. These controls operate as maximum restraints on tariffs and are confined to the two major tariffs for residential customers. All non-residential customers have now been removed from the constraints. The revised price restraints from April
2000 were designed by the DGES to complement, rather than seek to replace, the development of the competitive market. They are designed to leave scope for competing suppliers to offer prices below the levels implied by the constraints and to
encourage the retention and new entry of competing suppliers.
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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| | Structure of the Gas Industry in the UK
The UK gas industry, which was privatised in 1986, has the following major components:
Beach Terminals
Gas is transported from offshore fields on the UK Continental Shelf to one of seven beach terminals where it is processed before being fed into the onshore transportation
system.
The Onshore Transportation System
The onshore transportation system, most of which is owned and operated by Transco, the transportation arm of Lattice plc, and the rest by other public gas transporters, conveys gas
from the beach terminals to consumers. The system consists of a high pressure National Transmission System and 13 lower pressure Local Distribution Zones, and is interconnected with the gas transportation systems of continental Europe, Northern
Ireland and the Republic of Ireland.
Gas Storage Facilities
Storage capacities are largely used to balance supply and demand over time. Major facilities are used to balance seasonal variations in demand while diurnal storage capacities
provide flexibility in meeting changing gas demand on a daily basis. Competition in storage has been introduced progressively since 1998 through the auction of major storage capacity owned by Transco and the provision of new capacity by independent
operators, including ScottishPower.
Gas Shippers
Gas shippers contract with public gas transporters to have gas transported between the beach terminal and the point of supply. Gas shippers can also access storage
facilities.
Supply
Suppliers purchase gas to deliver to their customers by contracting with producers. Suppliers who do not also hold a shipper's licence pay gas shippers to have the gas transported
from the beach terminal through a public gas transporter's system



| | to the customer. Larger industrial and commercial customers, with annual demands exceeding 2,500 therms, have been able to choose their gas supplier for a number of years and
competition is well developed in this market. The residential market was opened to competition progressively commencing in April 1996 and completed in May 1998.
In each of Scotland, England and Wales, the gas industry is regulated under the Gas Act 1995 and the Utilities Act by the Secretary of State and by the Authority.
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| | Regulation of the Gas Industry in the UK
The three main Acts relating to the regulation of the gas industry in England, Wales and Scotland are the Gas Act 1986, the Gas Act 1995 and the Utilities Act. The Gas Act 1986
provided for the privatisation of the industry and for the establishment of the post-privatisation structure. It established the industry's regulatory regime, with the Director General of Gas Supply ("DGGS") as its head. The 1995 Act amended the
1986 Act and introduced the framework necessary for the introduction of residential competition. The Utilities Act transferred the functions of the DGGS to the Authority and provided for the appointment of a Chairman and other members of the
Authority by the Secretary of State. The Chairman of the Authority holds office for renewable periods of five years and is the Managing Director of Ofgem.
Under the Utilities Act, the principal objective of the Secretary of State and the Authority is to protect the interest of customers, wherever appropriate by promoting effective
competition. In carrying out those functions, they are required to have regard to the need to secure that all reasonable demands for gas are met; the need to ensure that licence holders are able to finance their functions; the interests of
individuals who are disabled or chronically sick, of pensionable age, with low incomes or residing in rural areas.
The Authority exercises, concurrently with the Director General of Fair Trading, certain functions relating to monopoly situations in the conveyance or supply of gas under the
Fair Trading Act 1973 and certain functions relating to anti-competitive conduct under the Competition Act 1980 and the Competition Act 1998.
The Licensing Regime
The Authority is responsible for granting new licences or licence extensions. The 1995 Act allows for the licensing of three separate activities  public gas transporter,
shipper and supplier. ScottishPower is licensed to carry out each of these activities. The Authority also has powers to modify licence conditions, on a similar basis to the regime for electricity.
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| | Structure of the Water Industry in England & Wales
Prior to privatisation of the water industry, the provision of water supply and wastewater services in England & Wales was split between 29 statutory water companies, each
incorporated by separate Acts of Parliament which could only supply water, and 10 water authorities established under the Water Act 1973, which could provide both water and wastewater services. Pursuant to the Water Act 1989 ("WA 1989"), the
functions of each water authority relating to water supply (except in areas where these functions were carried out through statutory water companies) and the provision of wastewater services were transferred on 1 September 1989 to a Water and
Sewerage Company ("WaSC"). At privatisation, certain of the water authorities' other functions, including pollution control, water resource management, fisheries, flood protection and alleviation, and land drainage were transferred to the National
Rivers Authority ("NRA").
The relevant provisions of the WA 1989 were consolidated with other functional legislative provisions into the Water Industry Act of 1991 ("WIA 1991"). This provides that each
company engaged in public water supply or wastewater services must be licensed by the Secretary of State for the Environment or by the Director General of Water Services ("DGWS"), in accordance with a general authorisation given by the Secretary of
State for the Environment.
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| | Regulation of the Water Industry in England & Wales
The Water Industry is principally regulated under the provisions of WIA 1991 and the Water Resources Act 1991 ("WRA 1991"). WIA 1991 consolidates enactments relating to the supply
of water and the provision of wastewater services, including the WA 1989 and other enactments. WA 1989 provided for the privatisation process itself and set up the post-privatisation structure and regulation of the industry. The provisions of the
Competition Act also apply to WaSCs.
The WA 1989 (now WIA 1991) provided for the appointment by the Secretary of State for the Environment of an industry regulator. The DGWS holds office for renewable periods of five
years, and is the head of the Office of Water Services ("OFWAT") and its staff of administrators, economists and accountants. The Environment Agency ("EA"), which superseded the NRA, regulates discharges by water companies into rivers and coastal
waters and the abstraction of water from rivers and ground water. The Drinking Water Inspectorate regulates the quality of drinking water in accordance with EU standards.
Under WIA 1991, the DGWS and the Secretary of State for the Environment must exercise or perform their duties in the manner best calculated to ensure that the functions of a water
undertaker and of a sewerage undertaker are properly carried out in every area of England & Wales; and ensure that companies holding Appointments are able (in particular, by securing reasonable returns on their capital) to finance the proper
carrying out of their functions. These powers and duties are also to be exercised in a manner best calculated to ensure that the interests of the customer in relation to the
fixing and the recovery of charges are protected; and, in particular, to ensure that the interests of customers and potential customers in rural areas are so protected; that no undue preference is shown; and that there is no undue discrimination in
the fixing of those charges. The DGWS and the Secretary of State for the Environment are also under a duty to ensure that the interests of customers are protected regarding benefits that could be secured for them by applying a share of the proceeds
of any disposals of a WaSC's land in future reviews.



| | The Competition Act introduced into UK law, with effect from 1 March 2000, the EU prohibitions on anti-competitive agreements and the abuse of a dominant position, and applied
them fully to utilities.
The DGWS exercises, concurrently with the Director General of Fair Trading, certain functions relating to monopoly situations in the supply of water or the provision of wastewater
services under the Fair Trading Act 1973, and certain functions relating to anti-competitive conduct in connection with the supply of water or securing a supply of water or with the provision of, or securing of, wastewater services under the
Competition Act 1980 and the Competition Act 1998.
Duties of Water Undertakers
Under WIA 1991, each water undertaker is under a general duty to develop and maintain an efficient and economical system of water supply within its licence area. It must also ensure
that all such arrangements have been made for providing supplies of water to premises in its licence area, for making such supplies available to people who demand them, and for maintaining, improving and extending its mains and other pipes, as are
necessary to enable it to meets its water supply obligations under the Act.
Duties of Sewerage Undertakers Under WIA 1991, each sewerage undertaker is under a general duty to provide, improve and extend such a system of public sewers and to cleanse and maintain these sewers to ensure that its sewerage region is effectively drained. Sewerage undertakers
are required to make provision for the emptying of sewers and whatever further arrangements are necessary from time to time for effectively dealing with the contents of sewers. In addition, discharges from wastewater treatment works must be
consented to by the EA and sewerage undertakers are responsible under WIA 1991 for regulating discharges of industrial effluent into sewers. Contamination of controlled waters by non-complying effluent being discharged by a treatment works may
involve the sewerage undertaker in liability, including clean-up costs.
The Licensing Regime
Following privatisation of the water industry in England & Wales, each of the water and sewerage undertakers, while maintaining its effective monopoly supply, became regulated
through an instrument of Appointment. The Appointment confirms the appointment of the water or sewerage undertaker as supplier in its own area and provides for the monitoring of its performance by the DGWS and the Secretary of State for the
Environment.
Modification of Licences Conditions of the Appointment may be modified, either in accordance with
the terms of the relevant licences or in accordance with the procedures laid down in WIA 1991. Subject to a power of veto by the Secretary of State, the DGWS may modify the conditions in the Appointment with the consent of the licensee. Before
making the modifications, the DGWS must publish the proposed modifications as part of a consultation process, giving third parties the opportunity to make representations and objections which the DGWS must consider. In the absence of consent, the
only means by which the DGWS can secure a modification is following a modification reference to the Competition Commission and in the circumstances set out below. A
modification reference requires the Competition Commission to investigate and report on whether matters specified in the reference relating to the carrying out of any function of a company by virtue of its Appointment operate, or may be expected to
operate, against the public interest and, if so, whether the adverse public interest effect of these factors could be remedied or prevented by modification of the conditions of the Appointment. In determining whether any particular matter operates,
or may be expected to operate, against the public interest, the Competition Commission is to have regard to the matters in relation to which duties are imposed on the Secretary of State and the DGWS.
If there is an adverse finding, the Competition Commission's report will state whether any adverse effects on the public interest could be remedied or prevented by modification of
the licence conditions. If the Competition Commission so concludes, the DGWS must then make such modifications to the Appointment as appear to him requisite for the purpose of remedying or preventing the adverse effects specified in the report,
after giving due notice and consideration to any representations and objections. The Secretary of State has the power to veto any modification by agreement.
Modifications to licence conditions may also be made in consequence of a monopoly or merger reference under the Fair Trading Act 1973 or a reference under the Competition Act.
Southern Water Services' Appointment was modified as a result of assurances given by ScottishPower as a condition to receiving regulatory clearance for its acquisition of Southern Water plc in 1996.
Term and Revocation of Licences Southern Water Services' Appointment continues until terminated by
not less than 10 years' notice given to Southern Water Services by the Secretary of State for the Environment, expiring not earlier than 25 years after 1 September 1989, the transfer date. Appointments may also be revoked or transferred to another company in certain circumstances specified in WIA 1991 or in the Appointments: for example, the appointee failing to comply with an enforcement order made by the Secretary of
State for the Environment or the DGWS, or the appointee being unable to pay its debts.
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| | Principal Conditions of Southern Water Services' Appointment The principal regulatory provisions
which apply to the regulated activities of Southern Water Services are set out in WIA 1991 and regulations and orders made under it. Other business activities of Southern Water, such as waste management and other environmental services, engineering
services and systems technology services, if undertaken, fall outside the direct scope of regulation under WIA 1991. Southern Water Services is an appointed WaSC and holds an Appointment regulated under WIA 1991 to supply water and sewerage services
within its authorised area, which regulates its appointed activities. Southern Water Services' Appointment requires Southern Water Services to prepare and publish separate accounts, including on a current cost accounting basis, showing separately
its appointed business from all other businesses and activities. It is a further Appointment requirement that the regulated business neither gives to, nor receives from, any other business or activity of Southern Water Services, any cross-subsidy,
whether those businesses are regulated by the Appointment or not.

Southern Water Services' Appointment was modified following assurances given to the Secretary of State by ScottishPower, as a condition to regulatory clearance of its acquisition
of Southern Water plc, to address regulatory concerns arising out of the merger, in particular to ensure the management independence of Southern Water Services and strengthen the ring fencing of its finances.

As a result, the Appointment of Southern Water Services contains an obligation that it must at all times conduct the businesses regulated by its Appointment as if such businesses
were substantially Southern Water Services' sole business and Southern Water Services were a separate public listed company. In particular, Southern Water Services must
ensure that its Board of directors is independent of ScottishPower and includes two non-executive directors of relevant experience and standing. All directors must disclose to Southern Water Services and to the DGWS any conflicts with their duties
as Directors of Southern Water Services and have regard exclusively to the interests of Southern Water Services as a water and sewage undertaker, in the event of a potential conflict with the interests of other group companies. The DGWS must be
informed of any change in the identity and functions of the directors of Southern Water Services.

In addition, Southern Water Services must not, without the consent of the DGWS make a loan to, or guarantee any liability of, any group company, or make any disposal of any asset
of the regulated business. The payment of dividends by Southern Water Services should not impair its ability to finance its regulated business. Similarly, any financial support or transfer of assets from Southern Water Services to a group company
must not adversely affect the former's ability to carry out its functions. In March 1998, Southern Water issued a £100 million variable rate bond to help fund capital expenditure. The bond listing provides a form of Stock Exchange listing for
the water business, to compensate OFWAT for the loss of comparative information (as a result of the discontinuance of Southern Water's Stock Exchange listing on the acquisition by ScottishPower). The bond listing imposes an obligation on Southern
Water Services to comply with financial information requirements incumbent on a quoted plc and to maintain an investment grade rating for all its corporate debt.

As a condition for regulatory clearance of ScottishPower's acquisition of Southern Water, ScottishPower gave assurances to the Secretary of State that it would not operate any new
business that is not regulated under the Electricity Act and whose annual turnover accounts for more than 5% of ScottishPower's aggregate annual turnover excluding all
subsidiaries, other than as a subsidiary company; ensure that ScottishPower had sufficient management and financial resources to fulfil its obligations to enable the introduction of competition in supply for all customers in its authorised area; and
agree to appropriate modifications to Southern Water's licence.

Price Controls
Southern Water Services' business is subject to price controls. In November 1999, the DGWS announced a revised price control for Southern Water Services to take effect from 1 April
2000 and to run for five years. Large industrial users can now choose their own water and sewerage suppliers. From 1 April 2000, all water companies, including Southern Water, have not been able to recoup from other customers any amounts lost by
offering lower tariffs to such industrial users. The regulated charging base to which price limits apply no longer includes tariffs to large industrial users. The Competition Act grants the DGWS concurrent powers with the Director General of Fair
Trading in relation to "commercial activities connected with the supply          of water or securing a supply of water or with the provision or securing          of sewerage services". Companies have been requested by OFWAT to prepare draft codes
under which they would enable competitors to gain access to their essential facilities. Southern Water has prepared a draft water access code which was submitted in August 2000.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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 Cross Reference to Form 20-F (US)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| | Environmental Regulation
Throughout its operations, ScottishPower will meet, or better, relevant legislative and regulatory environmental requirements and codes of practice. ScottishPower will publish its
sixth Corporate Environment Report in July 2001, copies will be available on request from the Company Secretary.
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 Cross Reference to Form 20-F (US)
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| | US Environmental RegulationFederal, state and local authorities regulate many of PacifiCorp's activities pursuant to laws designed to restore, protect and enhance the quality of the environment. These laws have increased the cost of providing electricity service. PacifiCorp
is unable to predict what material impact, if any, changes in environmental laws and regulations may have on the group's consolidated financial position, results of operations, cash flows, liquidity and capital expenditure requirements.
All of PacifiCorp's mining operations are subject to reclamation and closure requirements. Compliance with these requirements could result in higher expenditures for both capital
improvements and operating costs.
Air Quality
PacifiCorp's fossil fuel electricity generating plants are subject to regulation under federal, state and local requirements. Emission controls, low sulphur coal, plant operating
practices and continuous emissions monitoring are all used to enable coal-burning plants to comply with emission limits, opacity, visibility and other air quality requirements. The US Environmental Protection Agency ("EPA") has implemented new
regulations addressing regional haze. Carbon dioxide emissions are the subject of growing world-wide discussion and action in the context of global warming, but such emissions are not currently regulated. PacifiCorp's coal-burning plants, along with
all other major coal-burning plants in the US, participated in an effort to gather additional information about mercury emissions pursuant to a request issued by the EPA. Based in part on this effort, the EPA has indicated that controls to regulate mercury emissions from coal-burning plants will be brought forward by 2003. PacifiCorp has received Title V Air Operating Permits for all of its coal and natural
gas-fired power plants. In response to a 1998 citizen group challenge of the operating permits for PacifiCorp's Naughton and Jim Bridger power plants, the EPA ordered the State of Wyoming to reissue those permits with new continuous opacity
monitoring requirements in place. The plants are currently working with the state of Wyoming to determine what, if any, new requirements should be imposed. In 1999, the EPA commenced enforcement actions alleging violations of New Source Review
requirements by the owners of certain coal-fired generating plants in the eastern and mid-western US. PacifiCorp is not part of that action. However, in December 2000, the EPA notified PacifiCorp that it is investigating similar issues at four
PacifiCorp coal plants. PacifiCorp is co-operating with that investigation by gathering and providing requested information to the EPA.
Electric and Magnetic Fields ("EMFs")
A number of studies continue to examine the possibility of adverse health effects from EMFs, without conclusive results. Certain states and cities have enacted regulations to limit
the strength of magnetic fields at the edge of transmission line rights-of-way. Other than in California, none of the state agencies with jurisdiction over PacifiCorp's operations has adopted formal rules or programmes with respect to magnetic
fields or magnetic field considerations in the siting of electricity facilities. The California Public Utilities Commission has issued an interim order requiring power providers to implement no-cost or low-cost mitigation steps in the design of new
facilities. It is uncertain whether PacifiCorp's operations may be adversely affected in other ways as a result of EMF concerns.
Endangered Species
Presence of threatened and endangered species ("T&E species") or protection of their habitat can make it difficult and more costly to perform some of the core activities of PacifiCorp. These include the siting, construction, maintenance and operation of new and existing transmission and distribution facilities and
generating plants. In addition, T&E species issues and compliance with the Endangered Species Act ("ESA") impact the relicensing of existing hydro-electric generating projects, resulting in costly mitigation. Mitigation costs generally raise the
price PacifiCorp must pay to purchase wholesale power from hydro-electric facilities owned by others and increases the costs of operating PacifiCorp's own hydro-electric resources. Compliance with the ESA could also result in further restrictions on
land uses including timber harvesting and adversely affect electricity sales to PacifiCorp's customers in the wood products industry.
Environmental Clean-Up
Under the Federal Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes, entities that accidentally or intentionally disposed of or arranged
for the disposal of hazardous substances may be liable for clean-up of the contaminated property. In addition, the current or former owners or operators of affected sites also may be liable. PacifiCorp has been identified as a potentially
responsible party in connection with a number of clean-up sites because of current or past ownership or operation of the property or because PacifiCorp sent hazardous waste or other hazardous substances to the property in the past. PacifiCorp has
completed several clean-up actions and is actively participating in investigations and remedial actions at other sites. The costs associated with those actions are not expected to be material to the group's consolidated financial position, results
of operations, cash flows, liquidity or capital expenditure requirements.
Water Quality
The Federal Clean Water Act and individual state clean water regulations require a permit for the discharge of waste water, including storm water run off from the power plants and
coal storage areas, into surface waters. Also, permits may be required in some cases for discharges into ground waters. PacifiCorp believes that it currently has all required permits and management systems in place to assure compliance with permit
requirements.



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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Business Review
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| | UK Environmental Regulation
The group's UK businesses are subject to numerous regulatory requirements with respect to the protection of the environment, including environmental laws which regulate the
construction, operation and decommissioning of power stations, pursuant to legislation implementing environmental directives adopted by the EU and protocols agreed under the auspices of international bodies such as the United Nations Economic
Commission for Europe ("UNECE"). The group believes that it has taken and continues to take measures to comply with applicable laws and regulations for the protection of the environment. Applicable regulations and requirements pertaining to the
environment change frequently, however, with the result that continued compliance may require material investments, or that the group's costs and results of operation are less favourable than anticipated.
Electricity Generation, Transmission, Distribution and Supply
The Electricity Act obligates the Secretary of State to take into account the effect of electricity generation, transmission and supply activities upon the physical environment in
approving applications for the construction of generating facilities and the location of overhead power lines. The Electricity Act requires the group to take into account the conservation of natural features of beauty and other items of particular
interest, when it formulates proposals for development in connection with certain of its activities. The group is required, in terms of the Environmental Impact Assessment Regulations, to carry out an environmental assessment when it intends to
construct significant overhead transmission systems or power stations of greater capacity than 50 MW. The group also prepares formal statements on the 'Preservation of Amenity and Fisheries' in line with the requirements of the Electricity Act.
The Utilities Act provides for environmental guidance to be given by the Secretary of State to the energy regulator, Ofgem, which will also be required to formulate an
'Environment Action Plan'. Detailed Regulations are currently being drawn up for implementation later in 2001. The Utilities Act also provides for energy efficiency targets to be set for licensed suppliers to be implemented by an 'Energy Efficiency
Commitment'. Detailed Regulations are currently being drawn up. The Utilities Act also provides for Regulations to be drawn up which require licensed electricity suppliers to secure a certain percentage of their supplies from renewable energy
sources, compliance being demonstrated by tradable 'Renewable Obligation Certificates'. It is anticipated that this obligation will rise to 10% of supplies in the UK by 2010. ScottishPower continues to develop its windfarm business and expects to
meet the company's target of 10% generation from renewables by 2010.
The Environmental Protection Act 1990 ("EPA 1990") requires that potentially polluting activities such as the operation of combustion processes (which includes power plant)
requires prior authorisation. The Act also provides for the licensing of waste management and imposes certain obligations and duties on companies which produce, handle, and dispose of waste. Waste generated as a result of the group's electricity
activities is managed to ensure compliance with legislation and waste minimisation is undertaken where possible.
Possible adverse health effects of EMFs from various sources, including transmission and distribution lines, have been the subject of a number of studies and increasing public
discussion. The UK Childhood Cancer Study  the world's largest study ever of its kind  found no evidence that EMFs do cause cancer. Evidence from other research, such as laboratory studies, also argues against any link but, because of
the conclusions of other smaller studies from around the world, scientists cannot totally dismiss the possibility of a small risk to the very few children who receive the
highest exposure to magnetic fields. However, the March 2001 National Radiological Protection Board review concluded that the epidemiological evidence does not support the conclusion that exposure to magnetic fields causes leukemia.
Generation Activities
The principal emissions from fossil-fuelled electricity generation are sulphur dioxide ("SO2"), nitrogen oxides ("NOx"), carbon dioxide          ("CO2") and particulate matter, such as dust, with          the main waste being ash, namely pulverised fuel ash and furnace bottom          ash. The primary focus of current environmental legislation is to reduce          emissions of
SO2, NOx and particulates, the first two of which contribute to acid rain. A number of other power station emissions and discharges are subject to environmental regulation.
EPA 1990 is the primary UK statute governing the environmental regulation of power stations. It introduced a system of Integrated Pollution Control ("IPC") in April 1991 for large
scale industrial processes, including power stations. Under EPA 1990, the authority for enforcing IPC with respect to emissions to atmosphere in England & Wales is the EA and in Scotland is the Scottish Environment Protection Agency ("SEPA").
Control by the EA and SEPA came into force on 1 April 1996 and was established by the Environment Act 1995 ("EA 1995").
The EU has agreed a Directive on Integrated Pollution Prevention and Control, which introduces a system of licensing for industrial processes such as power stations. This
Directive is being implemented via the Pollution Prevention and Control Regulations ("PPC Regulations") which will bring modifications to the IPC regime into effect, on a staged basis.
The EU has adopted a framework directive on ambient air quality assessment and management, which came fully into force in May 1998 and is being implemented in the UK by means of
the National Air Quality Strategy published in 1997, and reviewed in 2000.
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| | Under the auspices of UNECE, protocols regarding reductions in the emissions of SO2and NOx have been agreed. These are currently implemented in the EU by
means of the Large Combustion Plants Directive ("LCPD"). The EU is currently finalising a "Ceilings Directive" which will implement the SO2 and NOx targets recently agreed in the UNECE Gothenburg Protocol. The LCPD is currently
under review and will be replaced by a new control framework. Controls on emissions from existing and new plants will be introduced via the new provisions, the Air Framework Directive and, in the future, by the PPC Regulations.
The EU has, under the terms of the Kyoto Protocol, signed up to the United Nations Framework Convention on Climate Change, under which Member States are committed to reducing
"greenhouse gases" by 8% below 1990 emission levels between the years 2008 and 2012. This reduction target applies to the EU as a whole, with each individual Member State being allocated its own target which is 12.5% for the UK. HM Government has
announced its intention of unilaterally setting itself a goal of 20% reduction in carbon dioxide emissions by 2010. The UK finalised in 2000 a "Climate          Change Programme" which sets in place a range of policy instruments aimed at delivery of
the 20% reduction target. These include targets for renewable energy, targets for combined heat and power, a Climate Change Levy to be charged on industrial and commercial energy usage, and residential energy efficiency measures. The provisions of
the Obligations implemented by the Utilities Act will play an important part in the Programme.
Each of ScottishPower's power stations is required to have IPC authorisation issued by the EA or SEPA. Under IPC, each power station has a single authorisation which regulates
emissions of certain pollutants and seeks to minimise pollution of the environment. Each IPC authorisation requires that a power station uses the Best Available Techniques Not Entailing Excessive Cost ("BATNEEC") to prevent the emissions described
above or, to the extent this is not practicable, to minimise and render harmless any such emissions. Each authorisation also contains an improvement programme.
ScottishPower's IPC authorisations do not have an expiry date, but the EA or SEPA is required to review the conditions contained within them at least once every four years and may
impose new conditions to prevent or reduce emissions of pollutants, subject to the application of BATNEEC. The EU Directive on Integrated Pollution Prevention and Control, being implemented on a staged basis by the PPC Regulations, will require that
all emission and pollution control measures be placed onto a "Best Available Techniques" basis to control impact on the environment.
Under the requirements of the LCPD, HM Government has implemented a Sulphur Strategy which gives effect to a national programme, the National Plan, to reduce SO2 and NOx emissions from power stations. ScottishPower and Scottish & Southern have entered into an agreement providing for the sharing of limits in emissions of SO2 and NOx from existing generating stations
in Scotland set out in the National Plan to meet the targets of the LCPD. It also provides for the sharing of station-specific limits on emissions of SO2 and NOx imposed by SEPA at the Peterhead, Longannet and Cockenzie
generating stations where capacity is shared between ScottishPower and Scottish & Southern.
Reductions of CO2, SO2 and NOx per unit of electricity generated have been achieved as a result of the group's investments in
environmental upgrades, such as low NOx burners and gas reburn, to existing power stations. That proportion of the group's output generated from renewable energy and gas-fired generation, has also increased resulting in further reductions in
emissions per unit of electricity produced.
The IPC authorisations granted in 1993 in respect of ScottishPower's existing power stations limit the levels of atmospheric emissions of SO2 and NOx from
each station. A number of minor variations have taken place and a full four year IPC review has now been completed by SEPA. This review continues the tightening of emission
limits, but provides for allowance in the event of the operator opting to fit and operate Flue Gas Desulphurisation ("FGD") plant.
The company is confident that it will be able to continue the environmental improvements required by potential future limits arising from this review without materially
constraining operational and commercial flexibility. In particular, gas reburn technology offers greater potential to reduce emissions than other technology in use elsewhere in the UK. Furthermore, planning consent has been gained for FGD at
Longannet. Detailed engineering design work is being undertaken and an installation programme devised to ensure that emission limits will be met.
Water
Since 1 April 1996, the EA has been responsible in England & Wales for the control of water pollution and the maintenance and improvement of the quality of controlled waters,
including the regulation of discharges to those waters; for conserving, redistributing and augmenting water resources and for securing the proper use of such resources for land drainage and flood defence. In Scotland, SEPA has largely replaced the
River Purification Boards to fulfil these responsibilities. The group is also subject to regulations governing drinking water quality, receiving water quality and wastewater discharges.
Within its general water resource management role, the EA has a duty to operate the system under WRA 1991, whereby water undertakers and other abstractors must have a licence
authorising each of their abstractions and other impoundments. It also has a duty to enter into water resource management arrangements with water undertakers to secure the proper management and operation of waters, reservoirs and other works vested
in the undertakers. The EA may, and shall if so directed, consider the setting of minimum acceptable flows in rivers and make recommendations to the Secretary of State accordingly.
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| | Under WRA 1991 and the Control of Pollution Act 1974, the EA may require persons to take precautions against pollution, may prohibit or restrict certain activities likely to cause
pollution in areas designated by the Secretary of State, and may impose a requirement for a consent to discharge matter from a drain or sewer. When reviewing existing consents and issuing new ones, the EA has said that it will seek to set
contamination which causes, or is likely to cause, significant harm to the environment or any pollution of conditions at the level required to at least maintain and, where appropriate, improve the quality of the receiving waters.
HM Government's upgrading of minimum levels of wastewater treatment for coastal works has required further improvements to recently completed new works such as Eastbourne,
Shoreham, Dover and Folkestone, as well as additional treatment levels for long-term investment projects at Littlehampton and Bognor, Margate and Broadstairs, and the Isle of Wight. Under EPA 1990, the EA is responsible for maintaining registers
containing details of applications for discharge consents, consents granted and the results of samples of effluent and receiving waters. The registers are open to public inspection.
The activities of the WaSCs are affected by the requirements of EU directives including the Drinking Water Directive, the Bathing Waters Directive and the Urban Waste Water
Treatment Directive. EU directives are binding on HM Government, not on the WaSCs, as to the result to be achieved within a specified period. It is the responsibility of European Member States, including the UK, to bring into force appropriate
national environmental legislation, such as the Urban Waste Water Treatment Regulations to implement these EU directives.
New requirements will be binding on the WaSCs only when they are translated into the law of England & Wales. Any expenditure incurred by a WaSC necessitated by new legislation
applying to them in their capacity as water or sewerage undertakers, or by any change in consents as a result of any changes to existing EU directives, or adoption of future
EU directives, would be eligible for consideration for a specific K adjustment.
WRA 1991 and the Urban Waste Water Treatment Regulations are the main UK statutes governing water abstraction, receiving water quality and wastewater discharges. This legislation
implements the Bathing Waters Directive and the Urban Waste Water Treatment Directive and requires improvements in the treatment of wastewater discharges. The Water Supply (Water Quality) Regulations introduce the requirements of the EU Drinking
Water Directive into the UK and govern drinking water quality. In 2000-01, Southern Water spent approximately £134 million to comply with the relevant statutes.
Southern Water, like other WaSCs in the UK, must have a licence from the EA authorising each of its abstractions and certain impoundments. For additional obligations of Southern
Water affecting the environment, see the sections of this document entitled "
Principal Business Activities  Southern Water
" and "
Regulation of the Water Industry in England & Wales
".
In addition to its other obligations affecting the environment, Southern Water may be required by the EA to take precautions against pollution, may be prohibited or restricted by
the EA from certain activities likely to cause pollution in areas designated by the Secretary of State, and may be required by the EA to obtain a consent to discharge matter (other than sewage or trade effluent) from a drain or sewer. Although
recent cases have suggested that commercial enterprises may be fined more heavily than in the past for pollution offences or for violating water quality standards, Southern Water does not believe the level of fines levied on it in 2000-01 will have
a materially adverse impact on its operations. Further, in the course of its activities, the EA may carry out anti-pollution works and may recover the cost of such works from the person responsible for the pollution: again, Southern Water does not
have a materially adverse exposure in this respect.
Contaminated Sites
While the nature of developments in environmental regulation and control cannot be predicted, the group anticipates that the direction of future changes will be towards tightening
controls. In view of the age and history of many sites owned by the group, the group may incur liability in respect of sites which are found to be contaminated, together with increased costs of managing or cleaning up such sites. Site values could
be affected and potential liability and clean-up costs may make disposal of potentially contaminated sites more difficult. EA 1995 requires the polluter (or if the polluter cannot be found or has legally transferred its responsibilities by
disclosure, the owner or occupant) of contaminated land to clean up any controlled waters, so that environmental compliance is consistent with the intended use of the site.
The UK Government has recently finalised the Contaminated Land Regulations to implement the provisions of EA 1995. This requires Local Authorities to identify sites where
significant harm is being caused and to take appropriate steps. In order for harm to be demonstrated it must be shown a source of pollution, a receptor and a pathway are present. Harm may be eliminated by clean-up or by breaking the source-receptor
pathway. Clean-up is only required to 'fit for subsequent use' standards. Other proposals which may impose strict liability for environmental damage are also under consideration by the EU and a Directive may be brought forward. ScottishPower is not
currently aware of any liability which it may have under EA 1995 or proposed EU directives which will have a materially adverse impact on its operations.
| | 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| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Business Review
| | ---------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Employment Regulation
Equal OpportunityUS Business PacifiCorp has an equal employment opportunity and harassment policy which reflects its belief that it can best achieve its objectives by effectively using the skills and
abilities of a diverse workforce. The US has extensive anti-discrimination legislation enacted at federal, state and local levels which prohibits discrimination in employment for a variety of reasons including age, race, colour, sex, religion,
creed, sexual orientation, national origin, physical or mental disability. As part of its equal employment opportunity policy, PacifiCorp has implemented and maintains a programme of 'affirmative action' in order to effectively employ minorities and
women in the workforce, and to encourage workforce diversity. This programme also covers Vietnam veterans and disabled persons/veterans. The programme also provides an effective means of complying with the periodic compliance reviews conducted by
the United States Department of Labor.
PacifiCorp has long recognised its responsibility to assist community action services. An integral part of the company's Affirmative Action Program is participation in
organisations which are active in workforce and economic development within communities served by PacifiCorp.
UK Businesses
It is ScottishPower's policy to promote equality of opportunity in recruitment, employment continuity, training and career development. To support the Policy Statement on Equal
Opportunities, specific policies have been introduced on people with disabilities, on sex and race discrimination, and on harassment. In addition, a number of family friendly policies have been introduced including a caring break, enhanced maternity
leave, paternity leave and leave for adoption or fertility treatment. ScottishPower is a Gold Card Member of the Employers' Forum on Disability, and also a member of the Employers' Forum on Age, the Equal Opportunities Commission Equality Exchange
and the Women's Engineering Society. The latter aims to promote the study and practice of engineering among women. As part of the ongoing development and implementation of
its equal opportunities strategy, the group has designed and implemented an Equality Framework, which is used to audit and undertake action plans on an annual basis. Actions arising from these plans are reported to the executive and shared with the
trade unions on an annual basis.
Health and SafetyUS Business
PacifiCorp has a safety strategy that focuses on the safety of its employees, customers and members of the public through the utilisation of sound safety policies and practices. The
commitment of PacifiCorp to strengthen yet further the safety of its operations is evident in the creation of the position of Director of Corporate Safety. PacifiCorp is also fully committed to the health and well-being of its employees. PacifiCorp
staff enjoy an excellent benefits package to ensure that they are cared for in all aspects of health care both during employment and, if they so wish, in retirement.
UK Businesses
ScottishPower's safety strategy is based on a system of corporate determination of strategy, policy and auditing standards, with devolved responsibility for implementation and active
leadership from the highest levels. The UK businesses continue to manage their operations to the highest health and safety standards, in the interests of staff, customers and members of the public. The group has a well-established occupational
health service and lifestyle health care programme, the UK employees therefore benefit from some of the best occupational health facilities in the UK.


Litigation
ScottishPower is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the business of the group, to which ScottishPower or any of
its subsidiaries is a party, or any such proceedings known to be contemplated by any governmental authority.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

|Summary of Key Operating Statistics
|-----------------------------------
|                                   

| | Table 1Summary of PacifiCorp Generating Facilities                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                            
| |                                                                                                                                                            
| |                                                                                                                                                            
| |                                                                                                                                                            
| | Hydro-electric Plants:                                                                                                                                     
| | Swift                                                                                                                                                      
| | Merwin                                                                                                                                                     
| | Yale                                                                                                                                                       
| | Five North Umpqua Plants                                                                                                                                   
| | John C. Boyle                                                                                                                                              
| | Copco Nos. 1 and 2 Plants                                                                                                                                  
| | Clearwater Nos. 1 and 2 Plants                                                                                                                             
| | Grace                                                                                                                                                      
| | Prospect No. 2                                                                                                                                             
| | Cutler                                                                                                                                                     
| | Oneida                                                                                                                                                     
| | Iron Gate                                                                                                                                                  
| | Soda                                                                                                                                                       
| | Fish Creek                                                                                                                                                 
| | 33 Minor Hydro-electric Plants                                                                                                                             
| |                                                                                                                                                            
| | Subtotal (53 Hydro-electric Plants)                                                                                                                        
| |                                                                                                                                                            
| | Thermal Electric Plants:                                                                                                                                   
| | Jim Bridger                                                                                                                                                
| | Huntington                                                                                                                                                 
| | Dave Johnston                                                                                                                                              
| | Naughton                                                                                                                                                   
| | Hunter 1 and 2                                                                                                                                             
| | Hunter 3                                                                                                                                                   
| | Cholla Unit 4                                                                                                                                              
| | Wyodak                                                                                                                                                     
| | Carbon                                                                                                                                                     
| | Craig 1 and 2                                                                                                                                              
| | Colstrip 3 and 4                                                                                                                                           
| | Hayden 1 and 2                                                                                                                                             
| | Blundell                                                                                                                                                   
| | Gadsby                                                                                                                                                     
| | Little Mountain                                                                                                                                            
| | Hermiston                                                                                                                                                  
| | James River                                                                                                                                                
| |                                                                                                                                                            
| | Subtotal (17 Thermal Electric Plants)                                                                                                                      
| |                                                                                                                                                            
| | Other Plants:                                                                                                                                              
| | Foote Creek                                                                                                                                                
| |                                                                                                                                                            
| | Subtotal (1 Other Plant)                                                                                                                                   
| |                                                                                                                                                            
| | Total Hydro, Thermal and Other Generating Facilities (71)                                                                                                  
| |                                                                                                                                                            
| | Notes: * Jointly owned plants; amount shown represents PacifiCorp's share only.Hydro-electric project locations are stated by locality and river watershed.
| |                                                                                                                                                            



| | Table 2PacifiCorp Recoverable Coal Reserves as at 31 March 2001
| | ----------------------------------------------------------------
| |                                                                 
| | Location                                                        
| |                                                                 
| | Craig, Colorado                                                 
| | Emery County, Utah                                              
| | Rock Springs, Wyoming                                           
| |                                                                 

| | Notes:
| | ------
| | 1     
| | 2     
| | 3     
| |       

| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Table 3PacifiCorp Electricity GWh Energy Sales by Customer Class                                                                                                               
| |                                                                                                                                                                                 
| | Electricity sales, by class of customer, for the years ended 31 March 2001 and 2000, the three months ended 31 March 1999, and the year ended 31
December 1998, were as follows:
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
|
| | Gigawatt hours Sold:                                                                                                                                                            
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 
| | Total GWh Sold                                                                                                                                                                  
| |                                                                                                                                                                                 
| |                                                                                                                                                                                 

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | SUMMARY OF KEY OPERATING STATISTICS
| | -----------------------------------

| | Table 4Total Electricity Units Distributed in Pacific Power Service Area (GWh)
| | -------------------------------------------------------------------------------
| |                                                                                
| | Year                                                                           
| |                                                                                
| | 1996-97                                                                        
| | 1997-98                                                                        
| | 1998-99                                                                        
| | 1999-00                                                                        
| | 2000-01                                                                        
| |                                                                                
| |                                                                                

| | Table 5Total Electricity Units Distributed in Utah Power Service Area (GWh)
| | ----------------------------------------------------------------------------
| |                                                                             
| | Year                                                                        
| |                                                                             
| | 1996-97                                                                     
| | 1997-98                                                                     
| | 1998-99                                                                     
| | 1999-00                                                                     
| | 2000-01                                                                     
| |                                                                             
| |                                                                             

| | Table 6PacifiCorp Distribution and Transmission Systems Key Information 2000-01
| | --------------------------------------------------------------------------------
| |                                                                                 
| |                                                                                 
| |                                                                                 
| | Franchise area                                                                  
| | System maximum demand                                                           
| | Transmission network (miles)                                                    
| | Underground                                                                     
| | Overhead                                                                        
| | Distribution network (miles)                                                    
| | Underground                                                                     
| | Overhead                                                                        
| |                                                                                 
| |                                                                                 

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  



| | Summary of Key Operating Statistics
| | -----------------------------------
|

| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Table 7  Sources of ScottishPower Owned Generating Capacity and Output in the UK and the Republic of Ireland as at 31 March 2001
| |                                                                                                                                  
| |                                                                                                                                  
| |                                                                                                                                  
| | Coal:                                                                                                                            
| | Longannet                                                                                                                        
| | Cockenzie                                                                                                                        
| |                                                                                                                                  
| | Methil                                                                                                                           
| | Oil:                                                                                                                             
| | Inverkip                                                                                                                         
| | Gas Turbine:                                                                                                                     
| | Rye House                                                                                                                        
| | Brighton                                                                                                                         
| | Knapton                                                                                                                          
| | Pumped Storage:                                                                                                                  
| | Cruachan                                                                                                                         
| | Conventional Hydro:                                                                                                              
| | Galloway Scheme                                                                                                                  
| | Lanark Scheme                                                                                                                    
| | Windfarms:                                                                                                                       
| | Barnesmore                                                                                                                       
| | Hagshaw Hill                                                                                                                     
| | P & L Windfarm                                                                                                                   
| | Rigged Hill                                                                                                                      
| | Corkey                                                                                                                           
| | Elliots Hill                                                                                                                     
| | Coal Clough                                                                                                                      
| | Carland Cross                                                                                                                    
| | Dun Law                                                                                                                          
| | Hare Hill                                                                                                                        
| | CHP                                                                                                                              
| |                                                                                                                                  
| | Total                                                                                                                            
| |                                                                                                                                  
| |                                                                                                                                  

| | Notes:
| | ------
| | 1     
| |       
| | 2     
| |       
| | 3     
| | 4     
| |       
| | 5     
| |       
| | 6     
| |       
| | 7     
| |       

| | Table 8  Sources of UK Generating Capacity and Output Available to ScottishPower Under Contract as at 31 March 2001
| | --------------------------------------------------------------------------------------------------------------------
| |                                                                                                                     
| |                                                                                                                     
| |                                                                                                                     
| |                                                                                                                     
| | Nuclear:                                                                                                            
| | Torness                                                                                                             
| | Hunterston B                                                                                                        
| | Total Nuclear                                                                                                       
| | Dual Oil and Gas Fired:                                                                                             
| | Peterhead                                                                                                           
| | Gas Turbine:                                                                                                        
| | Peterhead                                                                                                           
| | Conventional Hydro:                                                                                                 
| | Scottish & Southern                                                                                                 
| |                                                                                                                     
| | Total                                                                                                               
| |                                                                                                                     

| | Notes
| | -----
| | 1    
| |      
| | 2    
| |      
| | 3    
| |      
| | 4    
| |      

| |                                                                     
| | --------------------------------------------------------------------
| | Table 9

 UK Infrastructure  Power Systems Key Information 2000-01
| |                                                                     
| |                                                                     
| |                                                                     
| | Franchise area                                                      
| | System maximum demand                                               
| | Transmission network (km)                                           
| | Underground                                                         
| | Overhead                                                            
| | Distribution network (km)                                           
| | Underground                                                         
| | Overhead                                                            
| |                                                                     
| |                                                                     

| |                                                                                       |             |      |            |      |            |      |       |     |       
| | ------------------------------------------------------------------------------------- | ----------- | ---- | ---------- | ---- | ---------- | ---- | ----- | --- | ------
| | Table 10

 Total Electricity Units Distributed in ScottishPower's Service Area (GWh)
| |                                                                                      
| | Year                                                                                  | Residential | %    | Commercial | %    | Industrial | %    | Other | %   | Total 
| |                                                                                      
| | 1996-97                                                                               | 8,194       | 37.8 | 5,758      | 26.6 | 6,983      | 32.2 | 751   | 3.4 | 21,686
| | 1997-98                                                                               | 8,048       | 37.1 | 5,809      | 26.8 | 7,103      | 32.7 | 752   | 3.4 | 21,712
| | 1998-99                                                                               | 8,345       | 37.3 | 6,041      | 27.0 | 7,217      | 32.3 | 765   | 3.4 | 22,368
| | 1999-00                                                                               | 8,385       | 37.5 | 5,983      | 26.7 | 7,218      | 32.2 | 795   | 3.6 | 22,381
| | 2000-01                                                                               | 8,505       | 37.5 | 6,016      | 26.5 | 7,438      | 32.8 | 735   | 3.2 | 22,694
| |                                                                                      
| |                                                                                      

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Summary of Key Operating Statistics
| | -----------------------------------
| |                                    

| |                                                                               
| | ------------------------------------------------------------------------------
| | Table 11

 Total Electricity Units Distributed in Manweb's Service Area (GWh)
| |                                                                               
| | Year                                                                          
| |                                                                               
| | 1996-97                                                                       
| | 1997-98                                                                       
| | 1998-99                                                                       
| | 1999-00                                                                       
| | 2000-01                                                                       
| |                                                                               



| |                                                                      
| | ---------------------------------------------------------------------
| |                                                                      
| | Table 12  UK Infrastructure  Southern Water Key Information 2000-01
| |                                                                      
| | Franchise area                                                       
| | Water supply services                                                
| |                                                                      
| | Water supply                                                         
| | Water main                                                           
| | Reservoir storage capacity                                           
| | Wastewater treatment works                                           
| | Wastewater treatment services                                        
| |                                                                      
| | Wastewater treated                                                   
| |                                                                      

| |                                                                                     
| | ------------------------------------------------------------------------------------
| | Table 13  UK Infrastructure  Southern Water Storage Reservoirs as at 31 March 2001
| |                                                                                     
| | Description                                                                         
| |                                                                                     
| | Bewl Water                                                                          
| | Darwell                                                                             
| | Powdermill                                                                          
| | Weir Wood                                                                           
| |                                                                                     
| | Note:1	Includes water treatment works                                               
| |                                                                                     

| | Table 14  UK Infrastructure Southern Water Major Water Treatment Works as at 31 March 2001
| | --------------------------------------------------------------------------------------------
| |                                                                                             
| | Description                                                                                 
| |                                                                                             
| | Beauport                                                                                    
| | Burham                                                                                      
| | Eastling                                                                                    
| | Hardham                                                                                     
| | Otterbourne                                                                                 
| | Testwood                                                                                    
| | Twyford                                                                                     
| | Weir Wood                                                                                   
| | Wingham                                                                                     
| |                                                                                             
| |                                                                                             

|Table 15  UK Infrastructure Southern Water Major Wastewater Treatment Works as at 31 March 2001
|-------------------------------------------------------------------------------------------------
|                                                                                                 
|Description                                                                                      
|                                                                                                 
|Ashford                                                                                          
|Aylesford                                                                                        
|Brighton Portobello                                                                              
|Broomfield Bank                                                                                  
|Budds Farm                                                                                       
|Canterbury                                                                                       
|Chickenhall Eastleigh                                                                            
|Eastbourne                                                                                       
|Eastney                                                                                          
|Ford                                                                                             
|Millbrook                                                                                        
|Motney Hill                                                                                      
|Peel Common                                                                                      
|Weatherlees Hill                                                                                 
|Worthing East                                                                                    
|                                                                                                 
|                                                                                                 

| |                                                  
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| | Financial Review
| | ----------------
| |                 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | David NishFinance Director
All figures below are stated before the impact of goodwill amortisation and exceptional items unless otherwise stated.
Overview (2000-01)
For the year to 31 March 2001, group turnover grew significantly to £6,349 million, an increase of £2,234 million (54%), with PacifiCorp contributing revenues of
£3,122 million, an increase of £2,411 million. Revenues from retail customers in the US increased by 6% for the year, largely as a result of increased prices and higher demand, in part driven by strong economic growth and unusually hot
summer weather in the western US. Despite reductions in wholesale sales volumes of 20%, sales revenues more than doubled, reflecting the significant increase in power prices in the region. The reduction in UK turnover of £176 million was
principally related to the impact of the regulatory price reviews and intensified competition within the electricity sector. Thus' external turnover increased by £22 million for the year, compared to the equivalent period in 1999-00 after
adjusting for the disposal of the mobile telephone business in the prior year.
Cost of sales were 82% higher at £4,407 million, including a full year's trading from PacifiCorp against four months in 1999-00. Costs also increased due to higher US power purchase costs as a result of the Hunter outage, reduced availability
of hydro resources and the increase in retail load. Transmission and distribution costs were higher by £171 million year-on-year, including the impact of a full year's PacifiCorp costs of £158 million. Administrative expenses increased by
£83 million in the year, including PacifiCorp costs of £48 million and UK costs increased by £35 million, mainly as a result of the growth of Thus.
Operating profit for the year increased from £961 million to £970 million, up £9 million, despite the impact of the Hunter outage and the UK regulatory reviews.
PacifiCorp contributed operating profit of £351 million, after the impact of the Hunter outage, compared to £152 million for the four month period post acquisition to 31 March 2000. Performance in the UK businesses was consistent with the
trends reported in our interim and third quarter results, with operating profit of £619 million, compared to £810 million in the previous financial year. The reduction was principally due to the impact of the regulatory reviews and our continued investment in Thus.
As announced in May 2000, an exceptional charge of £121 million has been recognised for the costs of implementing the Transition Plan in PacifiCorp. In the year to March 2000,
exceptional charges of £55 million included costs and asset write downs incurred in preparing our Telecoms business for flotation, with a further £262 million of costs relating to impairment of assets in the UK energy and water businesses
and restructuring of our UK operations. These charges were more than offset by the £787 million gain from the partial disposal of Thus.
Largely as a result of the inclusion of a full year's results for PacifiCorp, the net interest charge increased by £105 million to £333 million in the year. Profit before
tax for the year fell by £108 million to £628 million and the ordinary tax charge, excluding deferred tax, represented an effective tax rate of around 14% on profits before goodwill amortisation and exceptional items. Including deferred
tax, the reported tax rate before goodwill amortisation and exceptional items for the year was 22.5%, with the impact of deferred tax on the results for the year being £51 million.
Earnings per share, before goodwill amortisation, exceptional items and deferred tax, were 30.65 pence for the year, compared to 41.22 pence in the same period last year. After
adjusting for the impact of deferred tax, earnings per share for the year were 27.86 pence compared to a restated earnings per share of 37.97 pence for the previous year.



|The fourth quarter dividend of 6.51 pence per share brought the total dividends per share for the year to 26.04 pence, an increase of 5%. This is in line with our stated dividend
aim of 5% nominal growth for each year through to March 2003. Dividend cover was 1.1 times.

Free cash flow for the year was £888 million, £182 million higher than the equivalent figure last year. ScottishPower invested £1,096 million in capital projects,
£210 million more than in the previous year. Of this total, £309 million related to PacifiCorp, an increase of £215 million compared to the four month period in 1999-00. Expenditure in the UK infrastructure businesses decreased by
£6 million.

Net debt increased from £4,842 million to £5,285 million as a result of the Rye House power station acquisition and the impact of foreign exchange movements. Gearing (net
debt/shareholders' funds) at 31 March 2001 was 90%, marginally higher than the 87% for 1999-00, restated for the impact of Financial Reporting Standard ("FRS") 19 on deferred tax. Interest cover was 3.0 times. Key group financial information is
shown in Table 16.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Table 16  Key Group Financial Information (2000-01 and 1999-00)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Profit before tax* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|EPS* before deferred tax (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|EPS* (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Dividends per share (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|* Before goodwill amortisation and exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                  
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| |                                                  

| |                 
| | ----------------
| | Financial Review
| |                 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Business Reviews (2000-01)

To provide a sharper focus on developing our businesses, the group has restructured into three divisions. The US Division includes PacifiCorp's regulated and unregulated
businesses; the UK Division includes Generation and Energy Supply; and the Infrastructure Division, which includes Power Systems and Southern Water in the UK, and which will also seek benefits between our US and UK infrastructure businesses.

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| |                 
| | ----------------
| | Financial Review
| |                 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | US Division

Turnover in PacifiCorp was £3,122 million in the year, an increase of £2,411 million on the four month period post acquisition in 1999-00. When comparing revenue, on a
like-for-like basis, to a full twelve month period for 1999-00, turnover was £845 million higher in the current year, due to higher retail volumes and the impact on wholesale revenues of the high power prices in the western US. Residential
revenues increased by £37 million, or 7%. Growth in the average number of customers of 2% added £10 million to revenues, with price increases in Oregon, Utah and Wyoming adding a further £19 million to revenues in 2000-01. Volume
increases of 3%, primarily due to weather, increased residential revenues by £8 million. Industrial revenues increased by £24 million, or 5%, primarily from price increases in Oregon, Utah and Wyoming and increased irrigation usage.
Commercial revenues increased by £29 million, or 6%, due to strong economic activity in Utah and Oregon. Growth in the average number of commercial customers of 3% added £15 million to revenues, with volume increases of 6% and higher
prices adding £14 million to revenues. Other retail revenues increased by £41 million mainly due to an increase in wheeling revenues from increased usage of PacifiCorp's transmission system by third parties. Wholesale revenues increased by
£718 million, or 102%. Sales prices for short-term firm and spot market sales averaged $107 per MWh in 2000-01 compared to $27 per MWh in 1999-00, resulting in £1,069 million of additional revenues. Partially offsetting this was a 27%
decrease in short-term firm and spot market sales that decreased revenues by £375 million. This decrease in volume was due to the sale of the Centralia plant and mine, the decrease in hydro availability, the outage of the Hunter unit, and the
increase in retail load requirements, all of which impacted the amount of available power to sell on the short-term and spot market. Increased prices and volumes relating to long-term firm contracts added £22 million to revenues. Other revenues
in the US Division reduced by £4 million during the year.

Operating profit from PacifiCorp for the financial year 2000-01 was £351 million, after the impact of the Hunter outage. Strong economic growth and abnormal temperatures have
led to increased retail demand in the western US and retail sales revenues have increased in the year by 6%. This growth, combined with lower than normal hydro generation, meant demand exceeded supply, resulting in exposure to high power prices in
the region. Purchased power costs increased year-on-year by over £1 billion (159%) which were largely offset by increased wholesale sales. The key financial information is shown in Table 17.
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| | Table 17  US Division (2000-01 and 1999-00)                                                                                             |         |        
| | ---------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------
| |                                                                                                                                         
| |                                                                                                                                          | 2000-01 | 1999-00
| |                                                                                                                                         
| | External turnover (£m)                                                                                                                   |         |        
| |  PacifiCorp                                                                                                                             | 3,122.3 | 711.7  
| |                                                                                                                                         
| | Operating profit* (£m)                                                                                                                   |         |        
| |  PacifiCorp                                                                                                                             | 351.3   | 151.7  
| |                                                                                                                                         
| | * Before goodwill amortisation and exceptional items.                                                                                   
| | Figures for 1999-00 represent the eexternal turnover and operating profit for the four months from date of acquisition to 31 March 2000.

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 Cross Reference to Form 20-F (US)
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| |                 
| | ----------------
| | Financial Review
| |                 

|UK Division

Generation Wholesale Generation Wholesale turnover increased by £18 million in the year to £276 million, with a higher proportion of sales now to third parties as competition continues to
develop. Agency sales grew by £53 million in the year, with volumes increased by 2,042 GWh to 3,874 GWh. Export sales in England & Wales reduced by £41 million, with volumes 1,705 GWh lower at 4,561 GWh. Interconnector utilisation
averaged 1,333 MW in the year. The acquisition of Rye House power station in March 2001 increased revenues in the year by £8 million.

Operating profit in Generation Wholesale was £93 million in the year, down £14 million compared
with the prior year, due to the continuing effects of competition on wholesale prices. Our new 400 MW combined-cycle gas turbine ("CCGT") plant at Brighton is now operational and produced a contribution to joint venture operating profits of £8
million in the year.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Energy Supply
Turnover in Energy Supply was £1,708 million in the year, a reduction of £191 million on 1999-00. Electricity sales in our home area in Scotland were £857 million,
representing a reduction of £153 million on the previous year, with volumes reduced by 10% to 16,673 GWh, primarily due to the impact of competition in the residential electricity market and downward pressure on prices. In the Manweb area
turnover fell by £84 million to £403 million, both as a result of the impact of competition and from lower prices allowed under the regulatory formulae. Domestic customer retention rates in our home areas remain competitive at 76% in the
ScottishPower area and 74% in Manweb. Electricity sales outside our home areas increased by £25 million to £209 million as we continue to grow the residential and small business customer bases outside our home areas. Gas and other energy
sales also increased strongly, by £21 million, to £239 million. The business now supplies 3.5 million electricity and gas customers in the UK.

Energy Supply contributed operating profit of £36 million for the year. Applying Ofgem's revised cost allocations, this was a £12 million improvement against the
equivalent period in 1999-00. Electricity margins in our home areas have improved as the business continues to focus on value and benefits from lower generation and use of system costs. In addition, the contribution from new electricity customers
outside our home areas and from gas customers increased by £12 million. These margin increases are in part offset by increased costs of capturing and serving our customer base, and increased system depreciation charges. The key financial
information is shown in Table 18.
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| | Table 18  UK Division (2000-01 and 1999-00)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | External turnover (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  Generation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  Energy Supply                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  Generation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  Energy Supply                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | * Before goodwill amortisation and exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| |                 
| | ----------------
| | Financial Review
| |                 

| | Infrastructure Division

Power SystemsIn the past, sales from the Power Systems business have been mainly internal to our Energy Supply business. As a result of competition in home markets, Power Systems
external sales continue to increase, up by £40 million in the year to £213 million, as distribution and transmission use of system charges are recovered from other electricity suppliers.

In Power Systems, operating profit was £324 million for the year. After adjusting for Ofgem's revised cost allocations on a consistent basis year-on-year, this was £64
million lower than in the equivalent period in 1999-00, with reduced prices allowed under the distribution and transmission regulatory reviews in part offset by savings in controllable costs.

Southern WaterSouthern Water's contribution to group turnover decreased by £49 million to £422 million following the OFWAT review, with measured sales reducing by £14
million and unmeasured sales £34 million lower than the previous year. New customer connections in the year were just over 13,000, and 21,000 customers opted to switch to
metered supply.

Southern Water contributed £221 million to operating profits, £65 million lower than last year, with reduced revenues following the OFWAT review and new costs arising
from recently commissioned capital schemes offset in part by cost saving initiatives. Southern Water remains on target to achieve cash savings of £67 million by March 2003. The key financial information is shown in Table 19.
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| | Table 19  Infrastructure Division (2000-01 and 1999-00)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | External turnover (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  Power Systems                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  Power Systems                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | * Before exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | ----------------
| | Financial Review
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| | Other Businesses

Telecoms (Thus)Total turnover from Thus was £234 million, up £17 million (8%) on the previous year, after allowing for the disposal of the mobile telephone business in the prior
year. Second half sales grew by 25% to £130 million compared with the first half and by 12% year-on-year. Total business service sales grew 31% to £160 million year-on-year, with second half sales up 39% to £93 million over the first
half and by 37% year-on-year. External turnover for the full year increased by 13% to £199 million on a like-for-like basis.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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| | Thus continued with the ongoing investment in its national network anddevelopment of its services. Operating
losses were £58 million for the twelve months to March 2001, compared to a loss of £10 million for the equivalent period in 1999-00. Thus has achieved its revenue target for the year and continues to deliver quarter-on-quarter improvements
in financial performance.
Other BusinessesTurnover in the Other UK businesses totalled £409 million, an increase of £9 million on last year. The Appliance Retailing business turnover was £317 million
in the year, £10 million lower than in 1999-00, with like-for-like sales 3% lower.
In the Other UK businesses, operating profits of £3 million were £12 million lower than last year, largely as a result of competitive trading conditions in our Appliance
Retailing business. The key financial information is shown in Table 20.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Table 20  Other Businesses (2000-01 and 1999-00)                 |         |        
|----------------------------------------------------------------- | ------- | -------
|                                                                 
|                                                                  | 2000-01 | 1999-00
|                                                                 
|External turnover (£m)                                            |         |        
| Telecoms (Thus)**                                               | 199.4   | 177.1  
| Other                                                           | 409.5   | 400.3  
|                                                                 
|Total                                                             | 608.9   | 577.4  
|                                                                 
|Operating profit/(loss)* (£m)                                     |         |        
| Telecoms (Thus)                                                 | (58.0)  | (9.5)  
| Other                                                           | 2.5     | 14.1   
|                                                                 
|Total                                                             | (55.5)  | 4.6    
|                                                                 
|* Before goodwill amortisation and exceptional items.             |         |        
|** Adjusted for disposal of mobile telephone business in 1999-00. |         |        
|                                                                  |         |        

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 Cross Reference to Form 20-F (US)
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| |                 
| | ----------------
| | Financial Review
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |         |        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------
| | Interest, Tax, Earnings and Dividends (2000-01)
Interest and TaxThe net interest charge of £333 million was £105 million higher than in 1999-00 due to the inclusion of a full year's trading from PacifiCorp and continued capital investment. The UK interest charge for the year was £184 million and represented an average rate for the year of 7.4%, versus 7.9% in 1999-00. The interest charge for
PacifiCorp was £140 million, including benefits from the sale of Powercor and Centralia in the year, resulting in an average interest rate of 6.6%. In addition, interest charges were increased by £9 million as a result of foreign exchange.
Interest cover was 3.0 times against 4.2 times in the prior year.
The taxation charge for the year was £141 million, £66 million lower than 1999-00. This amount excludes an exceptional tax credit of £46 million on the exceptional
charge for the costs associated with the PacifiCorp Transition Plan. Taxation, excluding deferred tax, in the year was £90 million, representing an effective tax rate of around 14% on profits before goodwill amortisation and exceptional items.
The impact of FRS 19 is fully reflected in the 2000-01 Accounts and the deferred tax charge for the year was £51 million. The group's effective tax rate, before goodwill amortisation and exceptional items was 22.5%, including the impact of
deferred tax, compared to 28.1% in the previous year. Key interest and tax information is shown in Table 21.
Earnings and DividendsThe profit after tax for the year including the effect of goodwill amortisation and exceptional items amounted to £285 million, a decrease of £602 million,
primarily as a result of the exceptional gain from the partial flotation of Thus reflected in last year's Accounts. Excluding the impact of exceptional items, profit after tax decreased by £129 million to £359 million, reflecting the
impact of the UK regulatory reviews. With a weighted average 1,830 million shares in issue during the year, earnings per share were 27.86 pence, compared to 37.97 pence in the previous year, as restated to include deferred tax. Excluding the impact
of deferred tax, earnings per share for the year were 30.65 pence, compared to 41.22 pence in 1999-00, a reduction of 26%. The exceptional charges of £121 million before
tax and £75 million after tax are reflected in the Accounts for the year to 31 March 2001, resulting in a decrease in group earnings per share of 4.09 pence.
The final quarter dividend of 6.51 pence per share brought the total dividends per share for the year to 26.04 pence, an increase of 5%, consistent with our stated aim of growing
dividends by 5% per annum for each of the three financial years from April 2000. Group dividend cover, excluding exceptional items and goodwill amortisation, fell to 1.1 times from 1.5 times the previous year, restated for the impact of deferred
tax.
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| | Table 21  Interest and Tax (2000-01 and 1999-00)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |         |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2000-01 | 1999-00
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | Interest charge* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 332.9   | 227.5  
| | Tax charge* excluding deferred tax (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 90.1    | 161.7  
| | Tax charge* including deferred tax (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 141.1   | 206.9  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | * Before exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |         |        

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| |                 
| | ----------------
| | Financial Review
| |                 

| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Capital Expenditure and Cash Flow (2000-01)
Capital ExpenditureThe group continued to invest in its businesses with net capital expenditure for 2000-01 of £1,096 million, an increase of £210 million over 1999-00, which
included four months' expenditure in PacifiCorp.

|
|

|US DivisionPacifiCorp capital expenditure amounted to £309 million. Expenditure of £169 million was focused on improving the quality and reliability of the electricity supply
to customers, and on expanding the network to meet demand for new electricity supply. Transmission investment was made to reinforce and refurbish specific parts of the overhead
line system and on network expansion to support new business opportunities. Spend on generation projects was £117 million. To ease the undercapacity in the region and to take advantage of market opportunities, projects are currently underway to
construct, or contract output from, 940 MW of new generation, an increase of over 10% to existing capacity, from both regulated and unregulated sources. These new sources of power will include state-of-the-art gas-fired generation, additions to
existing facilities, and output from the world's single largest windfarm.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|UK DivisionCapital expenditure in our UK Division totalled £158 million in the year, an increase of
£85 million. Generation Wholesale expenditure of £121 million was £89 million higher than in 1999-00, including £35 million of spend on the Public Finance Initiative project at Daldowie and a further £19 million on the
development of windfarms. Expenditure on new Combined Heat and Power plants totalled £33 million in the year. In Energy Supply, expenditure of £37 million primarily related to the development of billing systems and customer solutions.

Infrastructure DivisionIn Power Systems, net capital expenditure for the year amounted to £152 million, a decrease of £23 million on 1999-00 as the business continues to focus on
delivering the regulatory contract. The business spent £125 million on Distribution projects, including £41 million to improve the quality and reliability of the electricity supply to customers, and £45 million on expanding the
network to meet demand for new electricity supply. A further £29 million was invested in Transmission projects to reinforce and refurbish specific parts of the overhead line system and on network expansion to support new business opportunities.
In Southern Water, the current year marks the beginning of the five year regulatory period and capital expenditure amounted to £308 million, £45 million lower than 1999-00. This included £204 million on wastewater treatment and
disposal as the investment programme focused on the achievement of the main regulatory outputs agreed with OFWAT. The composition of the programme was dominated by construction of new wastewater treatment facilities as required by European Union
Directives. Construction of major wastewater treatment schemes was completed at Newhaven, Hythe and Littlehampton & Bognor with further significant works progressing at Portsmouth & Havant, Swalecliffe, Hastings, Dover & Folkestone, Worthing, Shoreham and Seaclean Wight. A further £43 million was spent on water distribution and treatment, with the principal focus on ongoing mains
renovation work, continuing leakage control and a significant asset maintenance scheme at Hardham.

Other BusinessesThus' expenditure in the year was £159 million, including £67 million on network development and £53 million on core telecoms products. Expenditure in the
Internet services business was £12 million and a further £15 million was incurred in the year on information systems. Capital expenditure in the Appliance Retailing business was £10 million.

Cash FlowNet cash inflow from operations increased from £1,118 million to £1,412 million, due to the inclusion of a full year's trading from PacifiCorp. Net interest paid
of £363 million was £107 million higher than 1999-00, as a result of the impact of PacifiCorp on net debt, whilst there was a decrease in tax paid of £2 million. Free cash flow for the group of £888 million was £182 million
higher than the equivalent figure in the prior year. From this was funded capital expenditure of £1,144 million, an increase of £226 million as a result of a full year's spend in PacifiCorp and higher expenditure in our UK Generation
business to develop our plant portfolio. Net cash inflows from acquisitions and disposals of £483 million primarily relate to the sale of the group's Australian assets and the Centralia plant and mine, in part offset by the costs of acquiring
Rye House power station in March 2001. Dividends paid to shareholders amounted to £471 million, up from £406 million last year due to the 5% increase in dividends per share and the enlarged shareholder base following the PacifiCorp
acquisition. Net debt at 31 March 2001 was £5,285 million, an increase of £444 million compared with a year ago, principally due to the acquisition of Rye House and
the impact of foreign exchange movements. Gearing (net debt/shareholders' funds) at 31 March 2001 was 90%, marginally higher than 87% at 31 March 2000, as restated for the impact of FRS 19 on deferred tax. Key capital expenditure and cash flow
information is shown in Table 22.
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|Table 22  Capital Expenditure and Cash Flow (2000-01 and 1999-00)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Net capital expenditure (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Free cash flow (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Net debt (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | ----------------
| | Financial Review
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|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|Overview (1999-00)

The financial results for the year to 31 March 2000 reflect, for the first time, the consolidation of four months' trading from our US subsidiary PacifiCorp, following the
acquisition in November 1999.

Group turnover grew during the year by £873 million to £4,115 million, an increase of 27%. Four months' trading from PacifiCorp's US operations contributed £712
million to external turnover, £27 million lower than the equivalent four month period in 1998-99. Wholesale revenues were £48 million lower due to the revised energy trading strategy adopted in 1998. This was partially offset by other
sales increases of £21 million, primarily as a result of customer growth. Turnover in the UK Division decreased in the year by £15 million (0.7%) to £2,157 million. Continued growth in new gas and out of area electricity customers
increased turnover by £111 million; the impact of competition in our home area resulted in increased Generation revenues from other electricity suppliers; and we experienced growth in sales of wholesale electricity. This was offset by a
reduction of £165 million in our home electricity supply markets as competition developed. In our Infrastructure Division, turnover increased by £102 million due to
price increases allowed under the regulatory formulae. Total Telecoms sales, including mobile telephone operations which were disposed of in November 1999, increased by £23 million in the year to £243 million; of which turnover for Thus
increased by 31% to £217 million. The Appliance Retailing business continued to expand and increased its turnover by £40 million.







|In line with turnover growth, cost of sales were 30% higher at £2,425 million, largely as a result of the inclusion of PacifiCorp. Transmission and distribution costs increased
by £93 million year-on-year, including PacifiCorp costs of £91 million. Administrative expenses increased by £71 million in the year, including PacifiCorp costs of £55 million and UK costs increased by £16 million, largely
as a result of higher depreciation charges. The UK infrastructure businesses have further reduced costs during the year and continue to use benchmarking as a tool to substantially reduce underlying operating costs and improve performance. The UK
customer facing businesses continue to invest in brand development, marketing and service, to grow energy and telecommunications revenues.

The PacifiCorp acquisition, together with continued strong control over operating costs, led to a significant increase in operating profit to £961 million, up £157
million. Performance in the UK businesses was consistent with the modest growth trends reported in our interim results, with operating profit increased to £809 million, compared to £804 million in the previous financial year. PacifiCorp
contributed operating profit of £152 million.

The net interest charge for the UK businesses increased by £16 million to £177 million, excluding £16 million of exceptional charges incurred on restructuring the
debt portfolio. This increase reflects the rising trend of interest rates, the continuing capital investment in UK infrastructure businesses and the impact of the share buy-back programme. Proceeds from the partial flotation of Thus partly offset
these increases. Including PacifiCorp and the exceptional debt restructuring costs, group interest increased by £82 million to £243 million in the year.

During November 1999, 49.9% of Thus was floated on the London Stock Exchange giving rise to an exceptional gain before tax of £787 million. Exceptional charges of £55
million have been recognised in respect of withdrawal from the use of fixed radio access technology in our Telecoms business and from the loss on disposal of our mobile telephone joint venture. In addition, exceptional charges of £262 million
before tax have been recognised during the second half of the year, including the costs of restructuring our UK operations, and provisions for the impairment of fixed assets following the outcome of the regulatory reviews, and provisions for
irrecoverable costs from energy contracts.

Profit before tax, including exceptional items and goodwill amortisation, increased sharply in the year, by £505 million to £1,149 million. The underlying profit before
tax grew by £91 million to £736 million. The tax charge represented an effective tax rate of 28.1%, compared to 27.1% in the previous year.

Earnings per share after exceptional items and goodwill amortisation, increased by 61% in the year to 63.69 pence; underlying earnings per share were 37.97 pence, a reduction of 4%
on the equivalent figure last year, due to the relative seasonality of profits earned by PacifiCorp in the period since acquisition.

The final quarter dividend of 6.20 pence per share brought the total dividends per share for the year to 24.80 pence, an increase of 10.2%. This is in line with our dividend aim
for the period to March 2000. Group dividend cover fell to 1.5 times from 1.8 times in the previous year.

Free cash flow for the year was £705 million, £3 million higher than the equivalent figure last year. The group invested £886 million in capital projects during the
year, £132 million more than in the previous year, with £94 million relating to PacifiCorp. Expenditure in the UK infrastructure businesses reduced by £35 million and investment in Energy Supply and Thus increased by £73
million.

Net debt increased from £2,421 million to £4,842 million as a result of the PacifiCorp acquisition, offset in part by the proceeds from the partial flotation of Thus.
Gearing (net debt/shareholders' funds) at 31 March 2000 fell to 87% compared to 201% a year ago. Interest cover remained prudent at 4.2 times. Key group financial information is shown in Table 23.
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|Table 23  Key Group Financial Information (1999-00 and 1998-99)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Profit before tax* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|EPS* before deferred tax (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|EPS* (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Dividends per share (pence)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|* Before goodwill amortisation and exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | ----------------
| | Financial Review
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|Business Reviews (1999-00)

US Division

PacifiCorp's results have been consolidated for four months' trading from date of acquisition.

Turnover for PacifiCorp's retail and wholesale activities totalled £692 million, £14 million lower than in the previous year. Sales to residential customers for the four
month period were £197 million, an increase of £4 million as a result of customer growth of 1.5%. Sales to commercial customers increased by £9 million, again as
a result of customer growth, with customer numbers increasing by 3%. Industrial sector sales increased by 278 GWh and £9 million as a result of the pilot programme to test competitive markets taking place in the previous financial year and
improved economic conditions. Wholesale sales of electricity were £48 million lower at £192 million as the revised energy trading strategy adopted in 1998 took effect.
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| | Operating profit from PacifiCorp for the period was £152 million, in line with expectations and £9 million higher than the four month period in the previous year,
primarily as a result of lower power purchase costs in the Retail and Wholesale businesses.

The group profit and loss account for the year to 31 March 2000 excludes any results of businesses held for disposal, principally Powercor, PacifiCorp's Australian subsidiary. The
key financial information is shown in Table 24.
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| | Table 24  US Division (1999-00 and 1998-99)                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | External turnover (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | * Before goodwill amortisation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Figures for 1999-00 represent the external turnover and operating profit for the four months from date of acquisition to 31 March 2000.                                                                                                                                                                                                                                                                                                                                                            
| | Figures for 1998-99 represent the external turnover and operating profit for the four months to 31 March 1999 and have been included for comparative
purposes only.                                                                                                                                                                                                                                                                                                                                
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | ----------------
| | Financial Review
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| | UK Division
Generation WholesaleGeneration Wholesale turnover increased sharply in the year, up 18% to £258 million, with growth in volumes through higher exports, up by 217 GWh to 6,266 GWh and
increased agency sales as a result of competition in the Scottish market, offset in part by lower Pool prices.
Operating profit in Generation Wholesale was £107 million in the year, down£8 million compared
with the prior year, due to the effects of competition. Margin reductions have been offset by lower operating costs, with increased operating efficiency and lower administration costs.
Energy SupplyElectricity sales in our home area in Scotland were £1,010 million, representing a reduction of £106 million on the previous year. Volumes in the ScottishPower
home area reduced by 6.9% to 18,461 GWh, primarily due to the impact of competition in the residential electricity market and downward pressure on prices in the industrial and commercial sectors. In the Manweb area turnover fell by £59 million
to £487 million, both as a result of the impact of competition and from lower prices allowed under the regulatory formulae. Sales outside our home area in England & Wales increased by £46 million to £184 million as we continue to
grow the residential and small business customer bases. Gas and other energy sales also increased significantly, by £65 million, to £218 million.
In Energy Supply, electricity profit in Scotland, as expected, reduced by £10 million to £26 million, with lower generation costs more than offset by price reductions,
loss of customers due to competition and increased systems depreciation. Operating profit from sales in England & Wales outside our home areas was £1 million, an
improvement from last year's break-even position, despite absorbing £5 million of additional capture costs for new electricity customers won in this market. In the commercial and residential gas markets the operating loss, at £6 million,
was £10 million better than in the prior year, after charging continuing customer capture costs of approximately £15 million and increased costs from serving the expanded customer base, offset by margin obtained from supplying new gas
customers. Payback on our initial investment in acquiring a new residential gas customer continues to be favourable. Operating profits for Manweb's Energy Supply business reduced by £7 million to £30 million, due to a reduction in tariffs
and a loss of customers through competition. Overall, due to the continued investment for growth, Energy Supply profits reduced by £6 million to £51 million. The key financial information is shown in Table 25.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |         |        
| | Table 25  UK Division (1999-00 and 1998-99)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |         |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1999-00 | 1998-99
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | External turnover (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |         |        
| |  Generation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 257.8   | 219.0  
| |  Energy Supply                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1,899.3 | 1,953.4
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2,157.1 | 2,172.4
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | Operating profit* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |         |        
| |  Generation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 106.8   | 115.3  
| |  Energy Supply                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 50.6    | 56.7   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 157.4   | 172.0  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | * Before exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |         |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |         |        

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| | Infrastructure Division

Power SystemsSales from the Power Systems business historically have been largely internal to our Energy Supply business. As a result of competition in home markets, Power Systems
external sales increased by £71 million to £173 million, as distribution and transmission use of system charges are recovered from other electricity suppliers.

In Power Systems, operating profit increased by £10 million to £361 million. Transmission operating profit improved by £13 million to £97 million with price
increases allowed under the regulatory formula and ongoing cost savings partially offset by higher rates and depreciation. Distribution operating profits reduced by £3 million, with revenues slightly improved from higher sales volumes in
Scotland, and continuing cost savings offset by increased depreciation charges, costs of tree cutting to protect network performance and new industry costs associated with the operation of the competitive electricity market.

Southern WaterSouthern Water's contribution to group turnover increased by £31 million to £470 million due to allowed price increases under the regulatory formula. New customer
connections in the year were just over 13,000, whilst some 26,000 Southern Water customers opted to switch to metered supply.

Southern Water contributed an additional £24 million of operating profit, rising to £286 million, from increased revenues and further cost savings delivered by the Way
Ahead initiative during the year of £16 million. These savings offset the additional costs of new cost obligations arising from the operation of new wastewater treatment plants and higher depreciation. The key financial information is shown in
Table 26.
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| |                                                          |         |        
| | -------------------------------------------------------- | ------- | -------
| | Table 26  Infrastructure Division (1999-00 and 1998-99) |         |        
| |                                                         
| |                                                          | 1999-00 | 1998-99
| |                                                         
| | External turnover (£m)                                   |         |        
| |  Power Systems                                          | 172.6   | 101.4  
| |  Southern Water                                         | 470.5   | 439.5  
| |                                                         
| | Total                                                    | 643.1   | 540.9  
| |                                                         
| | Operating profit* (£m)                                   |         |        
| |  Power Systems                                          | 361.2   | 350.6  
| |  Southern Water                                         | 286.5   | 262.2  
| |                                                         
| | Total                                                    | 647.7   | 612.8  
| |                                                         
| | * Before exceptional items.                              |         |        
| |                                                          |         |        

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| | Other Businesses

Telecoms (Thus)Total sales in Telecoms increased by £23 million to £243 million, of which £217 million related to Thus. External turnover in Telecoms increased by £22
million to £203 million, of which £177 million related to Thus.

The costs of continued investment in its growth strategy resulted in an operating loss of £10 million, compared to an operating profit of £11 million in 1998-99, due to
the costs of developing a national network and increased marketing costs associated with growing the customer base.

Other BusinessesTurnover in the Other UK businesses totalled £400 million, up from £348 million in the previous year.

The Appliance Retailing business continued to expand and increased its turnover by £40 million to £327 million, due to increased sales volumes and new store openings,
with appliance sales growing by 10% in the year and like-for-like sales increasing by 6%.

Operating profit in the Other UK businesses increased by £6 million to £14 million. The key financial information is shown in Table 27.
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| | Table 27  Other Businesses (1999-00 and 1998-99)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |         |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1999-00 | 1998-99
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | External turnover (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |        
| |  Telecoms (Thus)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 177.1   | 180.7  
| |  Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 400.3   | 348.3  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 577.4   | 529.0  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Operating profit/(loss)* (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |         |        
| |  Telecoms (Thus)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (9.5)   | 11.5   
| |  Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 14.1    | 7.7    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 4.6     | 19.2   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | * Before goodwill amortisation and exceptional items.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |         |        
| | ** Adjusted for disposal of mobile telephone business in 1999-00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |         |        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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| | Interest, Tax, Earnings and
Dividends

(1999-00)

Interest and TaxThe net interest charge of £243 million was £82 million higher than in 1998-99 due to the continued investment in capital expenditure, the impact of the share
buyback programme offset by the benefit of the proceeds received from the partial flotation of Thus. This interest charge includes £16 million of exceptional charges arising from changes to the group's debt portfolio. The average interest rate
for the UK businesses during the year was 7.9%, versus 8.0% in 1998-99. The inclusion of PacifiCorp increased the interest charge by £50 million, with an average interest rate in the four month period of 7.0%. Interest cover before exceptional
items and goodwill amortisation was 4.2 times against 5.0 times in the prior year.

The taxation charge for the year was £263 million, £88 million higher than 1998-99. This amount includes an exceptional tax charge of £56 million, primarily as a
result of the gain on the partial flotation of Thus. The effective tax rate was 28.1% compared to 27.1% in the previous year.
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| | Earnings and DividendsThe profit after tax for the year including the effect of goodwill amortisation and exceptional items amounted to £886 million, an increase of £417 million.
Excluding the impact of exceptional items, profit after tax increased by £19 million (4%) to £488 million. With a weighted average 1,390 million shares in issue during the year, earnings per share were 37.97 pence, a reduction of 4% on the
previous year.

Net exceptional gains of £470 million before tax and interest and £398 million after tax and interest are reflected in the Accounts for the year to 31 March 2000,
resulting in an improvement to group earnings per share of 28.63 pence.

The final quarter dividend of 6.20 pence per share brought the total dividends per share for the year to 24.80 pence, an increase of 10.2%, consistent with our dividend aim for the
period to March 2000. Group dividend cover fell to 1.5 times from 1.8 times the previous year. From April 2000 we aim to grow dividends by 5% per annum for each of the next three financial years.

TreasuryThe treasury focus during the year was on further refinancing of the group's debt to minimise interest payments and reduce risk. The group continues to ensure that
borrowings are financed from a variety of competitive sources and that committed facilities are available both to cover uncommitted borrowings and to meet the financing needs of the group in the future. Cash requirements are subject to seasonal
variations.

Following the PacifiCorp acquisition, the group's external borrowings are sourced in two separate pools of similar size. In the UK, Scottish Power UK plc ("SPUK") continues to be
the finance vehicle for the bulk of the UK activities. In the US, most of the debt is issued by PacifiCorp, and is entirely denominated in US dollars. In both cases regulatory constraints apply to financing activities. Scottish Power plc is not
permitted to borrow from its subsidiaries and is currently financed by way of dividend. It has no external borrowing facilities at present.

In the UK under SPUK's Euro-Medium Term Note Programme, established in November 1997, several issues were undertaken during the financial year. These included a $100 million,
two-year floating rate issue in April 2000, three index-linked issues amounting to £175 million to October 2024 at 3.494% issued between October 2000 and February 2001 and a £200 million, 20-year, 5.90% issue in February 2001. In addition
to these, there were six other smaller issues with maturities of five years.

Cumulative issues outstanding under the programme now total $3,066 million against a programme limit of $4,000 million. SPUK will continue to issue bonds under the programme which allows the UK part of the group continued access to a variety of funding sources and the ability to tap market demand as and when appropriate. As part of the group's
strategy to develop new funding sources, a £50 million 10 year loan from the European Investment Bank ("EIB") was borrowed for Manweb plc in February 2001. Total borrowings from the EIB now amount to £343 million. During the year SPUK has
taken on index-linked liabilities of £275 million, both through issues of debt and through swapping fixed rate debt into index-linked. This represents around 10% of the UK debt portfolio in recognition of the fact that a large percentage of UK
revenues are linked to inflation.

The refinancing activity has reduced short-term debt and permitted a reduction in bank facilities. In September 2000 notice was given to reduce SPUK's revolving credit facility to
£1,000 million. This facility matures in June 2001 and negotiations are underway to replace it with a new £1,000 million facility. The facility acts principally as committed support for issues of commercial paper.

In the US, the disposals of Powercor and Hazelwood have resulted in a reduction in net debt. A proportion of the proceeds from the sale was used to repay junior subordinated
debentures. A further amount has been lent by PacifiCorp Group Holdings to SPUK.

The group continues to manage its interest rate exposure by maintaining the majority of its debt at fixed rates of interest. This is done either directly by means of fixed rate
debt issues or by use of interest and cross currency swaps to convert variable rate debt into fixed rate debt or fixed/variable non-functional foreign currency denominated debt into fixed rate functional currency debt. The use of derivative
financial instruments relates directly to underlying anticipated indebtedness. The group treasury operates strictly within policies set out by the Board and is subject to regular examination by internal audit. The group's continuing policy is to maintain at least 70% of its anticipated year-end debt at fixed interest rates. In recognition of the long life of the group's assets and anticipated indebtedness and
to create financial efficiencies, the group has entered into borrowing agreements for periods out to 2039. In addition, SPUK has entered into derivative contracts to a notional value of £100 million which may result in fixed interest rates of
4.25% for periods out to 2030 on this notional amount. At 31 March 2001, the interest rate on some 71% (UK 70%, US 72%) of debt was fixed and the interest rate on a further 3% of total borrowings was capped (all UK).

The weighted average period of maturity of year-end fixed debt and swaps was 11 years (UK 10 years, US 13 years), while the forward cover on capped debt was for an average period
of just over a year (all UK). Accordingly, changes in floating interest rates will have a limited impact on interest payable by the group.

Both SPUK and PacifiCorp have credit ratings published by Moody's Investor Services, Standard & Poor's Ratings Group and The Fitch Group. SPUK's long-term ratings are now A1, A
and A+ from the three agencies respectively. PacifiCorp's senior secured debt is rated A2, A+, A and its unsecured debt is rated A3, A, A. Short-term ratings of P1, A1 and F1 apply to both companies. PacifiCorp Group
Holdings has slightly lower ratings although they remain investment grade. On 22 January 2001, Moody's changed their ratings outlook on PacifiCorp securities to negative from stable, citing increasing concerns about ongoing high costs of wholesale
power in the Pacific Northwest. On 13 February 2001, Standard & Poor's placed the ratings of the entire ScottishPower group on credit watch. This will remain the case until the wholesale power situation has been resolved.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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| | Quantitative and Qualitative Disclosures about Market Risk

Market Rate Sensitive Instruments and Risk Management
The following discussion about the group's risk management activities includes "forward looking" statements that involve risk and uncertainties. Actual results could differ materially
from those projected in the forward looking statements.

The tables in
Note 21
summarise the financial instruments, derivative instruments and derivative commodity instruments held by the group at 31 March 2001, which are sensitive to changes in interest rates, foreign exchange rates and commodity prices. The group uses
interest rate swaps, forward foreign exchange contracts and other derivative instruments to manage the primary market exposures associated with the underlying assets, liabilities and committed transactions. The group uses these instruments to reduce
risk by essentially creating offsetting market exposures. The instruments held by the group are not leveraged and are not held for financial trading purposes.

Financial Instruments and Risk ManagementOverviewThe main financial risks faced by the group are interest rate risk, foreign exchange rate risk, liquidity risk and energy price risk. The Board has reviewed and agreed
policies for managing each of these risks as summarised below. In order to mitigate the risks identified, the Board has endorsed the use of derivative financial instruments. The derivative financial instruments endorsed for use by the Board include
swaps, both interest rate and cross currency, swaptions, caps, forward rate agreements ("FRAs"), forward contracts, futures and contracts for differences ("CfDs"). The group treasury, which is authorised to conduct the day-to-day treasury activities
of the group, reports annually to the Board and is subject to both internal and external audit.

In the UK, the Energy Trading Centre which is authorised to carry out activities to manage electricity and gas price risk, reports monthly to a risk committee which includes three
executive directors. Electricity or gas price risk is defined as the possibility that a change in the cost of electricity or gas will either reduce the proceeds of electricity
or gas sales or increase the costs of electricity or gas purchases.

In the US, wholesale energy sales trading operates within defined policies for managing PacifiCorp's electricity price and supply risks in meeting load requirements. This trading
activity is reviewed as part of regular risk management meetings including ScottishPower and PacifiCorp directors and external consultants.

Interest rate risk managementThe group continues to access funding opportunities in the major global markets in a range of currencies at both fixed and floating rates of interest, using derivatives
where appropriate, to convert the obligations and payments into fixed or floating rate functional currency.

The exposure to fluctuating interest rates is managed by using a spectrum of financial instruments to maintain a majority of the group's debt portfolio at fixed rates. This
involves either issuing fixed rate debt or swapping floating rate debt obligations into fixed rates by either interest rate swaps or a string of FRAs. Flexibility in the fixed/floating mix is maintained by using interest rate caps that protect the
group should rates rise, i.e. above the strike price, while maintaining the potential benefit should interest rates fall. The overall policy framework with regard to the fixed/ floating debt mix has been approved by the Board. At 31 March 2001, 71%
(2000 78%) of the group's debt was either issued as fixed or converted to fixed rates using interest rates swaps. £100 million of FRAs were outstanding as at 31 March 2001 (2000 £nil).

All transactions are undertaken to manage the risks arising from underlying activities and no speculative trading is undertaken. The counterparties to these instruments generally
consist of financial institutions and other bodies with good credit ratings, i.e. "AA" rated by any one of the following, Standard & Poor's, Moody's or Fitch. Although the
group is potentially exposed to credit risk in the event of non-performance by counterparties, such credit risk is controlled through credit rating reviews of the counterparties and by limiting the total amount of exposure to any one party to levels
agreed by the Board. The group does not believe that it is exposed to any material concentration of credit risk.

Foreign exchange risk managementFollowing the PacifiCorp acquisition the significance of foreign currency risk has risen. Cross border trade-related cash flows remain limited to the impact of capital
equipment and fuel and are not significant in terms of the overall size of the group. The dividend stream which flows from PacifiCorp to the holding company amounts to over $300 million annually and can be sold forward on a graduated basis for
periods up to three years in order to minimise the effect of fluctuations in the £/$ exchange rate. The group's US net assets are not currently matched by borrowing in US dollars and all SPUK's debt is either denominated in sterling or, if
originally denominated in currencies other than sterling, is swapped to sterling. The group uses forward contracts to partially hedge its US net assets.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|Liquidity risk managementThe group's policy is to arrange that debt maturities are spread over a wide range of dates, thereby ensuring that the group is not subject to excessive refinancing risk in
any one year. The group has undrawn committed revolving credit facilities totalling £1,352 million, as at 31 March 2001, which provide backstop liquidity should the need arise.

Energy Price Risk ManagementUK BusinessUntil the introduction of the New Electricity Trading Arrangements ("NETA") on 27 March 2001, almost all electricity sold in England & Wales had to be sold to the Pool,
and electricity suppliers including Manweb had likewise to buy electricity from the Pool for resale to their customers. ScottishPower participated in the Pool during the year by exporting/ importing electricity to/from England & Wales via the interconnector. The Pool was operated under a Pooling and Settlement Agreement to which all licensed generators and suppliers of electricity in
Great Britain were party.

The group had procedures in place to minimise exposure to Pool price variations, that is, the possibility that a change in Pool prices would reduce the proceeds of electricity sold
to the Pool or increase the cost of electricity purchased from the Pool. These procedures involved SPUK and its subsidiary Manweb entering into CfDs. In general, the terms of CfDs are such that contracts are settled monthly (or more frequently) in
arrears by reference to actual half-hourly Pool prices. During the year ended 31 March 2001, around 90% of the group's exposure to Pool prices was hedged in this way.

NETA was introduced in England & Wales to replace the Pool. NETA is a new wholesale market, comprising trading between generators and suppliers of electricity in England &
Wales under which bulk electricity will be traded forward through bilateral contracts and one or more screen based power exchanges. NETA will be operated under the Balancing and Settlement Code to which all licensed generators and suppliers of
electricity in Great Britain are party.

The balancing mechanism, operated from 3 1/2 hours ahead of real-time up to real-time, by the National Grid Company, will be used to manage the grid system on a second-by-second
basis.

Market participants can participate actively in this market through the submission of bids and offers to vary their generation output or customer demand. The mechanism also
provides for calculation and settlement of imbalance charges arising from the differences between parties' notified contract positions and their actual physical energy flows.

The group has also entered into some longer-term (in excess of one year) arrangements to protect against
the volatility of electricity prices. These arrangements have the potential to be increased as the business grows and the time period covered will be reviewed on an ongoing basis.

The group also has procedures in place to minimise exposure to gas price variations. Gas price risk is managed through the use of a combination of longer-term (in excess of one
year) contracts, contracts with flexible delivery profiles and using the flexibility within our portfolio of gas storage and generation assets.

Cover is built up throughout the year and at 31 March 2001 a significant proportion of the group's exposure to electricity and gas price variations for the following financial year
is covered.

The group controls credit risk arising from its energy trading activities through credit approvals, counterparty credit limits and monitoring procedures.

US BusinessPacifiCorp's market risk to commodity price change is primarily related to its electricity purchases and sales arising principally from its electric supply obligation in the
US. This risk to price change is subject to fluctuations in weather, economic growth and generation resource availability which impacts supply and demand. Risk limits are established to govern energy purchases and sales. Price risk is managed
principally through the operation of its generation and transmission system in the western US and through its wholesale energy purchase and sales activities. Electricity futures contracts are utilised to hedge PacifiCorp's excess or shortage of net
electricity for future months. The changes in market value of such contracts have had a high correlation to the price changes of the hedged commodity.

PacifiCorp has been experiencing the adverse effect of higher market prices due to inadequate generating capacity in the Western System Coordinating Council ("WSCC"), generating
facility outages in the WSCC, including the unscheduled outage of PacifiCorp's Hunter generation unit from 24 November 2000 until 30 April 2001, lower hydro availability, high
natural gas prices and increases in demand throughout the WSCC due in large part to economic growth which materially impacted the cost of meeting PacifiCorp's system load requirements. While PacifiCorp plans for resources to meet its current and
expected retail and wholesale load obligations, resource availability, price volatility and load volatility may materially impact the power costs to PacifiCorp and profits from excess power sales in the future. If current market conditions continue,
prices paid by PacifiCorp to provide certain load balancing resources to supply its load may continue to exceed the amounts it receives through retail rates and wholesale prices. PacifiCorp has filed applications seeking deferred accounting
treatment for net power costs that varied from costs included in determining retail rates in the states of Utah, Oregon, Wyoming and Idaho. Approval of certain cost deferrals has been received in these states, and PacifiCorp is working with the
commissions in these states to develop mechanisms for the recovery of these cost deferrals. Approval of deferred accounting treatment mitigates a portion of the price risk, assuming that recovery mechanisms are implemented.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           





|PacifiCorp, along with other utilities in the western US, has been promoting conservation as a method to ease the current and potential future energy shortage. Actions have been
initiated to pay industrial and commercial electricity users to forego power consumption by shutting down their operations so that power could be redistributed to other uses and residential customers. PacifiCorp is also addressing supply and demand
issues through contracting power from customer-owned generation, providing consumer education about conservation, working with regulators to develop rate structures to promote conservation and providing monetary incentives to customers for reduction in usage. These actions along with increasing prices paid by customers for power may reduce the rate of electricity consumption.
Creditor Payment Policy and PracticeIn the UK, the group's current policy and practice concerning the payment of its trade creditors is to follow the Better Payment Practice Code to which it is a signatory.
Copies of the Code may be obtained from the Department of Trade and Industry or from the website www.payontime.co.uk.
The group's policy and practice is to settle terms of payment when agreeing the terms of the transaction, to include the terms in contracts and to pay in accordance with its
contractual and legal obligations. The group's creditor days at 31 March 2001 for its UK businesses and US business were 33 days and 40 days, respectively.
Going ConcernThe directors confirm that the company remains a going concern on the basis of its future cash flow forecasts and has sufficient working capital for present
requirements.


Accounting DevelopmentsDuring the past year, the UK Accounting Standards Board ("ASB") issued three new standards.
FRS 17 'Retirement benefits' introduces radical changes to accounting for pensions and similar benefits, although its measurement rules are not required to be implemented in
ScottishPower's Accounts until the year ending 31 March 2004. The requirements of the standard are currently being reviewed.
FRS 18 'Accounting policies' requires that companies adopt the accounting policies most appropriate to its particular circumstances, that these policies are reviewed regularly to
ensure they remain appropriate and are changed when a new policy becomes more appropriate. The directors have reviewed the group's accounting policies and believe them to be the most appropriate to the group's circumstances.
FRS 19 'Deferred tax' makes significant changes to accounting for deferred tax in the UK. Previously deferred tax was accounted for on the partial provisioning basis required by
Statement of Standard Accounting Practice 15. The new standard requires full provision to be made for deferred tax, with certain exceptions. This new standard has been implemented in preparing this year's Accounts and comparative figures have been
restated accordingly. The effect of this change in accounting policy is set out in
Note 6
to the Accounts.
A number of accounting pronouncements were issued during the past year by the Urgent Issues Task Force committee of the ASB. None of these pronouncements had any material impact on
the group's results or financial position.
Details of new accounting pronouncements issued in the US, which will impact on our future results in accordance with US Generally Accepted Accounting Principles ("GAAP"), are set
out in
Note 35
 . Our US GAAP results for future financial years could be materially impacted by Statement of Financial Accounting Standard 133 'Accounting for derivatives instruments and hedging activities'.
European Economic and Monetary Union and the Impact of the euroEuropean Economic and Monetary Union ("EMU") commenced on 1 January 1999 with the introduction of a new currency, the euro.
The group's businesses are almost totally UK and US focused, with very few sales or purchases denominated in currencies other than sterling or US dollars. As a result, while the UK
remains outside EMU, the group will be affected to only a very minor extent by the introduction of the euro.
The benefits of a new integrated capital market have been recognised and the group has already issued commercial paper and medium term notes in euros.


UK GAAP to US GAAP ReconciliationThe consolidated Accounts of the group are prepared in accordance with UK GAAP which differ in significant respects from US GAAP. Reconciliations of profit and equity
shareholders' funds between UK GAAP and US GAAP are set out in
Note 35
to the Accounts. Under US GAAP the profit for the year ended 31 March 2001 was £387 million compared to £881 million in the previous year, before charging an extraordinary item, net of tax, of £11 million. Earnings per share under US
GAAP, excluding extraordinary items, were 21.13 pence per share compared to 63.39 pence per share in 1999-00. In accordance with US GAAP, earnings per share are stated based on US GAAP earnings, without adjustments for the impact of the exceptional
items, other than those which are classified as extraordinary items under US GAAP, and goodwill amortisation. The inclusion of exceptional items, other than those which are classified as extraordinary items under US GAAP, in the determination of
earnings per share in accordance with US GAAP increased earnings by £409 million or 29.43 pence per share in 1999-00. The inclusion of goodwill amortisation decreased earnings by £164 million or 8.93 pence per share in 2000-01 and by
£75 million or 5.38 pence per share in 1999-00.
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|Equity shareholders' funds under US GAAP amounted to £7,463 million at 31 March 2001 compared to £7,001 million at 31 March 2000.

SummaryThese financial results have been impacted by the Hunter power station outage in Utah at a time of exceptional volatility in the western US power markets, and by the
expected reductions in revenues resulting from the UK regulatory reviews. However, our underlying business performance has been good and we have taken a number of steps to sharpen our focus on improving shareholder value.
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David Nish

Finance Director

3 May 2001

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| | Board of Directors
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| | Executive DirectorSir Ian Robinson(59) was Chief Executive from March 1995 until 17 April 2001; he retires from
the Board on 4 May 2001. He was awarded a Knighthood in the Millennium New Year's Honours List for his services to the Electricity Industry. He was previously with Trafalgar House plc, where he was Chief Executive of John Brown and a main Board
director. He is now Deputy Chairman of Hilton Group plc and Amey plc and a non-executive director of RMC Group plc. He also serves as Chairman of Scottish Enterprise, and previously chaired the Scottish Advisory Task Force on Welfare to Work. He is
a Fellow of the Royal Academy of Engineering and a Fellow of the Institution of Chemical Engineers.

Ian Russell(48) was appointed Chief Executive on 17 April 2001, having previously been appointed
Finance Director in April 1994 and Deputy Chief Executive in November 1998. He is a member of the Institute of Chartered Accountants of Scotland, having trained with Thomson McLintock, and has held senior finance positions with Tomkins plc and HSBC.

Charles Berry(49) joined ScottishPower in November 1991, and was appointed to the Board in April
1999. He is Executive Director UK, responsible in this capacity for the UK energy businesses of Generation, Trading and Supply as well as regulatory matters. Previously he was Executive Director Customer Sales & Services. He will succeed Ian
Russell as non-executive Chairman of Thus plc on 23 May 2001. He was previously Group Development Director of Norwest Holst, a subsidiary of Compagnie Général des Eaux, and prior to that held management positions within subsidiaries of
Pilkington plc.

David Nish(40) joined ScottishPower in September 1997 as Deputy Finance Director and was appointed
to the Board as Finance Director in December 1999. In this capacity, he also has responsibility at Board level for performance management and information technology. On 23 May 2001 he will be appointed a non-executive director of Thus plc. Prior to
joining ScottishPower, he was a partner with Price Waterhouse. He is a member of the Institute of Chartered Accountants of Scotland and its Qualifications Board, a non-executive director of Scottish Knowledge plc and a Member of the Scottish Council
of the CBI.

Alan Richardson(54) joined ScottishPower in July 1991 and was appointed to the Board in April 1999.
In November 1999 he was appointed Chief Executive Officer of PacifiCorp upon completion of the merger. He is Executive Director US, with continuing responsibility for PacifiCorp and increased focus on the regulated and non-regulated energy value
chains in the US. Between 1995 and April 1999 he was Managing Director Power Systems and, in that role, had responsibility for the Distribution businesses in Scotland and Manweb. He was previously director and General Manager of the Bushing Company
Limited and Reyrolle Limited. He is a Fellow of the Institution of Electrical Engineers.

Ken Vowles(59) joined ScottishPower in September 1990 and was appointed to the Board in September
1994 as Executive Director, Generation. He is Executive Director, International, with responsibility for the group's plant acquisition strategy and the company's overall operational effectiveness; he also has responsibility on a group-wide basis for
safety and environmental matters and has led the company's European portal investment. He has over 30 years' experience of the power generation industry, having previously
served with the Central Electricity Generating Board and National Power plc. He is a Fellow of the Institution of Electrical Engineers, a Fellow of the Institution of Mechanical Engineers and an Honorary Professor at Heriot Watt University. He is
Chairman of the Electrical Industries Environmental Committee and a member of the Energy Saving Trust.

For the purposes of the Annual Report on Form 20-F, the following are regarded as officers of the company.
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | Julian Brown                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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| | Ronnie Mercer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Andrew Mitchell                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | Paul Pagliari                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | James Stanley                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | Members of the Audit CommitteeJohn Parnaby, Chairman

Sir Peter GregsonAllan Leighton

Ewen Macpherson

Robert Miller

Charles Miller Smith

Members of the Nomination CommitteeCharles Miller Smith, Chairman

Mair Barnes

Sir Peter Gregson

Keith McKennonIan Russell

Members of the Remuneration CommitteeEwen Macpherson, Chairman

Euan Baird

Mair Barnes

Sir Peter Gregson

Nolan Karras

Keith McKennon

John Parnaby

Board ChangesEuan Baird and Allan Leighton joined the Board on 8 January 2001. Sir Ian Robinson was succeeded by Ian Russell as Chief Executive on 17 April 2001. Sir Ian Robinson retires
from the Board on 4 May 2001. In accordance with the Articles of Association, Euan Baird and Allan Leighton retire from office at the Annual General Meeting ("AGM") and, being eligible, offer themselves for election. In addition, Keith McKennon,
Mair Barnes, John Parnaby and Ian Russell retire by rotation at the AGM. Mair Barnes and Ian Russell, being eligible, offer themselves for re-election. Keith McKennon and John Parnaby will retire from the Board at the conclusion of the AGM and do
not accordingly seek re-election. Ian Russell has a service contract terminable by the company upon two years' notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Board of Directors
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    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| | Non-executive Directors

Charles Miller Smith(61) joined the Board as Deputy Chairman in August 1999 and was appointed
Chairman in April 2000. Following a career with Unilever for some 30 years, during the last five of which he was Director of Finance and latterly of the Food Executive, he was appointed Chief Executive of ICI in 1995 and since 1999 has been
Chairman. He is also a non-executive director of HSBC, The Royal Scottish National Orchestra and a Member of the Court of Governors of Henley Management College.

Keith McKennon(67) joined the Board as Deputy Chairman in November 1999. He continues as a director
of PacifiCorp, having previously (until the merger in November 1999) served as Chairman from 1994 and as President and Chief Executive Officer from 1998. Prior to joining PacifiCorp, he had a long career with Dow Chemical Company. He is a director
of the Oregon Historical Society and a member of the Oregon State University President's Advisory Council. He will retire from the Board after the AGM in July 2001.

Euan Baird(63) joined the Board in January 2001 and is Chairman and Chief Executive Officer of
Schlumberger Limited. He joined Schlumberger in 1960 and held various positions worldwide before taking up his present position in 1986. He is currently a trustee of Haven Capital Management Trust and Carnegie Institution of Washington, and a member
of the Comité National de la Science in France and the Prime Minister's Council of Science and Technology in the UK. His current term of office, subject to election in 2001, will expire at the AGM in 2004.

Mair Barnes(56) joined the Board in April 1998. She is a non-executive director of Abbey National
plc, Patientline plc and the South African company, Woolworths Holdings Limited, and also a non-executive member of the Departmental Board of the Department of Trade and Industry. She was previously Managing Director of Woolworths plc in the UK
until 1994, and then chaired Vantios plc and General Optica Limited until 1998 and 2000 respectively; she was also formerly a non-executive director of George Wimpey plc. Her
current term of office, subject to reelection in 2001, will expire at the AGM in 2004.

Sir Peter Gregson GCB(64) joined the Board in December 1996 and is the company's senior independent
non-executive director. He was formerly a career civil servant, having served latterly as Permanent Secretary of the Department of Energy from 1985 to 1989 and Permanent Secretary of the Department of Trade and Industry until his retirement in June
1996. He was a non-executive director of Woolwich plc and is Deputy Chairman of the Board of Companions of the Institute of Management. His current term of office expires at the AGM in 2003.

Nolan Karras(56) joined the Board in November 1999. He continues as a director of PacifiCorp, having
previously (until the merger in November 1999) served as Chairman of the PacifiCorp Personnel Committee. He is President of The Karras Company, Inc., and a Registered Principal for Raymond James Financial Services. He is Chief Executive Officer of
Western Hay Company, Inc., and a non-executive director of Beneficial Life Insurance Company and American General Savings Bank. He also served as a Member of the Utah House of Representatives from 1981 to 1990, and as Speaker of the Utah House of
Representatives from 1989 to 1990. His current term of office expires at the AGM in 2003.

Allan Leighton(48) joined the Board in January 2001. He was previously Chief Executive of Asda
Group, and latterly President and Chief Executive Officer of Wal-Mart Europe, until November 2000. Since then, he has developed a diverse portfolio of business interests; in particular, he is Chairman of BhS, Lastminute.com and Wilson Connolly
Holdings, Deputy Chairman of Leeds Sporting plc and a non-executive director of several other companies, including BSkyB, Consignia, Dyson and George Weston. He also chairs Race for Opportunity. His current term of office, subject to election in
2001, will expire at the AGM in 2004.

Ewen Macpherson(59) joined the Board in September 1996 and is Chairman of the Remuneration Committee.
He had a long career with 3i Group plc, leading to his appointment as Chief Executive from 1992 until his retirement in 1997. He is Chairman of Merrill Lynch New Energy Technology plc and a non-executive director of Foreign & Colonial Investment
Trust plc, Pantheon International Participations plc and Sussex Place Investment Management Limited. He is also Chairman of the Trustees of Glaxo-Wellcome Pension Fund. Previous appointments include Chairman of Glynwed International plc and
non-executive director of Booker plc and The Law Debenture Corporation plc. His current term of office expires at the AGM in 2003.

Robert Miller(57) joined the Board in November 1999. He continues as a director of PacifiCorp,
having previously (until the merger in November 1999) served as Chairman of the PacifiCorp Finance Committee. He became Chairman and Chief Executive Officer of Rite-Aid Corp in December 1999, having previously been Vice-Chairman of the Kroger
Company from May to December 1999 and, prior to that, President and Chief Executive Officer of Fred Meyer, Inc., since 1997, and Chairman since 1991. His current term of office expires at the AGM in 2003.

John Parnaby CBE(63) joined the Board in September 1994 and is Chairman of the Audit Committee. He
retired in October 1997 as Group Director of Lucas Varity plc after 15 years, initially with Lucas Industries plc, and then as Sector Chief Executive and Group Director  Technology. He is Chairman of Knowledge Process Software plc and Think
Digital plc and a member of the Council of Aston University. He is also a member of the Board of the UK Government Innovative Manufacturing Initiative. He has been a non-executive director of Jarvis plc and Molins plc and is a past President of the
Institutions of Electrical Engineers and Manufacturing Engineers and a former member of the Council of the Royal Academy of Engineering. He will retire from the Board after the AGM in July 2001.

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 Cross Reference to Form 20-F (US)
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| | Corporate Goverance
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| | Corporate Governance StatementThe company is committed to the highest standards of corporate governance. This statement together with the
Remuneration Report of the Directors
, describes how, in the course of the financial year ended 31 March 2001, the company has been in compliance with the principles of good governance set out by the Listing Rules of the Financial Services Authority in Section 1 of the Combined
Code.

Board of DirectorsThere is a well-established division of authority and responsibility at the most senior level within the company through the separation of the roles of Chairman and Chief
Executive. There are currently six executive and ten non-executive directors (including a non-executive Chairman) on the Board. Sir Peter Gregson is the senior independent non-executive director. With the exception of the Chairman, all non-executive
directors are considered by the Board to be independent.

The non-executive directors are from varied business and other backgrounds, and all directors have the benefit of induction visits and briefings following their appointment to the
Board. Their experience allows them to exercise independent judgement on the Board and their views carry substantial weight in Board decisions. They contribute to the company's strategy and policy formulation, in addition to monitoring its
performance and its executive management. The non-executive directors are appointed for a specified term; reappointment is not automatic, and each non-executive director's position is subject to review prior to the expiry of his or her term of
office.

The Board meets on a regular basis and has a schedule of matters concerning key aspects of the company's activities which are reserved to the Board for decision. The Board
exercises full control over strategy, investment and capital expenditure. In addition, individual executive directors have specific responsibilities for such matters as health, safety, environment and regulation. All directors have access to the Company Secretary, who is responsible for ensuring that all Board procedures are observed. Any director wishing to do so, in furtherance of his or her duties, may take
independent professional advice at the company's expense.
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 Cross Reference to Form 20-F (US)
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| | Corporate Goverance
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|Board CommitteesThe Board has four principal standing committees: namely, the Audit Committee, Nomination Committee, Remuneration Committee and the Executive Team. The composition, purpose
and function of each of these committees are described below.

Audit CommitteeThe Audit Committee is comprised of non-executive directors only and is chaired by John Parnaby (his successor in July 2001 will be Ewen Macpherson). It has a remit to
review the company's accounting policies, internal control and financial reporting, and makes recommendations on these matters to the Board for decision. It also considers the appointment and fees of the external auditors.

Nomination CommitteeThe Nomination Committee is chaired by the Chairman of the Board with, as members of the Committee, the Chief Executive and three independent non-executive directors. It has
a remit to consider and make recommendations to the Board on all new appointments of directors, having regard to the overall balance and composition of the Board; to consider and approve the remit and responsibilities of the executive directors; and
to review and advise upon issues of succession planning and organisational development.

Remuneration CommitteeThe Remuneration Committee is comprised of independent non-executive directors only and is chaired by Ewen Macpherson (his successor in July 2001 will be Sir Peter Gregson).
It has a remit to consider and make recommendations on Board remuneration policy and, on behalf of the Board, to determine specific remuneration packages for each of the executive directors. In discharging its remit, the Committee has regard to the
provisions of the Combined Code and has as an objective the aim of providing packages to attract, retain and motivate executive directors of the quality required; to judge the company's position in matters of remuneration policy and practice
relative to other companies; and to take into account wider issues of pay-setting. It also has responsibility for the company's bonus and incentive schemes. The
Remuneration Report of the Directors
for 2000-01 is set out
here
 .

Executive TeamThe Executive Team comprises the Chief Executive and other executive directors, together with the Group Director, Infrastructure; Group Director, Corporate Communications;
Group Director, Human Resources; Group Director, Legal; Group Director, Strategy; and the Company Secretary. Operational control and implementation of group strategy and policy are responsibilities delegated by the Board to the Chief Executive, who
is supported by the Executive Team (and by divisional and business boards) in the discharge of these functions. Major issues and decisions are reported to the Board.
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 Cross Reference to Form 20-F (US)
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| | -------------------
| | Corporate Goverance
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| | Internal ControlThe directors of ScottishPower have overall responsibility for the system of internal control and for reviewing the effectiveness of the system. The system of internal
control is designed to manage rather than eliminate the risk of failure to achieve business objectives. In pursuing these objectives, internal control can only provide reasonable and not absolute assurance against material misstatement or
loss.

The risk management framework adopted by the group is designed to ensure that key controls are embedded into business processes. The continued development and implementation of the
risk management and internal control system across the group has allowed the directors to comply with the Combined Code provisions on internal control in the course of the financial year ended 31 March 2001.
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|Control Environment
The company is committed to ensuring that a proper control environment is maintained. There is a commitment to competence and integrity, and to the communication of ethical values and
control consciousness to managers and employees. Human Resources policies underpin that commitment by a focus on enhancing job skills and promoting high standards of probity among staff. In addition, the appropriate organisational structure has been
developed within which to control the businesses and to delegate authority and accountability, having regard to acceptable levels of risk.

Identification and Evaluation of Risks and Control ObjectivesThe company's strategy is to follow an appropriate risk policy, which effectively manages exposures related to the achievement of business objectives.

Each business identifies and assesses the key business risks associated with the achievement of its strategic objectives. These risks are then mapped against the key business
processes in place and the controls embedded within the business process are then identified to manage the risk exposure. Any key actions needed to further enhance the control environment are identified along with the person responsible for the
management of the specific risk. All of this information is held in a series of Business Risk and Control Frameworks, which are fully reviewed and updated on a continuous basis.

In addition to the full review of the Business Risk and Control Frameworks described above, each month a review of the key risks, controls and action plans within each of the
businesses takes place and a Risk Report is produced for review by the board of each business. This monthly Risk Report is a standing item on the agenda of the business boards, which operate throughout the group.

The corporate centre also considers those risks to the group's strategic objectives that may not be identified and managed at a business level. The Executive Team on a monthly
basis receives the group-wide Risk Report for review. This report highlights the most significant risks across the group, the actions being taken to mitigate these and also
identifies individuals responsible for the management of these risks.

Business Control Managers have been appointed within each of the businesses to help ensure that the risk management and internal control system is consistently adopted, updated and
embedded into the business processes.

The use of a well-defined risk management methodology across all businesses allows a consistent and co-ordinated approach to risk reporting for review by the Executive Team, which
also receives regular reports on these matters from the Audit Committee, to enable the directors to review the effectiveness of the system of internal control.

A key element and requirement of the risk evaluation process is that a written certificate is provided twice per year by the Managing Director of each business confirming that they
have reviewed the effectiveness of the system of internal control during the year.

Monitoring and Corrective ActionThe Executive Team reviews monthly the key risks facing the group and the controls and monitoring procedures for these. Operation of the group's control and monitoring
procedures is reviewed and tested by the group's internal audit function under the supervision of the Head of Internal Audit, reporting to the Finance Director and with access to the Chairman of the Audit Committee. Internal audit reports and
recommendations on the group's procedures are reviewed regularly by the Audit Committee. As part of their external audit responsibilities, the external auditors also provide reports to the Audit Committee on the operation of the group's internal
financial control procedures. The Audit Committee also receives regular reports on the continued development, implementation and evaluation of the risk management and internal control system.
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 Cross Reference to Form 20-F (US)
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| | Remuneration Report of the Directors
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| | Remuneration CommitteeThe Board is responsible for determining the remuneration policy for the group. The Remuneration Committee determines the detail of remuneration arrangements for executive
directors and reviews proposals in respect of other senior executives.

The Remuneration Committee consists solely of independent non-executive directors. Its members, who have no personal financial interest, other than as shareholders, in the matters
considered by the Committee, are Ewen Macpherson (Chairman), Euan Baird, Mair Barnes, Sir Peter Gregson, Nolan Karras, Keith McKennon and John Parnaby. The Committee is advised internally and is also provided with independent advice from external
remuneration consultants in order to assist in determining and developing its policies.

Committee members are paid a fee and expenses, but do not receive any other remuneration from the company. Details of the remuneration of all non-executive directors are set out in
Table 28
 . The Committee's policy and disclosures on directors and senior management remuneration are set out below.

Following the flotation of Thus plc in November 1999, in accordance with good corporate governance principles, the Thus Board established a separate Remuneration Committee which
determines the details of remuneration arrangements for that company.

Executive Remuneration PhilosophyThe company's remuneration philosophy is to ensure that the rewards for executives and directors attract and retain executives of high quality, who have the requisite skills
and are incentivised to achieve performance which exceeds that of competitor companies. Furthermore, the objective is to ensure that incentive schemes are in line with best practice and promote the interests of shareholders.

The Committee considers a Personal Shareholding Policy for executives and senior managers to be in the best
interests of shareholders. Accordingly, the company introduced a Personal Shareholding Policy last year, further aligning the interests of executives and senior managers with those of shareholders. In conjunction with the proposals being put to the
Annual General Meeting, it is proposed to increase the levels of personal shareholding required under this Policy.

Competitiveness of RemunerationThe Committee believes that to attract and retain key executives of high calibre, the remuneration package it offers must be market-competitive. The remuneration strategy is
to adopt a mid-market position on all senior management remuneration packages, and to provide packages above the mid-market level only where supported by demonstrably superior personal performance. As the company evolves and establishes a presence
in new business sectors, remuneration packages will be developed to reflect the prevailing market practice in each business environment. This positioning will be established drawing upon advice from independent remuneration consultants and internal
advisers.

The Committee takes a balanced view of remuneration, considering each element relative to market and, in the past, has realigned elements of the package to reflect market
conditions or changes in market practice. Annual bonus arrangements have been structured so that targets reflect corporate, business unit and individual performance.

Remuneration PolicyIn setting remuneration levels, the Committee commissioned an independent evaluation of the roles of the executive, and also of the next levels of management within the
company. The Committee has also continued to take independent advice from external remuneration consultants on market-level remuneration, based on comparison with companies of similar size and complexity. In considering the comparator companies, the
consultants have included a number of other utilities but have not restricted their study solely to utilities. After careful consideration, the Committee is of the view that the stated remuneration policy is appropriate. In line with its objectives
to build international business, the company has recruited a number of executives with key business skills, and hence a reward structure broadly equivalent to other large UK-listed companies with international operations is necessary.

Base SalariesThe Committee sets the base salary for each executive director by reference to individual performance through a formal appraisal system, and to external market data, based
on job evaluation principles and reflecting similar roles in other comparable companies.

Annual Performance-related BonusExecutive directors and senior management participate in the company's performance-related pay schemes. All payments under the schemes are non-pensionable and are subject to
the approval of the Committee.

The 2000-01 scheme for executive directors provided a bonus of a maximum of 75% of salary, with half determined by the company's financial performance. The balance of the bonus is
linked to each executive's achievement of key strategic objectives, both short-term and long-term. Objectives are set annually and performance against these is reviewed on a six-monthly basis.

Two-thirds of any bonus payment will be paid in cash and the remaining one-third will be paid in shares, receipt of which will be deferred for a three-year period.
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| | Remuneration Report of the Directors
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| | Executive Share SchemesThe company operates a Long Term Incentive Plan ("LTIP") for executive directors and other senior managers. The LTIP links the rewards closely between management and
shareholders, and focuses on long-term corporate performance.

Under the current LTIP, awards to acquire shares in ScottishPower at nil or nominal cost are made to the participants up to a maximum value equal to 75% of base salary. The award will vest only if the Committee is satisfied that certain performance
measures are met. These relate to the sustained underlying financial performance of the company and customer service standards, including those set by Ofgem and OFWAT.
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| | The number of shares which vest is dependent upon the company's comparative total shareholder return performance, over a three-year performance period.

A number of share-based incentive schemes are also in place in the company's international operations. These are structured to comply with local tax and legislation and are
established at market-competitive levels. No executive director participates in any international share incentive arrangement.

It is some five years since the current LTIP was introduced and since then there have been significant changes in both UK market practice and the structure and scale of the
business. Some 49% of the company's revenues are now generated in the US.

In the Merger Agreement, shareholders approved the continuation of PacifiCorp's compensation, incentive and employee benefit plans and arrangements for a period of two years after
the merger date. The company was required to ensure that PacifiCorp's arrangements were no less favourable in the aggregate to the employee for the same period post-merger. This period expires in November 2001.

The Board believes the company should have in place incentive plans that are competitive for senior executives with international responsibilities and which reflect local market
practice. The Remuneration Committee acknowledges that, taken in conjunction with a Personal Shareholding Policy, executive share options are the most beneficial way of aligning employee interests with shareholder interests. Executive share options,
particularly in the US, are the most prevalent form of long-term incentive. The Board is of the view that it is desirable to have such plans in place.

Given the international dimension of the company and, in particular, the need to take account of market conditions in the US, approval for the introduction of a new Executive Share
Option Plan is being sought at the forthcoming Annual General Meeting. This will bring the long-term incentive arrangements more into line with those operated by other major UK companies with international activities.

Inland Revenue approval will be sought for the approved part of the Executive Share Option Plan. Executive directors and senior managers of participating companies within the group,
whether employed in the UK or overseas, may be eligible to participate, subject to the rules of the new Plan.

Employee Share SchemesThe company operates a savings-related share option scheme, which is open to all UK-based permanent employees. Under this scheme, options are granted over ScottishPower
shares at a discount of 20% from the prevailing market price at the time of grant to eligible employees who agree to save up to £250 per month over a period of three or five years.

In addition, the Government implemented legislation on 28 July 2000 to enable companies to introduce a new Inland Revenue approved Employee Share Ownership Plan ("ESOP"). The
company was amongst the first to introduce these arrangements for all UK-based employees. The ESOP enables employees to purchase shares in the company from pre-tax income up to the limits specified in the legislation. The company matches these
shares at no cost to the employee on a one-for-one ratio. The legislation also enables the company to award Free Shares to employees and, last year, the company offered employees an initial grant of 50 Shares to launch the ESOP.

PensionThe executive directors, and other senior management of the company, are provided with pension
benefits through the company's main pension scheme, and through an executive top-up pension plan which provides a maximum pension of two-thirds of final salary on retirement at age 63, reduced where service to age 63 is less than 20 years.
Pensionable salary is base salary in the 12 months prior to leaving the company.

Individuals who joined the company on or after 1 June 1989 are subject to the Inland Revenue earnings cap, introduced by the Finance Act 1989. Entitlement above the cap cannot be
provided through the company's approved pension benefits, and therefore arrangements on an unapproved basis have been made to provide total benefits for executives affected by the legislation as though there was no cap. The total liability in
respect of executives and senior employees arising in relation to unapproved benefits accrued for service for the year to 31 March 2001 was £500,000.

The Trustee body of the Executive Top Up Plan is chaired by the Company Secretary. The Committee has reported the pension expense in accordance with the requirements of the UK
Listing Authority. Pension costs detailed in the Accounts are calculated as the cost of providing benefits accrued in 2000-01.

BenefitsExecutive directors are eligible for a range of benefits on which they are assessed for tax. These include the provision of a company car, fuel, private medical provision
and permanent health insurance. Senior executives, depending upon grade, are eligible for certain of these benefits.

As with salary, the level of benefits is reviewed annually through surveys from independent consultants. Practice varies as to the composition of these items amongst the
comparator group and the company's benefits are broadly in line with the practice of the group. The company provides all levels of UK staff, including executive directors and certain pensioners, with a discount on merchandise sold by its Appliance
Retailing business.
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| | Remuneration Report of the Directors
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| | Service ContractsExisting executive directors appointed before 1 April 1999, have service contracts terminable by the company on two years' notice (prior to September 1994 notice periods
were three years) and by the individuals concerned on one year's notice. The Committee believes that it remains appropriate for these executive directors to continue to be on two-year rolling contracts. Executive directors, Charles Berry, David Nish
and Alan Richardson, were appointed to the Board on or after 1 April 1999; these appointments have service contracts terminable on one year's notice from both parties.

The Committee's policy on early termination is to emphasise the duty to mitigate to the fullest extent practicable. Senior managers within the company have notice periods ranging
from six months to one year.

External Non-executive AppointmentsThe company encourages its directors to become non-executive directors of other companies, provided that these are not with competing companies, are not likely to lead to
any conflicts of interest, and do not require extensive commitments of time which would prejudice their roles within the company. This serves to add to their personal and professional experience and knowledge, to the benefit of the company. Any fees
derived from such appointments may be retained by the executives.

Remuneration Policy for Non-executive DirectorsThe remuneration of non-executive directors is determined by the Board and consists of fees for their service in connection with the Board and Board Committees. Additional fees are also payable for chairing Board Committees. The non-executive
directors do not have service contracts, are not members of the company's pension schemes and do not participate in any bonus, share option or other profit or long-term incentive scheme. Full details of the remuneration of the non-executive
directors are contained in
Table 28
 .

Compensation of Directors and Officers
For US reporting purposes, it is necessary to provide information on compensation and interests for directors and officers. The aggregate amount of compensation paid by the group to
all directors and officers of the company, as a group, was £3,615,392.

During 2000-01 the aggregate amount set aside or accrued by the group to provide pension, retirement or similar benefits for directors and officers of the company pursuant to any
existing plan provided or contributed to by the group was £1,177,900.

Interest of Management in Certain TransactionsThere have been no material transactions during the group's three most recent financial years, nor are there presently proposed to be any material transactions to which the
company or any of its subsidiaries was or is a party and in which any director or officer, or 10% shareholder, or any relative or spouse thereof or any relative of such a spouse, who had the same home as such person or who is a director or officer
of any subsidiary of the company has or is to have a direct or indirect material interest.

During the group's three most recent financial years there has been no, and at present there is no, outstanding indebtedness to the company or any of its subsidiaries owed or owing
by any director or officer of the group or any associate thereof.

Directors' InterestsOther than as disclosed, none of the directors had a material interest in any contract of significance with the company and its subsidiaries during or at the end of the financial year. The directors' interests, all beneficial, in the ordinary
shares of the company, including interests in options under the company's Executive and Sharesave Schemes and awards under the LTIP, are shown in
Table 30
and
Table 31
 .

Directors' and Officers' Liability InsuranceThe company maintains liability insurance for the directors and officers of the company and its subsidiaries.
Directors' Emoluments and InterestsTotal EmolumentsTable 28
provides a breakdown of the total emoluments of the Chairman and all the directors in office during the year ended 31 March 2001.

Directors' Pension BenefitsDetails of pension benefits earned by the executive directors during the year are shown in
Table 29
 .
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| | Remuneration Report of the Directors
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| |                                                                                
| | -------------------------------------------------------------------------------
| | Table 28Directors' Emoluments 200001                                         
| |                                                                                
| |                                                                                
| |                                                                                
| | Chairman and executive directors                                               
| | Murray Stuart (retired 31 March 2000)                                          
| | Charles Miller Smith (appointed 1 August 1999, appointed Chairman 1 April 2000)
| | Sir Ian Robinson                                                               
| | Ian Russell                                                                    
| | Charles Berry                                                                  
| | David Nish (appointed 13 December 1999)                                        
| | Alan Richardson*                                                               
| | Ken Vowles                                                                     
| | Duncan Whyte (resigned 31 May 1999)                                            
| |                                                                                
| |                                                                                
| |                                                                                
| | Non-executive directors (fees and expenses)                                    
| | Keith McKennon (appointed 30 November 1999)                                    
| | Euan Baird (appointed 8 January 2001)                                          
| | Mair Barnes                                                                    
| | Sir Ronald Garrick (retired 30 April 1999)                                     
| | Sir Peter Gregson                                                              
| | Nolan Karras (appointed 30 November 1999)**                                    
| | Allan Leighton (appointed 8 January 2001)                                      
| | Ewen Macpherson                                                                
| | Robert Miller (appointed 30 November 1999)                                     
| | John Parnaby                                                                   
| |                                                                                
| | Total                                                                          
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| | Other emoluments  executive directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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| | *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | The emoluments of the highest paid director (Sir Ian Robinson) excluding pension contributions were £546,862 (2000 £688,611). In
addition, gains on exercise of share options during the year by Sir Ian Robinson amounted to £17,301 (2000 £nil). Details of other share related incentives are contained in Tables 30 and 31. Pensions contributions made by the company under
approved pension arrangements for Sir Ian Robinson amounted to £nil (2000 £nil). Sir Ian Robinson also has an entitlement under the unapproved pension benefits described further in
Table 29
, note (iii) below. The total liabilities for the 15 executives and senior employees arising in relation to unapproved benefits for service for the year to 31 March 2001 was £500,000 (2000 £600,000). All benefits for the above are provided
on a defined benefit basis.
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| | Renumeration Report of the Directors
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| | 

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| | -----------------------------------------------
| | Table29Defined Benefits Pension Scheme
200001
| |                                                
| |                                                
| |                                                
| | Chairman and executive directors               
| | Charles Miller Smith                           
| | Sir Ian Robinson (Note i)                      
| | Ian Russell                                    
| | Charles Berry                                  
| | David Nish                                     
| | Alan Richardson                                
| | Ken Vowles                                     
| |                                                

| | (i)   | The accrued entitlement of the highest paid director (Sir Ian Robinson) was £319,200 (2000 £226,904). The figures shown in the table above relate to Sir Ian's accrual of
pension over the year on the basis of his contract in force at the start of the year. In addition, following a change to his contract, his pension earned in the year increased by a further £31,192 per annum with an added value of £854,263.
The agreed change to his contract of employment was to allow Sir Ian to retire on his promised pension on 31 May 2001, being one year prior to his Normal Pension Date.
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| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year. Members of the group's schemes have the option of paying
additional voluntary contributions; neither the contributions nor the resulting benefits are included in the above table.                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | Executives who joined the company on or after 1 June 1989 are subject to the earnings cap introduced in the Finance Act 1989. Pension entitlements which cannot be provided through
the company's approved schemes due to the earnings cap are provided through unapproved pension arrangements. Full details are included in the Remuneration Report. The pension benefits disclosed above include approved and unapproved pension
arrangements.                                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iv)  | The increase in accrued pension during the year allows for an increase in inflation of RPI as measured at December 2000 (2.9%).                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (v)   | The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11, less directors' contributions.                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (vi)  | Transferred in benefits represent pension rights accrued in respect of previous employments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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| | Remuneration Report of the Directors
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|                                                           
|-----------------------------------------------------------
|Table 30Directors' Interests in Shares as at 31 March 2001
|                                                           
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|                                                           
|Charles Miller Smith                                       
|Sir Ian Robinson                                           
|Ian Russell                                                
|Charles Berry                                              
|David Nish                                                 
|Alan Richardson                                            
|Ken Vowles                                                 
|Keith McKennon                                             
|Euan Baird (appointed 8 Jan 2001)                          
|Mair Barnes                                                
|Sir Peter Gregson                                          
|Nolan Karras                                               
|Allan Leighton (appointed 8 Jan 2001)                      
|Ewen Macpherson                                            
|Robert Miller                                              
|John Parnaby                                               
|                                                           

| | None of the directors has an interest in ordinary shares which is greater than 1% of the issued share capital of the company.
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| | *                                                                                                                            
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| | **                                                                                                                           
| |                                                                                                                              
| | †                                                                                                                            
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| |                                                                                                                                                                                                                                                                                                                                                                                                              |             |                     |                  |                   |      
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------- | ------------------- | ---------------- | ----------------- | -----
| |                                                                                                                                                                                                                                                                                                                                                                                                              | Free shares | Partnership

shares | Matching

shares | Dividends

shares | Total
| |                                                                                                                                                                                                                                                                                                                                                                                                             
| | Sir Ian Robinson                                                                                                                                                                                                                                                                                                                                                                                             |            | 50                  | 50               |                  | 100  
| | Ian Russell                                                                                                                                                                                                                                                                                                                                                                                                  | 50          | 50                  | 50               | 1                 | 151  
| | Charles Berry                                                                                                                                                                                                                                                                                                                                                                                                | 50          | 50                  | 50               | 1                 | 151  
| | David Nish                                                                                                                                                                                                                                                                                                                                                                                                   | 50          | 50                  | 50               | 1                 | 151  
| | Alan Richardson                                                                                                                                                                                                                                                                                                                                                                                              |            | 50                  | 50               |                  | 100  
| | Ken Vowles                                                                                                                                                                                                                                                                                                                                                                                                   | 50          | 50                  | 50               |                  | 150  
| |                                                                                                                                                                                                                                                                                                                                                                                                             
| | Between 31 March 2001 and 3 May 2001 each of the executive directors (Sir Ian Robinson, Ian Russell, Charles Berry, David Nish, Alan Richardson, Ken
Vowles) acquired 27 Partnership Shares and 27 Matching Shares as part of the regular monthly transactions of the Employee Share Ownership Plan. Otherwise, there have been no changes in the directors' interests between 31 March 2001 and 3 May
2001.
| |                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                                  
| | -------------------------------------------------
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| |                                                  

| |                                     
| | ------------------------------------
| | Remuneration Report of the Directors
| |                                     



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | Table 31Directors' Interests in Performance and Other Share Plans as at 31 March 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Long Term Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  | Sir Ian Robinson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Ian Russell                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Charles Berry                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | David Nish                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Alan Richardson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | Ken Vowles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  | On 9 August 2000, the first awards under the Long Term Incentive Plan became exercisable. The mid-market closing price on that day was 548 pence and the
value attributable to those awards at that date was £556,395. Details of awards excercised are shown in the table above.                                                                                                                                                                                                                                                                                                             
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|# | During the year, the performance period for awards granted under the Long Term Incentive Plan in 1997 ended and, on the basis of the company's totalshareholder return, 25% of
shares under awards lapsed and 75% of shares under awards vested. However, awards may not be exercised until the fourth anniversary of the grant and are exercisable until the seventh anniversary.

FootnoteAwards made to directors under the Long Term Incentive Plan on 4 May 2001 were as follows: Ian Russell 92,075; Charles Berry 43,526; David Nish 50,223; Alan Richardson
50,223; Ken Vowles 50,223.
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| |                                                  

| |                                     
| | ------------------------------------
| | Remuneration Report of the Directors
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| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | Table 31Directors' Interests in Performance and Other Share Plans as at 31 March 2001 (continued)
| |                                                                                                   
| |                                                                                                   
| |                                                                                                   
| | Executive Share Option Scheme                                                                     
| | Alan Richardson                                                                                   
| |                                                                                                   
| | PacifiCorp Stock Incentive Plan†                                                                  
| | Keith McKennon                                                                                    
| |                                                                                                   

| | † | On 9 February 1999, PacifiCorp granted to Keith McKennon under the PacifiCorp Stock Incentive Plan, stock options to acquire 250,000 shares of PacifiCorp Common Stock at an option
price of $19 with a three-year vesting period (commencing one year after the grant date) and a ten-year exercise period. Following the completion of the merger with PacifiCorp, these options were converted to options to acquire 145,000 ScottishPower
ADSs. One ScottishPower ADS equates to four ordinary shares and therefore the option, expressed in ordinary shares, is over 580,000 ordinary shares. The ADS option price of $32.76 has been divided by the ADS ratio of four and converted to sterling
at the closing exchange rate on 31 March 2001.
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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                 
| | ----------------
| | Sharesave Scheme
| | Sir Ian Robinson
| |                 
| | Charles Berry   
| |                 
| |                 
| |                 
| |                 
| | David Nish      
| |                 
| | Alan Richardson 
| |                 
| |                 
| |                 
| |                 
| |                 
| | Ken Vowles      
| |                 
| |                 
| |                 
| |                 

| | *     | Denotes options granted under a threeyear scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | The market price of the shares at 31 March 2001 was 468 pence and the range during 2000-01 was 422 pence to 576 pence.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (ii)  | The Long Term Incentive Plan supersedes the Executive Share Option Scheme, and annual awards to acquire shares in ScottishPower at nil or nominal cost are made to the plan
participants up to a maximum value equal to 75% of base salary. The award will vest only if the Remuneration Committee is satisfied that certain performance measures related to the sustained underlying financial performance of the company and
improvements in certain Ofgem published Customer Service Standards and OFWAT published levels of service are achieved over a period of three financial years commencing with the financial year preceding the date an award is made. Assuming that such
targets have been achieved, the number of shares that can be acquired will be dependent upon how the company ranks in terms of its total shareholder return performance over a three-year period, in comparison to the constituent companies of the FTSE
100 index and the electricity and water sectors. A percentage of each half of the award will vest depending upon the company's ranking within each of the comparator groups. The plan participant may acquire the shares in respect of the percentage of
the award which has vested at any time after the fourth year up to the seventh year after the grant of the award. No dividends accrue to participants prior to vesting.
| | (iii) | The option price for Sharesave options is calculated by reference to the middle-market quotation on the
day immediately preceding the date of invitation and discounted by 20% in accordance with the Inland Revenue rules for such schemes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (iv)  | The number of options granted to a director under the Sharesave Scheme is calculated by reference to the total amount which the director agrees to save for a period of three to five
years under an Inland Revenue approved savings contract, subject to a current maximum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (v)   | Total gains made on exercise of directors' share options and awards during the year were £319,599 (2000 £42,796).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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| | ------------------------------------
| | Remuneration Report of the Directors
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| | 
| | 

| | Directors' Responsibility for the Accounts
The directors are required by law to prepare Accounts for each financial year and to present them annually to the company's members at the Annual General Meeting. The Accounts, of
which the form and content are prescribed by the Companies Act 1985 and applicable accounting standards, must give a true and fair view of the state of affairs of the company and of the group as at the end of the financial year, and of the group's
profit or loss for the period.

The directors confirm that suitable Accounting Policies have been used and applied consistently, and that reasonable and prudent judgements and estimates have been made in the
preparation of the Accounts for the year ended 31 March 2001. The directors also confirm that applicable accounting standards have been followed and that the Accounts have been prepared on the going concern basis.

The directors are responsible for maintaining proper accounting records and sufficient internal controls to safeguard the assets of the company and of the group and to prevent and
detect fraud or any other irregularities.

Auditors
PricewaterhouseCoopers have expressed their willingness to continue in office and a resolution to reappoint PricewaterhouseCoopers as the company's auditors will be proposed at the
Annual General Meeting.

Report of the Directors
The Report of the Directors
comprising the statements and reportshas been approved by the Board and signed on its behalf
by



Andrew Mitchell

Secretary	

3 May 2001
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| | Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995

Certain matters discussed in this document are "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995 and any rules, regulations
or releases of the Securities and Exchange Commission with respect thereto (the "PSLRA"). Forward-looking statements in this document include, but are not limited to, statements in: "Chief          Executive's Review" relating to ScottishPower's
intent to focus squarely on the energy market, plans to pursue selective acquisitions, cost savings from measures implemented in the Infrastructure Division, and objectives to reduce operating costs, capital investment and the workforce, the
development and the commencement of operation of new plants, the expectation of exceeding targeted amounts of renewable energy in the Pacific Northwest, goals for wholesale energy trading, reductions in CO2/KWh; "Business
Review  US Division" relating to plans to expand energy business, expectations for sources and supplies of energy requirements, prices paid by PacifiCorp to provide load balancing resources, price changes with the federal Bonneville Power
Administration, the approval process for US restructuring, forecasts for average annual growth in retail megawatt hour sales for the period from 2002 to 2005, and PacifiCorp's expectations regarding the effect of deregulation; "Business Review
 UK Division" relating to the development of windfarms, the ability of ScottishPower's UK power stations to support generation output and timing of the upgrade of the Scotland-England transmission link and the commencement of operation of the
Scotland-Northern Ireland interconnector; "Business Review           Infrastructure Division" relating to estimates for Southern Water's investment programme; "Business Review  Group Employees" relating to reductions in the PacifiCorp
workforce; "Business Review  Group Environmental          Policy" relating to the development and effects of renewable energy sources and environmental regulations and the goal of pursuing permitting changes that tend to reduce emissions while
allowing for efficient operation of thermal generating plants; "Business Review  US Business Regulation" relating to the economic impact of mandates from the Federal Power Act, the effectiveness of programs aimed at demand side management, the
effects and timing of the US restructuring efforts, the effectiveness of current and future price increases, as well as the impact of compliance costs; "Business Review  Regulation of the Electricity Industry in the          UK" relating to
the possible adjustment of ScottishPower's and Manweb's revenues resultingfrom the DGES revenue and output matching project; "Business Review           Environmental
Regulation" relating to ScottishPower's goal of meeting or bettering environmental requirements; "Business Review  UK Environmental          Regulation" relating to the effects of changes in the regulations of the UK, EU and United Nations,
and the ability to comply with such regulations, ScottishPower's expectation to meet its target of 10% generation from renewable energy sources by 2010, and the effect of requirements and fines on Southern Water by the Environmental Agency;
"Financial Review           Capital Expenditure and Cash Flow (2000-01)" relating to the description of new sources of power; "Financial Review  Financial Instruments          and Risk Management" relating to the belief that the group is
not exposed to any material concentration of credit risk; "Financial Review           Accounting Developments" relating to the impact on future US GAAP results for upcoming financial years; "Financial Review  European Economic
and Monetary Union and the impact of the euro" relating to limited effect of the introduction of the euro on ScottishPower's businesses; and our stated dividend aim is 5% of nominal growth for each year through to March 2003.

ScottishPower wishes to caution readers, and others to whom forwardlooking statements are addressed, that any such forwardlooking statements are not guarantees of
future performance and that actual results may differ materially from estimates in the forward-looking statements.

ScottishPower undertakes no obligation to revise these forwardlooking statements to reflect events or circumstances after the date hereof. In addition to the important
factors described elsewhere in this document, the following important factors, among others, could affect the group's actual future:

 any regulatory changes (including changes in environmental regulations) that may increase the operating costs of the group, may require the group to make unforeseen capital
expenditures or may prevent the regulated business of the group from achieving acceptable returns;

 future levels of industry generation and supply, demand and pricing, political stability, competition and economic growth in the relevant areas in which the group has
operations;

 the availability of acceptable quality fuel at favorable prices;

 the availability of operational capacity of plants;

 the success of reorganizational and cost-saving efforts; and

 development and use of technology, the actions of competitors, natural disasters and other changes to business conditions.

 development and use of technology, the actions of competitors, natural disasters and other changes to business conditions.

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| | Definitions
Business segment definitions ScottishPower defines business segments for management reporting purposes based on a combination of factors, principally differences in products and services and the regulatory
environment in which the businesses operate.
The business segments of the group are defined as follows:
United Kingdom Generation Wholesale The generation of electricity from the group's own power stations, the purchase of external supplies of energy for sale to other business segments of the group and the sale of
electricity to other public electricity suppliers, to the Pool in England & Wales and, since 27 March 2001, full participation in the New Electricity Trading Arrangements (NETA) in England & Wales.
Power Systems The transmission and distribution businesses in Scotland and the distribution business of Manweb operating in Merseyside and North Wales and, specifically, the transportation
of units of electricity from the power stations through the transmission and distribution networks to customers in Scotland and to customers in England & Wales through the Anglo-Scottish Interconnector.
Energy Supply The sale of energy to customers, together with related billing and collection activities.
Southern Water The provision of water and wastewater services in the south-east of England, together with related billing and collection activities.
Telecoms The provision of telecommunications services, Internet access and information services to national corporates, small and medium-sized enterprises and residential customers. For
the year ended 31 March 2001 this segment comprised Thus plc. In previous years this segment also included the operations of the mobile telephone business which was sold in November 1999 and the fixed radio access telephony operations from which the
group withdrew in July 1999.
Other The retailing and servicing of domestic electrical goods and home entertainment appliances, corporate services, generation gas trading and the businesses of the company's other
UK subsidiary undertakings. In addition it included the provision of electrical contracting and consultancy services prior to the disposal of the group's Contracting Services and Technology businesses during the year ended 31 March 2001.
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| | United States PacifiCorp A vertically integrated electric utility that includes the generation, transmission and distribution and sale of electricity to retail customers in portions of six western
states; Utah, Oregon, Wyoming, Washington, Idaho and California. The state regulatory commissions and Federal Energy Regulatory Commission (FERC) regulate the retail and wholesale operations. The operations also include wholesale sales and purchase
transactions with various entities. It also includes businesses of other US subsidiaries not regulated as electric utilities in the US. During the year ended 31 March 2001, the former PacifiCorp Domestic Electric and PacifiCorp Other business
segments were combined to form a PacifiCorp business segment as the directors considered that the activities of the PacifiCorp Other segment were not material.
Revenue cost definitions Cost of sales The cost of sales for the group, excluding Southern Water, reflect the direct costs of the generation and purchase of electricity, the purchase of natural gas, appliance
retailing, telecommunications services, electrical contracting and consultancy services. For Southern Water, cost of sales represents the cost of extracting water from underground and raw water surface reservoirs and of its treatment and supply to
customers and the collection of wastewater and its treatment and disposal.
Transmission and distribution costs The cost of transmitting units of electricity from the power stations through the transmission and distribution networks to customers. It includes the costs of metering,
billing and debt collection. This heading is considered more appropriate to the electricity industry than the standard Companies Act heading of distribution costs.
Administrative expenses The indirect costs of businesses, the costs of centralised services and rates.
Other definitions Company or ScottishPower Scottish Power plc.
Group Scottish Power plc and its consolidated subsidiaries.
Associated undertakings Entities in which the group holds a long-term participating interest and exercises significant influence.
Joint ventures Entities in which the group holds a long-term interest and shares control with another company external to the group.
Subsidiary undertakings Entities in which the group holds a long-term controlling interest.
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| | Basis of accounting The Accounts have been prepared under the historical cost convention, modified to include the revaluation of certain tangible fixed assets, and in accordance with applicable
accounting standards in the UK and, subject to the treatment of water infrastructure grants and contributions described under "Grants and contributions" below, comply with the requirements of the Companies Act 1985.
In preparing these Accounts, certain items have been included in order to comply with accounting presentation and disclosure requirements applicable in the United States in respect
of foreign registrants. A reconciliation to US GAAP is set out in
Note 35
 .
Basis of consolidation The group Accounts include the Accounts of the company and its subsidiary undertakings together with the group's share of results and net assets of associated undertakings and
joint ventures.
For commercial reasons certain subsidiaries have a different year end. The consolidation includes the Accounts of these subsidiaries as adjusted for material transactions in the
period between the year ends and 31 March.
Use of estimates The preparation of Accounts in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Accounts and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from those estimates.
Turnover Turnover comprises the sales value of energy, goods, water, wastewater and other services supplied to customers during the year and excludes Value Added Tax and intra-group
sales. Income from the sale of energy and measured water is the value of units supplied during the year and includes an estimate of the value of units supplied to customers between the date of their last meter reading and the year end.
Interest Interest on the funding attributable to major capital projects is capitalised gross of tax relief during the period of construction and written off as part of the total cost
over the operational life of the asset. All other interest payable and receivable is reflected in the profit and loss account as it arises.
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| | Financial instruments Debt instruments All borrowings are stated at the fair value of consideration received after deduction of issue costs. The issue costs and interest payable on bonds are charged to the profit
and loss account at a constant rate over the life of the bond.
Interest rate swaps/Forward rate agreements These are used to manage interest rate exposures. Amounts payable or receivable in respect of these agreements are recognised as adjustments to interest expense over the period
of the contracts. The cash flows from, and gains and losses arising on terminations of, these contracts are recognised as returns on investments and servicing of finance. Where associated debt is not retired in conjunction with the termination of an
interest swap, gains and losses are deferred and are amortised to interest expense over the remaining life of the associated debt to the extent that such debt remains outstanding.
Interest rate caps/Swaptions These are used to limit interest rate exposures. Premiums received and payable on these contracts are amortised over the period of the contracts and are disclosed as interest
income and expense.
Forward contracts The group enters into forward contracts for the purchase and/or sale of foreign currencies in order to manage its exposure to fluctuations in currency rates and to hedge
overseas net investment. Unrealised gains and losses on contracts are not accounted for until the maturity of the contract. The cash flows from forward purchase contracts are classified in a manner consistent with the underlying nature of the hedged
transaction. Where a currency forward contract no longer represents a hedge because either the underlying asset or liability has been derecognised, or the effectiveness of the hedge has been undermined, it is restated at fair value and any change in
value is taken directly to the profit and loss account and reported within exchange losses.
Premiums and discounts Premiums and discounts arising on the early repayment of borrowings are written off to the profit and loss account as incurred.
Contracts for Differences (CfDs) The group's objectives, policies and strategy for holding CfDs are outlined in the Financial Review.
The group used CfDs during the year to minimise exposure to Pool price variations in England & Wales. A CfD is a contract between two parties (e.g. a generator and a public
electricity supplier) that requires each party to make or receive payments over a specific term based on the difference between an agreed price (i.e. the bilaterally determined strike price) and a price that varies with a specified commodity index
(i.e. the Pool), applied to an agreed quantity (i.e. a number of MWhs). The average duration for such contracts is approximately one year. The group's use of such derivative instruments during the year related directly to the underlying purchase and
sale of electricity to and from the Pool.
The cost or income attributable to CfDs has been recorded in the accounting records when settlement was made. Where delivery under the CfD has taken place prior to the period end,
adjustments are made to account for the known variances between the contract strike price and the Pool price on the date of delivery.













With the introduction of NETA on 27 March 2001, the majority of CfDs have been translated into bilateral
contracts for the physical delivery or receipt of energy in England & Wales. The quantities to be delivered or received equate to the volumes and time periods covered by the former CfD and the amount payable or receivable is equivalent to the
strike price within the CfD.
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| | TaxationThe charge for ordinary taxation is based on the profits for the year and takes into account full provision for deferred tax, using the approach set out in Financial Reporting
Standard 19 'Deferred tax', in respect of timing differences on a non-discounted basis. Such timing differences arise primarily from the differing treatment for taxation and accounting purposes of provisions and depreciation of fixed assets.
Previously the provision for deferred tax was accounted for on the partial provisioning basis required by Statement of Standard Accounting Practice (SSAP) 15. The effect of this change in accounting policy on the results and net assets on the
current and previous financial years is disclosed in
Note 6
 .
Comparative figures have been restated in the Group Profit and Loss Account, the Balance Sheet and Notes.
Goodwill Purchased goodwill represents the excess of the fair value of the purchase consideration over the fair value of the net assets acquired. Goodwill arising from the purchase of
trading entities in accounting periods prior to 31 March 1998 was written off on acquisition against reserves. On disposal of trading entities, the goodwill previously included in reserves is charged to the profit and loss account matched by an
equal credit to reserves. Goodwill arising on acquisitions since 1 April 1998 has been capitalised and amortised through the profit and loss account over its estimated useful economic life. Goodwill arising on overseas acquisitions is regarded as a
currency asset and is retranslated at the end of each period at the closing rate of exchange.
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 Cross Reference to Form 20-F (US)
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| | Accounting Policies and Definitions
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| | Tangible fixed assets Accounting for non-water infrastructure assets Tangible fixed assets are stated at cost or valuation and are generally depreciated on the straight line method over their estimated operational lives. Tangible fixed assets
include capitalised employee, interest and other costs which are directly attributable to construction of fixed assets. Land is not depreciated except in the case of mines (see below). The main depreciation periods used by the group are as set out
below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       
| | Coal, oil-fired, gas and other generating stations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 22-45 
| | Hydro plant and machinery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 20-100
| | Other buildings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 40    
| | Transmission and distribution plant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 20-75 
| | Towers, lines and underground cables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 40-60 
| | Vehicles, miscellaneous equipment and fittings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3-40  
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| | The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.
Impairment losses are recognised in the period in which they are identified.
Mine reclamation and closure costs Provision is made for mine reclamation and closure costs when an obligation arises out of events prior to the year end. The amount recognised is the present value of the
estimated future expenditure determined in accordance with local conditions and requirements. A corresponding tangible fixed asset is also created of an amount equal to the provision. This asset, together with the cost of the mine, is subsequentlydepreciated on a unit of production basis. The unwinding of the discount is included within net interest and similar charges.
Decommissioning costs Provision is made for the estimated decommissioning costs at the end of the producing lives of the group's power stations on a discounted basis. Capitalised decommissioning
costs are depreciated over the useful lives of the related assets. The unwinding of the discount is included within net interest and similar charges.
Infrastructure accounting Water infrastructure assets, being mains and sewers, reservoirs, dams, sludge pipelines and sea outfalls comprise a network of systems. Expenditure on water infrastructure
assets relating to increases in capacity or enhancement of the network and on maintaining the operating capability of the network in accordance with defined standards of service is treated as an addition to fixed assets.
The depreciation charge for water infrastructure assets is the estimated level of annualised expenditure required to maintain the operating capability of the network and is based
on the asset management plan agreed with the water industry regulator as part of the price regulation process.
The asset management plan is developed from historical experience combined with a rolling programme of reviews of the condition of the infrastructure assets.
Leased assets As lessee Assets leased under finance leases are capitalised and depreciated over the shorter of the lease periods and the estimated operational lives of the assets. The interest element
of the finance lease repayments is charged to the profit and loss account in proportion to the balance of the capital repayments outstanding. Rentals payable under operating leases are charged to the profit and loss account on a straight line
basis.
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| | As lessor Rentals receivable under finance leases are allocated to accounting periods to give a constant periodic rate of return on the net cash investment in the lease in each period.
The amounts due from lessees under finance leases are recorded in the balance sheet as a debtor at the amount of the net investment in the lease after making provisions for bad and doubtful rentals receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Investments Investments in subsidiary and associated undertakings and joint ventures are stated in the balance sheet of the parent company at cost, or nominal value of shares issued as
consideration where applicable, less provision for any impairment in value. The Group Profit and Loss Account includes the group's share of the operating profits less losses, net interest charge and taxation of associated undertakings and joint
ventures. The Group Balance Sheet includes the investment in associated undertakings and joint ventures at the group's share of their net assets. Other fixed asset investments are carried at cost less provision for impairment in value.
Own shares held under trust The amount recorded in the balance sheet for shares in the company purchased for employee sharesave schemes represents the amounts receivable from option holders on exercise of
the options.
The group has taken advantage of the exemption within Urgent Issues Task Force (UITF) Abstract 17 not to apply the requirements therein to Inland Revenue approved savings-related
share option schemes and equivalent overseas schemes.
Long Term Incentive Plan Shares in the company purchased for the Long Term Incentive Plan are held under trust and are recorded within investments in the balance sheet at cost. The cost of awards made
by the trust under the Long Term Incentive Plan, being the difference between the fair value of the shares and the option price at the date of grant, is taken to the profit and loss account on a straight line basis over the period in which
performance is measured.
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| |  UK Menu
   
 Cross Reference to Form 20-F (US)
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| | Stocks Stocks are valued at the lower of cost and net realisable value.
US regulatory assets Statement of Financial Accounting Standard (FAS) 71 'Accounting for the Effects of Certain Types of Regulation' establishes US GAAP for utilities in the United States whose
regulators have the power to approve and/or regulate rates that may be charged to customers. Provided that, through the regulatory process, the utility is substantially assured of recovering its allowable costs by the collection of revenue from its
customers, such costs not yet recovered are deferred as regulatory assets. Due to the different regulatory environment, no equivalent GAAP applies in the UK.
Under UK GAAP, the group's policy is to recognise regulatory assets established in accordance with FAS 71 only where they comprise rights or other access to future economic
benefits which have arisen as a result of past transactions or events which have created an obligation to transfer economic benefits to a third party. Measurement of the past transaction or event and hence the regulatory asset, is determined in
accordance with UK GAAP.
Grants and contributions Capital grants and customer contributions in respect of additions to non-water infrastructure fixed assets are treated as deferred income and released to the profit and loss
account over the estimated operational lives of the related assets. Grants and contributions receivable relating to water infrastructure assets are deducted from the cost or valuation of those assets. While this treatment is in accordance with SSAP
4, it is not in accordance with the Companies Act 1985. The Act requires capital grants and contributions to be shown as deferred income rather than offset against the cost or valuation of tangible fixed assets.
This departure from the requirements of the Act is, in the opinion of the directors, necessary for the Accounts to give a true and fair view as, while provision is made for
depreciation of water infrastructure assets, these assets do not have determinable finite lives and therefore no basis exists on which to recognise grants and contributions as deferred income. The effect of this treatment on the value of tangible
fixed assets is disclosed in
Note 17
 .
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 Cross Reference to Form 20-F (US)
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| | Pensions The group provides pension benefits through both defined benefit and defined contribution arrangements. The regular cost of providing pensions and related benefits and any
variations from regular cost arising from the actuarial valuations for defined benefit schemes are charged to the profit and loss account over the expected remaining service lives of current employees following consultations with the actuary. Any
difference between the charge to the profit and loss account and the actual contributions paid to the pension schemes is included as an asset or liability in the balance sheet. Payments to defined contribution schemes are charged against profits as
incurred.
Post-retirement benefits other than pensions Certain additional post-retirement benefits, principally healthcare benefits, are provided to eligible retirees within the group's US businesses. The estimated cost of
providing such benefits is charged against profits on a systematic basis over the employees' working lives within the group.
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| |  UK Menu
   
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| | Environmental liabilities Provision for environmental liabilities is made when expenditure on remedial work is probable and the group is obliged, either legally or constructively through its
environmental policies, to undertake such work. Where the amount is expected to be incurred over the long term, the amount recognised is the present value of the estimated future expenditure and the unwinding of the discount is included within net
interest and similar charges.

Foreign currencies Company Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. At the year end, monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the balance sheet date or, where applicable, at the contracted rate. Any gain or loss arising on the restatement of such balances is taken to the profit and loss account.

Group The results and cash flows of overseas subsidiaries are translated to sterling at the average rate of exchange for each quarter of the financial year. The net assets of such
subsidiaries and the goodwill arising on their acquisition are translated to sterling at the closing rates of exchange ruling at the balance sheet date. Exchange differences which relate to the translation of overseas subsidiaries are taken directly
to group reserves and are shown in the Statement of Total Recognised Gains and Losses.

Exchange rates The exchange rates applied in the preparation of the Accounts were as follows:
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Year ended

31 March
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                     
| | Average rate for quarters ending:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2001                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 30 June                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $1.53/£             
| | 30 September                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $1.48/£             
| | 31 December                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $1.45/£             
| | 31 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $1.46/£             
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| | Closing rate as at 31 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $1.42/£             
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| | A glossary of terms used in the Accounts and their US equivalents is set out
here
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 Cross Reference to Form 20-F (US)
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| | Group Profit and Loss Accountfor the year ended 31 March 2001
| | -------------------------------------------------------------
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| |                                                                                                        |       |                                             |                                       |        |          |                                             |                                        |          |          |        |          |          |    |          |   
| | ------------------------------------------------------------------------------------------------------ | ----- | ------------------------------------------- | ------------------------------------- | ------ | -------- | ------------------------------------------- | -------------------------------------- | -------- | -------- | ------ | -------- | -------- | -- | -------- | --
| |                                                                                                        | Notes | Total

before

exceptional

items

2001

£m | Exceptional

item

2001

(Note 4)

£m |        | 2001

£m | Total

before

exceptional

items

2000

£m | Exceptional

items

2000

(Note 4)

£m |          | 2000

£m |        | 1999

£m |         
| |                                                                                                        |       |                                             |                                       |        |          |                                             |                                        |          |          |        |          |          |    |          |   
| | Turnover: group and share of joint ventures and associates                                             |       | 6,361.4                                     |                                       |       |          | 6,361.4                                     |                                        | 4,123.1  |          |       |          | 4,123.1  |    | 3,251.5  |   
| | Less: share of turnover in joint ventures                                                              |       | (11.7                                       | )                                     |       |          | (11.7                                       | )                                      | (7.6     | )        |       |          | (7.6     | )  | (7.3     | ) 
| | Less: share of turnover in associates                                                                  |       | (0.4                                        | )                                     |       |          | (0.4                                        | )                                      | (0.5     | )        |       |          | (0.5     | )  | (1.9     | ) 
| |                                                                                                       
| | Group turnover from continuing operations                                                              | 1     | 6,349.3                                     |                                       |       |          | 6,349.3                                     |                                        | 4,115.0  |          |       |          | 4,115.0  |    | 3,242.3  |   
| | Cost of sales                                                                                          |       | (4,407.4                                    | )                                     | (62.1  | )        | (4,469.5)                                   |                                        | (2,424.7 | )        | (173.5 | )        | (2,598.2 | )  | (1,860.5 | ) 
| |                                                                                                       
| | Gross profit from continuing operations                                                                |       | 1,941.9                                     |                                       | (62.1  | )        | 1,879.8                                     |                                        | 1,690.3  |          | (173.5 | )        | 1,516.8  |    | 1,381.8  |   
| | Transmission and distribution costs                                                                    |       | (521.6                                      | )                                     | (45.1  | )        | (566.7                                      | )                                      | (350.9   | )        | (61.1  | )        | (412.0   | )  | (258.1   | ) 
| | Administrative expenses                                                                                |       | (628.1                                      | )                                     | (13.5  | )        | (641.6                                      | )                                      | (458.7   | )        | (24.4  | )        | (483.1   | )  | (348.8   | ) 
| | Other operating income                                                                                 |       | 50.4                                        |                                       |       |          | 50.4                                        |                                        | 40.3     |          |       |          | 40.3     |    | 27.9     |   
| |                                                                                                       
| | Operating profit from continuing operations before goodwill amortisation                               |       | 970.2                                       |                                       | (120.7 | )        | 849.5                                       |                                        | 961.4    |          | (259.0 | )        | 702.4    |    | 804.0    |   
| | Goodwill amortisation                                                                                  |       | (127.6                                      | )                                     |       |          | (127.6                                      | )                                      | (40.4    | )        |       |          | (40.4    | )  | (1.2     | ) 
| | Operating profit from continuing operations                                                            | 1,2   | 842.6                                       |                                       | (120.7 | )        | 721.9                                       |                                        | 921.0    |          | (259.0 | )        | 662.0    |    | 802.8    |   
| | Share of operating (loss)/profit in joint ventures                                                     |       | (9.4                                        | )                                     |       |          | (9.4                                        | )                                      | 1.6      |          | (3.3   | )        | (1.7     | )  | 2.1      |   
| | Share of operating profit in associates                                                                |       | 0.1                                         |                                       |       |          | 0.1                                         |                                        | 0.1      |          |       |          | 0.1      |    | 0.2      |   
| |                                                                                                       
| |                                                                                                        |       | 833.3                                       |                                       | (120.7 | )        | 712.6                                       |                                        | 922.7    |          | (262.3 | )        | 660.4    |    | 805.1    |   
| | Gain on partial disposal of Thus                                                                       |       |                                            |                                       |       |          |                                            |                                        |         |          | 787.0  |          | 787.0    |    |         |   
| | Loss on disposal of and withdrawal from operations                                                     |       |                                            |                                       |       |          |                                            |                                        |         |          | (55.0  | )        | (55.0    | )  |         |   
| |                                                                                                       
| | Profit on ordinary activities before interest                                                          |       | 833.3                                       |                                       | (120.7 | )        | 712.6                                       |                                        | 922.7    |          | 469.7  |          | 1,392.4  |    | 805.1    |   
| | Net interest and similar charges                                                                      
| |  Group                                                                                                |       | (330.0                                      | )                                     |       |          | (330.0                                      | )                                      | (226.1   | )        | (15.9  | )        | (242.0   | )  | (160.8   | ) 
| |  Joint ventures                                                                                       |       | (2.9                                        | )                                     |       |          | (2.9                                        | )                                      | (1.4     | )        |       |          | (1.4     | )  | (0.5     | ) 
| |                                                                                                        | 5     | (332.9                                      | )                                     |       |          | (332.9                                      | )                                      | (227.5   | )        | (15.9  | )        | (243.4   | )  | (161.3   | ) 
| |                                                                                                       
| | Profit on ordinary activities before goodwill amortisation and taxation                                |       | 628.0                                       |                                       | (120.7 | )        | 507.3                                       |                                        | 735.6    |          | 453.8  |          | 1,189.4  |    | 645.0    |   
| | Goodwill amortisation                                                                                  |       | (127.6                                      | )                                     |       |          | (127.6                                      | )                                      | (40.4    | )        |       |          | (40.4    | )  | (1.2     | ) 
| | Profit on ordinary activities before taxation                                                          |       | 500.4                                       |                                       | (120.7 | )        | 379.7                                       |                                        | 695.2    |          | 453.8  |          | 1,149.0  |    | 643.8    |   
| | Taxation

 Group                                                                                      |       | (139.2                                      | )                                     | 45.9   |          | (93.3                                       | )                                      | (207.0   | )        | (56.0  | )        | (263.0   | )  | (174.5   | ) 
| |  Joint ventures                                                                                       |       | (1.9                                        | )                                     |       |          | (1.9                                        | )                                      | 0.1      |          |       |          | 0.1      |    | (0.5     | ) 
| |  Associates                                                                                           |       |                                            |                                       |       |          |                                            |                                        |         |          |       |          |         |    | (0.1     | ) 
| |                                                                                                       
| |                                                                                                        | 6     | (141.1                                      | )                                     | 45.9   |          | (95.2                                       | )                                      | (206.9   | )        | (56.0  | )        | (262.9   | )  | (175.1   | ) 
| |                                                                                                       
| | Profit after taxation                                                                                  |       | 359.3                                       |                                       | (74.8  | )        | 284.5                                       |                                        | 488.3    |          | 397.8  |          | 886.1    |    | 468.7    |   
| | Minority interests                                                                                     | 28    | 23.0                                        |                                       |       |          | 23.0                                        |                                        | (1.1     | )        |       |          | (1.1     | )  | 0.6      |   
| |                                                                                                       
| | Profit for the financial year                                                                          |       | 382.3                                       |                                       | (74.8  | )        | 307.5                                       |                                        | 487.2    |          | 397.8  |          | 885.0    |    | 469.3    |   
| | Dividends                                                                                              | 8     | (477.3                                      | )                                     |       |          | (477.3                                      | )                                      | (341.4   | )        |       |          | (341.4   | )  | (267.9   | ) 
| |                                                                                                       
| | (Loss)/profit retained                                                                                 | 27    | (95.0                                       | )                                     | (74.8  | )        | (169.8                                      | )                                      | 145.8    |          | 397.8  |          | 543.6    |    | 201.4    |   
| |                                                                                                       
| | Earnings per ordinary share                                                                            | 7     | 20.89                                       | p                                     | (4.09  | )p       | 16.80                                       | p                                      | 35.06    | p        | 28.63  | p        | 63.69    | p  | 39.60    | p 
| | Adjusting items  exceptional items                                                                    |       |                                            |                                       | 4.09   | p        | 4.09                                        | p                                      |         |          | (28.63 | )p       | (28.63   | )p |         |   
| | 
goodwill amortisation                                                                                |       | 6.97                                        | p                                     |       |          | 6.97                                        | p                                      | 2.91     | p        |       |          | 2.91     | p  | 0.10     | p 
| |                                                                                                       
| | Earnings per ordinary share before exceptional items, goodwill amortisation and deferred tax           |       | 30.65                                       | p                                     |       |          | 30.65                                       | p                                      | 41.22    | p        |       |          | 41.22    | p  | 42.52    | p 
| | Effect of deferred tax                                                                                 |       | (2.79                                       | )p                                    |       |          | (2.79                                       | )p                                     | (3.25    | )p       |       |          | (3.25    | )p | (2.82    | )p
| | Earnings per ordinary share before exceptional items and goodwill amortisation                         | 7     | 27.86                                       | p                                     |       |          | 27.86                                       | p                                      | 37.97    | p        |       |          | 37.97    | p  | 39.70    | p 
| |                                                                                                       
| | Diluted earnings per ordinary share                                                                    | 7     |                                             |                                       |        |          | 16.74                                       | p                                      |          |          |        |          | 63.25    | p  | 39.20    | p 
| | Adjusting items  exceptional items                                                                    |       |                                             |                                       |        |          | 4.07                                        | p                                      |          |          |        |          | (28.43   | )p |         |   
| | 
goodwill amortisation                                                                                |       |                                             |                                       |        |          | 6.94                                        | p                                      |          |          |        |          | 2.89     | p  | 0.10     | p 
| |                                                                                                        |       |                                             |                                       |        |          |                                             |                                        |          |          |       
| | Diluted earnings per ordinary share before exceptional items and goodwill amortisation                 | 7     |                                             |                                       |        |          | 27.75                                       | p                                      |          |          |        |          | 37.71    | p  | 39.30    | p 
| |                                                                                                        |       |                                             |                                       |        |          |                                             |                                        |          |          |       
| | Dividends per ordinary share                                                                           | 8     |                                             |                                       |        |          | 26.04                                       | p                                      |          |          |        |          | 24.80    | p  | 22.50    | p 
| |                                                                                                        |       |                                             |                                       |        |          |                                             |                                        |          |          |       
| | The
Accounting Policies and Definitions
, together with the Notes 1 to 40 form part of these Accounts.
| |                                                                                                       

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Group Profit and Loss Accountfor the year ended 31 March 2001
| | -------------------------------------------------------------
| |                                                              





| |                                                                                             |      |  |          |   |          |  |         
| | ------------------------------------------------------------------------------------------- | ---- |  | -------- | - | -------- |  | --------
| |                                                                                             | Note |  | 2001

£m |   | 2000

£m |  | 1999

£m
| |                                                                                             |      |  |          |   |          |  |         
| | Profit for the financial year                                                               |      |  | 307.5    |   | 885.0    |  | 469.3   
| | Exchange movement on translation of overseas results and net assets                         | 27   |  | 493.1    |   | 24.9     |  |        
| |                                                                                            
| | Total recognised gains and losses for the financial year                                    |      |  | 800.6    |   | 909.9    |  | 469.3   
| |                                                                                             |      |  |          |   |         
| | Prior year adjustment for implementation of FRS 19 Deferred tax (as explained in
Note 6
) |      |  | (800.6   | ) |          |  |         
| |                                                                                             |      |  |         
| | Total gains and losses recognised since last annual Accounts                                |      |  |         |   |          |  |         
| |                                                                                             |      |  |         
| |                                                                                             |      |  |         

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Reconciliation of Movements in Shareholders Fundsfor the year ended 31 March 2001
| | ----------------------------------------------------------------------------------
| |                                                                                   

| |                                                                                                    |          |   |          |   |         
| | -------------------------------------------------------------------------------------------------- | -------- | - | -------- | - | --------
| |                                                                                                    | 2001

£m |   | 2000

£m |   | 1999

£m
| |                                                                                                    |          |   |          |   |         
| | Profit for the financial year                                                                      | 307.5    |   | 885.0    |   | 469.3   
| | Dividends                                                                                          | (477.3   | ) | (341.4   | ) | (267.9  
| |                                                                                                   
| | (Loss)/profit retained                                                                             | (169.8   | ) | 543.6    |   | 201.4   
| | Exchange movement on translation of overseas results and net assets                                | 493.1    |   | 24.9     |   |        
| | Share capital issued                                                                               | 6.6      |   | 4,071.2  |   | 3.2     
| | Share buy-back (including costs)                                                                   |         |   | (302.0   | ) |        
| | Impairment of goodwill previously written off to reserves                                          |         |   | 7.5      |   |        
| | Goodwill realised on disposals                                                                     |         |   | 15.3     |   |        
| |                                                                                                   
| | Net movement in shareholders funds                                                                | 329.9    |   | 4,360.5  |   | 204.6   
| | Opening shareholders funds (as adjusted for

implementation of FRS 19 Deferred tax)             | 5,563.3  |   | 1,202.8  |   | 998.2   
| |                                                                                                   
| | Closing shareholders funds                                                                        | 5,893.2  |   | 5,563.3  |   | 1,202.8 
| |                                                                                                   
| | The
Accounting Policies and Definitions
, together with Notes 1 to 40 form part of these Accounts.
| |                                                                                                   

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Group Profit and Loss Accountfor the year ended 31 March 2001
| | -------------------------------------------------------------
| |                                                              

|1 Segmental information                |                                                              |                              |                         |                        |      |                                                               |                            
|-------------------------------------- | ------------------------------------------------------------ | ---------------------------- | ----------------------- | ---------------------- | ---- | ------------------------------------------------------------- | ---------------------------
|                                      
|                                       |                                                              | Total turnover               |                         | Inter-segment turnover |      | External turnover                                             |                            
|(a) Turnover by segment                | Notes                                                        | 2001

£m                     |                         | 2000

£m               |      | 1999

£m                                                      |                            
|                                      
|United Kingdom                         |                                                              |                              |                         |                        |      |                                                               |                            
|Generation Wholesale                   |                                                              | 798.8                        |                         | 884.6                  |      | 914.3                                                         |                            
|Power Systems                          |                                                              | 652.2                        |                         | 728.5                  |      | 716.9                                                         |                            
|Energy Supply                          |                                                              | 1,748.9                      |                         | 1,908.9                |      | 1,985.3                                                       |                            
|Southern Water                         |                                                              | 421.6                        |                         | 470.5                  |      | 440.2                                                         |                            
|Telecoms                               | (i)                                                          | 233.8                        |                         | 243.2                  |      | 219.9                                                         |                            
|Other                                  |                                                              | 729.1                        |                         | 756.5                  |      | 613.1                                                         |                            
|                                      
|United Kingdom total                   |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|United States                          |                                                              |                              |                         |                        |      |                                                               |                            
|PacifiCorp                             | (ii)                                                         | 3,122.3                      |                         | 711.7                  |      |                                                              |                            
|                                      
|United States total                    |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|Total                                  | (iii)                                                        |                              |                         |                        |      |                                                               |                            
|                                      
|                                       | Before

goodwill

amortisation

and

exceptional

item

2001 | Goodwill

amortisation

2001 | Exceptional

item

2001 |                        | 2001 | Before

goodwill

amortisation

and

exceptional

items

2000 | Goodwill

amortisation 2000
|(b) Operating profit/(loss) by segment | Note                                                         | £m                           |                         | £m                     |      | £m                                                            |                            
|                                      
|United Kingdom                         |                                                              |                              |                         |                        |      |                                                               |                            
|Generation Wholesale                   |                                                              | 92.9                         |                         | (0.4                   | )    |                                                              |                            
|Power Systems                          |                                                              | 324.2                        |                         |                       |      |                                                              |                            
|Energy Supply                          |                                                              | 36.1                         |                         |                       |      |                                                              |                            
|Southern Water                         |                                                              | 221.2                        |                         |                       |      |                                                              |                            
|Telecoms                               | (iv)                                                         | (58.0                        | )                       | (2.4                   | )    |                                                              |                            
|Other                                  |                                                              | 2.5                          |                         |                       |      |                                                              |                            
|                                      
|United Kingdom total                   |                                                              | 618.9                        |                         | (2.8                   | )    |                                                              |                            
|                                      
|United States                         
|PacifiCorp                             |                                                              | 351.3                        |                         | (124.8                 | )    | (120.7                                                        | )                          
|                                      
|United States total                    |                                                              | 351.3                        |                         | (124.8                 | )    | (120.7                                                        | )                          
|                                      
|Total                                  |                                                              | 970.2                        |                         | (127.6                 | )    | (120.7                                                        | )                          
|                                      
|                                       |                                                              |                              |                         |                        |      |                                                               |                            
|                                       |                                                              |                              |                         |                        |      |                                                               |                            
|(c) Depreciation by segment            |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|United Kingdom                         |                                                              |                              |                         |                        |      |                                                               |                            
|Generation Wholesale                   |                                                              |                              |                         |                        |      |                                                               |                            
|Power Systems                          |                                                              |                              |                         |                        |      |                                                               |                            
|Energy Supply                          |                                                              |                              |                         |                        |      |                                                               |                            
|Southern Water                         |                                                              |                              |                         |                        |      |                                                               |                            
|Telecoms                               |                                                              |                              |                         |                        |      |                                                               |                            
|Other                                  |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|United Kingdom total                   |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|United States                          |                                                              |                              |                         |                        |      |                                                               |                            
|PacifiCorp                             |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|United States total                    |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|Total                                  |                                                              |                              |                         |                        |      |                                                               |                            
|                                      
|                                      
|                                      

| | (i) The Telecoms segment included external turnover of £25.7 million for the year ended 31 March 2000 and £45.8 million for the year ended 31 March 1999 in respect of the
group's mobile telephone business which was disposed of in November 1999.

(ii) Turnover for PacifiCorp for the year ended 31 March 2000 amounted to £2,499.6 million.

(iii) In the segmental analysis turnover is shown by geographical origin. Turnover analysed by geographical destination is not materially different.

(iv) Goodwill amortisation for the Telecoms segment in 1999 was £1.2 million.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

|
|
|
|

|
|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |   |          |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | - | -------- | - | -------- | -
|2 Operating profit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |          |   |          |   |          |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |   |          |   |          |  
|Operating profit is stated after charging/(crediting):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Depreciation and impairment of tangible fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 480.3    |   | 417.1    |   | 224.2    |  
|Amortisation of goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 127.6    |   | 40.4     |   | 1.2      |  
|Release of customer contributions/grants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | (15.1    | ) | (15.6    | ) | (13.6    | )
|Research and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 4.2      |   | 5.5      |   | 5.3      |  
|Hire of plant and equipment  operating leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 0.3      |   | 0.4      |   | 4.6      |  
|Hire of other assets  operating leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 54.6     |   | 44.7     |   | 31.0     |  
|Auditors remuneration for audit of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
| group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 1.5      |   | 1.1      |   | 0.7      |  
| company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |         |   |         |   |         |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Non-audit fees paid to auditors:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Regulatory advice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | 1.3      |   | 1.2      |   | 0.9      |  
|Advice on systems and consultancy services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | 5.4      |   | 3.9      |   | 0.9      |  
|Taxation advice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 3.1      |   | 1.2      |   |         |  
|Due diligence, London Stock Exchange and SEC reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 1.6      |   | 3.8      |   | 3.6      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Total UK and US non-audit fees paid to auditors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | 11.4     |   | 10.1     |   | 5.4      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|For the year ended 31 March 2001, £10.7 million of the above non-audit fees were charged to operating profit and £0.7 million were included within the costs of sale of the
businesses held for disposal.

For the year ended 31 March 2000, £6.6 million (1999 £2.3 million) of the above non-audit fees were charged to operating profit, £3.1 million were charged to
exceptional gain on the partial disposal of Thus and £0.4 million (1999 £3.1 million) was included within costs of acquisition of PacifiCorp.

Operating profit for the years ended 31 March 2001 and 31 March 2000 is also stated after crediting net earnings of £4.3 million and £1.3 million respectively under
finance leases in the United States, which are financed by non-recourse borrowings and qualify for linked presentation under FRS 5. Net earnings comprise gross earnings of £33.8 million and £10.8 million less finance costs of £29.5
million and £9.5 million respectively.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

|
|

|
|
|
|

|                                       |  |          |   |          |   |          |  
|-------------------------------------- |  | -------- | - | -------- | - | -------- | -
|3 Employee information                 |  |          |   |          |   |          |  
|                                       |  |          |   |          |   |          |  
|(a) Employee costs                     |  | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                      
|Wages and salaries                     |  | 692.6    |   | 464.7    |   | 329.3    |  
|Social security costs                  |  | 34.5     |   | 33.7     |   | 25.9     |  
|Pension costs                          |  | 28.4     |   | 20.9     |   | 18.0     |  
|                                      
|Total employee costs                   |  | 755.5    |   | 519.3    |   | 373.2    |  
|Less: charged as capital expenditure   |  | (151.2   | ) | (89.4    | ) | (71.8    | )
|                                      
|Charged to the profit and loss account |  | 604.3    |   | 429.9    |   | 301.4    |  
|                                      



|                                                                                                                                                             |  |             |  |                |  |       
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------- |  | -------------- |  | ------
|(b) Employee numbers

The year end and average numbers of employees (full-time and part-time) employed by the group, including executive directors, were:   
|                                                                                                                                                             |  |             |  |                | 
|                                                                                                                                                             |  | At 31 March |  | Annual average | 
|                                                                                                                                                             |  | 2001        |  | 2000           |  | 1999  
|                                                                                                                                                             |  |             |  |                |  |       
|United Kingdom                                                                                                                                               |  |             |  |                |  |       
|Generation Wholesale                                                                                                                                         |  | 737         |  | 710            |  | 913   
|Power Systems                                                                                                                                                |  | 3,181       |  | 4,414          |  | 4,444 
|Energy Supply                                                                                                                                                |  | 3,440       |  | 2,147          |  | 1,749 
|Southern Water                                                                                                                                               |  | 2,103       |  | 2,143          |  | 2,262 
|Telecoms                                                                                                                                                     |  | 2,686       |  | 2,516          |  | 2,383 
|Other                                                                                                                                                        |  | 3,166       |  | 4,395          |  | 4,281 
|                                                                                                                                                            
|United Kingdom total                                                                                                                                         |  | 15,313      |  | 16,325         |  | 16,032
|                                                                                                                                                            
|United States                                                                                                                                                | 
|PacifiCorp                                                                                                                                                   |  | 6,668       |  | 7,789          |  |      
|                                                                                                                                                            
|United States total                                                                                                                                          |  | 6,668       |  | 7,789          |  |      
|                                                                                                                                                            
|Total                                                                                                                                                        |  | 21,981      |  | 24,114         |  | 16,032
|                                                                                                                                                            
|The year end and average numbers of full-time equivalent staff employed by the group, including executive directors, were:                                   | 
|                                                                                                                                                             |  | At 31 March |  | Annual average | 
|                                                                                                                                                             |  | 2001        |  | 2000           |  | 1999  
|                                                                                                                                                            
|United Kingdom                                                                                                                                               |  | 14,209      |  | 15,176         |  | 15,145
|United States                                                                                                                                                |  | 6,612       |  | 7,742          |  |      
|                                                                                                                                                            
|Total                                                                                                                                                        |  | 20,821      |  | 22,918         |  | 15,145
|                                                                                                                                                            
|(c) Directors remuneration

Details, for each director, of remuneration, pension entitlements and interests in share options are set out on pages 63 to 66.
|                                                                                                                                                            

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|                                                                  |  |          |  |          |   |          |   |          | 
|----------------------------------------------------------------- |  | -------- |  | -------- | - | -------- | - | -------- | 
|4 Exceptional items                                               |  |          |  |          |   |          |   |          | 
|                                                                 
|                                                                  |  | Notes    |  | 2001

£m |   | 2000

£m |   | 1999

£m | 
|                                                                  |  |          |  |          |   |          |   |          | 
|(a) Recognised in arriving at operating profit                    |  |          |  |          |   |          |   |          | 
|Reorganisation costs                                              |  | (i),(ii) |  | (120.7   | ) | (55.0    | ) |         | 
|Energy contracts                                                  |  | (iii)    |  |         |   | (107.1   | ) |         | 
|Impairment of assets                                              |  | (iv)     |  |         |   | (96.9    | ) |         | 
|                                                                 
|                                                                  |  |          |  | (120.7   | ) | (259.0   | ) |         | 
|                                                                 
|(b) Recognised after operating profit                             | 
|Share of joint venture impairment of assets                       |  |          |  |         |   | (3.3     | ) |         | 
|Gain on partial disposal of Thus                                  |  | (v)      |  |         |   | 787.0    |   |         | 
|Loss on disposal of and withdrawal from other Telecoms operations |  | (vi)     |  |         |   | (55.0    | ) |         | 
|                                                                 
|                                                                  |  |          |  |         |   | 728.7    |   |         | 
|Restructuring of debt portfolio                                   |  | (vii)    |  |         |   | (15.9    | ) |         | 
|Tax on exceptional items                                          |  |          |  | 45.9     |   | (56.0    | ) |         | 
|                                                                 
|                                                                  |  |          |  | 45.9     |   | 656.8    |   |         | 
|                                                                 
|Total exceptional items (net of tax)                              |  |          |  | (74.8    | ) | 397.8    |   |         | 
|                                                                 



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|Year ended 31 March 2001
|------------------------
|(i)                     
|                        
|Year ended 31 March 2000
|(ii)                    
|                        
|(iii)                   
|                        
|(iv)                    
|                        
|(v)                     
|                        
|(vi)                    
|                        
|(vii)                   
|                        

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|                                                                                                                                                                                                                                                             |          |   |          |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------- | - | -------- | - | -------- | -
|5 Net interest and similar charges                                                                                                                                                                                                                           |          |   |          |   |          |  
|                                                                                                                                                                                                                                                             |          |   |          |   |          |  
|Analysis of net interest and similar charges                                                                                                                                                                                                                 | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                                                                                                                                                                                                                                            
|Interest on bank loans and overdrafts                                                                                                                                                                                                                        | 38.1     |   | 24.6     |   | 35.5     |  
|Interest on other borrowings                                                                                                                                                                                                                                 | 333.7    |   | 251.1    |   | 144.4    |  
|Finance leases                                                                                                                                                                                                                                               | 2.2      |   | 0.7      |   |         |  
|                                                                                                                                                                                                                                                            
|Total interest payable                                                                                                                                                                                                                                       | 374.0    |   | 276.4    |   | 179.9    |  
|Interest receivable                                                                                                                                                                                                                                          | (33.7    | ) | (9.6     | ) | (3.8     | )
|Capitalised interest                                                                                                                                                                                                                                         | (32.2    | ) | (28.8    | ) | (14.8    | )
|                                                                                                                                                                                                                                                            
|Net interest charge                                                                                                                                                                                                                                          | 308.1    |   | 238.0    |   | 161.3    |  
|Unwinding of discount on provisions                                                                                                                                                                                                                          | 16.0     |   | 5.4      |   |         |  
|Foreign exchange                                                                                                                                                                                                                                             | 8.8      |   |         |   |         |  
|                                                                                                                                                                                                                                                            
|Net interest and similar charges                                                                                                                                                                                                                             | 332.9    |   | 243.4    |   | 161.3    |  
|                                                                                                                                                                                                                                                            
|Interest cover (times)                                                                                                                                                                                                                                       | 3.0      |   | 4.2      |   | 5.0      |  
|                                                                                                                                                                                                                                                            
|Interest cover is calculated by dividing profit on ordinary activities before interest (excluding exceptional items and goodwill amortisation) by the sum of the net
interest charge (excluding exceptional interest charges) and the unwinding of discount.
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|                                                  |                                    |   |                             |   |          |   |                                    |  |                              |  |          |  |          | 
|------------------------------------------------- | ---------------------------------- | - | --------------------------- | - | -------- | - | ---------------------------------- |  | ---------------------------- |  | -------- |  | -------- | 
|6 Tax on profit on ordinary activities           
|                                                  |                                    |   |                             |   |          |   |                                    |  |                              |  |          |  |          | 
|                                                  | Before exceptional

item

2001

£m |   | Exceptional

item

2001

£m |   | 2001

£m |   | Before

exceptionalitems

2000

£m |  | Exceptional

items

2000

£m |  | 2000

£m |  | 1999

£m | 
|                                                 
|Current tax:                                      |                                    |   |                             |   |          |   |                                    |  |                              |  |          |  |          | 
|UK Corporation tax at 30% (2000 30% and 1999 31%) | 145.6                              |   |                            |   | 145.6    |   | 135.6                              |  | 56.0                         |  | 191.6    |  | 141.6    | 
|Double taxation relief                            | (61.2                              | ) |                            |   | (61.2    | ) |                                   |  |                             |  |         |  |         | 
|                                                 
|UK Corporation tax liability                      | 84.4                               |   |                            |   | 84.4     |   | 135.6                              |  | 56.0                         |  | 191.6    |  | 141.6    | 
|Foreign taxation                                  | 5.7                                |   | (8.7                        | ) | (3.0     | ) | 26.1                               |  |                             |  | 26.1     |  |         | 
|                                                 
|Total current tax                                 | 90.1                               |   | (8.7                        | ) | 81.4     |   | 161.7                              |  | 56.0                         |  | 217.7    |  | 141.6    | 
|                                                 
|Deferred tax:                                    
|Origination and reversal of timing differences    | 51.0                               |   | (37.2                       | ) | 13.8     |   | 45.2                               |  |                             |  | 45.2     |  | 33.5     | 
|                                                 
|Total deferred tax                                | 51.0                               |   | (37.2                       | ) | 13.8     |   | 45.2                               |  |                             |  | 45.2     |  | 33.5     | 
|                                                 
|Total tax on profit on ordinary activities        | 141.1                              |   | (45.9                       | ) | 95.2     |   | 206.9                              |  | 56.0                         |  | 262.9    |  | 175.1    | 
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  |   |                                   |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | - | --------------------------------- | - | -------- | -
|The rate of current tax charge on profit on ordinary activities before exceptional items and goodwill amortisation varied from the standard rate of
corporation tax in the UK due to the following factors:                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  |   |                                   |   |          |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Before exceptional item

2001

% |   | Before exceptional items

2000

% |   | 1999

%  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  |   |                                   |   |          |  
|UK corporation tax rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | 30.0                             |   | 30.0                              |   | 31.0     |  
|Permanent differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | (9.8                             | ) | (2.6                              | ) | (1.9     | )
|Net effect of different rates of tax in overseas businesses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2.3                              |   | 0.7                               |   |         |  
|Advance corporation tax written back                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                 |   |                                  |   | (2.0     | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Effective tax rate on ordinary activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 22.5                             |   | 28.1                              |   | 27.1     |  
|Effect of deferred tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | (8.1                             | ) | (6.1                              | ) | (5.2     | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Effective current tax rate on ordinary activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 14.4                             |   | 22.0                              |   | 21.9     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Financial Reporting Standard (FRS) 19 Deferred tax issued on 7 December 2000 requires full provision to be made for deferred tax assets and liabilities,
subject to certain exceptions. Previously deferred tax was provided for in respect of timing differences to the extent that it was probable that a liability would crystallise in the foreseeable future. FRS 19 has been applied in preparing the 31
March 2001 Accounts and comparative figures have been restated in the Group Profit and Loss Account, the Balance Sheet and Notes. The effect on the groups previously reported results and net assets is as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  |   |                                   |   |          |  
|Profit retained                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                  |   | 2000

£m                          |   | 1999

£m |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|As previously reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                  |   | 600.9                             |   | 234.9    |  
|Effect of implementing new accounting policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                  |   | (57.3                             | ) | (33.5    | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|As restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                  |   | 543.6                             |   | 201.4    |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Net assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                  |   |                                   |   | 2000

£m |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|As previously reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                  |   |                                   |   | 6,663.6  |  
|Effect of implementing new accounting policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                  |   |                                   |   | (800.6   | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|As restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                  |   |                                   |   | 5,863.0  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|As a result of the change in accounting policy, the profit for the year ended 31 March 2001 has been reduced by £91.7 million.

The effect of the change in accounting policy on profit retained for the year ended 31 March 2000 has been to increase the charge for deferred tax and the goodwill amortisation
relating to the PacifiCorp acquisition.                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|7 Earnings per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(a) Earnings per ordinary share have been calculated for all years by dividing the profit for the financial year by the weighted average number of
ordinary shares in issue during the financial year, based on the following information:                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Profit for the financial year (£ million)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Basic weighted average share capital (number of shares, million)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Diluted weighted average share capital (number of shares, million)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|The difference between the basic and the diluted weighted average share capital is wholly attributable to outstanding share options and shares held in trust for the
groups Employee Share Ownership Plan.

(b) The calculation of earnings per ordinary share, on a basis which excludes exceptional items and goodwill amortisation, is based on the following adjusted earnings:                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Profit for the financial year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Adjusting items  exceptional items (net of attributable taxation)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| goodwill
amortisation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Adjusted earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Adjusted earnings per share has been presented in addition to earnings per share calculated in accordance with FRS 14 in order that more meaningful comparisons of
financial performance can be made.

As a result of the groups implementation of FRS 19, earnings per share disclosures have been expanded to show the effect of deferred tax on earnings per share before exceptional items and goodwill amortisation. The deferred tax charge on
pre-exceptional profits amounted to £51.0 million for the year ended 31 March 2001, £45.2 million for the year ended 31 March 2000 and £33.5 million for the year ended 31 March 1999.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|                               |  |                                  |  |                                  |  |                                 
|------------------------------ |  | -------------------------------- |  | -------------------------------- |  | --------------------------------
|                               |  |                                  |  |                                  |  |                                 
|8 Dividends per ordinary share
|                               |  |                                  |  |                                  |  |                                 
|                               |  | 2001

pence per

ordinary

share |  | 2000

pence per

ordinary

share |  | 1999

pence per

ordinary

share
|                              
|First interim dividend paid    |  | 6.51                             |  | 8.27                             |  | 7.50                            
|Second interim dividend paid   |  | 6.51                             |  | 8.10                             |  |                                
|Third interim dividend paid    |  | 6.51                             |  | 2.23                             |  |                                
|Final dividend                 |  | 6.51                             |  | 6.20                             |  | 15.00                           
|                              
|Total dividends                |  | 26.04                            |  | 24.80                            |  | 22.50                           
|                              
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|                                                                                                                                                                                                                  |  |       |  |          |   |          |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  | -------- | - | -------- | - | -------- | -
|                                                                                                                                                                                                                  |  | Notes |  | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                                                                                                                                                                                                  |  |       |  |          |   |          |   |          |  
|Cash inflow from continuing operating activities                                                                                                                                                                  |  | 10    |  | 1,411.6  |   | 1,117.5  |   | 944.9    |  
|Dividends received from associates and joint ventures                                                                                                                                                             |  |       |  | 2.1      |   | 0.5      |   | 0.9      |  
|Returns on investments and servicing of finance                                                                                                                                                                   |  | 9     |  | (373.5   | ) | (258.4   | ) | (149.9   | )
|Ordinary taxation                                                                                                                                                                                                 |  |       |  | (152.6   | ) | (154.3   | ) | (93.7    | )
|                                                                                                                                                                                                                 
|Free cash flow before windfall tax                                                                                                                                                                                |  |       |  | 887.6    |   | 705.3    |   | 702.2    |  
|Exceptional taxation  windfall tax                                                                                                                                                                               |  |       |  |         |   |         |   | (157.8   | )
|                                                                                                                                                                                                                 
|Free cash flow                                                                                                                                                                                                    |  |       |  | 887.6    |   | 705.3    |   | 544.4    |  
|Capital expenditure and financial investment                                                                                                                                                                      |  | 9     |  | (1,081.4 | ) | (842.3   | ) | (683.0   | )
|                                                                                                                                                                                                                 
|Cash flow before acquisitions and disposals                                                                                                                                                                       |  |       |  | (193.8   | ) | (137.0   | ) | (138.6   | )
|Acquisitions and disposals                                                                                                                                                                                        |  | 9     |  | 482.9    |   | 718.8    |   | (77.4    | )
|Equity dividends paid                                                                                                                                                                                             |  |       |  | (471.3   | ) | (406.0   | ) | (252.8   | )
|                                                                                                                                                                                                                 
|Cash (outflow)/inflow before use of liquid resources and financing                                                                                                                                                |  |       |  | (182.2   | ) | 175.8    |   | (468.8   | )
|Management of liquid resources                                                                                                                                                                                    |  | 9,13  |  | (11.9    | ) | (9.8     | ) | (12.1    | )
|Financing                                                                                                                                                                                                         | 
| Issue of ordinary share capital (net of costs)                                                                                                                                                                  |  | 9     |  | 6.6      |   | (29.2    | ) | 3.2      |  
| Issue of ordinary share capital by a subsidiary (net of costs)                                                                                                                                                  |  |       |  |         |   | 310.0    |   |         |  
| Share buy-back (including costs)                                                                                                                                                                                |  |       |  |         |   | (302.0   | ) |         |  
| Increase/(decrease) in debt                                                                                                                                                                                     |  | 9,13  |  | 189.5    |   | (100.0   | ) | 451.0    |  
|                                                                                                                                                                                                                  |  |       |  | 196.1    |   | (121.2   | ) | 454.2    |  
|                                                                                                                                                                                                                 
|Increase/(decrease) in cash in year                                                                                                                                                                               |  | 13    |  | 2.0      |   | 44.8     |   | (26.7    | )
|                                                                                                                                                                                                                 
|Free cash flow represents cash flow from continuing operating activities after adjusting for dividends received from associates and joint ventures, returns on
investments and servicing of finance and taxation.
|                                                                                                                                                                                                                 
|The
Accounting Policies and Definitions
, together with Notes 1 to 40 form part of these Accounts.                                                                                                               
|                                                                                                                                                                                                                 

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|                                                                                                   |  |      |  |          |   |          |   |          |  
|-------------------------------------------------------------------------------------------------- |  | ---- |  | -------- | - | -------- | - | -------- | -
|                                                                                                   |  | Note |  | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                                                                                   |  |      |  |          |   |          |   |          |  
|Increase/(decrease) in cash in year                                                                |  |      |  | 2.0      |   | 44.8     |   | (26.7    | )
|Cash (inflow)/outflow from (increase)/decrease in debt                                             |  |      |  | (189.5   | ) | 100.0    |   | (451.0   | )
|Cash outflow from movement in liquid resources                                                     |  |      |  | 11.9     |   | 9.8      |   | 12.1     |  
|                                                                                                  
|Change in net debt resulting from cash flows                                                       |  |      |  | (175.6   | ) | 154.6    |   | (465.6   | )
|Net debt acquired                                                                                  |  |      |  |         |   | (2,565.6 | ) | (2.7     | )
|Net debt disposed                                                                                  |  |      |  |         |   | 8.5      |   |         |  
|Exchange                                                                                           |  |      |  | (264.7   | ) | (17.3    | ) |         |  
|Other non-cash movements                                                                           |  |      |  | (3.3     | ) | (0.5     | ) | (0.3     | )
|                                                                                                  
|Movement in net debt in year                                                                       |  |      |  | (443.6   | ) | (2,420.3 | ) | (468.6   | )
|Net debt at end of previous year                                                                   |  |      |  | (4,841.5 | ) | (2,421.2 | ) | (1,952.6 | )
|                                                                                                  
|Net debt at end of year                                                                            |  | 13   |  | (5,285.1 | ) | (4,841.5 | ) | (2,421.2 | )
|                                                                                                  
|The
Accounting Policies and Definitions
, together with Notes 1 to 40 form part of these Accounts.
|                                                                                                  

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|                                                                                                                   |  |          |   |          |   |          |  
|------------------------------------------------------------------------------------------------------------------ |  | -------- | - | -------- | - | -------- | -
|9 Analysis of cash flows                                                                                           |  |          |   |          |   |          |  
|                                                                                                                   |  |          |   |          |   |          |  
|                                                                                                                   |  | 2001

£m |   | 2000

£m |   | 1999

£m |  
|                                                                                                                  
|(a) Returns on investments and servicing of finance                                                                |  |          |   |          |   |          |  
|Interest received                                                                                                  |  | 32.7     |   | 9.7      |   | 3.5      |  
|Interest paid                                                                                                      |  | (395.8   | ) | (265.7   | ) | (153.4   | )
|Dividends paid to minority interests                                                                               |  | (10.4    | ) | (2.4     | ) |         |  
|                                                                                                                  
|Net cash outflow for returns on investments and servicing of finance                                               |  | (373.5   | ) | (258.4   | ) | (149.9   | )
|                                                                                                                  
|(b) Capital expenditure and financial investment                                                                   | 
|Purchase of tangible fixed assets                                                                                  |  | (1,143.6 | ) | (917.7   | ) | (745.1   | )
|Deferred income received                                                                                           |  | 97.3     |   | 55.5     |   | 47.8     |  
|Sale of tangible fixed assets                                                                                      |  | 26.4     |   | 26.5     |   | 20.4     |  
|Purchase of fixed asset investments                                                                                |  | (61.5    | ) | (6.6     | ) | (6.1     | )
|                                                                                                                  
|Net cash outflow for capital expenditure and financial investment                                                  |  | (1,081.4 | ) | (842.3   | ) | (683.0   | )
|                                                                                                                  
|(c) Acquisitions and disposals                                                                                     | 
|Purchase of businesses and subsidiary undertakings                                                                 |  | (230.2   | ) | 2.1      |   | (77.4    | )
|Sale of businesses and subsidiary undertakings                                                                     |  | 713.1    |   | (3.7     | ) |         |  
|Partial disposal of Thus                                                                                           |  |         |   | 720.4    |   |         |  
|                                                                                                                  
|Net cash inflow/(outflow) from acquisitions and disposals                                                          |  | 482.9    |   | 718.8    |   | (77.4    | )
|                                                                                                                  
|(d) Management of liquid resources*                                                                                | 
|Cash outflow in relation to short-term deposits and other short-term investments                                   |  | (11.9    | ) | (9.8     | ) | (12.1    | )
|                                                                                                                  
|Net cash outflow for management of liquid resources                                                                |  | (11.9    | ) | (9.8     | ) | (12.1    | )
|                                                                                                                  
|(e) Financing                                                                                                      | 
|Issue of ordinary share capital                                                                                    |  | 6.6      |   | 3.8      |   | 3.2      |  
|Expenses paid in connection with share issue                                                                       |  |         |   | (33.0    | ) |         |  
|Issue of ordinary share capital by a subsidiary                                                                    |  |         |   | 327.0    |   |         |  
|Expenses paid in connection with share issue by a subsidiary                                                       |  |         |   | (17.0    | ) |         |  
|Share buy-back                                                                                                     |  |         |   | (302.0   | ) |         |  
|                                                                                                                   |  | 6.6      |   | (21.2    | ) | 3.2      |  
|Debt due within one year:                                                                                          | 
| net drawdown/(repayment) of uncommitted facilities                                                               |  | 6.6      |   | (75.0    | ) | (39.1    | )
| net commercial paper issued/(redeemed)                                                                           |  | 6.1      |   | (285.8   | ) | (174.9   | )
| medium-term notes/private placements                                                                             |  | (58.9    | ) | (3.3     | ) | (62.5    | )
| issue/(redemption) of loan notes                                                                                 |  | 0.4      |   | (8.0     | ) | (1.1     | )
| European Investment Bank loans                                                                                   |  | (4.6     | ) | 0.8      |   | (10.0    | )
| mortgages                                                                                                        |  | (96.4    | ) | 4.2      |   |         |  
| non recourse notes                                                                                               |  | (147.2   | ) |         |   |         |  
| other                                                                                                            |  | 0.5      |   |         |   |         |  
|Debt due after one year:                                                                                           | 
| medium-term notes/private placements                                                                             |  | 594.2    |   | 178.1    |   | 197.5    |  
| European Investment Bank loans                                                                                   |  | 42.8     |   | 86.2     |   | 51.2     |  
| 6.750% euro-sterling bond issue                                                                                  |  |         |   |         |   | 247.0    |  
| 5.250% deutschmark bond issue                                                                                    |  |         |   |         |   | 245.5    |  
| 11.457% sterling bond issue                                                                                      |  |         |   | (142.0   | ) |         |  
| 6.625% euro-sterling bond issue                                                                                  |  |         |   | 197.9    |   |         |  
| mortgages                                                                                                        |  | (25.8    | ) | (53.1    | ) |         |  
| secured pollution control revenue bonds                                                                          |  | 0.2      |   |         |   |         |  
| unsecured pollution control revenue bonds                                                                        |  | 1.9      |   |         |   |         |  
| junior debentures                                                                                                |  | (117.0   | ) |         |   |         |  
| non recourse notes                                                                                               |  | (21.2    | ) |         |   |         |  
| other                                                                                                            |  | 8.0      |   |         |   |         |  
|Capital element of finance lease rental payments                                                                   |  | (0.1     | ) |         |   | (2.6     | )
|Increase/(decrease) in debt                                                                                        |  | 189.5    |   | (100.0   | ) | 451.0    |  
|                                                                                                                  
|Net cash inflow/(outflow) from financing                                                                           |  | 196.1    |   | (121.2   | ) | 454.2    |  
|                                                                                                                  
|* Liquid resources include term deposits of less than one year, commercial paper and other short-term investments.
|                                                                                                                  

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|--------------------------------------------------------------------------------------------- |  | -------- | -
|                                                                                              |  |          |  
|10 Reconciliation of operating profit to net cash inflow from continuing operating activities
|                                                                                             
|                                                                                              |  | 2001

£m |  
|                                                                                             
|Operating profit                                                                              |  | 721.9    |  
|Depreciation and amortisation                                                                 |  | 607.9    |  
|Profit on sale of tangible fixed assets and disposal of businesses                            |  | (19.9    | )
|Release of deferred income                                                                    |  | (15.1    | )
|Movements in provisions for liabilities and charges                                           |  | 57.5     |  
|(Increase)/decrease in stocks                                                                 |  | (13.3    | )
|Increase in debtors                                                                           |  | (137.2   | )
|Increase/(decrease) in creditors                                                              |  | 209.8    |  
|                                                                                             
|Net cash inflow from continuing operating activities                                          |  | 1,411.6  |  
|                                                                                             
|                                                                                             

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  |                       |   |                        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | --------------------- | - | ---------------------- | -
|11 Effect of acquisitions and disposals on cash flows                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |                       |   |                        |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | Acquisition

2000

£m |   | Acquisitions

1999

£m |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Cash flow from operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |  |  | 242.4                 |   | 21.1                   |  
|Returns on investments and servicing of finance                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  | (40.6                 | ) | 0.3                    |  
|Taxation                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |  |  | 7.6                   |   | (0.1                   | )
|Capital expenditure and financial investment                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  | (103.1                | ) | (10.6                  | )
|Equity dividends paid                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  | (9.8                  | ) |                       |  
|Management of liquid resources                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |  |                      |   | (9.2                   | )
|Financing                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | (71.0                 | ) | (1.6                   | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Increase/(decrease) in cash                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | 25.5                  |   | (0.1                   | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The effect of acquisitions and disposals on cash flows during 2001 is not material. The analysis of cash flows of the acquisition in 2000 relates to the
post-acquisition cash flows of PacifiCorp. The cash flows relating to the disposal during 2000 were not material. The analysis of cash flows of the acquisitions in 1999 relates to the post-acquisition cash flows of Demon Internet Limited and
Watermark Games Limited. There were no disposals in 1999.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|                                                                                                                  |  |                       |   |                     |   |                       |   |                    |   |                        |  
|----------------------------------------------------------------------------------------------------------------- |  | --------------------- | - | ------------------- | - | --------------------- | - | ------------------ | - | ---------------------- | -
|12 Analysis of cash flows in respect of acquisitions and disposals                                               
|                                                                                                                 
|                                                                                                                  |  | Acquisition

2001

£m |   | Disposals

2001

£m |   | Acquisition

2000

£m |   | Disposal

2000

£m |   | Acquisitions

1999

£m |  
|                                                                                                                 
|Cash consideration including expenses                                                                             |  | (227.7                | ) | 716.5               |   | (28.4                 | ) |                   |   | (69.7                  | )
|Cash at bank and in hand acquired/(disposed)                                                                      |  |                      |   |                    |   | 41.4                  |   | (3.7               | ) | 1.4                    |  
|Pre-completion dividend to former PacifiCorp shareholders                                                         |  |                      |   |                    |   | (9.8                  | ) |                   |   |                       |  
|Deferred consideration in respect of prior year acquisitions                                                      |  | (2.5                  | ) |                    |   | (1.1                  | ) |                   |   | (9.1                   | )
|Expenses paid in respect of prior year disposals                                                                  |  |                      |   | (3.4                | ) |                      |   |                   |   |                       |  
|                                                                                                                 
|                                                                                                                  |  | (230.2                | ) | 713.1               |   | 2.1                   |   | (3.7               | ) | (77.4                  | )
|                                                                                                                 
|The cash flows arising on the groups partial disposal of its interest in Thus (net of expenses) were as follows:
|                                                                                                                  |  |                       |   |                     |   |                       |   |                    |   | 2000

£m               |  
|                                                                                                                 
|Cash received on primary issue by Thus                                                                            |  |                       |   |                     |   |                       |   |                    |   | 310.0                  |  
|Cash received on sale of shares by ScottishPower                                                                  |  |                       |   |                     |   |                       |   |                    |   | 720.4                  |  
|                                                                                                                 
|Total                                                                                                             |  |                       |   |                     |   |                       |   |                    |   | 1,030.4                |  
|                                                                                                                 
|                                                                                                                  |  |                       |   |                     |   |                       |   |                    |   |                        |  

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|                        |          |    |           |    |               |    |               |    |          |    |          |    |          |  
|----------------------- | -------- | -- | --------- | -- | ------------- | -- | ------------- | -- | -------- | -- | -------- | -- | -------- | -
|13 Analysis of net debt
|                       
|                        | At       |    |           |    | Acquisition   |    | Disposal      |    |          |    | Other    |    | At       |  
|                        | 1 April  |    |           |    | (excl. cash & |    | (excl. cash & |    |          |    | noncash |    | 31 March |  
|1999  00               | 1999     |    | Cash flow |    | overdrafts)   |    | overdrafts)   |    | Exchange |    | changes  |    | 2000     |  
|£m                      |          | £m |           | £m |               | £m |               | £m |          | £m |          | £m |         
|                       
|Cash at bank            | 38.1     |    | 68.6      |    |              |    |              |    |         |    |         |    | 106.7    |  
|Overdrafts              | (15.3    | )  | (23.8     | )  |              |    |              |    |         |    |         |    | (39.1    | )
|                        |          |    | 44.8      |    |               |    |               |    |          |    |          |    |          |  
|Debt due after 1 year   | (1,684.5 | )  | (267.1    | )  | (2,349.6      | )  |              |    | (15.9    | )  | (0.5     | )  | (4,317.6 | )
|Debt due within 1 year  | (828.3   | )  | 367.1     |    | (199.1        | )  | 8.5           |    | (1.2     | )  |         |    | (653.0   | )
|Finance leases          |         |    |          |    | (16.9         | )  |              |    | (0.2     | )  |         |    | (17.1    | )
|                        |          |    | 100.0     |    |               |    |               |    |          |    |          |    |          |  
|Other deposits          | 68.8     |    | 9.8       |    |              |    |              |    |         |    |         |    | 78.6     |  
|                       
|Total                   | (2,421.2 | )  | 154.6     |    | (2,565.6      | )  | 8.5           |    | (17.3    | )  | (0.5     | )  | (4,841.5 | )
|                       

|
|

|                                                                                                                                                                                                                                                                                                                      |          |               |         |              |        |             |          |          |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------- | ------- | ------------ | ------ | ----------- | -------- | -------- | -------- | -
|Other noncash changes to net debt represents amortisation of finance costs of £0.5 million.                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                      | At       |               |         |              |        |             | Other    |          | At       |  
|2000  01                                                                                                                                                                                                                                                                                                             | 1 April  |               |         |              |        |             | noncash |          | 31 March |  
|2000

£m                                                                                                                                                                                                                                                                                                              |          | Cash flow

£m |         | Exchange

£m |        | changes

£m |          | 2001

£m |         
|                                                                                                                                                                                                                                                                                                                     
|Cash at bank                                                                                                                                                                                                                                                                                                          | 106.7    |               | 13.1    |              | 19.9   |             |         |          | 139.7    |  
|Overdrafts                                                                                                                                                                                                                                                                                                            | (39.1    | )             | (11.1   | )            | (2.3   | )           |         |          | (52.5    | )
|                                                                                                                                                                                                                                                                                                                      |          |               | 2.0     |              |        |             |          |          |          |  
|                                                                                                                                                                                                                                                                                                                     
|Debt due after 1 year                                                                                                                                                                                                                                                                                                 | (4,317.  | 6)            | (474.0  | )            | (267.8 | )           | 191.1    |          | (4,868.3 | )
|Debt due within 1 year                                                                                                                                                                                                                                                                                                | (653.0   | )             | 284.4   |              | (12.4  | )           | (194.4   | )        | (575.4   | )
|Finance leases                                                                                                                                                                                                                                                                                                        | (17.1    | )             | 0.1     |              | (2.1   | )           |         |          | (19.1    | )
|                                                                                                                                                                                                                                                                                                                      |          |               | (189.5) |              |        |             |          |          |          |  
|Other deposits                                                                                                                                                                                                                                                                                                        | 78.6     |               | 11.9    |              |       |             |         |          | 90.5     |  
|                                                                                                                                                                                                                                                                                                                     
|Total                                                                                                                                                                                                                                                                                                                 | (4,841.5 | )             | (175.6  | )            | (264.7 | )           | (3.3     | )        | (5,285.1 | )
|                                                                                                                                                                                                                                                                                                                     
|Other noncash changes to net debt represents the movement in debt of £194.4 million due after more than one year to due within
one year, amortisation of finance costs of £0.5 million and finance costs of £2.8 million representing the effects of the Retail Price Index (RPI) on bonds carrying an RPI coupon.
|                                                                                                                                                                                                                                                                                                                      |          |               |         |              |        |             |          |          |          |  

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 Cross Reference to Form 20-F (US)
| |                                                  

| | Group Balance Sheetas at31 March 2001
| | -------------------------------------
| |                                      



|                                                                                                  
|--------------------------------------------------------------------------------------------------
|                                                                                                  
|                                                                                                  
|Fixed assets                                                                                      
|Intangible assets                                                                                 
|Tangible assets                                                                                   
|Investments                                                                                       
| Investments in joint ventures:                                                                  
|Share of gross assets                                                                             
|Share of gross liabilities                                                                        
|                                                                                                  
| Investments in associates                                                                       
| Other investments                                                                               
|                                                                                                  
|                                                                                                  
|                                                                                                  
|                                                                                                  
|Current assets                                                                                    
|Businesses held for disposal                                                                      
|Stocks                                                                                            
|Debtors                                                                                           
| Gross debtors                                                                                   
| Less nonrecourse financing                                                                     
|                                                                                                  
|Shortterm bank and other deposits                                                                
|                                                                                                  
|                                                                                                  
|                                                                                                  
|Creditors: amounts falling due within one year                                                    
|Loans and other borrowings                                                                        
|Other creditors                                                                                   
|                                                                                                  
|                                                                                                  
|                                                                                                  
|Net current liabilities                                                                           
|                                                                                                  
|Total assets less current liabilities                                                             
|Creditors: amounts falling due after more than one year                                           
|Loans and other borrowings                                                                        
|Provisions for liabilities and charges                                                            
| Deferred tax                                                                                    
| Other provisions                                                                                
|                                                                                                  
|Deferred income                                                                                   
|                                                                                                  
|Net assets                                                                                        
|                                                                                                  
|Called up share capital                                                                           
|Share premium                                                                                     
|Revaluation reserve                                                                               
|Capital redemption reserve                                                                        
|Merger reserve                                                                                    
|Profit and loss account                                                                           
|                                                                                                  
|Equity shareholders funds                                                                        
|Minority interests(including nonequity)                                                          
|                                                                                                  
|Capital employed                                                                                  
|                                                                                                  
|Net asset value per ordinary share                                                                
|                                                                                                  
|Approved by the Board on 3 May 2001 and signed on its behalf by                                   
|Charles Miller Smith

Chairman                                                                    
|                                                                                                  
|The
Accounting Policies and Definitions
, together with Notes 1 to 40 form part of these Accounts.
|                                                                                                  

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|                                   |  |       |  |          |   |          |  
|---------------------------------- |  | ----- |  | -------- | - | -------- | -
|14 Segmental information           |  |       |  |          |   |          |  
|                                  
|(a) Net assets by segment          |  | Notes |  | 2001

£m |   | 2000

£m |  
|                                  
|United Kingdom                     |  |       |  |          |   |          |  
|Generation Wholesale               |  |       |  | 459.8    |   | 201.0    |  
|Power Systems                      |  |       |  | 1,871.3  |   | 1,955.2  |  
|Energy Supply                      |  |       |  | 196.2    |   | 200.9    |  
|Southern Water                     |  |       |  | 1,831.4  |   | 1,618.0  |  
|Telecoms                           |  |       |  | 308.1    |   | 377.7    |  
|Other                              |  | (i)   |  | 87.3     |   | 56.8     |  
|                                  
|United Kingdom total               |  |       |  | 4,754.1  |   | 4,409.6  |  
|                                  
|United States                      | 
|PacifiCorp                         |  |       |  | 7,562.0  |   | 7,159.2  |  
|                                  
|United States total                |  |       |  | 7,562.0  |   | 7,159.2  |  
|                                  
|Unallocated net liabilities        |  | (ii)  |  | (6,137.1 | ) | (5,705.8 | )
|                                  
|Total                              |  |       |  | 6,179.0  |   | 5,863.0  |  
|                                  
|(b) Capital expenditure by segment |  | (iii) |  | 2001

£m |   | 2000

£m |  
|                                  
|United Kingdom                     |  |       |  |          |   |          |  
|Generation Wholesale               |  |       |  | 120.9    |   | 32.0     |  
|Power Systems                      |  |       |  | 217.0    |   | 216.5    |  
|Energy Supply                      |  |       |  | 37.2     |   | 41.4     |  
|Southern Water                     |  |       |  | 319.5    |   | 362.6    |  
|Telecoms                           |  |       |  | 158.9    |   | 164.8    |  
|Other                              |  |       |  | 9.8      |   | 27.8     |  
|                                  
|United Kingdom total               |  |       |  | 863.3    |   | 845.1    |  
|                                  
|United States                      | 
|PacifiCorp                         |  |       |  | 328.8    |   | 97.3     |  
|                                  
|United States total                |  |       |  | 328.8    |   | 97.3     |  
|                                  
|Total                              |  |       |  | 1,192.1  |   | 942.4    |  
|                                  
|(c) Total assets by segment        |  |       |  | 2001

£m |   | 2000

£m |  
|                                  
|United Kingdom                     | 
|Generation Wholesale               |  |       |  | 922.5    |   | 442.4    |  
|Power Systems                      |  |       |  | 2,489.0  |   | 2,496.3  |  
|Energy Supply                      |  |       |  | 534.5    |   | 487.5    |  
|Southern Water                     |  |       |  | 2,824.5  |   | 2,575.4  |  
|Telecoms                           |  |       |  | 599.5    |   | 450.0    |  
|Other                              |  |       |  | 138.4    |   | 73.4     |  
|                                  
|United Kingdom total               |  |       |  | 7,508.4  |   | 6,525.0  |  
|                                  
|United States                      | 
|PacifiCorp                         |  |       |  | 9,467.3  |   | 8,991.1  |  
|                                  
|United States total                |  |       |  | 9,467.3  |   | 8,991.1  |  
|                                  
|Total                              |  |       |  | 16,975.7 |   | 15,516.1 |  
|                                  
|                                  

| | (i)   | The net liabilities of the Appliance Retailing business, included within the Other business segment, excluding short-term bank and other deposits of £55.4
million (2000 £48.8 million), are £0.8 million (2000 net assets £9.1 million).
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                          
| | (ii)  | Unallocated net liabilities include net debt, dividends payable, tax liabilities, investments and businesses held for disposal.                                                                                                          
| |       |                                                                                                                                                                                                                                          
| | (iii) | Capital expenditure by business segment is stated gross of capital grants and customer contributions. Capital expenditure net of contributions amounted to
£1,095.6 million (2000 £887.3 million).                                       
| |       |                                                                                                                                                                                                                                          



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 Cross Reference to Form 20-F (US)
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| |                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 15 Net asset value per ordinary share                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                            
| | Net asset value per ordinary share has been calculated based on the following net assets and the number of shares in issue at the end of the respective
years (after adjusting for the effect of shares held in trust for the groups Sharesave Schemes and Employee Share Ownership Plan):
| |                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                            
| | Net assets (as adjusted) (£ million)                                                                                                                                                                                                                                                       
| | Number of ordinary shares in issue at year end (as adjusted) (number of shares, million)                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                            
|

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| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                                                                                                                             |  |      
|---------------------------------------------------------------------------------------------------------------------------- |  | -----
|                                                                                                                            
|16 Intangible fixed assets                                                                                                  
|                                                                                                                            
|Year ended 31 March 2000                                                                                                     |  | Note 
|                                                                                                                            
|Cost:                                                                                                                        |  |      
|At 1 April 1999                                                                                                              |  |      
|Acquisition  as restated for FRS 19                                                                                         |  | 30   
|Disposals                                                                                                                    |  |      
|Exchange                                                                                                                     |  |      
|                                                                                                                            
|At 31 March 2000  as restated                                                                                               |  |      
|                                                                                                                            
|Amortisation:                                                                                                                |  |      
|At 1 April 1999                                                                                                              |  |      
|Amortisation for the year  as restated for FRS 19                                                                           |  |      
|Disposals                                                                                                                    |  |      
|Exchange                                                                                                                     |  |      
|                                                                                                                            
|At 31 March 2000  as restated                                                                                               |  |      
|                                                                                                                            
|Net book value:                                                                                                              |  |      
|At 31 March 2000  as restated                                                                                               |  |      
|At 31 March 1999                                                                                                             |  |      
|                                                                                                                            
|Year ended 31 March 2001                                                                                                     |  | Notes
|                                                                                                                            
|Cost:                                                                                                                        |  |      
|At 1 April 2000                                                                                                              |  |      
|Acquisition                                                                                                                  |  | 29   
|Revision to provisional fair values                                                                                          |  | 30   
|Exchange                                                                                                                     |  |      
|                                                                                                                            
|At 31 March 2001                                                                                                             |  |      
|                                                                                                                            
|Amortisation:                                                                                                                |  |      
|At 1 April 2000                                                                                                              |  |      
|Amortisation for the year                                                                                                    |  |      
|Exchange                                                                                                                     |  |      
|                                                                                                                            
|At 31 March 2001                                                                                                             |  |      
|                                                                                                                            
|Net book value:                                                                                                              |  |      
|At 31 March 2001                                                                                                             |  |      
|At 31 March 2000                                                                                                             |  |      
|At 31 March 1999                                                                                                             |  |      
|                                                                                                                            
|Goodwill capitalised is being amortised over its estimated useful economic life, which is a range of between 15 to 20 years.
|                                                                                                                            

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                        
|------------------------
|17 Tangible fixed assets
|                        
|Year ended 31 March 2000
|                        
|Cost or valuation:      
|At 1 April 1999         
|Additions               
|Acquisition             
|Grants and contributions
|Disposals               
|Exchange                
|                        
|At 31 March 2000        
|                        
|Depreciation:           
|At 1 April 1999         
|Charge for the year     
|Impairment              
|Disposals               
|Exchange                
|                        
|At 31 March 2000        
|                        
|Net book value:         
|At 31 March 2000        
|At 31 March 1999        
|                        



|Year ended 31 March 2001                                              |  | Land and

buildings

£m |   | Water

infrastructure

assets

£m |   | Plant and

machinery

£m |   | Vehicles and

equipment

£m |   | Total

£m |  
|--------------------------------------------------------------------- |  | ----------------------- | - | --------------------------------- | - | ------------------------ | - | --------------------------- | - | --------- | -
|                                                                     
|Cost or valuation:                                                    |  |                         |   |                                   |   |                          |   |                             |   |           |  
|At 1 April 2000                                                       |  | 1,217.8                 |   | 1,093.7                           |   | 8,838.5                  |   | 1,280.7                     |   | 12,430.7  |  
|Additions                                                             |  | 115.4                   |   | 90.5                              |   | 739.2                    |   | 247.0                       |   | 1,192.1   |  
|Acquisitions                                                          |  | 54.2                    |   |                                  |   | 244.7                    |   | 1.1                         |   | 300.0     |  
|Revision to provisional fair values                                   |  |                        |   |                                  |   | (222.6                   | ) |                            |   | (222.6    | )
|Grants and contributions                                              |  |                        |   | (8.7                              | ) |                         |   |                            |   | (8.7      | )
|Disposals                                                             |  | (24.5                   | ) | (0.6                              | ) | (75.3                    | ) | (103.5                      | ) | (203.9    | )
|Exchange                                                              |  | 22.3                    |   |                                  |   | 529.0                    |   | 55.0                        |   | 606.3     |  
|                                                                     
|At 31 March 2001                                                      |  | 1,385.2                 |   | 1,174.9                           |   | 10,053.5                 |   | 1,480.3                     |   | 14,093.9  |  
|                                                                     
|Depreciation:                                                         | 
|At 1 April 2000                                                       |  | 237.0                   |   | 68.1                              |   | 1,135.9                  |   | 306.4                       |   | 1,747.4   |  
|Charge for the year                                                   |  | 42.4                    |   | 20.9                              |   | 259.8                    |   | 157.2                       |   | 480.3     |  
|Disposals                                                             |  | (14.3                   | ) | (0.6                              | ) | (6.3                     | ) | (50.5                       | ) | (71.7     | )
|Exchange                                                              |  | 0.5                     |   |                                  |   | 12.5                     |   | 4.1                         |   | 17.1      |  
|                                                                     
|At 31 March 2001                                                      |  | 265.6                   |   | 88.4                              |   | 1,401.9                  |   | 417.2                       |   | 2,173.1   |  
|                                                                     
|Net book value:                                                       | 
|At 31 March 2001                                                      |  | 1,119.6                 |   | 1,086.5                           |   | 8,651.6                  |   | 1,063.1                     |   | 11,920.8  |  
|At 31 March 2000                                                      |  | 980.8                   |   | 1,025.6                           |   | 7,702.6                  |   | 974.3                       |   | 10,683.3  |  
|                                                                     
|Historical cost analysis                                              |  |                         |   |                                   |   |                          |   | 2001

£m                    |   | 2000

£m  |  
|                                                                     
|Cost                                                                  |  |                         |   |                                   |   |                          |   | 13,941.9                    |   | 12,278.7  |  
|Depreciation based on cost                                            |  |                         |   |                                   |   |                          |   | (2,238.2                    | ) | (1,815.9  | )
|                                                                     
|Net book value based on cost                                          |  |                         |   |                                   |   |                          |   | 11,703.7                    |   | 10,462.8  |  
|                                                                     
|Included in the cost or valuation of tangible fixed assets above are: |  |                         |   |                                   |   | Notes                    |   | 2001

£m                    |   | 2000

£m  |  
|                                                                     
|Major assets in the course of construction                            |  |                         |   |                                   |   |                          |   | 900.3                       |   | 706.4     |  
|Grants and contributions in respect of water infrastructure assets    |  |                         |   |                                   |   |                          |   | (33.0                       | ) | (24.3     | )
|Capitalised interest                                                  |  |                         |   |                                   |   | (ii)                     |   | 94.5                        |   | 61.6      |  
|Assets not subject to depreciation                                    |  |                         |   |                                   |   | (iii)                    |   | 185.1                       |   | 136.0     |  
|                                                                     

| | (i)                                                                                                                                                                                                                                                                                                                   | The Manweb distribution and Southern Water operational assets were revalued by the directors on 30 September 1997. The valuations have not been and will not be updated, as
permitted under the transitional provisions of FRS 15 Tangible fixed assets. The net book value of tangible fixed assets included at valuation at 31 March 2001 was £2,198.1 million (2000 £2,253.1 million).                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii)                                                                                                                                                                                                                                                                                                                  | Interest on the funding attributable to major capital projects was capitalised during the year at a rate of 8% (2000 8%) in the United Kingdom and 7% (2000 7%) in the United
States.                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iii)                                                                                                                                                                                                                                                                                                                 | Assets not subject to depreciation are land. Land and buildings held by the group are predominantly freehold.                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (iv)                                                                                                                                                                                                                                                                                                                  | The historical cost of fully depreciated tangible fixed assets still in use was £224.6 million (2000 £256.3 million).                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (v)                                                                                                                                                                                                                                                                                                                   | Capitalised computer software costs developed for internal use include employee, interest and other external direct costs of materials and services which are directly
attributable to the development of computer software. Cumulative computer software costs capitalised are £455.5 million (2000 £333.1 million). The depreciation charge was £52.5 million (2000 £78.3 million including impairment,
1999 £10.9 million).
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (vi)                                                                                                                                                                                                                                                                                                                  | The net book value of land and buildings held under finance leases at 31 March 2001 was £28.0 million (2000 £17.0 million). The charge for depreciation against these
assets during the year was £0.9 million (2000 £nil).                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (vii)                                                                                                                                                                                                                                                                                                                 | Assets which were impaired in 2000 were valued on the basis of their estimated recoverable amounts.                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                      
| | The impairment charge in the year ended 31 March 2000 of £135.4 million has been charged to the profit and loss account as follows: cost of sales, £44.5
million, transmission and distribution costs, £38.5 million, administrative expenses, £13.9 million and loss from withdrawal from operations, £38.5 million.
| |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                               



| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

|
|
|
|

|                                                                                                                                                          |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | -------------- | ----------------- | ------------------------------------ | -------------------------------------- | --------------------------------- | ------------------------------------- | ---------------------- | ---------------------------------------- | --------- | ---------------------------------------
|18 Fixed asset investments                                                                                                                                |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|                                                                                                                                                         
|                                                                                                                                                          |            | Joint ventures |                   | Associated

undertakings

Shares

£m |                                        | Own

shares held

under trust

£m |                                       | Other

investments

£m |                                          | Total

£m |                                        
|                                                                                                                                                          | Shares

£m |                | Loans

£m        
|                                                                                                                                                         
|Cost or valuation:                                                                                                                                        |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|At 1 April 1999                                                                                                                                           |            | 3.3            |                   | 21.1                                 |                                        | 5.9                               |                                       | 41.6                   |                                          | 1.8       |                                        
|Additions                                                                                                                                                 |            |               |                   | 1.0                                  |                                        |                                  |                                       | 36.9                   |                                          | 12.6      |                                        
|Acquisitions                                                                                                                                              |            |               |                   |                                     |                                        |                                  |                                       | 0.4                    |                                          | 123.4     |                                        
|Share of retained (loss)/profit                                                                                                                           |            | (3.0           | )                 |                                     |                                        | 0.1                               |                                       |                       |                                          |          |                                        
|Disposals and other                                                                                                                                       |            |               |                   | (2.8                                 | )                                      | (0.6                              | )                                     | (8.5                   | )                                        | (1.4      | )                                      
|Exchange                                                                                                                                                  |            |               |                   |                                     |                                        |                                  |                                       |                       |                                          | 0.8       |                                        
|                                                                                                                                                         
|At 31 March 2000                                                                                                                                          |            | 0.3            |                   | 19.3                                 |                                        | 5.4                               |                                       | 70.4                   |                                          | 137.2     |                                        
|Additions                                                                                                                                                 |            | 23.7           |                   | 16.8                                 |                                        |                                  |                                       | 7.5                    |                                          | 32.1      |                                        
|Share of retained (loss)/profit                                                                                                                           |            | (4.8           | )                 | (9.4                                 | )                                      | 0.1                               |                                       |                       |                                          |          |                                        
|Disposals and other                                                                                                                                       |            | (0.4           | )                 | (1.7                                 | )                                      | (0.5                              | )                                     | (12.6                  | )                                        | (3.7      | )                                      
|Exchange                                                                                                                                                  |            |               |                   |                                     |                                        |                                  |                                       | 0.1                    |                                          | 16.5      |                                        
|                                                                                                                                                         
|At 31 March 2001                                                                                                                                          |            | 18.8           |                   | 25.0                                 |                                        | 5.0                               |                                       | 65.4                   |                                          | 182.1     |                                        
|                                                                                                                                                         
|The principal subsidiary undertakings, joint ventures and associated undertakings are listed
here
 .

Details of listed investments held are given below:
|                                                                                                                                                          |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|                                                                                                                                                         
|Balance Sheet value at 31 March 2001                                                                                                                      |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|                                                                                                                                                         
|Market value at 31 March 2001                                                                                                                             |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|(a) Shares in the company held under trust during the year are as follows:                                                                               
|                                                                                                                                                          |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|                                                                                                                                                          | Notes      |                | Dividends

waived |                                      | Shares

held at

1 April

1999

(000s) |                                   | Shares

acquired

during year

(000s) |                        | Shares

transferred

during year

(000s) |           | Shares

held at

31 March

2000

(000s)
|                                                                                                                                                         
|Long Term Incentive Plan                                                                                                                                  | (i)        |                | no                |                                      | 1,877                                  |                                   | 564                                   |                        |                                         |           | 2,441                                  
|ScottishPower Sharesave Schemes                                                                                                                           | (ii)       |                | yes               |                                      | 12,790                                 |                                   | 10,253                                |                        | (3,402                                   | )         | 19,641                                 
|PacifiCorp Stock Incentive Plan                                                                                                                           | (iii)      |                | no                |                                      |                                       |                                   | 108                                   | *                      | (50                                      | )         | 58                                     
|                                                                                                                                                         
|                                                                                                                                                          |            |                |                   |                                      | 14,667                                 |                                   | 10,925                                |                        | (3,452                                   | )         | 22,140                                 
|                                                                                                                                                         
|                                                                                                                                                          |            |                |                   |                                      |                                        |                                   |                                       |                        |                                          |           |                                        
|                                                                                                                                                          | Notes      |                | Dividends

waived |                                      | Shares

held at

1 April

2000

(000s) |                                   | Shares

acquired

during year

(000s) |                        | Shares

transferred

during year

(000s) |           | Shares

held at

31 March

2001

(000s)
|                                                                                                                                                         
|Long Term Incentive Plan                                                                                                                                  | (i)        |                | no                |                                      | 2,441                                  |                                   | 508                                   |                        | (237                                     | )         | 2,712                                  
|ScottishPower Sharesave Schemes                                                                                                                           | (ii)       |                | yes               |                                      | 19,641                                 |                                   |                                      |                        | (4,401                                   | )         | 15,240                                 
|PacifiCorp Stock Incentive Plan                                                                                                                           | (iii)      |                | no                |                                      | 58                                     |                                   | 131                                   |                        | (75                                      | )         | 114                                    
|Employee Share Ownership Plan                                                                                                                             | (iv)       |                | no                |                                      |                                       |                                   | 747                                   |                        |                                         |           | 747                                    
|                                                                                                                                                         
|                                                                                                                                                          |            |                |                   |                                      | 22,140                                 |                                   | 1,386                                 |                        | (4,713                                   | )         | 18,813                                 
|                                                                                                                                                         
|                                                                                                                                                         

| | *     | For the PacifiCorp Stock Incentive Plan this represents the balance of shares at 29 November 1999.                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (i)   | Shares of the company are held under trust as part of the Long Term Incentive Plan for executive directors and other senior managers (see
Remuneration Report of the Directors
for details of the plan).                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)  | Shares of the company are held in two Qualifying Employee Share Ownership Trusts as part of the Scottish Power UK plc Sharesave Scheme, the Scottish Power plc Sharesave Scheme
and the Southern Water Sharesave Scheme. Holders of options granted under the schemes will be awarded shares by the Trusts upon the exercise of the options. Details of options granted under these schemes are disclosed in
Note 26
 .                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (Iii) | Options granted under the PacifiCorp Stock Incentive Plan are for ScottishPower ADSs; for the purposes of the table above, options have been converted to ScottishPower ordinary
shares as follows: one ScottishPower ADS equals four ScottishPower ordinary shares. The figures relating to the PacifiCorp Stock Incentive Plan for the year ended 31 March 2000 relate to the period between the date of acquisition and 31 March 2000
and represent the unvested and unforfeited shares of restricted stock held.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (Iv)  | Shares of the company are held in the Employee Share Ownership Plan Trust on behalf of employees of the ScottishPower group. Shares appropriated under the Free Element and the
Matching Element are subject to forfeiture for a period of three years from the date of appropriation. Shares appropriated under the Partnership Element of the Employee Share Ownership Plan are not subject to forfeiture.                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                                  
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 Cross Reference to Form 20-F (US)
| |                                                  



|                                                   
|---------------------------------------------------
|Notes to the Group Balance Sheetas at 31 March 2001
|                                                   

|                                    |  |          |  |          | 
|----------------------------------- |  | -------- |  | -------- | 
|19 Stocks                           |  |          |  |          | 
|                                   
|                                    |  | 2001

£m |  | 2000

£m | 
|                                   
|Raw materials and consumables       |  | 103.7    |  | 98.5     | 
|Fuel stocks                         |  | 53.1     |  | 47.0     | 
|Work in progress                    |  | 8.2      |  | 11.6     | 
|Finished goods and goods for resale |  | 50.1     |  | 45.2     | 
|                                   
|                                    |  | 215.1    |  | 202.3    | 
|                                   
|                                   



| |                                                  
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 Cross Reference to Form 20-F (US)
| |                                                  

|
|
|
|

|                                                  |  |       |  |          |   |          |  
|------------------------------------------------- |  | ----- |  | -------- | - | -------- | -
|20 Debtors                                        |  |       |  |          |   |          |  
|                                                 
|                                                  |  |       |  |          |   |          |  
|                                                  |  | Notes |  | 2001

£m |   | 2000

£m |  
|                                                 
|(a) Amounts falling due within one year:          |  |       |  |          |   |          |  
|Trade debtors                                     |  | (i)   |  | 620.0    |   | 482.2    |  
|Amounts receivable under finance leases           |  | (ii)  |  | 42.6     |   | 43.7     |  
|Less non-recourse financing                       |  |       |  | (22.4    | ) | (17.2    | )
|                                                  |  |       |  | 20.2     |   | 26.5     |  
|Prepayments and accrued income                    |  |       |  | 428.1    |   | 391.6    |  
|Other debtors                                     |  |       |  | 55.8     |   | 154.5    |  
|                                                 
|                                                  |  |       |  | 1,124.1  |   | 1,054.8  |  
|(b) Amounts falling due after more than one year: | 
|Amounts receivable under finance leases           |  | (ii)  |  | 461.2    |   | 435.5    |  
|Less non-recourse financing                       |  |       |  | (263.3   | ) | (254.7   | )
|                                                  |  |       |  | 197.9    |   | 180.8    |  
|Other debtors                                     |  |       |  | 150.5    |   | 225.4    |  
|                                                 
|                                                  |  |       |  | 1,472.5  |   | 1,461.0  |  
|                                                 

| | (i)  | Trade debtors are stated net of provisions for doubtful debts of £74.7 million (2000 £69.6 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (ii) | The groups finance lease assets in the United States which are financed by non-recourse borrowing qualify for linked presentation under FRS 5. The provider of the finance
has agreed in writing in the finance documentation that it will seek repayment of the finance, as to both principal and interest, only to the extent that sufficient funds are generated by the specific assets it has financed and that it will not seek
recourse in any other form. The directors confirm that the group has no obligation to support any losses arising under these leases nor is there any intention to do so. Amounts receivable under finance leases at 31 March 2001 of £461.2 million
(2000 £435.5 million) are due as follows: between 1-2 years, £120.9 million (2000 £36.7 million); between 2-3 years, £49.8 million (2000 £98.0 million); between 3-4 years, £37.1 million (2000 £43.0 million);
between 4-5 years, £28.9 million (2000 £44.5 million) and after 5 years, £224.5 million (2000 £213.3 million). Total amounts receivable under finance leases during the year were £32.3 million (2000 £32.0 million).
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|
|

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| |                                                  

|
|
|
|

|                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|21 Loans and other borrowings                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                         
|Details of the groups objectives, policies and strategy with regard to financial instruments and risk management are contained within the
Financial Review
 . The analyses of financial instruments in this Note do not include short-term debtors and creditors as permitted by FRS 13.
|                                                                                                                                                                                                                                                                                         
|(a) Analysis by instrument                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                         
|Unsecured debt of UK businesses                                                                                                                                                                                                                                                          
|Bank overdraft                                                                                                                                                                                                                                                                           
|Uncommitted bank loan                                                                                                                                                                                                                                                                    
|Commercial paper                                                                                                                                                                                                                                                                         
|Medium-term notes/private placements                                                                                                                                                                                                                                                     
|Loan notes                                                                                                                                                                                                                                                                               
|European Investment Bank loans                                                                                                                                                                                                                                                           
|5.875% euro-US dollar bond 2003                                                                                                                                                                                                                                                          
|Variable coupon bond 2008                                                                                                                                                                                                                                                                
|5.250% deutschmark bond 2008                                                                                                                                                                                                                                                             
|6.625% euro-sterling bond 2010                                                                                                                                                                                                                                                           
|8.375% euro-sterling bond 2017                                                                                                                                                                                                                                                           
|6.750% euro-sterling bond 2023                                                                                                                                                                                                                                                           
|Unsecured debt of US businesses                                                                                                                                                                                                                                                          
|Bank overdraft                                                                                                                                                                                                                                                                           
|Commercial paper                                                                                                                                                                                                                                                                         
|PacifiCorp Group Holdings Senior Notes                                                                                                                                                                                                                                                   
|Junior subordinated debentures                                                                                                                                                                                                                                                           
|Preferred securities                                                                                                                                                                                                                                                                     
|Pollution control revenue bonds                                                                                                                                                                                                                                                          
|Finance leases                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                         
|Unsecured debt                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                         
|Secured debt of US businesses                                                                                                                                                                                                                                                            
|First mortgage and collateral trust bonds                                                                                                                                                                                                                                                
|Pollution control revenue bonds                                                                                                                                                                                                                                                          
|Other                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                         
|Secured debt                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                         



|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i)    | Commercial paper Scottish Power UK plc has an established US$2.0 billion (2000 US$2.0 billion) euro-commercial paper programme. Paper is issued in a range of currencies and swapped back into
sterling. PacifiCorp has a US$1.5 billion domestic commercial paper programme and PacifiCorp Group Holdings has a US$200 million domestic commercial paper programme. Amounts borrowed under the commercial paper programmes are repayable in less than
one year.                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(ii)   | Medium-term notes/private placements Scottish Power UK plc has an established US$4.0 billion euro-medium-term note programme. Paper is issued in a range of currencies and swapped back into sterling. As at 31 March
2001, maturities range from 1 to 39 years.                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(iii)  | Loan notes All loan notes are redeemable at the holders discretion. Ultimate maturity dates range from 2001 to 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(iv)   | European Investment Bank loans These loans incorporate agreements with various interest rates and maturity dates. The maturity dates of these arrangements range from 2006 to 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(v)    | Junior subordinated debentures The junior subordinated debentures were subordinated to PacifiCorp's first mortgage and collateral trust bonds, pollution control revenue bonds, commercial paper, bank debt and
any other future indebtedness.                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(vi)   | Preferred securities Wholly-owned subsidiary trusts of PacifiCorp ('the Trusts') have issued redeemable preferred securities representing preferred undivided beneficial interests in the assets of
the Trusts. The sole assets of the Trusts are junior subordinated deferrable interest debentures of PacifiCorp that bear interest at the same rates as the preferred securities to which they relate, and certain rights under related guarantees by
PacifiCorp.                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(vii)  | Finance leases These are facility leases that are accounted for as capital leases, maturity dates range from 2013 to 2021.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(viii) | First mortgage and collateral trust bonds First mortgage and collateral trust bonds of PacifiCorp may be issued in amounts limited by its Domestic Electric operation's property, earnings and other provisions of the
mortgage indenture. Approximately US$11.4 billion of the eligible assets (based on original costs) of PacifiCorp is subject to the lien of the mortgage.                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(ix)   | Pollution control revenue bonds Bonds issued by qualified tax exempt entities to finance, or refinance, the cost of certain pollution control, solid waste disposal and sewage facilities. PacifiCorp has
entered into agreements with the issuers pursuant to which PacifiCorp received the proceeds of the issuance and agreed to make payments sufficient to pay principal of, interest on, and certain additional expenses. The interest on the bonds is not
subject to federal income taxation for most bondholders. In some cases, PacifiCorp has issued First mortgage and collateral trust bonds as collateral for repayment.

|                                                      |  |                  |  |                  |  
|----------------------------------------------------- |  | ---------------- |  | ---------------- | -
|                                                      |  | At 31 March 2001 |  | At 31 March 2000 |  
|(b) Fair value of financial instruments               |  | Book

amount

£m |  | Fair

value

£m  |  
|                                                     
|Short-term debt and current portion of long-term debt |  | 627.9            |  | 627.9            |  
|Long-term debt                                        |  | 4,887.4          |  | 5,101.3          |  
|                                                     
|Total debt                                            |  | 5,515.3          |  | 5,729.2          |  
|Interest rate swaps                                   |  |                 |  | 54.8             |  
|Interest rate swaptions                               |  | 4.0              |  | 1.9              |  
|Forward rate agreements                               |  |                 |  | 0.1              |  
|Interest rate caps                                    |  |                 |  |                 |  
|Cross currency interest rate swaps                    |  |                 |  | (25.5            | )
|Forward contracts                                     |  | 8.1              |  | 16.0             |  
|                                                     
|Total financial instruments                           |  | 5,527.4          |  | 5,776.5          |  
|                                                     

|The assumptions used to estimate fair values of debt and other financial instruments are summarised below:
|----------------------------------------------------------------------------------------------------------
|(i)                                                                                                       
|                                                                                                          
|(ii)                                                                                                      
|                                                                                                          
|(iii)                                                                                                     
|                                                                                                          
|(iv)                                                                                                      
|                                                                                                          
|(v)                                                                                                       
|                                                                                                          
|(vi)                                                                                                      
|                                                                                                          
|(vii)                                                                                                     
|                                                                                                          
|(viii)                                                                                                    
|                                                                                                          

|                                                                 |  |          |  |          |  | 
|---------------------------------------------------------------- |  | -------- |  | -------- |  | 
|(c) Maturity analysis                                            |  | 2001

£m |  | 2000

£m | 
|                                                                 |  |          |  |          | 
|Repayments fall due as follows:                                  |  |          |  |          | 
|Within one year, or on demand                                    |  | 627.9    |  | 692.1    | 
|After more than one year                                         |  | 4,887.4  |  | 4,334.7  | 
|                                                                
|                                                                 |  | 5,515.3  |  | 5,026.8  | 
|                                                                
|Repayments due after more than one year are analysed as follows: | 
|Between one and two years                                        |  | 434.9    |  | 194.4    | 
|Between two and three years                                      |  | 213.7    |  | 363.9    | 
|Between three and four years                                     |  | 259.2    |  | 148.7    | 
|Between four and five years                                      |  | 349.2    |  | 242.0    | 
|More than five years                                             |  | 3,630.4  |  | 3,385.7  | 
|                                                                
|                                                                 |  | 4,887.4  |  | 4,334.7  | 
|                                                                

|Included in the 31 March 2001 More than five years figure above is £19.1 million for finance leases (2000 £17.1 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (USD)  UK group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Average interest rate (USD)  UK group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Average interest rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (CHF)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (CHF)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (CZK)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (CZK)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (EUR)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (EUR)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (JPY)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (JPY)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fixed rate (SEK)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Average interest rate (SEK)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Index-linked (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Average interest rate (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Average interest rate (GBP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (USD)  UK group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Average interest rate (USD)  UK group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Average interest rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Average interest rate (USD)  US group                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (CHF)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Average interest rate (CHF)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (EUR)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Average interest rate (EUR)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Variable rate (JPY)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Average interest rate (JPY)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|The average variable rates above, LIBOR, exclude margins. LIBOR is the London Inter Bank Offer Rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|GBP  Pounds Sterling, USD  American Dollars, CHF  Swiss Francs, CZK  Czech Koruna, EUR  Euros, JPY  Japanese Yen, SEK  Swedish Krona, DKK
 Danish Krone, AUD  Australian Dollars, RPI  UK Retail Price Index change since issue. BMA is a weekly high grade market index comprised of 7-day tax exempt variable rate demand notes produced by municipal market data. MCBY is the
Moodys Corporate Bond Yield. It is derived from the pricing data of 100 corporate bonds in the US market, each with current outstandings of over $100 million and maturities of 30 years.

Reference to m in m LIBOR represents months.

|                           |  |  |  |                  | 
|-------------------------- |  |  |  | ---------------- | 
|                           |  |  |  | At 31 March 2001 | 
|(d) Interest rate analysis |  |  |  | UK

£m           | 
|                           |  |  |  |                  | 
|Fixed rate borrowings      |  |  |  | 2,090.1          | 
|Capped rate borrowings     |  |  |  | 150.0            | 
|Floating rate borrowings   |  |  |  | 757.6            | 
|                          
|                           |  |  |  | 2,997.7          | 
|                          

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Weighted average interest

rate at which borrowings

are fixed/capped |  |                  | Weighted average period for which interest

rate is fixed/capped
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------- |  | ---------------- | ----------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | At 31 March 2001                                                      |  | At 31 March 2000 |                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | UK

%                                                                 |  | US

%            |                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                       |  |                  |                                                                 
|Fixed rate borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 7.1                                                                   |  | 7.8              |                                                                 
|Capped rate borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 7.0                                                                   |  |                 |                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|All amounts in the analysis above take into account the effect of interest rate swaps and caps and currency swaps. Floating rate borrowings bear interest at rates based on LIBOR,
certificate of deposit rates, interbank borrowing rates, prime rates or other shortterm market rates. The average interest rates on shortterm borrowings as at 31 March 2001 were as follows: UK operations 6.0%, US operations 5.7% (2000
5.8% and 6.2% respectively).

Based on the floating rate net debt of £1,473.3 million at 31 March 2001 (2000 £968.8 million), a 100 basis point change in interest rates would result in a £14.7
million change in profit before tax for the year (2000 £9.7 million change).

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  | At 31 March 2001 |  | At 31 March 2000
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | ---------------- |  | ----------------
|(e) Financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  | UK

£m           |  | US

£m          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  |                  |  |                 
|Fixed rate financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |  |  | 11.4             |  | 330.2           
|Floating rate financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |  | 121.1            |  | 100.2           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  | 132.5            |  | 430.4           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Included within US fixed rate financial assets at 31 March 2001 are amounts receivable under finance leases of £501.3 million (2000 £476.5 million) less
nonrecourse finance of £285.7 million (2000 £271.9 million) and amounts relating to a finance note of £114.6 million receivable over the period to June 2018 with the option for early settlement. The floating rate financial
assets of the groups UK and US operations are principally cash deposits.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  |                                                                    |  |                  |                                                      |      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | ------------------------------------------------------------------ |  | ---------------- | ---------------------------------------------------- | -----
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  |                                                                    |  |                  |                                                      |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | Weighted average interest rate at which financial assets are fixed |  |                  | Weighted average period for

which interest is fixed
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | At 31 March 2001                                                   |  | At 31 March 2000 |                                                      |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  | UK

%                                                              |  | US

%            |                                                      | UK

%
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |  |  |                                                                    |  |                  |                                                      |      
|Fixed rate financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  | 6.5                                                                |  | 10.8             |                                                      | 7.0  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|All amounts in the analysis above take into account the effect of interest rate swaps and currency swaps. Floating rate investments pay interest at rates based on LIBOR,
certificate of deposit rates, prime rates or other shortterm market rates. The average interest rates on shortterm financial assets as at 31 March 2001 were as follows: UK operations 6.1%, US operations 5.2% (2000 6.1% and 5.8%
respectively).

The fair values of the financial assets are not materially different from their book values.

(f) Borrowing facilities

The group has the following undrawn committed borrowing facilities at 31 March 2001 in respect of which all conditions precedent have been met. Of the facilities shown £1,000 million relates to operations in the UK. The remaining £351.7
million relates to operations in the US. During the financial year Scottish Power UK plc cancelled £1,000 million of its £2,000 million revolving credit facility that was outstanding, undrawn as at 31 March 2000.

|                                                                                                                                                                                                                      |  | Floating rate

2001

£m |  |  | Total

2001

£m |  | Total

2000

£m
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- |  |  | --------------- |  | ---------------
|                                                                                                                                                                                                                      |  |                         |  |  |                 |  |                
|Expiring within one year                                                                                                                                                                                              |  | 1,351.7                 |  |  | 1,351.7         |  | 188.1          
|Expiring between one and two years                                                                                                                                                                                    |  |                        |  |  |                |  | 2,438.9        
|                                                                                                                                                                                                                     
|Commitment fees on the above facilities were as follows: Scottish Power UK plc group £2.6 million (2000 £4.7 million); PacifiCorp group £0.5 million
(£0.3 million for the period 29 November 1999 to 31 March 2000).

|                                                                   
|-------------------------------------------------------------------
|(g) Maturity analysis of derivatives                               
|                                                                   
|Interest rate swaps                                                
|Variable to fixed (GBP)                                            
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Fixed to index-linked (GBP)                                        
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Fixed to variable (GBP)                                            
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Variable to variable (GBP)                                         
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Interest rate swaptions                                            
|Notional amount (GBP)                                              
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Forward rate agreements                                            
|Notional amount (GBP)                                              
|Average pay rate                                                   
|Average receive rate                                               
|                                                                   
|Interest rate caps                                                 
|Notional amount (GBP)                                              
|Strike price                                                       
|                                                                   
|Cross currency interest rate swaps                                 
|Receive fixed USD pay fixed GBP                                    
|Average pay rate (GBP)                                             
|Average receive rate (USD)                                         
|                                                                   
|Receive fixed USD pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (USD)                                         
|                                                                   
|Receive variable USD pay fixed GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (USD)                                         
|                                                                   
|Receive variable USD pay variable GBP                              
|Average pay rate (GBP)                                             
|Average receive rate (USD)                                         
|                                                                   
|Receive fixed CHF pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (CHF)                                         
|                                                                   
|Receive variable CHF pay variable GBP                              
|Average pay rate (GBP)                                             
|Average receive rate (CHF)                                         
|                                                                   
|Receive fixed CZK pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (CZK)                                         
|                                                                   
|Receive fixed EUR pay fixed GBP                                    
|Average pay rate (GBP)                                             
|Average receive rate (EUR)                                         
|                                                                   
|Receive fixed EUR pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (EUR)                                         
|                                                                   
|Receive variable EUR pay variable GBP                              
|Average pay rate (GBP)                                             
|Average receive rate (EUR)                                         
|                                                                   
|Receive fixed JPY pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (JPY)                                         
|                                                                   
|Receive variable JPY pay variable GBP                              
|Average pay rate (GBP)                                             
|Average receive rate (JPY)                                         
|                                                                   
|Receive fixed SEK pay variable GBP                                 
|Average pay rate (GBP)                                             
|Average receive rate (SEK)                                         
|                                                                   
|Forward contracts                                                  
|Buy GBP, sell USD                                                  
|Buy USD, sell GBP                                                  
|Buy DKK, sell GBP                                                  
|Buy SEK, sell GBP                                                  
|Buy GBP, sell SEK                                                  
|Buy AUD, sell GBP                                                  
|                                                                   
|                                                                   
|                                                                   
|The abbreviations contained in the table are defined in Note 21(c).

|(h) Hedges

Gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged is itself recognised. Unrecognised gains and losses on instruments used for hedging, and the movements therein, are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Unrecognised gains and (losses) on hedges at 1 April 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Transfer from gains to losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Transfer from losses to gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Losses arising in previous years that were recognised in 1999-00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) arising before 1 April 1999 that were not recognised in 1999-00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Gains and (losses) arising in 1999-00 that were not recognised in 1999-00                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Unrecognised gains and (losses) on hedges at 31 March 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) expected to be recognised in 2000-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) expected to be recognised in 2001-02 or later                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(i) Figures in the table above are calculated by reference to the 31 March 2000 fair value of the derivative concerned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Unrecognised gains and (losses) on hedges at 1 April 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Transfer from gains to losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Transfer from losses to gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(Gains) and losses arising in previous years that were recognised in 2000-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) arising before 1 April 2000 that were not recognised in 2000-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Gains and (losses) arising in 2000-01 that were not recognised in 2000-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Unrecognised gains and (losses) on hedges at 31 March 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) expected to be recognised in 2001-02                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Gains and (losses) expected to be recognised in 2002-03 or later                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(ii) Figures in the table above are calculated by reference to the 31 March 2001 fair value of the derivative concerned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(i) Currency exposures

As explained in the
Financial Review
the group uses forward contracts to mitigate the currency exposures arising from its net investment overseas. Gains and losses arising on net investment overseas and the forward contracts used to hedge the currency exposures are recognised in the
Statement of Total Recognised Gains and Losses.

The group did not hold material net monetary assets or liabilities in currencies other than local currency at 31 March 2001 (2000 £nil).
(j) Contracts for Differences

The gross value of outstanding CfDs in the groups UK businesses at 31 March 2001 was less than £0.1 million (2000 £427.2 million). The gross value of outstanding CfDs in the groups US businesses was not material. The group
estimated that the fair value amount of CfDs outstanding at the year end was £nil (2000 £1.8 million).
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at 31 March 2001
| | ---------------------------------------------------
| |                                                    

|
|

|                                     |  |          |  |          | 
|------------------------------------ |  | -------- |  | -------- | 
|22 Other creditors                   |  |          |  |          | 
|                                     |  |          |  |          | 
|                                     |  | 2001

£m |  | 2000

£m | 
|                                    
|Amounts falling due within one year: |  |          |  |          | 
|Trade creditors                      |  | 214.5    |  | 208.3    | 
|Corporate tax                        |  | 365.0    |  | 540.1    | 
|Other taxes and social security      |  | 45.5     |  | 15.7     | 
|Payments received on account         |  | 28.7     |  | 35.7     | 
|Capital creditors and accruals       |  | 234.1    |  | 217.6    | 
|Other creditors                      |  | 387.3    |  | 302.5    | 
|Accrued expenses                     |  | 981.4    |  | 632.7    | 
|Proposed dividend                    |  | 119.4    |  | 113.4    | 
|                                    
|                                     |  | 2,375.9  |  | 2,066.0  | 
|                                    
|                                    

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at 31 March 2001
| | ---------------------------------------------------
| |                                                    

|                                                             |         |  |              |   |            |  |          |   |         
|------------------------------------------------------------ | ------- |  | ------------ | - | ---------- |  | -------- | - | --------
|23 Provisions for liabilities and charges  Other provisions |         |  |              |   |            |  |          |   |         
|                                                             |         |  |              |   |            |  |          |   |         
|                                                             | At      |  |              |   |            |  | Utilised |   | At      
|                                                             | 1 April |  | Transferred  |   | New        |  | during   |   | 31 March
|                                                             | 1998    |  | to creditors |   | provisions |  | year     |   | 1999    
|1998-99                                                      | £m      |  | £m           |   | £m         |  | £m       |   | £m      
|                                                            
|Reorganisation and restructuring                             | 1.1     |  |             |   |           |  | (0.4     | ) | 0.7     
|Environmental and health                                     | 10.0    |  |             |   | 1.5        |  | (1.4     | ) | 10.1    
|Pensions                                                     | 15.6    |  | (6.8         | ) |           |  |         |   | 8.8     
|Other                                                        | 11.4    |  |             |   | 2.1        |  | (2.3     | ) | 11.2    
|                                                            
|                                                             | 38.1    |  | (6.8         | ) | 3.6        |  | (4.1     | ) | 30.8    
|                                                            

|                                     
|-------------------------------------
|                                     
|                                     
|                                     
|1999-00                              
|                                     
|Reorganisation and restructuring     
|Environmental and health             
|Decommissioning costs                
|Onerous contracts                    
|Pensions and post-retirement benefits
|Mine reclamation costs               
|Other                                
|                                     
|                                     
|                                     

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |         |       |              |       |          |       |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------- | ----- | ------------ | ----- | -------- | ----- | ----------
|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |         |       | Acquisition/ |       |          |       |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       | At      |       | revision to  |       |          |       |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       | 1 April |       | provisional  |       |          |       | New       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       | 2000    |       | fair values  |       | Disposal |       | provisions
|2000-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Notes |         | £m    |              | £m    |          | £m    |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Reorganisation and restructuring                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (a)   |         | 44.0  |              |      |          |      |           
|Environmental and health                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (b)   |         | 84.0  |              |      |          |      |           
|Decommissioning costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (c)   |         | 91.5  |              | (15.2 | )        | (6.7  | )         
|Onerous contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (d)   |         | 79.0  |              | 171.5 |          |      |           
|Pensions and post-retirement benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (e)   |         | 97.6  |              |      |          |      |           
|Mine reclamation costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (f)   |         | 104.8 |              |      |          | (17.3 | )         
|Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (g)   |         | 20.5  |              |      |          |      |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |         |       |              |       |          |       |           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |         | 521.4 |              | 156.3 |          | (24.0 | )         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |         |       |              |       |          |       |           
|(a) The provisions for reorganisation and restructuring comprise certain costs relating to the PacifiCorp Transition Plan announced in May 2000 and the estimated costs of
restructuring the group's UK businesses following the regulatory price reviews in the United Kingdom electricity and water industries announced in November 1999. The provisions are principally in respect of severance costs, most of which are
expected to be incurred in the period to March 2004.
(b) The environmental and health provisions principally comprise the costs of notified environmental remediation work and constructive obligations in respect of potential
environmental remediation costs identified by an external due diligence review in the United States. These costs are expected to be incurred principally over the next nine years.
(c) The provision for decommissioning costs is the discounted future estimated costs of decommissioning the group's power plants, principally in the United States, but also in the
United Kingdom. The decommissioning of these plants is expected to occur over the period between 2005 and 2047.
(d) The provision for onerous contracts comprises the costs of contracted energy purchases. The costs provided are expected to be incurred in the period to 31 March 2009 as
follows: less than 1 year £41.4 million, between 1 and 2 years £43.6 million, between 2 and 5 years £100.3 million, and the remainder after 5 years £58.8 million.
(e) Details of the group's pensions and other post-retirement benefits are disclosed in
Note 31
and
Note 35
 .
(f) The provision for mine reclamation costs comprises the discounted future estimated costs of reclaiming the group's mines in the United States. The costs are expected to be
incurred in the period up to 2031.
(g) The Other category comprises various provisions which are not individually sufficiently material to warrant separate disclosure.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   

|24 Provisions for liabilities and charges  Deferred tax |          |  
|-------------------------------------------------------- | -------- | -
|                                                        
|Deferred tax provided in the Accounts is as follows:     | Provided |  
|                                                         | 2001     |  
|                                                         | £m       |  
|                                                        
|Accelerated capital allowances                           | 1,963.1  |  
|Other timing differences                                 | (337.8   | )
|                                                        
|                                                         | 1,625.3  |  
|                                                        
|                                                         |          |  
|                                                         |          |  
|                                                        
|At 1 April 1998  as previously stated                   |          |  
|Prior year adjustment for FRS 19                         |          |  
|                                                        
|At 1 April 1998  as restated                            |          |  
|Charge to profit and loss account                        |          |  
|                                                        
|Deferred tax provided at 1 April 1999                    |          |  
|Charge to profit and loss account                        |          |  
|Movements arising from acquisition                       |          |  
|Exchange                                                 |          |  
|                                                        
|Deferred tax provided at 1 April 2000                    |          |  
|Charge to profit and loss account                        |          |  
|Movements arising from revisions to fair values          |          |  
|Exchange                                                 |          |  
|                                                        
|Deferred tax provided at 31 March 2001                   |          |  
|                                                        
|                                                        

|                                                 
|-------------------------------------------------
| UK Menu
   
 Cross Reference to Form 20-F (US)
|                                                 

| | Notes to the Group Balance Sheetas at 31 March 2001
| | ---------------------------------------------------
| |                                                    

|                                  |         |  |            |  |             |   |          | 
|--------------------------------- | ------- |  | ---------- |  | ----------- | - | -------- | 
|25 Deferred income                |         |  |            |  |             |   |          | 
|                                 
|                                  |         |  |            |  | Released to |   |          | 
|                                  | At      |  | Receivable |  | profit      |   | At       | 
|                                  | 1 April |  | during     |  | and loss    |   | 31 March | 
|                                  | 1999    |  | year       |  | account     |   | 2000     | 
|                                  | £m      |  | £m         |  | £m          |   | £m       | 
|                                 
|Grants and customer contributions | 393.2   |  | 49.2       |  | (15.6       | ) | 426.8    | 
|                                 

|                                                                                                      |         |  |            |  | Released to |   |          |  |          | 
|----------------------------------------------------------------------------------------------------- | ------- |  | ---------- |  | ----------- | - | -------- |  | -------- | 
|                                                                                                      | At      |  | Receivable |  | profit      |   |          |  | At       | 
|                                                                                                      | 1 April |  | during     |  | and loss    |   |          |  | 31 March | 
|                                                                                                      | 2000    |  | year       |  | account     |   | Exchange |  | 2001     | 
|                                                                                                      | £m      |  | £m         |  | £m          |   | £m       |  | £m       | 
|                                                                                                     
|Grants and customer contributions                                                                     | 426.8   |  | 88.6       |  | (15.1       | ) | 1.2      |  | 501.5    | 
|                                                                                                     
|Deferred income excludes grants and contributions received in respect of water infrastructure assets.
|                                                                                                     

|                                                 
|-------------------------------------------------
| UK Menu
   
 Cross Reference to Form 20-F (US)
|                                                 

| | Notes to the Group Balance Sheetas at 31 March 2001
| | ---------------------------------------------------
| |                                                    

|                                                               |      |         |        
|-------------------------------------------------------------- | ---- | ------- | -------
|26 Share capital                                               |      |         |        
|                                                              
|                                                               |      | 2001    | 2000   
|                                                               | Note | £m      | £m     
|                                                              
|Authorised:                                                    |      |         |        
|3,000,000,000 (2000 3,000,000,000) ordinary shares of 50p each |      | 1,500.0 | 1,500.0
|One Special Share of £1                                        | (a)  |        |       
|                                                              
|                                                               |      | 1,500.0 | 1,500.0
|                                                              
|Allotted, called up and fully paid:                            |      |         |        
|1,849,025,792 (2000 1,847,585,937) ordinary shares of 50p each |      | 924.5   | 923.8  
|One Special Share of £1                                        | (a)  |        |       
|                                                              
|                                                               |      | 924.5   | 923.8  
|                                                              

|
|

|(a) Special Share The 'Special Share', which can be held only by one of the Secretaries of State or any other person acting on behalf of HM Government, does not carry rights to vote at the
general or separate meetings but entitles the holder to attend and speak at such meetings. Written consent of the Special Shareholder is required before certain provisions of the company's Articles of Association or certain rights attaching to the
Special Share are varied. This share shall confer no rights to participate in the capital or profits of the company, except that in a winding up the Special Shareholder shall be entitled to repayment in priority to the other shareholders. The
Special Share is redeemable at par at any time by the Special Shareholder after consultation with the company.
(b) Employee Share Schemes The group has five types of share based schemes for employees. Options have been granted and awards made to eligible employees to subscribe for ordinary shares or ADSs in
Scottish Power plc in accordance with the rules of each scheme. The ScottishPower and Southern Water Sharesave Schemes are savings related and under normal circumstances share options are exercisable on completion of a three, five or seven year
save-as-you-earn contract as appropriate. The PacifiCorp Stock Incentive Plan relates to options over ScottishPower ADSs and vest over two or three years, as appropriate. The Executive Share Option Scheme applied to executive directors and certain
senior managers. However, this Scheme has been replaced with the Long Term Incentive Plan and, although it will not affect options already granted, this plan supersedes executive share options. Awards granted under the Long Term Incentive Plan will
vest only if the Remuneration Committee is satisfied that certain performance measures related to the sustained underlying financial performance of the group and improvements in customer service standards are achieved over a period of three
financial years commencing with the financial year preceding the date an award is made.
The Employee Share Ownership Plan (ESOP) allows eligible employees to make contributions from pre-tax salary to buy shares in ScottishPower which are held in trust (Partnership
Shares). These shares are matched by the Company (Matching Shares) and also held in trust. At the launch of the ESOP, Free Shares were offered to employees.
The K Plus Plan consists of the K Plus Employee Savings Plan and the K Plus Employee Stock Ownership Plan. The K Plan Employee Savings Plan is a 401(k) based qualified retirement
plan designed to provide income during employees' retirement. The K Plus Employee Stock Ownership Plan provides for matching contributions by PacifiCorp based on employees' contributions, plus additional discretionary employer contributions made to
all eligible employees.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(i) Summary of movements in share options in ScottishPower shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Outstanding at 1 April 1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Outstanding at 1 April 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Acquisition*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Outstanding at 1 April 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Lapsed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Outstanding at 31 March 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|* PacifiCorp share options as at 29 November 1999.
# PacifiCorp Stock Incentive Plan are options over ScottishPower ADSs; for the purpose of the table above, options have been converted to ScottishPower shares as follows: one
ScottishPower ADS equals four ScottishPower shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|
|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |              |              |          
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ------------ | ---------
|(ii) Analysis of share options outstanding at 31 March 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |              |              |          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |              |              | Number of
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Date of      | Number of    | shares   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | grant        | participants | (000s)   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|ScottishPower Sharesave Schemes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 20 June 1996 | 2,552        | 5,956    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 20 June 1997 | 1,846        | 2,289    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 12 June 1998 | 3,810        | 2,750    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 11 June 1999 | 4,293        | 3,187    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 9 June 2000  | 3,326        | 2,030    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Southern Water Sharesave Scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 25 Jan 1994  | 46           | 78       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 25 Jan 1995  | 39           | 109      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 25 Jan 1996  | 56           | 92       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Executive Share Option Scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 18 Dec 1991  | 3            | 40       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 25 June 1992 | 5            | 4        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 1 July 1993  | 2            | 28       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 17 Dec 1993  | 14           | 20       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 27 May 1994  | 2            | 1        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 18 Nov 1994  | 2            | 21       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 12 May 1995  | 3            | 26       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|PacifiCorp Stock Incentive Plan**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 3 June 1997  | 88           | 1,525    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 12 Aug 1997  | 24           | 261      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 10 Feb 1998  | 108          | 2,617    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 13 May 1998  | 5,815        | 1,343    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 9 Feb 1999   | 112          | 3,190    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 11 May 1999  | 6,133        | 1,413    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 16 Feb 2000  | 110          | 2,559    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 25 Jan 2001  | 2            | 457      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|** Options granted under the PacifiCorp Stock Incentive Plan are for ScottishPower ADSs; for the purpose of the table above, options have been converted to ScottishPower ordinary
shares as follows: one ScottishPower ADS equals four ScottishPower ordinary shares. The US$ ADS option price was converted so that it may be represented in terms of ScottishPower ordinary shares. The price was further converted at the closing
exchange rate on 31 March 2001 to be quoted in pence in the table above.
##Options became exercisable in the proportions of one-third on 9 February 2000, with a further third on
9 February 2001 and the remaining one-third becomes exercisable on 9 February 2002.
***Options became exercisable in the proportions 50% on 11 May 2000 and the remaining 50% becomes
exercisable on 11 May 2001.
###Options became exercisable in the proportions of one-third on 16 February 2001, with a further third
becoming exercisable on 16 February 2002 and the remaining one-third becomes exercisable on 16 February 2003.
####Options will become exercisable in the proportions of one-third on 25 January 2002, with a further
third becoming exercisable on 25 January 2003 and the remaining one-third becomes exercisable on 25 January 2004.
Where reference is made to Southern Water, this is to identify the Sharesave Scheme under which the options over Scottish Power plc ordinary shares have been granted. The exercise
prices of options granted prior to the rights issue on 30 August 1996 were adjusted to reflect the bonus element inherent in the rights issue.
For the Southern Water Sharesave Scheme, the date of grant refers to the date the original Southern Water Sharesave Scheme share options were granted. These options were exchanged
for options over ScottishPower shares following acquisition in 1996.
Where reference is made to PacifiCorp Stock Incentive Plan, this is to identify the scheme under which the options over Scottish Power plc ADSs have been granted. For the
PacifiCorp Stock Incentive Plan, the date of grant refers to the date the original PacifiCorp Common Stock options were granted. These options were exchanged for options over ScottishPower ADSs following the acquisition on 29 November
1999.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                   |                |                |                      |                              |                 |                |                           |       |      |   |       |  |        |   |        |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------- | -------------- | -------------- | -------------------- | ---------------------------- | --------------- | -------------- | ------------------------- | ----- | ---- | - | ----- |  | ------ | - | ------ | - | ------- | -
|27 Analysis of movements in shareholders' funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Number of

shares | Share

capital | Share

premium | Revaluation

reserve | Capital

redemption

reserve | Merger

reserve | Other

reserve | Profit

and loss

account | Total |     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Notes             | 000s           |                | £m                   |                              | £m              |                | £m                        |       | £m   |   | £m    |  | £m     |   | £m     |   | £m      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|At 1 April 1998  as originally stated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                   | 1,196,752      |                | 598.4                |                              |                |                | 227.3                     |       |     |   | 388.7 |  | &3150; |   | 493.4  |   | 1,707.8 |  
|Prior year adjustment for FRS 19                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                   |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | (709.6 | ) | (709.6  | )
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|At 1 April 1998  as restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                   | 1,196,752      |                | 598.4                |                              |                |                | 227.3                     |       |     |   | 388.7 |  |       |   | (216.2 | ) | 998.2  
|Retained profit for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                   |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 201.4  |   | 201.4   |  
|Share capital issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| Employee sharesave scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                   | 1,554          |                | 0.8                  |                              | 4.2             |                |                          |       |     |   |      |  | (3.1   | ) |       |   | 1.9     |  
| Executive share option scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                   | 372            |                | 0.2                  |                              | 1.1             |                |                          |       |     |   |      |  |       |   |       |   | 1.3     |  
|Revaluation surplus realised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                   |               |                |                     |                              |                |                | (3.4                      | )     |     |   |      |  |       |   | 3.4    |   |        |  
|Transfers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                   |               |                |                     |                              | (5.3            | )              |                          |       |     |   | 5.3   |  | 3.1    |   | (3.1   | ) |        |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|At 1 April 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                   | 1,198,678      |                | 599.4                |                              |                |                | 223.9                     |       |     |   | 394.0 |  |       |   | (14.5  | ) | 1,202.8
|Retained profit for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                   |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 543.6  |   | 543.6   |  
|Share capital issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| Employee sharesave scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                   | 12,044         |                | 6.0                  |                              | 49.7            |                |                          |       |     |   |      |  | (1.5   | ) | (16.2  | ) | 38.0    |  
| Executive share option scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                   | 168            |                | 0.1                  |                              | 0.5             |                |                          |       |     |   |      |  |       |   |       |   | 0.6     |  
| Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                   | 689,669        |                | 344.8                |                              | 3,687.8         |                |                          |       |     |   |      |  |       |   |       |   | 4,032.6 |  
|Revaluation surplus realised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                   |               |                |                     |                              |                |                | (3.4                      | )     |     |   |      |  |       |   | 3.4    |   |        |  
|Impairment of goodwill previously written off to reserves                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (a)               |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 7.5    |   | 7.5     |  
|Goodwill realised on disposals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (a)               |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 15.3   |   | 15.3    |  
|Share buyback                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                   | (52,973        | )              | (26.5                | )                            |                |                |                          |       | 26.5 |   |      |  |       |   | (302.0 | ) | (302.0  | )
|Exchange movements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (b)               |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 24.9   |   | 24.9    |  
|Transfers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                   |               |                |                     |                              | (4.2            | )              |                          |       | (8.2 | ) | 12.4  |  | 1.5    |   | (1.5   | ) |        |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|At 1 April 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                   | 1,847,586      |                | 923.8                |                              | 3,733.8         |                | 220.5                     |       | 18.3 |   | 406.4 |  |       |   | 260.5  |   | 5,563.3
|Retained loss for the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                   |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | (169.8 | ) | (169.8  | )
|Share capital issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| Employee sharesave scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                   | 304            |                | 0.1                  |                              | 1.4             |                |                          |       |     |   |      |  |       |   |       |   | 1.5     |  
| Executive share option scheme                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                   | 122            |                | 0.1                  |                              | 0.1             |                |                          |       |     |   |      |  |       |   |       |   | 0.2     |  
| ESOP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                   | 1,014          |                | 0.5                  |                              | 4.4             |                |                          |       |     |   |      |  |       |   |       |   | 4.9     |  
|Revaluation surplus realised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                   |               |                |                     |                              |                |                | (3.4                      | )     |     |   |      |  |       |   | 3.4    |   |        |  
|Exchange movements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (b)               |               |                |                     |                              |                |                |                          |       |     |   |      |  |       |   | 493.1  |   | 493.1   |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Balance at 31 March 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                   | 1,849,026      |                | 924.5                |                              | 3,739.7         |                | 217.1                     |       | 18.3 |   | 406.4 |  |       |   | 587.2  |   | 5,893.2
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(a) Cumulative goodwill written off to reserves as at 31 March 2001 was £1,349.9 million (2000 £1,349.9 million, 1999 £1,372.7 million).
(b) The cumulative foreign currency translation adjustments at 31 March 2001 amount to £518.0 million (2000 £24.9 million, 1999 £nil).
(c) When ScottishPower acquired Southern Water plc, a balance was established under merger reserve for the cost to ScottishPower of transferring existing options over Southern
Water plc shares to the Scottish Power plc Share Option Scheme. Prior to 1 April 2000, transfers were made between the Other reserve and the Profit and loss account reserve to reflect the exercise of these options as new shares were issued. However,
the shares to satisfy the exercise of these options have now been acquired by a Qualifying Employee Share Ownership Trust and, accordingly, no further such transfers between reserves are required.
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| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |        |   |            |   |       |   |        |   |            |  |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | - | ---------- | - | ----- | - | ------ | - | ---------- |  | ----- | -
|28 Minority interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |        |   |            |   |       |   |        |   |            |  |       |  
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Equity |   | Non-equity |   | Total |   | Equity |   | Non-equity |  | Total |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2001   |   | 2001       |   | 2001  |   | 2000   |   | 2000       |  | 2000  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | £m     |   | £m         |   | £m    |   | £m     |   | £m         |  | £m    |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|At 1 April                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 161.6  |   | 138.1      |   | 299.7 |   | 1.3    |   |           |  | 1.3   |  
|Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |       |   |           |   |      |   | 0.2    |   | 134.8      |  | 135.0 |  
|Arising on partial disposal of Thus                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |       |   |           |   |      |   | 162.2  |   |           |  | 162.2 |  
|Disposal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |   |           |   |      |   | (0.8   | ) |           |  | (0.8  | )
|Exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |   | 19.5       |   | 19.5  |   |       |   | 0.9        |  | 0.9   |  
|Profit and loss account                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (33.4  | ) | 10.4       |   | (23.0 | ) | (1.3   | ) | 2.4        |  | 1.1   |  
|Dividends paid to minority interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |   | (10.4      | ) | (10.4 | ) |       |   |           |  |      |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|At 31 March                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 128.2  |   | 157.6      |   | 285.8 |   | 161.6  |   | 138.1      |  | 299.7 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Non-equity minority interests include 100% of the preferred stock and preferred stock subject to mandatory redemption of PacifiCorp. Of the total preferred stock subject to
mandatory redemption at 31 March 2001, £75.7 million is due to be redeemed within 1 year, £2.6 million is due to be redeemed in each of the next 4 years with the remaining £42.4 million being redeemable after 5 years.
The fair value of preferred stock subject to mandatory redemption is £130.5 million. The fair value of other preferred stock is not materially different from book value.
The weighted average rate of return on preferred stock subject to mandatory redemption is 7.6% and on other preferred stock is 5.1%.
Preferred stockholders have first preference in the event of a liquidation of PacifiCorp and first rights to dividends. The holders of these shares only have rights against the
PacifiCorp group of companies.
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| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at 31 March 2001
| | ---------------------------------------------------
| |                                                    

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|29 Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|In March 2001, the group acquired the business and assets of Rye House power station for a total consideration of £227.7 million. The acquisition
method of accounting has been adopted and the goodwill on the purchase has been capitalised and is being amortised over 20 years. The directors have estimated the useful economic life of the goodwill acquired after assessment of the earnings
generating life of the plant. The details of the transaction are shown below.                                                                                                                                                                                                                                         
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|Fair value of Rye House consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|Tangible fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Stocks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Debtors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Creditors: amounts falling due within one year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Provisions for liabilities and charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Net assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Goodwill arising on acquisition of Rye House                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|Purchase consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Satisfied by:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Cash paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Acquisition expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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|The net assets of the Rye House power station did not form part of a separate legal entity acquired and therefore no information on book values is available. The tangible fixed
assets acquired have been provisionally fair valued at net depreciated replacement cost and a provision for an onerous gas contract has been established by reference to market prices prevailing at the time of the acquisition.
The post-acquisition results and cash flows of the Rye House business are not material to the groups results and cash flows for the year ended 31 March 2001.
The fair values attributed to the acquisition are provisional due to the proximity of the date of acquisition to the financial year end.
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| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|30 Revision to provisional fair values of PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|On 29 November 1999 the group acquired PacifiCorp for a total consideration of £4,111.3 million. As set out in the March 2000 Accounts the fair values of the assets and
liabilities of PacifiCorp, established for the purposes of those Accounts, were provisional due to the size and complexity of the acquisition. In the year ended 31 March 2001 these fair values have been finalised as permitted by FRS 7. The details
of the adjustments to the provisional fair values are set out below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|Fair value of PacifiCorp consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Tangible fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Businesses held for disposal                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Creditors: amounts falling due within one year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| Loans and other borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| Other creditors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Creditors: amounts falling due after more than one year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| Loans and other borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Provisions for liabilities and charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Minority interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Net assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Goodwill arising on acquisition of PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Purchase consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(a) Prior year adjustmentThe provisional fair values attributed to the net assets of PacifiCorp have been restated for the effects of the implementation of the group's new accounting policy for deferred tax in accordance with FRS 19 (see
Note 6
).
(b) Revisions to provisional fair values of PacifiCorpRevisions have been made during the year ended 31 March 2001 to the provisional fair values originally attributed to the net assets of PacifiCorp in the March 2000 Accounts.
The principal revisions are:
(i) at the time of the PacifiCorp acquisition, various regulatory rates cases and depreciation studies were outstanding. All of these have now been concluded and tangible fixed
assets have been written down by £222.6 million following the outcome.
(Ii) US regulatory assets, included within debtors, have been reduced by £137.8 million following reassessment of their recoverability in the context of the US regulatory
regime.
(iii) provision of £150.8 million has been made for liabilities for taxation, including related interest, arising out of US tax authorities' audits of PacifiCorp's
preacquisition tax computations and other liabilities including legal costs.
(iv) the deferred tax effect of the above adjustments.
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| |                                                  
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| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



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|31 Pensions                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|At 31 March 2001, ScottishPower had eight statutorily approved defined benefit pension schemes and one statutorily approved defined contribution
scheme. The PacifiCorp arrangements are included following the acquisition of PacifiCorp on 29 November 1999. The pension charge for the PacifiCorp arrangements in the year to 31 March 2000 is for the post-acquisition period only. Details of the
principal schemes are set out below:
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|Pension Fund                                                                                                                                                                                                                                                                                                                                                                                                                               
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|ScottishPower                                                                                                                                                                                                                                                                                                                                                                                                                              
|Manweb                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                             
|Final Salary LifePlan                                                                                                                                                                                                                                                                                                                                                                                                                      
|PacifiCorp*                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|* The PacifiCorp figures include the unfunded Supplementary Executive Retirement Plan (SERP). The SERP accounts for less than 5% of the PacifiCorp
liabilities.

** Includes £54.8m charge in the year relating to Special Termination Benefits.

*** In relation to the post-acquisition period only.

The components of the pension charge are as follows:                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Pension Fund                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|ScottishPower*                                                                                                                                                                                                                                                                                                                                                                                                                             
|Manweb                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                             
|Final Salary LifePlan                                                                                                                                                                                                                                                                                                                                                                                                                      
|PacifiCorp**                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|* The net pension charge is set to a minimum of nil where the variation credit exceeds regular cost plus interest.

** Relating to post 29 November 1999 only for the year to 31 March 2000.

*** Being a normal variation credit of £9.5m increased by the cost of Special Termination Benefits of £54.8m.

The prepayment/(provision) as at the year end can be reconciled as follows:                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Prepayment/                                                                                                                                                                                                                                                                                                                                                                                                                                
|(provision)                                                                                                                                                                                                                                                                                                                                                                                                                                
|at 1 April                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Pension Fund                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|ScottishPower                                                                                                                                                                                                                                                                                                                                                                                                                              
|Manweb                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                             
|Final Salary LifePlan                                                                                                                                                                                                                                                                                                                                                                                                                      
|PacifiCorp*                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                           
|* The PacifiCorp figures for the year to 31 March 2000 relate to the post-acquisition period only.

** Arising on acquisition as at 29 November 1999.                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                           



|
|

|The individual scheme funding details and assumptions made are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Pension fund                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|ScottishPower                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Manweb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Final Salary LifePlan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|* 9.25% represents the expected return on assets and 7.5% represents the liability discount rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(a) Group pension arrangementsFollowing a review of the group's UK pension arrangements, the ScottishPower Pension Scheme, Manweb Scheme and Southern Water Pension Scheme were closed to new members from
31 December 1998.

The group introduced two new group pension plans for new UK employees effective from 1 January 1999. The new plans are a defined benefit plan (Final Salary LifePlan) and a defined
contribution plan (Money Purchase LifePlan) which are open to continuous contract employees aged between 16 and 60, subject to any qualifying period of service required by the group.

Following the acquisition of PacifiCorp on 29 November 1999, the associated US pension arrangements are now included in the group's Accounts. Further details of these US
arrangements are given in
subnote (f)
 .

Each of the pension schemes' assets are invested in an appropriate diversified range of equities, bonds, property and cash. The broad proportions invested in each asset class at 31
March 2001 are as follows:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Equities | Bonds | Property | Cash | Total
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | ----- | -------- | ---- | -----
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | %        | %     | %        | %    | %    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|ScottishPower                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 87       | 4     | 8        | 1    | 100  
|Manweb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 69       | 30    |         | 1    | 100  
|Southern Water                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 71       | 25    |         | 4    | 100  
|Final Salary LifePlan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 100      |      |         |     | 100  
|PacifiCorp                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 69       | 31    |         |     | 100  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(b) ScottishPowerScottish Power UK plc operates a funded pension scheme of the company providing defined retirement and death benefits based on final pensionable salary. This scheme was open
prior to 1 January 1999 to employees of ScottishPower. Members are required to contribute to the Scheme at a rate of 5% of pensionable salary. Scottish Power UK plc meets the balance of cost of providing benefits, and company contributions paid are
based on the results of the actuarial valuation of the Scheme and are agreed by Scottish Power UK plc and the Scheme Trustees.

The assets of the Scheme are held separately from those of the company in a trustee administered fund. Included in the Scheme assets are 1,021,570 ScottishPower shares
(£4,780,948, based on market value as at 31 March 2001), purchased only as part of a pooled strategy to match the relative weightings in the UK Stock Exchange index.

The pension charge for the year is based on the advice of the Scheme's independent qualified actuary and is calculated using the same assumptions as those used at the last
actuarial valuation of the Scheme. The Scheme assets have been taken at an adjusted market value.

The prepayment included in the balance sheet represents the accumulated excess of the actual contributions paid to the Scheme over the pension accounting charge. The expensing
calculations detailed above resulted in the accounting rate used for the calculation of the 200001 pension charge being £nil. This is derived from a regular cost of 19.8% of salaries, fully offset by a variation credit. The variation
credit is calculated as the assessed surplus, less the prepayment, spread as a fixed percentage of pensionable salary roll over nine years.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



|(c) ManwebPrior to 1 January 1999, most of the Manweb employees were entitled to join the Manweb Group of the Electricity Supply Pension Scheme, which provides pension and other
related benefits based on final pensionable pay to employees throughout the Electricity Supply Industry in England & Wales. The ongoing contributions to the Scheme are based on the results of the actuarial valuation of the Scheme and the advice
of the Scheme Actuary. On average, the company pays contributions at twice the rate payable by the member.
The assets are held in a separate trustee administered fund. Included in the Scheme assets are 202,797 ScottishPower shares (£949,090 based on market value as at 31 March
2001), purchased only as part of a pooled strategy to match the relative weightings in the UK Stock Exchange index. For funding and expensing purposes, the Scheme assets are valued by discounting the income which can be expected from a notional
portfolio of assets at the valuation rate of interest.
The pension charge for the year, of 12% of pensionable salaries, is based on the advice of the Scheme's independent qualified actuary and is calculated using the same assumptions
as at the last actuarial valuation of the Scheme. The variation credit is calculated as the assessed surplus spread over three years and an annual charge in respect of Early Retirement Deficiency Costs payable over 14 years.
(d) Southern WaterSouthern Water operates a number of pension schemes. The scheme details above relate to the principal defined benefit scheme which covers the majority of the Southern Water
employees. Members are required to contribute to the Scheme at varying rates of pensionable salary depending upon category of membership. The company meets the balance of the cost of the accruing benefits. Contributions paid are based on the results
of the actuarial valuation of the Scheme and are agreed by the company and the Scheme Trustees.
The assets are held in a separate trustee administered fund. For funding and expensing purposes, the scheme assets are valued by discounting the income which can be expected from a
notional portfolio of assets at the valuation rate of interest.
The pension charge for the year, of 10.0% of pensionable salaries, is based on the advice of the Scheme's independent qualified actuary and is calculated using the same assumptions
as at the last actuarial valuation of the Scheme. The variation credit is calculated as the assessed surplus spread over 17 years.
(e) Final Salary LifePlanThe group operates a funded pension scheme providing defined retirement and death benefits based on final pensionable salary for eligible UK employees of the group. The assets of the LifePlan are held in a separate trustee administered fund. The
pension charge of the year, of 11.4% of pensionable salaries, is based on the advice of the LifePlan's independent qualified actuary, representing the assessed balance of cost of the accruing benefits after allowing for members' contributions of 5%
of pensionable salaries. The same actuarial assumptions have been adopted for both funding and expensing purposes.


(f) PacifiCorpPacifiCorp operates pension plans covering substantially all its employees. Benefits are based on the employee's years of service and final pensionable salary, adjusted to reflect estimated Social Security benefits. Pension costs are funded
annually by no more than the maximum amount of pension expense which can be deducted for federal income tax purposes. The PacifiCorp pensions figures in these Accounts include the unfunded Supplementary Executive Retirement Plan (SERP). The SERP
accounts for less than 5% of the PacifiCorp liabilities. PacifiCorp meets the entire cost of accruing benefits under PacifiCorp plans. The assets for the funded Plan are held in a separate fund. For funding and expensing purposes, the Plan assets
are valued at market levels, and liabilities costed on financial assumptions in line with market return expectations. The pension charge for the period is based on the advice of the Plan's independent qualified actuary. PacifiCorp also provides
post-retirement benefits and post-employment benefits to certain employees. Details of these benefits are disclosed in
Note 35
 .
(g) Additional pension arrangementsThe group operates an approved defined contribution pension scheme (Money Purchase LifePlan) for eligible employees. Contributions are paid by the member and employer at
fixed rates. The benefits secured at retirement or death reflect each employee's accumulated fund and the cost of purchasing benefits at that time. The assets of the scheme are held in a separate trustee administered fund. The pension charge for the
year represents the defined employer contribution and amounted to £0.3 million. The group also operates pension schemes for a number of other groups of employees; details of these have been omitted from the Accounts on the grounds of
materiality.
Further details of the group's pensions arrangements are disclosed in
Note 35
 .
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                         
|-------------------------
|32 Contingent liabilities
|                         

| | Thus FlotationIn November 1999, the group floated a minority stake in its Internet and telecommunications business, Thus plc. In the event that Thus plc ceases to be a part of the
ScottishPower capital gains tax group before 30 September 2005, Thus plc will become liable to corporation tax on chargeable gains currently estimated, after consideration of various uncertainties, at amounts up to £570 million. Members of the
ScottishPower group have agreed to indemnify Thus plc for any such liability, except in circumstances arising without the consent of the ScottishPower group.
Legal proceedingsThe group's businesses are parties to various legal claims, actions and complaints, certain of which involve material amounts. Although the group is unable to predict with certainty whether or not it will ultimately be successful in these legal
proceedings or, if not, what the impact might be, the directors currently believe that disposition of these matters will not have a materially adverse effect on the group's consolidated Accounts.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  



|
|
|
|

|                                                          |       |      
|--------------------------------------------------------- | ----- | -----
|33 Financial commitments                                  |       |      
|                                                         
|                                                          | 2001  | 2000 
|(a) Analysis of annual commitments under operating leases | £m    | £m   
|                                                         
|Leases of land and buildings expiring:                    |       |      
|Within one year                                           | 0.6   | 0.4  
|Between one and two years                                 | 1.7   | 1.2  
|Between two and three years                               | 0.6   | 1.2  
|Between three and four years                              | 0.5   | 1.2  
|Between four and five years                               | 0.8   | 0.1  
|More than five years                                      | 28.7  | 23.4 
|                                                         
|                                                          | 32.9  | 27.5 
|                                                         
|Other operating leases expiring:                         
|Within one year                                           | 13.8  | 14.4 
|Between one and two years                                 | 8.4   | 1.0  
|Between two and three years                               | 3.5   | 7.7  
|Between three and four years                              | 0.9   | 0.9  
|Between four and five years                               | 0.5   | 2.7  
|More than five years                                      | 0.1   | 1.0  
|                                                         
|                                                          | 27.2  | 27.7 
|                                                         
|                                                          | 2001  | 2000 
|(b) Capital commitments                                   | £m    | £m   
|                                                         
|Contracted but not provided                               | 174.9 | 286.5
|                                                         

|                                                                                                                                                                                                                                                     |      |              |                           |                         |       |      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ------------ | ------------------------- | ----------------------- | ----- | -----
|(c) Other contractual commitments

Under contractual commitments in the UK the group has rights and obligations in relation to the undernoted contracts. The annual value of the purchases and sales arising from these contracts is provided below:
|                                                                                                                                                                                                                                                     |      |              |                           | Purchases/sales in year
|                                                                                                                                                                                                                                                     |      |              |                           | under group commitments
|                                                                                                                                                                                                                                                     |      | Commitment   | Commitment                | 2001                    | 2000  | 1999 
|                                                                                                                                                                                                                                                     | Note | entered into | expires                   | £m                      | £m    | £m   
|                                                                                                                                                                                                                                                    
|The purchase of electricity from British Energy Generation (UK) Limited                                                                                                                                                                              |      | 1990         | 2005                      | 265.8                   | 370.1 | 367.7
|                                                                                                                                                                                                                                                    
|The purchase of electricity from Scottish and Southern Energy plc                                                                                                                                                                                    | (i)  | 1990         | see below                 | 49.7                    | 72.4  | 78.8 
|                                                                                                                                                                                                                                                    
|The supply of electricity to Scottish and Southern Energy plc                                                                                                                                                                                        |      | 1990         | 2005                      | 17.6                    | 17.6  | 18.2 
|                                                                                                                                                                                                                                                    
|Revenue from the operation of the companys transmission system and access by Scottish and Southern Energy plc to the Anglo-Scottish Interconnector                                                                                                  |      | 1990         | No fixed

date of

expiry | 32.4                    | 31.0  | 27.7 
|                                                                                                                                                                                                                                                    
|Purchase of coal from The Scottish Coal Company Limited                                                                                                                                                                                              |      | 1998         | 2003                      | 41.0                    | 19.0  | 22.0 
|                                                                                                                                                                                                                                                    
|Purchase of coal from The Scottish Coal (Deep Mine) Company Limited                                                                                                                                                                                  |      | 1998         | 2004                      | 44.8                    | 49.2  | 50.5 
|                                                                                                                                                                                                                                                    
|Purchase of gas from various fields in the North Sea                                                                                                                                                                                                 |      | 1994         | 2017                      | 172.0                   | 125.8 | 123.6
|                                                                                                                                                                                                                                                    

|(i) There are two agreements relating to the purchase of electricity from Scottish and Southern Energy plc. These expire in 2012 and 2039.
In the US, the group manages its energy resource requirements by integrating long-term firm, short-term and spot market purchases with its own generating resources to economically
operate the system (within the boundaries of Federal Energy Regulatory Commission requirements) and meet commitments for wholesale sales and retail load growth. The long-term wholesale sales commitments include contracts with minimum sales
requirements of £331.9 million, £310.8 million, £196.2 million, £163.2 million and £139.9 million for the years 2002 to 2006 respectively. As part of its energy resource portfolio, PacifiCorp acquires a portion of its power
through long-term purchases and/or exchange agreements which require minimum fixed payments of £296.1 million, £282.7 million, £237.7 million, £226.4 million and £224.3 million for the years 2002 to 2006 respectively. The
purchase contracts include agreements with the Bonneville Power Administration, the Hermiston Plant and a number of cogenerating facilities.
(ii) Under the terms of the agreement to dispose of the group's UK technology, contracting and information technology divisions during the year ended 31 March 2001, the group has
entered into purchase commitments with the purchasers of these businesses. The purchase commitments under these agreements at 31 March 2001 are:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Commitment to purchase in year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|34

Related party transactions                                                                                                                                           
|                                                                                                                                                                         
|Related party transactions and balances with joint ventures and associated undertakings

 
(a) Trading transactions and balances arising in the normal course of business
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|Related party                                                                                                                                                            
|                                                                                                                                                                         
|Sales by related parties                                                                                                                                                 
|Scottish Electricity Settlements Limited                                                                                                                                 
|ScotAsh Limited                                                                                                                                                          
|South Coast Power Limited                                                                                                                                                
|Calanais Limited*                                                                                                                                                        
|Purchases by related parties                                                                                                                                             
|Scottish Electricity Settlements Limited                                                                                                                                 
|ScotAsh Limited                                                                                                                                                          
|South Coast Power Limited                                                                                                                                                
|CeltPower Limited                                                                                                                                                        
|Calanais Limited*                                                                                                                                                        
|                                                                                                                                                                         

|In addition to the above, during the year to 31 March 2001, PacifiCorp has made management and similar charges to Powercor of £1.4 million (30 November 1999 to 31 March 2000
£2.0 million). At 31 March 2001, Powercor owed the group £nil (2000 £21.9 million).
*On 23 March 2001 the group disposed of its 50% holding in Calanais Limited; as a result it ceased to be a joint venture from this date.
(b) Funding transactions and balances arising in the normal course of business
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Related party                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Scottish Electricity Settlements Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|ScotAsh Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|RoboScot (38) Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20F (US)
| |                                                  

| | Notes to the Group Balance Sheetas at31 March 2001
| | --------------------------------------------------
| |                                                   



|                                                                                                                                                                                                                                                                                  |       |        |   |      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------ | - | -----
|                                                                                                                                                                                                                                                                                 
|35 Summary of differences between UK and US Generally Accepted Accounting Principles (GAAP)                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                 
|The consolidated Accounts of the group are prepared in accordance with UK GAAP which differs in certain significant respects from US GAAP. The effect
of the US GAAP adjustments to profit for the financial year and equity shareholders funds are set out in the tables below.
|                                                                                                                                                                                                                                                                                  |       | 2001   |   | 2000 
|(a) Reconciliation of profit for the financial year to US
GAAP:                                                                                                                                                                                                                   | Notes | £m     |   | £m   
|                                                                                                                                                                                                                                                                                 
|Profit for the financial year under UK GAAP                                                                                                                                                                                                                                       |       | 307.5  |   | 885.0
|US GAAP adjustments:                                                                                                                                                                                                                                                              |       |        |   |      
|Amortisation of goodwill                                                                                                                                                                                                                                                          | (i)   | (35.9  | ) | (34.4
|US regulatory assets                                                                                                                                                                                                                                                              | (ii)  | 73.8   |   |     
|Pensions                                                                                                                                                                                                                                                                          | (iii) | 95.5   |   | 44.8 
|Depreciation on revaluation uplift                                                                                                                                                                                                                                                | (iv)  | 3.4    |   | 3.4  
|Decommissioning and mine reclamation liabilities                                                                                                                                                                                                                                  | (v)   | (32.3  | ) | (6.7 
|PacifiCorp Transition Plan costs                                                                                                                                                                                                                                                  | (ii)  | 108.2  |   |     
|Other                                                                                                                                                                                                                                                                             | (xi)  | (0.4   | ) | (8.0 
|Re-classification as extraordinary item                                                                                                                                                                                                                                           | (vi)  |       |   | 15.9 
|                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                  |       | 519.8  |   | 900.0
|Deferred tax effect of US GAAP adjustments                                                                                                                                                                                                                                        | (vii) | (133.0 | ) | (19.2
|                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                  |       | 386.8  |   | 880.8
|Extraordinary item (net of tax)                                                                                                                                                                                                                                                   | (vi)  |       |   | (11.1
|                                                                                                                                                                                                                                                                                 
|Profit for the financial year under US GAAP                                                                                                                                                                                                                                       |       | 386.8  |   | 869.7
|                                                                                                                                                                                                                                                                                 
|Earnings per share under US GAAP  continuing operations                                                                                                                                                                                                                          |       | 21.13  | p | 63.39
| extraordinary item (net of tax)                                                                                                                                                                                                                                                 | (vi)  |       |   | (0.80
|                                                                                                                                                                                                                                                                                 
|Earnings per share under US GAAP                                                                                                                                                                                                                                                  | (x)   | 21.13  | p | 62.59
|                                                                                                                                                                                                                                                                                 
|Diluted earnings per share under US GAAP  continuing operations                                                                                                                                                                                                                  |       | 21.05  | p | 62.95
|
extraordinary item (net of tax)                                                                                                                                                                                                                                                 | (vi)  |       |   | (0.79
|                                                                                                                                                                                                                                                                                 
|Diluted earnings per share under US GAAP                                                                                                                                                                                                                                          | (x)   | 21.05  | p | 62.16
|                                                                                                                                                                                                                                                                                 

|                                                                                    
|------------------------------------------------------------------------------------
|(b) Effect on equity shareholders funds of differences between UK GAAP and US GAAP:
|                                                                                    
|                                                                                    
|                                                                                    
|Equity shareholders funds under UK GAAP                                            
|US GAAP adjustments:                                                                
|Goodwill                                                                            
|Business combinations                                                               
|Amortisation of goodwill                                                            
|ESOP shares held in trust                                                           
|US regulatory assets                                                                
|Pensions                                                                            
|Dividends                                                                           
|Revaluation of fixed assets                                                         
|Depreciation on revaluation uplift                                                  
|Decommissioning and mine reclamation liabilities                                    
|PacifiCorp Transition Plan costs                                                    
|Other                                                                               
|Deferred tax:                                                                       
|Effect of US GAAP adjustments                                                       
|Effect of differences in methodology                                                
|                                                                                    
|Equity shareholders funds under US GAAP                                            
|                                                                                    



|(i) Goodwill and business combinationsGoodwillUnder UK GAAP, goodwill arising from the purchase of operating entities before 31 March 1998 has been written off directly against reserves. Goodwill arising on acquisitions
after 31 March 1998 is capitalised and amortised through the income statement over its useful economic life. Under US GAAP, goodwill arising from the purchase of operating entities should be held as an intangible asset in the balance sheet and
amortised over its expected useful life.
The goodwill adjustment is made to recognise goodwill previously written off to reserves under UK GAAP as an intangible asset under US GAAP.

This goodwill, which is capitalised under US GAAP, is then amortised on a straight line basis over its estimated useful economic life of 40 years with the effect being a reduction
in profit reflecting the amortisation charge for the period.

Business combinationsIn addition to re-instating the goodwill calculated under UK GAAP as described above, goodwill must also be recalculated in accordance with US GAAP. This is required due to
differences between UK GAAP and US GAAP in the determination of acquisition price and valuation of assets and liabilities at the acquisition date. The adjustment referred to as business combinations reflects principally the impact of recalculating
the goodwill arising on the acquisitions of Manweb, Southern Water and PacifiCorp under US GAAP.

In cases where traded equity securities are exchanged as consideration, UK GAAP requires the fair value of consideration to be determined at the date the transaction is completed,
while US GAAP requires the fair value of such consideration to be determined at the date the acquisition is announced.

(ii) US regulatory assetsStatement of Financial Accounting Standard (FAS) 71 'Accounting for the Effects of Certain Types of Regulation' establishes US GAAP for utilities in the United States whose
regulators have the power to approve and/or regulate rates that may be charged to customers. Provided that, through the regulatory process, the utility is substantially assured of recovering its allowable costs by the collection of revenue from its
customers, such costs not yet recovered are deferred as regulatory assets. Due to the different regulatory environment, no equivalent GAAP applies in the UK.

Under UK GAAP, the group's policy is to recognise regulatory assets established in accordance with FAS 71 only where they comprise rights or other access to future economic
benefits which have arisen as a result of past transactions or events which have created an obligation to transfer economic benefits to a third party.

The impact of the application of different accounting policies is that US regulatory assets amounting to £778.4 million (2000 £348.1 million) are not recognised under UK
GAAP, including deferred excess power costs and PacifiCorp Transition Plan costs.

Profits under US GAAP are consequently increased by £182.0 million in 2001 (2000 £nil), representing the deferral of costs expensed under UK GAAP net of amortisation of
regulatory assets recognised under US GAAP.

PacifiCorp Transition Plan costs are also accounted for as regulatory assets under US GAAP but have been separately identified in view of their significance.

(iii) Pension costsThe fundamental differences between UK GAAP and US GAAP are as follows:

(a) Under UK GAAP, the annual pension charge is determined so that it is a substantially level percentage of the current and expected future payroll. Under US GAAP, the aim is to
accrue the cost of providing pension benefits in the year in which the employee provides the related service in accordance with FAS 87, which requires readjustment of the significant actuarial assumptions annually to reflect current market and
economic conditions.

(b) Under UK GAAP, pension liabilities are usually discounted using an interest rate that represents the expected long-term return on plan assets. Under US GAAP, pension
liabilities are discounted using the current rates at which the pension liability could be settled.

(c) Under UK GAAP, variations from plan can be aggregated and amortised over the remaining employee service lives. Under US GAAP, variations from plan must be amortised separately
over remaining service lives.

(d) Under UK GAAP, alternative bases can be used to value plan assets. Under US GAAP, plan assets should be valued at market or at market related values.

(iv) Revaluation of fixed assetsThe revaluation of Manweb distribution assets and Southern Water operational assets is not permitted under US GAAP. Accordingly, the reconciliation restates fixed assets to historical cost and the depreciation charge has been adjusted. Refer to
Note 17
(i) for further information relating to the fixed assets revaluation.

(v) Decommissioning and mine reclamation liabilitiesUnder UK GAAP future decommissioning costs are provided for, on a discounted basis, generally at the inception of the asset life with a corresponding increase to the cost of
the asset. This increased cost is depreciated over the useful life of the asset. Under US GAAP, for regulated industries, decommissioning costs are accounted for by depreciating the related tangible fixed asset to a negative amount which equates to
the estimated decommissioning costs. In respect of mine reclamation costs UK GAAP requires the discounted future costs of reclamation to be provided for, with a corresponding increase to the cost of the mine assets. Under US GAAP anticipated mine
reclamation costs are accrued over the life of the mine asset.

(vi) Extraordinary itemUnder UK GAAP, certain costs of early debt repayment have been treated as exceptional interest costs. Under US GAAP, costs of early debt repayment are classified as
extraordinary items. Earnings per share under US GAAP are shown both before and after extraordinary items.

(vii) Deferred taxUnder UK GAAP, Financial Reporting Standard 19 'Deferred tax', requires full provision for deferred tax at future enacted rates. Provision is only made in respect of assets revalued for accounting purposes where a commitment exists to sell the
asset at the balance sheet date.

Under US GAAP, full provision for deferred tax is required to the extent that accounting profit differs from taxable profit due to temporary timing differences. Provision is made
based on enacted tax law.

The item 'effect of US GAAP adjustments' reflects the additional impact of making full provision for deferred tax in respect of adjustments made in restating the balance sheet to
US GAAP.

The item 'effect of differences in methodology' reflects the impact of making full provision for deferred tax under US GAAP compared to UK GAAP.

(viii) ESOP shares held in trustUnder UK GAAP, shares held by an Employee Share Ownership Plan (ESOP) are recorded as fixed asset investments at cost less amounts written off. Under US GAAP, shares held in trust are recorded at cost in the balance sheet as a deduction from
shareholders' funds. No dividends have been paid on the shares held by the ScottishPower ESOP and future dividends have been waived.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(ix) Ordinary dividendsUnder UK GAAP, final ordinary dividends are recognised in the financial year in respect of which they are proposed by the Board of Directors. Under US GAAP, such dividends
are not recognised until they are formally declared by the Board of Directors.

(x) Earnings per shareUnder UK GAAP, earnings per share is calculated by dividing the net profit for the period by the weighted average number of shares (for basic and diluted number of shares)
outstanding for the period. UK GAAP permits the presentation of more than one measure of earnings per share provided that all such measures are clearly explained and are given equal prominence on the face of the income statement.

Under US GAAP, earnings per share is calculated by dividing earnings from continuing operations, excluding extraordinary items, by the weighted average number of shares (for basic
and diluted number of shares) outstanding for the period. US GAAP permits only one measure of earnings per share as a performance measure.

(a) Earnings per ordinary share have been calculated by dividing the profit for the financial year under US GAAP by the weighted average number of ordinary shares in issue during
the financial year, based on the following information:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |         |         |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ------- | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |         |         |         | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2001    | 2000    | 1999    | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Profit for the financial year under US GAAP (£m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 386.8   | 869.7   | 451.3   | 
|Basic weighted average share capital (number of shares, millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 1,830.3 | 1,389.6 | 1,185.2 | 
|Diluted weighted average share capital (number of shares, millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1,837.4 | 1,399.2 | 1,197.2 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The difference between the basic and the diluted weighted average share capital is wholly attributable to outstanding share options and shares held in trust for the group's Employee
Share Ownership Plan.

(b) As permitted under UK GAAP, earnings per share have been presented including and excluding the impact of exceptional items and goodwill amortisation to provide an additional
measure of underlying performance. In accordance with US GAAP, earnings per share have been presented above based on US GAAP earnings, without adjustments for the impact of exceptional items, other than those which are classified as extraordinary
items under US GAAP, and goodwill amortisation. Such additional measures of underlying performance are not permitted under US GAAP. The inclusion of exceptional items, other than those which are classified as extraordinary items under US GAAP, in
the determination of earnings per share in accordance with US GAAP increased earnings by £408.9 million or 29.43 pence per share for the year ended 31 March 2000. The inclusion of goodwill amortisation decreased earnings by £163.5 million
or 8.93 pence per share for the year ended 31 March 2001, by £74.8 million or 5.38 pence per share for the year ended 31 March 2000 and by £34.9 million or 2.94 pence per share for the year ended 31 March 1999.

(xi) OtherOther differences between UK and US GAAP are not individually material and relate to post-retirement benefits other than pensions, capitalisation of finance costs,
marketable securities, energy exchange contracts and stock option compensation expense.

UK GAAP permits the use of long-term discount rates in determining the provision for post-retirement benefits other than pensions. US GAAP requires the use of current market
rates.

Under UK GAAP only interest on debt funding may be capitalised during the period of construction. Under US GAAP, as applied by regulated electricity utilities, both the cost of
debt and the cost of equity applicable to domestic utility properties are capitalised during the period of construction.

UK GAAP permits current asset investments to be valued at the lower of cost and net realisable value. US GAAP requires that such investments, insofar as they are available-for-sale
securities, are marked-to-market with movements in market value being included in other comprehensive income.

Under UK GAAP, obligations under energy exchange contracts are valued based on the forecast cost at the balance sheet date of delivering energy under the contract. Under US GAAP
for regulated utilities, obligations under energy exchange contracts are valued based on the cost avoided in receiving delivery of energy under the contract.

Under US GAAP, the group applies Accounting Principles Board Opinion No. 25 (APB 25), 'Accounting for Stock Issued to Employees', and related interpretations in accounting for its
plans and a compensation expense has been recognised accordingly for its Share Option Schemes. As the group applies APB 25 in accounting for its plans, under FAS 123, 'Accounting for Stock-Based Compensation', it has adopted the disclosure only
option in relation to its Share Option Schemes. Had the group determined compensation cost based on the fair value at the grant date for its share options under FAS 123, the group's profit for financial year under US GAAP and earnings per share
under US GAAP would have been reduced to the pro forma amounts below:

|                                                                                                                                                                                                                                                                                                                                                                 |       |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | - | ----- | -
|For the year                                                                                                                                                                                                                                                                                                                                                     | 2001  |   | 2000  |  
|                                                                                                                                                                                                                                                                                                                                                                
|Profit for financial year under US GAAP (£m)                                                                                                                                                                                                                                                                                                                     | 386.8 |   | 869.7 |  
|Pro forma (£m)                                                                                                                                                                                                                                                                                                                                                   | 380.6 |   | 864.6 |  
|Earnings per share under US GAAP                                                                                                                                                                                                                                                                                                                                 | 21.13 | p | 62.59 | p
|Pro forma                                                                                                                                                                                                                                                                                                                                                        | 20.79 | p | 62.22 | p
|                                                                                                                                                                                                                                                                                                                                                                
|The effect on 1999 profit for the financial year under US GAAP and earnings per share would have been immaterial.

The weighted average fair value of options granted during the year was £1.6 million. The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions used:

|                                     |      |   |      |  
|------------------------------------ | ---- | - | ---- | -
|For the year                         | 2001 |   | 2000 |  
|                                    
|Dividend yield                       | 6.4  | % | 4.5  | %
|Risk-free interest rate              | 4.9  | % | 6.0  | %
|Volatility                           | 24.0 | % | 30.0 | %
|Expected life of the options (years) | 4    |   | 4    |  
|                                    

|The weighted average life of the share options outstanding as at 31 March 2001 and March 2000 was as follows:
|-------------------------------------------------------------------------------------------------------------
|                                                                                                             
|                                                                                                             
|                                                                                                             
|ScottishPower Sharesave Schemes                                                                              
|Southern Water Sharesave Scheme                                                                              
|Executive Share Option Scheme                                                                                
|PacifiCorp Stock Incentive Plan                                                                              
|                                                                                                             



|(xii) ReclassificationsThe reconciliations of profit for the financial year and equity shareholders' funds at the year end from UK GAAP to US GAAP only include those items which have a net effect on profit or equity shareholders' funds. There are other GAAP
differences, not included in the reconciliations, which would affect the classification of assets and liabilities or of income and expenditure. The principal items which would have such an effect are as follows:
 under UK GAAP debt issue costs are deducted from the carrying value of the related debt instrument. US GAAP requires such costs to be included as an asset

 under UK GAAP customer contributions in respect of fixed assets are generally credited to a separate deferred income account. Under US GAAP such contributions are netted off
against the cost of the related fixed assets

 items included as exceptional items under UK GAAP are either classified as extraordinary items or special charges under US GAAP

 under US GAAP, transmission and distribution costs would be included in cost of sales, and gross profit from continuing operations would be calculated after deducting these
expenses

 under UK GAAP, the investor's interest in the turnover and results of a joint venture or associate are disclosed gross. The investor's share of the interest and
taxation are disclosed separately as a component of the group interest and taxation lines. Under US GAAP, the investor's interest in the net results of joint ventures and associates is disclosed as a single line in the income statement, net of
interest and taxation.

Consolidated statement of comprehensive incomeUnder US GAAP, certain items shown as components of common equity must be more prominently reported in a separate statement as components of comprehensive income.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |         |   |      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | - | -----
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The consolidated statement of comprehensive income is set out below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2001    |   | 2000 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | £m      |   | £m   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Profit for the financial year under US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 386.8   |   | 869.7
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| Foreign currency translation adjustment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 670.8   |   | 25.1 
| Unrealised (loss)/gain on available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (4.6    | ) | 2.0  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Total comprehensive income under US GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1,053.0 |   | 896.8
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The accumulated balances related to each component of other comprehensive income are as follows; foreign currency translation adjustment £695.9 million (2000 £25.1
million) and unrealised loss on available-for-sale securities £2.6 million (2000 £2.0 million unrealised gain).

Consolidated statement of cash flowsThe consolidated statement of cash flows prepared in accordance with FRS 1 (Revised) presents substantially the same information as that required under US GAAP. Under US
GAAP, however, there are certain differences from UK GAAP with regard to the classification of items within the cash flow statement and with regard to the definition of cash and cash equivalents.

Under UK GAAP, cash flows are presented separately for operating activities, dividends received from associates and joint ventures, returns on investments and servicing of finance,
taxation, capital expenditure and financial investment, acquisitions and disposals, equity dividends paid, management of liquid resources, and financing. Under US GAAP, only three categories of cash flow activity are reported; operating activities,
investing activities and financing activities. Cash flows from dividends received from associates and joint ventures, returns on investments and servicing of finance and taxation would be included as operating activities under US GAAP. Equity
dividends paid would be included under financing activities under US GAAP.

Under US GAAP, cash and cash equivalents are not offset by bank overdrafts repayable within 24 hours from the date of the advance, as is the case under UK GAAP and instead such
bank overdrafts are classified within financing activities.

The consolidated cash flow statement prepared in conformity with UK GAAP is set out
here
 . In this statement an additional measure, free cash flow, is included which is not an accepted measure under US GAAP. This measure represents cash flow from operations after adjusting for dividends received from associates and joint ventures,
returns on investments and servicing of finance and taxation. UK investors regard free cash flow as the money available to management annually to be allocated among a number of options including capital expenditure, payments of dividends and the
financing of acquisitions.

|                                                                                                                                 |          |   |        
|-------------------------------------------------------------------------------------------------------------------------------- | -------- | - | -------
|The consolidated statement of cash flows under US GAAP is set out below:                                                        
|                                                                                                                                 | 2001     |   | 2000   
|                                                                                                                                 | £m       |   | £m     
|                                                                                                                                
|Cash inflow from continuing operating activities                                                                                 | 1,411.6  |   | 1,117.5
|Dividends received from associates and joint ventures                                                                            | 2.1      |   | 0.5    
|Returns on investments and servicing of finance                                                                                  | (373.5   | ) | (258.4 
|Ordinary taxation                                                                                                                | (152.6   | ) | (154.3 
|Windfall tax                                                                                                                     |         |   |       
|                                                                                                                                
|Net cash provided by operating activities                                                                                        | 887.6    |   | 705.3  
|                                                                                                                                
|Capital expenditure and financial investment                                                                                     | (1,081.4 | ) | (842.3 
|Acquisitions and disposals                                                                                                       | 482.9    |   | 718.8  
|                                                                                                                                
|Net cash used in investing activities                                                                                            | (598.5   | ) | (123.5 
|                                                                                                                                
|Financing                                                                                                                        | 196.1    |   | (121.2 
|Add: movement in bank overdrafts                                                                                                 | 11.1     |   | 23.8   
|Equity dividends paid                                                                                                            | (471.3   | ) | (406.0 
|                                                                                                                                
|Net cash (required)/provided by financing activities                                                                             | (264.1   | ) | (503.4 
|                                                                                                                                
|Net increase/(decrease) in cash and cash equivalents                                                                             | 25.0     |   | 78.4   
|Exchange movement on cash and cash equivalents                                                                                   | 19.9     |   |       
|Cash and cash equivalents at beginning of financial year                                                                         | 185.3    |   | 106.9  
|                                                                                                                                
|Cash and cash equivalents at end of financial year                                                                               | 230.2    |   | 185.3  
|                                                                                                                                
|All liquid investments with maturities of three months or less at the time of acquisition are considered to be cash equivalents.
|                                                                                                                                



|
|

|Significant non-cash investing or financing activities | 2001

£m | 2000

£m | 1999

£m
|------------------------------------------------------ | -------- | -------- | --------
|                                                      
|On acquisition of subsidiaries:                        |          |          |         
|Shares allotted as part of purchase consideration      |         | 4,065.5  |        
|                                                      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Additional information required under US GAAP(a) Infrastructure accountingThe group's accounting policy in respect of Southern Water's infrastructure assets and related maintenance and renewals expenditure, as set out and explained in the
accounting policies, is not generally accepted under US GAAP which requires historical cost depreciation accounting for these assets. The difference between the infrastructure renewals depreciation charge and depreciation accounting under US GAAP is
not material to profit and equity shareholders' funds.
(b) Deferred tax

The additional components of the estimated net deferred tax liability that would be recognised under US GAAP are as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Deferred tax liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Excess of book value over taxation value of fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Other temporary differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Deferred tax assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Other temporary differences                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Net deferred tax liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Analysed as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Current                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Non-current                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) PensionsAt 31 March 2001, ScottishPower had eight statutorily approved defined benefit pension schemes and one statutorily approved defined contribution scheme. The PacifiCorp
arrangements are included following the acquisition of PacifiCorp on 29 November 1999.

Benefits under the defined benefit plans reflect each employee's basic earnings, years of service and age at retirement. Funding of the defined benefit plans is based upon
actuarially determined contributions, with members paying contributions at fixed rates and the employers meeting the balance of cost as determined by the scheme actuaries.

Under the defined contribution plan, contributions are paid by the member and employer at a fixed rate. Benefits under the defined contribution plan reflect each employee's fund at
retirement and the cost of purchasing benefits at that time.

Reconciliations of the beginning and ending balances of the projected pension benefit obligation and the funded status of these plans for the years ending 31 March 2001, 31 March
2000 and 31 March 1999 are as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Change in benefit obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Benefit obligation at beginning of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Additional obligation from acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Service cost (excluding plan participants contributions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Interest cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Plan amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Special termination benefits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Plan participants contributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Actuarial loss/(gain)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Benefits paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Benefit obligation at end of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Change in plans assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Fair value of plans assets at beginning of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Additional fair value of assets from acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Actual return on plans assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Employer contributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Plan participants contributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Benefits paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Fair value of plans assets at end of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Reconciliation of funded status to prepaid benefit cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Funded status                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Unrecognised net actuarial gain                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Unrecognised prior service cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Unrecognised Transition Obligation Asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Prepaid benefit cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|For all plans, the value of assets exceeded the Accumulated Benefit Obligation at the end of the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 



|                                                                                                                                                                                 |          |   |         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | - | --------
|The components of pension benefit costs for the years ended 31 March 2001, 2000 and 1999 were as follows (figures for 2000 include postacquisition
period only for PacifiCorp):
|                                                                                                                                                                                 | 2001

£m |   | 2000

£m
|                                                                                                                                                                                
|Service cost                                                                                                                                                                     | 66.6     |   | 57.6    
|Interest cost                                                                                                                                                                    | 179.8    |   | 137.7   
|Expected return on plans assets                                                                                                                                                 | (287.2   | ) | (211.1  
|Amortisation of experience gains                                                                                                                                                 | (36.0    | ) | (22.8   
|Amortisation of prior service cost                                                                                                                                               | (1.1     | ) |        
|Amortisation of Transition Obligation Asset                                                                                                                                      | (0.8     | ) | (0.8    
|                                                                                                                                                                                
|Net periodic benefit (credit)/cost                                                                                                                                               | (78.7    | ) | (39.4   
|                                                                                                                                                                                

|                                                                                  
|----------------------------------------------------------------------------------
|The actuarial assumptions adopted in arriving at the above figures are as follows:
|UK arrangements  assumptions at:                                                 
|                                                                                  
|Expected return on plans assets                                                  
|Discount rate                                                                     
|Rate of earnings increase                                                         
|Pension increases                                                                 
|                                                                                  

|                                  |                |                |                  
|--------------------------------- | -------------- | -------------- | -----------------
|US arrangements  assumptions at: | 31 March

2001 | 31 March

2000 | 29 November

1999
|                                 
|Expected return on plans assets  | 9.25% p.a.     | 9.25% p.a.     | 9.25% p.a.       
|Discount rate                     | 7.75% p.a.     | 7.5% p.a.      | 7.5% p.a.        
|Rate of earnings increase         | 4.0% p.a.      | 4.0% p.a.      | 4.0% p.a.        
|Inflation rates                   | 4.0% p.a.      | 4.0% p.a.      | 4.0% p.a.        
|                                 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) Other postretirement benefitsPacifiCorp provides healthcare and life insurance benefits through various plans for eligible retirees on a basis substantially similar to those who are active employees.
The cost of postretirement benefits is accrued over the active service period of employees. For those employees retired at 1 January 1994, PacifiCorp funds postretirement expense on a payasyougo basis and has unfunded
accrued liability of £99.6 million at 31 March 2001. For those employees retiring on or after 1 January 1994, PacifiCorp funds post-retirement benefit expense through a combination of funding vehicles: PacifiCorp did not fund over the period 1
April 2000 to 31 March 2001. These funds are invested in common stocks, bonds and United States government obligations. The figures below relate to the combined position for the unfunded and funded arrangements.

The net periodic postretirement benefit cost and significant assumptions are summarised as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Service cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Interest cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Expected return on plan assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Net periodic post-retirement benefit cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|* For the postacquisition period (29 November 1999 to 31 March 2000)

The change in the accumulated post-retirement benefit obligation, change in plan assets and funded status are as follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                
|Change in accumulated post-retirement benefit obligation                                                                                                                                        
|                                                                                                                                                                                                
|Accumulated postretirement benefit obligation at beginning of year                                                                                                                             
|Service cost                                                                                                                                                                                    
|Interest cost                                                                                                                                                                                   
|Plan participants contributions                                                                                                                                                                
|Special termination benefit loss                                                                                                                                                                
|Actuarial gain                                                                                                                                                                                  
|Benefits paid                                                                                                                                                                                   
|Exchange                                                                                                                                                                                        
|                                                                                                                                                                                                
|Accumulated postretirement obligation at end of year                                                                                                                                           
|                                                                                                                                                                                                

|* For the postacquisition period (29 November 1999 to 31 March 2000)

** As at acquisition  29 November 1999
|--------------------------------------------------------------------------------------------------------------
|Change in plan assets                                                                                         
|                                                                                                              
|Plan assets at fair value at beginning of year                                                                
|Actual return on plan assets                                                                                  
|Company contributions                                                                                         
|Plan participants contributions                                                                              
|Benefits paid                                                                                                 
|Exchange                                                                                                      
|                                                                                                              
|Plan assets at fair value at end of year                                                                      
|                                                                                                              
|* For the postacquisition period (29 November 1999 to 31 March 2000)

** As at acquisition  29 November 1999

|Reconciliation of accrued post-retirement costs and total amount recognised | 2001

£m |   | 2000

£m |  
|--------------------------------------------------------------------------- | -------- | - | -------- | -
|                                                                           
|Funded status of plan                                                       | (66.1    | ) | (20.1    | )
|PacifiCorp unrecognised net gain                                            | 6.0      |   | (26.4    | )
|                                                                           
|Accrued post-retirement benefit cost                                        | (60.1    | ) | (46.5    | )
|                                                                           

|The actuarial assumptions adopted in arriving at the above figures are as follows: |                    |  |                    | 
|---------------------------------------------------------------------------------- | ------------------ |  | ------------------ | 
|US arrangements  assumptions at:                                                  | 31 March

2001

£m |  | 31 March

2000

£m | 
|                                                                                  
|Expected return on plans assets                                                   | 9.25% p.a.         |  | 9.25% p.a.         | 
|Discount rate                                                                      | 7.75% p.a.         |  | 7.50% p.a.         | 
|Initial healthcare cost trend  under 65                                           | 6.00% p.a.         |  | 6.60% p.a.         | 
|Initial healthcare cost trend  over 65                                            | 6.50% p.a.         |  | 6.80% p.a.         | 
|Initial healthcare cost trend rate                                                 | 4.50% p.a.         |  | 4.50% p.a.         | 
|                                                                                  

|The assumed healthcare cost trend rate gradually decreases over fourteen years. The healthcare cost trend rate assumption has a significant effect on the amounts reported.
Increasing the assumed healthcare cost trend rate by one percentage point would have increased the accumulated postretirement benefit obligation (the "APBO") as of 31 March 2001 by £13.1 million (2000 £15.7 million), and the annual
net periodic postretirement benefit costs by £1.1 million (2000 £1.4 million). Decreasing the assumed healthcare cost trend rate by one percentage point would have reduced the APBO as of 31 March 2001 by £16.0 million (2000
£14.9 million), and the annual net periodic post-retirement benefit costs by £1.4 million (2000 £1.3 million).
Post-employment benefitsPacifiCorp provides certain postemployment benefits to former employees and their dependants during the period following employment but before retirement. The costs of
these benefits are accrued as they are incurred. Benefits include salary continuation, severance benefits, disability benefits and continuation of healthcare benefits for terminated and disabled employees and workers compensation benefits. The
provision for postemployment benefits was £12.0 million at 31 March 2001 (2000 £11.5 million).
Employee savings and stock ownership planPacifiCorp has an employee savings and stock ownership plan that qualifies as a taxdeferred arrangement under Section 401(a), 401(k), 409, 501 and 4975(e)(7) of the
Internal Revenue Code. Participating United States employees may defer up to 16% of their compensation, subject to certain regulatory limitations. PacifiCorp matches a portion of employee contributions with ScottishPower ADSs, vesting that portion
over five years. PacifiCorp makes an additional contribution of ScottishPower ADSs to qualifying employees equal to a percentage of the employee's eligible earnings. These contributions are immediately vested. Employer contributions to the savings
plan were £12.2 million in the period from 1 April 2000 to 31 March 2001.
Recent US accounting pronouncementsAccounting for Derivative Instruments and Hedging ActivitiesIn June 1998, the Financial Accounting and Standards Board (FASB) issued FAS 133 'Accounting for Derivative Instruments and Hedging Activities' which, as amended, will be
effective for the group for financial years commencing on 1 April 2001. The statement establishes accounting and reporting standards that require that every derivative instrument be recorded on the balance sheet as either an asset or liability
measured at fair value. Changes in the derivative's fair value will be recognised concurrently in earnings unless specific hedge accounting criteria are met.
The group has considered the application of this standard to its operations and has completed an assessment of the impact of this standard. Due to the initial uncertainty of the
implementation date of the New Electricity Trading Arrangements (NETA) and the effect this had on the re-negotiation of contractual terms, the group assessed the impact of FAS 133 on the relevant preNETA contractual terms and conditions. The
group estimates that, the cumulative post-tax effect of adopting FAS 133, as amended, under the pre-NETA contractual terms and conditions, will decrease net income by £92.0 million and increase other comprehensive income by £421.3 million.
However, the transition effect, as of 31 March 2001, is subject to change. The group continues to assess the application and impact of this standard, particularly in the light of recent discussions of the Derivative Implementation Group (DIG). The
FASB and DIG continue to address FAS 133 implementation issues, and their conclusions may require changes in the group's current interpretations of the standard. At this time the group is not able to quantify the potential financial statement impact
of the matters and conclusions which are under consideration by the FASB and DIG.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Company Balance Sheetas at31 March 2001
| | ---------------------------------------
| |                                        





|                                                                |       |         |   |         |  
|--------------------------------------------------------------- | ----- | ------- | - | ------- | -
|                                                                |       | 2001    |   | 2000    |  
|                                                                | Notes | £m      |   | £m      |  
|                                                               
|Fixed assets                                                    |       |         |   |         |  
|Investments                                                     | 36    | 4,746.4 |   | 4,746.3 |  
|                                                               
|Current assets                                                  |       |         |   |         |  
|Debtors                                                         | 37    | 718.8   |   | 642.8   |  
|                                                               
|Creditors: amounts falling due within one year                  | 38    | (166.6  | ) | (135.7  | )
|                                                               
|Net current assets                                              |       | 552.2   |   | 507.1   |  
|                                                               
|Net assets                                                      |       | 5,298.6 |   | 5,253.4 |  
|                                                               
|Called up share capital                                         | 39    | 924.5   |   | 923.8   |  
|Share premium                                                   | 39    | 3,739.7 |   | 3,733.8 |  
|Capital redemption reserve                                      | 39    | 18.3    |   | 18.3    |  
|Profit and loss account                                         | 39    | 616.1   |   | 577.5   |  
|                                                               
|Shareholders funds                                             | 39    | 5,298.6 |   | 5,253.4 |  
|                                                               
|Approved by the Board on 3 May 2001 and signed on its behalf by

|                               |                             
|------------------------------ | ----------------------------
|Charles Miller Smith

Chairman | David Nish

Finance Director
|                               |                             

|The
Accounting Policies and Definitions,
together with Notes 1 to 40 form part of these accounts.
|-------------------------------------------------------------------------------------------------
|                                                                                                 

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  

| | Notes to the Company Balance Sheetas at31 March 2001
| | ----------------------------------------------------
| |                                                     

|                           |              |            |       |  
|-------------------------- | ------------ | ---------- | ----- | -
|                           |              |            |       |  
|36 Fixed asset investments |              |            |       |  
|                          
|                           | Subsidiary   | Own shares |       |  
|                           | undertakings | held under |       |  
|                           | Shares       | Loans      | trust |  
|                           | £m           | £m         | £m    |  
|                          
|Cost or valuation:         |              |            |       |  
|At 1 April 2000            | 1,663.5      | 3,049.9    | 32.9  |  
|Additions                  | 3.6          |           | 3.8   |  
|Disposals and other        |             |           | (7.3  | )
|                          
|At 31 March 2001           | 1,667.1      | 3,049.9    | 29.4  |  
|                          
|                          

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  



|                                                      
|------------------------------------------------------
|Notes to the Company Balance Sheet as at 31 March 2001
|                                                      

|                                          |       |       | 
|----------------------------------------- | ----- | ----- | 
|                                          |       |       | 
|37 Debtors                                |       |       | 
|                                         
|                                          | 2001  | 2000  | 
|                                          | £m    | £m    | 
|                                         
|Amounts falling due within one year:      |       |       | 
|Loans to subsidiary undertakings          | 633.8 | 572.5 | 
|Interest due from subsidiary undertakings | 85.0  | 70.3  | 
|                                         
|                                          | 718.8 | 642.8 | 
|                                         
|                                         

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  



|                                                      
|------------------------------------------------------
|Notes to the Company Balance Sheet as at 31 March 2001
|                                                      

|                                     |       |      
|------------------------------------ | ----- | -----
|                                     |       |      
|38 Creditors                         |       |      
|                                    
|                                     | 2001  | 2000 
|                                     | £m    | £m   
|                                    
|Amounts falling due within one year: |       |      
|Corporation tax                      | 31.7  | 5.3  
|Accrued expenses                     | 15.5  | 17.0 
|Proposed dividend                    | 119.4 | 113.4
|                                    
|                                     | 166.6 | 135.7
|                                    
|                                    

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  



|                                                      
|------------------------------------------------------
|Notes to the Company Balance Sheet as at 31 March 2001
|                                                      

|                                                      
|------------------------------------------------------
|39 Analysis of movements in share capital and reserves
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|At 1 April 2000                                       
|Retained profit for the year                          
|Share capital issued                                  
| Employee sharesave scheme                           
| Executive share option scheme                       
| ESOP                                                
|                                                      
|At 31 March 2001                                      
|                                                      
|                                                      

| |                                                  
| | -------------------------------------------------
| |  UK Menu
   
 Cross Reference to Form 20-F (US)
| |                                                  



|                                                      
|------------------------------------------------------
|Notes to the Company Balance Sheet as at 31 March 2001
|                                                      

| |                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 40 Profit and loss account                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                   
| | As permitted by Section 230 of the Companies Act 1985, the company has not presented its own profit and loss account. The company's profit and loss account was approved by the
Board on 3 May 2001. The profit for the financial year per the Accounts of the company was £512.3 million (2000 £1,144.4 million).
| |                                                                                                                                                                                                                                                                                                                   

| |                                                  
| | -------------------------------------------------
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Principal Subsidiary Undertakings and Other Investments
| | -------------------------------------------------------
| |                                                        



|Subsidiary undertakings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                      | Proportion |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ---------- | -
|Class of share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | of shares            |           
|capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | held                 | Activity  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|CRE Energy Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Ordinary shares £1   | 100        | %
|Domestic Appliance Insurance Limited (Isle of Man)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Ordinary shares £1   | 100        | %
|Manweb plc                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Ordinary shares 50p  | 100        | %
|NA General Partnership*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | n/a                  | 100        | %
|PacifiCorp (USA)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Common stock         | 100        | %
|PacifiCorp Financial Services Inc (USA)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Common stock         | 100        | %
|PacifiCorp Group Holdings (USA)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Common stock         | 100        | %
|Scottish Power UK plc**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Ordinary shares 50p  | 100        | %
|ScottishPower Insurance Limited (Isle of Man)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Ordinary shares £1   | 100        | %
|Southern Water Services Finance plc                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Ordinary shares £1   | 100        | %
|Southern Water Services Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Ordinary shares £1   | 100        | %
|Thus plc                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Ordinary shares 2.5p | 50.1       | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Fixed asset investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                      |            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      |            |  
|Joint ventures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                      |            |  
|CeltPower Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Ordinary shares £1   | 50         | %
|ScotAsh Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Ordinary shares £1   | 50         | %
|Scottish Electricity Settlements Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Ordinary shares £1   | 50         | %
|Shoreham Operations Company Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Ordinary shares £1   | 50         | %
|South Coast Power Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Ordinary shares £1   | 50         | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      |            |  
|Associated undertaking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                      |            |  
|Wind Resources Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Ordinary shares £1   | 45         | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                      |            |  
|Other investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                      |            |  
|Folkestone & Dover Water Services Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Ordinary shares £1   | 25         | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Preference shares £1 | 22         | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Deferred shares £1   | 12         | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Notes

* NA General Partnership is a partnership and therefore has no defined class of share capital.

** The investment in this company is a direct holding of Scottish Power plc.

The directors consider that to give full particulars of all undertakings would lead to a statement of excessive length. The information above includes the undertakings whose
results or financial position, in the opinion of the directors, principally affect the results or financial position of the group.

All companies are incorporated in Great Britain, unless otherwise stated.

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 Cross Reference to Form 20-F (US)
| |                                                  

| | Independent Auditors Reportto the members of Scottish Power plc
| | ----------------------------------------------------------------
| |                                                                 

| | We have audited the Accounts which comprise the
Accounting Policies and Definitions
, the
Group Profit and Loss Account
, the
Group Balance Sheet
, the
Group Cash Flow Statement
, the
Statement of Total Recognised Gains and Losses
, the
Company Balance Sheet
and the related notes including the disclosures in respect of directors' remuneration contained in
Note 3
(c).
Respective responsibilities of directors and auditorsThe directors' responsibilities for preparing the Annual Report and Accounts/Form 20-F in accordance with applicable United Kingdom law and accounting standards are set out
in the statement of directors' responsibilities.
Our responsibility is to audit the Accounts in accordance with relevant legal and regulatory requirements, United Kingdom Auditing Standards issued by the Auditing Practices Board
and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the Accounts give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in
our opinion, the Report of the Directors is not consistent with the Accounts, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified
by law or the Listing Rules regarding directors' remuneration and transactions is not disclosed.
We read the Chairman's Statement, the Chief Executive's Review, the Business Review, the Financial Review, the Corporate Governance statement, the Remuneration Report of the
Directors and the other information contained in the Annual Report and Accounts/Form 20-F and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Accounts.
We review whether the Corporate Governance statement reflects the company's compliance with the seven provisions of the Combined Code specified for our review by the Listing Rules,
and we report if it does not. We are not required to consider whether the board's statements on internal control cover all risks and controls, or to form an opinion on the effectiveness of the company's or group's corporate governance procedures or
its risk and control procedures.
Basis of audit opinionWe conducted our audit in accordance with Auditing Standards issued by the United Kingdom Auditing Practices Board and with Auditing Standards generally accepted in the
United States. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Accounts. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation
of the Accounts, and of whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give
reasonable assurance that the Accounts are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
Accounts.
United Kingdom opinionIn our opinion the Accounts give a true and fair view of the state of affairs of the company and the group at 31 March 2001 and of the profit and cash flows of the group for
the year then ended and have been properly prepared in accordance with the United Kingdom Companies Act 1985.
United States opinion

In our opinion the Accounts referred to above present fairly, in all material respects, the consolidated financial position of the group at 31 March 2001 and 31 March 2000, and the results of its operations and its cash flows for the years ended 31
March 2001, 31 March 2000 and 31 March 1999 in conformity with accounting principles generally accepted in the United Kingdom. These principles differ in certain respects from accounting principles generally accepted in the United States. The effect
of the differences in the determination of net income, shareholders' equity and cash flows is shown in
Note 35
to the Accounts.
PricewaterhouseCoopers

Chartered Accountants and Registered Auditors

Glasgow3 May 2001
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| | a) The work carried out by the auditors does not involve consideration of the maintenance and integrity of the Scottish Power plc website and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the Annual Report & Accounts/Form 20-F since it was initially presented on the website.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.
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 Cross Reference to Form 20-F (US)
| |                                                  

| | Five Year Summary
| | -----------------
| |                  

|
|

|                                                                                                                                               |         | Years ended 31 March |  
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------------------- | -
|                                                                                                                                               |        
|                                                                                                                                               |         | 2001                 |  
|                                                                                                                                               | Notes   | $m                   |  
|                                                                                                                                              
|UK GAAP Information                                                                                                                            |         |                      |  
|Profit and Loss Account Information:                                                                                                           |         |                      |  
|Turnover                                                                                                                                       | (a)     | 9,016                |  
|Operating profit                                                                                                                               | (a)     | 1,025                |  
|Operating profit (as adjusted)                                                                                                                 | (a),(b) | 1,377                |  
|Profit before taxation                                                                                                                         |         | 540                  |  
|Profit before taxation (as adjusted)                                                                                                           | (b)     | 892                  |  
|Profit after ordinary taxation                                                                                                                 |         | 405                  |  
|Profit for financial year                                                                                                                      | (c)     | 437                  |  
|Dividends                                                                                                                                      |         | (677                 | )
|Balance Sheet Information:                                                                                                                     |         |                      |  
|Total assets                                                                                                                                   |         | 24,106               |  
|Capital expenditure (net)                                                                                                                      | (d)     | 1,556                |  
|Long-term liabilities                                                                                                                          |         | 11,066               |  
|Net debt                                                                                                                                       |         | 7,505                |  
|Equity shareholders funds                                                                                                                     |         | 8,368                |  
|Net assets                                                                                                                                     |         | 8,774                |  
|Basic weighted average share capital (number of shares, million)                                                                               |         | 1,830                |  
|Diluted weighted average share capital (number of shares, million)                                                                             |         | 1,837                |  
|Ratios and statistics:                                                                                                                         |         |                      |  
|Earnings per ordinary share                                                                                                                    |         | $0.2386              |  
|Earnings per ordinary share (as adjusted)                                                                                                      | (f)     | $0.3956              |  
|Diluted earnings per ordinary share                                                                                                            |         | $0.2377              |  
|Earnings per ScottishPower ADS                                                                                                                 | (e)     | $0.95                |  
|Earnings per ScottishPower ADS (as adjusted)                                                                                                   | (e),(f) | $1.58                |  
|Diluted earnings per ADS                                                                                                                       | (e)     | $0.95                |  
|Dividend per ScottishPower ordinary share                                                                                                      |         | $0.3698              |  
|Dividends per ScottishPower ADS                                                                                                                | (e)     | $1.48                |  
|Dividend cover (as adjusted)                                                                                                                   | (f)     | 1.1                  | x
|Interest cover (as adjusted)                                                                                                                   | (f)     | 3.0                  | x
|Gearing                                                                                                                                        | (g)     | 90                   | %
|US GAAP Information                                                                                                                            |         |                      |  
|Turnover                                                                                                                                       |         | 9,016                |  
|Profit for the financial year                                                                                                                  | (c)     | 550                  |  
|Earnings per ordinary share                                                                                                                    | (h)     | $0.3000              |  
|Diluted earnings per ordinary share                                                                                                            |         | $0.2989              |  
|Earnings per ScottishPower ADS                                                                                                                 | (e),(h) | $1.21                |  
|Diluted earnings per ADS                                                                                                                       | (e)     | $1.20                |  
|Total assets                                                                                                                                   |         | 26,477               |  
|Equity shareholders funds under US GAAP                                                                                                       |         | 10,597               |  
|                                                                                                                                              
|Prior year figures have been restated for the change in accounting policy in 2001 relating to deferred tax following implementation of FRS 19.

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| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | The results for the financial year ended 31 March 1997 included turnover of £316.2 million, operating profit of £114.4 million and operating profit, before
exceptional reorganisation costs, of £135.6 million in respect of Southern Water for the period of the year following its acquisition on 6 August 1996. The results for the financial year ended 31 March 2000 included turnover of £711.7
million, operating profit of £114.9 million and operating profit, before goodwill amortisation, of £151.7 million in respect of PacifiCorp for the period of the year following its acquisition on 29 November 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | Operating profit (as adjusted) and profit before taxation (as adjusted) exclude the effect of exceptional items and goodwill amortisation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c) | Profit for the financial year ended 31 March 1998 is stated after charging windfall tax of £317 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | Capital expenditure is stated net of capital grants and customer contributions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (e) | Earnings and dividends per ScottishPower ADS have been calculated based on a ratio of four ScottishPower ordinary shares to one ScottishPower ADS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (f) | The adjusted figures for Earnings per ordinary share, Earnings per ScottishPower ADS, Dividend cover and Interest cover exclude the effects of exceptional items, goodwill
amortisation and windfall tax as applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (g) | Gearing is calculated by dividing net debt by equity shareholders' funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (h) | As permitted under UK GAAP, earnings per share have been presented including and excluding the impact of the exceptional items, goodwill amortisation and windfall tax to provide an
additional measure of underlying performance. In accordance with US GAAP, earnings per share have been presented based on US GAAP earnings, without adjustments for the impact of exceptional items, other than those which are classified as
extraordinary items under US GAAP, goodwill amortisation and windfall tax. Such additional measures of underlying performance are not permitted under US GAAP. The inclusion of exceptional items, other than those which are classified as extraordinary
items under US GAAP, in the determination of earnings per share in accordance with US GAAP increased earnings by £408.9 million or 29.43 pence per share/£1.18 per ADS for the year ended 31 March 2000. The inclusion of goodwill amortisation
decreased earnings by £163.5 million or 8.93 pence per share/£0.36 per ADS for the year ended 31 March 2001, by £74.8 million or 5.38 pence per share/£0.22 per ADS for the year ended 31 March 2000, by £34.9 million or 2.94
pence per share/£0.12 per ADS for the year ended 31 March 1999, by £33.5 million or 2.84 pence per share/£0.11 per ADS for the year ended 31 March 1998 and by £26.2 million or 2.37 pence per share/£0.09 per ADS for the year
ended 31 March 1997. The inclusion of windfall tax decreased earnings by £317.0 million or 26.86 pence per share/£1.07 per ADS for the year ended 31 March 1998.
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| | (i) | Amounts for the financial year ended 31 March 2001 have been translated, solely for the convenience of the reader, at $1.42 to £1.00, the closing exchange rate
on 31 March 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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| | Glossary of Financial Terms and US Equivalents
| | ----------------------------------------------
| |                                               

|                                                        | 
|------------------------------------------------------- | 
|Financial Term used in UK Annual Report                 | 
|                                                       
|Accounts                                                | 
|Associates                                              | 
|Capital allowances                                      | 
|Capital redemption reserve                              | 
|Creditors                                               | 
|Creditors: amounts falling due within one year          | 
|Creditors: amounts falling due after more than one year | 
|Employee share schemes                                  | 
|Employee costs                                          | 
|Finance lease                                           | 
|Financial year                                          | 
|Fixed asset investments                                 | 
|Freehold                                                | 
|Gearing                                                 | 
|Investment in associates and joint ventures             | 
|Loans to associates and joint ventures                  | 
|Net asset value                                         | 
|Operating profit                                        | 
|Other debtors                                           | 
|Own work capitalised                                    | 
|Profit                                                  | 
|Profit and loss account (statement)                     | 
|Profit and loss account (in the balance sheet)          | 
|Profit for financial year                               | 
|Profit on sale of fixed assets                          | 
|Provision for doubtful debts                            | 
|Provisions                                              | 
|Recognised gains and losses (statement)                 | 
|Reserves                                                | 
|Severance costs                                         | 
|Share premium account                                   | 
|Shareholders funds                                     | 
|Stocks                                                  | 
|Tangible fixed assets                                   | 
|Trade debtors                                           | 
|Turnover                                                | 
|                                                        | 

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| | Investor Information
| | --------------------
|

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Nature of Trading MarketThe principal trading market for the ordinary shares of ScottishPower is the London Stock Exchange. In addition, American Depositary Shares ("ADSs") (each of which
represents four ordinary shares) have been issued by The Morgan Guaranty Trust Company of New York, as depositary (the "Depositary"), for the company's ADSs and are traded on the New York Stock Exchange following listing on 8 September
1997.
Table 32 sets out, for the periods indicated, the highest and lowest middle market quotations for the ordinary shares, as derived from the Daily Official List of the London Stock
Exchange and the range of high and low closing sale prices for ADSs, as reported on the New York Exchange Composite Tape.
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|
|

|                                   |                                                                                                                                                                                                                                    |                             |         |       | 
|---------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ----- | 
|Table 32  Historical Share Prices |                                                                                                                                                                                                                                    |                             |         |      
|                                  
|Period                             | Ordinary Shares1                                                                                                                                                                                                                   | American Depositary Shares2
|High (p)                           | Low (p)                                                                                                                                                                                                                            | High ($)                    | Low ($)
|                                  
|1996-97                            | 400.50                                                                                                                                                                                                                             | 300.50                      | 24.52   | 18.63
|                                  
|1997-98                            | 582.00                                                                                                                                                                                                                             | 352.00                      | 38.74   | 23.18
|                                  
|1998-99                            | 675.00                                                                                                                                                                                                                             | 521.00                      | 44.63   | 34.13
|                                  
|1999-00                            |                                                                                                                                                                                                                                    |                             |         |      
|Firstquarter                       | 575.50                                                                                                                                                                                                                             | 508.50                      | 36.55   | 32.68
|Secondquarter                      | 601.50                                                                                                                                                                                                                             | 518.00                      | 39.06   | 33.62
|Thirdquarter                       | 595.00                                                                                                                                                                                                                             | 458.50                      | 39.11   | 29.66
|Fourthquarter                      | 528.50                                                                                                                                                                                                                             | 359.50                      | 33.55   | 22.97
|                                  
|2000-01                            |                                                                                                                                                                                                                                    |                             |         |      
|Firstquarter                       | 576.00                                                                                                                                                                                                                             | 498.00                      | 33.88   | 33.44
|Secondquarter                      | 576.00                                                                                                                                                                                                                             | 495.00                      | 30.69   | 29.88
|Thirdquarter                       | 567.00                                                                                                                                                                                                                             | 483.50                      | 30.75   | 30.06
|Fourthquarter                      | 529.00                                                                                                                                                                                                                             | 422.00                      | 26.65   | 26.15
|                                  
|October 2000                       | 536.00                                                                                                                                                                                                                             | 516.00                      | 31.25   | 29.81
|November 2000                      | 567.00                                                                                                                                                                                                                             | 523.00                      | 32.13   | 29.38
|December 2000                      | 529.00                                                                                                                                                                                                                             | 483.50                      | 30.38   | 28.00
|January 2001                       | 524.00                                                                                                                                                                                                                             | 422.00                      | 31.44   | 25.06
|February 2001                      | 498.00                                                                                                                                                                                                                             | 463.50                      | 28.60   | 26.78
|March 2001                         | 491.00                                                                                                                                                                                                                             | 462.00                      | 28.61   | 26.22
|                                  
|Notes:                            
|1                                  | The past performance of the ordinary shares is not necessarily indicative of future performance.                                                                                                                                  
|2                                  | Calculated using a ratio of four ordinary shares to one ADS, the ratio which took effect on the listing of the ADSs on the New York Stock
 Exchange on 8 September 1997. Until that time, each ADS represented 10 ordinary shares.

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 Cross Reference to Form 20-F (US)
| |                                                  

| | Investor Information
| | --------------------
| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On 31 March 2001, there were 495 registered holders of 317,295 ordinary shares with addresses in the US and
58,644 registered holders of 80,585,522 ADSs (equivalent to 322,342,088 ordinary shares). The combined holdings of these shareholders represented 17.43% of the total number of
ordinary shares outstanding as at 31 March 2001. UK registered shareholders represented 82.34% of the total number of ordinary shareholders, and all shareholders other than those registered in the UK or the US represented 0.23% of the total number
of ordinary shareholders outstanding as at 31 March 2001. As certain of the ordinary shares and ADSs are held by brokers and other nominees, these numbers may not be representative of the actual number of beneficial owners in the US or elsewhere or
the number of ordinary shares or ADSs beneficially held by US persons.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|
|

|Table 33 Analysis of Ordinary Shareholdings at 31 March 2001
|-------------------------------------------------------------
|                                                             
|Range of holdings                                            
|                                                             
|1-100                                                        
|101-200                                                      
|201-600                                                      
|601-1,000                                                    
|1,001-5,000                                                  
|5,001-100,000                                                
|100,001 and above                                            
|                                                             
|Total                                                        
|                                                             
|                                                             

| |                                                  
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| | Investor Information
| | --------------------
| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Share Capital and Options As a result of the exercise of options under the employee Sharesave and Executive Share Option Schemes and the issue of shares to the Trustee of the Employee Share
Ownership Plan, a total of 1,439,855 ordinary shares of 50p each were issued during the year. Accordingly, the number of ordinary shares in issue was 1,849,025,792 as at 31 March 2001. During the year, 2,458,622 options over ordinary shares were
granted to 3,998 employees under the ScottishPower Sharesave Scheme. No options were granted under the Executive Share Option Scheme, which was replaced in 1996 by the introduction of the Long Term Incentive Plan. Awards in respect of 807,694 shares
were made under the Plan during the year and these awards are subject to the achievement of specified performance criteria. Details are contained in the
Remuneration Report
 . During the year ended 31 March 2001, options were granted to two employees under the PacifiCorp Stock Incentive Plan over a total of 456,600 ordinary shares.



| | Between 31 March 2001 and 3 May 2001, a further 280,102 ordinary shares have been issued as a result of the allotments in respect of the Employee Share Ownership Plan and of the
exercise of options under the aforementioned share option schemes. At the Annual General Meeting of the company last year, shareholders granted authority to the directors to purchase up to 184,761,911 ordinary shares. The directors have not
exercised this authority.
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|
|

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| | -------------------------------------------------
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| |                                                  

| | Investor Information
| | --------------------
| |                     

Substantial ShareholdingsAs at 3 May 2001, the company had been notified that the following companies were substantial shareholders:

|Putnam Investment Management | 4.41% | 
|---------------------------- | ----- | 
|CGNU                         | 3.71% | 
|Prudential plc               | 3.14% | 

| | Control of Company
As far as is known to the company, it is not directly or indirectly owned or controlled by another corporation or by any foreign government.

As at 3 May 2001, no person known to the company owned more than 5% of any class of the group's voting securities.

As at 3 May 2001, the total amount of voting securities owned by directors and executive officers of ScottishPower as a group is shown in Table 34.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         

|
|

|Table 34  Voting Securities                          |               |                     
|----------------------------------------------------- | ------------- | --------------------
|                                                     
|Title of Class

Identity of Group                     | Amount

Owned | Percentage

of Class
|                                                     
|Ordinary shares

Directors and officers

(22 persons) | 633,626       | 0.03%               
|                                                     

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Full details of the directors' interests in ScottishPower shares are shown in Tables 30 and 31 in the
Remuneration Report
 . None of the officers had a beneficial interest in 1% or more of the issued share capital.

In addition, as at 3 May 2001, the directors and officers of the company, as a group, held options to purchase 1,466,563 ordinary shares, all of which were issued pursuant to the
Long Term Incentive Plan, Executive Share Option Scheme, ScottishPower's Sharesave Schemes or the PacifiCorp Stock Incentive Plan.

The company does not know of any arrangements the operation of which might result in a change in control of the group.
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                                  
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| |                                                  

| | Investor Information
| | --------------------
| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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| | Exchange RatesThe group publishes its consolidated Accounts in pounds sterling. In this document, references to "pounds sterling", "pounds", "pence" or "p" are to UK currency and
references to "US dollars", "US$" or "$" are to US currency. Solely for the convenience of the reader, this report contains translations of certain pounds sterling amounts into US dollars at specified rates, or, if not so specified, at the Noon
Buying Rate in New York City for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York ("Noon Buying Rate") on 31 March 2001 of £1.00 = $1.42. On 3 May 2001, the Noon Buying Rate was $1.43
to £1.00. No representation is made that the pound sterling amounts have been, could have been or could be converted into US dollars at the rates indicated or at any other rates.

Table 35 sets out, for the periods indicated, certain information concerning the Noon Buying Rate for US dollars per £1.00.
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|
|

|                                     |                                                                                                |       |          |          | 
|------------------------------------ | ---------------------------------------------------------------------------------------------- | ----- | -------- | -------- | 
|Table 35  Historical Exchange Rates
|                                    
|Period                               | High                                                                                           | Low   | Average1 | Year end
|                                    
|1996-97                              | $1.71                                                                                          | $1.49 | $1.60    | $1.64   
|1997-98                              | $1.69                                                                                          | $1.61 | $1.65    | $1.68   
|1998-99                              | $1.72                                                                                          | $1.60 | $1.65    | $1.61   
|1999-00                              | $1.68                                                                                          | $1.55 | $1.61    | $1.59   
|2000-01                              | $1.61                                                                                          | $1.40 | $1.52    | $1.42   
|                                     |                                                                                                |       |          |         
|October 2000                         | $1.47                                                                                          | $1.43 | $1.45    |         
|November 2000                        | $1.45                                                                                          | $1.40 | $1.43    |         
|December 2000                        | $1.50                                                                                          | $1.44 | $1.46    |         
|January 2001                         | $1.50                                                                                          | $1.46 | $1.48    |         
|February 2001                        | $1.48                                                                                          | $1.44 | $1.45    |         
|March 2001                           | $1.47                                                                                          | $1.42 | $1.44    |         
|                                    
|Note:                               
|                                     | The average of the Noon Buying Rates on the last day of each month during the relevant period.

| |                                                  
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| | Investor Information
| | --------------------
| |                     

| | DividendsAlthough dividends were historically declared and paid and financial reports published semi-annually, following completion of the merger with PacifiCorp, the company moved
to quarterly reporting and the quarterly payment of dividends.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | A dividend of 6.51 pence per share on the ordinary shares will be paid on 15 June 2001 to shareholders on the register on 18 May 2001. This dividend will also be paid to ADS holders
on 15 June 2001. This makes total dividends for the year of 26.04 pence per share.

Future dividends will be dependent upon the group's earnings, financial condition and other factors. Dividends paid in the past are not necessarily indicative of future dividends.

The company's stated dividend aim is to achieve 5% nominal growth for each year through to March 2003.

Table 36 sets out the dividends paid on ordinary shares and ADSs in respect of the past five financial years, excluding any associated UK tax credit in respect of such
dividends.

A person resident in the UK for tax purposes who receives a dividend from the company is generally entitled to a tax credit, currently at a rate of 1/9th of the dividend ("associated UK tax credit"). For further information, see "Taxation of Dividends".
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                                  
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| |                      
| | ---------------------
| | Investors Information
| |                      

|
|

|                                        |       |                 |         |         |         |        
|--------------------------------------- | ----- | --------------- | ------- | ------- | ------- | -------
|Table 36  Historical Dividend Payments
|                                       
|                                        |       | Financial Years
|                                        | Notes | 200001         | 199900 | 199899 | 199798 | 199697
|                                       
|Pence per ordinary share                | 1     |                 |         |         |         |        
|Interim                                 |       |                | 8.27p   | 7.50p   | 6.80p   | 6.17p  
|Precompletion                          |       |                | 8.10p   |        |        |       
|Quarter (29 Nov 1999  31 Dec 1999)     |       |                | 2.23p   |        |        |       
|Quarter (1 Jan 2000  31 Mar 2000)      |       |                | 6.20p   |        |        |       
|Quarter (1 April  30 June)             |       | 6.51p           |        |        |        |       
|Quarter (1 July  30 Sept)              |       | 6.51p           |        |        |        |       
|Quarter (1 Oct  31 Dec)                |       | 6.51p           |        |        |        |       
|Quarter (1 Jan  31 Mar )               |       | 6.51p           |        |        |        |       
|Final                                   |       |                |        | 15.00p  | 13.60p  | 12.33p 
|                                       
|Total                                   |       | 26.04p          | 24.80p  | 22.50p  | 20.40p  | 18.50p 
|                                       
|US dollars per ADS                      | 1,2   |                 |         |         |         |        
|Interim                                 |       |                | $0.5324 | $0.48   | $0.46   | $0.40  
|Precompletion                          |       |                | $0.5215 |        |        |       
|Quarter (29 Nov 1999  31 Dec 1999)     |       |                | $0.1413 |        |        |       
|Quarter (1 Jan 2000  31 Mar 2000)      |       |                | $0.3856 |        |        |       
|Quarter (1 April  30 June)             |       | $0.3928         |        |        |        |       
|Quarter (1 July  30 Sept)              |       | $0.3702         |        |        |        |       
|Quarter (1 Oct  31 Dec)                |       | $0.3805         |        |        |        |       
|Quarter (1 Jan31 Mar)                  |       | $0.3721         |        |        |        |       
|Final                                   |       |                |        | $0.97   | $0.91   | $0.81  
|                                       
|Total                                   |       | $1.5156         | $1.5808 | $1.45   | $1.37   | $1.21  
|                                       

|Notes:
|------
|1     
|2     
|      

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| | Investor Information
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| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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| | Memorandum and Articles of AssociationA summary of certain provisions of the company's Memorandum and Articles of Association will be filed with the company's report to the US Securities and Exchange Commission
on Form 20-F.

Exchange Controls and Other Limitations Affecting Security HoldersThere are currently no UK laws, decrees or regulations that restrict the export or import of capital, including, but not limited to, foreign exchange capital restrictions,
or that affect the remittance of dividends or other payments to nonUK resident holders of the company's securities except as otherwise set forth in "Taxation".

There are no limitations imposed by UK law or by the company's Memorandum and Articles of Association that
restrict the right of non-UK resident or nonUK citizen owners to hold or to vote the ordinary shares.

Taxation
The following discussion of UK and US federal income tax consequences is set forth with respect to US tax considerations in reliance upon the advice of Milbank, Tweed, Hadley &
McCloy LLP, special US counsel to the company, and with respect to UK tax considerations in reliance upon the advice of Freshfields Bruckhaus Deringer, the company's UK lawyers. The discussion is intended only as a summary of the principal US
federal income tax and UK tax consequences to investors who hold the ADSs or ordinary shares as capital assets and does not purport to be a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposition of
ADSs or ordinary shares. The summary does not discuss special tax rules that may be applicable to certain classes of investors, including banks, insurance companies, tax exempt
entities, dealers, traders who elect to mark to market, investors with a functional currency other than the US dollar, persons who hold ADSs as part of a hedge, straddle or conversion transaction, or holders of 10% or more of the voting stock of the
company. The statements of UK and US tax laws and practices set out below are based on the laws in force and as interpreted by the relevant taxation authorities as of the date of this report. The statements are subject to any changes occurring after
that date in UK or US law or practice, in the interpretation thereof by the relevant taxation authorities, or in any double taxation convention between the US and the UK. The US and the UK have entered into negotiations to update the current
convention between the two countries for the avoidance of double taxation with respect to taxes on income and capital gains ("Income Tax Convention"). The company believes, and the discussion therefore assumes, that it is not a passive foreign
investment company for US federal income tax purposes.



| | Each investor is urged to consult their own tax adviser regarding the tax consequences of the purchase, ownership and disposition of ordinary shares or ADSs under the laws of the
US, the UK and their constituent jurisdictions and any other jurisdiction where the investor may be subject to tax.

If the obligations contemplated by the Deposit Agreement are performed in accordance with its terms, a beneficial owner of ADSs will be treated as the owner of the underlying
ordinary shares for the purposes of the Income Tax Convention of the US Internal Revenue Code of 1986, as amended ("Code").

For the purposes of this summary, the term "US Holder" means a beneficial owner of the ADSs that is a US citizen or resident, a domestic corporation or partnership, a trust subject
to the control of a US person and the primary supervision of a US court, or an estate, the income of which is subject to US federal income tax regardless of its source.For the purposes of this summary, the term "Eligible US Holder" means a US holder that is a resident of the US for the purposes of the Income Tax Convention and that satisfies the
following conditions:is not also resident in the UK for UK tax purposes;
is not a corporation which, alone or together with one or more associated corporations, controls, directly or indirectly, 10% or more of the voting stock of the
company;
whose holding of the ADSs is not effectively connected with a permanent establishment in the UK through which such holder carries on a business or with a fixed base in the UK from
which such holder performs independent personal services; and
under certain circumstances, is not a company 25% or more of the capital of which is owned, directly or indirectly, by persons that are neither individual residents of, nor
nationals of the US.
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| | Investor Information
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| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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| | Taxation of DividendsThe company is not required to withhold any UK taxes from its dividend payments to US Holders. Therefore the amount of a dividend paid to a US Holder will not be reduced by
any UK withholding tax. Under UK tax law and the Income Tax Convention, an Eligible US Holder is in theory entitled to an additional payment from the UK ("UK tax credit") equal to 1/9th of the amount of any dividend paid by the company to the
holder. While, as noted above, the dividend paid by the company is not subject to any UK withholding tax, under current UK law, the UK tax credit that otherwise would be payable by the UK is completely offset by a UK withholding tax equal to 100% of
that UK tax credit. Accordingly, US Holders will receive the full amount of any dividend declared by the company (without deduction for UK tax) but will not be entitled to an additional cash payment from the UK in respect of the UK tax credit. An
Eligible US Holder who elects to claim a credit (as described below) against the holder's US federal income tax liability with respect to the UK withholding tax imposed on the
UK tax credit amount, is required to include, in addition to the gross amount of the dividend paid by the company, the amount of UK tax credit in taxable income for US federal income tax purposes, even though none of the amount of the UK tax credit
is paid by the UK. An Eligible US Holder who includes the amount of the UK tax credit in taxable income, generally will be entitled to credit against the holder's US tax liability, the amount of the UK tax credit that the holder is deemed to have
received, as discussed below, which US tax credit may result in a reduction in the holder's effective US tax rate on the cash dividend received. Following is a simplified numerical example of the US tax treatment of dividends paid to an Eligible US
Holder who is subject to tax at a rate of 35% and is eligible for and claims a US tax credit for the complete amount of the UK tax credit:
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|
|

|                                     | $      |  
|------------------------------------ | ------ | -
|                                     |        |  
|Dividend received                    | 90.00  |  
|UK tax credit                        | 10.00  |  
|                                     |        |  
|US taxable income                    | 100.00 |  
|                                     |        |  
|US tax @ 35%                         | 35.00  |  
|US tax credit for UK withholding tax | (10.00 | )
|                                     |        |  
|US tax liability                     | 25.00  |  
|                                     |        |  
|Cash dividend received               | 90.00  |  
|US tax liability                     | (25.00 | )
|                                     |        |  
|After-tax cash amount                | 65.00  |  
|                                    
|Approximate effective US tax rate    |        |  
|on cash received                     | 27.8   | %
|                                    

| | Note that the US federal income tax consequences of dividends paid to an Eligible US Holder will depend upon the holder's particular circumstances and, consequently, the US federal
income tax consequences applicable to a particular holder may differ from those set out in the above example. Eligible US Holders are urged to consult their own tax advisers regarding the tax consequences to them of the payment of a dividend by the
company.

The procedures for claiming a US tax credit, with respect to dividends received from a UK corporation, are outlined in US Internal Revenue Service Revenue Procedure 2000  13, 2000  6 I.R.B. 1.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | An Eligible US Holder recognises income when the dividend is actually or constructively received by the holder, in the case of ordinary shares, or by the Depositary, in the case of
ADSs. The dividend will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of dividends received from other US corporations. Distributions in excess of current and accumulated earnings and profits,
as determined for US federal income tax purposes, will be treated as a return of capital to the extent of the Eligible US Holder's basis in the ordinary shares or ADSs and thereafter as a capital gain. In determining the amount of dividend income,
an Eligible US Holder will use the spot currency exchange rate on the date the dividend is included in income. Any difference between that amount and the dollars actually received may constitute a foreign currency gain or loss. Individual Eligible
US Holders, however, are not required to recognise a gain of less than $200 from the exchange of foreign currency in a "personal transaction" as defined in Section 988(e) of the Code.

Subject to certain limitations and requirements, an Eligible US Holder will be entitled under the Income Tax Convention to credit the UK withholding tax imposed on the amount of
the UK tax credit against the Eligible US Holder's US federal income tax liability, provided the holder includes the gross amount of the UK tax credit in the holder's gross income as described above. Claiming a US foreign tax credit with respect to
the UK withholding tax imposed under the Income Tax Convention upon the UK tax credit, may result in a lower effective US federal income tax rate on dividends paid by the company for certain Eligible US Holders as demonstrated in the above numbered
example. An Eligible US Holder is not required to affirmatively make a claim to the UK Inland Revenue to be entitled to the US foreign tax credit, although an Eligible US Holder electing to claim the credit must complete an Internal Revenue Service
Form 8833 (Treaty Based Return Position Disclosure) and file such Form with the holder's federal income tax return. Eligible US Holders that include the amount of the UK tax
credit in gross income, but do not elect to claim foreign tax credits may instead claim a deduction for UK withholding tax. For foreign tax credit limitation purposes, the dividend will be income from sources outside the US. The rules relating to
the computation of foreign taxes are complex and Eligible US Holders should consult their own tax advisers to determine whether, and to what extent, a credit would be available and whether any filings or other actions may be required to substantiate
an Eligible US Holder's foreign tax credit claim.
If the US Holder is a US partnership, trust or estate, the UK tax credit will be available only to the extent that the income derived by such partnership, trust or estate is
subject to US federal income tax as the income of a resident either in its hands or in the hands of its partners or beneficiaries, as the case may be. Whether holders of ADSs who reside in countries other than the US are entitled to a tax credit in
respect of dividends on ADSs depends in general upon the provisions of conventions or agreements, if any, as may exist between such countries and the UK.
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| | Investor Information
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| |                     

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| | Taxation of Capital GainsIn general, for US tax purposes, US Holders of ADSs will be treated as the owners of the underlying
ordinary shares that are represented by such ADSs and deposits and withdrawals of ordinary shares by US Holders in exchange for ADSs will not be treated as a sale or other disposition for US federal income tax purposes. Upon a sale or other
disposition of ordinary shares or ADSs, US Holders will recognise a gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollar value of the amount realised and the US Holder's tax basis (determined in
US dollars) in such ordinary shares or ADSs. Generally, such gain or loss will be a long-term capital gain or loss if the Eligible US Holder's holding period for such ordinary shares or ADSs exceeds one year. Any such gain and loss generally will be
income from sources within the US for foreign tax credit limitation purposes. Long-term capital gain for an individual US Holder is generally subject to a maximum tax rate of 20%.

A US Holder who is not resident or ordinarily resident for UK tax purposes in the UK will not generally be liable for UK tax on capital gains recognised on the sale or other
disposition of ADSs or ordinary shares, unless the ADS holder carries on a trade, profession or vocation in the UK through a branch or agency and the ADSs are, or have been, used, held or acquired for the purposes of such trade, profession or
vocation or such branch or agency.

US citizens resident or ordinarily resident in the UK, US corporations resident in the UK by reason of their business being managed or controlled in the UK and US citizens who or
US corporations which, are trading or carrying on a trade, profession or vocation in the UK through a branch or agency and who or which have used, held or acquired ADSs or ordinary shares for the purposes of such trade, profession or vocation or
such branch or agency may be liable for both UK and US tax in respect of a gain on the disposal of the ADSs. Such holders may not be entitled to a tax credit against their US federal income tax liability for the amount of UK capital gains tax or UK
corporation tax on chargeable gains, as the case may be, paid in respect of such gain unless the holder appropriately can apply the credit against tax due on income from foreign sources.

US Information Reporting and Backup Withholding.In general, information reporting requirements will apply to dividend payments (or other taxable distributions) in respect of ordinary shares or ADSs made within the US to a
non-corporate US person. Accordingly, individual US Holders will receive an annual statement showing the amount of taxable dividends paid to them during the year. "Backup withholding" at the rate of 31% will apply to such payments (i) if the holder
or beneficial owner fails to provide an accurate taxpayer identification number in the manner required by US law and applicable regulations, (ii) if there has been notification from the Internal Revenue Service of a failure by the holder or
beneficial owner to report all interest or dividends required to be shown on its federal income tax returns or, (iii) in certain circumstances, if the holder or beneficial owner fails to comply with applicable certification requirements.



| | In general, payment of the proceeds from the sale of ordinary shares or ADSs to or through a US office of a
broker is subject to both US backup withholding and information reporting requirements, unless the holder or beneficial owner establishes an exemption. Different rules apply to payments made outside the US through an office outside the US.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Investor Information
| | --------------------
| |                     

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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| | UK Inheritance TaxAn individual who is domiciled in the US for the purposes of the convention between the US and the UK for the avoidance of double taxation with respect to estate and gift
taxes ("Estate Tax Convention") and who is not a national of the UK for the purposes of the Estate Tax Convention will not generally be subject to UK inheritance tax in respect of the ADSs or ordinary shares on the individual's death or on a gift of
the ADSs or ordinary shares during the individual's lifetime, unless the ADSs or ordinary shares are part of the business property of a permanent establishment of the individual in the UK or pertain to a fixed base in the UK of an individual who
performs independent personal services. Special rules apply to ADSs held in trust. In the exceptional case where the shares are subject both to UK inheritance tax and to US federal gift or estate tax, the Estate Tax Convention generally provides for
the tax paid in the UK to be credited against tax paid in the US.

UK Stamp Duty and Stamp Duty Reserve Tax No UK stamp duty will be payable on the acquisition or transfer of ADSs provided that the instrument of transfer is executed outside the UK and subsequently remains at all
times outside the UK. An agreement to transfer ADSs will not give rise to a liability to stamp duty reserve tax.

Subject to certain exceptions, a transfer on sale of ordinary shares, as opposed to ADSs will generally be subject to UK stamp duty at a rate of 0.5% (rounded up, if necessary, to
the nearest £5) of the consideration given for the transfer. An agreement to transfer such shares will normally give rise to a charge to UK stamp duty reserve tax at a rate of 0.5% of the consideration payable for the transfer, provided that
stamp duty reserve tax will not be payable if stamp duty has been paid. Where such ordinary shares are later transferred to the Depositary's nominee, further stamp duty or stamp duty reserve tax will normally be payable at the rate of 1.5% (rounded
up, if necessary to the nearest £5) of the value of the ordinary shares at the time of the transfer.

A transfer of ordinary shares by the Depositary or its nomine to the relative ADS holder when the ADS holder is not transferring beneficial ownership gives rise to a UK stamp duty
liability of £5 per transfer.

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|Financial Calendar
|------------------
|                  

| |               
| | --------------
| |               
| | 15 June 2001  
| |               
| | 27 July 2001  
| |               
| | August 2001   
| |               
| | August 2001   
| |               
| | September 2001
| |               
| | November 2001 
| |               
| | November 2001 
| |               
| | December 2001 
| |               
| | February 2002 
| |               
| | February 2002 
| |               
| | March 2002    
| |               
| | May2002       
| |               
| | May2002       
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| | June2002      
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| | Annual General MeetingThe Annual General Meeting will be held at The Glasgow Royal Concert Hall, Sauchiehall Street, Glasgow, on Friday 27 July 2001 at 11.00 am. Details of the resolutions to be
proposed at the Annual General Meeting are contained in the Notice of Meeting.
Quarterly ResultsCopies of the Quarterly Results may be obtained, free of charge, on request from the Company Secretary at the company's registered office. Quarterly Results will also be
published on the company's website:www.scottishpower.com
Half-Year ResultsThe company, as permitted by the London Stock Exchange, publishes its Half-Year Results in one UK national newspaper. In 2001, it is expected that the Half-Year Results will be
published in The Times and on the company's website. Copies of the Half-Year Results may be obtained, free of charge, on request from the Company Secretary at the company's registered office. |  | Environment and Community ReportsCopies of the Corporate Environment and Community Reports may be obtained, free of charge, on request from the Company Secretary at the company's registered office. The
Corporate Environment and Community Reports are also published on the company's website.
Press releases and up-to-date information on the company can be found on the company's website.
The Annual Review 2000-01 is also available on audio tape, free of charge, from the Company's Secretary at the company's registered office.
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|Shareholder Services
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| | Tel: |  | 1 (866) SCOTADR (Toll Free)1 (866) 726 8237 (Toll Free) 1 (781) 575 2678 (Outside US not Toll Free)
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| | Fax: |  | 1 (781) 575 4082                                                                                   

| | Dividend Reinvestment PlanGlobal Invest DirectGlobal Invest Direct is the Direct Share Purchase and Dividend Reinvestment plan for ADS holders which allows existing and first time investors to purchase ADSs without a
broker. Global Invest Direct encourages investors to make initial and ongoing investments in the company by providing investors with the convenience of investing directly in ScottishPower's ADSs, with reduced brokerage commissions and service costs.
For further details, please contact Morgan Guaranty Trust Company of New York as detailed above.

Agent for US Federal Securities Laws

The agent for ScottishPower for US federal securities law purposes is:
Puglisi & Associates,
850 Library Avenue, Suite 204
PO Box 885
Newark
Delaware 19715
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| | Glossary of Terms
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| | Term  Definition
ADS  American Depositary Share (US)
Authority  The Gas and Electricity Markets Authority, the body which determines energy market regulation in Great Britain (UK)
BETTA  British Electricity Trading and Transmission Arrangements (UK)
BPA  Bonneville Power Administration (US)
Billion  One thousand million (1,000,000,000)
CCGT  Combined-cycle gas turbine
CO2  Carbon Dioxide
Company  Scottish Power plc
DGES  Director General of Electricity Supply (UK)
DGGS  Director General of Gas Supply (UK)
DGWS  Director General of Water Services (UK)
Distribution  The transfer of electricity from the transmission system to customers (US equivalent is Power Distribution)
DTI  Department of Trade and Industry (UK)
EA  Environment Agency (UK)
EU  European Union
EPA  Environmental Protection Agency (US)
EMFs  Electric and Magnetic Fields
Energy supply  Sales of electricity and gas to residential, commercial and industrial customers (UK)
ESI  The electricity supply industry in Great Britain (UK)
ESOP  Employee Share Ownership Plan (UK)
FERC  Federal Energy Regulatory Commission (US)
FGD  Flue Gas Desulphurisation
First-tier  Public electricity supply within a company's home area (UK)
Gas  Natural gas
Giga (G)  One thousand million (1,000,000,000) units
Great Britain  England, Scotland and Wales
Group  Scottish Power plc and its consolidated subsidiaries
Guaranteed Standards  Standards of performance agreed between the Company and Ofgem for transmission, distribution and supply (UK)
Home area  The geographical area in which a PES was previously the sole licensed supplier of residential customers (UK)
Interconnector  The high voltage link connecting the transmission system of Scotland with that of England & Wales (UK)
ISA  Individual Savings Account (UK)
ISP  Internet Service Provider
Kilo (k)  One thousand (1,000) units
LTIP  LongTerm Incentive Plan
Mega (M)  One million (1,000,000) units
NEA  Nuclear Energy Agreement, between British Energy, ScottishPower and Scottish & Southern (UK)
NETA  New Electricity Trading Arrangements (UK)
NOx  Oxides of Nitrogen
Ofgem  Office of Gas and Electricity Markets, the gas and electricity regulator in Great Britain (UK)
OFWAT  Office of Water Services, the water regulator in England & Wales (UK)
PED  Public Electricity Distributor (UK)
PES  Public Electricity Supplier (UK)
plc  Public limited company (UK)
Power production  The US term for the generation of electricity
PSCs  Public Services Commissions, the individual bodies which regulate utilities in each of the states (US)
Rates  The US term for Tariffs
Retail sales  Sales of electricity to residential, commercial and industrial customers (US)
RPI  Retail Price Index, the equivalent of the US Consumer Price Index  CPI (UK)
SEC  Securities and Exchange Commission (US)
Second-tier  Public electricity supply outside a company's home area (UK)
SEPA  Scottish Environment Protection Agency (UK)
Sewage  Wastewater contained in or being discharged from sewerage (UK)
Sewerage  Wastewater infrastructure assets (UK)
SO2  Sulphur Dioxide
Transmission  The transfer of electricity from power stations to the distribution system
UK  United Kingdom, comprising England, Scotland, Wales and Northern Ireland
US  United States of America
UWWTD  Urban Waste Water Treatment Directive (UK)
Volt (V) Unit of electrical potential
WaSC  Water and Sewerage Company (UK)
Watt (W)  Unit of electrical power, the rate at which electricity is produced or used
Watt hour (Wh)  Unit of electrical energy, the production or consumption of one Watt for one hour
Wholesale  The dealing of bulk power with another power supplier
WSCC  Western System Coordinating Council (US)
WTW  Wastewater Treatment Works (UK)
(US) or (UK) in the definitions above indicates that the term is applicable to the United States or the United Kingdom, respectively.
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|Conversion Factors | Metres |   | Yards     
|                   | 0.91   | 1 | 1.09      
|                   | Km     |   | Miles     
|                   | 1.61   | 1 | 0.62      
|                   | Litres |   | US Gallons
|                   | 3.78   | 1 | 0.26      
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