<PAGE>

                                                                     EXHIBIT 4.8

                                  SP MANWEB PLC
                         CONFORMED DISTRIBUTION LICENCE

     1.   This conformed electricity Distribution licence has been produced by
          Shepherd & Wedderburn from materials supplied by ScottishPower. It is
          intended for use by ScottishPower personnel as a convenient reference
          tool, but is not a substitute for the definitive texts from which it
          has been produced.

     2.   The conformed licence is intended to consolidate (a) the provisions of
          annexe 4 to the licensing scheme made by the Secretary of State on 28
          September 2001 in relation to Scottish Power UK plc and Manweb plc
          (the "scheme") (b) the standard conditions for distribution licences
          determined by the Secretary of State on 27 September 2001 as brought
          into effect in relation to Manweb plc by the scheme (c) all directions
          and consents of a continuing nature issued under the licence and (d)
          all modifications to the licence made since 1 October 2001.

     3.   Those standard conditions which, in accordance with Part II of the
          licence, are not in effect have been included in this document for
          completeness, but are shown in italics.

     4.   The underline and strike through contained in this document reflect
          the changes made by the modification to the electricity distribution
          licence issued to licence holders having a distribution services area
          situated in England and Wales.

                            Shepherd & Wedderburn WS
                                  Saltire Court
                                20 Castle Terrace
                                Edinburgh EH1 2ET

                                     [LOGO]

                               Tel: 0131-228 9900
                               Fax: 0131-228 1222

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                   PRELIMINARY
                                   -----------
<S>                                                                                                        <C>
PART I.   TERMS OF THE LICENCE                                                                              5
PART II.  THE STANDARD CONDITIONS                                                                           7
PART III. AMENDMENTS TO STANDARD LICENCE CONDITIONS                                                         9

                        CONSOLIDATED STANDARD CONDITIONS
                        --------------------------------

SECTION A. INTERPRETATION, APPLICATION AND PAYMENTS                                                        10

1.     Definitions and Interpretation                                                                      10
2.     Application of Section C (Distribution Services Obligations)                                        32
3.     Payments by Licensee to the Authority                                                               35

SECTION B. GENERAL                                                                                         38

4.     Basis of Charges for Use of System and Connection to System:
       Requirements for Transparency                                                                       38
4A.    Non-Discrimination in the Provision of Use of System and
       Connection to System                                                                                43
4B.    Requirement to Offer Terms for Use of System and Connection                                         44
4C.    Functions of the Authority                                                                          49
5.     Distribution System Planning Standard and Quality of Service                                        51
6.     Safety and Security of Supplies Enquiry Service                                                     52
7.     Provision of Information about Theft or Abstraction of Electricity,
       Damage and Meter Interference                                                                       54
8.     Provisions Relating to the Connection of Metering Equipment                                         55
9.     Distribution Code                                                                                   57
9A.    Compliance with other Distribution Codes                                                            60
10.    Balancing and Settlement Code and NETA Implementation                                               61
11.    Change Co-ordination for NETA                                                                       64
12.    Settlement Agreement for Scotland                                                                   65
</TABLE>

                                        1

<PAGE>

<TABLE>
<S>                                                                                                          <C>
12A.     Compliance with the Trading Code in Scotland                                                        66
13.      Change Co-ordination for the Utilities Act 2000                                                     67
14.      The Master Registration Agreement                                                                   69
15.      Compliance with the Grid Codes                                                                      70
16.      Security Arrangements                                                                               71
17.      Provision of Services for Persons who are of Pensionable Age or
         Disabled or Chronically Sick                                                                        72
18.      Provision of Services for Persons who are Blind or Deaf                                             73
19.      Code of Practice on Procedures with Respect to Site Access                                          74
20.      Payments in Relation to Standards of Performance                                                    75
21.      Complaint Handling Procedure                                                                        76
22.      Preparation, Review of and Compliance with Customer Service Codes                                   77
23.      Record of and Report on Performance                                                                 79
24.      Provision of Information to the Authority                                                           80
25.      Long Term Development Statement                                                                     82
26.      Compliance with CUSC                                                                                85
27.      Not used                                                                                            87
28.      Not used                                                                                            87
29.      Disposal of Relevant Assets                                                                         88
30.      Not used                                                                                            91
31.      Not used                                                                                            91

SECTION C.  DISTRIBUTION SERVICES OBLIGATIONS                                                                92

32.      Interpretation of Section C (Distribution Services Obligations)                                     92
32A.     Convenience Customers                                                                               94
33.      Not used                                                                                            95
34.      Compulsory Acquisition of Land etc.                                                                 96
35.      Other Powers etc.                                                                                   97
36.      Basis of Charges for Distributor Metering and Data Services:
         Requirements for Transparency                                                                       98
36A.     Non-Discrimination in the Provision of Distributor Metering
         and Data Services                                                                                  100
</TABLE>

                                        2

<PAGE>

<TABLE>
<S>                                                                                                         <C>
36B.     Requirement to offer Terms for the Provision of Distributor Metering
         and Data Services                                                                                  101
36C.     Functions of the Authority                                                                         104
37.      The Metering Point Administration Service and the Master
         Registration Agreement                                                                             106
38.      Establishment of a Data Transfer Service                                                           109
39.      Restriction on Use of Certain Information and Independence of
         the Distribution Business                                                                          112
40.      Appointment of Compliance Officer                                                                  118
41.      Prohibition of Cross-Subsidies                                                                     121
42.      Regulatory Accounts                                                                                122
42A.     Change of Financial Year                                                                           127
43.      Restriction on Activity and Financial Ring Fencing                                                 129
44.      Availability of Resources                                                                          132
45.      Undertaking from Ultimate Controller                                                               135
46.      Credit Rating of Licensee                                                                          137
47.      Indebtedness                                                                                       138
48.      Last Resort Supply: Payment Claims                                                                 141
49.      Incentive Scheme and Associated Information                                                        145


                        SPECIAL CONDITIONS AND SCHEDULES
                        --------------------------------

PART IV. SPECIAL CONDITIONS                                                                                 152

A:  Definitions                                                                                             152
B: Restriction of distribution charges                                                                      158
Annex A to Special Condition B (Restriction of distribution charges)                                        165
Annex B to Special Condition B (Restriction of distribution charges)                                        177
Annex C to Special Condition B (Restriction of Distribution Charges)                                        178
C: Restriction of distribution charges: adjustments                                                         179
D: Information to be provided to the Authority in connection with the charge
       restriction conditions                                                                               180
E: Allowances in respect of Security costs                                                                  185

</TABLE>

                                        3

<PAGE>

<TABLE>
<S>                                                                                                         <C>
F: Duration of charge restriction conditions                                                                189
Schedule A: supplementary provisions of the charge restriction conditions                                   191
SCHEDULE 1 - SPECIFIED AREA                                                                                 203
SCHEDULE 2 - REVOCATION                                                                                     204
SCHEDULE 3 - DISTRIBUTION SERVICES AREA                                                                     207

                             CONSENTS AND DIRECTIONS
                             -----------------------

(01.04.92)        Direction issued under Condition 27 of the Public Electricity
                  Supply Licence of Manweb plc now Standard Condition 29
                  of this licence                                                                           209
(19.04.00)        Direction issued under Condition 12 of the Public Electricity
                  Supply Licence of Manweb plc now Standard Condition 39
                  of this licence                                                                           214
(19.04.00)        Direction issued under Condition 12 of the Public Electricity
                  Supply Licence of Manweb plc now Standard Condition 39
                  of this licence                                                                           217
(28.07.00)        Direction issued under Condition 12 of the Public Electricity
                  Supply Licence of Manweb plc now Standard Condition 39
                  of this licence                                                                           220
(01.10.01)        Consent issued under Standard Condition 47 of this licence                                224
(01.10.01)        General Consent issued under Standard Condition 29
                  of this licence                                                                           226
</TABLE>

                                        4

<PAGE>

                                   PRELIMINARY

                          PART I. TERMS OF THE LICENCE

1.   This licence, treated as granted under section 6(l)(c) of the Electricity
     Act 1989 ("the Act") authorises Manweb plc (a company registered in England
     & Wales under number 02366937 ("the licensee") whose registered office is
     situated at Manweb House, Chester Business Park, Wrexham Road, Chester, CH4
     9RF to distribute electricity for the purpose of giving a supply to any
     premises or enabling a supply to be so given in the area specified in
     Schedule 1 during the period specified in paragraph 3 below, subject to:-

     (a)  the standard conditions of electricity distribution of licences
          referred to in Part II below which shall have effect in the licence
          subject to such amendments (if any) as are set out in Part III below
          (together "the conditions");
     (b)  the special conditions, if any, set out in Part IV below ("the Special
          Conditions"); and
     (c)  such Schedules hereto, if any, as may be referenced in the conditions,
          the Special Conditions or the terms of the licence.

2.   This licence is subject to transfer, modification or amendment in
     accordance with the provisions of the Act, the Special Conditions or the
     conditions.

3.   This licence, unless revoked in accordance with Schedule 2, shall continue
     until determined by not less than 25 years' notice in writing given by the
     Authority to the licensee.

4.   The provisions of section 109(1) of the Act (Service of documents) shall
     have effect as if set out herein and as if for the words "this Act" there
     were substituted the words "the licence".

5.   Without prejudice to sections 11 and 23(1) of the Interpretation Act 1978,
     Parts I to IV inclusive of and the Schedules to this licence shall be
     interpreted and construed in like manner as an Act of Parliament passed
     after the commencement of the Interpretation Act 1978.

6.   References in this licence to a provision of any enactment, where, after
     the date of this licence

                                       5

<PAGE>

     (a)  the enactment has been replaced or supplemented by another enactment,
          and

     (b)  such enactment incorporates a corresponding provision in relation to
          fundamentally the same subject matter,

     shall be construed, so far as the context permits, as including a reference
     to the corresponding provision of that other enactment.

7.   Pursuant to paragraph 6 of standard condition 2 (Application of Section C
     (Distribution Services Obligations)) of the Electricity Distribution
     Licence the "distribution services area "is specified in Schedule 3 hereto.

Pursuant to a licensing scheme made by the Secretary of State under Part II of
schedule 7 to the Utilities Act 2000 on 28th September 2001 this licence was
made and is treated as granted under section 6(l)(c) of the Electricity Act
1989.

                                       6

<PAGE>

                        PART II. THE STANDARD CONDITIONS

Standard conditions in effect in this licence

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Section A                        Section B                        Section C
-------------------------------------------------------------------------------------------------------------
<S>                              <C>                              <C>
Standard condition 1             Standard condition 4             Standard condition 32
-------------------------------------------------------------------------------------------------------------
Standard condition 2             Standard condition 4A            Standard condition 32A
-------------------------------------------------------------------------------------------------------------
Standard condition 3             Standard condition 4B            Standard condition 34
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 4C            Standard condition 35
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 5             Standard condition 36
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 6             Standard condition 36A
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 7             Standard condition 36B
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 8             Standard condition 36C
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 9             Standard condition 37
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 9A            Standard condition 38
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 10            Standard condition 39
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 11            Standard condition 40
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 12            Standard condition 41
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 12A           Standard condition 42
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 13            Standard condition 42A
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 14            Standard condition 43
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 15            Standard condition 44
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 16            Standard condition 45
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 17            Standard condition 46
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 18            Standard condition 47
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 19            Standard condition 48
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 20            Standard condition 49
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 21
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 22
-------------------------------------------------------------------------------------------------------------
                                 Standard condition 23
-------------------------------------------------------------------------------------------------------------

</TABLE>

                                       7

<PAGE>

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

                           Standard condition 24
--------------------------------------------------------------------------------
                           Standard condition 25
--------------------------------------------------------------------------------
                           Standard condition 26
--------------------------------------------------------------------------------
                           Standard condition 29
--------------------------------------------------------------------------------

Note: A copy of the current standard conditions of electricity distribution
licences can be inspected at the principal office of the Authority. The above
list is correct at the date of this licence but may be changed by subsequent
amendments or modifications to the licence. The authoritative up-to-date version
of this licence is available for public inspection at the principal office of
the Authority.

                                       8

<PAGE>

               PART III. AMENDMENTS TO STANDARD LICENCE CONDITIONS

                                       9

<PAGE>

                        CONSOLIDATED STANDARD CONDITIONS

               SECTION A. INTERPRETATION, APPLICATION AND PAYMENTS

Condition 1. Definitions and Interpretation

1.       In these standard conditions, unless the context otherwise requires:

         the "Act"                             means the Electricity Act 1989.

         "affiliate"                           in relation to the licensee means
                                               any holding company of the
                                               licensee, any subsidiary of the
                                               licensee or any subsidiary of a
                                               holding company of the licensee
                                               in each case within the meaning
                                               of section 736, 736A and 736B of
                                               the Companies Act 1985.

         "alternative accounting rules"        for the purposes of standard
                                               condition 42 (Regulatory
                                               Accounts) only, has the meaning
                                               given in that condition.

         "amendment"                           for the purposes of standard
                                               condition 49 (Incentive Scheme
                                               and Associated Information) only,
                                               has the meaning given in that
                                               condition.

         "Application Regulations"             means the Electricity
                                               (Applications for Licences and
                                               Extensions and Restrictions of
                                               Licences) Regulations 2001.

         "appropriate time"                    for the purposes of standard
                                               condition 39 (Restriction on Use
                                               of Certain Information and
                                               Independence of the Distribution
                                               Business) only, has the meaning
                                               given in that condition.

                                       10

<PAGE>

        "auditors"                             means the licensee's auditors for
                                               the time being holding office in
                                               accordance with the requirements
                                               of the Companies Act 1985.

        "authorised"                           in relation to any business or
                                               activity means authorised by
                                               licence granted or treated as
                                               granted under section 6 or by
                                               exemption granted under section 5
                                               of the Act.

        "authorised electricity operator"      means any person (other than the
                                               licensee) who is authorised to
                                               generate, transmit, distribute,
                                               or supply electricity and shall
                                               include any person who has made
                                               an application to be so
                                               authorised which application has
                                               not been refused and any person
                                               transferring electricity to or
                                               from or across an interconnector
                                               or Scottish interconnection or
                                               who has made an application for
                                               use of an interconnector or
                                               Scottish interconnection which
                                               has not been refused.

        the "Authority"                        means the Gas and Electricity
                                               Markets Authority established
                                               under section 1 of the Utilities
                                               Act 2000.

        "BSC"                                  for the purposes of Section B
                                               only, has the meaning given in
                                               standard condition 10 (Balancing
                                               and Settlement Code and NETA
                                               Implementation).

        "BSC Framework Agreement"              for the purposes of standard
                                               condition 10 (Balancing and
                                               Settlement Code and NETA
                                               Implementation) only, has the
                                               meaning given in that condition.

        "bilateral agreement"                  for the purposes of standard
                                               condition 26 (Compliance

                                       11

<PAGE>

                                               with CUSC) only, has the meaning
                                               given in that condition.

        "charge restriction conditions"        for the purposes of standard
                                               condition 49 (Incentive Scheme
                                               and Associated Information) only,
                                               has the meaning given in that
                                               condition.

        "charging review date"                 for the purposes of standard
                                               condition 49 (Incentive Scheme
                                               and Associated Information) only,
                                               has the meaning given in that
                                               condition.

        "competent authority"                  for the purposes of standard
                                               condition 39 (Restriction on Use
                                               of Certain Information and
                                               Independence of the Distribution
                                               Business) only, has the meaning
                                               given in that condition.

        "confidential information"             for the purposes of standard
                                               condition 39 (Restriction on Use
                                               of Certain Information and
                                               Independence of the Distribution
                                               Business) only, has the meaning
                                               given in that condition.

        "consolidated distribution business"   for the purposes of standard
                                               condition 42 (Regulatory
                                               Accounts) only, has the meaning
                                               given in that condition.

        "construction agreement"               for the purposes of standard
                                               condition 26 (Compliance with
                                               CUSC) only, has the meaning given
                                               in that condition.

        "Consumer Council"                     means the Gas and Electricity
                                               Consumer Council as

                                       12

<PAGE>

                                               established under section 2 of
                                               the Utilities Act 2000.

        "convenience customers"                means customers supplied or
                                               requiring to be supplied at any
                                               premises which are (i) connected
                                               to the licensee's distribution
                                               system; and (ii) situated within
                                               the distribution services area of
                                               a distribution services provider
                                               other than the licensee.

        "core industry documents"              for the purposes of standard
                                               conditions 10 (Balancing and
                                               Settlement Code and NETA
                                               Implementation) and 11 (Change
                                               Co-ordination for NETA) only, has
                                               the meaning given in standard
                                               condition 10; and for the
                                               purposes of standard condition 26
                                               (Compliance with CUSC) only, has
                                               the meaning given in that
                                               condition.

        "cross-default obligation"             for the purposes of standard
                                               condition 47 (Indebtedness) only,
                                               has the meaning given in that
                                               condition.

        "current cost assets"                  for the purposes of standard
                                               condition 42 (Regulatory
                                               Accounts) only, has the meaning
                                               given in that condition.

        "CUSC"                                 for the purposes of standard
                                               condition 26 (Compliance with
                                               CUSC) only, has the meaning given
                                               in that condition.

        "CUSC Framework agreement"             for the purposes of standard
                                               condition 26 (Compliance with
                                               CUSC) only, has the meaning given
                                               in that condition.

                                       13

<PAGE>

        "customer"                             means any person supplied or
                                               requiring to be supplied with
                                               electricity at any premises in
                                               Great Britain, but shall not
                                               include any authorised
                                               electricity operator in its
                                               capacity as such.

        "data aggregation"                     has the meaning given in standard
                                               condition 36B (Requirement to
                                               Offer Terms for the Provision of
                                               Distributor Metering and Data
                                               Services).

        "data processing"                      has the meaning given in standard
                                               condition 36B (Requirement to
                                               Offer Terms for the Provision of
                                               Distributor Metering and Data
                                               Services).

        "data retrieval"                       has the meaning given in standard
                                               condition 36B (Requirement to
                                               Offer Terms for the Provision of
                                               Distributor Metering and Data
                                               Services).

        "data transfer service"                for the purposes of Section C
                                               only, has the meaning given in
                                               standard condition 32
                                               (Interpretation of Section C
                                               (Distribution Services
                                               Obligations)).

        "declared net capacity"                means, in relation to generation
                                               plant, the highest generation of
                                               electricity at the main
                                               alternator terminals which can be
                                               maintained for an indefinite
                                               period of time without causing
                                               damage to the plant, less so much
                                               of that capacity as is consumed
                                               by the plant.

        "disposal"                             for the purposes of standard
                                               condition 29 (Disposal of
                                               Relevant Assets) only, has the
                                               meaning given in that

                                       14

<PAGE>

                                      condition.

 "distribution arrangements"          has the meaning given in standard
                                      condition 25 (Long Term Development
                                      Statement).


 "distribution business"              means a business of the licensee, or in
                                      relation to sub-paragraphs (a) and (b)
                                      below, and except to the extent otherwise
                                      specified by the authority in a direction
                                      to the licensee, any business of any
                                      affiliate or related undertaking of the
                                      licensee comprising:

                                      (a)  the distribution of electricity
                                           through the licensee's distribution
                                           system, including any business in
                                           providing connections to such system;

                                      (b)  the provision of the services
                                           specified in sub-paragraphs (c) and
                                           (d) of paragraph 1 of standard
                                           condition 36B (Requirement to Offer
                                           Terms for the Provision of
                                           Distributor Metering and Data
                                           Services); and

                                      (c)  the provision of the services
                                           specified in sub-paragraphs (a) and
                                           (b) of paragraph 1 of standard
                                           condition 36B (Requirement to Offer
                                           Terms for the Provision of
                                           Distributor Metering and Data
                                           Services),

                                      or any business ancillary thereto.

"Distribution Code"                   means a distribution code required to be
                                      prepared by a licensed distributor
                                      pursuant to standard condition 9
                                      (Distribution Code) and approved by the
                                      Authority as revised from time to time
                                      with the approval of the Authority.

                                       15

<PAGE>

"distribution licence"                    means a distribution licence granted
                                          or treated as granted under section
                                          6(1)(c) of the Act.

"distribution services area"              has the meaning given at sub-paragraph
                                          5(b) of standard condition 2
                                          (Application of Section C
                                          (Distribution Services Obligations)).

"Distribution Services Direction"         has the meaning given in standard
                                          condition 2 (Application of Section C
                                          (Distribution Services Obligations)).

"distribution services provider"          means a licensed distributor in whose
                                          licence Section C has effect.

"distribution system"                     means the system consisting (wholly or
                                          mainly) of electric lines owned or
                                          operated by an authorised distributor
                                          and used for the distribution of
                                          electricity from grid supply points or
                                          generation sets or other entry points
                                          (and bulk supply points in Scotland)
                                          to the points of delivery to customers
                                          or authorised electricity operators or
                                          any transmission company within Great
                                          Britain in its capacity as operator of
                                          a transmission system and includes any
                                          remote transmission assets (owned by a
                                          transmission licensee within England
                                          and Wales) operated by such
                                          distributor and any electrical plant,
                                          meters and metering equipment owned or
                                          operated by such distributor in
                                          connection with the distribution of
                                          electricity, but shall not include any
                                          part of a transmission system.

                                       16

<PAGE>

"distributor metering and data services"  for the purposes of Section C only,
                                          has the meaning given in paragraph 9
                                          of standard condition 36B (Requirement
                                          to Offer Terms for the Provision of
                                          Distributor Metering and Data
                                          Services).

"domestic customer"                       means a customer supplied or requiring
                                          to be supplied with electricity at
                                          domestic premises (but excluding such
                                          customer in so far as he is supplied
                                          or requires to be supplied at premises
                                          other than domestic premises).

"domestic premises"                       means premises at which a supply is
                                          taken wholly or mainly for domestic
                                          purposes.

"Electricity Arbitration Association"     for the purposes of standard condition
                                          39 (Restriction on Use of Certain
                                          Information and Independence of the
                                          Distribution Business) only, has the
                                          meaning given in that condition.

"electricity supplier"                    means any person authorised to supply
                                          electricity.

"estimated costs"                         for the purposes of standard condition
                                          3 (Payments by the Licensee to the
                                          Authority) only, has the meaning given
                                          in that condition.

"existing connection"                     means, in relation to any premises,
                                          an existing connection to the
                                          licensee's distribution system which
                                          does not require modification, or a
                                          new or modified connection to such
                                          system in respect of which all works
                                          have been completed, such that in
                                          either case

                                       17

<PAGE>

                                          electricity is able to be supplied to
                                          the premises in accordance with the
                                          terms of the relevant supply
                                          agreement.

"external distribution activities"        for the purposes of standard condition
                                          39 (Restriction on Use of Certain
                                          Information and Independence of the
                                          Distribution Business) only, has the
                                          meaning given in that condition.

"financial year"                          subject to standard condition 42A
                                          (Change of Financial Year) (where
                                          applicable), means a period of 12
                                          months beginning on 1 April of each
                                          year and ending on 31 March of the
                                          following calendar year.

"Fuel Security Code"                      for the purposes of Section B only,
                                          has the meaning given in standard
                                          condition 16 (Security Arrangements).

"generation set"                          means any plant or apparatus for the
                                          production of electricity and shall
                                          where appropriate include a generating
                                          station comprising more than one
                                          generation set.

"Grid Code"                               means the Grid Code which each
                                          transmission company is required to
                                          prepare and have approved by the
                                          Authority as from time to time revised
                                          with the approval of the Authority.

"grid supply point"                       means any point at which electricity
                                          is delivered from a transmission
                                          system to any distribution system.

                                       18

<PAGE>

"the handbook"                            for the purposes of standard condition
                                          42 (Regulatory Accounts) only, has the
                                          meaning given in that condition.

"holding company"                         means a company within the meaning of
                                          sections 736, 736A and 736B of the
                                          Companies Act 1985.

"indebtedness"                            for the purposes of standard condition
                                          47 (Indebtedness) only, has the
                                          meaning given in that condition.

"information"                             includes any documents, accounts,
                                          estimates, returns, records or reports
                                          and data in written, verbal or
                                          electronic form and information in any
                                          form or medium whatsoever (whether or
                                          not prepared specifically at the
                                          request of the Authority or the
                                          Consumer Council) of any description
                                          specified by the Authority.

"interconnection"                         means:

                                          the 275 kV and 400 kV circuits between
                                          and including the associated
                                          switchgear at Harker sub-station in
                                          Cumbria and the associated switchgear
                                          at Strathaven sub-station in
                                          Lanarkshire;

                                          the 275 kV transmission circuit
                                          between and including the associated
                                          switchgear at Cockenzie in East
                                          Lothian and the associated switchgear
                                          at Stella

                                       19

<PAGE>

                                   in Tyne and Wear; and

                                   the 400 kV transmission circuit between and
                                   including the associated switchgear at
                                   Torness in East Lothian and the associated
                                   switchgear at Stella in Tyne and Wear

                                   all as existing at the date on which the
                                   transmission licence comes into force as from
                                   time to time maintained, repaired or renewed,
                                   together with any alteration, modification or
                                   addition (other than maintenance, repair or
                                   renewal) which is primarily designed to
                                   effect a permanent increase in one or more
                                   particular interconnection capacities as they
                                   exist immediately prior to such alteration,
                                   modification or addition and as from time to
                                   time maintained, repaired or renewed; and

                                   the 132 kV transmission circuit between and
                                   including (and directly connecting) the
                                   associated switchgear at Chapelcross and the
                                   associated switchgear at Harker sub-station
                                   in Cumbria; and

                                   the 132 kV transmission circuit between and
                                   including (and connecting, via Junction V)
                                   the associated switchgear at Chapelcross and
                                   the associated switchgear at Harker
                                   sub-station in Cumbria

                                   all as existing at the date on which the
                                   transmission licence comes into force and as
                                   from time to time

                                       20

<PAGE>

                                        maintained, repaired or renewed.

     "interconnector(s)"                means the electric lines and electrical
                                        plant and meters owned or operated by a
                                        transmission company solely for the
                                        transfer of electricity to or from a
                                        transmission system into or out of
                                        England and Wales.

     "investment"                       for the purposes of Section C only, has
                                        the meaning given in standard condition
                                        43 (Restriction on Activity and
                                        Financial Ring Fencing).

     "investment grade issuer credit    for the purposes of Section C only, has
     rating"                            the meaning given in standard condition
                                        46 (Credit Rating of Licensee).

     "licensed distributor"             means any holder of a distribution
                                        licence.

     "licensee's Distribution Code"     means the distribution code required to
                                        be prepared by the licensee pursuant to
                                        standard condition 9 (Distribution Code)
                                        and approved by the Authority as revised
                                        from time to time with the approval of
                                        the Authority.

     "licensee's distribution system"   means the distribution system owned or
                                        operated by the licensee.

     "Master Registration Agreement"    means the agreement of that title
                                        referred to and comprising such matters
                                        as are set out in standard condition 37
                                        (The Metering Point Administration
                                        Service and the Master Registration
                                        Agreement).

                                       21

<PAGE>

     "metering equipment"               includes any electricity meter and any
                                        associated equipment which materially
                                        affects the operation of that meter.

     "Metering Point Administration     for the purposes of Section C only, has
     Service"                           the meaning given in standard condition
                                        32 (Interpretation of Section C
                                        (Distribution Services Obligations)).

     "metering point administration     for the purposes of Section C only, has
     services"                          the meaning given in standard condition
                                        32 (Interpretation of Section C
                                        (Distribution Services Obligations)).

     "Metering Point Administration     has the meaning given in standard
     Service operator"                  condition 38 (Establishment of a Data
                                        Transfer Service).

     "non-domestic customer"            means a customer who is not a domestic
                                        customer.

     "other Distribution Codes"         means the distribution codes which the
                                        holder(s) of a distribution licence
                                        (other than the licensee) are required
                                        to draw up and have approved by the
                                        Authority pursuant to standard condition
                                        9 (Distribution Code) of their
                                        distribution licence, as from time to
                                        time revised with the approval of the
                                        Authority.

     "owned"                            in relation to an electricity meter or
                                        other property includes leased and
                                        cognate expressions shall be construed
                                        accordingly.

     "participating interest"           has the meaning given by section 260 of
                                        the Companies Act 1985 as amended by
                                        section 22 of the

                                       22

<PAGE>

                                        Companies Act 1989.

     "permitted purpose"                for the purposes of Section C only, has
                                        the meaning given in standard condition
                                        32 (Interpretation of Section C
                                        (Distribution Services Obligations)).

     "Pooling and                       means the agreement of that title
     Settlement Agreement"              approved by the Secretary of State as
                                        from time to time amended.

     "regulatory instructions and       for the purposes of standard condition
     guidance"                          49 (Incentive Scheme and Associated
                                        Information) only, has the meaning given
                                        in that condition.

     "related undertaking"              in relation to the licensee means any
                                        undertaking in which the licensee has a
                                        participating interest.

     "relevant asset"                   means any asset for the time being
                                        forming part of the licensee's
                                        distribution system, any control centre
                                        for use in conjunction therewith, and
                                        any legal or beneficial interest in land
                                        upon which any of the foregoing is
                                        situate (which for the purposes of
                                        property located in Scotland means any
                                        estate, interest, servitude or other
                                        heritable or leasehold right in or over
                                        land including any leasehold interests
                                        or other rights to occupy or use and any
                                        contractual or personal rights relating
                                        to such property or the acquisition
                                        thereof).

     "relevant duties"                  for the purposes of standard condition
                                        40 (Appointment of a Compliance Officer)
                                        only, has the meaning given in that
                                        condition.

                                       23

<PAGE>

     "relevant proportion"              for the purposes of standard condition 3
                                        (Payments by the Licensee to the
                                        Authority) only, has the meaning given
                                        in that condition.

     "relevant year"                    for the purposes of standard condition 3
                                        (Payments by the Licensee to the
                                        Authority) only, has the meaning given
                                        in that condition; and for the purposes
                                        of standard condition 48 (Last Resort
                                        Supply: Payment Claims) only, has the
                                        meaning given in that condition.

     "relinquishment of operational     for the purposes of standard condition
     control"                           29 (Disposal of Relevant Assets) only,
                                        has the meaning given in that condition.

     "remote transmission assets"       means any electric lines, electrical
                                        plant or meters in England and Wales
                                        owned by a transmission company ("the
                                        owner transmission company") which:

                                        (a)  are embedded in the licensee's
                                             distribution system or the
                                             distribution system of any
                                             authorised distributor and are not
                                             directly connected by lines or
                                             plant owned by the owner
                                             transmission company to a
                                             sub-station owned by the owner
                                             transmission company; and

                                        (b)  are by agreement between the owner
                                             transmission company and the
                                             licensee or such authorised
                                             distributor operated under the
                                             direction and control of the
                                             licensee or such authorised
                                             distributor.

     "Scottish interconnection"         means such part of the interconnection
                                        as is situated in Scotland.

                                       24

<PAGE>

     "Secretary of State's costs"       for the purposes of standard condition 3
                                        (Payments by Licensee to the Authority)
                                        only, has the meaning given in that
                                        condition.

     "separate business"                for the purposes of standard condition
                                        39 (Restriction on Use of Certain
                                        Information and Independence of the
                                        Distribution Business) only, has the
                                        meaning given in that condition.

     "the scheme"                       for the purposes of standard condition
                                        49 (Incentive Scheme and Associated
                                        Information) only, has the meaning given
                                        in that condition.

     "Settlement Agreement for          has the meaning given in standard
     Scotland"                          condition 12 (Settlement Agreement for
                                        Scotland).

     "settlement purposes"              means for the purposes of settlement as
                                        set out in the Balancing and Settlement
                                        Code or the Settlement Agreement for
                                        Scotland.

     "specified information"            for the purposes of standard condition
                                        49 (Incentive Scheme and Associated
                                        Information) only, has the meaning given
                                        in that condition.

     "standby"                          means the periodic or intermittent
                                        supply or sale of electricity:

                                        (a)  to an authorised electricity
                                             operator to make good any shortfall
                                             in the availability of electricity
                                             to that operator for the purposes
                                             of its supply of electricity to
                                             persons seeking such

                                       25

<PAGE>

                                             supply; or

                                        (b)  to a customer of the licensee to
                                             make good any shortfall between the
                                             customer's total supply
                                             requirements and that met either by
                                             its own generation or by
                                             electricity supplied by an
                                             electricity supplier other than the
                                             licensee.

     "statutory accounts"               means the accounts that the licensee
                                        prepares under the Companies Act 1985
                                        (as amended by the Companies Act 1989).

     "subsidiary"                       means a subsidiary within the meanings
                                        of sections 736, 736A and 736B of the
                                        Companies Act 1985.

     "supply licence"`                  means a supply licence granted or
                                        treated as granted under section 6(1)(d)
                                        of the Act.

     "top-up"                           means the supply or sale of electricity
                                        on a continuing or regular basis:

                                        (a)  to an authorised electricity
                                             operator to make good any shortfall
                                             in the availability of electricity
                                             to that operator for the purposes
                                             of its supply of electricity to
                                             persons seeking such supply; or

                                        (b)  to a customer of the licensee to
                                             make good any shortfall between the
                                             customer's total supply
                                             requirements and that met either by
                                             its own

                                       26

<PAGE>

                                            generation or by electricity
                                            supplied by an electricity supplier
                                            other than the licensee.

     "trading code"                    for the purposes of Section B only, has
                                       the meaning given in standard condition
                                       12A (Compliance with Trading Code in
                                       Scotland).

     "transmission company"            means the holder for the time being of a
                                       transmission licence.

     "transmission licence"            means a transmission licence granted or
                                       treated as granted under section 6(1)(b)
                                       of the Act.

     "transmission system"             means a system consisting (wholly or
                                       mainly) of high voltage electric lines
                                       owned or operated by a transmission
                                       company and used for the transmission of
                                       electricity from one generating station
                                       to a sub-station or to another generating
                                       station, or between sub-stations or to or
                                       from any interconnector or Scottish
                                       interconnection in question and in
                                       relation to Scotland including any
                                       interconnector and Scottish
                                       interconnection, and includes any
                                       electrical plant and meters owned or
                                       operated by the transmission company in
                                       connection with the transmission of
                                       electricity but shall not include any
                                       remote transmission assets.

     "ultimate controller"             means:

                                       (a)  a holding company of the licensee
                                            which is not itself a subsidiary of
                                            another company;

                                       27

<PAGE>

                                       and

                                 (b)   any person who (whether alone or with a
                                       person or persons connected with him) is
                                       in a position to control, or to exercise
                                       significant influence over, the policy of
                                       the licensee or any holding company of
                                       the licensee by virtue of:

                                       (i)     rights under contractual
                                               arrangements to which he is a
                                               party or of which he is a
                                               beneficiary; or


                                       (ii)    rights of ownership (including
                                               rights attached to or deriving
                                               from securities or rights under a
                                               trust) which are held by him or
                                               of which he is a beneficiary;

                                       but excluding any director or employee of
                                       a corporate body in his capacity as such;
                                       and

                                 (c)   for the purposes of sub-paragraph (b), a
                                 person is connected with another person if they
                                 are party to any arrangement regarding the
                                 exercise of any such rights as are described in
                                 that paragraph.

        "undertaking"            has the meaning  given by section 259 of the
                                 Companies Act 1985.

        "unmetered supply"       means a supply of electricity to premises which
                                 is not, for the purpose of calculating the
                                 charges for electricity customer at such
                                 premises, measured by metering equipment.

                                       28

<PAGE>

        "use of system"          means use of the licensee's distribution system
                                 for the distribution of electricity by the
                                 licensee for any person.

        "use of system charges"  means charges made or levied or to be made or
                                 levied by the licensee for the provision of
                                 services as part of the distribution business
                                 to any person as more fully described in
                                 standard condition 4 (Basis of Charges for Use
                                 of System and Connection to System:
                                 Requirements for Transparency) but shall not
                                 include connection charges.

2.   Any words or expressions used in the Utilities Act 2000 or Part I of the
     Act shall, unless the contrary intention appears, have the same meanings
     when used in the standard conditions.

3.   Except where the context otherwise requires, any reference to a numbered
     standard condition (with or without a letter) or Schedule is a reference to
     the standard condition (with or without a letter) or Schedule bearing that
     number in this licence, and any reference to a numbered paragraph (with or
     without a letter) is a reference to the paragraph bearing that number in
     the standard condition or Schedule in which the reference occurs, and
     reference to a Section is a reference to that Section in these standard
     conditions.

4.   These standard conditions shall have effect as if, in relation to a licence
     holder who is a natural person, for the words "it", "its" and "which" there
     were substituted the words "he", "him", "his", "who" and "whom", and
     cognate expressions shall be construed accordingly.

5.   Except where the context otherwise requires, a reference in a standard
     condition to a paragraph is a reference to a paragraph of that standard
     condition and a reference in a paragraph to a sub-paragraph is a reference
     to a sub-paragraph of that paragraph.

                                       29

<PAGE>

6.   Any reference in these standard conditions to -

     (a)  a provision thereof;

     (b)  a provision of the standard conditions of electricity supply licences,
          or

     (c)  a provision of the standard conditions of electricity generation
          licences,

     (d)  a provision of the standard conditions of electricity transmission
          licences,

     shall, if these standard conditions or the standard conditions in question
     come to be modified, be construed, so far as the context permits, as a
     reference to the corresponding provision of these standard conditions or
     the other standard conditions in question as modified.

7.   In construing these standard conditions, the heading or title of any
     standard condition or paragraph shall be disregarded.

8.   Any reference in a standard condition to the purposes of that condition
     generally is a reference to the purposes of that standard condition as
     incorporated in this licence and as incorporated in each other licence
     under section 6(1)(c) of the Act (whenever granted) which incorporates it.

9.   Where any obligation of the licence is required to be performed by a
     specified date or time, or within a specified period, and where the
     licensee has failed so to perform, such obligation shall continue to be
     binding and enforceable after the specified date or time, or after the
     expiry of the specified period (but without prejudice to all the rights and
     remedies available against the licensee by reason of the licensee's failure
     to perform by that date or time, or within that period).

10.  Anything required by or under these standard conditions to be done in
     writing may be done by facsimile transmission of the instrument in question
     or by other electronic means and, in such case -

                                       30

<PAGE>

(a)  the original instrument or other confirmation in writing shall be delivered
     or sent by pre-paid first-class post as soon as is reasonably practicable,
     and

(b)  where the means of transmission had been agreed in advance between the
     parties concerned, in the absence of and pending such confirmation, there
     shall be a rebuttable presumption that what was received duly represented
     the original instrument.

11.  The definitions referred to in this condition may include some definitions
     which are not used or not used exclusively in Sections A and B (which
     Sections are incorporated in all distribution licences). Where:

     (a)  any definition is not used in Sections A and B, that definition shall,
          for the purposes of this licence, be treated:

          (i)   as part of the standard condition or conditions (and the
                Section) in which it is used;

          (ii)  as not having effect in the licence until such time as the
                standard condition in which the definition is used has effect
                within the licence in pursuance of standard condition 2
                (Application of Section C (Distribution Services Obligations);

     (b)  any definition which is used in Sections A and B is also used in one
          or more other Sections:

          (i)   that definition shall only be modifiable in accordance with the
                modification process applicable to each of the standard
                conditions in which it is used; and

          (ii)  if any such standard condition is modified so as to omit that
                definition, then the reference to that definition in this
                condition shall automatically cease to have effect.

                                       31

<PAGE>

Condition 2.  Application of Section C (Distribution Services Obligations)

1.   Where the Secretary of State provides, by a scheme made under Schedule 7 to
     the Utilities Act 2000, for Section C (in whole or in part) to have effect
     within this licence:

     (a)  paragraphs 4 to 8 shall cease to be suspended and shall have effect in
          the licensee's licence; and

     (b)  the licensee shall be obliged to comply with the requirements of
          Section C (in whole or, as the case may be, in part) of this licence,

     from the date the said scheme takes effect. Such provision made by the
     Secretary of State in the said scheme shall be treated, for the purposes of
     paragraphs 5, 6, and 7 of this condition, as if it were a Distribution
     Services Direction made by the Authority.

2.   Until -

     (a)  the Secretary of State provides, by a scheme made under Schedule 7 to
          the Utilities Act 2000, for Section C (in whole or in part) to have
          effect within this licence; or

     (b)  the Authority has issued to the licensee a direction pursuant to
          paragraph 4,

     the standard conditions in Section C (in whole or, as the case may be, in
     part) shall not have effect within this licence; and the licensee shall not
     be obliged to comply with any of the requirements of Section C (in whole
     or, as the case may be, in part) of this licence.

3.   Except where paragraph 1 applies to the licensee, paragraphs 4 to 8 of this
     standard condition shall be suspended and shall have no effect in this
     licence until such time as

                                       32

<PAGE>

     the Authority, with the consent of the licensee, issues to the licensee a
     notice ending the suspension and providing for those paragraphs to have
     effect in this licence with effect from the date specified in the notice.

4.   The Authority may, with the consent of the licensee, issue a direction (a
     "Distribution Services Direction"). Where the Authority has issued to the
     licensee a Distribution Services Direction the standard conditions in
     Section C (in whole or, as the case may be, in part) shall have effect
     within this licence from the date specified in the direction; and the
     licensee shall be obliged to comply with the requirements of Section C (in
     whole or, as the case may be, in part) to the extent and subject to the
     terms specified in such direction.

5.   A Distribution Services Direction:

     (a)  may specify that the standard conditions in Section C (in whole or in
          part) are to have effect in this licence;

     (b)  shall specify or describe an area (the "distribution services area")
          within which the licensee shall be obliged to comply with any of the
          requirements of Section C (in whole or, as the case may be, in part);
          and

     (c)  shall specify whether or not the requirements of Section C (in whole
          or, as the case may be, in part) apply to convenience customers.

6.   The Authority may, with the consent of the licensee:

     (a)  vary the terms (as set out in the Distribution Services Direction or
          elsewhere) under which Section C (or parts thereof) has effect in this
          licence; or

     (b)  provide for Section C (or parts thereof) to cease to have effect in
          this licence.

7.   The variation or cessation provided for in paragraph 6 shall take effect
     from the date

                                       33

<PAGE>

     specified in the variation or cessation notice given to the licensee by the
     Authority.

8.   With effect from the date of cessation referred to in paragraph 7,
     paragraphs 4 to 7 of this condition shall be suspended and shall cease to
     have effect in this licence, but the Authority may at any time thereafter,
     with the consent of the licensee, give to the licensee a notice ending the
     suspension and providing for those paragraphs to have effect again in this
     licence with effect from the date specified in the notice.

                                       34

<PAGE>

Condition 3. Payments by Licensee to the Authority

1.   The licensee shall, at the times stated, pay to the authority such amounts
     as are determined by or under this condition.

2.   In respect of each relevant year at the beginning of which the licensee
     holds this licence, the licensee shall pay to the Authority the aggregate
     of:

     (a)  an amount which is the relevant proportion of the estimated costs of
          the Authority during the year in question;

     (b)  an amount which is the relevant proportion of the estimated costs of
          the Consumer Council during the year in question;

     (c)  an amount which is the relevant proportion of the estimated costs
          incurred in the previous relevant year by the Competition Commission
          in connection with references made to it with respect to the licence
          or any other electricity distribution licence;

     (d)  an amount which is the relevant proportion of the Secretary of State's
          costs during the year in question;

     (e)  an amount which is the relevant proportion of the difference (being a
          positive or negative amount), if any, between:

          (aa) any costs estimated by the Authority or, in the case of
          sub-paragraph 2(d), the Secretary of State in the previous relevant
          year under sub-paragraphs 2(a), (b), (c), and (d); and

          (bb) the actual costs of the Authority, the Consumer Council, the
          Competition Commission (in connection with that reference) and the
          Secretary of State for the previous relevant year or, in the case of
          the Competition Commission, for the relevant year prior to the
          previous relevant year; and

                                       35

<PAGE>

     (f)  in respect of the relevant year ending on 31 March 2002, an amount
          which is the relevant proportion of the actual unrecovered costs of
          the Director General of Electricity Supply and the Relevant Consumers'
          Committees.

3.   The amounts determined in accordance with paragraph 2 shall be paid by the
     licensee to the Authority in two instalments, with:

     (a)  the first instalment being due for payment by 30 June in each year;
          and

     (b)  the second instalment being due for payment by 31 January in each year

     provided that, in each case, if the Authority has not given notice of the
     amount of the instalment due at least 30 days before the payment date
     stated above, the licensee shall pay the amount due within 30 days from the
     actual giving of notice by the Authority to the licensee (whenever notice
     is given).

4.   Where the licensee fails to pay the amount determined in accordance with
     paragraph 2 within 30 days of the due date set out in paragraph 3, it shall
     pay simple interest on the amount at the rate which is from time to time
     equivalent to the base rate of NatWest Bank plc or, if there is no such
     base rate, such base rate as the Authority may designate for the purposes
     hereof.

5.   In relation to any data or information specified by the Authority in a
     direction given for the purposes of this condition generally, the licensee
     shall submit a certificate to the Authority, approved by a resolution of
     the board of directors of the licensee and signed by a director of the
     licensee pursuant to that resolution. Such certificate shall be submitted
     to the Authority each year on the date specified by the Authority. Each
     certificate shall be in the following form -

     "In the opinion of the directors of [the licensee], all data and
     information provided to the Authority on [date provided to the Authority]
     for the purposes of enabling the Authority to calculate the licence fee
     payable by [the licensee] pursuant to standard condition 3 (Payments by the
     Licensee to the Authority) is accurate."

                                       36

<PAGE>

6.   In this condition:

     "estimated costs"             means costs estimated by the Authority as
                                   likely to be:

                                   (a)  the costs of the Authority and the
                                        consumer Council; and

                                   (b)  the costs incurred by the Competition
                                        Commission, such estimate having regard
                                        to the views of the Competition
                                        Commission.

     "relevant proportion"         means the proportion of the costs
                                   attributable to the licensee in accordance
                                   with principles determined by the Authority
                                   for the purposes of this condition generally
                                   and notified to the licensee.

     "relevant year"               means a year beginning on 1 April of each
                                   calendar year and ending on 31 March of the
                                   following calendar year.

     "Secretary of State's costs"  means costs estimated by the Secretary of
                                   State as likely to be his costs in
                                   relation to:

                                   (a)  the establishment of the Authority and
                                        the Consumer Council; and

                                   (b)  Schedule 7 to the Utilities Act 2000.

7.   In sub-paragraph 2(f) of this condition:

     "Director General of Electricity Supply"      means the office previously
                                                   established under section 1
                                                   of the Act;

     "Relevant Consumers' Committees"              means the committees
                                                   previously appointed by the
                                                   Director General of
                                                   Electricity Supply under
                                                   section 2 of that Act

                                       37

<PAGE>

SECTION B. GENERAL

Condition 4. Basis of Charges for Use of System and Connection to System:
Requirements for Transparency

1.   The licensee shall as soon as practicable prepare statements in a form
     approved by the Authority setting out the basis upon which charges will be
     made for the provision of:

     (a)  use of system; and

     (b)  connections to the licensee's distribution system,

     in each case in such form and with such detail as shall be necessary to
     enable any person to make a reasonable estimate of the charges which the
     person would become liable to pay for the provision of such services, and
     (without prejudice to the foregoing) including the information set out in
     paragraphs 2 and 3 respectively.

2.   The statement referred to at sub-paragraph 1(a) shall include:

     (a)  a schedule of charges for the distribution of electricity under use of
          system;

     (b)  a schedule of adjustment factors to be made in respect of distribution
          losses, in the form of additional supplies required to cover those
          distribution losses;

     (c)  the methods by which and the principles on which the charges (if any)
          for availability of distribution capacity on the licensee's
          distribution system will be made;

     (d)  a schedule of charges in respect of accounting and administrative
          services; and

     (e)  a schedule of the charges (if any) which may be made for the provision
          and installation of any electrical plant at entry or exit points, the
          provision and installation of which are ancillary to the grant of use
          of system, and for the maintenance of such electrical plant.

3.   The statement referred to at sub-paragraph 1(b) shall include:

     (a)  a schedule listing those items (including the carrying out of works
          and the provision and installation of electric lines or electrical
          plant) of significant cost liable to be

                                       38

<PAGE>

          required for the purpose of connection (at entry or exit points) to
          the licensee's distribution system for which connection charges may be
          made or levied and including (where practicable) indicative charges
          for each such item and (in other cases) an explanation of the methods
          by which and the principles on which such charges will be calculated;

     (b)  the methods by which and the principles on which any charges will be
          made in respect of extension or reinforcement of the licensee's
          distribution system rendered (in the licensee's discretion) necessary
          or appropriate by virtue of providing connection to or use of system
          to any person seeking connection;

     (c)  the methods by which and the principles on which connection charges
          will be made in circumstances where the electric lines or electrical
          plant to be installed are (at the licensee's discretion) of greater
          size or capacity than that required for use of system by the person
          seeking connection;

     (d)  the methods by which and the principles on which any charges
          (including any capitalised charge) will be made for maintenance,
          repair and replacement required of electric lines or electrical plant
          provided and installed for making a connection to the licensee's
          distribution system;

     (e)  (save to the extent that such matters are included in any agreement
          offered in accordance with standard condition 36B (Requirement to
          Offer Terms for the Provision of Distributor Metering and Data
          Services) the methods by which and principles on which any charges
          will be made for the provision of special metering or telemetry or
          data processing equipment by the licensee for the purposes of enabling
          any person who is party to the Pooling and Settlement Agreement and/or
          the Balancing and Settlement Code to comply with its obligations in
          respect of metering thereunder, or for the performance by the licensee
          of any service in relation to such metering thereto; and

     (f)  the methods by which and principles on which any charges will be made
          for disconnection from the licensee's distribution system and the
          removal of electrical plant and electric lines following
          disconnection.

4.   Connection charges for those items referred to in paragraph 3 shall be set
     at a level which will enable the licensee to recover:

                                       39

<PAGE>

     (a)  the appropriate proportion to be determined having regard to the
          factors set out in paragraph 4 of standard condition 4B (Requirement
          to Offer Terms for Use of System and Connection) of the costs directly
          or indirectly incurred in carrying out any works, the extension or
          reinforcement of the licensee's distribution system or the provision
          and installation, maintenance, repair, and replacement or (as the case
          may be) removal following disconnection of any electric lines or
          electrical plant; and

     (b)  a reasonable rate of return on the capital represented by such costs.

5.   If so requested and subject to paragraphs 6 and 10, the licensee shall, as
     soon as practicable and in any event within 28 days (or where the Authority
     so approves such longer period as the licensee may reasonably require
     having regard to the nature and complexity of the request) after the date
     referred to in paragraph 12 give or send to any person making such request
     a statement showing present and future circuit capacity, forecast power
     flows and loading on the part or parts of the licensee's distribution
     system specified in the request and fault levels for each distribution node
     covered by the request and containing:

     (a)  such further information as shall be reasonably necessary to enable
          such person to identify and evaluate the opportunities available when
          connecting to and making use of the part or parts of the licensee's
          distribution system specified in the request; and

     (b)  if so requested, a commentary prepared by the licensee indicating the
          licensee's views as to the suitability of the part or parts of the
          licensee's distribution system specified in the request for new
          connections and the distribution of further quantities of electricity.

6.   The licensee shall include in every statement given or sent under paragraph
     5 the information required by that paragraph except that the licensee may:

     (a)  with the prior consent of the Authority omit from any such statement
          any details as to circuit capacity, power flows, loading or other
          information, disclosure of which would, in the view of the Authority,
          seriously and prejudicially affect the commercial interests of the
          licensee or any third party; and

                                       40

<PAGE>

     (b)  omit information the disclosure of which would place the licensee in
          breach of standard condition 39 (Restriction on Use of Certain
          Information and Independence of the Distribution Business) (if
          applicable).

7.   The licensee:

     (a)  shall, at least once in every year, review the information set out in
          the statements prepared in accordance with paragraph 1 in order that
          the information set out in such statements shall continue to be
          accurate in all material respects; and

     (b)  may, with the approval of the Authority, from time to time alter the
          form of such statements.

8.   The licensee shall send a copy of the statements prepared in accordance
     with paragraph 1 and of any revision of such statements, to the Authority.

9.   The licensee shall give or send a copy of the statements prepared in
     accordance with paragraph 1, or (as the case may be) of the latest revision
     of such statements, to any person who requests a copy of such statement or
     statements.

10.  The licensee may make a charge for any statement given or sent pursuant to
     paragraph 9 of an amount which shall not exceed the amount specified in
     directions issued by the Authority for the purposes of this condition based
     on the Authority's estimate of the licensee's reasonable costs of providing
     such a statement.

11.  The licensee may within 10 days after receipt of the request provide an
     estimate of its reasonable costs in the preparation of any statement
     referred to in paragraph 5, and its obligation to provide such statement
     shall be conditional on the person requesting such statement agreeing to
     pay the amount estimated or such other amount as the Authority may, upon
     application of the licensee or the person requesting such statement,
     direct.

12.  For the purposes of paragraph 5, the date referred to shall be the later
     of:

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<PAGE>

     (a)  the date of receipt of the request referred to in paragraph 5; or

     (b)  the date on which the licensee receives agreement from the person
          making the request to pay the amount estimated or such other amount as
          is determined by the Authority (as the case may be) under paragraph
          11.

13   The licensee shall, not less than 5 months prior to the date on which it
     proposes to amend its use of system charges in respect of any agreement for
     use of system, send to the Authority a notice setting out the licensee's
     proposals in relation to such amendment together with an explanation of the
     proposed amendment (including a statement of any assumptions on which such
     proposals are based), and the licensee shall send a copy of such notice to
     any person who has entered into an agreement for use of system under
     standard condition 4B (Requirement to Offer Terms for Use of System and
     Connection).

14.  Except with the prior consent of the Authority, the licensee shall not
     amend its use of system charges in respect of any agreement for use of
     system save to the extent that it has given prior notice of the amendment
     in accordance with paragraph 13 and such amendment reflects the proposals
     made in the notice (subject only to revisions consequent upon material
     changes in the matters which were expressed, in the statement which
     accompanied the notice, to be assumptions on which the proposals were
     based).

                                       42

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Condition 4A. Non-Discrimination in the Provision of Use of System and
Connection to System

1.   In the carrying out of works for the purpose of connection to the
     licensee's distribution system, or in providing for the modification to or
     retention of an existing connection to its distribution system, the
     licensee shall not discriminate between any persons or class or classes of
     persons.

2.   In the provision of use of system the licensee shall not discriminate
     between any persons or class or classes of persons.

3.   Without prejudice to paragraphs 1 and 2, and subject to the provisions of
     standard condition 4 (Basis of Charges for Use of System and Connection to
     System), the licensee shall not make charges for the provision of use of
     system to any person or class or classes of persons which differ from the
     charges for such provision to any other person or to any class or classes
     of persons, except in so far as such differences reasonably reflect
     differences in the costs associated with such provision.

4.   The licensee shall not in setting its charges for connection or use of
     system restrict, distort or prevent competition in the generation,
     transmission, distribution or supply of electricity.

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<PAGE>

Condition 4B. Requirement to Offer Terms for Use of System and Connection

1.   On application made by any person the licensee shall (subject to paragraph
     4) offer to enter into an agreement for use of system:

     (a)  to accept into the licensee's distribution system at such entry point
          or points and in such quantities as may be specified in the
          application, electricity to be provided by or on behalf of such
          person; and/or

     (b)  to distribute such quantities of electricity as are referred to in
          sub-paragraph (a) (less any distribution losses) at such exit point or
          points on the licensee's distribution system and to such person or
          persons as the applicant for use of system may specify.

2.   On application made by any person for a connection, the licensee shall
     offer terms for making the connection pursuant to section 16 and section
     16A of the Act. Such offer of a connection shall comply with the provisions
     of this condition.

3.   Where the licensee:

     (i)  makes an offer to enter into a connection agreement pursuant to
          section 22 of the Act; or

     (ii) replies to a request for a connection made to it under section 16A of
          the Act

     the licensee shall, in making the offer or replying to the applicant, make
     detailed provision regarding:

     (a)  the carrying out of the works (if any) required to connect the
          licensee's distribution system to any other system for the
          transmission or distribution of electricity, and for the obtaining of
          any consents necessary for such purpose;

     (b)  the carrying out of the works (if any) in connection with the
          extension or reinforcement of the licensee's distribution system
          rendered (in the licensee's

                                       44

<PAGE>

          discretion) appropriate or necessary by reason of making the
          connection or modification to an existing connection and for the
          obtaining of any consents necessary for such purpose;

     (c)  (save to the extent that such matters are included in any agreement
          offered in accordance with standard condition 36B (Requirement to
          Offer Terms for the Provision of Distributor Metering and Data
          Services)) the installation of appropriate meters (if any) required to
          enable the licensee to measure electricity being accepted into the
          licensee's distribution system at the specified entry point or points
          or leaving such system at the specified exit point or points;

     (d)  the installation of such switchgear or other apparatus (if any) as may
          be required for the interruption of supply where the person seeking
          connection or modification of an existing connection does not require
          the provision of top-up or standby; and

     (e)  (save to the extent that such matters are included in any agreement
          offered in accordance with standard condition 36B (Requirement to
          Offer Terms for the Provision of Distributor Metering and Data
          Services) the installation of special metering, telemetry or data
          processing equipment (if any) for the purpose of enabling any person
          who is party to the Pooling and Settlement Agreement and/or the
          Balancing and Settlement Code whilst such agreement is still in
          existence to comply with its obligations in respect to metering or the
          performance by the licensee of any service in relation to such
          metering thereunder.

4.   In making an offer pursuant to this condition to enter into any connection
     agreement or in replying to a request for connection under section 16A of
     the Act, the licensee shall set out:

     (a)  the date by which in the case of an agreement under paragraph 2, any
          works required to permit access to the licensee's distribution system
          (including for this purpose any works to reinforce or extend the
          licensee's distribution system) shall be completed, time being of the
          essence unless, in the case of connection agreements only, otherwise
          agreed between the parties;

                                       45

<PAGE>

(b)  the charges to be paid in respect of the services required, such charges
     (unless manifestly inappropriate):

     (i)    to be presented in such a way as to be referable to the statements
            prepared in accordance with paragraph 1 of standard condition 4
            (Basis of Charges for Use of System and Connection to System:
            Requirements for Transparency) or any revision thereof; and

     (ii)   to be set in conformity with the requirements of standard condition
            4 (Basis of Charges for Use of System and Connection to System:
            Requirements for Transparency); and

     (iii)  in the case of a connection agreement under paragraph 2,
            additionally to be set in conformity with the requirements of
            paragraph 5.

(c)  such other detailed terms in respect of each of the services required as
     are or may be appropriate for the purpose of the agreement.

5. For the purpose of determining an appropriate proportion of the costs
     directly or indirectly incurred in carrying out works under an agreement
     for providing a connection or modification to or retention of an existing
     connection, the licensee shall have regard to:

     (a)    the benefit (if any) to be obtained or likely in the future to be
            obtained by the licensee or any other person as a result of the
            carrying out of such works whether by reason of the reinforcement or
            extension of the licensee's distribution system or the provision of
            additional entry or exit points on such system or otherwise;

     (b)    the ability or likely future ability of the licensee to recoup a
            proportion of such costs from third parties; and

     (c)    the principles that:

                                       46

<PAGE>

          (i)  no charge will normally be made for reinforcement of the existing
               distribution system if the new or increased load requirement does
               not exceed 25 per cent of the existing effective capacity at the
               relevant points on the system; and

          (ii) charges will not generally take into account system reinforcement
               carried out at more than one voltage level above the voltage of
               connection.

6.   The licensee shall offer terms for agreements in accordance with paragraphs
     2 and 4 as soon as practicable and (save where the Authority consents to a
     longer period) in any event not more than the period specified in paragraph
     7 after receipt by the licensee (or its agent) from any person of an
     application containing all such information as the licensee may reasonably
     require for the purpose of formulating the terms of the offer.

7.   For the purposes of paragraph 6, the period specified shall be:

     (a)  in the case of persons seeking the provision of use of system only, 28
          days;

     (b)  in the case of persons seeking connection or a modification to an
          existing connection, 3 months; and

     (c)  in the case of persons seeking use of system in conjunction with
          connection or a modification to an existing connection, 3 months.

8.   The licensee shall not be obliged pursuant to this condition to offer to
     enter or to enter into any agreement:

     (a)  under paragraphs 2 and 4 if to do so would be likely to involve the
          licensee being:

          (i)  in breach of its duties under section 9 of the Act;

                                       47

<PAGE>

          (ii)  in breach of any regulations made under section 29 of the Act or
                of any other enactment relating to safety or standards
                applicable in respect to the distribution business;

          (iii) in breach of the Grid Codes or the licensee's Distribution Code;
                or

          (iv)  in breach of the conditions; or

     (b)  under paragraph 2 or 4, if the person making the application does not
          undertake to be bound, in so far as applicable, by the terms of the
          licensee's Distribution Code or the applicable Grid Code from time to
          time in force; or

     (c) under paragraphs 2 and 4, if to do so would be likely to involve the
          licensee doing something which, without the consent of another person,
          would require the exercise of a power conferred by any provision of
          Schedules 3 or 4 to the Act; where the licence does not provide for
          that provision to have effect in relation to it; and any necessary
          consent has not, at the time the request is made, been given.

9.   The licensee shall within 28 days following receipt of a request from any
     person, give or send to such person such information in the possession of
     the licensee as may be reasonably required by such person for the purpose
     of completing an application under the Application Regulations or such
     provisions to like effect contained in any further regulations then in
     force made pursuant to sections 6(3), 60 and 64(1) of the Act.

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<PAGE>

Condition 4C. Functions of the Authority

1.   If, after a period which appears to the Authority to be reasonable for the
     purpose, the licensee has failed to enter into an agreement with any person
     entitled or claiming to be entitled thereto pursuant to a request under
     standard condition 4B (Requirement to Offer Terms for Use of System and
     Connection) for use of system, or an agreement for connection, the
     Authority may, on the application of such person or the licensee, settle
     any terms of the agreement in dispute between the licensee and that person
     in such manner as appears to the Authority to be reasonable having (in so
     far as relevant) regard in particular to the following considerations:

     (a)  that such a person should pay to the licensee, in the case of
          provision of use of system, the use of system charges determined in
          accordance with standard condition 4 (Basis of Charges for Use of
          System and Connection to System: Requirements for Transparency); and

          in the case of provision of a connection or modification to an
          existing connection to the system, the whole or an appropriate
          proportion (as determined in accordance with paragraph 4 of standard
          condition 4B (Requirement to Offer Terms for Use of System and
          Connection)) of the costs referred to in paragraph 4 of standard
          condition 4 (Basis of Charges for Use of System and Connection to
          System: Requirements for Transparency), together with a reasonable
          rate of return on the capital represented by such costs;

     (b)  that the performance by the licensee of its obligations under the
          agreement should not cause it to be in breach of those provisions
          referred to at sub-paragraph 8(a) of standard condition 4B
          (Requirement to Offer Terms for Use of System and Connection);

     (c)  that any methods by which the licensee's distribution system is
          connected to any other system for the transmission or distribution of
          electricity accord (in so far as applicable to the licensee) with the
          applicable Distribution Codes and Grid Codes; and

                                       49

<PAGE>

     (d)  that the terms and conditions of the agreement so settled by the
          Authority and of any other agreements entered into by the licensee
          pursuant to a request under standard condition 4B (Requirement to
          Offer Terms for Use of System and Connection) should be in as similar
          a form as is practicable.

2.   In so far as any person entitled or claiming to be entitled to an offer
     under standard condition 4B (Requirement to Offer Terms for Use of System
     and Connection) wishes to proceed on the basis of an agreement as settled
     by the Authority pursuant to paragraph 1, the licensee shall forthwith
     enter into and implement such agreement in accordance with its terms.

3.   If either party to such agreement proposes to vary the contractual terms of
     any agreement for use of system, for the provision of a connection or for
     the modification to an existing connection to the licensee's distribution
     system, entered into pursuant to standard condition 4B (Requirement to
     Offer Terms for Use of System and Connection) or under this condition in
     any manner provided for under such agreement, the Authority may, at the
     request of that party, settle any dispute relating to such variation in
     such manner as appears to the Authority to be reasonable.

                                       50

<PAGE>

Condition 5. Distribution System Planning Standard and Quality of Service

1.   The licensee shall plan and develop the licensee's distribution system in
     accordance with a standard not less than that set out in Engineering
     Recommendation P.2/5 (October 1978 revision) of the Electricity Council
     Chief Engineers' Conference in so far as applicable to it or such other
     standard of planning as the licensee may, following consultation (where
     appropriate) with the transmission company and any other authorised
     electricity operator liable to be materially affected thereby and with the
     approval of the Authority, adopt from time to time.

2.   The licensee shall within 3 months after this condition comes into force
     draw up and submit to the Authority for its approval a statement setting
     out criteria by which the quality of performance of the licensee in
     maintaining the licensee's distribution system's security and availability
     and quality of service may be measured.

3.   The licensee shall within 2 months after the end of each financial year
     submit to the Authority a report providing details of the performance of
     the licensee during the previous financial year against the criteria
     referred to in paragraphs 1 and 2.

4.   The Authority may (following consultation with the licensee and, where
     appropriate, with the transmission company and any other authorised
     electricity operator liable to be materially affected thereby) issue
     directions relieving the licensee of its obligation under paragraph 1 in
     respect of such parts of the licensee's distribution system and to such
     extent as may be specified in the directions.

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<PAGE>

Condition 6. Safety and Security of Supplies Enquiry Service

1.   The licensee shall establish, or procure the establishment of, and
     subsequently operate and maintain, or procure the subsequent operation and
     maintenance of, an enquiry service for use by any person for the purposes
     of receiving reports and offering information, guidance or advice about any
     matter or incident which:

     (a)  affects or is likely to affect the maintenance of the security,
          availability and quality of service of the licensee's distribution
          system; or

     (b)  arises from or in connection with the operation of, or otherwise
          relates to, the licensee's distribution system and which causes danger
          or requires urgent attention or is likely to cause danger or require
          urgent attention.

2.   The service established, operated and maintained in accordance with
     paragraph 1 shall:

     (a)  be provided without charge by the licensee to the user at the point of
          use;

     (b)  ensure that all reports and enquiries are processed in a prompt and
          efficient manner whether made by telephone, in writing or in person;
          and

     (c)  be available to receive and process telephone reports and enquiries at
          all times on every day of each year.

3.   In the establishment and operation and maintenance of the enquiry service
     in accordance with paragraph 1 the licensee shall not discriminate between
     any persons or class or classes of persons.

4.   In the establishment, operation and maintenance of the enquiry service in
     accordance with paragraph 1 the licensee shall not restrict, distort or
     prevent competition in the supply of electricity.

5.   The licensee shall have in force at all times a statement approved by the
     Authority setting out details of the service to be provided in accordance
     with paragraph 1, and the licensee shall give or send a copy of such
     statement to any person requesting it.

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<PAGE>

6.   The licensee shall give to the Authority notice of any amendments it
     proposes to make to the statement prepared under paragraph 5, and shall not
     make such amendments until either:

     (a)  a period of one month from the date of the notice has expired; or

     (b)  prior to the expiry of such period, the licensee has obtained the
          written approval of the Authority to such amendments.

7.   The licensee shall take steps to inform each authorised electricity
     operator which uses the service of any change to the address or telephone
     number of such service established, operated and maintained in accordance
     with paragraph 1, as soon as is practicable but in any event prior to such
     change becoming effective.

                                       53

<PAGE>

Condition 7. Provision of Information about Theft or Abstraction of Electricity,
Damage and Meter Interference

1.   Where a person other than the licensee is the owner of any electrical
     plant, electric lines or meter the licensee shall, as soon as is reasonably
     practicable, inform that person of any incident where the licensee has
     reason to believe:

     (a)  that there has been damage to such electrical plant, electric line or
          metering equipment; or

     (b)  that there has been interference with the metering equipment to alter
          its register or prevent it from duly registering the quantity of
          electricity supplied;

     provided that the licensee shall not be obliged to inform the owner of any
     electrical plant, electrical line or meter of any such incident where it
     has reason to believe that the damage or interference referred to above was
     caused by such owner.

2.   Where the licensee, in the course of providing services to any person
     supplying electricity to premises directly connected to the licensee's
     distribution system, has reason to believe that:

     (a)  there has been damage to any electrical plant, electric line or
          metering equipment through which such premises are supplied with
          electricity; or

     (b)  there has been interference with the metering equipment through which
          such premises are supplied to alter its register or prevent it from
          duly registering the quantity of electricity supplied,

     the licensee shall, as soon as reasonably practicable, inform that person
     (the person supplying electricity to the premises in question) of the
     incident in question.

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<PAGE>

Condition 8. Provisions Relating to the Connection of Metering Equipment

1.   On application made by any person the licensee shall, subject to paragraph
     5, offer to enter into an agreement authorising that person to connect
     metering equipment to the licensee's distribution system.

2.   In making an offer to enter into an agreement specified in paragraph 1, the
     licensee shall set out:

     (a)  the date from which the applicant is authorised to undertake
          connections;

     (b)  the procedures to be adopted by the applicant when making connections,
          with particular regard to those relating to safety; and

     (c)  such other detailed terms as are or may be appropriate for the
          purposes of the agreement.

3.   The licensee shall offer terms for an agreement in accordance with
     paragraph 1 as soon as practicable and (save where the Authority consents
     to a longer period) in any event not more than 28 days after receipt by the
     licensee from any person of an application containing all such information
     as the licensee may reasonably require for the purpose of formulating the
     terms of the offer.

4.   In the offering of the terms in accordance with paragraph 1, the licensee
     shall not show undue preference to or exercise undue discrimination against
     any person or class or classes of persons and shall not offer terms or
     operate in such a way as to restrict, distort or prevent competition.

5.   The licensee shall not be obliged pursuant to this condition to offer to
     enter or to enter into any agreement where to do so would be likely to
     cause the licensee to be in breach of those provisions referred to at
     paragraph 7(a) of standard condition 4B (Requirement to Offer Terms for Use
     of System and Connection).

6.   If, after a period which appears to the Authority to be reasonable for the
     purpose, the licensee has failed to enter into an agreement with any person
     entitled or claiming to be entitled thereto pursuant to a request under
     this condition, the Authority may, on the

                                       55

<PAGE>

     application of such person or the licensee, settle any terms of the
     agreement in dispute between the licensee and that person in such manner as
     appears to the Authority to be reasonable.

7.   If the licensee or other party to such agreement proposes to vary the terms
     of any agreement entered into pursuant to this condition in any manner
     provided for under such agreement, the Authority may, at the request of the
     licensee or other party to such agreement, settle any dispute relating to
     such variation in such manner as appears to the Authority to be reasonable.

8.   In so far as any person entitled or claiming to be entitled to an offer
     under this condition wishes to proceed on the basis of an agreement or a
     variation to it as settled by the Authority pursuant to paragraphs 6 and 7,
     the licensee shall forthwith enter into and implement such agreement or
     variation in accordance with its terms.

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<PAGE>

Condition 9. Distribution Code

1.   The licensee shall in consultation with authorised electricity operators
     liable to be materially affected thereby prepare and at all times have in
     force and shall implement and (subject to paragraph 10 of this condition)
     comply with a Distribution Code:

     (a)  covering all material technical aspects relating to connections to and
          the operation and use of the licensee's distribution system or (in so
          far as relevant to the operation and use of the licensee's
          distribution system) the operation of electric lines and electrical
          plant connected to the licensee's distribution system and (without
          prejudice to the foregoing) making express provision as to the matters
          referred to in paragraph 5 below; and

     (b)  which is designed so as:

          (i)  to permit the development, maintenance and operation of an
               efficient, co-ordinated and economical system for the
               distribution of electricity; and

          (ii) to facilitate competition in the generation and supply of
               electricity.

2.   The Distribution Code in force at the date this condition comes into force
     shall be sent to the Authority for its approval. Thereafter the licensee
     shall (in consultation with authorised electricity operators liable to be
     materially affected thereby) periodically review (including upon the
     request of the Authority) the Distribution Code and its implementation.
     Following any such review, the licensee shall send to the Authority:

     (a)  a report on the outcome of such review; and

     (b)  any proposed revisions to the Distribution Code from time to time as
          the licensee (having regard to the outcome of such review) reasonably
          thinks fit for the achievement of the objectives referred to in
          sub-paragraph 1(b); and

     (c)  any written representations or objections from authorised electricity
          operators (including any proposals by such operators for revisions to
          the Distribution Code not accepted by the licensee in the course of
          the review) arising during the consultation process and subsequently
          maintained.

3.   Revisions to the Distribution Code proposed by the licensee and sent to the
     Authority pursuant to paragraph 2 must receive the prior approval of the
     Authority before being implemented.

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<PAGE>

4.   Having regard to any written representations or objections referred to in
     sub-paragraph 2(c), and following such further consultation (if any) as the
     Authority may consider appropriate, the Authority may issue directions
     requiring the licensee to revise the Distribution Code in such manner as
     may be specified in the directions, and the licensee shall forthwith comply
     with any such directions.

5.   The Distribution Code shall include:

     (a)  a distribution planning and connection code containing:

          (i)  connection conditions specifying the technical, design and
               operational criteria to be complied with by any person connected
               or seeking connection to the licensee's distribution system; and

          (ii) planning conditions specifying the technical and design criteria
               and procedures to be applied by the licensee in the planning and
               development of the licensee's distribution system and to be taken
               into account by persons connected or seeking connection with the
               licensee's distribution system in the planning and development of
               their own plant and systems; and

     (b)  a distribution operating code specifying the conditions under which
          the licensee shall operate the licensee's distribution system and
          under which persons shall operate their plant and/or distribution
          systems in relation to the licensee's distribution system, in so far
          as necessary to protect the security and quality of supply and safe
          operation of the licensee's distribution system under both normal and
          abnormal operating conditions.

6.   The licensee shall give or send a copy of the Distribution Code (as from
     time to time revised) to the Authority.

7.   The licensee shall (subject to paragraph 8) give or send a copy of the
     Distribution Code (as from time to time revised) to any person requesting
     the same.

8.   The licensee may make a charge for any copy of the Distribution Code (as
     from time to time revised) given or sent pursuant to paragraph 7 of an
     amount which will not exceed any

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<PAGE>

     amount specified for the time being for the purposes of this condition in
     directions issued by the Authority.

9.   In preparing, implementing and complying with the Distribution Code
     (including in respect of the scheduling of maintenance of the licensee's
     distribution system), the licensee shall not unduly discriminate between or
     unduly prefer any person or class or classes of persons.

10.  The Authority may (following consultation with the licensee) issue
     directions relieving the licensee of its obligations under the Distribution
     Code in respect of such parts of the licensee's distribution system and to
     such extent as may be specified in the directions.

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Condition 9A. Compliance with other Distribution Codes

1.   The licensee shall comply with the provisions of the other Distribution
     Codes insofar as applicable to the licensee or the licensee's distribution
     business.

2.   The Authority may, following consultation with the licensed distributor(s)
     responsible for any other Distribution Code(s) and any authorised
     electricity operators directly affected thereby, issue directions relieving
     the licensee of its obligation in paragraph 1 in respect of such parts of
     the other Distribution Code(s) and to such extent and subject to such
     conditions as may be specified in those directions.

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<PAGE>

Condition 10.  Balancing and Settlement Code and NETA Implementation

1.   Insofar as the licensee shall distribute or offer to distribute electricity
     within any area of England and Wales, the licensee shall be a party to the
     BSC Framework Agreement and shall comply with the BSC.

2.   The licensee shall comply with the programme implementation scheme
     established in accordance with paragraph 3 as modified from time to time in
     accordance with paragraph 5.

3.   The programme implementation scheme is a scheme designated by the Secretary
     of State setting out the steps, including without limitation steps as to
     the matters referred to in paragraph 4, to be taken (or procured) by the
     licensee (and/or by authorised electricity operators) which are, in the
     Secretary of State's opinion, appropriate in order to give full and timely
     effect to:

     (a)  any modifications made to this licence and to the licences of
          authorised electricity operators by the Secretary of State pursuant to
          the power vested in him under section 15A of the Act;
     (b)  any conditions imposed by any exemption from the requirement to hold
          any such licence; and
     (c)  the matters envisaged by such modifications and conditions.

4.   The programme implementation scheme may include provisions, inter alia,

     (a)  to secure or facilitate the amendment of any of the core industry
          documents;
     (b)  to secure that any systems, persons or other resources employed in the
          implementation of the Pooling and Settlement Agreement may be employed
          in the implementation of the BSC;
     (c)  for the giving of the indemnities against liabilities to which parties
          to the Pooling and Settlement Agreement may be exposed;
     (d)  for securing the co-ordinated and effective commencement of
          implementation of and operations under the BSC, including the testing,
          trialling and start-up of the

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<PAGE>

          systems, processes and procedures employed in such implementation and
          employed by authorised electricity operators and others in connection
          with such operations;

     (e)  for co-ordinating the administration and implementation of the BSC and
          the administration of the Pooling and Settlement Agreement;

     (f)  for the licensee to refer to the Authority for determination, whether
          of its own motion or as provided in the programme implementation
          scheme, disputes, as to matters covered by the scheme, between persons
          who are required (by conditions of their licences or exemptions) or
          who have agreed to comply with the scheme or any part of it; and

     (g)  for the Authority, in the circumstances set out in the scheme, to
          require that consideration be given to the making of a proposal to
          modify the BSC and, if so, to require the making of such proposal in
          the manner set out in the scheme, such power to be exercisable at any
          time within the period of 12 months after the start of the first
          period for trading under the BSC as determined by the Secretary of
          State.

5.   (a)  The Secretary of State may at any time direct, in accordance with the
          provisions of the programme implementation scheme, that the programme
          implementation scheme be modified in the manner set out in such
          direction, in order to give (or continue to give) full and timely
          effect to the matters described in paragraph 3.

     (b)  The Secretary of State shall serve a copy of any such direction on the
          licensee, and thereupon the licensee shall comply with the scheme as
          modified by the direction.

6.   If there is any conflict between the requirements contained in the
     programme implementation scheme pursuant to paragraph 4(a) and/or imposed
     on the licensee by paragraphs 2 and 5 of this condition, and those imposed
     on the licensee by any other condition, the provisions of paragraph(s)
     4(a), 2 and/or 5 (as appropriate) shall prevail.

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7.   Without prejudice to paragraph 2, the licensee shall use all reasonable
     endeavours to do such things as may be requisite and necessary in order to
     give full and timely effect to the modifications made to this licence as
     determined by the Secretary of State pursuant to the power vested in him
     under section 15A of the Act (and to give full and timely effect to the
     matters envisaged by such modifications).

8.   In this condition:

     "BSC"                        means the balancing and settlement code
                                  required to be in place, pursuant to the
                                  transmission licence granted to the
                                  transmission company in England and Wales, as
                                  from time to time modified.

     "BSC Framework Agreement"    means the agreement of that title, in the form
                                  approved by the Secretary of State, by which
                                  the BSC is made contractually binding between
                                  the parties to that agreement, as from time to
                                  time amended, with the consent of the
                                  Secretary of State.

     "core industry documents"    mean those documents which:

                                  (a) in the Secretary of State's opinion are
                                      central industry documents associated with
                                      the activities of the licensee and
                                      authorised electricity operators, the
                                      subject matter of which relates to or is
                                      connected with the BSC or the balancing
                                      and settlement arrangements, and

                                  (b) have been so designated by the Secretary
                                      of State.

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Condition 11. Change Co-ordination for NETA

1.   Insofar as the licensee shall distribute or offer to distribute electricity
     within any area of England and Wales, the licensee shall take all
     reasonable measures to secure and implement (consistently with the
     procedures applicable under or in relation to the core industry documents
     to which it is party (or in relation to which it holds rights in respect of
     amendment) as modified or replaced from time to time), and shall not take
     any steps to prevent or unduly delay, changes to those documents , such
     changes being changes which are appropriate in order to give full and
     timely effect to and/or in consequence of any modification which has been
     made to the BSC.

2.   For the purposes of paragraph 1, core industry documents has the meaning
     given in paragraph 8 of standard condition 10 (Balancing and Settlement
     Code and NETA Implementation).

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Condition 12. Settlement Agreement for Scotland

1.   In so far as the licensee shall distribute or offer to distribute
     electricity within any area of Scotland or to the extent that the
     Settlement Agreement for Scotland may apply in respect of the activities of
     the distribution business, the licensee shall comply with the relevant
     provisions of the Settlement Agreement for Scotland.

2.   In this condition:

     "Settlement Agreement for Scotland" means the agreement of that title, as
     nominated by the Authority for the purposes of this condition, to be
     prepared in accordance with and comprise such matters as are set out in
     special condition I (The Settlement Agreement for Scotland) of each of the
     electricity distribution licences of SP Distribution Limited, and Scottish
     Hydro-Electric Power Distribution Limited (and any other name by which any
     of these companies come to be known), as from time to time revised with the
     approval of the Authority.

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Condition 12A. Compliance with the Trading Code in Scotland

1.   (a)  Insofar as the licensee shall distribute or offer to distribute
          electricity within any area of Scotland, the licensee shall comply
          with the provisions of the Trading Code during any period that the
          licensee is a member of the trading system established by the Trading
          Code, including any requirements thereunder for the Authority's
          approval or consent, for compliance with directions issued by the
          Authority or relating to determinations made by the Authority.

     (b)  The Authority may (following consultation with such other members of
          such trading system as the Authority shall consider appropriate) issue
          directions relieving the licensee of its obligation under
          sub-paragraph (a) in respect of such parts of the Trading Code and to
          such extent as may be specified in those directions.

2.   In this condition:

     "Trading Code"     means the trading code required to be adopted pursuant
                        to standard condition D2 (Trading Code for Scotland) of
                        the standard conditions of transmission licences and
                        approved by the Authority as from time to time revised
                        with the approval of the Authority.

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Condition 13.  Change Co-ordination for the Utilities Act 2000

1.   The licensee shall take all reasonable measures to secure and implement,
     and shall not take any steps to prevent or unduly delay, such changes to
     the industry framework documents as are necessary or expedient to give full
     and timely effect to the provisions of the Utilities Act 2000.

2.   In complying with paragraph 1, the licensee shall act in the case of each
     industry framework document consistently with the change procedures
     currently applicable to that document, except where to do so would be
     inconsistent with any provision of the Utilities Act 2000, in which event
     that provision shall take precedence.

3.   For the purposes of this condition, "industry framework document" means,
     subject to paragraph 4, any of the following documents to which the
     licensee is a party, or in relation to which it holds rights in respect of
     amendment or termination, together with any documents which are
     supplemental or ancillary thereto:

     (a) the Pooling and Settlement Agreement;
     (b) the Balancing and Settlement Code;
     (c) Master Connection and Use of System Agreement or the Connection and Use
         of System Code;
     (d) the Settlement Agreement for Scotland;
     (e) the Master Registration Agreement;
     (f) the Data Transfer services Agreement;
     (g) the Radio Teleswitch Agreement;
     (h) any Grid Code or Scottish Grid Code;
     (i) any Distribution Code;
     (j) the Trading Code;
     (k) the Fuel Security Code;
     (l) any agreement for use of an interconnector or Scottish interconnection;
         and

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     (m)  any agreement for the provision of distribution use of system, meter
          provision services, meter maintenance services, data retrieval
          services, data processing services, data aggregation services, or
          prepayment meter services.

4.   Where the Authority considers that the list of industry framework documents
     set out in paragraph 3 should be modified for the purposes of this
     condition generally, the licensee shall discuss any proposed modification
     (including addition) to the list in good faith and use all reasonable
     endeavours to agree such modification with the Authority.

5.   This condition shall cease to have effect on 30 June 2002 or such earlier
     date as the Authority may specify in a direction given for the purposes of
     this condition generally.

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Condition 14. The Master Registration Agreement

1.   The licensee shall be a party to and shall comply with the provisions of
     the Master Registration Agreement.

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<PAGE>

Condition 15. Compliance with the Grid Codes

1.   The licensee shall comply with the provisions of every Grid Code in so far
     as applicable to it.

2.   The Authority may (following consultation with the transmission company
     responsible for the relevant Grid Code) issue directions relieving the
     licensee of its obligation under paragraph 1 in respect of such parts of
     such Grid Code and to such extent and subject to such conditions as may be
     specified in those directions.

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<PAGE>

Condition 16. Security Arrangements

1.   Insofar as the licensee shall distribute or offer to distribute electricity
     within any area of England and Wales, the licensee shall comply with the
     provisions of the Fuel Security Code and such provisions shall have effect
     as if they were set out in this licence.

2.   Insofar as the licensee shall distribute or offer to distribute electricity
     within any area of Scotland:

     (a)  if so directed in directions issued by the Authority for the purposes
          of this condition, the licensee shall, not later than such date as may
          be specified in such directions, enter into an agreement designated by
          the Secretary of State for the purposes of this condition relating to
          compliance with directions issued by the Secretary of State under
          section 34 and/or section 35 of the Act; and

     (b)  the licensee shall comply with and perform its obligations under any
          agreement which it enters into pursuant to sub-paragraph (a) above.

3.   In this condition:

        "Fuel Security Code"        means the document of that title designated
                                    as such by the Secretary of State as from
                                    time to time amended.

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Condition 17. Provision of Services for Persons who are of Pensionable Age or
Disabled or Chronically Sick


1.   The licensee shall, no later than 1 November 2001, prepare and submit to
     the Authority for its approval a code of practice detailing the special
     services the licensee will make available for domestic customers who are of
     pensionable age or disabled or chronically sick.

2.   The code of practice shall include arrangements whereby the licensee will:


     (a)  maintain a register of customers who have special communication needs
          or depend on electricity for medical reasons by virtue of being of
          pensionable age or disabled or chronically sick, and who require
          advance notice of planned interruptions to the supply of electricity,
          comprising the relevant details of each customer who requests or whose
          supplier requests his inclusion on it;

     (b)  give to all customers so registered, either via the relevant supplier
          or, where appropriate, directly, in respect of interruptions to the
          supply of electricity, such information and advice as may be
          appropriate and is of such nature as shall be set out in the code of
          practice, provided that where the licensee is providing the supplier
          with any such information, the licensee shall provide such information
          as soon as is practicable; and

     (c)  in the case where the request for the inclusion in the register is
          made directly to the licensee, provide the relevant supplier with the
          relevant details in such form and at such intervals as is relevant to
          the supplier's licence obligations.

3.   This condition is subject to the provisions of standard condition 22
     (Preparation, Review of and Compliance with Customer Service Codes).

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<PAGE>

Condition 18. Provision of Services for Persons who are Blind or Deaf

1.   The licensee shall, no later than 1 November 2001, prepare and submit to
     the Authority for its approval a code of practice detailing the special
     services the licensee will make available for domestic customers who are
     disabled by virtue of being blind or partially sighted, or deaf or hearing
     impaired.

2.   The code of practice shall include arrangements by which the licensee will,
     on request, in each case free of charge:


     (a)  make available to blind and partially sighted domestic customers a
          facility for enquiring or complaining about any service provided by
          the licensee, by telephone or other appropriate means; and

     (b)  make available to deaf and hearing impaired domestic customers, being
          in possession of appropriate equipment, facilities to assist them in
          enquiring or complaining about any service provided by the licensee.

3.   This condition is subject to the provisions of standard condition 22
     (Preparation, Review of and Compliance with Customer Service Codes).

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<PAGE>

Condition 19. Code of Practice on Procedures with Respect to Site Access

1.   The licensee shall, no later than 1 November 2001, prepare and submit to
     the Authority for its approval a code of practice setting out the
     principles and procedures the licensee will follow in respect of any person
     acting on its behalf who requires access to customers' premises.

2.   The code of practice shall include procedures calculated to ensure that
     persons visiting customers' premises on behalf of the licensee:

     (a)  possess the skills necessary to perform the required duties;

     (b)  are readily identifiable to members of the public;

     (c)  use passwords provided for vulnerable customers;

     (d)  are appropriate persons to visit and enter customers' premises;

     (e)  are able to inform customers, on request, of a contact point for help
          and advice they may require in relation to the safety and security of
          the supply of the electricity; and

     (f)  comply with the provisions of the Rights of Entry (Gas and Electricity
          Boards) Act 1954.

3.   This condition is subject to the provisions of standard condition 22
     (Preparation, Review of and Compliance with Customer Service Codes).

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<PAGE>

Condition 20.  Payments in Relation to Standards of Performance

1.   The licensee shall not enter into a use of system agreement with any
     electricity supplier that does not provide for the licensee to make
     payments in respect of the performance of the distribution business of the
     licensee to the electricity supplier for the benefit of any customer of
     that electricity supplier equivalent to such sums as would have been paid
     pursuant to any provision of Regulations made under section 39A of the Act.

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<PAGE>

     Condition 21. Complaint Handling Procedure

1.   The licensee shall, no later than 1 November 2001, prepare and submit to
     the Authority for its approval a code of practice detailing the procedure
     for handling complaints from domestic customers about the manner in which
     the licensee conducts its distribution business.

2.   Any procedure established in accordance with this condition shall specify
     the periods within which it is intended that different descriptions of
     complaint should be processed and resolved.

3.   This condition is subject to the provisions of standard condition 22
     (Preparation, Review of and Compliance with Customer Service Codes).

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<PAGE>

Condition 22. Preparation, Review of and Compliance with Customer Service Codes

1.   This condition applies to any code of practice required to be prepared by
     the licensee pursuant to standard condition 17 (Provision of Services for
     Persons who are of Pensionable Age or Disabled or Chronically Sick),
     standard condition 18 (Provision of Services for Persons who are Blind or
     Deaf), standard condition 19 (Code of Practice on Procedures in Respect of
     Site Access) and standard condition 21 (Complaint Handling Procedure) of
     this licence.

2.   In first preparing such a code the licensee shall, prior to submitting that
     code to the Authority, consult the Consumer Council and shall have regard
     to any representations made by the Consumer Council about such code or the
     manner in which it is likely to be operated.

3.   Where before the expiry of 30 days of the licensee first submitting such
     code to the Authority for its approval the Authority notifies the licensee
     that the Authority considers the code is not sufficient for the purposes of
     meeting the requirements of this licence, the licensee shall forthwith make
     such changes as the Authority may require.

4.   The licensee shall, whenever requested to do so by the Authority, review
     such code and the manner in which it has been operated, with a view to
     determining whether any modification should be made to it or to the manner
     of its operation.

5.   In carrying out any such review the licensee shall consult the Consumer
     Council and shall have regard to any representations made by the Consumer
     Council about such code or the manner in which it is likely to be or (as
     the case may be) has been operated.

6.   The licensee shall submit any revision of such code which, after consulting
     the Consumer Council in accordance with paragraph 5, the licensee wishes to
     make, to the Authority for its approval and following its approval in
     writing shall then revise the code accordingly.

7.   The licensee shall:

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     (a)  as soon as practicable following the preparation of any code or any
          revision made to it send to the Authority and the Consumer Council a
          copy of such code or such revision (in each case in the form approved
          by the Authority);

     (b)  at least once in each year, draw the attention of those customers to
          whom such code applies, to the existence of the code and of each
          substantive revision of it and to the means by which a copy of such
          code may be inspected in its latest form, in such manner as in the
          reasonable opinion of the licensee will give adequate publicity to it;
          and

     (c)  give or send free of charge a copy of such code (as from time to time
          revised) to any person who requests it.

8.   No changes may be made to any code otherwise than in accordance with the
     foregoing procedures.

9.   The licensee shall ensure, so far as reasonably practicable, that it
     complies with such arrangements or procedures (as the case may be) as are
     contained in or described by any code to which this condition applies and
     approved by the Authority or any revision to such code approved by the
     Authority.

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Condition 23. Record of and Report on Performance

1.   The licensee shall keep a record of its general operation of the
     arrangements mentioned in standard conditions 17 to 22 and if the Authority
     so directs in writing, of its operation of any particular cases specified,
     or of a description specified, by the Authority.

2.   The licensee shall keep a statistical record of its performance in relation
     to the provision of services to domestic customers.

3.   The licensee shall, from time to time as required by the Authority, provide
     to the Authority and to the Consumer Council such of the information
     contained in the records prepared in accordance with paragraphs 1 and 2 as
     the Authority may request in writing.

4.   As soon as is reasonably practicable after the end of each calendar year,
     the licensee shall submit to the Authority and the Consumer Council a
     report dealing with the matters mentioned in paragraphs 1 and 2 in relation
     to that year and shall:

     (a)  publish the report so submitted in such manner as will in the
          reasonable opinion of the licensee secure adequate publicity for it;
          and

     (b)  send a copy of it free of charge to any person requesting one,

     except that, in performing its obligations under sub-paragraphs (a) and
     (b), the licensee shall exclude from the report such information as
     appears to it to be necessary or expedient to ensure that, save where
     they consent, individual domestic customers referred to therein cannot
     readily be identified.

5.   The report shall be presented, so far as is reasonably practicable, in a
     standard form designated by the Authority for the purposes of this
     condition.

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Condition 24. Provision of Information to the Authority

1.   Subject to paragraphs 5 and 7, the licensee shall furnish to the Authority,
     in such manner and at such times as the Authority may reasonably require,
     such information and shall procure and furnish to it such reports, as the
     Authority may reasonably require or as may be necessary for the purpose of
     performing:

     (a)  the functions conferred on it by or under the Act; and

     (b)  any functions transferred to or conferred on it by or under the
          Utilities Act 2000.

2.   The licensee shall procure from each company or other person which the
     licensee knows or reasonably should know is at any time an ultimate
     controller of the licensee a legally enforceable undertaking in favour of
     the licensee in a form specified by the Authority that that ultimate
     controller ("the information covenantor") will give to the licensee, and
     will procure that any person (including, without limitation, a corporate
     body) which is a subsidiary of, or is controlled by, the information
     covenantor (other than the licensee and its subsidiaries) will give to the
     licensee, all such information as may be necessary to enable the licensee
     to comply fully with the obligation imposed on it in paragraph 1. Such
     undertaking shall be obtained within 7 days of such corporate body or other
     person in question becoming an ultimate controller of the licensee and
     shall remain in force for so long as the licensee remains the holder of
     this licence and the information covenantor remains an ultimate controller
     of the licensee.

3.   The licensee shall deliver to the Authority evidence (including a copy of
     each such undertaking) that the licensee has complied with the obligation
     to procure undertakings pursuant to paragraph 2, and shall comply with any
     direction from the Authority to enforce any undertaking so procured.

4.   The licensee shall not, save with the consent in writing of the Authority,
     enter (directly or indirectly) into any agreement or arrangement with any
     ultimate controller of the licensee or, where the ultimate controller is a
     corporate body, any of the subsidiaries of such a corporate ultimate
     controller (other than the subsidiaries of the licensee) at a time when:

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<PAGE>

     (a)  an undertaking complying with paragraph 2 is not in place in relation
          to that ultimate controller; or

     (b)  there is an unremedied breach of such undertaking; or

     (c)  the licensee is in breach of the terms of any direction issued by the
          Authority under paragraph 3 of this condition.

5.   The licensee shall not be required by the Authority to furnish it under
     this condition with information for the purpose of the exercise of its
     functions under section 47 of the Act.

6.   The licensee shall, if so requested by the Authority, give reasoned
     comments on the accuracy and text of any information or advice (so far as
     relating to its activities as holder of an electricity distribution
     licence) which the Authority proposes to publish pursuant to section 48 of
     the Act.

7.   This condition shall not require the licensee to produce any documents or
     give any information which it could not be compelled to produce or give in
     evidence in civil proceedings before a court.

8.   The power of the Authority to call for information under this condition is
     in addition to the power of the Authority to call for information under or
     pursuant to any other condition. There shall be a presumption that the
     provision of information in accordance with any other condition is
     sufficient for the purposes of that condition, but that presumption shall
     be rebutted, if the Authority states in writing that in its opinion such
     further information is, or is likely to be, necessary to enable it to
     exercise functions under the condition in question.

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Condition 25. Long Term Development Statement

1.   The purposes of this condition are:

     (a)  to secure the provision by the licensee of information which will
          assist any person who contemplates entering into distribution
          arrangements with the licensee to identify and evaluate the
          opportunities for doing so; and

     (b)  to ensure the general availability of such information in the public
          domain.

2.   Where the Authority gives the licensee a direction to do so, the licensee
     shall prepare and maintain a statement in such form as may be specified in
     the direction for the purposes of this condition generally, containing,
     with respect to each of the 5 succeeding years on a rolling basis beginning
     with 1st April in any year, such information as it is reasonably
     practicable for the licensee to provide which identifies or relates to the
     matters specified in paragraph 4.

3.   The direction specified in paragraph 2 may be given by the Authority at any
     time during a year. Any statement to be prepared by the licensee pursuant
     to paragraph 2 shall be prepared within 3 months of the giving of the
     direction. The licensee shall be obliged to include in the first such
     statement prepared the information referred to in paragraph 2 with respect
     to each year of the 5 succeeding years on a rolling basis beginning with
     1st April of the year in which the direction is given.

4.   The matters referred to at paragraph 2 are:

     (a)  the use likely to be made of the licensee's distribution system;

     (b)  the likely development of the licensee's distribution system;

     (c)  the likely development of those facilities which the licensee expects
          to be taken into account from time to time in determining charges for
          making connections to its distribution system and for use of system;

     (d)  the licensee's plans for modifying its distribution system, including
          works which it expects to be carried out for that purpose within the
          forthcoming 2 years (from the date of the statement);

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     (e)  the identification of those parts of the licensee's distribution
          system which are likely to reach the limit of their capability during
          the succeeding 5 year period, including those parts which may
          experience thermal overloading, voltage problems or excess fault
          levels;

     (f)  the licensee's plans to alleviate or rectify any predicted
          shortcomings in the operation and/or capability of its distribution
          system; and

     (g)  (where applicable) how the actual developments in the recent past
          compared with the licensee's plans contained in previous statements.

5.   Any statement to be prepared by the licensee pursuant to paragraph 2 shall
     be prepared within 3 months of the giving of the relevant direction.

6.   Except in so far as the Authority otherwise consents, the licensee shall on
     an annual basis prepare a revision of any statement prepared under
     paragraph 2 so as to ensure that, so far as is reasonably practicable, the
     information in the revised statement is up to date.

7.   The licensee shall, subject to any requirement to comply with the listing
     rules (within the meaning of Part IV of the Financial Services Act 1986) of
     The Stock Exchange and with paragraph 8 -

     (a)  furnish the Authority with a copy of the statement prepared under
          paragraph 2 and of each revision of the statement prepared under
          paragraph 6;

     (b)  in such form and manner as the Authority may direct, publish such a
          summary of the statement or, as the case may be, of a revision of the
          statement as will assist a person in deciding whether to ask for a
          copy of the statement;

     (c)  prepare a version of the statement or revision which excludes, so far
          as is practicable, any such matter as is mentioned in paragraph 8 and
          send a copy thereof to any person who asks for one and makes such
          payment to the licensee in respect of the cost thereof as it may
          require not exceeding such amount as the Authority may from time to
          time approve for the purposes hereof.

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8.   In complying with the requirements of paragraph 7(b), the licensee shall
     have regard to the need for excluding, so far as is practicable, any matter
     which relates to the affairs of a person where the publication of that
     matter would or might seriously and prejudicially affect his interests.

9.   Any question arising under paragraph 8 as to whether the publication of
     some matter which relates to the affairs of a person would or might
     seriously and prejudicially affect his interests shall be determined by the
     Authority.

10.  A direction given under paragraph 2 is only effective where the Authority
     has informed the licensee of its intention to do so in a notice which:

     (a)  states the date on which it is proposed that the direction should take
          effect;

     (b)  sets out the proposed contents of the direction with respect to the
          form in which the statement is to be prepared and maintained for the
          purposes of this condition;

     (c)  specifies the time (not being less than 28 days from the date of the
          notice) within which representations with respect to the proposed
          direction may be made,

     and has considered any representations which are duly made by the licensee
     and are not withdrawn.

11.  Any consultation undertaken by the Authority with the holder of a licence
     granted under section 6(1)(c) of the Act before the determination of this
     standard condition by the Secretary of State pursuant to section 33(1) of
     the Utilities Act 2000 shall be effective for the purposes of paragraph 10.

12.  In this condition, "distribution arrangements" includes distribution
     arrangements which relate to -

     (a)  the utilisation of the licensee's distribution system; and

     (b)  connections to the licensee's distribution system. -

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Condition 26. Compliance with CUSC

1.   Insofar as the licensee distributes or offers to distribute to any premises
     situated in England and Wales, the licensee shall be a party to the CUSC
     Framework Agreement and shall comply with the CUSC and, if it is party to
     the agreement known as the Master Connection and Use of System Agreement
     ("MCUSA"), execute such other documents as shall be stated as required to
     be made in any direction issued by the Authority to enable the MCUSA and
     its supplemental agreements and ancillary service agreements (as defined or
     referred to in MCUSA) and any associated agreements derived from MCUSA to
     be amended appropriately into the CUSC Framework Agreement, CUSC, bilateral
     agreements, construction agreements and, so far as is appropriate,
     associated agreements derived from CUSC so as to maintain continuity of
     contractual relationships.

2.   The licensee shall take all reasonable steps to secure and implement
     (consistently with the procedures applicable under or in relation to the
     core industry documents to which it is a party (or in relation to which it
     holds rights in respect of amendment)as modified or replaced from time to
     time), and shall not take any steps to prevent or unduly delay, changes to
     those documents, such changes being changes which are appropriate in order
     to give full and timely effect to and/or in consequence of any modification
     which has been made to the CUSC.

3.   For the avoidance of doubt, paragraph 2 is without prejudice to any rights
     of approval, veto or direction in respect of proposed changes to the core
     industry documents which the Authority may have.

4.   In this condition:

     "bilateral agreement"           means an agreement between the holder of a
                                     transmission licence in England and Wales
                                     and a CUSC user supplemental to the CUSC
                                     relating to a direct connection to that
                                     transmission system identifying the
                                     relevant connection site and setting

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                                     out other site specific details in relation
                                     to that connection to the transmission
                                     system, including provisions relating to
                                     payment of connection charges.

     "construction agreement"        means an agreement between the holder of a
                                     transmission licence in England and Wales
                                     and a CUSC user in respect of construction
                                     works required on that transmission system
                                     and the associated construction works of
                                     the CUSC user in relation to a connection
                                     to the transmission system or in relation
                                     to a generating station connected to a
                                     distribution system in England and Wales,
                                     whether for the initial connection or a
                                     modification of the connection.

     "core industry documents"       means those documents which have been
                                     designated by the Secretary of State as
                                     such.

     "CUSC"                          means the Connection and Use of System Code
                                     required to be in place pursuant to the
                                     transmission licence granted to the
                                     transmission company in England and Wales,
                                     as from time to time modified.

     "CUSC Framework Agreement"      means the agreement of that title, in the
                                     form approved by the Secretary of State, by
                                     which the CUSC is made contractually
                                     binding between the parties to that
                                     agreement, as amended from time to time
                                     with the approval of the Secretary of
                                     State.

                                       86

<PAGE>

Condition 27.  Not used

Condition 28.  Not used

                                       87

<PAGE>

Condition 29. Disposal of Relevant Assets

1.   The licensee shall not dispose of or relinquish operational control over
     any relevant asset otherwise than in accordance with the following
     paragraphs of this condition.

2.   Save as provided in paragraph 3, the licensee shall give to the Authority
     not less than two months' prior written notice of its intention to dispose
     of or relinquish operational control over any relevant asset, together with
     such further information as the Authority may request relating to such
     asset or the circumstances of such intended disposal or relinquishment of
     control or to the intentions in regard thereto of the person proposing to
     acquire such asset or operational control over such asset.

3.   Notwithstanding paragraphs 1 and 2, the licensee may dispose of or
     relinquish operational control over any relevant asset:

     (a)   where:

           (i)      the Authority has issued directions/1/ /2/for the purposes
                    of this condition containing a general consent (whether or
                    not subject to conditions) to:

                    (aa)   transactions of a specified description; or
                    (bb)   the disposal of or relinquishment of operational
                           control over relevant assets of a specified
                           description; and

           (ii)     the transaction or the relevant assets are of a description
                    to which such directions apply and the disposal or
                    relinquishment is in accordance with any conditions to which
                    the consent is subject; or

     (b)   where the disposal or relinquishment of operational control in
           question is required by or under any enactment or subordinate
           legislation.

4.   Notwithstanding paragraph 1, the licensee may dispose of or relinquish
     operational control over any relevant asset as is specified in any notice
     given under paragraph 2 in circumstances where:

     (a)   the Authority confirms in writing that it consents to such disposal
           or relinquishment (which consent may be made subject to the
           acceptance by the licensee or any third

____________________
/1/  Direction issued under Condition 27 of the Public Electricity Supply
     Licence of Manweb plc now Standard Condition 29 of this licence (01.04.92)

/2/  General Consent issued under Standard Condition 29 of this licence

                                       88

<PAGE>


           party in favour of whom the relevant asset is proposed to be disposed
           or operational control is proposed to be relinquished to) of such
           conditions as the Authority may specify; or

     (b)   the Authority does not inform the licensee in writing of any
           objection to such disposal or relinquishment of control within the
           notice period referred to in paragraph 2.

5.   In this condition:

     "disposal"                      means:

                                     (a)  in relation to disposal of a relevant
                                     asset situated in England and Wales
                                     includes any sale, gift, exchange,
                                     assignment, lease, licence, loan, mortgage,
                                     charge, or grant of any other encumbrance
                                     or the permitting of any encumbrance to
                                     subsist or any other disposition;

                                     (b) in relation to disposal of a relevant
                                     asset situated in Scotland includes the
                                     grant of any disposition, conveyance,
                                     contract of excambion, any lease,
                                     assignation, licence, the grant of any
                                     right of possession, loan, standard
                                     security, floating charge to a third party,
                                     or the grant of any servitude right,
                                     wayleave or any other transaction or event
                                     which is capable under any enactment or
                                     rule of law of affecting the title to a
                                     registered interest in land

                                     and "dispose" and cognate expressions shall
                                     be construed accordingly;

                                     includes, without limitation, entering into
                                     any agreement or arrangement whereby
                                     operational

                                       89

<PAGE>

                                     control of a relevant asset or relevant
                                     assets is not or ceases to be under the
                                     sole management of the licensee.

     "relinquishment of operational
     control"

                                       90

<PAGE>

Condition 30.  Not used

Condition 31.  Not used

                                       91

<PAGE>

SECTION C.  DISTRIBUTION SERVICES OBLIGATIONS

Condition 32.  Interpretation of Section C (Distribution Services Obligations)

1.   In this Section of the standard conditions, unless the context otherwise
     requires:

     "data transfer catalogue"         has the meaning given at paragraph 5(c)
                                       of standard condition 37 (The Metering
                                       Point Administration Service and the
                                       Master Registration Agreement).

     "data transfer service"           means the data transfer service and
                                       service facility to be established,
                                       operated and maintained by the licensee,
                                       in conjunction and co-operation with all
                                       other distribution services providers, in
                                       accordance with and comprising the
                                       elements set out in standard condition 38
                                       (Establishment of a Data Transfer
                                       Service).

     "Metering Point Administration
     Service"                          means the service to be established,
                                       operated and maintained by the licensee
                                       in accordance with standard condition 37
                                       (The Metering Point Administration
                                       Service and the Master Registration
                                       Agreement).

     "metering point administration
     services"                         means the services of the Metering Point
                                       Administration Service established in
                                       accordance with standard condition 37
                                       (The Metering Point Administration
                                       Service and the Master Registration
                                       Agreement) or, where the context
                                       requires, means the

                                       92

<PAGE>

                                       equivalent services provided by any other
                                       distribution services provider in
                                       accordance with the provisions of its
                                       distribution licence.

     "permitted purpose"               means the purpose of all or any of the
                                       following:

     (a)  the distribution business or any other business or activity within the
          limits of paragraph 4 of standard condition 43 (Restriction on
          Activity and Financial Ring Fencing);

     (b)  any business or activity to which the Authority has given its consent
          in writing in accordance with paragraph 3 (d) of condition 43; and

     (c)  without prejudice to the generality of sub-paragraph (a), any payment
          or transaction lawfully made or undertaken by the licensee for a
          purpose within sub-paragraphs 1(b)(i) to (vii) of standard condition
          47 (Indebtedness);

                                       93

<PAGE>

Condition 32A.  Convenience Customers

1.   The licensee shall establish and maintain an accurate list of any
     convenience customers.

2.   The licensee shall update the list referred to in paragraph 1 at least once
     in every period of 12 months.

                                       94

<PAGE>

Condition 33.  Not used

                                       95

<PAGE>

Condition 34. Compulsory Acquisition of Land etc.

1.   The powers and rights conferred by or under the provisions of Schedule 3 to
     the Act (Compulsory Acquisition of Land etc. by Licence Holders) shall have
     effect in relation to the licensee to enable the licensee to carry on the
     activities authorised by this licence and which:

     (a)  are comprised within its distribution business; and

     (b)  are carried on within the distribution services area or necessitate
          the use of the licensee's distribution system, including any extension
          of or addition to the licensee's distribution system, whether or not
          connected to such system.

                                       96

<PAGE>

Condition 35.  Other Powers etc.

1.   The powers and rights conferred by or under the provisions of Schedule 4 to
     the Act (Other Powers etc. of Licence Holders) shall have effect in
     relation to the licensee to enable the licensee to carry on the activities
     authorised by this licence and which:

     (a)  are comprised within its distribution business; and

     (b)  are carried on within the distribution services area or necessitate
          the use of the licensee's distribution system, including any extension
          of or addition to the licensee's distribution system, whether or not
          connected to such system.

                                       97

<PAGE>

Condition 36. Basis of Charges for Distributor Metering and Data Services:
Requirements for Transparency

1.   The licensee shall as soon as practicable prepare statements in a form
     approved by the Authority setting out the basis upon which charges will be
     made for the provision of each of the distributor metering and data
     services, in each case in such form and with such detail as shall be
     necessary to enable any person to make a reasonable estimate of the charges
     to which the person would become liable to pay for the provision of such
     services and of the other terms, likely to have a material impact on the
     conduct of the person's business, upon which the service would be provided
     and (without prejudice to the foregoing) including the information set out
     in paragraph 2.

2.   The statements referred to at paragraph 1 shall include a schedule of
     charges for each of the distributor metering and data services, together
     with an explanation of the methods by which and the principles on which
     such charges will be calculated.

3.   The Authority may, upon the written request of the licensee, issue a
     direction relieving the licensee of its obligations under paragraph 1 to
     such extent and subject to such terms and conditions as the Authority may
     specify in that direction.

4.   The licensee shall not in setting its charges for, or in setting the other
     terms that will apply to the provision of any of the distributor metering
     and data services, restrict, distort or prevent competition in the
     generation, distribution or supply of electricity or in the provision of
     meter maintenance or data retrieval services.

5.   The licensee:

     (a)  shall, at least once in every year, review the information set out in
          the statements prepared in accordance with paragraph 1 in order that
          the information set out in such statements shall continue to be
          accurate in all material respects; and

     (b)  may, with the approval of the Authority, from time to time alter the
          form of such statements.

                                       98

<PAGE>

6.   The licensee shall send a copy of the statement prepared in accordance with
     paragraph 1, and of each revision of such statement, to the Authority.

7.   The licensee shall give or send a copy of the statement prepared in
     accordance with paragraph 1, or (as the case may be) of the latest revision
     of such statement, to any person who requests a copy of such statement or
     statements.

8.   The licensee may make a charge for any statement given or sent pursuant to
     paragraph 7 of an amount which shall not exceed the amount specified in
     directions issued by the Authority for the purposes of this condition based
     on the Authority's estimate of the licensee's reasonable costs of providing
     such a statement.

                                       99

<PAGE>

Condition 36A. Non-Discrimination in the Provision of Distributor Metering and
Data Services

1.   In the provision of any of the distributor metering and data services, the
     licensee shall not discriminate between any persons or class or classes of
     persons.

2.   Without prejudice to paragraph 1, and subject to the provisions of standard
     condition 36 (Basis of Charges for Distributor Metering and Data Services:
     Requirements for Transparency), the licensee shall not make charges for the
     provision of any of the distributor metering and data services to any
     person or class or classes of persons which differ from the charges for
     such provision to any other person or class or classes of person except in
     so far as such differences reasonably reflect differences in the costs
     associated with such provision.

                                      100

<PAGE>

Condition 36B. Requirement to offer Terms for the Provision of Distributor
Metering and Data Services

1.   This condition sets out the obligations relating to the following services:

     (a)  the provision of metering equipment which, at the discretion of the
          licensee, may be metering equipment which is owned by him or by any
          person other than the person making such application;

     (b)  the installation, commissioning, testing, repair, maintenance, removal
          and replacement of metering equipment;

     (c)  metering point administration services pursuant to and in accordance
          with the Master Registration Agreement; and

     (d)  data transfer services.

2.   On application made by any person, the licensee shall (subject to paragraph
     6) offer to enter into an agreement for the provision within its
     distribution services area of such of the services described in
     sub-paragraphs 1(a), (b) and (c) as may be required.

3.   On application made by any person the licensee shall (subject to paragraph
     6) offer to enter into an agreement for the provision of data transfer
     services.

4.   In making an offer pursuant to this condition to enter into any agreement,
     the licensee shall set out:

     (a)  the date by which the services required shall be provided (time being
          of the essence, unless otherwise agreed between parties);

     (b)  the charges to be paid in respect of the services required, such
          charges (unless manifestly inappropriate):

          (i)  to be presented in such a way as to be referable to the
               statements prepared in accordance with paragraph 1 of standard
               condition 36 (Basis of Charges for Distributor Metering and Data
               Services: Requirements for Transparency) or any revision thereof;

                                      101

<PAGE>

          (ii) to be set in conformity with the requirements of standard
               condition 36 (Basis of Charges for Distributor Metering and Data
               Services: Requirements for Transparency); and

     (c)  such other detailed terms in respect of each of the services required
          as are or may be appropriate for the purpose of the agreement.

5.   The licensee shall offer terms for agreements in accordance with paragraphs
     2 and 3 as soon as practicable and (save where the Authority consents to a
     longer period) in any event not more than 28 days after receipt by the
     licensee (or its agent) from any person of an application containing all
     such information as the licensee may reasonably require for the purpose of
     formulating the terms of the offer.

6.   The licensee shall not be obliged pursuant to this condition to offer to
     enter or to enter into any agreement if to do so would be likely to involve
     the licensee being:

     (a)  in breach of its duties under section 9 of the Act;

     (b)  in breach of any regulations made under section 29 of the Act or of
          any other enactment relating to safety or standards applicable in
          respect of the distribution business;

     (c)  in breach of any Grid Code or Distribution Code; or

     (d)  in breach of the conditions.

7.   The licensee shall undertake each of the services referred to in paragraph
     1 in the most efficient and economic manner practicable having regard to
     the alternatives available and the other requirements of the licence and of
     the Act in so far as they relate to the provision of those services.

8.   In the provision of any of the services referred to in paragraph 1 the
     licensee shall not restrict, distort or prevent competition in the supply
     of electricity.

9.   The services referred to in paragraph 1 shall collectively be referred to
     as the distributor metering and data services. For the avoidance of doubt
     distributor metering and data services as referred to in this licence
     excludes data retrieval, data processing and data aggregation.

                                      102

<PAGE>

10.      In this condition:

         "data retrieval"           means services comprising any or all of the
                                    following:

                                    the retrieval and verification of meter
                                    reading data from electricity meters and the
                                    delivery of such data to any person for the
                                    purpose of data processing.

         "data processing"          means services comprising any or all of the
                                    following:

                                    the processing, validation and estimation of
                                    meter reading data, and the creation,
                                    processing and validation of data in respect
                                    of the consumption of electricity at
                                    premises which receive an unmetered supply,
                                    and the delivery of such data to any person
                                    for the purpose of data aggregation.

         "data aggregation"         means services comprising any or all of the
                                    following:

                                    the collation and summation of meter reading
                                    data (whether actual or estimated) and of
                                    data in respect of the consumption of
                                    electricity at premises which receive an
                                    unmetered supply, and the delivery of such
                                    data to any person for settlement purposes.

                                      103

<PAGE>

Condition 36C. Functions of the Authority

1.   If, after a period which appears to the Authority to be reasonable for the
     purpose, the licensee has failed to enter into an agreement with any person
     entitled or claiming to be entitled thereto pursuant to a request under
     standard condition 36B (Requirement to Offer Terms for the Provision of
     Distributor Metering and Data Services), the Authority may, on the
     application of such person or the licensee, settle any terms of the
     agreement in dispute between the licensee and that person in such manner as
     appears to the Authority to be reasonable having (in so far as relevant)
     regard in particular to the following considerations:

     (a)  that the performance by the licensee of its obligations under the
          agreement should not cause it to be in breach of those provisions
          referred to at paragraph 6 of standard condition 36B (Requirement to
          Offer Terms for the Provision of Distributor Metering and Data
          Services); and

     (b)  that the terms and conditions of the agreement so settled by the
          Authority and of any other agreements entered into by the licensee
          pursuant to a request under standard condition 36B (Requirement to
          Offer Terms for the Provision of Distributor Metering and Data
          Services) should be in as similar a form as is practicable.

2.   In so far as any person entitled or claiming to be entitled to an offer
     under standard condition 36B (Requirement to Offer Terms for the Provision
     of Distributor Metering and Data Services) wishes to proceed on the basis
     of the agreement as settled by the Authority pursuant to paragraph 1, the
     licensee shall forthwith enter into and implement such agreement in
     accordance with its terms.

3.   If either party to such agreement proposes to vary the contractual terms of
     any agreement for the provision of any of the distributor metering and data
     services entered into pursuant to standard condition 36B (Requirement to
     Offer Terms for the Provision of Distributor Metering and Data Services) or
     this condition in any manner provided for under such agreement, the
     Authority may, at the request of that party, settle any dispute relating to
     such variation in such manner as appears to the Authority to be reasonable.

                                      104

<PAGE>

4.   The Authority may (following consultation with the licensee) issue
     directions relieving the licensee of its obligations under standard
     condition 36B (Requirement to Offer Terms for the Provision of Distributor
     Metering and Data Services) relating to distributor metering and data
     services in respect of such parts of that condition and to such extent as
     may be specified in the directions.

                                      105

<PAGE>

Condition 37. The Metering Point Administration Service and the Master
Registration Agreement

1.    The licensee shall establish, or procure the establishment of, and
      subsequently operate and maintain, or procure the subsequent operation
      and maintenance of, a service to be known as the "Metering Point
      Administration Service."

2.    The Metering Point Administration Service shall, within the distribution
      services area, fulfil the following functions:

      (a)   the maintenance of such a register of technical and other data as is
            necessary to facilitate supply by any electricity supplier to all
            premises connected to the licensee's distribution system within the
            distribution services area or, where so requested, connected to
            another distribution system within the distribution services area
            and to meet the reasonable requirements of electricity suppliers in
            respect of such premises for information for settlement purposes,
            including (where so required):

            (i)    the identity of the electricity supplier responsible under
                   the Balancing and Settlement Code (where the distribution
                   services area is within England and Wales) and/or the
                   Settlement Agreement for Scotland (where the distribution
                   services area is within Scotland) for the metering point at
                   such premises;

            (ii)   the type of metering equipment installed at each such
                   premises; and

            (iii)  a unique and accurate address of each such premises so far as
                   is reasonably practicable having regard to the nature and
                   source of the information provided to the licensee;

      (b)   the amendment of the register maintained in accordance with sub-
            paragraph (a) to reflect changes of electricity supplier in respect
            of any premises;

      (c)   the provision, in a timely and efficient manner, of such data
            contained in the register as is reasonably required and requested
            to:

            (i)    any electricity supplier or agent thereof;

                                      106

<PAGE>

            (ii)   any person identified in the Balancing and Settlement Code
                   (where the distribution services area is within England and
                   Wales) and/or the Settlement Agreement for Scotland (where
                   the distribution services area is within Scotland) as an
                   appropriate person for the receipt of data for settlement
                   purposes; and

            (iii)  any person identified in the Master Registration Agreement as
                   entitled to such data for the purpose of facilitating changes
                   of electricity supplier in respect of any premises; and

      (d)   the maintenance of an enquiry service for the provision to any
            customer or an electricity supplier, on request and free of charge
            to that customer, of such data contained in the register as is
            relevant to the supply of electricity to premises which are (or are
            to be) owned or occupied by the customer, and the taking of such
            steps as will in the opinion of the licensee secure adequate
            publicity for the operation of the enquiry service.

3.    The licensee shall use its best endeavours, in conjunction and co-
      operation with all other distribution services providers, to prepare and
      maintain a form of agreement to be known as the Master Registration
      Agreement.

4.    The Master Registration Agreement shall be an agreement made between:

      (a)   on the one part, the licensee and all other distribution services
            providers in their capacity as providers of metering point
            administration services; and

      (b)   on the other part:

            (i)    all electricity suppliers (or their agents) which require
                   the provision of metering point administration services from
                   at least one distribution services provider; and

            (ii)   such other persons as are, for settlement purposes,
                   appropriate parties to the agreement.

5.    The Master Registration Agreement shall comprise:

                                      107

<PAGE>

      (a)  terms for the provision of metering point administration services in
           accordance with the requirements of paragraph 2 and the equivalent
           requirements in the distribution licences of all other distribution
           services providers;

      (b)  provisions to facilitate, and procedures and practices to be
           followed by electricity suppliers in relation to changes of
           electricity supplier in respect of any premises;

      (c)  a catalogue of definitions, flows and forms of such data as may
           require to be transferred by or to parties to the Master
           Registration Agreement, or as between any persons for settlement
           purposes or for any related purposes (the "data transfer catalogue");

      (d)  arrangements for the variation of the Master Registration  Agreement
           following consultation with the parties, or representatives of the
           parties, to that agreement;

      (e)  provisions (which shall require to be approved in advance by the
           Authority) by virtue of which the whole or specified parts of the
           Master Registration Agreement shall not be capable of variation
           without the prior approval of the Authority; and

      (f)  such other matters as are or may be appropriate for the development,
           maintenance and operation of an efficient, co-ordinated and
           economical system for the supply of electricity and for the purpose
           of facilitating competition in electricity supply.

                                      108

<PAGE>

Condition 38. Establishment of a Data Transfer Service

1.    The licensee shall use its best endeavours, in conjunction and co-
      operation with all other distribution services providers:

      (a)  to establish, or to procure the establishment of, a service to be
           known as the data transfer service; and

      (b)  subsequently to operate and maintain, or to procure the subsequent
           operation and maintenance of, such data transfer service in
           accordance with the provisions of this condition.

2.    The data transfer service shall:

      (a)  provide a network over which may be made all of the electronic data
           transfers  specified at paragraph 3;

      (b)  operate and maintain that network; and

      (c)  provide a connection to that network, on request, to any person who
           is or will be a party to any of the electronic data transfers
           specified at paragraph 3.

3.    The electronic data transfers specified at this paragraph are those which
      are reasonably required for any of the purposes set out at paragraph 4 and
      which are made between:

      (a)  a Metering Point Administration Service operator and an electricity
           supplier or any agent thereof;

      (b)  a Metering Point Administration Service operator and any person
           identified in the Balancing and Settlement Code or the Settlement
           Agreement for Scotland as an appropriate person for the receipt of
           data from the Metering Point Administration Service operator for
           settlement purposes;

      (c)  any transmission company (or any agent thereof) or Scottish
           Electricity Settlements Limited or its successor in title (or any
           agent thereof) and an electricity supplier (or any agent thereof);

      (d)  an electricity supplier (or any agent thereof) and another
           electricity supplier (or any agent thereof);

      (e)  an electricity supplier and any of its agents;

                                      109

<PAGE>

      (f)  different agents of the same electricity supplier;

      (g)  electricity suppliers (or their agents) and generators (or their
           agents) which are parties to the Settlement Agreement for Scotland;
           and

      (h)  Scottish Electricity Settlements Limited or its successor in title
           (or any agent thereof) and any person (or any agent thereof) who is a
           party to or complies with the Settlement Agreement for Scotland.

4.    The purposes of this paragraph are to:

      (a)  meet obligations with respect to the transfer of data for settlement
           purposes;

      (b)  communicate meter reading and meter standing data;

      (c)  facilitate the provision of metering point administration services;

      (d)  communicate distribution use of system information; and

      (e)  fulfil such other requirements relating to the transfer of data as
           may be requisite for the supply of electricity to customers and
           compliance by electricity suppliers with the Master Registration
           Agreement.

5.    The data transfer service shall, where relevant, transmit data in a form
      which complies with the provisions of the data transfer catalogue.

6.    In fulfilling its obligations under paragraph 1 the licensee shall not, or
      (if appropriate) shall ensure that any third party acting on the
      licensee's instruction or behalf shall not, restrict, distort or prevent
      competition in the provision of meters, meter maintenance, data retrieval,
      data processing, data aggregation or prepayment meter services and markets
      for any of the distributor metering and data services.

7.    Any obligation placed on the licensee under standard conditions 36A to 36C
      in respect of the provision of the data transfer service shall (for the
      purposes of those conditions) be treated as a requirement on the licensee
      to use its best endeavours, in conjunction and co-operation with all other
      distribution services providers, to fulfil that obligation or to procure
      the fulfilment of that obligation by a third party, and standard
      conditions 36A to 36C shall apply mutatis mutandis to the provision of
      data transfer services by the

                                      110

<PAGE>

      distribution services providers acting co-operatively and by means of
      procurement of third party services.

8.    Further, in relation to the provision of data transfer services the
      reference at paragraph 1 of standard condition 36C (Functions of the
      Authority) to the licensee failing to enter into an agreement shall be a
      reference to the licensee, in conjunction with all other distribution
      services providers, failing to enter into, or failing to procure that a
      third party enters into, an agreement for the provision of those services.

9.    In this condition:

      "Metering Point Administration means the licensee or any other
      Service operator"      distribution services provider in its capacity as a
                             provider of metering point administration services.

                                      111

<PAGE>

Condition 39. Restriction on Use of Certain Information and Independence of the
Distribution Business

1.       Any information relating to or deriving from the management or
         operation of the distribution business shall, for the purposes of this
         condition, be treated as confidential information.

2.       The licensee shall not (and shall procure that its affiliates and
         related undertakings shall not) disclose or authorise access to
         confidential information:

         (a)   save to the extent provided by sub-paragraphs 3(a) to (d), to
               such of its (or its affiliates' or related undertakings')
               employees, agents, advisers, consultants or contractors as are
               engaged in, or in respect of, the management or operation of any
               supply business; or

         (b)   save to the extent permitted by paragraph 3, to any other person.

3.       The licensee shall (and shall procure that its affiliates and related
         undertakings shall) disclose or authorise access to confidential
         information only:

          (a)  in the following circumstances, namely;

               (i)      to such of its (or its affiliates' or related
                        undertakings') employees, agents, advisers, consultants
                        or contractors as are engaged in, or in respect of, the
                        management or operation of the distribution business or
                        any external distribution activities and require access
                        to the information for that purpose; and

               (ii)     to personnel of any other holder of a distribution
                        licence (a distribution licence holder) engaged in the
                        external distribution activities of that distribution
                        licence holder to the extent necessary for the
                        performance by such personnel of those external
                        distribution activities, and the use by such personnel
                        of that information for that purpose;

provided that effective arrangements are maintained in place at all times for
ensuring that no further disclosure of any information supplied or obtained
pursuant to this paragraph is made and that such information is used only for
the purpose of the distribution business or any external distribution activities
of the licensee

                                       112

<PAGE>

         (b)   where the licensee (or any affiliate or related undertaking of
               the licensee) is required or permitted to disclose such
               information by virtue of:

               (i)      any requirement of a competent authority;

               (ii)     the conditions of any licence granted under the Act or
                        any document referred to in such a licence /3/4/5/ with
                        which it is required by virtue of the Act or that
                        licence to comply;

               (iii)    any other requirement of law; or

               (iv)     the rules of the Electricity Arbitration Association or
                        of any judicial or other arbitral process or tribunal of
                        competent jurisdiction;

         (c)   where such information was provided by or relates to any person
               who has notified (or otherwise agreed with) the licensee that it
               need not be treated as confidential; or

         (d)   where such information, not being information provided by or
               relating to any person other than the licensee, is placed by the
               licensee in the public domain,

         and in each case the licensee shall disclose or authorise access to the
         confidential information only insofar as is necessary or appropriate in
         all the circumstances.

4.       The licensee shall use all reasonable endeavours to ensure that any
         person who is in possession of or has access to confidential
         information in accordance with sub-paragraph 3(a) shall use such
         information only for the purposes of the distribution business or any
         external distribution activities.

5.       For the purpose of facilitating its compliance with paragraphs 1 to 4,
         the licensee shall establish and shall thereafter maintain the full
         managerial and operational independence of the distribution business
         and any external distribution activities from each other business
         (whether or not a separate business) of the licensee and of its
         affiliates and related undertakings.


_____________________

/3/      Direction issued under Condition 12 of the Public Electricity Supply
         Licence of Manweb plc now Standard Condition 39 of this licence
         (19.04.00)

/4/      Direction issued under Condition 12 of the Public Electricity Supply
         Licence of Manweb plc now Standard Condition 39 of this licence
         (19.04.00)

/5/      Direction issued under Condition 12 of the Public Electricity Supply
         Licence of Manweb plc now Standard Condition 39 of this licence
         (28.07.00)

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<PAGE>

6.       In order to facilitate its compliance with paragraphs 1 to 5, the
         licensee shall ensure that:

         (a)      the distribution business is provided with such premises,
                  systems, equipment, facilities, property, personnel, data and
                  management resources as are necessary for its efficient and
                  effective management and operation of such business;

         (b)      no business of the licensee (or of any affiliate or related
                  undertaking of the licensee) other than the distribution
                  business, may use or have access to:

                  (i)   premises or parts of premises occupied by persons
                        engaged in, or in respect of, the management or
                        operation of the distribution business or any external
                        distribution activities;

                  (ii)  systems for the recording, processing or storage of data
                        to which persons engaged in, or in respect of, the
                        management or operation of the distribution business or
                        any external distribution activities also have access;

                  (iii) equipment, facilities or property employed for the
                        management or operation of the distribution business or
                        any external distribution activities; or

                  (iv)  the services of persons who are (whether or not as their
                        principal occupation) engaged in, or in respect of, the
                        management or operation of the distribution business or
                        any external distribution activities; and

         (c)      it can and does, insofar as is legally possible, prevent any
                  person who has ceased to be engaged in, or in respect of, the
                  management or operation of the distribution business from
                  being engaged in, or in respect of, the activities of any
                  other business of the licensee (or of any affiliate or related
                  undertaking of the licensee) until the expiry of an
                  appropriate time from the date on which the person ceased to
                  be engaged by the distribution business.

7.       The Authority may, upon the written request of the licensee, issue a
         direction relieving the licensee of its obligations under paragraphs 1
         to 6 to such extent and subject to such terms and conditions as the
         Authority may specify in that direction - where:

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<PAGE>

         (a)      it is not reasonably practicable for the licensee to comply
                  with any aspect of those obligations;

         (b)      in the case of paragraphs 2 to 4, a failure to comply with any
                  aspect of those obligations would be of a trivial nature; or

         (c)      in the case of paragraph 5 and sub-paragraph 6(b), any
                  arrangements for the use of or access to premises, systems,
                  equipment, facilities, property or personnel by both the
                  distribution business and any other business of the licensee
                  (or of any affiliate or related undertaking of the licensee):

                  (i)      do not involve a cross-subsidy being either given to
                           the distribution business by such other business or
                           received from the distribution business by such other
                           business;

                  (ii)     obtain for the distribution business, in the most
                           efficient and economical manner possible, the use of
                           the relevant premises, systems, equipment,
                           facilities, property or personnel; and

                  (iv)     do not restrict, distort or prevent competition in
                           the generation or supply of electricity.

8.       Where, subsequent to the issue of a direction pursuant to paragraph 7,
         the criteria set out at sub-paragraph 7(a), (b) or (c) cease to be
         satisfied, the Authority may withdraw the direction or modify any terms
         and conditions which may be specified in it.

9.       For the purposes of paragraphs 7 and 8 the Authority shall, following
         consultation with the licensee, determine any question as to whether
         the criteria set out at sub-paragraph 7(a), (b) or (c) are or continue
         to be satisfied.

10.

         (a)      This paragraph applies only in circumstances in which the
                  licensee does not itself carry out any distributor metering
                  and data services as part of the distribution business but
                  those services are provided for it by an agent acting
                  independently of the licensee which is not an affiliate of the
                  licensee and in which the licensee holds no shares or other
                  financial interest ('a metering agent')

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         (b)   Where paragraph (a) applies, the licensee may disclose
               confidential information to its metering agent notwithstanding
               that the metering agent provides distributor metering and data
               services to others, provided that the licensee maintains, and
               procures that the metering agent also maintains, in place at all
               times effective arrangements so that the metering agent does not
               disclose information relating to the distribution business to any
               affiliate or related undertaking of the licensee except to the
               extent necessary for the metering agent to provide distributor
               metering and data services as part of the distribution business
               to that affiliate or related undertaking.



11.      In this condition:

         "appropriate time"                     means 3 months, or such shorter
                                                period as the Authority may
                                                approve in respect of any person
                                                or class of persons.

         "competent authority"                  means the Secretary of State,
                                                the Authority, the compliance
                                                officer, the Stock Exchange, the
                                                Panel on Take-overs and Mergers,
                                                or any local or national agency,
                                                regulatory body, authority,
                                                department, inspectorate,
                                                minister (including Scottish
                                                Ministers), ministry, official
                                                or public or statutory person
                                                (whether autonomous or not) of,
                                                or of the government of, the
                                                United Kingdom, the United
                                                States of America, or the
                                                European Community.



         "confidential information"             has the meaning given at
                                                paragraph 1.



         "external distribution activities"     means any business of the
                                                licensee or any affiliate or
                                                related undertaking of the
                                                licensee comprising or ancillary
                                                to the maintenance,

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<PAGE>

                                                repair or operation of, or other
                                                activities in connection with
                                                any electricity distribution
                                                system other than the licensee's
                                                distribution system ('an
                                                external distribution system').

      "Electricity Arbitration Association"     means the unincorporated
                                                members' club of that name
                                                formed inter alia to promote the
                                                efficient and economic operation
                                                of the procedure for the
                                                resolution of disputes within
                                                the electricity supply industry
                                                by means of arbitration or
                                                otherwise in accordance with its
                                                arbitration rules.

      "separate business"                       means the distribution business
                                                taken separately from any other
                                                business of the licensee, but so
                                                that where all or any part of
                                                such business is carried on by
                                                an affiliate or related
                                                undertaking of the licensee such
                                                part of the business as is
                                                carried on by that affiliate or
                                                related undertaking shall be
                                                consolidated with any other such
                                                business of the licensee (and of
                                                any other affiliate or related
                                                undertaking) so as to form a
                                                single separate business.

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<PAGE>

Condition 40.  Appointment of Compliance Officer

1.       The licensee shall no later than 28 days after the date of the
         Authority's direction prepare a statement in a form approved by the
         Authority setting out the practices, procedures and systems which the
         licensee has adopted (or intends to adopt) to ensure its compliance
         with the relevant duties.

2.       The licensee may periodically revise the information set out in and,
         with the approval of the Authority, alter the form of the statement
         prepared in accordance with paragraph 1 and shall, at least once in
         every year during which this licence is in force, review such statement
         in order that the information set out therein shall continue to be
         accurate in all material respects.

3.       The licensee shall send a copy of the statement prepared in accordance
         with paragraph 1, and of each revision of such statement in accordance
         with paragraph 2, to the Authority.

4.       The licensee shall, following consultation with the Authority, appoint
         a competent person (who shall be known as the "compliance officer") for
         the purpose of facilitating compliance by the licensee with the
         relevant duties.

5.       The licensee shall at all times engage the services of the compliance
         officer for the performance of such duties and tasks as the licensee
         considers it appropriate to assign to him for the purposes specified at
         paragraph 4, which duties and tasks shall include those set out at
         paragraph 8.

6.       The licensee shall procure that the compliance officer:

         (a)   is provided with such staff, premises, equipment, facilities and
               other resources; and

         (b)   has such access to its premises, systems, information and
               documentation

         as, in each case, he might reasonably expect to require for the
         fulfilment of the duties and tasks assigned to him.

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<PAGE>

7.       The licensee shall make available to the compliance officer a copy of
         any complaint or representation received by it from any person in
         respect of a matter arising under or by virtue of standard condition 39
         (Restriction on Use of Certain Information and Independence of the
         Distribution Business) or in relation to any of the practices,
         procedures and systems adopted by the licensee in accordance with the
         statement referred to at paragraph 1.

8.       The duties and tasks assigned to the compliance officer shall include:

         (a)   providing relevant advice and information to the licensee for the
               purpose of ensuring its compliance with the relevant duties;

         (b)   monitoring the effectiveness of the practices, procedures and
               systems adopted by the licensee in accordance with the statement
               referred to at paragraph 1;

         (c)   investigating any complaint or representation made available to
               him in accordance with paragraph 7;

         (d)   recommending and advising upon the remedial action which any such
               investigation has demonstrated to be necessary or desirable;

         (e)   providing relevant advice and information to the licensee for the
               purpose of ensuring its effective implementation of:

               (i)  the practices, procedures and systems adopted in accordance
                    with the statement referred to at paragraph 1; and

               (ii) any remedial action recommended in accordance with
                    sub-paragraph (d); and

         (f)   reporting annually to the directors of the licensee in respect of
               each year after this condition comes into force as to his
               activities during the period covered by the report, including the
               fulfilment of the other duties and tasks assigned to him by the
               licensee.

9.       As soon as is reasonably practicable following each annual report of
         the compliance officer, the licensee shall produce a report:

         (a)   as to its compliance during the relevant year with the relevant
               duties; and

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         (b)   as to its implementation of the practices, procedures and systems
               adopted in accordance with the statement referred to at paragraph
               1.

10.      The report produced in accordance with paragraph 9 shall in particular:

         (a)   detail the activities of the compliance officer during the
               relevant year;

         (b)   refer to such other matters as are or may be appropriate in
               relation to the implementation of the practices, procedures and
               systems adopted in accordance with the statement referred to at
               paragraph 1; and

         (c)   set out the details of any investigations conducted by the
               compliance officer, including:

               (i)      the number, type and source of the complaints or
                        representations on which such investigations were based;

               (ii)     the outcome of such investigations; and

               (iii)    any remedial action taken by the licensee following such
                        investigations.

11.      The licensee shall submit to the Authority a copy of the report
         produced in accordance with paragraph 9, and shall give or send a copy
         of the report to any person who requests such a copy.

12.      In this condition:


         "relevant             duties" means the obligations set out at standard
                               condition 39 (Restriction on Use of Certain
                               Information and Independence of the Distribution
                               Business) and the terms and conditions of any
                               direction issued pursuant to paragraph 7 of
                               standard condition 39.

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<PAGE>

Condition 41. Prohibition of Cross-Subsidies

1.       The licensee shall procure that the distribution business shall not
         give any cross-subsidy to, or receive any cross-subsidy from, any other
         business of the licensee or of an affiliate or related undertaking of
         the licensee.

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<PAGE>

Condition 42. Regulatory Accounts

1.       The following paragraphs of this condition apply for the purpose of
         ensuring that the licensee (and any affiliate or related undertaking)
         maintains accounting and reporting arrangements which enable regulatory
         accounts to be prepared for the consolidated distribution business and
         showing the financial affairs of the consolidated distribution
         business.

2.       Unless the Authority otherwise consents (such consent may be given in
         relation to some or all of the obligations in this condition and may be
         given subject to such conditions as the Authority considers
         appropriate), the licensee shall:

         (a)   keep or cause to be kept for the period referred to in section
               222(5)(b) of the Companies Act 1985 and in the manner referred to
               in that section such accounting records in respect of the
               consolidated distribution business so that the revenues, costs,
               assets, liabilities, reserves and provisions of, or reasonably
               attributable to, the consolidated distribution business are
               separately identifiable in the accounting records of the licensee
               (and any affiliate or related undertaking) from those of any
               other business of the licensee;

         (b)   prepare on a consistent basis from such accounting records in
               respect of:

               (i)      each financial year, accounting statements comprising a
                        profit and loss account, a statement of total recognised
                        gains and losses, a balance sheet, and a cash flow
                        statement, together with notes thereto, and showing
                        separately in respect of the consolidated distribution
                        business and in appropriate detail the amounts of any
                        revenue, cost, asset, liability, reserve or provision
                        which has been either:

                        (aa)  charged from or to any other business together
                              with a description of the basis of that charge; or

                        (bb)  determined by apportionment or allocation between
                              the consolidated distribution business and any
                              other business together with a description of the
                              basis of the apportionment or allocation; and

               (ii)     the first six months of each financial year, an interim
                        profit and loss account; and

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<PAGE>

               (iii)     each financial year, sufficient accounting information
                         in respect of the consolidated distribution business to
                         allow the preparation of consolidated accounting
                         statements of the licensee or, where applicable, the
                         ultimate controller. Such information shall include a
                         profit and loss account, a statement of total
                         recognised gains and losses, a balance sheet, and a
                         cash flow statement together with notes thereto;

         (c)   procure, in respect of the accounting statements prepared in
               accordance with this condition in respect of each financial year,
               a report by the auditors and addressed to the Authority stating
               whether in their opinion those statements have been properly
               prepared in accordance with this condition and give a true and
               fair view of the revenues, costs, assets, liabilities, reserves
               and provisions of, or reasonably attributable to, the
               consolidated distribution business to which the statements
               relate; and

         (d)   deliver to the Authority a copy of the account referred to in
               sub-paragraph (b)(ii), the auditors' report referred to in
               sub-paragraph (c), the accounting statements referred to in
               sub-paragraph (b)(i) and the accounting information referred to
               in sub-paragraph (b)(iii), as soon as reasonably practicable, and
               in any event not later than three months after the end of the
               period to which it relates in the case of the account referred to
               in sub-paragraph (b)(ii) and six months after the end of the
               financial year to which they relate in the case of the accounting
               statements, auditors' report and accounting information referred
               to in sub-paragraphs (b)(i), (b)(iii) and (c).

3.       Unless the Authority so specifies in directions issued for the purposes
         of this condition, or with the Authority's prior written approval, the
         licensee shall not in relation to the accounting statements in respect
         of a financial year change the bases of charge or apportionment or
         allocation referred to in sub-paragraph 2(b)(i) from those applied in
         respect of the previous financial year.

4.       Where, in relation to the accounting statements in respect of a
         financial year, the licensee has changed such bases of charge or
         apportionment or allocation from those adopted for the immediately
         preceding financial year, the licensee shall, if so directed in
         directions issued by the Authority, in addition to preparing accounting
         statements on those bases which it has

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<PAGE>

         adopted, prepare such accounting statements on the bases which applied
         in respect of the immediately preceding financial year.

5.       Accounting statements and information in respect of a financial year
         prepared under sub-paragraph 2(b)(i) and (b)(iii) shall, so far as
         reasonably practicable and unless otherwise approved by the Authority
         having regard to the purposes of this condition:

         (a)   have the same content and format as the statutory accounts of the
               licensee prepared under section 226 and, where appropriate,
               section 227 of the Companies Act 1985 and conform to the best
               commercial accounting practices including all relevant accounting
               standards issued or adopted by the Accounting Standards Board
               currently in force;

         (b)   state the accounting policies adopted; and

         (c)   with the exception of the part of such statements and information
               which shows separately the amounts charged, apportioned or
               allocated and describes the bases of charge or apportionment or
               allocation respectively, be published with the statutory accounts
               of the licensee.

6.       Unless the accounting statements and information prepared under
         sub-paragraph 2(b)(i) and (b)(iii) are prepared on the current cost
         basis as provided by the alternative accounting rules, the licensee
         shall, unless otherwise agreed by the Authority, in addition to
         preparing those accounting statements under that paragraph, prepare
         accounting statements for the consolidated distribution business
         covering the same period, which shall comprise and show separately:

         (a)   a profit and loss account, a statement of total recognised gains
               and losses, a balance sheet, and a cash flow statement, together
               with notes thereto, which shall:

               (i)      include in respect of current cost assets amounts
                        determined on the current cost basis as provided by the
                        alternative accounting rules; and

               (ii)     show or disclose the information and other matters
                        required by the alternative accounting rules to be shown
                        or disclosed in accounts where the amounts included in
                        respect of assets covered by any items shown in those
                        accounts have been determined on any basis mentioned in
                        paragraph 31 of section C of Part II of Schedule 4 to
                        the Companies Act 1985;

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         (b)   in respect of the consolidated distribution business the adjusted
               amount of any such provision for depreciation as is referred to
               in paragraph 32(2) of section C of Part II of Schedule 4 to the
               Companies Act 1985 and the items shown in the profit and loss
               account of the consolidated distribution business for the
               relevant period which are affected by the determination of
               amounts on the current cost basis as provided by the alternative
               accounting rules, including the profit (or loss) before taxation;
               and

         (c)   such other current cost information as is referred to in the
               handbook as the Authority may reasonably require;

         and shall deliver the same, together with an auditors' report prepared
         in relation to the current cost basis accounting statements in the form
         referred to in sub-paragraph 2(c), to the Authority within the time
         limit referred to in sub-paragraph 2(d), and shall (with the exception
         of the part of such statements and information which shows separately
         the amounts charged, apportioned or allocated and describes the bases
         of charge or apportionment or allocation respectively) publish the same
         with the statutory accounts of the licensee.

7.       References in this condition to costs or liabilities of, or reasonably
         attributable to, the consolidated distribution business shall be
         construed as excluding taxation and capital liabilities which do not
         relate principally to the consolidated distribution business, and
         interest thereon; and references to any profit and loss account shall
         be construed accordingly.

8.       Without prejudice to paragraph 5 of the terms of this licence,
         references in this condition to sections of the Companies Act 1985 are
         references to those provisions as amended, substituted or inserted by
         the relevant provisions of the Companies Act 1989 and if such
         provisions of the Companies Act 1989 are not in force at the date of
         grant of this licence shall be construed as if such provisions were in
         force at such date.

9.       For the purposes of paragraph 6:

         "alternative accounting rules"      means the rules set out in section
                                             C of Part II of Schedule 4 to the
                                             Companies Act

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<PAGE>

                                                  1985.

         "current cost assets"                    means assets of any
                                                  description mentioned in
                                                  paragraph 31 of section C of
                                                  Part II of Schedule 4 to the
                                                  Companies Act 1985.

         "the handbook"                           means the handbook issued by
                                                  the Accounting Standards
                                                  Committee of the Consultative
                                                  Committee of Accounting Bodies
                                                  (CCAB Limited) or any
                                                  successor body entitled
                                                  "Accounting for the effects of
                                                  changing prices: a handbook"
                                                  in its current edition for the
                                                  time being or in the event
                                                  that no such handbook shall be
                                                  in issue such guidance or
                                                  publication as may be issued
                                                  in replacement or substitution
                                                  therefor.

10.     For the purposes of this condition:

         "consolidated distribution business"     means the consolidation, for
                                                  regulatory accounting
                                                  purposes, of the businesses
                                                  referred to in the definition
                                                  of "distribution business" as
                                                  defined in standard condition
                                                  1 (Definitions and
                                                  Interpretation).

         "regulatory accounts"                    means the accounts required to
                                                  be prepared by the licensee
                                                  pursuant to this condition.

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<PAGE>

Condition 42A. Change of Financial Year

1.       The definition of "financial year" in standard condition 1 (Definitions
         and Interpretation) shall, for the purpose only of the statutory
         accounts of the licensee, cease to apply to the licensee from the date
         the licensee sends a notice to the Authority for that purpose.

2.       Such notice:

         (a)   shall specify the date from which, for the purpose set out at
               paragraph 1, the current and subsequent financial years of the
               licensee shall run; and

         (b)   shall continue in effect until revoked by the licensee issuing a
               further notice.

3.       While the notice continues in effect the licensee shall procure the
         preparation of and shall deliver to the Authority audited group
         accounts for its group of companies for each financial year.

4.       Audited group accounts produced in accordance with paragraph 3:


         (a)   shall comprise consolidated group accounts in respect of the
               group of companies;

         (b)   shall, save insofar as is necessary to reflect a different
               financial year, have the same form and content as the statutory
               accounts of the licensee;

         (c)   shall be accompanied by a report by the auditors and addressed to
               the Authority stating whether in their opinion the audited group
               accounts have been properly prepared in accordance with this
               condition and give a true and fair view of the state of affairs
               of the group of companies and of its profits or losses, total
               recognised gains or losses and cash flows during the financial
               year;

         (d)   may, with the prior written consent of the Authority, omit or
               provide in a different form, specified in the consent, such
               information as may be specified in the consent; and

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<PAGE>

         (e)   shall clearly disclose any differences between the accounting
               policies underlying the preparation of the statutory accounts of
               the licensee and the accounting policies underlying the
               preparation of the audited group accounts.

5.       The licensee may, for the purpose only of its statutory accounts,
         change its financial year from that previously notified by sending to
         the Authority a new notice pursuant to paragraph 1. Where the licensee
         sends the Authority a new notice the previous notice shall be revoked,
         as provided by sub-paragraph 2(b). The licensee's financial year-end
         will change with effect from the date specified in the new notice. The
         new notice shall specify the licensee's new financial year-end.

6.       No provisions of this condition shall apply to the financial year of
         the licensee as defined in standard condition 1 (Definitions and
         Interpretation) for the purpose of accounts produced in compliance with
         standard condition 42 (Regulatory Accounts). No provisions of this
         condition shall affect the licensee's obligations in respect of payment
         of licence fees under standard condition 3 (Payments by the Licensee to
         the Authority).

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<PAGE>

Condition 43. Restriction on Activity and Financial Ring Fencing

1.   Save as provided by paragraphs 3 and 4, the licensee shall not conduct any
     business or carry on any activity other than the distribution business.

2.   The licensee shall not without the prior written consent of the Authority
     hold or acquire shares or other investments of any kind except:

     (a)   shares or other investments in a body corporate the sole activity of
           which is to carry on business for a permitted purpose; or

     (b)   shares or other investments in a body corporate which is a subsidiary
           of the licensee and incorporated by it solely for the purpose of
           raising finance for the distribution business; or

     (c)   investments acquired in the usual and ordinary course of the
           licensee's treasury management operations, subject to the licensee
           maintaining in force, in relation to those operations, a system of
           internal controls which complies with best corporate governance
           practice as required (or in the absence of any such requirement
           recommended) from time to time for listed companies in the United
           Kingdom.

3.   Subject to the provisions of paragraph 2 nothing in this condition shall
     prevent:

     (a)   any affiliate in which the licensee does not hold shares or other
           investments from conducting any business or carrying on any activity;

     (b)   the licensee from holding shares as, or performing the supervisory or
           management functions of, an investor in respect of any body corporate
           in which it holds an interest consistent with the provisions of this
           licence;

     (c)   the licensee from performing the supervisory or management functions
           of a holding company in respect of any subsidiary; or

     (d)   the licensee from carrying on any business or conducting any activity
           to which the Authority has given its consent in writing;

4.   Nothing in this condition shall prevent the licensee or an affiliate or
     related undertaking of the licensee in which the licensee holds shares or
     other investments (a 'relevant associate') conducting de-minimis business
     as defined in this paragraph so long as the limitations specified in this
     paragraph are complied with.

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<PAGE>

     (a)   For the purpose of this paragraph " de-minimis business" means any
           business or activity carried on by the licensee or a relevant
           associate or relevant associates other than:

           (i)    the distribution business; and

           (ii)   any other business activity to which the Authority has given
                  its consent in writing in accordance with paragraph 3(d).

     (b)   The licensee or a relevant associate may carry on de-minimis business
           provided that the relevant associate carries on no other business
           except activities of the distribution business and business
           activities authorised by the Authority under paragraph 3(d), and
           neither of the following limitations is exceeded, namely:

           (i)    the aggregate turnover of all the de-minimis business carried
                  on by the licensee and all its relevant associates does not in
                  any period of twelve months commencing on 1 April of any year
                  exceed 2 1/2% of the aggregate turnover of the distribution
                  business as shown by the most recent audited accounting
                  statements of the licensee produced under paragraphs 2(b)(i)
                  and (c) of standard condition 42 (Regulatory Accounts); and

           (ii)   the aggregate amount (determined in accordance with sub-
                  paragraph (d) below) of all investments made by the licensee
                  and all its relevant associates in their de-minimis business
                  or de-minimis businesses does not at any time after the date
                  this condition takes effect in this licence exceed 2 1/2% of
                  the sum of share capital in issue, share premium and
                  consolidated reserves of the licensee as shown by its most
                  recent audited historical cost financial statements then
                  available.

     (c)   For the purpose of sub-paragraph (b) of this paragraph, "investment"
           means any form of financial support or assistance given by or on
           behalf of the licensee or a relevant associate for the de-minimis
           business whether on a temporary or permanent basis including (without
           limiting the generality of the foregoing) any commitment to provide
           any such support or assistance in the future.

     (d)   At any relevant time, the amount of an investment shall be the sum
           of:

           (i)    the value at which such investment was included in the audited
                  historical cost balance sheet of the licensee or a relevant
                  associate as at its latest

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<PAGE>

           accounting reference date to have occurred prior to the date this
           condition takes effect in this licence (or, where the investment was
           not so included, zero);

     (ii)  the aggregate gross amount of all expenditure (whether of a capital
           or revenue nature) howsoever incurred by the licensee or a relevant
           associate in respect of such investment in all completed accounting
           reference periods since such accounting reference date; and

     (iii) all commitments and liabilities (whether actual or contingent) of the
           licensee or a relevant associate relating to such investment
           outstanding at the end of the most recently completed accounting
           reference period.

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<PAGE>

Condition 44.  Availability of Resources

1.   The licensee shall at all times act in a manner calculated to secure that
     it has available to it all such resources, including (without limitation)
     management and financial resources, personnel, fixed and moveable assets,
     rights, licences, consents and facilities on such terms and with all such
     rights as shall ensure that it is at all times able:

     (a)   to properly and efficiently to carry on the distribution business;
           and

     (b)   to comply in all respects with its obligations under this licence and
           such obligations under the Act as apply to the distribution business
           including, without limitation, its duty to develop and maintain an
           efficient, co-ordinated and economical system of electricity
           distribution.

2.   The licensee shall submit a certificate to the Authority, approved by a
     resolution of the board of directors of the licensee and signed by a
     director of the licensee pursuant to that resolution. Such certificate
     shall be submitted in June of each year. Each certificate shall be in one
     of the following forms:

     (a)   "After making enquiries, the directors of the licensee have a
           reasonable expectation that the licensee will have available to it,
           after taking into account in particular (but without limitation) any
           dividend or other distribution which might reasonably be expected to
           be declared or paid, sufficient financial resources and financial
           facilities to enable the licensee to carry on the distribution
           business for a period of 12 months from the date of this
           certificate."

     (b)   "After making enquiries, the directors of the licensee have a
           reasonable expectation, subject to what is said below, that the
           licensee will have available to it, after taking into account in
           particular (but without limitation) any dividend or other
           distribution which might reasonably be expected to be declared or
           paid, sufficient financial resources and financial facilities to
           enable the licensee to carry on the distribution business for a
           period of 12 months from the date of this certificate. However, they
           would like to draw attention to the following factors which may cast
           doubt on the ability of the licensee to carry on the distribution
           business."

     (c)   "In the opinion of the directors of the licensee, the licensee will
           not have available to it sufficient financial resources and financial
           facilities to enable the licensee to

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           carry on the distribution business for a period of 12 months from the
           date of this certificate."

3.   The licensee shall submit to the Authority with that certificate a
     statement of the main factors which the directors of the licensee have
     taken into account in giving that certificate.

4.   The licensee shall inform the Authority in writing immediately if the
     directors of the licensee become aware of any circumstance which causes
     them no longer to have the reasonable expectation expressed in the then
     most recent certificate given under paragraph 2.

5.   The licensee shall use its best endeavours to obtain and submit to the
     Authority with each certificate provided for in paragraph 2 a report
     prepared by its auditors and addressed to the Authority stating whether or
     not the auditors are aware of any inconsistencies between, on the one hand,
     that certificate and the statement submitted with it and, on the other
     hand, any information which they obtained during their audit work.

6.   The directors of the licensee shall not declare or recommend a dividend,
     nor shall the licensee make any other form of distribution within the
     meaning of section 263 of the Companies Act 1985, unless prior to the
     declaration, recommendation or making of the distribution (as the case may
     be) the licensee shall have issued to the Authority a certificate complying
     with the following requirements of this paragraph.

     (a)   The certificate shall be in the following form:

           "After making enquiries, the directors of the licensee are satisfied:

           (i)    that the licensee is in compliance in all material respects
                  with all obligations imposed on it by standard condition 24
                  (Provision of Information to the Authority), standard
                  condition 43 (Restriction on Activity and Financial
                  Ring-fencing), standard condition 44 (Availability of
                  Resources), standard condition 45 (Undertaking from Ultimate
                  Controller), standard condition 46 (Credit Rating) and
                  paragraph 1 of standard condition 47 ( Indebtedness) of the
                  licence; and

           (ii)   that the making of a distribution of [ ] on [ ] will not,
                  either alone or when taken together with other circumstances
                  reasonably foreseeable at

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                  the date of this certificate, cause the licensee to be in
                  breach to a material extent of any of these obligations in the
                  future.

     (b)   The certificate shall be signed by a director of the licensee and
           approved by a resolution of the board of directors of the licensee
           passed not more than 14 days before the date on which the
           declaration, recommendation or payment will be made.

     (c)   Where the certificate has been issued in respect of the declaration
           or recommendation of a dividend, the licensee shall be under no
           obligation to issue a further certificate prior to payment of that
           dividend provided such payment is made within six months of that
           certificate.

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Condition 45.  Undertaking from Ultimate Controller

1.       The licensee  shall  procure from each company or other person which
         the licensee knows or reasonably should know is at any time an ultimate
         controller of the licensee a legally enforceable undertaking in favour
         of the licensee in the form specified by the Authority that that
         ultimate controller ("the covenantor") will refrain from any action,
         and will procure that any person (including, without limitation, a
         corporate body) which is a subsidiary of, or is controlled by, the
         covenantor (other than the licensee and its subsidiaries) will refrain
         from any action, which would then be likely to cause the licensee to
         breach any of its obligations under the Act or this licence. Such
         undertaking shall be obtained within 7 days of the company or other
         person in question becoming an ultimate controller and shall remain in
         force for as long as the licensee remains the holder of this licence
         and the covenantor remains an ultimate controller of the licensee.

2.       The licensee shall:

         (a)   deliver to the Authority evidence (including a copy of each such
               undertaking) that the licensee has complied with its obligation
               to procure undertakings pursuant to paragraph 1;

         (b)   inform the Authority immediately in writing if the directors of
               the licensee become aware that any such undertaking has ceased to
               be legally enforceable or that its terms have been breached; and

         (c)   comply with any direction from the Authority to enforce any such
               undertaking;

         and shall not, save with the consent in writing of the Authority, enter
         (directly or indirectly) into any agreement or arrangement with any
         ultimate controller of the licensee or of any of the subsidiaries of
         any such corporate ultimate controller (other than the subsidiaries of
         the licensee) at a time when,

         (i)   an undertaking complying with paragraph 1 is not in place in
               relation to that ultimate controller; or

         (ii)  there is an unremedied breach of such undertaking; or

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         (iii)    the licensee is in breach of the terms of any direction issued
                  by the Authority under paragraph 2 of this condition.

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Condition 46.  Credit Rating of Licensee

1.       The licensee shall use all reasonable endeavours to ensure that the
         licensee maintains at all times an investment grade issuer credit
         rating.

2.       In this condition:

         "investment grade issuer credit rating" means:

         (a)      an issuer rating of not less than BBB- by Standard & Poor's
                  Ratings Group or any of its subsidiaries or a corporate rating
                  of not less than Baa3 by Moody's Investors Service, Inc. or
                  any of its subsidiaries or such higher rating as shall be
                  specified by either of them from time to time as the lowest
                  investment grade credit rating, or

         (b)      an equivalent rating from any other reputable credit rating
                  agency which, in the opinion of the Authority, notified in
                  writing to the licensee, has comparable standing in the United
                  Kingdom and the United States of America.

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Condition 47. Indebtedness

1.       In addition to the requirements of standard condition 29 (Disposal of
         Relevant Assets), the licensee shall not without the prior written
         consent of the Authority/6/ (following the disclosure by the licensee
         of all material facts):

         (a)      create or continue or permit to remain in effect any mortgage,
                  charge, pledge, lien or other form of security or encumbrance
                  whatsoever, undertake any indebtedness to any other person or
                  enter into any guarantee or any obligation otherwise than:

                  (i)    on an arm's length basis;

                  (ii)   on normal commercial terms;

                  (iii)  for a permitted purpose; and

                  (iv)   (if the transaction is within the ambit of standard
                         condition 29 (Disposal of Relevant Assets)) in
                         accordance with that condition;

         (b)      transfer, lease, license or lend any sum or sums, asset, right
                  or benefit to any affiliate or related undertaking of the
                  licensee otherwise than by way of:

                  (i)    a dividend or other distribution out of distributable
                         reserves;

                  (ii)   repayment of capital;

                  (iii)  payment properly due for any goods, services or assets
                         provided on an arm's length basis and on normal
                         commercial terms;

                  (iv)   a transfer, lease, licence or loan of any sum or sums,
                         asset, right or benefit on an arm's length basis, on
                         normal commercial terms and made in compliance with the
                         payment condition;

                  (v)    repayment of or payment of interest on a loan not
                         prohibited by sub-paragraph (a);

________________________

/6/ Consent issued under Standard Condition 47 of this licence

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                  (vi)   payments for group corporation tax relief or for the
                         surrender of Advance Corporation Tax calculated on a
                         basis not exceeding the value of the benefit received;
                         or

                  (vii)  an acquisition of shares or other investments in
                         conformity with paragraph 2 of standard condition 43
                         (Restriction on Activity and Financial Ring Fencing)
                         made on an arm's length basis and on normal commercial
                         terms;

          (c)     enter into an agreement or incur a commitment incorporating a
                  cross-default obligation; or

          (d)     continue or permit to remain in effect any agreement or
                  commitment incorporating a cross-default obligation subsisting
                  at the date this condition takes effect in this licence, save
                  that the licensee may permit any cross-default obligation in
                  existence at that date to remain in effect for a period not
                  exceeding twelve months from that date, provided that the
                  cross-default obligation is solely referable to an instrument
                  relating to the provision of a loan or other financial
                  facilities granted prior to that date and the terms on which
                  those facilities have been made available as subsisting on
                  that date are not varied or otherwise made more onerous.

          (e)     the provisions of sub-paragraphs (c) and (d) of this paragraph
                  shall not prevent the licensee from giving any guarantee
                  permitted by and compliant with the requirements of
                  sub-paragraph (a).

          (f)     The payment condition referred to in sub-paragraph (b)(iv) is
                  that the consideration due in respect of the transaction in
                  question is paid in full when the transaction is entered into
                  unless either:

                  (i)    the counter-party to the transaction has and maintains
                         until payment is made in full an investment grade
                         issuer credit rating, or

                  (ii)   the obligations of the counter-party to the transaction
                         are fully and unconditionally guaranteed throughout the
                         period during which any part of the consideration
                         remains outstanding by a guarantor which has and
                         maintains an investment grade issuer credit rating.

2.        In this condition:

          "cross-default obligation"      means a term of any agreement or
                                          arrangement

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                                           whereby the licensee's liability to
                                           pay or repay any debt or other sum
                                           arises or is increased or accelerated
                                           or is capable of arising, increasing
                                           or of acceleration by reason of a
                                           default (howsoever such default may
                                           be described or defined) by any
                                           person other than the licensee,
                                           unless:

                                           (i)      that liability can arise
                                                    only as the result of a
                                                    default by a subsidiary of
                                                    the licensee,

                                           (ii)     the licensee holds a
                                                    majority of the voting
                                                    rights in that subsidiary
                                                    and has the right to appoint
                                                    or remove a majority of its
                                                    board of directors, and

                                           (iii)    that subsidiary carries on
                                                    business only for a purpose
                                                    within paragraph (a) of the
                                                    definition of permitted
                                                    purpose.

         "indebtedness"                    means all liabilities now or
                                           hereafter due, owing or incurred,
                                           whether actual or contingent, whether
                                           solely or jointly with any other
                                           person and whether as principal or
                                           surety, together with any interest
                                           accruing thereon and all costs,
                                           charges, penalties and expenses
                                           incurred in connection therewith.

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Condition 48.  Last Resort Supply: Payment Claims

1.       This condition sets out the circumstances in which the licensee shall
         increase its use of system charges in order to compensate any
         electricity supplier (a "claimant") which claims for losses that it has
         incurred in complying with a last resort supply direction.

2.       The following provisions apply where the licensee receives from a
         claimant a valid claim for a last resort supply payment.

3.       Where the licensee receives a valid claim it shall, during the relevant
         year, make a consequential increase to its use of system charges in
         respect of that year which relate to the distribution of electricity to
         premises to such an extent as it reasonably estimates to be appropriate
         to secure that such consequential increase in its revenue equals the
         specified amount.

4.       The licensee shall, during, or as soon as practicable after the end of,
         the relevant year, pay to the claimant, by quarterly or monthly
         instalments (as specified in the claim), the amount of that
         consequential increase in revenue mentioned in paragraph 3 to the
         extent that it does not exceed the specified amount.

5.       If the amount paid to the claimant under paragraph 4 is less than the
         specified amount, the licensee shall in the following year -

         (a)    pay to the claimant (in accordance with any directions given by
                the Authority) the shortfall together with 12 months' interest
                thereon; and

         (b)    increase the charges which relate to the distribution of
                electricity to premises during the year following the relevant
                year to such extent as it reasonably estimates to be appropriate
                to secure that the consequential increase in its revenue equals
                the amount of that shortfall together with 12 months' interest
                thereon.

6.       If the amount of the consequential increase mentioned in paragraph 3
         exceeds the specified amount, the licensee shall, during the year
         following the relevant year,

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         decrease the charges which relate to the distribution of electricity to
         premises to the extent that it reasonably estimates to be necessary in
         order to reduce its use of system revenue for that year by an amount
         equal to the excess together with 12 months' interest thereon.

7.       Any question whether any estimate for the purposes of paragraph 3, 5 or
         6 is a reasonable one shall be determined by the Authority.

8.       The licensee shall not enter into any use of system agreement with an
         electricity supplier which does not permit variation of its use of
         system charges in pursuance of this condition.

9.       The provisions of this condition shall have effect notwithstanding that
         the licensee has not provided the notice required by paragraph 13 of
         standard condition 4 (Basis of Charges for Use of System and Connection
         to System: Requirements for Transparency).

10.      In calculating the licensee's use of system revenue during any period
         for the purposes of a price control condition any increase or decrease
         in revenue attributable to the licensee's compliance with this
         condition shall be treated as if it had not occurred.

11.      The licensee shall prepare, in respect of each year in which it
         increases or decreases charges in pursuance of paragraph 3, 5 or 6, a
         statement showing -

         (a)    the aggregate amount of its revenue derived from increases in
                charges in pursuance of paragraph 3;

         (b)    the aggregate amount of its revenue derived from increases in
                charges in pursuance of paragraph 5;

         (c)    the aggregate amount of the decrease in its revenue resulting
                from decreases in charges in pursuance of paragraph 6; and

         (d)    in the case of each last resort supply payment, the aggregate
                payments to the claimant made in respect of the year in question
                (whenever those payments were made).

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12.      The licensee shall give the statements referred to in paragraph 11 to
         the Authority within the first 4 months of the year following that to
         which they relate.

13.      On giving the statement mentioned in paragraph 11(d) to the Authority,
         the licensee shall publish it in such manner as, in the reasonable
         opinion of the licensee, will secure adequate publicity for it.

14.      Where the licensee receives more than one claim for a last resort
         payment, this condition (other than sub-paragraphs 11(a), (b) and (c))
         shall apply separately as respects each separate claim but in so far as
         it results in changes to the licensee's use of system charges it shall
         have the cumulative effect of such separate applications.

15.      (a)      For the purposes of this condition -

                  "last resort supply direction" and "last resort supply
                  payment" have, respectively the meanings given to them in
                  standard conditions 29 (Supplier of Last Resort) and 29A
                  (Supplier of Last Resort Supply Payments) of the standard
                  conditions of the electricity supply licence;

                  "price control condition" means any condition of the licence
                  which places a monetary limitation on the use of system
                  charges which may be levied or the use of system revenue which
                  may be recovered by the licensee during a given period;

                  "relevant year" means, in relation to any valid claim  -

                  (a)   where the claim was received by the licensee at least 60
                        days before the beginning of a year, that year; or

                  (b)   where the claim was received by the licensee less than
                        60 days before the beginning of a year, the next year;

                  "specified amount" means the amount specified on a valid claim
                  together with interest calculated in accordance with
                  sub-paragraph (b);

                  "valid claim" means a claim for which a claimant has been give
                  a consent by the Authority pursuant to standard condition 29A
                  (Supplier of Last Resort

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                Supply Payments) of the standard conditions of the electricity
                supply licence; and

                "year" means a period of 12 months beginning with 1st April.

         (b)    The interest referred to in sub-paragraph (a) is simple interest
                for the period commencing with the date on which the valid claim
                was received by the licensee and ending with the date which is
                61 days before the start of the relevant year, except where that
                period is of 30 days or less, in which case no interest shall be
                payable.

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Condition 49. Incentive Scheme and Associated Information

1.   The principal purpose of this condition is to secure the collection of
     information on a common basis, and to an appropriate degree of accuracy, by
     each distribution services provider so as:

     (a)  to facilitate the establishment and operation of an incentive scheme
          ("the scheme") to improve the operation and delivery of appropriate
          outputs of the licensee; and

     (b)  to monitor any perverse incentives arising from the collection and
          publication of such information and from the operation of the scheme
          and the charge restriction conditions.

2.   The licensee shall establish appropriate systems, processes and procedures
     to measure and record specified information from the dates specified in
     paragraph 4 and in accordance with Regulatory Instructions and Guidance
     (including any associated information specified therein).

3.   For the purposes of this condition:

     "charge restriction conditions" shall have the same meaning as in special
     condition A (Definitions) for licensed distributors in England and Wales or
     special condition B for licensed distributors in Scotland;

     "charging review date" means the date from which modifications to the
     charge restriction conditions relating to all distribution services
     providers have effect:

     (a)  whether before or after the date upon which the modifications are
          made;

     (b)  whether or not the same modifications are made in respect of each
          distribution services provider; and

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     (c)  where such modifications have been proposed by the Authority following
          a review by the Authority of the charge restriction conditions (or
          that part to which the modifications relate) in relation to all
          distribution services providers;

     "Regulatory Instructions and Guidance" means any instructions and guidance
     issued by the Authority for the purposes of this condition as modified from
     time to time by notice under paragraph 9 and may include:

     (a)  instructions and guidance as to the establishment of different
          systems, processes, procedures and manners for providing and recording
          information and of standards for different classes of information;

     (b)  a timetable for the development of the systems, processes and
          procedures required to achieve the appropriate standards of accuracy
          and reliability with which specified information shall be recorded;

     (c)  the meaning of words and phrases used in defining specified
          information;

     (d)  requirements for the recording of information associated with
          specified information which are reasonably necessary to enable an
          examiner to determine the accuracy and reliability of specified
          information;

     (e)  requirements as to the form and manner in which specified information
          shall be provided to the Authority;

     (f)  requirements as to the manner in which specified information shall be
          recorded and as to the standards of accuracy and reliability with
          which it shall be recorded; and

     (g)  a statement as to whether and to what extent each category of
          specified information is required for the purposes of the scheme;

     "specified information" means:

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     (a)  the number of interruptions in the supply of electricity through the
          licensee's distribution system which occur in each period of 12 months
          commencing on 1 April in each calendar year and have a duration of -

          (i)    less than three minutes, together (in respect of each
                 interruption) with the number of customers whose supply was
                 interrupted and the cause of that interruption; and

          (ii)   three minutes or more, together (in respect of each
                 interruption) with -

                 (aa) the number of customers whose supply of electricity was
                      interrupted and the duration of the interruption;
                 (bb) the source, voltage level and HV circuit; and
                 (cc) the aggregate number of re-interruptions;

     (b)  in relation to telephone calls made to the enquiry service operated
          under paragraph 1 of standard condition 6 (Safety and Security of
          Supplies Enquiry Service) -

          (i)    the speed of response for answering each call; and

          (ii)   in the case of each call answered by a human operator -

                 (aa) the telephone number of the caller;
                 (bb) the time of the call; and
                 (cc) if known, the name of the caller and whether the caller is
                      or is not a domestic customer;

     (c)  (i)    the aggregate number and cause of faults occurring in specified
                 classes or types of electrical plant or electric lines:

          (ii)   a statement setting out the asset management strategy of the
                 licensee in respect of the licensee's distribution system; and

          (iii)  a statement of the reasons for any material increase or
                 decrease in the number and cause of faults referred to in
                 sub-paragraph (i) having regard to equivalent data held in
                 respect of previous years; and

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     (d)  such other information as may from time to time be specified by the
          Authority, by notice to the licensee in accordance with paragraph 9.

4.   The licensee shall collect specified information in respect of:

     (a)  the matters specified in sub-paragraphs (a), (b) and (c) of the
          definition of specified information from and including 1 April 2001;
          and

     (b)  any matter specified under sub-paragraph (d) of that definition from
          the date specified in a notice given in accordance with paragraph 9.

5.   The licensee shall provide to the Authority:

     (a)  the information referred to in sub-paragraph (b)(ii) of the definition
          of specified information for each week within 4 days of the end of
          that week;

     (b)  the information referred to in sub-paragraphs (a),(b)(i) and (c) of
          that definition on or before 31 May 2002 and 30 April in each
          succeeding year (or such later date as the Authority may by notice
          specify) in respect of the period of 12 months expiring on the
          preceding 31 March; and

     (c)  the information referred to in sub-paragraph (d) of that definition in
          respect of such period and by such date as shall be specified in the
          relevant notice given under that sub-paragraph.

6.   The licensee shall permit a person or persons nominated by the Authority
     (in each case "an examiner") to examine the systems, processes and
     procedures referred to in paragraph 2 and their operation, the specified
     information and the extent to which each complies, and is in accordance,
     with Regulatory Instructions and Guidance.

7.   The licensee shall (and shall procure, insofar as it is able to do so, that
     any affiliate of the licensee, any person by whom it procures the
     performance of the obligation in paragraph 2 and any auditor of such person
     or of the licensee shall) co-operate fully with an

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     examiner so as to enable him to carry out, complete and report to the
     Authority on any examination carried out in accordance with paragraph 6.

8.   The licensee's obligation under paragraph 7 to co-operate or procure
     co-operation with an examiner shall include, without limitation and insofar
     as necessary or expedient for such purpose, in each case subject to
     reasonable prior notice to the licensee:

     (a)  providing access to management, employees, agents or independent
          contractors of the licensee sufficient to enable the examiner to make
          any enquiries and to discuss any matters which he reasonably considers
          to be relevant to the carrying out of the examination;

     (b)  giving to the examiner access at reasonable hours to any premises
          occupied by the licensee or any other person in performing the
          obligations set out in this condition; and

     (c)  allowing the examiner at reasonable hours:

          (i)   to inspect and make copies of, and take extracts from, any
                documents and records of the licensee maintained in relation to
                specified information (other than information which is subject
                to legal privilege);

          (ii)  to carry out inspections, measurements and tests on or in
                relation to any systems maintained and operated for or in
                relation to the requirements of this condition; and

          (iii) to take onto such premises or onto or into any assets used for
                the purpose of the licensee such other persons and such
                equipment as may be necessary or expedient for the purpose of
                carrying out the examination.

9.   A notice published by the Authority which adds to the categories of
     specified information or which modifies Regulatory Instructions and
     Guidance (in each case, an "amendment") shall have effect where the
     Authority has:

     (a)  given prior notice to all distribution services providers:

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          (i)   stating that it proposes to make the amendment and setting out
                its effect, the date it is proposed it should take effect and
                (where relevant) whether the additional category of specified
                information is required for the purposes of the scheme;

          (ii)  stating the reasons why it proposes to make the amendment; and

          (iii) specifying the time (not being less than 28 days from the date
                of publication of the notice) within which representations or
                objections with respect to the proposed amendment may be made;
                and

     (b)  considered any representations or objections which are duly made and
          not withdrawn.

10.  A notice under paragraph 9 may not, where the amendment relates to a
     requirement in Regulatory Instructions and Guidance to provide any
     specified information to a greater level of accuracy or the introduction of
     an additional category of specified information which is or is intended to
     be required for the purposes of the scheme, specify a date for the purpose
     of paragraph 9(a)(i) other than a charging review date nor be given less
     than 12 months prior to that date unless all distribution services
     providers have agreed an alternative date or period of notice.

11.  The reasons for proposing an amendment which relates to any change in
     Regulatory Instructions and Guidance (other than that referred to in
     paragraph 10) in respect of specified information which is or is intended
     to be required for the purposes of the scheme may have regard in particular
     to the desirability of:

          (i)   removing or reducing inconsistencies between distribution
                services providers in the application of the Regulatory
                Instructions and Guidance or its interpretation;

          (ii)  improving the presentation or style of the Regulatory
                Instructions and Guidance or of the form and manner in which the
                specified information is to be provided;

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          (iii) summarising the terms of reference and instructions from time to
                time given to an examiner; or

          (iv)  setting out any of the matters referred to in paragraphs (a) to
                (f) of the definition of Regulatory Instructions and Guidance in
                respect of any additional category of specified information

          so as more effectively to achieve the purposes of this condition.

Department of Trade and Industry
September 2001

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                        SPECIAL CONDITIONS AND SCHEDULES

                           PART IV. SPECIAL CONDITIONS

Special Condition A:  Definitions

1.   This Condition and Special Conditions B to F and Schedule A only apply to
     the distribution services area (as defined in standard condition 1
     (Definitions and Interpretation)) of the licensee.

2.   Unless the context otherwise requires words and expressions used in the
     standard conditions of this licence shall bear the same meaning in these
     Special Conditions.

3.   In this Condition and in Special Conditions B to F and Schedule A:

     "attributed"                              means when used in relation to
                                               transmission connection point
                                               charges or remote transmission
                                               asset rentals or distribution
                                               losses, attributed in accordance
                                               with the principles set out in
                                               Part A of Schedule A and
                                               attribute, attributed,
                                               attributable and attribution
                                               shall be construed accordingly.

     "average charge per unit distributed"     means the distribution revenue in
                                               the relevant year divided by the
                                               regulated quantity distributed in
                                               that year.

     "average specified rate"                  means the average of the daily
                                               base rates of Barclays Bank plc
                                               current from time to time during
                                               the period in respect of which
                                               the calculation falls to be made.

     "charge restriction conditions"           means Special Conditions A to F
                                               inclusive together with Schedule
                                               A to this licence, as from time
                                               to time modified or replaced in

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                                               accordance with the provisions of
                                               the Act.

     "distribution losses"                     means units unaccounted for on
                                               the licensee's distribution
                                               system, measured as being the
                                               difference between the units
                                               metered on entry into the system
                                               and the units metered on leaving
                                               the system.

     "distribution revenue                     means the revenue (measured on an
                                               accruals basis) derived by the
                                               licensee from the provision of
                                               distribution services in the
                                               relevant year, after deduction
                                               of:

                                               (i)  an amount equal to such part
                                                    of the total amount payable
                                                    in that relevant year to the
                                                    transmission company
                                                    (measured on an accruals
                                                    basis) in respect of
                                                    transmission connection
                                                    point charges and remote
                                                    transmission asset rentals
                                                    and which would otherwise be
                                                    included in distribution
                                                    revenue by reason of being
                                                    recovered in that relevant
                                                    year by the licensee in its
                                                    use of system charges, as
                                                    falls to be attributed to
                                                    the regulated quantity
                                                    distributed in that relevant
                                                    year; and

                                               (ii) value added tax (if any) and
                                                    any other taxes based
                                                    directly on the amounts so
                                                    derived.

     "distribution services"                   means all services provided by
                                               the licensee as part of its
                                               distribution business other than
                                               excluded services.

     "EHV premises"                            means those premises to which
                                               units are delivered by the
                                               licensee which fall to be

                                       153

<PAGE>

                                               treated as EHV premises in
                                               accordance with Part B of
                                               Schedule A.

     "EHV units"                               means units distributed by the
                                               licensee which are delivered or
                                               deemed to be delivered to EHV
                                               premises.

     "eleventh relevant year                   means the relevant year
                                               commencing 1st April 2000.

     "excluded services"                       means those services provided by
                                               the licensee which in accordance
                                               with the principles set out in
                                               Part C of Schedule A fall to be
                                               treated as excluded services.

     "HV units"                                means units (other than EHV
                                               units) distributed by the
                                               licensee which are delivered to
                                               premises connected to the
                                               licensee's distribution system at
                                               a voltage at or higher than 1000
                                               volts.

     "LV units"                                means units distributed by the
                                               licensee which are delivered to
                                               premises connected to the
                                               licensee's distribution system at
                                               a voltage less than 1000 volts.

     "LV1 units"                               means LV units which are
                                               distributed by the licensee
                                               outside night-time periods to
                                               domestic premises or small
                                               premises (other than domestic
                                               premises) where the appropriate
                                               use of system charges apply
                                               different rates in night-time
                                               periods as opposed to other times
                                               of day, for the avoidance of
                                               doubt including the use of system
                                               charges under the tariffs
                                               specified in paragraph D2 of Part
                                               D of Schedule A.

     "LV2 units"                               means LV units which are
                                               distributed by the licensee to
                                               domestic premises or small
                                               premises (other than domestic
                                               premises):

                                       154

<PAGE>

                                               (a)  During night-time periods,
                                                    where the appropriate use of
                                                    system charges apply
                                                    different rates in
                                                    night-time periods as
                                                    opposed to other times of
                                                    the day; or

                                               (b)  Where the appropriate use of
                                                    system charges are
                                                    incorporated into tariffs
                                                    which restrict availability
                                                    of supply to specified
                                                    off-peak periods,

                                               for the avoidance of doubt
                                               including the use of system
                                               charges under the tariffs
                                               specified in paragraph D3 of Part
                                               D of Schedule A.

     "LV3 units"                               means LV units other than LVI and
                                               LV2 units, for the avoidance of
                                               doubt including units distributed
                                               under the tariffs specified in
                                               paragraph D4 of Part D of
                                               Schedule A.

     "maximum average charge per unit          means the charge calculated in
     distributed"                              accordance with the formula in
                                               paragraph 1 of Special Condition
                                               B (Restriction of distribution
                                               charges).

     "metered"                                 means, in relation to any
                                               quantity distributed as measured
                                               by a meter installed for such
                                               purpose or (where no such meter
                                               is installed or it is not
                                               reasonably practicable to measure
                                               the quantity by such meter) as
                                               otherwise reasonably calculated.

     "regulated distribution unit category"    means as the case may be HV units
                                               or LV1 units or LV2 units or LV3
                                               units.

     "regulated quantity distributed"          means the aggregate quantity of
                                               units distributed (for any person
                                               under use of system) by the
                                               licensee through the licensee's

                                       155

<PAGE>

                                               distribution system in relevant
                                               year t metered at exit points on
                                               leaving the licensee's
                                               distribution system but excluding
                                               for this purpose:

                                               (a)  Units distributed for the
                                                    purpose of supply to
                                                    premises outside the
                                                    licensee's distribution
                                                    services area; and

                                               (b)  EHV units.

     "relevant year                            means a financial year commencing
                                               on or after 1st April 1990.

     "relevant year t"                         means that relevant year for the
                                               purposes of which any calculation
                                               falls to be made.

     "relevant year t-1"                       means the relevant year preceding
                                               relevant year t or, in respect of
                                               the period prior to 1st April
                                               1990. the period of 12 calendar
                                               months commencing on 1st April
                                               1989: and similar expressions
                                               shall be construed accordingly.

     "remote transmission asset rental"        means any rent or other periodic
                                               payment payable by the
                                               distribution business of the
                                               licensee to the transmission
                                               company in respect of remote
                                               transmission assets forming part
                                               of the licensee's distribution
                                               system.

     "transmission connection point charges"   means charges levied by the
                                               transmission company as
                                               connection charges by direct
                                               reference to the number or nature
                                               of the connections between the
                                               licensee's distribution system
                                               and the transmission system and
                                               payable by the distribution
                                               business of the licensee.

     "unit"                                    means a kilowatt hour.

4.   Any reference in these Special Conditions to -

                                       156

<PAGE>

     (a)  a provision thereof;

     (b)  a provision of the standard conditions of electricity distribution
          licences;

     (c)  a provision of the standard conditions of electricity supply licences;

     (d)  a provision of the standard conditions of electricity generation
          licences;

     (e)  a provision of the standard conditions of electricity transmission
          licences;

     shall, if these or the standard conditions in question come to be modified,
     be construed, so far as the context permits, as a reference to the
     corresponding provision of these or the standard conditions in question as
     modified.

                                       157

<PAGE>

Special Condition B: Restriction of distribution charges

Basic Formula

1.   Without prejudice to Special Condition E (Allowances in respect of Security
     costs), the licensee shall in setting its charges for the provision of
     distribution services use its best endeavours to ensure that in any
     relevant year the average charge per unit distributed shall not exceed the
     maximum average charge per unit distributed calculated in accordance with
     the following formula:

          M\\dt\\ = P\\dt\\ + PN\\dt\\ + LF\\dt\\ - PM\\dt\\ - K\\dt\\
                                         --------

2.   For the purposes of paragraph 1, Mdt means the maximum average charge per
     unit distributed in relevant year t.

Formula for P\\dt\\ as used in paragraph 1

3.   For the purposes of paragraph 1, P\\dt\\ is derived from the following
     formula:

                where:

                P\\dt\\ = (PUM.GR\\t\\PID\\t\\) + (PL.(AL\\t\\-L\\t\\).PIL\\t\\)
                          ------------------------------------------------------
                                             D\\t\\

     PUM        means the amount set against that term in the part of Annexe A
                to this Condition that applies to the licensee.

     GR\\t\\    in the eleventh relevant year has the value of 1 and in each
                subsequent relevant year is derived from the following formula:

                                       158

<PAGE>

                 GR\\t\\ = 0.5 ( (SIGMA)P\\oi\\.D\\it\\     C\\dt\\ )
                               (------------------------ + ---------) GR\\t-1\\
                               ((SIGMA)P\\oi\\.D\\it-1\\   C\\dt-1\\)

                 Where

     (SIGMA)     means the summation across all regulated distribution unit
                 categories i as described in the definition of the term
                 P\\oi\\.

     P\\oi\\     means, in respect of each regulated distribution unit category
                 i set out in column 1 under that term in the part of Annexe A
                 to this Condition which applies to the licensee, the value
                 opposite that category in column 2.

     D\\it\\     means that number of units in each regulated distribution unit
                 category i distributed in relevant year t.

     D\\it-1\\   means that number of units in each regulated distribution unit
                 category i distributed in relevant year t-l.

     C\\dt\\     means a notional figure, representing the number of customers
                 in the licensee's distribution services area (for the purpose
                 of this term Cd, only) for each relevant year, given in the
                 table appearing under that term in the part of Annexe A to this
                 Condition that applies to the licensee.

     C\\dt-1\\   means the number equal to C\\dt\\, in relevant year t-1.

     PID\\t\\    in the eleventh relevant year has the value of 1 and in each
                 subsequent relevant year is derived from the following formula:

                 PID\\dt\\ = (1 + RPI\\t\\ - Xd\\t\\) PID\\t-1\\
                                  ------------------
                                         100

                                       159

<PAGE>

                 Where

     RPI\\t\\    means the percentage change (whether of a positive or a
                 negative value) in the arithmetic average of the Retail Price
                 Index numbers published or determined with respect to each of
                 the six months July to December (inclusive) in relevant year t-
                 1 and the arithmetic average of the Retail Price Index numbers
                 published or determined with respect to the same months in
                 relevant year t-2.

     Xd\\t\\     shall equal 3.

     PL          means an amount equal to 2.9p.

     AL\\t\\     means an amount (in units) representing allowed distribution
                 losses in relevant year t, being the allowed percentage of the
                 adjusted units distributed (calculated as provided in paragraph
                 E5 of Part E of Schedule A) where, in respect of each relevant
                 year t, the allowed percentage shall equal that percentage
                 which the aggregate of adjusted distribution losses (calculated
                 as provided in paragraphs E2 to E5 of Part E of Schedule A)
                 over the 10 preceding relevant years bears to the aggregate of
                 adjusted units distributed (calculated as aforesaid) over the
                 corresponding relevant years.

     L\\t\\      means in respect of relevant year t, adjusted grid supply point
                 purchases less adjusted units distributed (calculated as
                 provided in paragraphs E2 to E5 of Part E of Schedule A).

     PIL\\t\\    is derived from the following formula:

                 PIL\\t\\ = (1 + RPI\\t\\) PIL\\t-1\\
                                 --------
                                   100

                                       160

<PAGE>

                 where, for the eleventh relevant year, PIL\\t-1\\ equals 1.

     D\\t\\      means the regulated quantity distributed in relevant year t.


Formula for PN\\dt\\ as used in paragraph 1

4.   For the purposes of paragraph 1, in the eleventh and subsequent relevant
     years the term PN\\dt\\ shall be calculated in accordance with the
     following formula:

                 PN\\dt\\ = (PS + PR)PIR\\t\\
                            -----------------
                                 D\\t\\

     where:

     PS          means an amount equal to (Pound)3.25 million for each of the
                 eleventh to the fifteenth relevant years, and thereafter shall
                 be 0.

     PR          means, in the eleventh and all subsequent relevant years, the
                 amount given against the licensee's name in Annexe B to this
                 Condition.

     PIR\\t\\    is derived from the following formula:

                 PIR\\t\\ = (1 + RPI\\t\\) PIR\\t-1\\
                                 --------
                                    100

                 where for the ninth relevant year PIR\\t-1\\ equals 1

                                       161

<PAGE>

Formula for PM\\dt\\ as used in paragraph 1

5.   For the purposes of paragraph 1, PM\\dt\\ is derived from the following
     formula:

                 PMd\\t\\ = RM\\dt\\
                            --------
                             D\\t\\

     where:

     RM\\dt\\    means an amount equal to the licensee's relevant reduction in
                 costs in relevant year t, resulting from the fact that the
                 licensee has ceased to provide meter provision services and
                 meter operation services (as defined in paragraph 1 of standard
                 condition 36B (Requirement to Offer Terms for the Provision of
                 Distributor Metering and Data Services)) in respect of
                 customers in respect of whom it provided meter provision
                 services and meter operation services at 31 March 2000. The
                 licensee's relevant reduction in costs shall be calculated in
                 real terms, and shall be the amount, if any, by which the
                 licensee's cash operating costs (excluding costs of a
                 non-recurring nature) of providing such services in the
                 relevant year t fall short of its cash operating costs
                 (excluding costs of a non-recurring nature) of providing such
                 services in the tenth relevant year, to the extent that such
                 shortfall is attributable to the fact that the licensee has
                 ceased, since 31 March 2000, to provide (whether directly or
                 through an agent acting on its behalf) meter provision services
                 and meter operation services in respect of such customers. The
                 licensee's relevant reduction in costs shall exclude the amount
                 of any reduction in costs in providing any services which
                 constitute

                                       162

<PAGE>

                 excluded services.

Formula for K\\dt\\ as used in Paragraph 1

6.   For the purposes of paragraph 1, K\\dt\\ means the correction factor per
     unit (whether of a positive or a negative value) derived, subject to
     paragraph 3 of Special Condition C (Restriction of distribution charges:
     adjustments), from the following formula: provided that the value of
     K\\dt\\ for the eleventh relevant year shall be the value of K\\dt\\
     arising for that year from the application of the formula applicable under
     Licence Condition 3A of the Public Electricity Supply licence previously
     granted to Manweb in the form of that condition in force on 31 March 2000,
     but adjusted by adding the amount of TA\\dt\\, for the tenth relevant year,
     calculated by the application of the formula applicable under Licence
     Condition 3A of that Public Electricity Supply licence as then in force:

                 K\\dt\\= R\\dt-1\\-(D\\t-1.M\\dt-1)
                          --------------------------(1+I\\dt\\)
                                     D\\t\\            -------
                                                         100
     where:

     R\\dt-1\\   means the distribution revenue in relevant year t-l.

     D\\t-1\\    means the regulated quantity distributed in relevant year t-l.

     M\\dt-1\\   means maximum average charge per unit distributed in relevant
                 year t-1.

     I\\dt\\     means that interest rate in relevant year t which is equal to,
                 where Kdt (taking no account of Id for this purpose) has a
                 positive value, the average specified rate plus 4, or where Kdt
                 (taking no account of Id for this purpose) has a negative
                 value, the average specified rate.

                                       163

<PAGE>

Formula for LF\\dt\\ as used in Paragraph 1

7.   For the purposes of paragraph 1, for the tenth and preceding relevant years
     LF\\dt\\ shall be zero, and for any subsequent relevant year LF\\dt\\ is
     derived from the following formula:

     LF\\dt\\ LP\\dt\\ - LA\\dt\\
              -------------------
                     D\\t\\

     where:

     LP\\dt\\    means an amount equal to the payments made by the licensee, in
                 the relevant year t, in accordance with its obligations set out
                 in Standard Licence Condition 3 or in respect of the eleventh
                 relevant year made by the predecessor company of the licence
                 holder to the Director General of Electricity Supply under the
                 licence condition entitled "Payment of fees" in the public
                 electricity supply licence referred to in paragraph 6.

     LA\\dt\\    is derived from the following formula:

                 LA\\dt\\ = PF.PIF\\t\\

     PF          means, in the eleventh and all subsequent relevant years, the
                 amount given against the licensee's name in column PF of Annex
                 C to this Condition.

     PIF\\t\\    is derived from the following formula:

                 PIF\\t\\ = (1 + RPI\\t\\)
                            (    --------) PIF\\t-1\\
                            (      100   )

                 where for the ninth relevant year PIF\\t-1\\ equals 1.

                                       164

<PAGE>

Annex A to Special Condition B (Restriction of distribution charges)

EASTERN ELECTRICITY Ltd

                                             (Pound)m

PUM                                           287.9

C\\dt\\ for relevant year beginning on

                                                        '000s

       1 April 2000                                       3249
       1 April 2001                                       3281
       1 April 2002                                       3314
       1 April 2003                                       3347
       1 April 2004                                       3381

every subsequent relevant year 3415

P\\0i\\

Column 1                                                  Column 2

unit category i                                           value (p)

                      LV1
                   2.0009

                      LV2
                   0.3031

                      LV3
                   1.3431

                       HV
                   0.4584

                                       165

<PAGE>

EAST MIDLANDS DISTRIBUTION plc

                                             (Pound)m

                PUM
                240.3

C\\dt\\ for relevant year beginning on

                                 '000s

     1 April 2000                            2376
     1 April 2001                            2400
     1 April 2002                            2424
     1 April 2003                            2448
     1 April 2004                            2472

every subsequent relevant year 2497

P\\0i\\

Column 1                                     Column 2

unit category I                              value (p)
                     LV1
                  1.6131

                     LV2
                  0.5557

                     LV3
                  1.5711

                      HV
                  0.6350

                                       166

<PAGE>

GPU POWER NETWORKS (UK) PLC

                                             (Pound)m

PUM             243.5

C\\dt\\ for relevant year beginning on

     '000s

     1 April 2000                                2303
     1 April 2001                                2326
     1 April 2002                                2349
     1 April 2003                                2373
     1 April 2004                                2397

every subsequent relevant year 2420

P\\0i\\

Column 1                         Column 2

unit category i                  value (p)

                     LV1
                  1.9729

                     LV2
                  0.3966

                     LV3
                  1.6108

                      HV
                  0.5992

                                       167

<PAGE>

LONDON POWER NETWORKS LIMITED

                                             (Pound)m

PUM                220.8

C\\dt\\ for relevant year beginning on

                                    '000s

     1 April 2000                                2072
     1 April 2001                                2093
     1 April 2002                                2114
     1 April 2003                                2135
     1 April 2004                                2156

every subsequent relevant year 2178

P\\0i\\

Column 1                         Column 2

unit category i                  value (p)

                     LV1
                  2.2073

                     LV2
                  0.4057

                     LV3
                  1.5912

                      HV
                  0.5932

                                       168

<PAGE>

MANWEB plc

                                             (Pound)m

PUM                158.0

C\\dt\\ for relevant year beginning on

                                 '000s

     1 April 2000                                1423
     1 April 2001                                1437
     1 April 2002                                1452
     1 April 2003                                1466
     1 April 2004                                1481

every subsequent relevant year 1496

P\\0i\\

Column 1                         Column 2

unit category i                  value (p)

                     LV1
                  2.1041

                     LV2
                  0.4323

                     LV3
                  1.7558

                      HV
                  0.5097

                                       169

<PAGE>

NORTHERN ELECTRIC DISTRIBUTION LIMITED

                                             (Pound)m

PUM                152.6

C\\dt\\ for relevant year beginning on

                                 '000s

     1 April 2000                               1500
     1 April 2001                               1515
     1 April 2002                               1530
     1 April 2003                               1545
     1 April 2004                               1561

every subsequent relevant year 1577

P\\0i\\

Column 1                                         Column 2

unit category i                                  value (p)
                     LV1
                  2.0911

                     LV2
                  0.3273

                     LV3
                  1.9284

                      HV
                  0.4723

                                       170

<PAGE>

NORWEB plc

                                              (Pound)m

PUM               208.9

C\\dt\\ for relevant year beginning on

            '000s

     1 April 2000                                 2250
     1 April 2001                                 2272
     1 April 2002                                 2295
     1 April 2003                                 2318
     1 April 2004                                 2341

every subsequent relevant year 2365

P\\0i\\

Column 1                             Column 2

unit category i                      value (p)

                  LV1                2.1750
                  LV2 0               .2821
                  LV3                1.6304
                   HV                0.5335

                                       171

<PAGE>

SEEBOARD POWER NETWORKS PLC

                                                                (Pound)m

PUM                                  159.1

C\\dt\\ for relevant year beginning on

        '000s

     1 April 2000                                    2153
     1 April 2001                                    2175
     1 April 2002                                    2196
     1 April 2003                                    2218
     1 April 2004                                    2240

every subsequent relevant year 2263

P\\0i\\

Column 1                                             Column 2

unit category i                                      value (p)
                        LV1
                     1.8735

                        LV2
                     0.3213

                        LV3
                     1.4098

                         HV
                     0.5892

                                       172

<PAGE>

SOUTHERN ELECTRIC POWER DISTRIBUTION PLC

                                           (Pound)m

PUM             297.7

C\\dt\\ for relevant year beginning on

            '000s

     1 April 2000                                 2728
     1 April 2001                                 2755
     1 April 2002                                 2783
     1 April 2003                                 2811
     1 April 2004                                 2839

every subsequent relevant year 2867

P\\0i\\

Column 1                             Column 2

unit category i                      value (p)

                     LV1
                  2.0600

                     LV2
                  0.3816

                     LV3
                  1.4815

                      HV
                  0.5560

                                       173

<PAGE>

WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC

                                              (Pound)m

PUM                125.6

C\\dt\\ for relevant year beginning on

            '000s

     1 April 2000                                     998
     1 April 2001                                    1008
     1 April 2002                                    1018
     1 April 2003                                    1028
     1 April 2004                                    1039

every subsequent relevant year 1049

P\\0i\\

Column 1                             Column 2

unit category i                      value (p)

                     LV1
                  2.4442

                     LV2
                  0.3641

                     LV3
                  2.2009

                      HV
                  0.7272

                                       174

<PAGE>

WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC

                                     (Pound)m

PUM               171.0

C\\dt\\ for relevant year beginning on

            '000s

     1 April 2000           1369
     1 April 2001           1383
     1 April 2002           1397
     1 April 2003           1410
     1 April 2004           1425

every subsequent relevant year 1439

P\\0i\\

Column 1                             Column 2

unit category i                      Value (p)

             LV1
             2.3889

             LV2                     0.6679
             LV3                     1.8707
             HV                      0.5072

                                       175

<PAGE>

YORKSHIRE ELECTRICITY DISTRIBUTION plc

                                                                (Pound)m

PUM                                      215.4

C\\dt\\ for relevant year beginning on

                                                        '000s

     1 April 2000                               2129
     1 April 2001                               2150
     1 April 2002                               2172
     1 April 2003                               2194
     1 April 2004                               2215

every subsequent relevant year 2238

P\\0i\\

Column 1                                        Column 2

unit category i                                 value (p)

                     LV1
                  1.9497

                     LV2                        0.3271

                     LV3                        1.6654

                      HV                        0.5750

                                       176

<PAGE>

Annex B to Special Condition B (Restriction of distribution charges)

----------------------------------------------------------------------------
                                                           PR
                                                           (Pound)M
----------------------------------------------------------------------------
EASTERN ELECTRICITY LTD                                                2.97
----------------------------------------------------------------------------
EAST MIDLANDS DISTRIBUTION PLC                                         2.35
----------------------------------------------------------------------------
GPU POWER NETWORKS (UK) PLC                                            2.34
----------------------------------------------------------------------------
LONDON POWER NETWORKS LIMITED                                          2.14
----------------------------------------------------------------------------
MANWEB PLC                                                             1.69
----------------------------------------------------------------------------
NORTHERN ELECTRIC DISTRIBUTION LIMITED                                 1.76
----------------------------------------------------------------------------
NORWEB PLC                                                             2.28
----------------------------------------------------------------------------
SEEBOARD POWER NETWORKS PLC                                            2.15
----------------------------------------------------------------------------
SOUTHERN ELECTRIC POWER DISTRIBUTION PLC                               2.64
----------------------------------------------------------------------------
WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC                           1.38
----------------------------------------------------------------------------
WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC                            1.65
----------------------------------------------------------------------------
YORKSHIRE ELECTRICITY DISTRIBUTION PLC                                 2.19
----------------------------------------------------------------------------
SCOTTISH POWER DISTRIBUTION LTD                                        2.01
----------------------------------------------------------------------------
SCOTTISH HYDRO ELECTRIC POWER DISTRIBUTION LTD                         1.16
----------------------------------------------------------------------------

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

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

                                       177

<PAGE>

Annex C to Special Condition B (Restriction of Distribution Charges)

------------------------------------------------------------------------------
                                                                  PF
------------------------------------------------------------------------------
                                                                (Pound)m
------------------------------------------------------------------------------
EASTERN ELECTRICITY LIMITED                                       0.731
------------------------------------------------------------------------------
EAST MIDLANDS ELECTRICITY DISTRIBUTION PLC                        0.579
------------------------------------------------------------------------------
LONDON POWER NETWORKS PLC                                         0.492
------------------------------------------------------------------------------
SP MANWEB PLC                                                     0.452
------------------------------------------------------------------------------
GPU POWER NETWORKS (UK) PLC                                       0.575
------------------------------------------------------------------------------
NORTHERN ELECTRIC DISTRIBUTION LIMITED                            0.352
------------------------------------------------------------------------------
UNITED UTILITIES ELECTRICITY PLC (FORMERLY NORWEB PLC)            0.527
------------------------------------------------------------------------------
SEEBOARD POWER NETWORKS PLC                                       0.442
------------------------------------------------------------------------------
SOUTHERN ELECTRIC POWER DISTRIBUTION PLC                          0.649
------------------------------------------------------------------------------
WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC                      0.269
------------------------------------------------------------------------------
WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC                       0.317
------------------------------------------------------------------------------
YORKSHIRE ELECTRICITY DISTRIBUTION PLC                            0.529
------------------------------------------------------------------------------

                                       178

<PAGE>

Special Condition C:  Restriction of distribution charges:  adjustments

1.   If, in respect of any relevant year, the average charge per unit
     distributed exceeds the maximum average charge per unit distributed by more
     than 3 per cent, the licensee shall furnish an explanation to the Authority
     and in the next following relevant year the licensee shall not effect any
     increase in charges unless it has demonstrated to the reasonable
     satisfaction of the Authority that the average charge per unit distributed
     would not be likely to exceed the maximum charge per unit distributed in
     that next following relevant year.

2.   If, in respect of any two successive relevant years, the sum of the amounts
     by which the average charge per unit distributed has exceeded the maximum
     average charge per unit distributed is more than 4 per cent, then in the
     next following relevant year the licensee shall, if required by the
     Authority, adjust its charges such that the average charge per unit
     distributed would not be likely, in the judgement of the Authority, to
     exceed the maximum average charge per unit in that next following relevant
     year.

3.   If, in respect of two successive relevant years, the average charge per
     unit distributed is less than 90 per cent of the maximum average charge per
     unit distributed, the Authority. after consultation with the licensee, may
     direct that in calculating K\\dt\\ for the purposes of paragraph 6 of
     Special Condition B (Restriction of distribution charges) in respect of the
     next following relevant year, there shall be substituted for R\\dt-1\\ in
     the formula at paragraph 6 of Special Condition B (Restriction of
     distribution charges) such figure as the Authority may specify being not
     less than R\\dt-1\\ and not more than 0.90 (Dt-1.M\\dt-1\\).

                                       179

<PAGE>

Special Condition D: Information to be provided to the Authority in connection
with the charge restriction conditions

1.   Where the licensee is intending to make any change in charges for the
     provision of distribution services regulated under Special Condition B
     (Restriction of distribution charges) the licensee shall (unless otherwise
     agreed by the Authority) not later than the date of publication of such
     charges provide the Authority with:

     (a)  written forecast of the maximum average charge per unit distributed,
          together with its components, in respect of the relevant year t in
          which such a change is to take effect and in respect of the next
          following relevant year t+1; and

     (b)  a written estimate of the maximum average charge per unit distributed,
          together with its components, in respect of the relevant year t-1
          immediately preceding the relevant year in which the change is to take
          effect unless a statement complying with paragraph 7 in respect of
          relevant year t-l has been furnished to the Authority before the
          publication of the proposed change.

2.   [No longer used]

3.   If within three months of the commencement of any relevant year t the
     licensee has not made any such change in charges as is referred to in
     paragraph 1, the licensee shall provide the Authority with a written
     forecast of the maximum average charge per unit distributed, together with
     its components, in respect of the relevant year t.

4.   The Authority may issue directions providing that any forecast or estimate
     provided in accordance with paragraphs 1 or 3 shall be accompanied by such
     information as regards the assumptions underlying the forecast or estimate
     as may be necessary to enable the Authority to be satisfied that the
     forecast or estimate has been properly prepared on a consistent basis.

5.   Not later than six weeks after the commencement of each relevant year t,
     the licensee shall send to the Authority a statement as to:

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     (a)  whether or not the provisions of Special Condition C (Restriction of
          distribution charges: adjustments) are likely to be applicable in
          consequence of the average charge per unit distributed in the
          preceding relevant year t- 1 or the two preceding relevant years t-l
          and t-2; and

     (b)  its best estimate as to the relevant correction factor K\\dt\\ to be
          applied in calculating the maximum average charge per unit distributed
          in respect of the relevant year t.

6.   [No longer used]

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7.   Not later than three months after the end of a relevant year the licensee
     shall send to the Authority a statement, in respect of that relevant year,
     showing the specified items referred to in paragraph 9.

8.   The statement referred to in the preceding paragraph shall be:

     (a)  accompanied by a report from the Auditors that in their opinion (i)
          such statement fairly presents each of the specified items referred to
          in paragraph 9 in accordance with the requirements of the charge
          restriction conditions and (ii) the amounts shown in respect of each
          of those specified items are in accordance with the licensee's
          accounting records which have been maintained in respect of the
          distribution business in accordance with standard condition 42
          (Regulatory Accounts) of this licence; and

     (b)  certified by a director of the licensee on behalf of the licensee that
          to the best of his knowledge, information and belief having made all
          reasonable enquiries:

          (i)   there is no amount included in its calculations under Special
                Condition B (Restriction of distribution charges) and Schedule A
                which represents other than:

                (aa)  bona fide consideration for the provision of distribution
                      services in the course of its distribution business; or

                (bb)  an amount permitted under the charge restriction
                      conditions to be so included;

          (ii)  there is no amount included in its calculations of allowed
                security costs under Special Condition E (Allowances in respect
                of Security costs ) which represents other than an amount
                permitted under the charge restriction conditions to be so
                included;

          (iii) no service has been treated as an excluded service which was not
                properly so treated and no amount included in the revenues in
                respect thereof represents other than bona fide consideration
                for the provision of the excluded service to which it relates;

          (iv)  all amounts which should properly be taken into account for the
                purposes of the charge restriction conditions have been taken
                into account.

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9.   The specified items to be contained in the statement referred to in
     paragraph 7 shall be the following:

     (c)  the regulated quantity distributed;

     (d)  the quantity distributed in each regulated distribution unit category;

     (e)  the average charge per unit distributed;

     (f)  the amount in respect of the Terms ALt and Lt in paragraph 3 of
          Special Condition B (Restriction of distribution charges) calculated
          as therein provided:

     (g)  the value of the term TAd\\t\\ in respect of the tenth relevant year
          only, together with the value of each of its component parts, as
          detailed in paragraph 4 of Special Condition B (Restriction of
          distribution charges) in the form of the licence in force on 31 March
          2000;

     (h)  the value of the term LFd\\t\\ together with the value of each of its
          component parts, as detailed in paragraph 7 of special condition B
          (Restriction of distribution charges);

     (i)  the information referred to at paragraph 8 of Special Condition E
          (Allowances in respect of Security costs );

     (j)  the statements and information referred to in paragraph A5, B2, C7, Dl
          and E10 of Schedule A.

10.  Where the Authority issues directions in accordance with paragraph 9 of
     Special Condition E (Allowances in respect of Security costs ) or
     paragraphs A6, B3, C8, D5 or E11 of Schedule A then such directions shall
     not have effect from a date earlier than the commencement of the relevant
     year to which the statement last furnished to the Authority pursuant to
     paragraph 7 prior to the issue of the directions related, unless such
     statement (or the accompanying report or certificate under paragraph 8) or
     any statement, report or certificate in respect of an earlier relevant year
     was incorrect or was misleading in any material respect.

11.  Where the Authority issues such directions as are referred to in the
     preceding paragraph the Authority may require the licensee to provide a
     revised statement in respect of such of

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     the specified items as may be affected by the directions, and the licensee
     shall comply with such request.

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Special Condition E: Allowances in respect of Security costs

1.   At any time during a security period, the licensee may give notice in
     writing to the Authority suspending, with effect from the date of receipt
     of the notice by the Authority, application of such of the charge
     restriction conditions as may be specified in the notice for the unexpired
     term of the security period.

2.   At any time during a security period, the Authority may (having regard to
     its duties under the Act or under the Utilities Act 2000) by means of
     directions:

     (a)  suspend or modify for the unexpired term of the security period the
          charge restriction conditions or any part or parts thereof; or

     (b)  introduce for the unexpired term of the security period new charge
          restriction conditions

     in either case, so as to make such provision as in the opinion or
     estimation of the Authority is requisite or appropriate:

     (i)  to enable the licensee to recover by means of increased charges an
          amount estimated as being equal to the licensees allowed security
          costs during such period;

     (ii) to ensure that such part of the amount referred to in sub-paragraph
          (i) above as is estimated as being equal to the allowed security costs
          incurred by the licensee as costs in its distribution business are
          recovered by means of appropriate equitable increases on the charges
          made by the licensee in its distribution business

     and the licensee shall comply with the terms of any directions so issued.

3.   At any time following a security period, the Authority may (following such
     consultation with the licensee and others as the Authority may consider
     appropriate) issue directions suspending or modifying the charge
     restriction conditions or any part or parts thereof or replacing such
     directions as may have been made during the security period and introducing
     such new charge restriction conditions as in the opinion of the Authority
     are appropriate in all the circumstances (including at the Authority's
     discretion an appropriate

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     adjustment having regard to any profit gained or foregone by the licensee
     during the security period), and the licensee shall comply with any
     directions so issued.

4.   At any time within three months after the issue of directions by the
     Authority under paragraph 3, the licensee may serve on the Authority a
     disapplication request in respect of such of the charge restriction
     conditions or any part or parts thereof as are specified in the request.

5.   If within three months of the receipt by the Authority of the
     disapplication request referred to in paragraph 4, the Authority has either
     not agreed in writing to such disapplication request or has not made a
     reference to the Competition Commission under Section 12 of the Act
     relating to the modification of the charge restriction conditions, the
     licensee may deliver one months written notice to the Authority terminating
     the application of the charge restriction conditions (or any part or parts
     thereof) as were specified in the disapplication request.

6.   Subject to paragraphs 7 and 9, the licensee shall in any relevant year be
     entitled to recover an aggregate amount equal to its allowed security costs
     in that year or (insofar as not previously recovered) any previous year, by
     means of appropriate equitable increases on the charges made by the
     licensee in its distribution business.

7.   Paragraph 6 shall not apply in so far as such allowed security costs:

     (a)  were otherwise recovered by the licensee; or

     (b)  were taken into account by the Authority in setting charge restriction
          conditions by means of directions issued under paragraph 3 above.

8.   The licensee shall following the end of each relevant year provide to the
     Authority, as being one of the specified items to be contained in the
     statement referred to at paragraph 7 of Special Condition D (Information to
     be provided to the Authority in connection with the charge restriction
     conditions), details in respect of that relevant year of:

     (a)  the amount of the licensee's allowed security costs; and

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<PAGE>

     (b)  the aggregate amounts charged under paragraph 6 on account of the
          licensee's allowed security costs; and

     (c)  the bases and calculations underlying the increases in charges made by
          the licensee in its distribution business under paragraph 6.

9.   Where the Authority is satisfied that the licensee has recovered amounts in
     excess of the allowed security costs, the Authority may issue directions
     requiring the licensee to take such steps as may be specified to reimburse
     purchasers from the distribution business (as the case may be) for the
     excess amounts charged to them, and the licensee shall comply with any
     directions so issued provided that if the excess amounts relate to allowed
     security costs paid to any authorised electricity operator, the licensee
     shall not be obliged to make any such reimbursement unless and until it has
     recovered such costs from the relevant authorised electricity operator.

10.  No amounts charged by the licensee under this Condition (whether or not
     subsequently required to be reimbursed) shall be taken into account for the
     purpose of applying the charge restriction provisions of Special Condition
     B (Restriction of distribution charges).

11.  In this Condition:

     "allowed security cost"            shall have the meaning ascribed to that
                                        term in the Fuel Security Code.

     "security period"                  means a period commencing on the date on
                                        which any direction issued by the
                                        Secretary of State under Section
                                        34(4)(b) of the Act enters into effect
                                        and terminating on the date (being not
                                        earlier than the date such direction, as
                                        varied, is revoked or expires) as the
                                        Authority, after consultation with such
                                        persons (including without limitation,
                                        licence holders liable to be principally
                                        affected) as it shall consider

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<PAGE>

                                        appropriate, may with the consent of the
                                        Secretary of State by notice to all
                                        licence holders determine after having
                                        regard to the views of such persons.

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<PAGE>

Special Condition F: Duration of charge restriction conditions

1.   The charge restriction conditions shall apply so long as this licence
     continues in force but shall cease to have effect (in whole or in part, as
     the case may be) if the licensee delivers to the Authority a disapplication
     request made in accordance with paragraph 2 and:

     (a)  the Authority agrees in writing to the disapplication request; or

     (b)  their application (in whole or in part) is terminated by notice given
          by the licensee in accordance with either paragraph 4 or paragraph 5.

2.   A disapplication request pursuant to this Condition shall (a) be in writing
     addressed to the Authority, (b) specify the charge restriction conditions
     (or any part or parts thereof) to which the request relates and (c) state
     the date from which the licensee wishes the Authority to agree that the
     specified charge restriction conditions shall cease to have effect.

3.   Save where the Authority otherwise agrees, no disapplication following
     delivery of a disapplication request pursuant to this Condition shall have
     effect earlier than that date which is the later of:

     (a)  a date being not less than 18 months after delivery of the
          disapplication request; and

     (b)  31st March 2005.

4.   If the Authority has not made a reference to the Competition Commission
     under Section 12 of the Act relating to the modification of the charge
     restriction conditions before the beginning of the period of 12 months
     which will end with the disapplication date, the licensee may deliver
     written notice to the Authority terminating the application of such of the
     charge restriction conditions (or any part or parts thereof) as are
     specified in the disapplication request with effect from the disapplication
     date or a later date.

5.   If the Competition Commission makes a report on a reference made by the
     Authority relating to the modification of the charge restriction conditions
     (or any part or parts

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<PAGE>

     thereof) specified in the disapplication request and such report does not
     include a conclusion that the cessation of such charge restriction
     conditions, in whole or in part, operates or may be expected to operate
     against the public interest, the licensee may within 30 days after the
     publication of the report by the Authority in accordance with Section 13 of
     the Act deliver to the Authority written notice terminating the application
     of such charge restriction conditions with effect from the disapplication
     date or later.

6.   A disapplication request or notice served under this Condition may be
     served in respect of a specified geographic area.

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<PAGE>

SCHEDULE A: SUPPLEMENTARY PROVISIONS OF THE CHARGE RESTRICTION CONDITIONS

Part A. Principles for Attribution

General Principles

A1.  Where for the purposes of the charge restriction conditions, a share of
     costs borne by the licensee requires to be attributed to any part of the
     market, the licensee shall make that attribution on a basis which ensures
     that no more than a fair proportion of those costs, reflecting the costs
     incurred by the licensee in supplying that part of the market, are so
     attributed.

A2.  The following paragraphs of this Part of Schedule A are without prejudice
     to paragraph Al.

Transmission connection point charges and remote transmission asset rentals

A3.  The transmission connection point charges and remote transmission asset
     rentals requiring to be attributed between the regulated quantity
     distributed and other quantities distributed shall be attributed in
     proportion to the transmission connection point and remote transmission
     asset capacity required for the purpose of distributing those quantities.

Distribution losses

A4.  Where an amount (in units) in respect of distribution losses requires to be
     calculated and attributed in respect of EHV units and units distributed by
     the licensee for the purpose of supply to premises outside the licensee's
     distribution services area, such calculation and attribution shall be made
     consistently with the principles underlying the schedule of adjustment
     factors referred to at sub-paragraph (b) of paragraph 2 of standard
     condition 4

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<PAGE>

     (Basis of Charges for Use of System and Connection to System: Requirements
     for Transparency).

Information to be provided by licensee

A5.  The licensee shall following the end of each relevant year furnish to the
     Authority, as being one of the specified items to be included in the
     statement referred to at paragraph 7 of Special Condition D (Information to
     be provided to the Authority in connection with the charge restriction
     conditions), a statement confirming that the calculation of the
     transmission connection point charges, the remote transmission asset
     rentals and of distribution losses was made in accordance with the
     provisions of this Part of Schedule A.

A6.  Where the Authority is satisfied that the basis of calculation or
     attribution (as the case may be) used by the licensee is not in conformity
     with paragraph Al, the Authority may issue directions specifying an
     alternative basis of calculation or attribution, and the basis of
     calculation or attribution by the licensee (as the case may be) shall be
     adjusted accordingly with effect from the date of issue of the directions
     or (subject to paragraph 10 of Special Condition D (Information to be
     provided to the Authority in connection with the charge restriction
     conditions)) such other date as may be specified in those directions.

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<PAGE>

Part B. EHV premises

B1.  EHV premises shall comprise:

     (a)  in relation to premises connected to the licensee's distribution
          system as at the date this licence enters into force, those premises
          specified in the list of EHV premises notified in writing to the
          Authority by the licensee within twenty-eight days after this licence
          enters into force; and

     (b)  in relation to premises connected to the licensee's distribution
          system which are either first connected or (having been previously
          connected) have had their connections materially altered following the
          date this licence enters into force, means premises connected to the
          licensee's distribution system as a voltage at or higher than 22
          kilovolts or at a sub-station with a primary voltage of 66 kilovolts
          or above

B2.  The licensee shall following the end of each relevant year furnish to the
     Authority, as being one of the specified items to be included in the
     statement referred to at paragraph 7 of Special Condition D (Information to
     be provided to the Authority in connection with the charge restriction
     conditions), a statement listing any changes in the premises falling to be
     treated as EHV premises.

B3.  Where the Authority is satisfied that any premises treated by the licensee
     as EHV premises should not in conformity with sub-paragraph B1(b) above be
     so treated, the Authority may issue directions to that effect, and such
     premises shall cease to be treated as EHV premises from the date of issue
     of the directions or (subject to paragraph 10 of Special Condition D
     (Information to be provided to the Authority in connection with the charge
     restriction conditions)) such other date as may be specified in those
     directions.

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Part C. Excluded services

C1.      There may be treated as excluded services provided by the licensee in
         its distribution business such services in respect of which charges are
         made which:

         (a)    do not fall within paragraph C2 of this Part; and
         (b)    may (subject to paragraph C8) be determined by the licensee as
                falling under one of the principles set out in paragraphs C3 to
                C6 of this Part.

C2.      No service provided by the licensee as part of its distribution
         business shall be treated as an excluded service in so far as it
         consists of the provision of services remunerated under the use of
         system charges in accordance with paragraph 2 of standard condition 4
         (Basis of Charges for use of System and Connection to System) including
         (without prejudice to the foregoing):

         (i)    (subject to paragraph C3 of this Part) the transport of
                electricity;
         (ii)   the carrying out of works for the installation of electric lines
                or electrical plant (not otherwise payable in the form of
                connection charges);
         (iii)  the carrying out of works or the provision of maintenance or
                repair or other services for the purpose of enabling the
                licensee to comply with standard conditions 5, 9, 9A and 15, the
                Electricity Supply Regulations 1988 or any regulations made
                under Section 29 of the Act or any other enactment relating to
                safety or standards applicable in respect of the distribution
                business; and
         (iv)   (subject to paragraph C5 of this Part) the provision,
                installation and maintenance of any meters, switchgear or other
                electrical plant (not being part of connection charges).

C3.      The licensee may treat as being an excluded service for the purposes of
         its distribution business the transport of:

         (a)    units of electricity not consumed in the licensee's distribution
                services area
         (b)    EHV units, provided that the licensee's charges for the
                distribution of such units do not exceed the charging rates
                underlying the information as to EHV revenue and EHV units
                distributed given by the licensee to the Authority and used by
                it

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<PAGE>

                for the purposes of setting the term PUM in Special Condition B
                (Restriction of distribution charges), subject only to such
                adjustments as may be appropriate in the reasonable opinion of
                the Authority to reflect material variations between the actual
                charges made and the charging rates underlying the information
                as to EHV revenue provided to the Authority by the licensee.

C4.      Charges of the type described in paragraph 3 of standard condition 4
         (Basis of Charges for use of System and Connection to System) and
         charges in respect of the statements referred to in paragraph 5 of
         standard condition 4 (Basis of Charges for use of System and Connection
         to System), may each be treated as excluded services for the purposes
         of the distribution business.

C5.      A service provided by the licensee as part of its distribution business
         may be treated as an excluded service in so far as it consists in the
         provision of services (including metering, electric lines or electrical
         plant) for the specific benefit of any third party requesting the same
         and not made available by the licensee as a normal part of its
         distribution business remunerated by use of system charges including
         (without prejudice to the foregoing):

         (i)    special metering (including "time of day" metering) to
                facilitate energy saving programmes for the benefit of customers
                requesting the same;
         (ii)   charges for moving mains, services or meters forming part of the
                licensee's distribution system to accommodate extension,
                re-design or re-development of any premises on which the same
                are located or to which they are connected;
         (iii)  the provision of electric lines and electrical plant (a) insofar
                as the same are required for the specific purpose of enabling
                the provision of top-up or standby supplies or sales of
                electricity or (b) to provide a higher degree of security than
                is required for the purposes of complying with standard
                condition 5 (Distribution System Planning Standard and Quality
                of Service);
         (iv)   the amount by which charges for the provision of prepayment
                meters to customers exceed charges for the provision of standard
                meters for such customers, in respect of which the amount
                receivable per customer shall not exceed that used by the

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<PAGE>

                Authority in formulating PUM in Special Condition B (Restriction
                of distribution charges); and
         (v)    special metering or telemetry or data processing equipment for
                the purposes of enabling any person which is a party to the
                Balancing and Settlement Code to comply with its obligations in
                respect of metering thereunder, or for the performance by the
                licensee of any service in relation thereto.

C6.      There may be treated as an excluded service for the purposes of the
         distribution business, charges for the relocation of electric lines or
         electrical plant and the carrying out of works associated therewith
         pursuant to a statutory obligation (other than under Section 9(1) or
         Section 16 of the Act) imposed on the licensee.

Information to be provided to the Authority

C7.      The licensee shall following the end of each relevant year furnish to
         the Authority, as being one of the specified items to be included in
         the statement referred to at paragraph 7 of Special Condition D
         (Information to be provided to the Authority in connection with the
         charge restriction conditions), details specifying separately the
         nature of all services provided as part of its distribution business
         and treated as excluded services by the licensee during the course of
         such year and stating the revenues derived by the licensee in respect
         of each such service so treated.

C8.      Where the Authority is satisfied that in light of the principles set
         out in paragraphs C2 to C6 inclusive any service treated by the
         licensee as an excluded service should not be so treated, the Authority
         shall issue directions to that effect, and the service or services
         specified in the directions shall cease to be treated as excluded
         services from the date of issue of the directions or (subject to
         paragraph 10 of Special Condition D (Information to be provided to the
         Authority in connection with the charge restriction conditions)) such
         other date as may be specified in the directions.

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Part D. Regulated distribution unit categories

D1       The licensee shall following the end of each relevant year furnish to
         the Authority, as being one of the specified items to be included in
         the statement referred to at paragraph 7 of Special Condition D
         (Information to be provided to the Authority in connection with the
         charge restriction conditions), details specifying separately those use
         of system charges in respect of which the licensee has during the
         course of such year treated the units distributed as falling within the
         definition of each of LV1 units and LV2 units and LV3 units
         respectively.

D2.      The definition of LVI units includes units distributed under the
         following tariffs:

         (a)    Economy 7 (day) - domestic, quarterly
         (b)    White Meter (day) - domestic, quarterly
         (c)    3E (day) - non-domestic, quarterly, Economy 7
         (d)    4E (day) - non-domestic, quarterly tariff for customers supplied
                at LV from a sub- station
         (e)    M4 (day, evening and weekend) - non-domestic quarterly time of
                day tariff for customers supplied at LV from a sub-station

D3.      The definition of LV2 units includes units distributed under the
         following tariffs:

         (a)    Economy 7 (night) - domestic, quarterly
         (b)    White Meter (night) - domestic, quarterly
         (c)    Off peak A)
         (d)    Off peak C)
         (e)    Off peak D)      Restricted hours off-peak, quarterly
         (f)    Off peak E)
         (g)    Off peak S)
         (h)    3E (night) - non-domestic, quarterly, Economy 7
         (i)    M3 (night) - non-domestic, quarterly, tariff for customers
                supplied at LV from a sub-station

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<PAGE>

         (j)    M4 (night) - non-domestic, quarterly, time of day tariff for
                customers supplied at LV from a sub-station

D4.      The definition of LV3 units includes units distributed under the
         following tariffs:

         (a)    Domestic 'S' - domestic, quarterly
         (b)    Public Lighting Misc. charges
         (c)    3S, 3T
         (d)    4S, 4T - non-domestic, quarterly
         (e)    5N, 6N, 7N
         (f)    M6,M7

D5.      Notwithstanding the provisions of paragraphs D2 to D4 above, where the
         Authority is satisfied that a tariff or tariffs in respect of which the
         licensee has treated the units distributed as falling within one of the
         categories in paragraphs D2 to D4 above should not be so treated, the
         Authority shall issue directions to that effect and the tariff or
         tariffs specified in the directions shall cease to be so treated from
         the date of issue of the directions or (subject to paragraph 10 of
         Special Condition D (Information to be provided to the Authority in
         connection with the charge restriction conditions)) such other date as
         may be specified in the directions and shall with effect from such date
         be treated in such manner as may be specified in the directions.

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Part E. Calculation of factor in respect of distribution losses

El.      The terms AL\\t\\ and L\\t\\ which are used in paragraph 3 of Special
         Condition B (Restriction of distribution charges), shall each be
         determined, for relevant years commencing on or after the 1st April
         1995, using the consistent methodological basis set out in paragraphs
         E2 to E5 below.

Consistent methodological basis for determination of AL\\t\\ and L\\t\\

E2.      Adjusted distribution losses shall be deemed to be the difference
         between adjusted grid supply point purchases and adjusted units
         distributed.

E3.      Units metered on entry to the licensee's distribution system shall be
         adjusted to obtain adjusted grid supply point purchases by:

         (a)    excluding that number of units which is equal to the sum of:

                (i)   EHV units; and
                (ii)  units distributed by the licensee for the purpose of
                      supply to premises outside the licensee's distribution
                      services area; and
                (iii) an amount in respect of distribution losses between the
                      grid supply point and the exit point attributable to the
                      units referred to in (i) and (ii) above, as determined in
                      accordance with paragraph A4 in Part A of Schedule A; and

         (b)    including an amount (in units) to represent the effect of units
                entering the licensee's distribution system otherwise than at
                grid supply points, being the difference between the number of
                units so entering and the number of units that would have been
                required to have entered at grid supply points in their absence
                (such latter number of units being calculated consistently with
                the principles underlying the schedule of adjustment factors in
                respect of distribution losses referred to at sub-paragraph (b)
                of paragraph 2 of standard condition 4 (Basis of Charges for Use
                of System and Connection to System: Requirements for
                Transparency)).

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E4.      For so long as units are metered on entry to the licensee's
         distribution system at bulk supply points instead of at grid supply
         points, such units shall be calculated by:

         (i)    applying the procedures in paragraph E3 as if all references to
                units metered at grid supply points were to units metered at
                bulk supply points; and
         (ii)   grossing-up units metered at the bulk supply points by the
                relevant grid supply point conversion factor being either:

                (a)   0.5 per cent of the units metered at the bulk supply
                      points; or
                (b)   such other factor to take account of losses occurring
                      between the grid supply points and the bulk supply points
                      as the licensee may with the prior approval of the
                      Authority determine to be appropriate.

E5.      Adjusted units distributed shall be obtained by:

                (a)   calculating all units distributed by the licensee metered
                      at exit points on leaving the licensee's distribution
                      system; and
                (b)   deducting therefrom EHV units and units distributed for
                      the purpose of supply to premises outside the licensee's
                      distribution services area; and
                (c)   adding thereto an amount equal to the units consumed on
                      the licensee's premises in the licensee's distribution
                      services area (insofar as not otherwise taken into account
                      in determining units distributed under sub-paragraph (a)
                      above).

Initial relevant loss percentage in the term AL\\t\\

E6.      The first relevant year, the initial relevant loss percentage in the
         term AL\\t\\ shall (consistently with the methodology set out in
         paragraphs E2 to E5 above) be deemed to be:

           Adjusted GSP purchase units less adjusted units distributed
                           Adjusted units distributed

         where adjusted GSP purchase units are calculated as provided in
         paragraph E7 and adjusted units distributed are calculated as provided
         in paragraph E8.

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<PAGE>

E7.      Adjusted GSP purchase units shall be calculated in accordance with the
         procedures successively described in the following sub-paragraphs:

         (a)    the actual losses in each of relevant years t-l, t-2 and t-3
                (the "historic losses") shall be calculated as the difference in
                each of those years between units purchased at entry points to
                the licensee's distribution system and units sold;
         (b)    the historic loss percentage shall be calculated as the
                proportion (expressed as a percentage) which the aggregate
                historic losses were of the aggregate units purchased at entry
                points to the licensee's distribution system, in each case over
                the three relevant years t-l to t-3;
         (c)    the total number of units sold in relevant year t-l shall be
                grossed up by the historic loss percentage ("BSP purchase
                units"); and
         (d)    the figure for BSP purchase units resulting from sub-paragraph
                (c) shall be adjusted to obtain adjusted GSP purchase units in
                accordance with the provisions of paragraphs E3 and E4 above.

E8.      Adjusted units distributed shall be calculated by applying the
         methodology of paragraph E5 in respect of those units referred to in
         sub-paragraphs (a) to (c) of paragraph E5 in relevant year t-l.

Information to be provided to the Authority

E9.      The licensee shall within three months after the entry into force of
         this licence furnish to the Authority a statement showing the initial
         relevant loss percentage and the underlying calculations.

E10.     The licensee shall, following the end of each relevant year, furnish to
         the Authority, as being one of the specified items to be included in
         the statement referred to at paragraph 7 of Special Condition D
         (Information to be provided to the Authority in connection with the
         charge restriction conditions), a statement showing adjusted
         distribution losses for that

                                      201

<PAGE>

         relevant year, accompanied by the underlying calculations and (where
         appropriate) an explanation of any changes in the basis of calculation
         or estimation thereof.

E11.     Where the Authority is satisfied that any statement or underlying
         calculation provided has not been drawn up in conformity with
         paragraphs E2 to E8 above, the Authority may issue directions, and the
         statement or underlying calculation shall be adjusted with effect from
         the date of issue of the directions or (subject to paragraph 10 of
         Special Condition D (Information to be provided to the Authority in
         connection with the charge restriction conditions)) such other date as
         may be specified in the directions.

                                      202

<PAGE>

                                   SCHEDULE 1


                                 SPECIFIED AREA


                                  Great Britain

                                      203

<PAGE>

                                   SCHEDULE 2

                                   REVOCATION

1.       The Authority may at any time revoke the licence by giving no less than
         30 days' notice (24 hours' notice, in the case of a revocation under
         sub-paragraph 1(g)) in writing to the licensee:

(a)      if the licensee agrees in writing with the Authority that the licence
         should be revoked;
(b)      if any amount payable under standard condition 3 (Payments by licensee
         to the Authority) is unpaid 30 days after it has become due and remains
         unpaid for a period of 14 days after the Authority has given the
         licensee notice that the payment is overdue - provided that no such
         notice shall be given earlier than the sixteenth day after the day on
         which the amount payable became due;
(c)      if the licensee fails:

         (i)    to comply with a final order (within the meaning of section 25
                of the Act) or with a provisional order (within the meaning of
                that section) which has been confirmed under that section and
                (in either case) such failure is not rectified to the
                satisfaction of the Authority within three months after the
                Authority has given notice in writing of such failure to the
                licensee - provided that no such notice shall be given by the
                Authority before the expiration of the period within which an
                application under section 27 of the Act could be made
                questioning the validity of the final or provisional order or
                before the proceedings relating to any such application are
                finally determined; or
         (ii)   to pay any financial penalty (within the meaning of section 27A
                of the Act) by the due date for such payment and such payment is
                not made to the Authority within three months after the
                Authority has given notice in writing of such failure to the
                licensee - provided that no such notice shall be given by the
                Authority before the expiration of the period within which an
                application under section 27E of the Act could be made
                questioning the

                                      204

<PAGE>

                validity or effect of the financial penalty or before the
                proceedings relating to any such application are finally
                determined;

(d)      if the licensee fails to comply with:

         (i)    an order made by the Secretary of State under section 56,73,74
                or 89 of the Fair Trading Act 1973; or
         (ii)   an order made by the court under section 34 of the Competition
                Act 1998.

(e)      if the licensee has not within 5 years after the date on which this
         licence comes into force, commenced the distribution of electricity to
         any of the premises within the area specified in Schedule 1 to this
         licence;

(f)      if the licensee has ceased to distribute electricity to all of the
         premises within the area specified in Schedule 1 to this licence for a
         period of 5 years;

(g)      if the licensee:

         (i)    is unable to pay its debts (within the meaning of section 123(1)
                or (2) of the Insolvency Act 1986, but subject to paragraphs 2
                and 3 of this schedule) or has any voluntary arrangement
                proposed in relation to it under section 1 of that Act or enters
                into any scheme of arrangement (other than for the purpose of
                reconstruction or amalgamation upon terms and within such period
                as may previously have been approved in writing by the
                Authority);
         (ii)   has a receiver (which expression shall include an administrative
                receiver within the meaning of section 251 of the Insolvency Act
                1986) of the whole or any material part of its assets or
                undertaking appointed;
         (iii)  has an administration order under section 8 of the Insolvency
                Act 1986 made in relation to it;
         (iv)   passes any resolution for winding-up other than a resolution
                previously approved in writing by the Authority; or
         (v)    becomes subject to an order for winding-up by a court of
                competent jurisdiction; or

(h)      if the licensee is convicted of having committed an offence under
         section 59 of the Act in making its application for the licence.

                                      205

<PAGE>

2.       For the purposes of sub-paragraph l(g)(i), section 123(1)(a) of the
         Insolvency Act 1986 shall have effect as if for "(Pounds)750" there was
         substituted "(Pounds)100,000" or such higher figure as the Authority
         may from time to time determine by notice in writing to the licensee.

3.       The licensee shall not be deemed to be unable to pay its debts for the
         purposes of sub-paragraph l(g)(i) if any such demand as is mentioned in
         section 123(1)(a) of the Insolvency Act 1986 is being contested in good
         faith by the licensee with recourse to all appropriate measures and
         procedures or if any such demand is satisfied before the expiration of
         such period as may be stated in any notice given by the Authority under
         paragraph 1.

                                      206

<PAGE>

                                   SCHEDULE 3

                           DISTRIBUTION SERVICES AREA

The distribution services area shall comprise that area which is outlined on the
attached map and shall additionally include those premises listed in List A (the
"Additional Premises") but shall not include those premises listed in List B
(the "Excluded Premises").

A:       ADDITIONAL PREMISES

         None

B:       EXCLUDED PREMISES

(a)      PART OF THE DISTRIBUTION SERVICES AREA OF NORWEB PLC

         Address                              Grid Ref:
         -------                              ---------
         Halsall Lane Pumping Station         SD 4080 0864
         Halsall Lane
         Ormskirk
         L39 3AT

                                      207

<PAGE>

                             CONSENTS AND DIRECTIONS

                                      208

<PAGE>

Direction issued under Condition 27 of the Public Electricity Supply Licence of
Manweb plc now Standard Condition 29 of this licence (01.04.92)

OUR REF          BW-92-04.14
                 [DIR/T/244]

1 April 1992



Mr M G Metcalfe
Head of Regulation
Manweb plc
Sealand Road
CHESTER
CH1 4LR

PUBLIC ELECTRICITY SUPPLY LICENCE: CONDITION 27
DISPOSAL OF RELEVANT ASSETS

The Director General of Electricity Supply ("the Director") directs that for the
purposes of Condition 27 of the Public Electricity Supply Licence (the
"Licence") issued to Manweb plc (the "Licensee") on 26 March 1990:

1.       The Licensee may dispose of a relevant asset without giving prior
         notice if:

         (i)    the relevant asset is obsolete or redundant;

         (ii)   the disposal will not constitute a disposal of a legal (rather
                than an equitable) interest until the relevant asset is obsolete
                or redundant; or

                                      209

<PAGE>

         (iii)  where the relevant asset comprises only land above or below
                which an electric line (but not electrical plant) of the
                licensee is situated, the disposal complies with paragraph 3.

2.       The consent in paragraph 1 shall not apply:

         (i)    in respect of a relevant asset if

                (a)   the value of that asset;

                (b)   the value of that asset and other related relevant assets
                      which are being or intended to be disposed of at the same
                      time; or

                (c)   the value of that asset and other relevant assets which
                      together formed a part of the Licensee's distribution
                      system and are being declared obsolete or redundant at the
                      same time or as part of the same operation,

                exceeds (Pounds)100,000 (as amended on 1 April each year by the
                percentage change in the Retail Price Index since 1 April 1990);

         (ii)   in respect of a relevant asset which is obsolete unless an
                appropriate replacement or alterative arrangement has been
                installed in the Licensee's distribution system, or is being or
                is intended to be installed in such a manner that continuity of
                the function of that system is achieved;

         (iii)  where the disposal constitutes a sale and lease back
                arrangement;

         (iv)   where the relevant asset is intended to remain in operational
                use but not under the operational control of the Licensee and
                its value exceeds (Pounds)10,000 (as amended on 1 April each
                year by the percentage change in the Retail Price Index since 1
                April 1990); or

                                      210

<PAGE>

         (v)    where the disposal would have the effect of reducing the ability
                of private electricity suppliers to compete with the Licensee by
                the use of its system.

3.       For the purposes of paragraph 1 (iii) the disposal shall be on terms
         which will permit the electric line (including any replacement thereof)
         to remain in position for as long as it forms part o the licensee's
         distribution system under a wayleave, easement or other legal estate
         which in any such case includes sufficient rights of access in favour
         of the Licensee for the purpose of inspection, maintenance, replacement
         or repair as may reasonably be necessary to enable that line to remain
         in operation as part of the Licensee's distribution system.

4.       The Licensee may without giving prior notice dispose of any relevant
         asset to a wholly owned subsidiary ("the subsidiary") (as defined in
         the Companies Act 1985 as amended or re-enacted from time to time) of
         the Licensee if the Licensee has prior to the disposal delivered to the
         Director a document duly executed by the subsidiary and the Licensee
         (in a form capable of being enforced by the Director) undertaking to
         the Director that:

         (i)    the subsidiary, in respect of the relevant asset, will comply
                with the provision of Conditions 27 and 28 of the Licence as if
                it were the Licensee; and

         (ii)   the Licensee will not cause or permit the subsidiary to cease to
                be its wholly owned subsidiary without the prior written consent
                of the Director to the disposal of the relevant asset(s) owned
                by the subsidiary.

5.       The Licensee may without giving prior notice grant to a third party an
         easement, wayleave, licence or similar right over any land or property
         in which the Licensee has a legal or beneficial interest and which is a
         relevant asset, save where the grant of such a right would have a
         material adverse effect on the Licensee's ability to use or develop the
         land for the purposes of the Licensee's Distribution Business.

                                      211

<PAGE>

6.       The Licensee may without giving prior notice dispose of any relevant
         asset to another Licensee provided that:

         (i)    the Licensee to whom disposal is made is subject to the
                provisions of licence conditions equivalent to condition 27 and
                28 of the Licence;

         (ii)   the relevant asset will become a relevant asset under those
                equivalent licence conditions upon disposal;

         (iii)  the Licensee will be able to fulfil the duties arising under or
                by virtue of the Licence after disposal of the relevant asset.

7.       The consent contained in paragraphs 1, 4, 5 and 6 relates only to
         Condition 27 and shall not apply or be deemed to apply for the purpose
         of any consent or approval which the director may or may be required to
         give in relation to a disposal under any other Condition or under the
         Act.

8.       In this direction:

                "obsolete" means no longer performs its required function either
                in an efficient manner or at all through wear and tear,
                obsolescence, damage, failure, unsafe operation or advances in
                technology and includes equipment that the Licensee has decided
                to render obsolete as a result of inspection;

                "prior notice" means a notice to the Director under paragraph 2
                of condition 27 of the Licence;

                "redundant" means no longer required or necessary in order to
                enable the Licensee to comply with its obligations under the Act
                or the Licence in relation to the Licensee's distribution system
                provided that a relevant asset shall not be

                                      212

<PAGE>

                regarded as being redundant solely because it is in the
                ownership or control of a third party;

                "value" means the estimated price that could be expected to be
                received in the market at the time of disposal;

         and other words and phrases in this Direction which are defined for the
         purposes of the Licence shall have the same meaning as in the Licence.



DR B WHARMBY
Authorised on behalf of the
Director General of Electricity Supply

                                      213

<PAGE>

Direction issued under Condition 12 of the Public Electricity Supply Licence of
Manweb plc now Standard Condition 39 of this licence (19.04.00)

 Direction given under Condition 12 of the public electricity supply licence of
                                   Manweb plc

In accordance with paragraph 7 of Condition 12 of the public electricity supply
licence held by Manweb plc (the Licensee), the Director hereby directs as
follows.

The Licensee shall, to the extent that it is not already compliant with its
obligations as at 31st March 2000, be relieved of such obligations for the
duration of this direction:

..        under paragraphs 2 to 4 of Condition 12; and
..        under paragraphs 5 and 6 of Condition 12

in each case subject to the terms and conditions set out below.

The Separation Plan

1.       The Licensee shall use all reasonable endeavours to comply with the
         terms of the Separation Plan.

2.       The Separation Plan shall be the document attached to this direction as
         Annex A, as it may be amended from time to time in accordance with
         paragraphs 7 and 8 below.

3.       Where the Separation Plan specifies a date by which an action is to be
         completed, the Licensee shall use all reasonable endeavours to complete
         the action by that date.

4.       Where the Separation Plan does not specify a date by which an action is
         to be completed, the Licensee shall use all reasonable endeavours to
         make progress towards the completion of the action as soon as is
         reasonably practicable.

                                      214

<PAGE>

5.       The Licensee shall report to the Director on its compliance with the
         terms of the Separation Plan at least once every 3 months during the
         currency of this direction.

6.       The Licensee shall review its compliance with the terms of the
         Separation Plan, together with the Director and in the light of its
         reports and of any reports of the Compliance Officer, at least once
         every 6 months during the currency of this direction.

7.       When the Licensee reviews its compliance under paragraph 6 above, or at
         any other time when there is a material change in the Licensee's
         circumstances, the Director may (giving his reasons) request that the
         Licensee review the terms of the Separation Plan with a view to its
         amendment. The Licensee shall, within 28 days of any such request,
         propose changes to the relevant part of the Plan. Any such changes
         shall require to be approved by the Director.

8.       The Licensee may at any time request the Director to approve changes to
         the Separation Plan.

Confidential Information

9.       Subject to paragraph 10 below, and save as provided for in the
         Separation Plan, the Licensee shall not engage for the purposes of the
         Distribution Business the same employees, agents, advisers, consultants
         or contractors as are engaged for the purposes of any other business of
         itself (or any affiliate or related undertaking).

10.      Paragraph 9 above shall not apply insofar as:

         (a)    in the case of agents, advisers, consultants or contractors
                engaged by the Distribution Business and also by any other
                business of the Licensee (or by any affiliate or related
                undertaking) ("the appointees"), the Licensee has used all
                reasonable endeavours to ensure that:

                                      215

<PAGE>

                (i)   the Distribution Business does not give any cross-subsidy
                      to or receive any cross-subsidy from that other business;
                      and

                (ii)  the appointees cannot have access to confidential
                      information about the Distribution Business unless
                      effective arrangements are maintained in place which
                      prevent the use or disclosure of such information in any
                      way which would obtain a commercial advantage for any
                      other business and that such information is used only for
                      the purpose of the Distribution Business or any external
                      distribution activities of the Licensee;

                or

         (b)    in any particular case, the Licensee has obtained the prior
                written approval of the Director.

Duration and Interpretation

11.      The direction in respect of paragraph 2 to 4 of Condition 12 shall
         cease to have effect on 31 March 2002. The direction in respect of
         paragraph 5 to 6 of Condition 12 shall cease to have effect on 31 March
         2002, unless on or before that date the Licensee has demonstrated to
         the reasonable satisfaction of the Director that it is, and will
         remain, in compliance with the requirements of paragraph 7 (c) of
         Condition 12, in which event this direction shall cease to have effect
         on 31 March 2005.

12.      Words and phrases used in this direction shall, unless the contrary
         intention appears, have the same meaning as in the public electricity
         supply licence held by the Licensee.

PAM BARRETT

Authorised on behalf of the Director              19 April 2000

                                      216

<PAGE>

Direction issued under Condition 12 of the Public Electricity Supply Licence of
Manweb plc now Standard Condition 39 of this licence (19.04.00)

                            The Electricity Act 1989

                                Sections 6 and 7

 Public Electricity Supply Licences granted to Scottish Power UK plc and Manweb
                                      plc


                                    Direction

                                     of the

                     Director General of Electricity Supply

Whereas -

(1)      Scottish Power UK plc ("SP") and Manweb plc ("Manweb") are the holders
         of public electricity supply licences granted under section 6(1)(c) of
         the Electricity Act 1989 (the SP and Manweb Licences respectively).

(2)      SP and Manweb are members of the same group of companies.

(3)      Condition 9 in Part V of the SP Licence and condition 12 of the Manweb
         Licence (the "Conditions") require the Distribution Businesses of SP
         and of Manweb to have information separation and managerial and
         operational independence from other businesses of SP and of Manweb.

(4)      Paragraph (7) of each of the Conditions provides that the Director may
         issue a direction relieving each licence holder from certain of its
         obligations under the Conditions.

                                      217

<PAGE>

(5)      SP and Manweb each have requested the Director to issue a direction
         relieving them from the above mentioned obligations to the extent
         necessary for the Distribution Businesses of SP and Manweb to be
         managed and operated as a single business.

(6)      In response to the request the Director is satisfied that, having
         regard to the terms of paragraph (7) of the Conditions, he is entitled
         to issue directions in the manner hereinafter appearing.

NOW THEREFORE THE DIRECTOR ISSUES THE FOLLOWING DIRECTION -

1.       The terms "Distribution Business of SP" and "Distribution Business of
         Manweb" have the meaning given to the term "Distribution Business" in
         the SP and Manweb licences respectively.

2.       This Direction is issued for the purposes of the paragraphs numbered 7
         in both Condition 9 in Part V of the SP Licence and Condition 12 of the
         Manweb Licence.

3.       SP and Manweb are relieved of their obligations under paragraphs 1 to 6
         of Condition 9 in Part V of the SP Licence and Condition 12 of the
         Manweb Licence respectively to such extent as is necessary for the
         management and operation of the Distribution Business of SP and the
         Distribution Business of Manweb to be managed and operated as a single
         business subject to the conditions that -

         (a)    in the case of paragraph 5 and sub-paragraph 6(b) of the
                Conditions, any arrangements for the use of or access to
                premises, systems, equipment facilities, property or personnel
                by both the Distribution Businesses of SP and of Manweb:

                (i)   do not involve a cross-subsidy being given to the SP
                      Distribution Business from the Manweb Distribution
                      Business or received from the SP Distribution Business by
                      the Manweb Distribution Business;

                                      218

<PAGE>

                (ii)  obtain for the Distribution Businesses, in the most
                      efficient and economical manner possible, the use of the
                      relevant premises, systems, equipment, facilities,
                      property or personnel; and

                (iii) do not restrict, distort or prevent competition in the
                      generation or supply of electricity; and

         (b)    nothing in this Direction shall relieve either SP of Manweb from
                any obligation in respect of any Separation Plan prepared for
                the purpose of or in relation to any other Direction given
                pursuant to paragraph 7 of either of the Conditions;

4.       This Direction shall cease to have effect on the earlier of

         (a)    notification by the Director to SP and to Manweb that he is
                satisfied that there has been a material failure to comply with
                the condition set out in paragraph 3 above;

         (b)    the Conditions ceasing to have effect; or

         (c)    the expiry of 28 days from the date of service on the Director
                by either SP or Manweb of a request for the revocation of the
                Direction.

Pam Barrett

Authorised in that behalf by
the Director General of
Electricity Supply

Date 19.4.2000

                                      219

<PAGE>

Direction issued under Condition 12 of the Public Electricity Supply Licence of
Manweb plc now Standard Condition 39 of this licence (28.07.00)

                            The Electricity Act 1989

                                Sections 6 and 7

       Electricity Transmission Licence granted to Scottish Power (UK) plc

Public Electricity Supply Licences granted to Scottish Power (UK) plc and Manweb
                                      plc

                                    Direction

                                     of the

                     Director General of Electricity Supply

Whereas -

(1)      Scottish Power (UK) plc ("SP") is the holder of a transmission licence
         ("the Transmission Licence") granted under section 6(1)(b) of the
         Electricity Act 1989 ("the Act").

(2)      SP and Manweb plc ("Manweb") are the holders of public electricity
         supply licences granted under section 6(1)(c) of the Act ("the SP PES
         Licence" and "the Manweb PES Licence" respectively).

(3)      SP and Manweb are members of the same group of companies.

(4)      Condition 8 in Part IV of the Transmission Licence ("Condition 8")
         prohibits SP from disclosing confidential information.

                                      220

<PAGE>

(5)      Condition 8A in Part IV of the Transmission Licence ("Condition 8A")
         requires SP to maintain the full managerial and operational
         independence of the Transmission Business of SP from other businesses
         of SP and of its affiliates and related undertakings.

(6)      Paragraph (9) of Condition 8A provides that the Director in certain
         circumstances may issue a direction relieving SP of its obligations
         under Condition 8 and under paragraphs 1(a), 2 and 8 of Condition 8A to
         such extent and subject to such terms and conditions as he may specify
         in that direction.

(7)      Condition 9 in Part V of the SP PES Licence ("Condition 9") and
         Condition 12 of the Manweb PES Licence ("Condition 12") require the
         Distribution Businesses of SP and of Manweb to have information
         separation and managerial and operational independence from other
         businesses of SP and of Manweb.

(8)      Paragraph (7) of each of the Condition 9 and Condition 12 provides that
         the Director in certain circumstances may issue a direction relieving
         SP and Manweb from certain of their obligations under the Conditions.

(9)      SP and Manweb have requested the Director to issue directions relieving
         them from their above mentioned obligations to the extent necessary for
         the Transmission and Distribution Businesses of SP to be managed and
         operated as a single business with the Distribution Business of Manweb.

(10)     In response to the request the Director is satisfied that, having
         regard to the terms of paragraph (9) of Condition 8A and to paragraph
         (7) of each of Condition 9 and Condition 12, he is entitled to issue a
         direction in the manner hereinafter appearing.

NOW THEREFORE THE DIRECTOR ISSUES THE FOLLOWING DIRECTION -

1.       Except where the context requires otherwise, any terms used in this
         direction that are defined in Part 1 of the composite document setting
         out the generation and public

                                      221

<PAGE>

         electricity supply licences of SP and the Transmission Licence shall
         have the meaning given to them in that Part.

2.       This direction is issued for the purposes of paragraph (9) of Condition
         8A and of paragraph (7) of each of Condition 9 and Condition 12.

3.       SP is relieved of its obligations under Condition 8 and paragraphs
         1(a), 2 and 8 of Condition 8A and SP and Manweb are relieved of their
         obligations under paragraphs 1 to 6 of Condition 9 and Condition 12
         respectively to such extent as is necessary for the Transmission and
         Distribution Businesses of SP to be managed and operated as a single
         business with the Distribution Business of Manweb subject to the
         conditions that -

         (a)    any arrangements for the use of or access to premises, systems,
                equipment, facilities, property or personnel by the Transmission
                and Distribution Businesses of SP and the Distribution
                Businesses of Manweb;

                (i)   do not involve a cross-subsidy being given by any one of
                      the Transmission or Distribution Businesses of SP or the
                      Manweb Distribution Business to any other of those
                      businesses;

                (ii)  obtain for the Transmission and Distribution Businesses of
                      SP and the Manweb Distribution Business, in the most
                      efficient and economical manner possible, the use of the
                      relevant premises, systems, equipment, facilities,
                      property or personnel; and

                (iii) do not restrict, distort or prevent competition in the
                      generation or supply of electricity;

         (b)    nothing in this direction shall relieve either SP or Manweb from
                any obligation in respect of any Separation Plan prepared for
                the purpose of any of the conditions of the SP and Manweb PES
                Licences; and

                                      222

<PAGE>

         (c)    nothing in this direction shall relieve either SP or Manweb from
                any obligation imposed on them by Directive 96/92/EC.

4.       This direction shall cease to have effect on the earlier of -

         (a)    notification by the Director to SP and to Manweb that he is
                satisfied that there has been a material failure to comply with
                the condition set out in paragraph 3 above;

         (b)    Condition 8, Condition 8A, Condition 9 or Condition 12 ceasing
                to have effect; or

         (c)    the expiry of 28 days from the date of service on the Director
                by either SP or Manweb of a request for the revocation of the
                direction.

The Official Seal of the Director General
of Electricity Supply hereunto affixed is
authenticated by


Charles Coulthard

Authorised in that behalf by the Director
General of Electricity Supply

Date 28 July 2000

                                      223

<PAGE>

Consent issued under Standard Condition 47 of this licence (01.10.01)


To Manweb plc
Manweb House
Chester Business Park
Wrexham Road
Chester
CH4 9RF

Consent under Distribution Standard Licence Condition 47

1.       This consent is issued by the Gas and Electricity Markets Authority
         ("the Authority") to the Licensee under paragraph 1 of the above
         condition ("the Condition").

2.       The Authority hereby consents to the Licensee being a party to a group
         registration scheme with HM Customs & Excise for value added tax
         ("VAT") purposes, subject to the following condition, namely that
         throughout the period during which such registration subsists, the
         Licensee shall have the benefit of a legally enforceable undertaking
         and indemnity from the controlling member of the VAT group in respect
         of which the registration has been made whereby the Licensee is kept
         indemnified from any liability to VAT (including interest, penalties
         and costs) which does not arise out of the authorised business of the
         Licensee under the Licence but which is claimed against the Licensee as
         a result of such group registration.

3.       This consent shall have effect on and from the date specified below. It
         shall remain in effect until the Authority shall withdraw it or replace
         it by a further consent made under the Condition.

                                      224

<PAGE>

4.       Words and expressions used in this consent have the meaning attributed
         to them in the said Standard Licence Conditions.


Dated:   1 October 2001


Signed

John Neilson
Duly authorised in that behalf by the Authority

                                      225

<PAGE>

General Consent issued under Standard Condition 29 of this licence (01.10.01)

THE ELECTRICITY ACT 1989 (AS AMENDED)

ELECTRICITY DISTRIBUTION LICENCES

GENERAL CONSENT ISSUED PURSUANT TO STANDARD LICENCE CONDITION 29
(DISPOSAL OF RELEVANT ASSETS) OF THE ELECTRICITY DISTRIBUTION LICENCE

This direction is issued by the Gas and Electricity Markets Authority ("the
Authority") under paragraph 3(a)(i) of Condition 29 (Disposal of relevant
assets) in the standard licence conditions of the electricity distribution
licences granted or treated as granted under section 6(1)(c) of the Electricity
Act 1989 (as amended) ("the Act").

The provisions of this direction are applicable to, and available for, every
holder ("the licensee") of such an electricity distribution licence ("the
licence"). The direction takes effect on and from the date specified below.

The Authority hereby directs that the licensee may enter into an agreement or
arrangement whereby operational control of a relevant asset or relevant assets
ceases to be under the sole management of the licensee without giving prior
notice in any case where the agreement or arrangement (for these purposes called
"the transaction") complies in all respect with the terms set out below:

1.       The transaction shall be consistent with all applicable conditions
         contained in the licence.

2.       Any other consent or clearance required under statute or under the
         licence in respect of the transaction shall have been obtained.

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3.       The transaction shall provide for the supply of a service or the
         provision of a resource which relates to a relevant asset or relevant
         assets by a counter-party ("the resource provider") on behalf of the
         licensee.

4.       The resource provider shall be and remain an affiliate of the licensee
         but shall not be a holding company of the licensee.

5.       The transaction shall be effected by contract made between the licensee
         and the resource provider; such contract shall be binding and
         enforceable both in Great Britain and in any other jurisdiction in
         which the resource provider has its principal place of business; and
         the contract shall contain provisions to the following effect:

         (a)    no force majeure or equivalent provision in the contract shall
                excuse any failure on the part of the licensee, or the resource
                provider acting on its behalf, to comply with the licensee's
                statutory or licence obligations unless (and to the extent that)
                the event or circumstance in question would have excused the
                licensee under the Act or the licence if it had itself performed
                the service or provided the resource;

         (b)    responsibility for performance of all obligations to which the
                contract relates shall be clearly specified, subject to the
                overriding requirement that the licensee remains ultimately
                responsible for all statutory and licence obligations applicable
                to the licensee's business;

         (c)    the resource provider shall covenant with the licensee to
                refrain from any action which would then be likely to cause the
                licensee to breach any of its licence or statutory obligations;

         (d)    the resource provider shall disclose to the licensee the basis
                or bases of all charges for services provided or supplies made
                pursuant to the contract, together with sufficient information
                and analysis to support the basis for the calculation of the

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                total sum payable by the licensee; and the resource provider
                shall not raise any objection to, or seek to prevent, disclosure
                of such information to the Authority.

         (e)    the licensee shall be free, at any time after the fifth
                anniversary of the commencement of the contract, without penalty
                and on reasonable notice, to resource any service or supply from
                an alternative source of its choosing if more favourable terms
                become available; and

         (f)    the resource provider shall be under obligation to provide to
                the licensee any information within its possession or control
                which the licensee may from time to time require in order to
                enable the licensee:

                (i)   to comply with any request by the Authority for
                      information or reports pursuant to Condition 24 (Provision
                      of Information to the Authority) of the licence (subject
                      to paragraphs 5 and 7 of that condition);

                (ii)  to assess the performance or position of the resource
                      provider or any of its subsidiaries with respect to the
                      provision of any service or supply made to the licensee;
                      or

                (iii) to monitor adherence by the resource provider to the terms
                      of the contract.

6.       (1)    The licensee shall procure from that company or other corporate
                body which is from time to time the ultimate holding company of
                the licensee and the resource provider, or from such other
                corporate body as the Authority may from time to time agree,
                acknowledgements and legally enforceable undertakings in favour
                of the licensee in the form annexed to this direction and headed
                Form A. Such acknowledgements and undertakings shall be obtained
                within seven days of the company or other corporate body in
                question ("the covenantor") becoming such ultimate holding
                company and shall remain in force for so long as the covenantor
                remains such ultimate holding company.

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(2)      For the purpose of this paragraph "ultimate holding company" means the
         company or other corporate body which is the holding company of both
         the licensee and the resource provider and is not itself a subsidiary
         of another company or corporate body.

(3)      The licensee shall:

         (a)    deliver to the Authority evidence (including a copy of the
                acknowledgements and undertakings) that the licensee has
                complied with its obligation to procure acknowledgements and
                undertakings pursuant to this paragraph;

         (b)    inform the Authority immediately in writing if the directors of
                the licensee become aware that any such undertaking has ceased
                to be legally enforceable or that its terms have been breached;
                and

         (c)    comply with any direction from the Authority to enforce any such
                undertaking.

(4)      The licensee shall not, save with the consent in writing of the
         Authority, obtain or continue to obtain the service or resource in
         question from the resource provider at any time when:

         (a)    the specified acknowledgements and undertakings are not in
                place; or

         (b)    there is an unremedied breach of any undertaking; or

         (c)    the licensee is in breach of any direction issued by the
                Authority under sub-paragraph (3) of this paragraph.

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7.       The consent given by this direction applies only for the purpose of the
         said Condition 29 and shall not apply or be deemed to apply for any
         other purpose.

8.       Words or phrases in this direction which are defined for the purposes
         of the licence shall have the same meaning as in the licence.



Dated 1 October 2001




Signed..................................

Richard Ramsay
duly authorised by the Authority in that behalf

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ANNEXURE TO THE DIRECTION BY THE GAS AND ELECTRICITY MARKETS AUTHORITY MADE
PURSUANT TO STANDARD CONDITION 29 IN THE ELECTRICITY DISTRIBUTION LICENCE ON THE
         2001


Form A

Acknowledgements and Undertakings

Acknowledgements

The covenantor acknowledges to the licensee:

(1)      that it is in the best interest of the covenantor that the licensee
         complies with its statutory and licence obligations; and

(2)      that all matters relating to the enforcement of the licensee's rights
         under the relevant contract(s) shall be reserved to the directors of
         the licensee without regard to other interests.

Undertakings

The covenantor undertakes to the licensee:

(1)      to procure that the resource provider will:

         (a)    refrain from any action which would then be likely to cause the
                licensee to breach any of its statutory or licence obligations;

         (b)    provide the licensee with any information within its possession
                or control which the licensee may from time to time require in
                order to enable the licensee:

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                -     to comply with any request by the Authority for
                      information or reports pursuant to Condition 24 (Provision
                      of Information to the Authority) of the licence (subject
                      to paragraphs 5 and 7 of that condition);

                -     to assess the performance or position of the resource
                      provider or any of its subsidiaries with respect to the
                      provision of any service or supply made to the licensee;
                      or

                -     to monitor adherence by the resource provider to the terms
                      of the contract;

         (a)    not unduly discriminate in favour of, or against, the licensee
                in the provision to it of supplies or services; and

         (b)    not take any action which would constitute disposal of, or
                relinquishment of operation control over, any asset to which
                Condition 29 of the licence applies save in accordance with the
                requirements of that condition and any consent issued by the
                Authority under it (other than to the licensee upon the expiry
                or termination of any relevant contract in accordance with its
                terms);

                (1)   to procure that any contract between the licensee and the
                      resource provider shall comply with the requirements set
                      out in the direction to which this form is annexed and
                      shall not be amended so as to cease in any way to be
                      compliant with those requirements; and

                (2)   to procure that the resource provider has and maintains
                      resources and operating capacity at a level sufficient to
                      ensure efficient performance of the contract and the
                      efficient discharge of the relevant obligations of the
                      licensee.

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