ScottishPower's US competitive energy business, PPM Energy, has signed long-term agreements to sell 125 MW of the proposed 150 MW Shiloh windfarm, expected to be commercially operational by the end of 2005.

The two new agreements mean about 90% of PPM Energy's wind output is now sold under long-term contract.  Pacific Gas and Electric Company (PG&E) has signed a 15-year agreement to purchase up to 75 MW and Modesto Irrigation District (MID) has signed a 10-year agreement for up to 50 MW of Shiloh's output.  
 
PPM Energy CEO Terry Hudgens said: "We welcome our first renewable energy sale to PG&E as well as the repeat business from MID.  Both are key players in the important California marketplace."

PPM Energy acquired the fully permitted 150 MW Shiloh Wind farm in Solano County, California, from enXco, an affiliate of EDF of France, in May 2005. 

PPM Energy currently controls about 830 MW of wind energy in seven states and has announced a total of 574 MW additional wind projects to be built in 2005.  It now has around 1,400 MW of wind energy under its control, well on target toward its goal of at least 2,300 MW online by 2010.

Further Information:

Jennifer Lawton            Head of Investor Relations                   0141 636 4527

Colin McSeveny           Group Media Relations Manager            0141 636 4515

Details of corporate restructuring

Following the decision to sell PacifiCorp, ScottishPower is now focused on the continued growth and development of its UK operations and continued growth of PPM Energy in the US.  These combined continuing businesses have grown their profits by 38% over the two years to March 2005. 

There are substantial opportunities for their further development and a £4.5bn investment programme, allied to continuing improvements in operating performance, will underpin future growth across all of these businesses. This restructuring introduces an operating structure that reflects the new shape and scale of the group post PacifiCorp. It also puts operating management at the centre of the business and delivers essential support functions in a cost efficient manner.

The cost savings announced today will come principally from two sources:

First, the ownership and management of PacifiCorp imposed operational and reporting requirements on ScottishPower. As a consequence of the sale, cost savings are achievable from the reduction of functions that support the ownership of PacifiCorp.  These will no longer be required and the cessation of a wide range of managerial and regulatory activities will release substantial savings.

Secondly, there will also be a substantial change to the organisational structure of the UK businesses, designed to drive performance through reduced layers of management, the achievement of further efficiencies, and the consolidation of shared support functions.

The continuing businesses in the UK will be Energy Networks, Energy Retail and Energy Wholesale, and in the US, PPM Energy.  The heads of each of these four businesses will report directly to the Chief Executive.

They will also become members of the main operating forum of the group, the Executive Team, together with three functional heads who will lead the shared support services, namely Finance and Strategy; Legal, Secretariat and Commercial; and, Human Resources and Communications.  In addition, Ronnie Mercer, Executive Vice President of PacifiCorp Operations will remain on the Executive Team until the sale of PacifiCorp is complete, at which point it is expected that he will retire.

The new Executive Team will now be:

• Ian Russell, Chief Executive
• Simon Lowth, Finance and Strategy
• Terry Hudgens, PPM Energy
• David Rutherford, Energy Networks
• Willie MacDiarmid, Energy Retail
• John Campbell, Energy Wholesale
• Ronnie Mercer, PacifiCorp Operations
• James Stanley, Legal, Secretariat and Commercial
• Stephen Dunn, Human Resources and Communications

Contact Details

Jennifer Lawton                        Head of Investor Relations              0141 636 4527

Simon McMillan            UK Media Relations Manager                0141 566 4875

NOTE FOR READERS:

Energy Networks - (formerly Infrastructure Division)

Three wholly-owned subsidiaries of SPUK SP Transmission Ltd, SP Distribution Ltd and SP Manweb plc are the "asset owner companies" holding the group's UK regulated assets and transmission and distribution licences. A further wholly-owned subsidiary of SPUK SP Power Systems Ltd ("PowerSystems") provides management expertise and conducts the day to day operation of the networks.

The asset-owner companies act as an integrated business unit to concentrate divisional expertise on regulatory issues and investment strategy.  PowerSystems implements work programmes commissioned by and agreed with the asset-owner business. 

In 2004/05 operating profit for the Infrastructure Division was £416.3m

Energy Retail and Energy Wholesale - (formerly UK Division)

• Energy Retail

Scottish Power Energy Retail is the gas and electricity supply company and holder of the group's supply licences, manages pricing, selling, billing and receipting for gas and electricity supply to both business and domestic customers and deals with enquiries arising in the course of this business.  Included within Energy Retail is SP Dataserve Ltd, which is the data management and metering company, managing the data processes that underpin customer registration through billing and settlement.  

The group has over 5.1m customers in the UK.

• Energy Wholesale

This division now includes ScottishPower Energy Management that is responsible for the commercial running of the power stations, including the scheduling and fuel purchasing, managing retail economics and pricing, and for managing commodity risk through buying and selling wholesale energy via ScottishPower Energy Management (Agency).

Within the Energy Wholesale portfolio will also be ScottishPower Generation Limited, which owns and operates the group's 6,200MW of power station and other generation assets in the British Isles and holds the group's generation licence.

The Strategic Transactions business develops the group's position in renewable generation and other aspects of the emerging market for environmental instruments through selected investment in plant and gas storage facilities, as well, as building and commissioning wind farms in the British Isles.

In total the UK Division combined operating profit in 2004/05 was £175.6m.

PPM Energy

PPM Energy is the group's fast growing competitive US energy business, with operating assets in ten US states and in Canada.  Its diverse portfolio, focus on wind power and moderate risk approach all position PPM Energy for expected earnings growth.  The business is growing through a strategic focus on clean energy: concentrating on renewable power, natural gas storage and hub services; and gas-fired generation.

In 2004/05 its operating profit was £58.1m.