Responding to the OFGEM paper on the Scottish Trading Arrangements:

ScottishPower said customers in Scotland since flotation have, in fact, enjoyed lower bills than their English counterparts the average Scottish customer paying £61 less over the period or roughly the equivalent of three months' free electricity.

Prices to domestic customers in Scotland have reduced by 16% since 1990 and stand at their lowest level in real terms since 1974. In addition, customer service has improved across all aspects of our business

ScottishPower also stressed that the company is totally committed to competition as the best way to drive benefits for customers in the future, and was one of the first companies into the competitive electricity market.

Many of the issues raised by the Regulator relate to the structure of the Scottish electricity market which was deliberately set up differently from England and Wales to reflect differences in the two markets, for example the smaller size, and fewer generating stations.

During the 1990s prices to domestic electricity customers in Scotland have been set by the price controls established by the Regulator. Prices in England and Wales were higher in the early 1990s and are now on average marginally lower than in Scotland. The reasons for this are:

• Removal of levy for green energy which only applied in England and Wales
• Higher costs in operating the rural electricity networks in Scotland where geography and size of territory lead to higher costs.
• Costs associated with generation contracts imposed on the Scottish companies at privatisation.

In general terms, OFGEM's view of future arrangements is consistent with ScottishPower's and we will work with the Regulator to ensure Scottish customers continue to benefit.

Further Information:
Colin McSeveny,               Group Media Relations Manager       0141 636 4515