ScottishPower announces that its non-regulated US Subsidiary PacifiCorp Power Marketing, Inc. (PPM) began full commercial operations of the 484-MW Klamath Cogeneration Plant on 29 July. It is one of the few major new power plants to be built in the Pacific Northwest in recent years.

Under contract with the City of Klamath Falls, PPM manages, operates and fuels the plant and markets its entire output. PPM owns half the plant's output, which it continues to market to wholesale customers throughout the West. PPM also serves as broker for the City of Klamath Falls' share of the output. A large portion of the output has already been sold in long-term contracts to entities across the Pacific Northwest and California.

PPM and the City of Klamath Falls developed the natural gas-fired combined-cycle cogeneration plant which sits less than 30 miles from one of the most actively traded electricity markets at the California-Oregon border. It is also close to both the electricity and gas transmission networks. Start-up of the plant began this May with significant test power flowing into the grid the last two months.

The plant has enjoyed strong support from conservation groups for its efficiency, cogeneration process and for setting the global standard for the most carbon dioxide mitigation ever for a fossil-fueled power plant.

Terry Hudgens, PPM's chief executive officer, said: "The Klamath Cogeneration Plant is the first plant in the Northwest to come online specifically to sell electricity as a merchant plant. We've had great success selling the plant's clean, affordable energy proving that Klamath was built at just the right time and in just the right place."

The Klamath plant plays a major role in ScottishPower's plans to grow its US generation portfolio. The expansion is designed to take long-term advantage of market opportunities in the region.

Further Information:
Colin McSeveny,       Group Media Relations Manager     0141-636-4515
Andrew Jamieson,         Head of  Investor Relations       0141-636-4527