ScottishPower and PacifiCorp announced today that they have reached an overall settlement with the staff of the Public Utility Commission of Oregon (OPUC) regarding the proposed merger of the companies. The OPUC staff will support and recommend approval of the merger with an agreed set of conditions.

Settlement followed staff's earlier conditional recommendation of the merger. Agreement was reached on a set of conditions including the adoption and implementation of service standards and conservation commitments.

Agreement was also reached on a credit to customers of $12 million per year for three years and $15 million in the fourth year, beginning on the first anniversary of the completion of the merger. The merger credit includes Oregon's share of the $10 million cost savings which ScottishPower had previously committed to pass to customers.

The company will be able to offset $9 million and $12 million of the credit in years 3 and 4, respectively, through filing a rate case in which cost savings are demonstrated.

The agreement also includes the option for the Commission to require the company to file a rate case by March 1, 2004, with rates effective January 1, 2005. This option would be exercised only if the company's earnings in Oregon were above a reasonable range. The agreement does not preclude the company from filing a rate case before that date.

Speaking today Ian Russell, Deputy Chief Executive and Finance Director said, "We are pleased to have reached this agreement which reflects the effort undertaken by the staff and the companies."

This agreement is subject to approval of the OPUC. Hearings are currently scheduled in Oregon from 28-30 July 1999.

Further Information:
Sue Clark,                Director of Corporate Affairs        0141 636 4560
Colin McSeveny,          Group Media Manager              0141 636 4515