Acquisition

Scottish & Southern Energy PLC
06 October 2003



Scottish and Southern Energy plc



FOR IMMEDIATE USE
Ref: NR-3299a
6 October 2003





                          SCOTTISH AND SOUTHERN ENERGY
                        ACQUISITION OF MEDWAY POWER LTD

Scottish and Southern Energy plc ('SSE') has today agreed to acquire the equity
interests of AES Medway Electric Ltd ('AES') and EDF Energy (South East
Generation Ltd) ('EDF Energy') in Medway Power Ltd ('Medway') for a total
consideration of £89.8m in cash. In addition, SSE has assumed net debt in Medway
of £140.9m. The acquisition is expected to complete by early November.

SSE already owns 37.5% of the equity interests in Medway and will, therefore,
become the sole owner of the business, which comprises a 700MW combined cycle
gas turbine (CCGT) power station on the Isle of Grain in Kent.

SSE will also acquire AES Medway Operations ('AESMO'), a wholly-owned subsidiary
of AES, which operates and maintains the power station, for a consideration of
£11.7m in cash and will have full responsibility for the management and
operation of Medway.

In addition, SSE will acquire the economic benefit from having a 100% interest
in Medway's power purchase agreement with EDF Energy. Under the existing
ownership, the output from Medway has first been offered equally to SSE and EDF
Energy, under contracts due to run until 2011. These power purchase contracts
are currently 'in-the-money' for Medway and 'out-of-the-money' for the
purchasers of the power.

Within the total value of the transaction, SSE attributes a value of around £260
/kW to these contracts, based on 100% ownership of Medway, and estimates that
the cost of acquiring the actual power station is equivalent to around £160/kW.

Following the acquisition, SSE will provide a similar amount of power as at
present to EDF Energy, at similar prices, but the power may be provided from any
part of SSE's generation portfolio. Overall, therefore, SSE will be able to meet
its generation requirements more flexibly and will have a greater ability to
deploy Medway, as a wholly-owned asset within its wider generation portfolio, in
the balancing mechanism under the New Electricity Trading Arrangements (NETA).

The power station is modern with commercial operation starting in 1996. Its
reliability is supported by a long-term commercial services agreement for major
turbine maintenance signed with GE in 2002. The acquisition means that the
capacity of SSE's wholly-owned power stations and SSE's share of power station
joint ventures is now almost 5,500MW.  This comprises gas-fired and renewable
generation. The acquisition is expected to be earnings enhancing, pre and post
goodwill, in the first year.

Ian Marchant, Chief Executive of SSE, said: 'Electricity generation in the UK is
changing dramatically. There are concerns that the UK will not have enough
generation capacity to meet peak demand in future years. The growth in
renewables, which we all expect to see, will need to be backed up by efficient,
flexible gas-fired power stations.

I am, therefore, pleased to have completed this acquisition, which enables us to
add another modern, flexible and efficient power station to our group of
generation assets. It will also enable us to secure significant operational and
financial synergies and optimise maintenance agreements. We will be able to
deploy fully our enlarged generation portfolio within NETA and take advantage of
its flexibility to perform with maximum effectiveness within the electricity
balancing market.'

                                    - ENDS -



Additional information:

1. As at 31 December 2002 the net assets of Medway were £45.5m. Its turnover in
the year to 31 December 2002 was £146.1m and it achieved a profit before tax of
£19.4m.

2. As at 31 December 2002 the net assets of AESMO were £1.2m. Its turnover in
the year to 31 December 2002 was £5.3m and it achieved a profit before tax of
£2.4m.

3.  Scottish and Southern Energy plc is a UK owned energy utility with over five
million energy customers. It is one of the largest operators of electricity
networks in the UK and has the most modern efficient generation of the major UK
electricity generators. It is the largest generator from renewable sources in
the UK. The company's headquarters are in Perth and it employs over 9,000 staff.


Enquiries to:

Scottish and Southern Energy
Alan Young - Director of Corporate Communications                  0870 900 0410
Denis Kerby - Media and Investor Relations Manager                 0870 900 0410

Financial Dynamics
Andrew Dowler                                                      020 7831 3113




                      This information is provided by RNS
            The company news service from the London Stock Exchange