Acquisition

Scottish & Southern Energy PLC
10 February 2006


ACQUISITION OF HARRISON SMITH (BATLEY) LIMITED AND JOINT VENTURE COMPANY
APPOINTED PREFERRED BIDDER FOR LEEDS CITY COUNCIL STREET LIGHTING


The contracting subsidiary of Scottish and Southern Energy plc (SSE), Southern
Electric Contracting, has completed the acquisition of Yorkshire-based plumbing
and heating contractor, Harrison Smith (Batley) Limited. In addition, SSE's
joint venture with The Royal Bank of Scotland plc ('RBS'), Tay Valley Lighting,
has been appointed by Leeds City Council as preferred bidder for its street
lighting PFI (Private Finance Initiative).


Harrison Smith, based in Batley, West Yorkshire, is a well-established
contractor employing almost 50 members of staff. Over half its £4m turnover
comes from industrial/commercial work, such as office and residential
refurbishments. It is particularly active in the hospitality and catering
industry, with blue-chip customers including Premier Lodge and The Spirit Group.
Its remaining income comes from social housing refurbishments for local
authorities, mainly partnering contracts under the Government's Decent Homes
scheme.


The acquisition will give SEC the scope to offer a more comprehensive range of
electrical, heating and plumbing services to its customers in the North of
England.


The transaction has a total value of around one million pounds. It follows the
acquisition by SEC in 2005 of Eastern Contracting, the former contracting
business of Eastern Electricity. That business has been successfully integrated
into SEC. It is shortly to open a sixth regional office in Norwich and is taking
the first steps in its strategic expansion plan with a recruitment drive
covering the whole of the Eastern region.


SSE's presence in Yorkshire has been further strengthened following the decision
by Leeds City Council to select the joint venture between SSE and RBS as
preferred bidder for its street lighting PFI.


The first five years of the 25-year contract would see the majority of the
110,000 street lights, illuminated signs and bollards in the city replaced,
other than those recently installed. Its completion would result in it becoming
the largest street lighting PFI in the UK. If confirmed, SEC Lighting Services,
part of the SSE Contracting Group, would be responsible for all replacement,
repair and maintenance work.


Tay Valley Lighting has established itself as one of the leading players in the
street lighting PFI field and is already successfully carrying out a similar
scheme in Stoke-on-Trent, as well as in Newcastle and North Tyneside. The final
agreement on this important deal would result in SSE more than doubling its
income from this market sector.


Ian Marchant, SSE's Chief Executive, said:


'The acquisition of Harrison Smith is an important step forward in our plan to
grow incrementally the scope and scale of SEC's activities. Securing preferred
bidder status for the Leeds PFI is another significant milestone in the
development of the business. Our key priorities now are to complete the
integration of Harrison Smith into SEC and to secure the formal award of the
Leeds PFI contract.


'SEC is an important part of SSE and complements activities in areas such as
Energy Supply and Energy Services and maintaining its long-term growth is an
important part of our plans going forward.'


Enquiries to:

Scottish and Southern Energy

Alan Young, Director of Corporate Communications 0870 900 0410

Penny Porter, Corporate Communications 0870 900 0410








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