Interim Management Statement

Scottish & Southern Energy PLC
05 March 2007


                        SCOTTISH AND SOUTHERN ENERGY PLC

                        INTERIM MANAGEMENT STATEMENT AND

                                DIVIDEND POLICY


Scottish and Southern Energy plc ('SSE') has completed a review of its dividend
targets for the period until 31 March 2010 and will set out the details in a
presentation to investors and analysts at the Edison Electrical Institute
International Utility Conference which begins in London today.


As part of the new targets, the Board expects to recommend to shareholders a
final dividend of 39.9p per share in respect of the year ending 31 March 2007,
compared with 32.7p in the 2005/06 financial year, an increase of 22%. This will
make a full year dividend of 55p, compared with 46.5p last year, an increase of
18.3%.


This increase is also designed to provide a significantly higher base for future
dividend growth. From this new, higher base, SSE's target will be to deliver at
least 4% real growth in the dividend paid to shareholders in respect of 2007/
08,2008/09 and 2009/10. Thereafter, SSE expects to continue to deliver at least
sustained real growth in the dividend.


This new policy replaces SSE's existing dividend targets, which were to deliver
at least 4% real growth in the dividend payable to shareholders in respect of
2006/07 and 2007/08, with sustained real growth thereafter.


The review has taken place as SSE nears the end of the second year of the
five-year Distribution Price Control period. A similar review took place at the
same point in the previous five-year Distribution Price Control period, in 2002.


The expected full-year dividend in respect of 2006/07, of 55p, compares with
32.4p for 2001/02, since when the dividend will have increased by 69.8%, which
represents a compound annual growth rate of 11.2%. It will also be double the
dividend paid by SSE to shareholders for the financial year ending 31 March
2000.


In 2007/08 and subsequently, it is expected that the final dividend will
represent around two thirds of the total annual dividend paid and the interim
dividend around one third.


SSE will also tell investors and analysts that it has now achieved over 7.7
million energy supply-related customers - an increase of 200,000 since its
interim results in November 2006 and of one million since the start of the
current financial year on 1 April 2006.


SSE expects to report on 31 May preliminary results for 2006/07 which are in
line with the current consensus of brokers' forecasts.


Sir Robert Smith, Chairman of SSE, said:


'Our decision to step up our dividend targets follows our analysis of the
performance of, and prospects for, the business. That analysis has confirmed
that SSE is in an excellent position to deliver very good results in the years
ahead and our enhanced dividend policy reflects this.'


Ian Marchant, Chief Executive of SSE, will tell delegates at the International
Utility Conference:


'SSE's strategy is to deliver sustained real growth in the dividend payable to
shareholders through the efficient operation of, and investment in, a balanced
range of regulated and non-regulated energy-related businesses.


'This strategy has continued to be successfully implemented in 2006/07, with key
operational successes including the achievement of over 7.7 million energy
supply customers. This continuing growth in customer numbers clearly follows our
commitment to responsible energy pricing - again demonstrated by the price cuts
which we started to implement last week - and to sector-leading customer
service.

We have also significantly improved power station availability during this year,
and made good progress with our investments in electricity generation at
Glendoe, Ferrybridge, Fiddler's Ferry and Marchwood.


'This good progress is being matched in our other major investments in
electricity networks and gas storage, with the first new capacity at Aldbrough
on course to be commissioned later this year.


'Our electrical Contracting business has continued to perform well and our
Connections business has also continued to develop, with the recent
commissioning of the out-of-area electricity network for Francis Flower in
Runcorn.


'As our major investment programme bears fruit, our asset base in energy
networks, electricity generation, energy supply and gas storage, which has grown
substantially in recent years, will again increase significantly in the coming
years.


'This growth in assets will continue to be allied to ongoing improvements in
operational performance, which remains central to our future business
development. We will also continue to examine other opportunities for growth,
although the achievement of our new dividend growth targets is not dependent on
them.


'SSE's core objective is the delivery of sustained real growth in the dividend,
and today's announcement means we will have doubled the dividend in just seven
years. With the company approaching the tenth anniversary of its formation, at
the end of next year, our new targets set the scene for the achievement of more
than a decade of sustained real growth in the dividend.'

Enquiries to:

Scottish and Southern Energy plc
Alan Young - Director of Corporate Communications        + 44 (0)870 900 0410
Sally Fairbairn - Investor Relations Manager             + 44 (0)870 900 0410

Financial Dynamics
Andrew Dowler                                            + 44 (0)20 7831 3113






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