Proposal

Scottish & Southern Energy PLC
15 November 2006


15 November 2006

SCOTTISH AND SOUTHERN ENERGY PLC

                 PROPOSAL TO ENTER WATER SECTOR FOR FIRST TIME

Scottish and Southern Energy plc ('SSE') has decided to make a formal
application to Ofwat for 'Inset Appointments' which would allow it to install,
own and operate water and wastewater services for end user customers for the
first time.

SSE is already a significant provider of connections in electricity and gas - in
September 2006, the number of new premises connected to its wholly-owned gas
networks passed 40,000 for the first time. The decision to seek 'Inset
Appointments' follows a review by SSE of the extent of its ability to offer
'multi-utility' services to large developments. In water, this is currently
limited to contracting-related functions. SSE has concluded that its objective
should be to install, own and operate water and wastewater networks, and is now
engaged in detailed discussions with Ofwat.

SSE expects that its initial applications will be in respect of significant
developments in south-east London and Wiltshire, providing connections to around
2,500 and around 1,000 properties respectively. SSE would also aim to provide a
series of beyond-the-meter water services, such as schemes to manage water usage
and maximise recycling.

Ian Marchant, Chief Executive of SSE, said:

'Our decision to move into gas connections some years ago was a natural
extension of our network capability in electricity. With a strong presence in
two of the three core utilities, it makes sense to look at the best way of
completing the set.

'We've decided that seeking 'Inset Appointments' is the right way forward,
because it will enable us to offer 'multi-utility' solutions to our customers
for the larger developments. That's why we hope to make formal applications to
Ofwat early in the new year.

'We think this is the best way of dipping our toe in water. It complements an
existing business activity very well and it's based on a precedent of evolving
from electricity connections only, to electricity and gas. In other words, it's
in line with the SSE way of doing things.'



Enquiries to:

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

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






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