AGM Statement

Scottish & Southern Energy PLC
26 July 2001

26 July 2001

                       SCOTTISH AND SOUTHERN ENERGY PLC
                     ANNUAL GENERAL MEETING, 26 JULY 2001

Speaking to shareholders at Scottish and Southern Energy's third Annual
General Meeting, held in Perth today, Chairman Dr Bruce Farmer said: 'This has
been another very good year for Scottish and Southern Energy. We have seen
successful expansion through the acquisition of the SWALEC energy supply
business from British Energy. Our operational efficiency and the standard of
service we offer our customers has also improved whilst we've delivered
greater than anticipated synergy savings. Credit for these impressive results
is due to our staff, who once again have excelled themselves.'

Commenting on the Company's financial results, Dr Farmer said: 'Our strong
operational performance is backed up by an equally strong set of financial
results, with profit before tax increasing by 5.8% and earnings per share by
7.2%. This is a very good result considering the impact of the price reviews,
which reduced allowed revenue by around £70M. Last year we said we expected to
achieve £95M of merger benefits. We've already beaten that, delivering £115M
from the original SSE merger and a further £5M from the SWALEC acquisition.
We aim to achieve total savings of £140M. This, along with the acquisition of
SWALEC and new generation assets coming into commercial operation at Seabank
and Peterhead have been the main drivers of our earnings growth.

'Moving from performance to dividend, the Board has recommended a full year
dividend of 30p. This would be the interim dividend of 9p which was paid out
in March and a final dividend of 21p which will be paid in September. That's
an increase of over 9% and well above the target which we set last year.'

Dr Farmer reminded shareholders about the harsh winter weather which had
caused widespread disruption last winter: 'In October, our network in England
was battered by the worst storms since 1987 and in Scotland, February brought
the most severe blizzards for some years. Despite this we saw a reduction of
10% in customer minutes lost in Scotland, our best ever network performance.
In England our performance was well ahead of Industry Regulator, Ofgem's
targets once corrected for the October storms.

'Our massive investment in upgrading the networks and our ability to rapidly
transfer the Group's resources from one part of the country to another meant
we were able to restore supplies much more quickly than would have been
previously possible. In fact, in Scotland, we were able to release staff to
help ScottishPower and Northern Electric who still had customers without
electricity days after we had reconnected ours.

'Guaranteed Standards cover a range of services such as how quickly we can
provide a new electricity supply or change an electricity meter, even how long
it takes us to reply to a customer's enquiry. This year we set a new record
with less than one failure to meet these standards, per 100,000 customers.

'Scottish and Southern Energy is now firmly established as one of the most
successful and efficient companies in the British energy markets, committed to
delivering growth in shareholder value. Our confidence is reflected in our
clear dividend target. From the full year dividend of 30p this year, we aim to
deliver at least 4% real growth per year for the next two years and sustained
real growth for the following two years.'

Bringing shareholders up to date with more recent events, Dr Farmer continued:
'In the first three months of this year our operational and financial
performance has been good, with further reductions in failures against the
guaranteed standards and customer minutes lost well ahead of target. We've
also announced plans to invest in our first wind farm, an 11 Megawatt unit at
Tangy, near Campeltown in the west of Scotland and to generate electricity
from coal mine methane with a 10 Megawatt power station at Wheldale near
Leeds.

'We were delighted to learn just last week that the Government has recognised
the contribution our hydro-electric power stations make to the nation's
renewable energy. The premium we will now receive for the electricity
generated by refurbished stations up to 20 Megawatts in size makes it
attractive to proceed with a 10 year, £250 million investment programme to
prolong their working lives, increase their efficiency and output, and
safeguard this valuable British renewable asset for many years to come.'

Dr Farmer paid tribute to the directors who retired during the course of the
year: 'Each has played a crucial part in the development of the Company, Lord
Wilson who so capably led the Company through integration, Peter Stormonth
Darling, non-Executive Director, Ian McMillan, Power Systems Director and Jim
Hart, Commercial Director.' He concluded: 'On behalf of the Board I would also
like to pay tribute to our staff for their sheer hard work and determination
to do their very best for our customers and shareholders. It is greatly
appreciated.  It is their efforts that make this Company what it is and they
are to be congratulated on their achievements in the last year.'

Notes to Editors:

1.  Dr Bruce Farmer (64) became chairman of Scottish and Southern Energy in
November 2000, following the retirement of Lord Wilson. He is Chairman of The
Morgan Crucible Company plc and Bodycote plc, President of the Institute of
materials and a council member of the CBI. He was previously Chairman of
Southern Electric plc from April 1998 until the merger and Chief Executive of
The Morgan Crucible Company plc, Wellworthy and Brico Engineering.

2.  Scottish and Southern Energy is one of the largest energy companies in the
UK serving over 4 million electricity and 1 million gas customers. It also
manages the UK's largest electricity distribution network and accounts for 10%
of the country's generation assets with close to 50% of the country's
renewable generation capacity.



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