Statement re: Price Controls

Scottish & Southern Energy PLC
20 December 2006




                     SCOTTISH AND SOUTHERN ENERGY PLC
             ELECTRICITY TRANSMISSION PRICE CONTROL REVIEW AND
                  GAS DISTRIBUTION PRICE CONTROL REVIEW


Scottish and Southern Energy plc ('SSE') has decided, on balance, to accept
Ofgem's final proposals for electricity transmission price controls for 2007-12.
In addition, Scotia Gas Networks ('SGN'), in which SSE has a 50% stake, has
decided to accept Ofgem's final proposals for the gas distribution one-year
price control for 2007-08.

While the cost of capital in electricity transmission is disappointing, SSE has
concluded, ultimately, that there is within Ofgem's detailed proposals for areas
such as capital and operational expenditure sufficient scope and incentive to
secure an acceptable level of revenue. SSE's acceptance of the proposals is
subject to their being correctly reflected in licence modifications.

As in electricity transmission, the cost of capital in gas distribution is
disappointing, and should not be seen as precedent for the forthcoming five-year
review. Nevertheless, SGN's two networks have the highest P0 increases in
revenue among the eight gas distribution networks. The policy framework for
'shrinkage' gas, pensions deficits and capital and replacement expenditure have
all been satisfactorily dealt with in the context of what is a one-year review
period. SGN is now engaged in the preparations for the gas distribution price
control review for 2008-13.



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