29th

1
ENA Conference Health and Safety at
ScottishPower Ian Russell CEO
29th 30th April 2004
2
Agenda

• ScottishPower
• Health and Safety
• Track record
• World class ambitions
• Plans for the future
• Conclusions

3
ScottishPower

• Turnover of 5.3 (9) billion in 2002-03
• Market capitalisation of 7.1 billion (11.7
  billion)
• 60 US - 40 UK
• Vertically integrated in US and UK
• 14,000 employees
• Supply 5.5 million homes
• CSR part of our corporate DNA

Clear strategy to become a leading international
energy business
4
ScottishPower in the UK

• 10 UK share of domestic electricity market
• Generation mix of coal, gas, hydro and wind
• 3rd largest distribution company in the UK
• 4m customers and growing
• The leading developer of wind energy in the UK

5
ScottishPower in the US

• 135,000 square miles of service territory in six
  states
• Among three largest power companies in the
  Western US
• 8GW of generation and 15,000 miles of
  transmission
• 1.5 million customers
• Accounted for 20 of US wind power development
  last year and among top 3 wind power providers

WASHINGTON
MONTANA
OREGON
IDAHO
WYOMING
NEVADA
UTAH
COLORADO
CALIFORNIA
NEW MEXICO
ARIZONA
PacifiCorp service territory
6
Strategic Overview
UK
US
How we create value
UK Division
PPM

• Carefully selected high return investments where
  we have knowledge advantages
• Strong commercial, trading and risk management
  skills
• Consistent investment in asset base for steady
  growth
• Outperformance from operational and regulatory
  management skills

Competitive

• Transferable operational management skills
• Deep knowledge of local UK and US markets

Infrastructure
PacifiCorp
Regulated
Investing in all our businesses to maximise
shareholder value
7
Agenda

• ScottishPower
• Health and Safety
• Track record
• World class ambitions
• Plans for the future
• Conclusions

8
Chief Executives Statement
no harm to our employees, customers or the
general public
adopt best practice for all our operations
ScottishPower has a good health and safety
record... but we are determined to improve still
further
9
Health Safety Performance History
10
In More Detail - SP v RECs v EA
11
Fatalities

• 1 employee killed this year, 2 last year, totally
  unacceptable
• Quote from Safety Representative Conference
• Achieving 1 Billion profit in the US does
  not matter when employees are being killed
  at work

12
Drivers for Change

• Employees are our key assets - their health,
  safety and wellbeing is of paramount importance
• FY 02/03 115 LTAs, 33 down from previous year -
  still too many of our people hurt/injured
• FY 03/04 90 LTAs, 21 improvement
• Safety is good business
• Strategy is to be a great energy business
• must be great in health and safety

13
Agenda

• ScottishPower
• Health and Safety
• Track record
• World class ambitions
• Plans for the future
• Conclusions

14
Chief Executives Statement
It is my ambition to achieve World Class health
and safety performance in all of our Businesses.
What is World Class and how do you get there?
15
Gauging Health and Safety PerformanceWhere are
we now?
Decide what to measure Develop measurement tool
16
Components of a Health SafetyManagement System
The Measurement Criteria
Formulation of Group Health Safety Standards
17
Group Health and Safety FrameworkSets the
Standards and Principles

• Leadership
• Employee Involvement
• Risk Management
• Training Competence
• Occupational Health
• Information Communication
• Rules Procedures
• Contractor and Supplier Safety
• Accident Investigation
• Change Management
• Public Safety Stakeholder Relationships
• Audit and Review

Measure Performance against Standards
18
Group Health and Safety Standards

• Premise is the better we are in these areas, the
  better our health and safety performance and the
  safer and healthier our employees are.
• Designed by the Policy Formulation Committee and
  agreed by the Group Health and Safety Executive
  Committee in June 2003
• Things are to be measured during the assessment

19
Measurement

• Baseline Assessment
• ScottishPower Best Practice
• External Benchmarking
• Performance Targets

20
Power Systems v SP Best Practice
21
Targets - Now Future

• CSS
• Leadership - Achieve L4
• Risk Management - Achieve L3
• Occupational Health - Achieve L3
• Dataserve
• Leadership - Achieve L4
• Risk Management - Achieve L4
• Occupational Health - Achieve L3

• Generation UK
• Leadership - Maintain L4
• Risk Management - Maintain L3
• Occupational Health - Achieve L3
• Generation US
• Leadership - Achieve L4
• Occupational Health - Achieve L3
• Training Competence - Achieve L3

22
Targets - Now Future

• InterWest Mining
• Risk Management - Achieve L4
• Occupational Health - Achieve L3
• Contractor Supplier Safety - Achieve L3
• Power Systems
• Leadership - Maintain L4
• Occupational Health - Achieve L3
• Rules Procedures - Maintain L4

• Power Delivery
• Leadership - Achieve L4
• Occupational Health - Achieve L3
• Audit Review - Achieve L3
• Risk Management - Achieve L3
• PPME
• Leadership - Maintain L3
• Occupational Health - Achieve L3

23
Agenda

• ScottishPower
• Health and Safety
• Track record
• World class ambitions
• Plans for the future
• Conclusions

24
Benchmarking

• Standards used as benchmarking framework
• Visits to identified leaders in health and safety
• Utilities
• Petrochemical
• Focus on Leadership and Employee Involvement
• Getting to great target agreed by Board and a
  business plan on requirements to get there
  (November 2004)

25
Power Systems v SP Best Practice Estimated
World Class Performance
26
Closing Remarks

• We are a large International Energy Company
• Good but not great health and safety performance
• Talked about our history and the drivers for
  change
• I have set the scene for my personal commitment
  and my team
• The challenge is to establish and maintain a
  sustainable world class health and safety culture
  in ScottishPower
• It starts with me

27
Finally

• Presentations from
• Ernest Wessman - US Perspective
• Duncan McLellan - Employee Involvement
• David Imlah - Occupational Health
• Alan Laird - Public and Contractor Safety
• Will give more detail about what we are doing