28 February 2002

2. Safe harbor

3. Ian Russell Chief Executive

4. Strategic context

5. US division structure

6. Purpose of meeting

7. Agenda PacifiCorp- PacifiCorp strategy & achieving the allowed ROE - Judi Johansen- Regulatory overview - Don Furman- Managing risk - Bob Klein, Ariel Salama- Getting to the allowed ROE - Matthew Wright PacifiCorp Power Marketing, Inc.- Growing an unregulated energy business - Terry Hudgens

8. PacifiCorp Management FocusJudi Johansen CEO PacifiCorp

9. US Division - Scope & Scale Among 3 largest western IOUs- 1.5m customers- Six state territory (the UK fits inside Oregon by itself)- 15,000 miles of transmission- 8 GW of generation 72% of revenues from Oregon, Utah

10. PacifiCorp Organization

11. Maximising recovery of costs through theregulatory process- Don Furman Reducing commodity price exposure - Bob Klein, Ariel Salama Achieving the allowed return on equity - Matthew Wright US Division -PacifiCorp Management Focus

12. Agenda PacifiCorp strategy Current market scene Where we are today How we will deliver results PacifiCorp conclusions

13. PacifiCorp strategy Increase revenues through rate filings Strip out costs regulators disallow Align business practices with regulatory rules Deliver operational efficiencies � balanced with customer service, reliability, safety Complete long-term projects Reach allowable ROE by 2004/05

14. Current market scene -Where we are today US recession impacts Power surplus in Western US Pacific Northwest hydro-electric availability close to normal Natural gas prices low Wholesale electric price volatility has returned to more historic levels

15. Wholesale power markets Requirement to serve customers predominates regulated business Power resources cover 80-90% of load on average at PacifiCorp Risk mitigation and management processes in place Significant future load growth anticipated

16. Major strategic projects underway Structural Realignment Proposal RTO West California strategy

17. A long-term solution -Structural Realignment Proposal (SRP) Resolves issues related to existing & future generation Seeks to resolve cost allocation issues Multi-state process Enables each state to pursue independent energy policies Preserves system reliability, efficiency and safety

18. RTO West structure State-chartered non-profit organization- Goal to promote efficiency in wholesale markets- Includes western investor-owned utilities, Bonneville Power Administration- Governed by an independent board- Goal to be operational in 2004

19. California Serve 42,000 mainly rural customers Proposed sale to Nor-Cal Electric Authority - Good support from most parties $16 million general rate case filed- Decision requested by late summer State dealing with major issues, challenges

20. Improving efficiencies Transition Plan on target Efficiencies being delivered company wide Goal to reach �top 10�

21. Achieving the allowed ROE - Transition Plan

22. PacifiCorp perspective Significant size and scope Reshaping underway Working to achieve the allowed ROE Delivering on our strategy

23. Maximising recovery of costs through the regulatory processDon Furman SVP Regulation & External Affairs

24. Regulation agenda Optimizing allowable recovery Overview of rate cases Deferred accounting filings Power cost adjustments (PCAs) General rate cases & timeline Other issues

25. Maximising recovery of coststhrough the regulatory process $407m in deferred costs $278m requested to date $95m request to be filed in Wyoming Seeking further deferral of $109m in Utah related to excess power costs + $46m in mine closure costs

26. Deferred excess power costs

27. Power Cost Adjustments (PCAs) Filed in Oregon, Utah, Idaho and California To be filed in Wyoming in April Reduce residual risk of commodity price swings- More typical with gas utilities Ultimate form likely to vary by state- May involve sharing mechanisms Commissions link with generation resource plans

28. Achieving the allowed ROE -Recent filings $132m additional revenues Further $70m of general rate case requests Future cases filed as needed

29. Regulatory timeline of key dates

30. Other issues Oregon Electric Restructuring- Implemented in March 2002- Cost-of-service option for all customers until July 2003- Recovery of implementation costs + interest- No major impacts expected 2001 FERC price mitigation order- Regional wholesale price mitigation- Extended price limits to western spot sales- Recent FERC report update

31. Regulation -Conclusions Maximise recovery of allowable costs Implement PCAs & IRP Achieve allowable ROE

32. Reducing commodity price exposureRobert Klein SVP Commercial & Trading

33. Commercial & Trading agenda Overview Typical trading profile Risk management Reducing commodity risk exposure Long-term generation planning (IRP) Conclusion

34. Commercial and Trading Expanded group over past 12 months Enhanced risk mitigation processes Portfolio of instruments to hedge risks Transact to shape system demand Regulated obligation to serve Risk mitigation today and tomorrow

35. Typical load and resource profile -Indicative Summer Day

36. Risk management overview

37. Reducing commodity price exposure Gadsby peakers (Utah) Shaped generation resources Physically settled call options Temperature contingent hedges Hydro hedges Integrated Resource Plan Power cost adjustment mechanisms requested

38. Temperature contingent instrumentFinancial Safeguards

39. Hydro Hedge -Financial safeguards

40. Risk management conclusions Markets stable New tools and increased resources further reduce commodity risk IRP will help provide long-range plan Operating as a hedger and balancer, not a trader Integrated approach to risk management

41. Ariel Salama Group Energy Risk Director

42. Philosophy of risk management Proactive approach to risk management Eliminate unnecessary risks Consistent methodology A portfolio approach Demand adequate returns for shareholders and customers Goal is to be a leader in risk management- Predominantly conservative and safe

43. Group risk governance cycle

44. Value and risk relationships

45. Reducing earnings volatility

46. Group actions to reduce volatility Allocate lower than requested limits Review and follow up on existing exceptions to limits Continually search for better risk management products in the market to better hedge our positions Drive to improve our measurement capability Demand high capital charge on existing and new initiatives

47. Risk management - Approval process Establishment of local, divisional and Group risk management review teams & forums Approvals based on the Value at Risk (VaR) methodology for portfolio impact of individual transactions Approval levels vary according to size - conservative trading levels

48. Energy risk management organization

49. Global Credit Risk Management Zero tolerance for credit losses Every credit exposure reviewed and approved Use of sophisticated tools: credit scoring and simulations Develop a global view of counterparty credit risk and a centralized database for all credit agreements

50. Risk management -Conclusion Continually seek out products to better hedge our position and support divisional goals Improving measurement capabilities Installing company-wide risk culture in line with strategic objectives

51. Achieving the allowed Return on Equity Matthew Wright EVP Power Delivery

52. Agenda Power Delivery overview Merger commitments progress Delivering the Transition Plan in Power Delivery

53. Power Delivery - Size and Scale

54. PacifiCorp Overview -Merger Commitments Established c. 450 merger commitments in total - 87% being delivered already & rest on schedule Adopt new performance standards and customer guarantees - done Network reliability improvements - on schedule Acquire 50 MW of renewables within 5 years - done Donate $5 million to PacifiCorp Foundation - done Deliver low-income customer initiatives and environmental commitments - done

55. Power Delivery - Transition Plan Progress 120 out of 200 Transition Plan initiatives in Power Delivery Significant organizational and operational changes Workforce reductions while overall performance maintained Strong controls for business performance in place Introduction of new technology- Customer Contact Centers - Project Discovery- Distribution Systems Integration Program - DSIP c$30 million of savings achieved to date

56. Power Delivery -Customer Services Organization Two �centers of excellence� created March 2001- Customer Contact Center- Customer Credit Center Refocus introduces efficiencies through - Quicker resolution of inquiries - Improved coordination - Decrease in net write-offs- Improved cash flow Service levels maintained during the transition

57. Reduction in management layers Consolidation of engineering, administrative functions Operation center consolidation/closures - 20 centers closed to date Improved work practices- Introduction of new crew scheduling system - Meter reader reroutes- Site agent

58. Power Delivery -Other initiatives Delivering improved service levels- JD Power survey moved from 11th to 7th place Employee safety program New technical employee training centers opened Union negotiations

59. Power Delivery - Conclusion Merger commitments being met Transition Plan initiatives on schedule Balanced approach- Cost savings- Service improvements- Investment

60. Judi Johansen CEO PacifiCorp

61. Maximising recovery of costs through theregulatory process Reducing commodity price exposure Achieving the allowed return on equity US Division PacifiCorp Management Focus

62. Growing an unregulated energy business Terry Hudgens CEO PacifiCorp Power Marketing Inc.

63. PPM agenda Overview PPM Business Strategy Market Opportunities Thermal Generation Strategy Renewable Energy Strategy Gas Storage/Hub Services Strategy Conclusions

64. PPM overview Two major projects completed on schedule - no capex Asset-backed energy company Leading wholesaler of renewable power products Long-term sales - >800MW of capacity Long-term contracts - 5-25 years + locked-in margins Staff reaching critical mass - proven track record �Pipeline� of new development opportunities

65. PPM business strategy Value growth achieved within an unregulated energy platform Growth strategy built around thermal generation, renewable generation and gas storage and hub services Strong trading and risk management capability A balanced business portfolio Investment in projects with trading flexibility, expansion capability and arbitrage opportunities

66. PPM market opportunities

67. Thermal generation strategy Three supply sources, eight long-term contracts Growth plans impacted by current prices Potential opportunities:- Leverage strategic value of Klamath Falls site Other options

68. Renewable generation strategy Control generation in robust wind energy markets- One supply source, three long-term contracts Grow from 264 MW - Targeting 10 states, 15-20 projects Create value through development & merchant skills Federal tax credit - market stimulus

69. Gas storage strategy Develop/acquire assets in key trading areas Provide synergies across organization Serve a market need for additional storage �Greenfield� opportunities

70. Conclusions - PPM Strong portfolio of assets and power contracts Leader in renewable energy - first in the West Flexible business model and strategy PPM goals consistent with Group strategy

71. Ian Russell Chief Executive

72. Agenda PacifiCorp- PacifiCorp strategy- Regulatory overview- Managing risk- Getting to the allowed ROE PacifiCorp Power Marketing, Inc.- Growing an unregulated energy business