Scottish Power to sell gas with AA

Scottish Power, the multi-utility that owns Manweb and Southern Water, will today announce a marketing alliance with the Automobile Association to sell electricity and gas nation-wide. The alliance is the first of the so-called "affinity" partnerships that the utilities are expected to forge with high street brands in readiness for the opening up of the domestic energy markets to full competition in 1998.

The AA has 9.2 million members and sells a range of services such as travel and insurance in addition to its traditional roadside breakdown service.

United Utilities, the owner of North West Water and the regional electricity company Norweb, will also announce details today of the new energy supply business it is creating to attack the deregulated market.

Hydro-Electric, Scottish Power's neighbour north of the border, is also examining plans for an affinity arrangement. A possible partner is the insurance group General Accident.

The alliance between Scottish Power and the AA will give the utility a presence outside its franchise areas in the south of Scotland, Merseyside and southern England.