It is negotiating to buy Pacificorp, a west coast power generator, for £4bn ($7.5bn).
It would be the largest takeover of a major US utility by a foreign company.
Scottish Power, which also owns Manweb and Southern Water, has been looking to diversify outside of the UK for some time. In its interim report, the company said it was "exploring opportunities for international investment, particularly in the US energy sector".
Earlier in the year, it failed in attempts to merge first with Florida Progress, owner of Florida Light & Power, and then with Cinergy of Ohio, after disagreements over management control.
The merged group would be worth £12.5bn and have seven million customers, including 1.5 million in seven states on the US's booming west coast. It is expected to keep its headquarters in Glasgow.
Scottish Power also owns Demon, the biggest UK-owned Internet Service Provider.
Pacificorp vulnerable
It has been Pacificorp's own failure to get in to the UK energy market that has left it vulnerable to a takeover.
In April it lost a battle with Texas Utilities for control of British company Energy Group plc.
The chief executive, Fred Buckman, then resigned, and has been replaced by a caretaker chairman Keith McKinnon.
Since then, its earnings has plummeted and its stock price has fallen, making it vulnerable to a bid. A spokesman for the group said that "when we receive a reasonable offer, for the sake of our shareholders were are obligated to consider it".
Other UK rivals going West
Scottish Power is not the only UK power company that wants to get into the newly-deregulated US utilities market.
Earlier the year PowerGen failed to negotiate a merger with Houston Energy, while both National Power and the National Grid have been looking for US partners for some time.
The driving force has been the liberalisation of the world power generating industry, which has made the US market particularly attractive. Profits in the UK, meanwhile, are stagnating as increased competition across all sectors is being phased in.
Power to the people
(25 Nov 98 | The Company File)
Battle for the utilities
(20 Nov 98 | The Company File)
Regional electricity sparks profits
(12 Nov 98 | The Company File)
Scottish Power to lobby Ofwat
(04 Nov 98 | The Company File)
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