AEP Reaches Merger Settlement With IURC Negotiating Team

April 20, 1999•News Release

Columbus, Ohio, and Dallas, April 20, 1999 -- American Electric Power (NYSE: AEP) has reached a settlement with the Indiana Utility Regulatory Commission staff negotiating team addressing matters pertinent to Indiana regarding the proposed merger between AEP and Central and South West Corporation (NYSE: CSR). AEP and CSW announced their intent to merge on Dec. 22, 1997, and are seeking necessary regulatory approvals. The settlement in Indiana, presented Monday at an IURC hearing in Indianapolis, was reached through negotiations between the companies and the IURC staff negotiating team that began in the fall of 1998. The IURC is expected to issue an order on the agreement next month. "We are working diligently to successfully address the questions or concerns about our merger, as we have done with this settlement," said E. Linn Draper Jr., AEP's chairman, president and chief executive officer. "This merger is good for the consumer, competition and our industry in general, as well as beneficial to our employees and shareholders. "Our strategy is to work toward settlements with our states, customers and other stakeholders who have expressed concerns with the merger," Draper said. "Early discussions with interested parties who have intervened in merger regulatory cases moved slowly as they learned about our plans and the benefits of the merger. More recently, the pace of those discussions has quickened, particularly during the past three months, and we expect to make additional announcements soon." Under terms of the settlement, AEP has agreed to share merger savings with Indiana customers as well as AEP shareowners; establish performance standards that will maintain or improve customer service and system reliability; join a regional transmission organization by Dec. 31, 2000; and to establish affiliate rules to protect consumers and promote fair competition. If approved, the IURC will not oppose the merger during upcoming hearings or reviews by the Federal Energy Regulatory Commission and the Securities and Exchange Commission. Indiana's jurisdictional share of the guaranteed merger savings -- approximately $121.2 million over the next eight years -- will be split between Indiana customers and AEP shareowners, with customers receiving approximately 55 percent of the savings. Once the merger is consummated, Indiana customers will receive their share of the savings either through credits of approximately 1 percent to 1.5 percent every year. The credits will continue for at least eight years and will not be affected by any changes to the current regulatory structure in Indiana. The settlement agreement extends by one year -- to Jan. 1, 2005 -- the base rate filing limitation currently in effect for AEP in Indiana. It also provides for additional annual deposits of $5.5 million in the Indiana Nuclear Decommissioning Trust Funds in the years 2001 through 2003. Central and South West Corp. is a global, diversified public utility holding company based in Dallas. CSW owns four electric operating subsidiaries serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional electricity company in the United Kingdom; other international energy operations and non-utility subsidiaries involved in energy-related investments, telecommunications, energy efficiency and financial transactions. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio.

For More Information, Contact: At AEP: Pat Hemlepp 614/223-1620 At CSW: Larry Jones 214/777-1276

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