Aug. 9, 1999•News Release
Columbus, Ohio and Dallas, Aug. 9, 1999 – Hearings to consider the pending merger application between American Electric Power Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE: CSR) begin today at the Public Utility Commission of Texas (PUCT) in Austin, Texas.
CSW is the parent company to Central Power and Light Company (CPL), West Texas Utilities Company (WTU) and Southwestern Electric Power Company (SWEPCO). CSW’s electric operating companies serve a combined total of 988,300 customers in Texas.
The hearings also will address a proposed settlement that will result in combined rate reductions totaling $221 million over a six-year period for Texas customers of the three CSW Texas electric operating companies after the settlement is approved and the merger is completed. The settlement, which was announced in May, also calls for divestiture of 1,604 megawatts of existing and proposed generating capacity within Texas.
“We look forward to the start of these hearings because the hearings will give us the opportunity to provide additional details on the value that this merger will provide to CSW’s customers in Texas and AEP and CSW shareholders,” said E. Linn Draper Jr., AEP’s chairman, president and chief executive officer. “We also continue to work with other parties in Texas to attempt to reach additional settlements as this hearings process continues.”
The settlement agreement is with AEP/CSW and the General Counsel of the PUCT, the State of Texas, the Texas Industrial Energy Consumers, the Low Income Intervenors, the Office of Public Utility Counsel (OPUC) and the Steering Committee of the Cities of McAllen, Corpus Christi, Victoria, Abilene, Big Lake, Vernon and Paducah. The cumulative amount of these rate-reduction riders will result in total reductions over the six-year period in the following amounts: | Cumulative Reduction | Annual Reduction |
| CPL | $142.8 million | $23.8 million |
| SWEPCO | $42.1 million | $7.0 million |
| WTU | $36.1 million | $6.0 million |
AEP and CSW announced their intent to merge on Dec. 22, 1997. The merger has received conditional approval by state regulatory commissions in Arkansas, Louisiana and Oklahoma, three of the four states within CSW's service territory. The Oklahoma order confirmed an Oklahoma Corporation Commission (OCC) staff settlement recommendation to the OCC to not oppose approval of the merger by the Federal Energy Regulatory Commission (FERC).
AEP and CSW have reached a settlement with the FERC trial staff, in which the staff supports a finding that the merger will have no adverse effect on competition. The FERC hearings concluded on July 19. On July 28, the FERC issued an order imposing a procedural schedule on the administrative law judge and other parties so the commission can act on the pending merger in February or March of next year.
AEP and CSW have also announced settlement agreements with the International Brotherhood of Electrical Workers (IBEW) and the Utility Workers Union of America (UWUA) resulting in the IBEW UWUA local unions withdrawing their opposition to completion of the merger; with the Indiana Utility Regulatory Commission (IURC) resulting in Indiana customers receiving merger benefits and including a commitment by the IURC to not oppose the merger during consideration of the merger agreement by the FERC and the SEC; with key parties in Kentucky that has been approved by the Kentucky Public Service Commission; with the Missouri Public Service Commission that addresses the commission's concerns about the effect of the merger on retail competition in the state; and with a variety of wholesale customers that had intervened in federal proceedings. The Nuclear Regulatory Commission has approved a license transfer application related to the merger.
The merger requires approval by the FERC and the SEC and review by the Department of Justice.
Once the merger is completed, the new company will be called American Electric Power.
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.
News releases and other information about CSW can be found on the World Wide Web at http://www.csw.com.
For More Information, Contact:
For American Electric Power:
Pat Hemlepp
614/223-1620
For Central and South West:
Larry Jones
214/777-1276