Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE:
CSR) today jointly filed a request with the Louisiana Public Service
Commission for approval of their proposed merger and a finding that the
merger is in the public interest.
Testimony submitted in the filing outlines the expected company-wide
benefits of the merger to AEP and CSW customers and shareholders, which
include:
- $2 billion in net non-fuel cost savings over 10 years;
- $98 million in net fuel savings over 10 years;
- Improved capital structure and increased financial strength;
- Increased diversity in customer base, generating resources and service
territory; - Optimization of business practices and continued high-quality service;
- Support for restructuring of retail electric markets; and
- Support for an independent system operator.
AEP and CSW have proposed a regulatory plan in Louisiana that provides for:
- Approximately $2.6 million in fuel cost savings to Louisiana customers of
CSW´s Southwestern Electric Power Company (SWEPCO) subsidiary during the 10
years following completion of the merger; - A commitment not to raise base rates above current levels prior to Jan. 1,
2002, for SWEPCO customers in Louisiana and a plan to share approximately
one-half of the savings created by the merger during the first 10 years
following the merger. Under this plan, approximately $26 million of these
non-fuel merger-related savings will be used to reduce future costs to
SWEPCO´s Louisiana customers; and - A commitment to continue the current high level of customer service and to
identify opportunities and implement measures to further improve service
quality.
The Louisiana filing provides that there will be minimal job reductions
among
employees having direct contact with customers. CSW?s work force currently
totals about 7,000 employees, and AEP?s work force totals about 18,000
employees. AEP and CSW intend to use a combination of reduced hiring and
attrition to the maximum extent possible to minimize the need for employee
separations.
Today´s joint filing marks the third of several regulatory filings that
will be made to obtain approval of the proposed merger. As previously
reported, on April 30, CSW and AEP submitted filings to the Public Utility
Commission of Texas and the Federal Energy Regulatory Commission seeking
favorable rulings relating to the proposed merger. CSW and AEP will be
seeking approval shortly from the Oklahoma and Arkansas utility regulatory
commissions. The parties plan to make other required federal filings with
the Nuclear Regulatory Commission, the Securities and Exchange Commission,
the Federal Communications Commission and the Department of Justice and/or
the Federal Trade Commission later this year. AEP and CSW anticipate
obtaining all necessary regulatory approvals and completing the merger by
March 31, 1999. However, there can be no assurance that AEP and CSW will
obtain all necessary regulatory approvals, or when such approvals will be
obtained.
On May 27, AEP shareholders will vote on whether to increase the number of
authorized shares of AEP common stock and whether to approve issuance of
the required number of
shares of stock to complete the merger. CSW shareholders on May 28 will
vote on a proposal to approve the merger. A joint proxy statement
describing the specific terms of the proposed merger has been mailed to
shareholders of both companies. Completion of the merger is subject to
satisfaction of several other conditions, and there can be no assurance
that those conditions will be satisfied.
Central and South West Corporation 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.
American Electric Power Company, Inc., 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.
This news release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions and involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are: whether or not the proposed merger of AEP and CSW
ultimately is consummated, the timing of consummation and the effects of
any conditions imposed by regulators on the merged companies; electric load
and customer growth; abnormal weather conditions; available sources and
cost of fuel and generating capacity; the speed and degree to which
competition enters the power generation, wholesale and retail sectors of
the electric utility industry; state and federal legislative and regulatory
initiatives that, among other things, increase competition, threaten cost
and investment recovery and affect rate structures; the ability of the
combined company to successfully reduce its cost structure; the degree to
which the combined company develops nonregulated business ventures; the
economic climate and growth in the service territories of the two
companies; the amount of savings generated by the merger; the inflationary
trends and interest rates and the other risks detailed from time to time in
the two companies´ SEC reports.
Central and South West:
Pat Hemlepp
614/223-1620
Larry Jones
214/777-1276
Pat Hemlepp
614/223-1620
Larry Jones
214/777-1276