SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 21, 2004
(Date of earliest event reported)
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
0-346 AEP TEXAS CENTRAL COMPANY 74-0550600
(A Texas Corporation)
1 Riverside Plaza
Columbus, Ohio 43215
Telephone (614) 716-1000
Item 7. Financial Statements and Exhibits.
The Exhibit Index on page 3 is incorporated herein by reference.
Item 9. Regulation FD Disclosure.
The information, including the exhibit attached hereto, in this Current
Report is being furnished and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section. The information in this Current
Report shall not be incorporated by reference into any registration statement or
other document pursuant to the Securities Act of 1933, except as otherwise
stated in such filing.
Attached and incorporated herein by reference as Exhibit 99 is a copy of
the press release of AEP Texas Central Company regarding its filing of
exceptions to findings of an Administrative Law Judge in a rate case with the
Public Utility Commission of Texas.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AEP TEXAS CENTRAL COMPANY
By:/s/ Thomas G. Berkemeyer__
Name: Thomas G. Berkemeyer
Title: Assistant Secretary
July 21, 2004
EXHIBIT INDEX
Exhibit No. Description
99 Press Release issued by AEP Texas Central Company, dated
July 21, 2004.
AEP TEXAS
A unit of American Electric Power NEWS from AEP Texas
MEDIA CONTACT:
Larry Jones
Communications Manager
512/391-2970
FOR IMMEDIATE RELEASE
AEP TEXAS FILES STRONG EXCEPTIONS TO ADVERSE RECOMMENDATIONS
BY ALJS IN TCC TRANSMISSION AND DISTRIBUTION RATE CASE
AUSTIN, Texas, July 21, 2004 -- AEP Texas, a unit of American Electric Power
(NYSE: AEP), today filed strong exceptions to the preliminary recommendations
issued by administrative law judges in its Texas Central Company (TCC) rate
case. The exceptions urge that the Public Utility Commission of Texas (PUCT)
reject the judges' recommendations and approve a rate increase for TCC.
"The proposal for decision, issued by administrative law judges for the
State Office of Administrative Hearings (SOAH), sends two clear messages if
ultimately approved by the PUCT as recommended. It says to Wall Street, `don't
invest in Texas.' It says to customers, `ensuring the delivery of reliable
electric service is not priority-one,'" said Charles Patton, AEP Texas president
and chief operating officer.
"If the administrative law judges' recommended rate decrease of at least
$33 million had been in effect during calendar year 2003, TCC would have
operated at a net loss of approximately $5 million from providing transmission
and distribution service," Patton continued. "Losing money is not a recipe for
reliable service."
TCC is requesting an adjusted $41 million increase, or about 9 percent, in
the rates charged to Retail Electric Providers for the delivery of electricity
over its wires. The original $66 million increase request was reduced as the
result of a settlement among parties to the case.
There should be very little impact on residential and small commercial
customers of the affiliated Retail Electric Provider (CPL Retail Energy, which
is now owned by Centrica). Regardless of whether a rate increase or decrease is
approved, a previously existing rate credit will be reduced, resulting in an
increase of about 40 cents a month for a residential customer using 1,000
kilowatt-hours (kWh). Because prices for those customer groups are frozen under
the "Price to Beat" provisions of the Texas restructuring law, this would be the
only impact to residential and small commercial customers of CPL Retail Energy.
Other competitive Retail Electric Providers will determine what action, if any,
to take as a result of the final order by the PUCT.
TCC's costs to transport electricity over its transmission and
distribution systems have become substantially greater than the estimated costs
established by the PUCT in the 2001 restructuring proceedings. The current case
was filed at the PUCT as a result of TCC having been required to justify its
rate structure by several cities in south Texas. The PUCT will decide whether to
approve, amend or deny the recommendations made by the SOAH judges.
"Significant evidence in the case was ignored in the proposal for
decision," Patton said. "Additionally, TCC also is concerned because it appears
that the recommendations do not honor past settlements."
The judges concluded that TCC initiated the rate case in November 2003,
resulting in a $30 million disallowance of TCC's costs due to prior agreements
associated with the merger of AEP and Central and South West Corporation. "The
judges came to this conclusion although the South Texas cities' had signed a
stipulation which stated the contrary," Patton emphasized. "In addition, June
and July 2003 billings for expenses incurred by the cities clearly document the
fact that the cities' lawyers believed they were working on a rate case when the
resolutions were filed. The cities are seeking to recover these costs as rate
case-expenses, which are recoverable under Texas law.
"The cities, which retain original jurisdiction over TCC's retail
distribution rates, passed resolutions in June and July 2003 requiring that TCC
make filings to support its current rate levels," Patton continued. "It should
be crystal clear, even to an uninformed observer, that these actions initiated
this entire process," Patton said. "Had they not taken these actions, we
wouldn't be talking about this today. Furthermore, we clearly showed that
merger-related savings had been achieved as promised. We hope the full
commission will review all of the evidence--evidence, which in many instances,
was not addressed in the proposal for decision."
TCC is a transmission and distribution utility providing energy delivery
service to a 44,000-square-mile area of south Texas. TCC's service territory
generally includes the southern portion of Texas from just south of San Antonio
to the Mexican border and from Bay City west to Eagle Pass. Major cities in
TCC's service area include Corpus Christi, McAllen, Harlingen, Laredo and
Victoria. TCC's service territory is entirely within the Electric Reliability
Council of Texas (ERCOT). All of the retail customers in TCC's service territory
have retail choice. TCC provides distribution service to approximately 700,000
end users receiving electric service from 28 retail electric providers.
American Electric Power owns more than 36,000 megawatts of generating
capacity in the United States and is the nation's largest electricity generator.
AEP is also one of the largest electric utilities in the United States, with
more than 5 million customers linked to AEP's 11-state electricity transmission
and distribution grid. The company is based in Columbus, Ohio.
These reports made by AEP and its registrant subsidiaries contain
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. Although AEP and its registrant subsidiaries believe that
their expectations are based on reasonable assumptions, any such statements may
be influenced by factors that could cause actual outcomes and results to be
materially different from those projected. Among the factors that could cause
actual results to differ materially from those in the forward-looking statements
are: electric load and customer growth; weather conditions; available sources
and costs of fuels; availability of generating capacity and the performance of
AEP's generating plants; the ability to recover regulatory assets and stranded
costs in connection with deregulation; new legislation and government regulation
including requirements for reduced emissions of sulfur, nitrogen, carbon and
other substances; resolution of pending and future rate cases, negotiations and
other regulatory decisions (including rate or other recovery for environmental
compliance); oversight and/or investigation of the energy sector or its
participants; resolution of litigation (including pending Clean Air Act
enforcement actions and disputes arising from the bankruptcy of Enron Corp.);
AEP's ability to reduce its operation and maintenance costs; the success of
disposing of investments that no longer match AEP's corporate profile; AEP's
ability to sell assets at attractive prices and on other attractive terms;
international and country-specific developments affecting foreign investments
including the disposition of any current foreign investments; the economic
climate and growth in AEP's service territory and changes in market demand and
demographic patterns; inflationary trends; AEP's ability to develop and execute
on a point of view regarding prices of electricity, natural gas, and other
energy-related commodities; changes in the creditworthiness and number of
participants in the energy trading market; changes in the financial markets,
particularly those affecting the availability of capital and AEP's ability to
refinance existing debt at attractive rates; actions of rating agencies,
including changes in the ratings of debt and preferred stock; volatility and
changes in markets for electricity, natural gas, and other energy-related
commodities; changes in utility regulation, including the establishment of a
regional transmission structure; accounting pronouncements periodically issued
by accounting standard-setting bodies; the performance of AEP's pension plan;
prices for power that AEP generates and sells at wholesale; and changes in
technology and other risks and unforeseen events, including wars, the effects of
terrorism (including increased security costs), embargoes and other catastrophic
events.
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