Exhibit 99.1
CSW Submits Plan in Texas
for Transition to Competition
Dallas, Texas (Jan. 10, 2000) -- Central and South West Corporation (CSW) (NYSE:
CSR) today filed with the Public Utility Commission of Texas (PUCT) its business
separation plan required by Texas Senate Bill 7 on Electric Restructuring (SB
7). The business separation plan describes the approach proposed by CSW to
separate, or "unbundle," the activities of each of its Texas electric operating
companies into three entities. While the plan is directed to meet the
requirements of the Texas restructuring legislation, the separation plan should
also meet restructuring requirements anticipated in Arkansas, Louisiana and
Oklahoma.
CSW is the parent company of Central Power and Light Company (CPL), West Texas
Utilities Company (WTU), Southwestern Electric Power Company (SWEPCO) and Public
Service Company of Oklahoma (PSO). CPL and WTU operate in Texas. SWEPCO operates
in portions of Texas, Louisiana and Arkansas. PSO operates in Oklahoma.
CSW's separation plan describes the proposed approach that will be taken to
separate the traditional activities of its integrated electric companies to
provide for competition in Texas. By Jan. 1, 2002, utilities must separate their
operations into three basic units:
- - A retail electric provider (REP), which will sell electric service to retail
customers;
- - A power generation company, which will produce the electricity; and
- - An energy delivery company (transmission and distribution, or T&D), which
will deliver the electricity to the customer.
Based on the experience by other utilities in other states, the total cost to
restructure the entire CSW system to implement retail competition in its states
could range from $100 million to $200 million.
"The plan will ensure a smooth transition for our customers while providing a
cost-effective way to separate the energy delivery, generation and retail
business functions to comply with SB 7," said Mark Roberson, CSW vice president
of regulatory affairs. "The proposed separation is intended to minimize
restructuring costs for the benefit of our customers.
"The plan envisions a two-stage structural separation," Roberson continued. "The
first stage will be the structural separation of the management and control of
the transmission and distribution areas from the generation areas of the
corporation and the creation of a separate retail electric provider. This would
occur on or before the Jan. 1, 2002, start date for retail competition in Texas.
"The second stage would occur after a transition period of up to six years
following the Jan. 1, 2002, start date," Roberson said. "By Jan. 1, 2008, CSW
will have resolved in a cost-effective way existing contracts that restrict
transfers of asset ownership and would have transferred legal ownership of
generating and T&D assets to the new entities. By that time, operating staffs
also would have been transferred into the separate generating and T&D
companies."
Taking this two-stage approach is expected to potentially save approximately $35
million in refinancing costs that likely would occur if there were a requirement
to transfer asset ownership by Jan. 1, 2002, according to Wendy Hargus, CSW
treasurer. Consequently, CSW is asking the PUCT to provide a decision on an
accelerated basis as to whether it will allow its proposed two-stage approach.
"Under the proposed two-stage structural separation plan, separate books and
records would be kept for each business unit," Hargus said. "Office, computer
systems, accounting systems and similar equipment would be segregated, and the
employee Code of Conduct would restrict information exchanges among employees of
the businesses. Ownership of the power plants and T&D facilities will continue
on the books of our individual electric operating companies during the
transition period."
"Our goal in CSW's reorganization planning is to maintain the efficiencies and
economies that have been achieved by the CSW system through consolidation of
similar activities over the last several years," Roberson said. "At the same
time, we must ensure that we meet the requirements mandated by Texas SB 7 while
allowing the flexibility to meet the requirements of Arkansas Act 1556, as well
as any restructuring requirements mandated in Louisiana or Oklahoma."
Central and South West Corporation is a Dallas-based public utility holding
company that owns four U.S. electric utility subsidiaries with 1.7 million
customers, a regional electricity company serving 2 million customers in the
United Kingdom, and non-utility subsidiaries involved in energy-related
investments as well as subsidiaries that offer telecommunications, energy
efficiency and financial transactions. On December 22, 1997, CSW announced a
definitive merger agreement for a tax-free, stock-for-stock transaction with
Columbus, Ohio-based American Electric Power Company, Inc.
Media contact: Larry Jones, communications project coordinator for Central and
South West Corporation, 214 777-1276.
Financial community contact: Becky Hall, director of investor relations for
Central and South West Corporation, 214 777-1277.
Internet inquiries: corpcom@csw.com