CSW
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  Central and South West Corporation
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     1616 Woodall Rodgers Freeway
P.O. Box 660164 * Dallas, Texas 75266-0164


E.R. Brooks
Chairman, President and Chief Executive Officer

                                  April 9, 1997

Dear Shareholder:

Many of you have called or written with questions and concerns about the recent
movement in Central and South West Corporation's stock price. We appreciate your
taking the time to communicate with us about this disappointing development. We
share your concern, and CSW management is taking steps to respond to the
situation. These steps are designed to protect the interests of our
shareholders.

Although our normal corporate policy is to not comment on changes in our stock
price, we believe a major factor contributing to the decline is the uncertainty
about the ultimate outcome of the Central Power and Light Company (CPL) rate
case. Recent developments relating to CPL's rate case and orders by the Public
Utility Commission of Texas (PUCT) have been reported in our news releases and
filings with the Securities and Exchange Commission.

On March 5, a PUCT Commissioner, when discussing the then-pending CPL rate case,
suggested that the PUCT was not bound by the prior decisions of the Commission.
Since then, CSW's stock price has dropped significantly, as have the stock
prices of other investor-owned utilities in Texas. In fact, the combined market
value of the four largest investor-owned utilities in Texas has dropped by more
than $3.7 billion since March 5.

On March 31, the PUCT issued a final order in the CPL case which would lower
CPL's base rates by approximately $27 million, retroactive to May 1996. The
final order requires CPL to refund the difference between the higher rates
customers have paid since May and the rate decrease. The Commissioners also put
into place a mechanism to lower CPL's rates by an additional $16 million in 1998
and another $16 million on top of the prior reductions in 1999. These
reductions, if ultimately upheld, would have a material adverse effect on the
earnings of CPL and CSW.

We will file a motion for rehearing on April 21, and we also are evaluating
other legal remedies. The Commissioners indicated that their action is designed
to prepare CPL for retail competition, a scenario where customers could choose
their electric supplier from among a number of competitors. However, retail
competition currently is not permitted under Texas law.

We support competition that is fair for all of our customers and our
shareholders. At the same time, we are committed to protecting the interests of
both groups as the transition to increased competition occurs within our
industry. We are therefore participating in state and federal policy discussions
to voice our concern that any new legislation meets this requirement.

As you know, in January 1997, CSW's board of directors elected to maintain the
quarterly dividend payable on February 28, 1997, of $0.435 per share, or an
indicated rate of $1.74 per year. CSW continuously monitors factors that could
affect its dividend policy, including the regulatory and legislative issues
currently facing CSW and the electric utility industry. Decisions as to future
dividends will continue to be made quarterly by CSW's board of directors, based
upon CSW's earnings, financial condition and other factors.

Traditionally, the CSW board of directors has declared dividends to be payable
on the last business day of February, May, August and November.

As one of more than 74,000 individual CSW shareholders, your opinion is
important to us and can make a difference to lawmakers. I URGE YOU TO BECOME
MORE INVOLVED IN STATE AND FEDERAL ISSUES THAT AFFECT YOU A SHAREHOLDER,
ESPECIALLY IF YOU ARE A TEXAS SHAREHOLDER. IF ARE WILLING TO HELP INFLUENCE
LEGISLATION, PLEASE COMPLETE THE ENCLOSED POSTAGE-PAID CARD AND RETURN IT TO US
AS SOON AS POSSIBLE. WE WILL ALERT YOU WHEN CONTACTING YOUR FEDERAL OR STATE
LAWMAKERS ABOUT A PARTICULAR ISSUE MIGHT BE HELPFUL TO YOUR INTERESTS AS A CSW
SHAREHOLDER.

Thank you for your continued support of Central and South West.

Yours very truly,


E.R. Brooks

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[ ] Please alert me when contacting my federal or state lawmakers about a
particular issue might be helpful to my interests as a CSW shareholder.

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