AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Contact for American Electric Power:
Deb Strohmaier 614/223-1656
Contact for Central and South West:
Larry Jones 214/777-1276
FOR IMMEDIATE RELEASE
AMERICAN ELECTRIC POWER AND CENTRAL AND SOUTH WEST
REQUEST MERGER APPROVAL FROM FERC AND TEXAS PUC
Columbus, Ohio and Dallas, Texas, (April 30, 1998) -- American Electric Power
Company, Inc. (NYSE: AEP) and Central and South West Corporation (CSW) (NYSE:
CSR) today jointly filed requests with the Federal Energy Regulatory Commission
(FERC) for approval of their proposed merger and with the Public Utility
Commission of Texas (PUCT) for a finding that the merger is in the public
interest.
Testimony submitted in the filings outlines the expected benefits of the merger
to AEP and CSW customers and shareholders. These benefits include:
* $2 billion in non-fuel operations and maintenance expense savings over 10
years;
* $98 million in net fuel savings over 10 years;
* Improved capital structure and increased financial strength;
* Optimization of business practices and continued high-quality service;
* Increased diversity in customer base, generating resources and service
territory;
* Increased support for restructuring of retail electric markets; and
* Increased support for an independent system operator (ISO).
The filings address required regulatory standards under applicable law and seek
favorable determinations by the FERC and the PUCT.
Specifically, AEP and CSW have proposed a regulatory plan in Texas that provides
for:
* Approximately $29 million in fuel cost savings to Texas customers during
the 10-year period following completion of the merger;
* A commitment to not raise base rates prior to Jan. 1, 2002 for Texas
customers and a plan to share approximately one-half of the savings created
by the merger during the first 10 years following the merger. In Texas,
approximately $183 million of the savings from synergies will be used to
reduce future costs to 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 Texas 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 filings mark the first of several regulatory filings that will be made
to obtain approval of the proposed merger. CSW and AEP will be seeking approval
from the Oklahoma, Arkansas and Louisiana utility regulatory commissions in the
second quarter. 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
will be made later this year. AEP and CSW anticipate obtaining all necessary
regulatory approvals and completion of the merger by March 31, 1999. There can
be no assurance that AEP and CSW will obtain all necessary regulatory approvals,
or when such approvals will be obtained.
AEP shareholders on May 27 will vote on whether to issue the additional shares
of stock required to complete the merger. CSW shareholders on May 28 will vote
on whether to approve the merger. Proxy statements describing the specific terms
of the proposed agreement were mailed to shareholders of both companies last
week. 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.
News releases and other information about AEP can be found on the World Wide Web
at HTTP://WWW.AEP.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: 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; economies 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.
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