EXHIBIT 99.1
AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Contact for American Electric Power:
Pam Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
AMERICAN ELECTRIC POWER AND CENTRAL AND SOUTH WEST CORPORATION
JOINTLY FILE FOR MERGER APPROVAL FROM OKLAHOMA CORPORATION COMMISSION
Columbus, Ohio, and Dallas, Texas (August 17, 1998) -- American Electric Power
Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE: CSR) on
Friday jointly filed a request with the Oklahoma Corporation Commission for
approval of their proposed merger.
Testimony submitted in the filing outlines the expected combined company
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 Oklahoma that provides for:
- Approximately $11.8 million in fuel cost savings to Oklahoma
customers of CSW's Public Service Company of Oklahoma (PSO)
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 PSO retail customers in Oklahoma and to share
approximately one-half of the savings from synergies created by the
merger during the first 10 years following the merger. Under this
plan, approximately $78.6 million of these non-fuel merger-related
savings will be used to reduce future costs to PSO's retail
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 Oklahoma filing provides that there will be minimal job reductions among
employees having direct contact with customers. CSW's U.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.
Friday's joint filing marks the sixth 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. On May 15, the companies submitted an application for
approval of the proposed merger to the Louisiana Public Service Commission, and
on June 12, the companies filed a similar request with the Arkansas Public
Service Commission.
In addition, CSW subsidiary Central Power and Light Company (CPL) on June 19
filed a license transfer application with the Nuclear Regulatory Commission
(NRC) in connection with the proposed merger. The application requests the NRC's
consent to the indirect transfer of control of CPL's interests in the NRC
licenses issued with respect to the South Texas Project (STP) nuclear power
plant to AEP.
AEP and CSW plan to make other required federal filings with the Securities and
Exchange Commission, the Federal Communications Commission, the Department of
Justice and the Federal Trade Commission later this year. However, there can be
no assurance that AEP and CSW will obtain all necessary regulatory approvals, or
when such approvals will be obtained.
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 nonutility 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
AEP.
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.
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.
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