AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Exhibit 99.1
Contact for American Electric Power:
Pat Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
FOR IMMEDIATE RELEASE:
AEP and CSW Settlement with Two Intervenors Could Result
In Rate Reductions Totaling $180 million for Texas Customers
During Six-Year Period Following Approval of Proposed Merger
Columbus, Ohio, and Dallas, Texas (November 19, 1998) - American Electric Power
Company, Inc. ("AEP")[NYSE: AEP] and Central and South West Corporation
("CSW")[NYSE: CSR] said that their stipulated settlement with two intervenor
groups would result in combined rate reductions totaling approximately $180
million over a six-year period for Texas customers of the three CSW Texas
electric operating companies if the settlement is approved by the Public Utility
Commission of Texas (PUCT) and the merger is completed as planned.
The signed stipulated settlement agreement between AEP, CSW, the Office of
Public Utility Counsel (OPUC) and the Steering Committee of the cities of
McAllen, Corpus Christi, Victoria, Abilene, Big Lake, Vernon and Paducah was
filed with the PUCT on Nov. 13. The settlement resolves all issues of the
signing parties, subject to final approval by the individual city councils. A
pre-hearing conference to set a schedule to consider the settlement and approval
of the merger application is scheduled for Dec. 2.
The proposed settlement provides for combined rate reductions totaling
approximately $180 million over a six-year period for CSW's electric operating
company customers through two separate rate riders. Both rate reduction riders
become effective upon approval of the settlement and completion of the merger.
The first rate reduction rider provides for $84.4 million in estimated net
merger savings to be credited to Texas customer bills through a net merger
savings rate reduction rider over the six years following completion of the
merger with the aggregate rate reductions for customers of the CSW Texas
companies as follows:
Central Power and Light Company (CPL) $52.7 million
Southwestern Electric Power Company (SWEPCO) $16.1 million
West Texas Utilities Company (WTU) $15.6 million
The second rate reduction rider will be implemented to resolve issues associated
with CPL, WTU and SWEPCO rate and fuel reconciliation proceedings in Texas. The
$95.6 million rate reductions over the six years following completion of the
merger include:
Central Power and Light Company $61.3 million
Southwestern Electric Power Company $19.9 million
West Texas Utilities Company $14.4 million
CSW has agreed to withdraw its appeal of the CPL glide-path rate reduction of
$13.5 million implemented in May 1998, as well as the second glide-path rate
reduction of $13.5 million scheduled to take effect May 1999, if the settlement
is approved and the AEP/CSW merger is completed. CSW currently is awaiting a
decision on its appeal of the glide-path reductions and other issues.
In addition, as a part of the settlement proposal, CPL, SWEPCO and WTU agree not
to seek an increase in base rates prior to Jan. 1, 2003, and OPUC and members of
the Cities Steering Committee will not initiate rate reviews prior to Jan. 1,
2001.
The settlement proposal also provides for a sharing of off-system sales margins
on the wholesale electricity market after the effective date of the merger. The
proposed settlement also includes affiliate transaction standards and provides
for the maintenance of service quality for Texas customers.
Last week, AEP, CSW and SWEPCO announced a settlement with the general staff of
the Arkansas Public Service Commission (APSC) on the regulatory plan phase
related to the proposed merger. The settlement calls for SWEPCO to reduce rates
through a net merger savings rider for its Arkansas customers by amounts
totaling approximately $6 million over the five-year period following completion
of the merger. The parties filed the settlement with the APSC on Nov. 3. The
APSC will consider approval of the settlement on Dec. 1.
Applications seeking approval of the merger also have been filed with the
Oklahoma Corporation Commission, the Louisiana Public Service Commission, the
Federal Energy Regulatory Commission and the Securities and Exchange Commission.
Additionally, the Nuclear Regulatory Commission (NRC) on Nov. 5 approved the
license transfer application filed by CPL regarding the South Texas Project
nuclear power plant.
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 Dec. 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.
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News releases and other information about AEP can be found on the World Wide Web
at http://www.aep.com.
News releases and other information about CSW can be found on the World Wide Web
at http://www.csw.com.