UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of earliest event reported: June 18, 1999
Date of report: July 2, 1999
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
1-1443 Central and South West Corporation 51-0007707
(A Delaware Corporation)
1616 Woodall Rodgers Freeway
Dallas, Texas 75202-1234
(214) 777-1000
0-346 Central Power and Light Company 74-0550600
(A Texas Corporation)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(512) 881-5300
0-343 Public Service Company of Oklahoma 73-0410895
(An Oklahoma Corporation)
212 East 6th Street
Tulsa, Oklahoma 74119-1212
(918) 599-2000
1-3146 Southwestern Electric Power Company 72-0323455
(A Delaware Corporation)
428 Travis Street
Shreveport, Louisiana 71156-0001
(318) 222-2141
0-340 West Texas Utilities Company 75-0646790
(A Texas Corporation)
301 Cypress Street
Abilene, Texas 79601-5820
(915) 674-7000
GLOSSARY OF TERMS
The following abbreviations or acronyms used in this text are defined below:
Abbreviation or Acronym Definition
AEP........................American Electric Power Company, Inc., Columbus, Ohio
AEP Merger.................Proposed merger between AEP and CSW where CSW would
become a wholly-owned subsidiary of AEP
CSW........................Central and South West Corporation, Dallas, Texas
CSW System.................CSW and its subsidiaries
SWEPCO.....................Southwestern Electric Power Company, Shreveport,
Louisiana
SWEPCO's Cajun Asset
Proposal..................SWEPCO's Joint Reorganization Plan for Cajun Electric
Power Cooperative, Inc., as amended
Texas Electric Restructuring
Legislation..............Senate Bill 7, June 18, 1999, effective September 1,
1999
FORWARD-LOOKING INFORMATION
This report made by CSW and certain of its subsidiaries contains forward-looking
statements within the meaning of Section 21E of the Exchange Act. Although CSW
and each of its subsidiaries believe that their expectations are based on
reasonable assumptions, any such statements may be influenced by factors that
could cause actual outcomes and results to be materially different from those
projected. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include, but are not
limited to:
- - the impact of general economic changes in the United States and in
countries in which CSW either currently has made or in the future may
make investments,
- - the impact of the proposed AEP Merger including any regulatory
conditions imposed on the merger, the inability to consummate the AEP
Merger, or other merger and acquisition activity including SWEPCO's
Cajun Asset Proposal,
- - the impact of deregulation on the United States electric utility
business, especially in the States comprising the CSW System's service
territory
- - increased competition and electric utility industry restructuring in
the United States,
- - federal and state regulatory developments and changes in law which may
have a substantial adverse impact on the value of CSW System generating
and other assets,
- - timing and adequacy of rate relief,
- - adverse changes in electric load and customer growth,
- - climatic changes or unexpected changes in weather patterns,
- - changing fuel prices, generating plant and distribution facility
performance.
ITEM 5. OTHER EVENTS
Texas Electric Restructuring Legislation
On June 18, 1999, legislation was signed into law in Texas that will
restructure the electric utility industry in that state. The new law gives Texas
customers of investor-owned utilities the opportunity to choose their electric
provider beginning on January 1, 2002. The legislation also provides a rate
freeze until then followed by a 6 percent rate reduction for residential and
small commercial customers, additional rate reductions for low income customers
and a number of customer protections. Rural electric cooperatives and municipal
electric systems can choose whether to participate in retail competition.
Some of the key provisions of the legislation include:
- - Beginning January 1, 2002, retail customers of investor-owned electric
companies will be able to choose their electric provider. The affiliated
retail electric provider of the utility that serves the customer on
December 31, 2001 will continue to serve the customer unless the customer
chooses another retail electric provider. Delivery of the electricity
will continue to be the responsibility of the local electric utility
company at regulated prices. Each utility must unbundle its business
activities into a retail electric provider, a power generation company and
a transmission and distribution utility.
- - Retail electric cooperatives and municipal electric systems can choose
whether to participate in retail competition.
- - Investor-owned utilities must freeze their rates effective September 1,
1999, through the start of competition on January 1, 2002. Investor-owned
utilities will then lower rates for residential and small commercial
customers by 6 percent. This reduced rate is known as the "Price to Beat",
which will be available to those customers for five years.
- - The legislation establishes a System Benefit Fund for low-income
customer assistance, customer education and to offset reductions in
school property tax revenues. The fund will be funded through a charge
on retail electric providers that can be set by the Public Utility
Commission of Texas at up to 65 cents per megawatt-hour.
- - Electric utilities are allowed to recover the reasonable excess costs over
market of assets that otherwise may not be recoverable in the future
competitive market. A majority of those regulatory assets and stranded
costs can be recovered through securitization, which is a financing
process to recover regulatory assets and stranded costs through the
use of debt that lowers the carrying cost of assets compared to
conventional utility financing methods.
- - Each year during the 1999 through 2001 rate freeze period, utilities with
stranded costs are required to apply any earnings in excess of the most
recently approved cost of capital (if issued on or after January 1, 1992)
to reduce stranded costs. Utilities without stranded costs must either
flow such amounts back to customers or make capital expenditures to
improve transmission or distribution facilities or to improve air quality.
- - Investor-owned utilities will be required to auction entitlements
to at least 15 percent of their generating capacity for five years or
until 40 percent of the residential and small commercial consumption of
electricity in the utility's service area is provided by a
nonaffiliated retail electric provider.
- - Grandfathered power plants, those built or started prior to
implementation of the Texas Clean Air Act of 1972, must reduce
emissions of Nitrogen Oxide (NOx) by 50 percent and Sulfur Dioxide
(SO2) by 25 percent by May 2003. The law also requires an additional
2,000 megawatts of renewable power generation in Texas by 2009 from retail
electric providers, municipally owned utilities and electric cooperatives.
- - A Legislative Oversight Committee will be established to monitor the
implementation and effectiveness of electric utility restructuring and
make recommendations for any necessary further legislative action.
CSW is currently analyzing the impact of the Texas Electric Restructuring
Legislation on Central Power and Light Company, Southwestern Electric Power
Company and West Texas Utilities Company, its three regulated electric companies
that operate in Texas.
SWEPCO's Cajun Asset Proposal
On June 23, 1999, SWEPCO issued a news release related to SWEPCO's Joint
Reorganization Plan for Cajun Electric Power Cooperative, Inc., which is
attached as an exhibit and incorporated herein by reference.
As reported in the SWEPCO release, on June 22, 1999 SWEPCO amended its
plan to raise its base bid from $940.5 million to $990.5 million. On June 24,
1999 the other bidder, Louisiana Generating LLC, amended its plan to raise its
base bid from $960 million to $995 million. The bankruptcy court released the
schedule for final pleadings to be made in July 1999 in the Cajun bankruptcy but
did not indicate when a decision will be issued.
Proposed AEP Merger
On June 25, 1999, AEP issued a news release, which is attached as an
exhibit and incorporated herein by reference, announcing a plan to restart its
Cook Nuclear Plant.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 SWEPCO News Release dated June
23, 1999 related to SWEPCO's Joint Reorganization Plan for
Cajun Electric Power Cooperative, Inc.
Exhibit 99.2 AEP News Release dated June 25, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, each registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CENTRAL AND SOUTH WEST CORPORATION
Date: July 2, 1999
By: /s/ Lawrence B. Connors
Lawrence B. Connors
Controller and Chief Accounting Officer
(Principal Accounting Officer)
CENTRAL POWER AND LIGHT COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
WEST TEXAS UTILITIES COMPANY
Date: July 2, 1999
By: /s/ R. Russell Davis
R. Russell Davis
Controller and Chief Accounting Officer
(Principal Accounting Officer)