Exhibit 99.2
AEP AMERICAN
ELECTRIC
POWER
AEP: America's Energy Partner
Media contacts: Pat D. Hemlepp Larry Jones
American Electric Power Central and South West Corp.
614/223-1620 214/777-1276
Analysts contacts: John Bilacic Becky Hall
American Electric Power Central and South West Corp.
614/223-2847 214/777-1277
FOR IMMEDIATE RELEASE
AEP ANNOUNCES PLAN TO RESTART COOK NUCLEAR PLANT;
UNITS SCHEDULED TO RETURN TO SERVICE IN APRIL AND SEPTEMBER 2000
COLUMBUS, Ohio, June 25, 1999 - American Electric Power Company Inc. (NYSE: AEP)
today announced that its board of directors has approved a comprehensive plan to
restart the idle Cook Nuclear Plant. Unit 2 is scheduled to return to service in
April 2000 and Unit 1 is to return to service in September 2000.
The announcement follows a comprehensive systems readiness review of all
operating systems at the Cook plant. Plant officials shut down both units of the
facility, located in Bridgman, Mich., in September 1997 because of questions
raised during a design inspection by the Nuclear Regulatory Commission.
E. Linn Draper Jr., chairman, president and chief executive officer of
AEP, said, "After evaluating the difficult choices facing the future of the Cook
plant, AEP management and its board of directors determined that restarting the
plant is the best decision for our shareholders, customers and employees. The
restart plan is comprehensive, realistic and deliverable and we are confident
that it can be completed on schedule and on budget. Our confidence is based on
the caliber of the team managing the restart effort, its effective working
relationship with the regulatory authorities and the consistency of the timing
and cost estimates of our plan with other comparable successful restarts."
The company said that expenditures associated with the restart will total
approximately $574 million, of which $192 million has already been spent. These
costs will be accounted for primarily as expenses in 1999 and 2000. The company
expects the outage and restart effects to reduce AEP's earnings per share by
about 27 cents a share for the first half of 1999, another 37 cents per share
for the second half of 1999, and $1.15 per share in the year 2000. A portion of
1999 restart costs have been deferred, so the earnings impact for 1999 is less
than it would otherwise have been. The company indicated that the financial
impact of this restart plan will not affect the company's dividend.
Before making its decision, the board evaluated whether to restart the
plant or to shut it down completely. In examining the restart option, the board
considered cost estimates derived from a thorough readiness review by an
experienced management group, the newly strengthened controls set in place to
manage the project, and the likelihood that the anticipated expenditures would
be recoverable in a competitive marketplace.
In addition, the board considered the opportunities for improved
operational performance that could be achieved from a successful restart, as
well as the likelihood that the actions taken to qualify the plant for restart
also will enable it to satisfy the NRC's rigorous requirements for relicensing
and extended operation. Based on its evaluation, the board concluded that the
risks associated with restart were manageable and appropriate, particularly when
compared to the alternative of shutting down the plant, writing off the
investment and losing significant sales opportunities.
Draper added, "We have brought together seasoned nuclear executives to
develop and implement the restart plan. They are unparalleled in experience and
success in restarting idle nuclear facilities, truly a world-class team of
highly experienced engineers and experts. Most of the key members have helped to
direct successful plant restarts and all have effective working relationships
with regulators and the industry that will contribute to the efficient and
effective implementation of the restart plan."
Bob Powers, AEP's senior vice president of nuclear generation said, "We
have undertaken the most comprehensive, rigorous review of the Cook operations
since the plant first came on line, in continuous contact with the NRC. During
the course of our review, the team has uncovered many engineering and design
issues that were masked by the successful operation of the Cook plant.
Fortunately, all of these issues have been successfully dealt with in other
restart programs and none will require untested solutions or major plant
modifications."
The company had previously indicated that it will replace a steam
generator for Unit 1 before that unit would be returned to service. The expected
costs of replacement have been set at approximately $165 million, of which $68
million has already been spent. These costs will be accounted for as a capital
investment unrelated to the restart.
"When the units are returned to service, Cook plant will be a more
efficient and more predictable producer of energy and revenue," Powers said.
"Moreover, as a result of the scope and thoroughness of the restart effort, the
plant will be in the best possible position to satisfy the NRC's stringent
requirements for relicensing and extended operation," he added.
"The decision to restart Cook, like the decision to merge with Central and
South West Corp. (NYSE: CSR) and to acquire Louisiana Intrastate Gas,
underscores AEP's long term strategy of growing our already substantial energy
commodity business by building a diversified portfolio of operations from a
variety of fuels and strategically located geographic sources," Draper noted.
"Restarting Cook and qualifying it for relicensing and extended operation
expands the range of that portfolio," he added.
E. R. Brooks, chairman and chief executive officer of Dallas-based CSW,
AEP's merger partner, said, "We continue to believe in the strategic logic of
this merger. We will continue with AEP to assess developments at Cook in the
context of the overall transaction. The current projections by AEP for the Cook
plant have not altered our continuing support for the transaction. We are
continuing to cooperate fully in the activities necessary to achieve successful
completion of the merger."
AEP, 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. On
Dec. 22, 1997, AEP announced a definitive merger agreement for a tax-free,
stock-for-stock transaction with Central and South West Corp., a public utility
holding company based in Dallas.
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This press release contains statements that are forward looking within the
meaning of Section 21 E of the Securities Exchange Act of 1934. These forward
looking statements reflect numerous assumptions and involve a number of risks
and uncertainties. Key factors that could have a direct impact include various
events that could impact the successful execution of the restart plan, such as
the timing and the nature of actions by the NRC and other regulatory bodies,
potential new plant modifications not foreseen at this time which could extend
the outage further, the impact of the outage and restart activities on earnings,
and other factors described in the Company's Securities and Exchange Commission
filings.
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News releases and other information about AEP can be found on the World
Wide Web at http://www.aep.com.
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