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 Report (Date of earliest event reported): September 6, 1995
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, TX 75202-1234
(214) 777-1000
0-340 West Texas Utilities Company 75-0646790
(A Texas Corporation)
301 Cypress Street
Abilene, TX 79601-5820
(915) 674-7000
This combined Form 8-K is separately filed by Central and South West
Corporation and West Texas Utilities Company. Information contained herein
relating to an individual company is filed by such company on its own behalf.
Each company makes no representation as to information relating to the other
company.
ITEM 5. OTHER EVENTS
WEST TEXAS UTILITIES COMPANY (WTU) REGULATORY MATTERS
WTU Agreement in Principle To Settle Rate Proceeding Docket No. 13369,
Appeal of Docket No. 7510 and Deferred Accounting Proceeding Docket No. 13949
Background
WTU, a wholly-owned subsidiary of Central and South West Corporation
(CSW), has been the subject of several regulatory matters. Such matters,
which cover a variety of issues, include the following:
* Current Rate Proceeding and Fuel Reconciliation -
Docket No. 13369 before the Public Utility Commission of
Texas (Texas Commission)
* Writ of Error to Supreme Court of Texas (Supreme Court)
- review of WTU's 1987 Texas Rate Case - Docket No. 7510
* Texas Commission's proceeding on remand - Docket No. 13949
- regarding deferred accounting treatment for Oklaunion
Power Station Unit No. 1 originally authorized in Texas
Commission's Docket No. 7289
For further information and earlier developments
related to these regulatory matters, reference is made to
CSW's and WTU's combined 1994 Annual Report on Form 10-K,
CSW's and WTU's combined Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and June 30, 1995, and
CSW's and WTU's combined Current Report on Form 8-K dated
July 10, 1995.
Recent Developments
On September 6, 1995, WTU announced that it had reached
an Agreement in Principle (Settlement) with major parties to
settle the pending regulatory proceedings listed above in
Background. Under the terms of the Settlement, WTU will
lower its retail base rates by $13.5 million per year, of
which $5.9 million has been in place since October 1, 1994,
and WTU will be prevented from increasing retail base rates
until October 1, 1998. In addition to the annual impact on
base rates, WTU will make a $21 million refund to retail
customers, including the amounts retroactive to October 1,
1994. The Settlement also provides that the Texas
Commission will find that a reasonable return on equity for
WTU is 11.375%.
The Settlement is expected to impact WTU's results of
operations for the next several years, reducing annual
earnings by approximately $8 million after-tax. Details of
the items with significant earnings impact for 1995 and 1996
under the Settlement, including certain accounting
provisions contemplated thereby, are set forth in the table
below:
Earnings Impact of Significant Provisions of the Settlement
1995 1996
Pre-tax After-tax Pre-tax After-tax
($ in millions)
Refund to retail customers (21.0) (13.7) -- --
Effect of retail rate reduction (1.7) (1.1) (7.6) (4.9)
Current flowback of property
related excess deferred
federal income taxes 6.9 6.9 -- --
Five year flowback of non-
property related excess
deferred federal income taxes 0.1 0.1 0.5 0.5
Capitalization and amortization
of previously expensed
restructuring costs 12.7 8.3 (1.9) (1.2)
Accelerated amortization of
deferred Oklaunion plant costs
(accelerated from the remaining
31 years to 7 years) -- -- (2.9) (2.3)
Other amortization (0.2) (0.1) (0.8) (0.5)
The Settlement would resolve WTU's current rate review
and fuel reconciliation before the Texas Commission (Docket
No. 13369), the appeal of WTU's 1987 Texas rate case (Docket
No. 7510) now pending before the Supreme Court and the
deferred accounting issue (Docket No. 13949) which is
currently before the Texas Commission. The Texas Commission
had been scheduled to consider the deferred accounting issue
on September 6, 1995, and testimony on the rate review had
been scheduled to begin on September 7, 1995. The appeal of
Docket No. 7510 is currently before the Supreme Court on
Application for Writ of Error filed by WTU. Other parties
to the appeal also sought review by the Supreme Court.
Completion of the proposed Settlement is subject to
both a final written agreement and the approval of the
Settlement rates and other provisions by the Texas
Commission. An interim Texas Commission order may be issued
by late September and the final order is expected in the
fourth quarter of 1995.
The Settlement will eliminate several significant risks
that have been the subject of regulatory proceedings
relating to deferred accounting and rates and will enable
WTU's rates to remain at competitive levels.
Notwithstanding the Settlement's anticipated adverse impact
on WTU's future results of operations, management believes
that it is prudent to accept the Settlement in light of the
uncertainty and expense of otherwise pursuing the regulatory
proceedings resolved by the Settlement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrants have duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized. The signature for each undersigned registrant
shall be deemed to relate only to matters having reference
to such registrant or its subsidiaries.
CENTRAL AND SOUTH WEST CORPORATION
Date: September 13, 1995
By: /s/ Wendy G. Hargus
Wendy G. Hargus
Controller
WEST TEXAS UTILITIES COMPANY
Date: September 13, 1995
By: /s/ R. Russell Davis
R. Russell Davis
Controller
