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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): July 5, 1994
CENTRAL AND SOUTH WEST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-1443 51-0007707
(Commission File Number) (IRS Employer Identification No.)
1616 Woodall Rodgers Freeway, Dallas TX 75202
(Address of principal executive offices) (zip code)
(214) 777-1000
(Registrant's telephone number, including area code)
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Item 5. Other Events
Litigation and Regulatory Proceedings - Deferred Accounting
New Developments
On June 22, 1994, the Supreme Court of Texas issued
decisions in the deferred accounting cases of Central and
South West Corporation's (Corporation) wholly-owned
subsidiaries, Central Power and Light Company (CPL) and
West Texas Utilities Company (WTU).
In a 5-4 vote, the Supreme Court of Texas sustained
deferred accounting as an appropriate mechanism for the
Public Utility Commission of Texas (Texas Commission) to use
in preserving the financial integrity of utilities. The
Supreme Court of Texas held that the Texas Commission can
authorize utilities to defer those costs that are incurred
between the in-service date of a plant and the effectiveness
of new rates, which includes such costs.
In CPL's case, the Supreme Court of Texas upheld the
portion of the 1992 Third Court of Appeals', Austin, Texas
(Court of Appeals) decision that permitted CPL to include in
rate base deferred post-in-service operations and
maintenance costs from Unit 1 of the South Texas Project
(STP) nuclear plant. The Supreme Court of Texas also
reversed the portion of the Court of Appeals decision
providing that deferred post-in-service carrying costs could
not be included in rate base. In addition, the Supreme
Court of Texas remanded the case to the Court of Appeals for
consideration of specific unresolved arguments. CPL's total
pre-tax STP deferrals for the periods affected were
approximately $492 million, of which $270 million are
carrying costs.
While management cannot predict the ultimate outcome of
CPL's deferred accounting proceeding, management believes
that CPL will successfully sustain the approval of its
deferred accounting orders or will be successful in
renegotiation of its rate settlement, so there will be no
material adverse effect on the Corporation's financial
position or continuing consolidated results of operations.
In WTU's case, the Supreme Court of Texas reversed the
1990 Court of Appeals decision upholding an order of the
Texas Commission that permitted WTU to defer post-in-service
operations and maintenance costs and carrying costs
associated with the Oklaunion power plant. The Supreme
Court of Texas based its reversal on the lack of a formal
Texas Commission finding under the appropriate legal
standard, remanded the matter to the Texas Commission for
further proceedings consistent with its judgment and
instructed the Texas Commission on remand to review WTU's
entire deferral under a financial integrity standard rather
the measurable harm to financial condition standard
initially used. WTU recorded approximately $32 million of
pre-tax Oklaunion deferred costs, of which $25 million are
carrying costs.
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Management believes that WTU's deferred accounting will
ultimately be sustained by the Texas Commission, on the
basis that evidence previously submitted supports the use of
deferred accounting under the financial integrity standard
set forth by the Supreme Court of Texas. However, no
assurance can be given as to the outcome of any proceedings
involving this matter. While management cannot predict the
ultimate outcome of WTU's deferred accounting proceeding,
management believes that the resolution of the proceeding
will not have a material adverse effect of the Corporation's
financial position or continuing consolidated results of
operations.
The parties in each case have 15 days in which to apply
to the Supreme Court of Texas for a rehearing.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the 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 5, 1994
By: WENDY G. HARGUS
Wendy G. Hargus
Controller
