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File No. 70-8517
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM U-1 DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
______________________________________
CENTRAL AND SOUTH WEST CORPORATION
and
CENTRAL AND SOUTH WEST SERVICES, INC.
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
(Names of companies filing this statement and
addresses of principal executive offices)
_____________________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
____________________________________
Stephen J. McDonnell
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
P.O. Box 660164
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
with copies to
Messrs. George J. Forsyth, Guilford W. Gaylord & Rodrigo J. Howard
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
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Central and South West Corporation ("CSW"), a Delaware corporation
and a holding company registered under the Public Utility Holding Company
Act of 1935, as amended ("the Act"), and Central and South West Services,
Inc. ("CSWS"), a wholly owned subsidiary service company of CSW, hereby file
this Amendment No. 2 to the Form U-1 Declaration in File No. 70-8517 for the
purpose of amending and supplementing Items 1.B, 1.C, 1.D, and 1.E, Item 4,
and Exhibit 14.4, as follows. In all other respects, the Amendment as
previously filed and heretofore amended will remain the same.
1. In Item 1.B ("Overview"):
(a) The fifth paragraph is amended in its entirety to read as follows:
"Organizationally, the Restructuring establishes new functional
business units (described more fully below), but does not involve the
formation of new entities. In addition, the Restructuring does not
require the writedown of any rate base assets. No utility assets have
been transferred among companies within the CSW System, in connection
with the Restructuring. Further, CSW does not anticipate that any
utility assets will be transferred in the future, in connection with
the Restructuring."
2. In Item 1.C ("Control Over CSWS Services"):
(a) The second sentence of the first paragraph is amended by inserting
the words "the CSW budget process," immediately after the word
"include".
(b) The following new section is added, immediately after the first
paragraph of Item 1.C:
"CSWS Budget Process. The budgeting process at CSW begins with
management at all CSW System companies working together to determine
appropriate targets for expenditures. Specifically, for CSWS, the
initial targets are determined as a result of an assessment of needs
based on input from the Electric Operating Companies. The preliminary
targets for CSWS are presented to the Electric Operating Company CEO's
for their approval and CSW management for compliance with the overall
targets. This process involves the Electric Operating Companies from
the very beginning and bases the targets on their needs. Each company
is expected to set its detailed budgets in accordance with these broad
targets.
In addition, beginning with the 1996 budget cycle the
Customer/Supplier Partnership program (described below) will permit
further improvements to the budget process. CSWS is working to develop
a complete list of products and services provided by each department.
Management at each of the Electric Operating Companies will in turn
provide feedback on the effectiveness and importance of each product
and service. This information will be used to identify opportunities
to reduce or eliminate costs in the budget, as well as to plan future
service levels."
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(c) The third paragraph of the section entitled "Work Order Procedures"
is amended in its entirety as follows:
"Currently, work orders for multiple Electric Operating Companies
are informally approved at the time the work is requested. CSWS
communicates with the Electric Operating Companies regarding the work
to be performed, and determines which companies will benefit from the
services provided. The services are billed at the end of each month to
the Electric Operating Companies receiving such services, and the
charges for such services are reviewed by analysts in the planning and
analysis departments of each Electric Operating Company. As noted
above, the planning and analysis function reports to the vice president
of administration of the Electric Operating Company, who in turn
reports solely and directly to the president of the Electric Operating
Company; thus, charges are reviewed by Independent EOC Representatives.
CSW will establish a formal up-front authorization procedure regarding
work orders for multiple Electric Operating Companies, in excess of
$500,000. This procedure will provide for approval of such work orders
by an Independent EOC Representative."
(d) The section entitled "Accuracy Review -- Billing Procedures" is
amended by adding to it the following new third paragraph:
"Where a dispute occurs regarding billings from CSWS to an Electric
Operating Company, the dispute generally will be resolved through
informal discussions between accounting personnel at CSWS and personnel
at the Electric Operating Company, typically staff in the planning and
analysis department. If the dispute is not resolved at this level, the
dispute would be elevated to progressively higher levels of management
at both CSWS and the Electric Operating Company, until the dispute is
resolved. If necessary, the dispute could proceed to the chief
executive officer level; however, past experience is that all billing
disputes are resolved at much lower levels in the respective
organizations."
(e) The fifth sentence of the first paragraph of the section entitled
"Review -- Internal Audit" is amended to correct "Exhibit 14.4" to
"Exhibit 14.5."
(f) The section entitled "Review -- Internal Audit" is amended by
adding to it the following new second paragraph:
"The Internal Audit group is composed of 43 persons, with 40
professional staff and 3 administrative personnel. In addition to the
Director of Corporate Audits, 31 employees are assigned to audit the
CSW Electric unit and 11 employees are assigned to CSW Enterprises."
(g) The last paragraph of the section entitled "Review -- Internal
Audit" is amended in its entirety to read as follows:
"Copies of audit reports dated December 6, 1993 and February 16,
1995 are included as Exhibits 14.4 and 14.5 hereto, respectively."
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3. In Item 1.D ("Services affected by the Restructuring"), the section
entitled "2. Generation and dispatch" is amended by adding to it the
following new sixth paragraph:
"The benefits from the centralization of generation and dispatch
functions in the CCC include both operating expense and capital
reductions from previously estimated amounts. The Restructuring
permits a reduction of staff in this area of 33 persons, which results
in a reduction of annual operating expenses of approximately $2.4
million. Further, the Restructuring allows for a reduction of $19
million in capital expenditures, as compared to previous estimates, as
a result of eliminating duplicate hardware and software systems."
4. In Item 1.E ("Financial Impact"):
(a) The third paragraph is amended by adding to the end of that
paragraph the following new sentence:
"Costs related to office space requirements resulting from the
Restructuring have been included in the figures set forth in Exhibit
19.1."
5. In Item 4 ("Regulatory Approval"):
(a) The first sentence of the first paragraph is amended in its
entirety to read as follows:
"Based on review of applicable state laws and other factors
described herein, no state or federal approvals, with the exception of
ministerial matters relating to the physical location of records as
described below and the approval of this Declaration as is being
required by the Commission, are required for the implementation of the
Restructuring."
6. The date set forth in Exhibit 14.4 to the Declaration, the memorandum
from T. Bart Edwards to Susan Everett, is amended to read "December 6,
1993."
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S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, as amended, the undersigned company has duly caused this
document to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: March 27, 1995
CENTRAL AND SOUTH WEST CORPORATION
By: /s/ STEPHEN J. MCDONNELL
Stephen J. McDonnell
Treasurer
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CERTIFICATE OF SERVICE
The undersigned hereby certifies that he has this 27th day of
March, 1995 caused a copy of Amendment No. 2 to the Declaration of Central
and South West Corporation ("CSW") and Central and South West Services, Inc.
("CSWS") on Form U-1 to be mailed to each of the persons listed below by
first class mail, postage prepaid:
Jacqueline T. Miller
Assistant General Counsel
Office of General Counsel
Oklahoma Corporation Commission
400 Jim Thorpe Office Building
Oklahoma City, Oklahoma 73105
Robert W. Gee
Chairman
Public Utility Commission of Texas
7800 Shoal Creek Blvd.
Austin, Texas 78757
Patrick Wood, III
Commissioner
Public Utility Commission of Texas
7800 Shoal Creek Blvd.
Austin, Texas 78757
Sarah Goodfriend
Commissioner
Public Utility Commission of Texas
7800 Shoal Creek Blvd.
Austin, Texas 78757
Mary W. Cochran
General Counsel
Arkansas Public Service Commission
1000 Center Street
P. O. Box 400
Little Rock, Arkansas 72203-0400
Paul R. Hightower
Commission Counsel
Arkansas Public Service Commission
1000 Center Street
P. O. Box 400
Little Rock, Arkansas 72203-0400
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Michael R. Fontham
Stone, Pigman, Walther, Wittmann & Hutchinson
546 Carondelet Street
New Orleans, Louisiana 70130
Noel J. Darce
Stone, Pigman, Walther, Wittmann & Hutchinson
546 Carondelet Street
New Orleans, Louisiana 70130
William H. Bruchette
Brickfield, Bruchette & Ritts, P.C.
1025 Thomas Jefferson St., N.W.
8th Floor, West Tower
Washington, D.C. 20007
A. Hewitt Rose
Brickfield, Bruchette & Ritts, P.C.
1025 Thomas Jefferson St., N.W.
8th Floor, West Tower
Washington, D.C. 20007
/s/ STUART SOLOMON
Stuart Solomon
