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: November 19, 1998
Date of report: December 7, 1998
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
<PAGE>
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.
ALJ.....................................Administrative Law Judge
Arkansas Commission.....................Arkansas Public Service Commission
CPL.....................................Central Power and Light Company, Corpus
Christi, Texas
CSW.....................................Central and South West Corporation,
Dallas, Texas
CSW System..............................CSW and its subsidiaries
FERC....................................Federal Energy Regulatory Commission
Louisiana Commission....................Louisiana Public Service Commission
Oklahoma Commission.....................Oklahoma Corporation Commission
STP.....................................South Texas Project nuclear electric
generating station, jointly owned by
CPL, Houston Lighting and Power Company,
City of Austin, and City of San Antonio
SWEPCO..................................Southwestern Electric Power Company,
Shreveport, Louisiana
Texas Commission........................Public Utility Commission of Texas
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, in making any such statements, 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
U.S. and in countries in which CSW either currently has made or in the future
may make investments; the impact of deregulation on the U.S. electric utility
business; increased competition and electric utility industry restructuring in
the U.S.; 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 the SWEPCO Plan; federal and
state regulatory developments and changes in law which may have a substantial
adverse impact on the value of CSW System 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; decommissioning costs associated
with nuclear generating facilities; costs associated with any year 2000 failure
either within the CSW System or supplier failures that adversely affect the CSW
System; uncertainties in foreign operations and foreign laws affecting CSW's
investments in those countries; the effects of retail competition in the natural
gas and electricity distribution and supply businesses in the United Kingdom;
and the timing and success of efforts to develop domestic and international
power projects. In the non-utility area, the previously mentioned factors would
apply and also include, but are not limited to: the ability to compete
effectively in new areas, including telecommunications, power marketing and
brokering, and other energy related services, as well as evolving federal and
state regulatory legislation and policies that may adversely affect those
industries generally or the CSW System's business in areas in which it operates.
<PAGE>
ITEM 5. OTHER EVENTS
On November 19 and 24, 1998, CSW and AEP issued news releases related
to their proposed merger, which are summarized below.
AEP and CSW stated that they had agreed to a procedural schedule
relating to FERC's hearing on the merger. The scheduling conference was held as
the result of a FERC order issued November 10, instructing AEP and CSW to
address several competitive issues related to the merger. AEP and CSW plan to
refile their case with the FERC by January 13, 1999.
The procedural schedule calls for hearings before an ALJ to begin on
June 1, 1999. The companies expect to seek a final FERC order before the end of
the fourth quarter of 1999. The new FERC procedural schedule therefore is
expected to extend by several months the companies' previously targeted merger
completion date.
The companies are continuing settlement discussions with FERC, other
regulatory bodies and intervenors in the proceedings. AEP and CSW have reached
settlements with several intervenor groups in Texas and Arkansas, and, on
November 5, 1998, the Nuclear Regulatory Commission approved the license
transfer application filed by CSW's CPL regarding its 25.2% interest in STP.
In Arkansas, AEP, CSW and SWEPCO have reached a settlement with the
general staff of the Arkansas Commission on the regulatory plan phase related to
the proposed merger. A hearing to consider approval of the settlement is
scheduled in early December 1998.
In Texas, the companies have reached a settlement-in-principle with the
Office of Public Utility Counsel and the Steering Committee of the cities of
McAllen, Corpus Christi, Victoria, Abilene, Big Lake, Vernon and Paducah subject
to approval of their respective city councils. The proposed settlement would
resolve all issues of the signing parties if it is approved by the Texas
Commission and the merger is completed as currently planned.
AEP and CSW jointly filed with the FERC on April 30, 1998 for approval
of their proposed merger. The companies also have filed applications seeking
approval of the merger with the Arkansas Commission, Louisiana Commission,
Oklahoma Commission and Texas Commission as well as the Securities and Exchange
Commission. The companies also plan to file merger applications soon with the
Federal Communications Commission and the Department of Justice.
Copies of the news releases are incorporated by reference and attached
as exhibits.
Since the issuance of these press releases, new information is
available regarding state merger proceedings. In Texas, an ALJ scheduled a
hearing to consider the merger on April 27, 1999, which is anticipated to
continue for approximately three weeks. A final decision is expected from the
Texas Commission in September 1999. In Arkansas, the hearing regarding the
proposed settlement between the general staff of the Arkansas Commission and
AEP, CSW and SWEPCO was held by the Arkansas Commission on on December 1, 1998.
The Arkansas Commission has not issued a decision on the proposed settlement,
but may do so as early as the end of this year. Merger hearings are scheduled to
begin at the Louisiana Commission on January 18, 1999. In Oklahoma, hearings to
consider the regulatory proposals related to the merger are sheduled to begin on
January 20, 1999.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 CSW News Release dated November 19, 1998 relating to CSW
and AEP merger proceedings with Texas and other regulatory agencies.
Exhibit 99.2 CSW News Release dated November 24, 1998 relating to CSW
and AEP merger proceedings with the Federal Energy Regulatory
Commission.
<PAGE>
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: December 7, 1998
By: /s/ Lawrence B. Connors
Lawrence B. Connors
Controller
CENTRAL POWER AND LIGHT COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
WEST TEXAS UTILITIES COMPANY
Date: December 7, 1998
By: /s/ R. Russell Davis
. R. Russell Davis
Controller
AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Exhibit 99.1
Contact for American Electric Power:
Pat Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
FOR IMMEDIATE RELEASE:
AEP and CSW Settlement with Two Intervenors Could Result
In Rate Reductions Totaling $180 million for Texas Customers
During Six-Year Period Following Approval of Proposed Merger
Columbus, Ohio, and Dallas, Texas (November 19, 1998) - American Electric Power
Company, Inc. ("AEP")[NYSE: AEP] and Central and South West Corporation
("CSW")[NYSE: CSR] said that their stipulated settlement with two intervenor
groups would result in combined rate reductions totaling approximately $180
million over a six-year period for Texas customers of the three CSW Texas
electric operating companies if the settlement is approved by the Public Utility
Commission of Texas (PUCT) and the merger is completed as planned.
The signed stipulated settlement agreement between AEP, CSW, the Office of
Public Utility Counsel (OPUC) and the Steering Committee of the cities of
McAllen, Corpus Christi, Victoria, Abilene, Big Lake, Vernon and Paducah was
filed with the PUCT on Nov. 13. The settlement resolves all issues of the
signing parties, subject to final approval by the individual city councils. A
pre-hearing conference to set a schedule to consider the settlement and approval
of the merger application is scheduled for Dec. 2.
The proposed settlement provides for combined rate reductions totaling
approximately $180 million over a six-year period for CSW's electric operating
company customers through two separate rate riders. Both rate reduction riders
become effective upon approval of the settlement and completion of the merger.
The first rate reduction rider provides for $84.4 million in estimated net
merger savings to be credited to Texas customer bills through a net merger
savings rate reduction rider over the six years following completion of the
merger with the aggregate rate reductions for customers of the CSW Texas
companies as follows:
<PAGE>
Central Power and Light Company (CPL) $52.7 million
Southwestern Electric Power Company (SWEPCO) $16.1 million
West Texas Utilities Company (WTU) $15.6 million
The second rate reduction rider will be implemented to resolve issues associated
with CPL, WTU and SWEPCO rate and fuel reconciliation proceedings in Texas. The
$95.6 million rate reductions over the six years following completion of the
merger include:
Central Power and Light Company $61.3 million
Southwestern Electric Power Company $19.9 million
West Texas Utilities Company $14.4 million
CSW has agreed to withdraw its appeal of the CPL glide-path rate reduction of
$13.5 million implemented in May 1998, as well as the second glide-path rate
reduction of $13.5 million scheduled to take effect May 1999, if the settlement
is approved and the AEP/CSW merger is completed. CSW currently is awaiting a
decision on its appeal of the glide-path reductions and other issues.
In addition, as a part of the settlement proposal, CPL, SWEPCO and WTU agree not
to seek an increase in base rates prior to Jan. 1, 2003, and OPUC and members of
the Cities Steering Committee will not initiate rate reviews prior to Jan. 1,
2001.
The settlement proposal also provides for a sharing of off-system sales margins
on the wholesale electricity market after the effective date of the merger. The
proposed settlement also includes affiliate transaction standards and provides
for the maintenance of service quality for Texas customers.
Last week, AEP, CSW and SWEPCO announced a settlement with the general staff of
the Arkansas Public Service Commission (APSC) on the regulatory plan phase
related to the proposed merger. The settlement calls for SWEPCO to reduce rates
through a net merger savings rider for its Arkansas customers by amounts
totaling approximately $6 million over the five-year period following completion
<PAGE>
of the merger. The parties filed the settlement with the APSC on Nov. 3. The
APSC will consider approval of the settlement on Dec. 1.
Applications seeking approval of the merger also have been filed with the
Oklahoma Corporation Commission, the Louisiana Public Service Commission, the
Federal Energy Regulatory Commission and the Securities and Exchange Commission.
Additionally, the Nuclear Regulatory Commission (NRC) on Nov. 5 approved the
license transfer application filed by CPL regarding the South Texas Project
nuclear power plant.
Central and South West Corporation is a Dallas-based public utility holding
company that owns four U.S. electric utility subsidiaries with 1.7 million
customers, a regional electricity company serving 2 million customers in the
United Kingdom, and nonutility subsidiaries involved in energy-related
investments as well as subsidiaries that offer telecommunications, energy
efficiency and financial transactions. On Dec. 22, 1997, CSW announced a
definitive merger agreement for a tax-free, stock-for-stock transaction with
AEP.
American Electric Power Company, Inc., 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.
###
News releases and other information about AEP can be found on the World Wide Web
at http://www.aep.com.
News releases and other information about CSW can be found on the World Wide Web
at http://www.csw.com.
AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Exhibit 99.2
Contact for American Electric Power:
Pat Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
FOR IMMEDIATE RELEASE:
AEP, CSW Remain Confident In proposed Merger;
Will Seek Prompt Regulatory Review
Columbus, Ohio, and Dallas, Texas (Nov. 24, 1998) - American Electric Power
Company, Inc., ("AEP") [NYSE: AEP] and Central and South West Corp. ("CSW")
[NYSE: CSR] expressed confidence in the timely completion of their proposed
merger after agreeing today to a procedural schedule guiding the Federal Energy
Regulatory Commission's (FERC) hearing on the merger.
The procedural schedule calls for hearings before an administrative law judge
(ALJ) to begin June 1, 1999. The companies will seek a FERC order early in the
fourth quarter of 1999. The FERC schedule would extend by several months the
merger's previously targeted completion date in the first half of 1999.
"We believe the FERC schedule preserves our ability to close the merger in 1999
and that it indicates a desire on the part of the FERC to proceed in an
expeditious manner," said Rich Munczinski, AEP senior vice president, corporate
planning and budgeting. "Our goal would be to receive a FERC order in October.
"Today's events do not change our view of this merger," Munczinski said. "In
fact, with the continued consolidation within our industry, this merger
continues to make all the sense in the world, and we will continue to work to
complete the merger in a timely manner."
Munczinski said AEP and CSW would continue settlement discussions with the FERC,
other regulatory bodies and intervenors in the proceedings. The two companies
already have reached settlements with several groups in Texas and Arkansas, and
the Nuclear Regulatory Commission (NRC) approved the license transfer
application filed by CSW's Central Power and Light Company subsidiary regarding
the South Texas Project nuclear power plant.
<PAGE>
"We are encouraged by the positive progress we have been able to make in the
states of Arkansas and Texas," Munczinski said. "We continue to make progress in
the remaining federal and state filings."
In Arkansas, AEP, CSW and Southwestern Electric Power Company (SWEPCO), a CSW
subsidiary, have reached a settlement with the general staff of the Arkansas
Public Service Commission (APSC) on the regulatory plan phase related to the
proposed merger. A hearing to consider approval of the settlement is scheduled
for Dec. 1.
In Texas, the companies' settlement-in-principle with the Office of Public
Utility Counsel and the Steering Committee of the cities of McAllen, Corpus
Christi, Victoria, Abilene, Big Lake, Vernon and Paducah would result in
combined rate reductions totaling approximately $180 million over a six-year
period for Texas customers of the three CSW Texas electric operating companies.
The settlement resolves all issues of the signing parties if it is approved by
the Public Utility Commission of Texas (PUCT) and the merger is completed as
planned.
AEP and CSW will refile their case with the FERC by Jan. 13, 1999. Today's
scheduling conference was held as the result of a FERC order issued Nov. 10. The
order instructed AEP and CSW to address several competitive issues related to
the merger.
AEP and CSW jointly filed with the FERC on April 30, 1998 for approval of their
proposed merger. The companies also have filed applications seeking approval of
the merger with the Arkansas and Texas commissions, as well as the Louisiana
Public Service Commission, the Oklahoma Corporation Commission, and the
Securities and Exchange Commission. The companies plan to make the final two
filings associated with approval of the merger with the Federal Communications
Commission and the Department of Justice in the near future.
The companies announced a definitive merger agreement for a tax-free,
stock-for-stock transaction on Dec. 22, 1997.
Central and South West Corporation is a Dallas-based public utility holding
company that owns four U.S. electric utility subsidiaries with 1.7 million
customers, a regional electricity company serving 2 million customers in the
United Kingdom, and nonutility subsidiaries involved in energy-related
investments as well as subsidiaries that offer telecommunications, energy
efficiency and financial transactions.
American Electric Power Company, Inc., 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.
<PAGE>
###
News releases and other information about AEP can be found on the World Wide Web
at http://www.aep.com.
News releases and other information about CSW can be found on the World Wide Web
at http://www.csw.com.
