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: January 25, 2000
Date of report: February 14, 2000
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
(361) 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) 673-3000
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., Columbus, Ohio
AEP Merger.................Proposed Merger between AEP and CSW where CSW would
become a wholly owned subsidiary of AEP
CPL........................Central Power and Light Company, Corpus Christi,
Texas
CSW........................Central and South West Corporation, Dallas, Texas
CSW System.................CSW and its subsidiaries
Exchange Act...............Securities Exchange Act of 1934, as amended
MMbtu......................Million British thermal units
STP........................South Texas Project nuclear electric generating
station
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 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 the proposed AEP Merger including any regulatory conditions
imposed on the merger or the inability to consummate the AEP Merger,
- - increased competition and the restructuring of the electric utility
industry in the United States,
- - federal and state regulatory developments and changes in law which may
have a substantial adverse impact on the value of CSW System generating
and other assets,
- - the impact of general economic changes in the United States and in
countries in which CSW either currently has made or in the future may make
investments,
- - 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 computer related failure(s) within the
CSW System, with the electric grid or with supplier(s) that adversely
affect the CSW System, and
- - risks associated with hedging and other risk management techniques.
<PAGE>
ITEM 5. OTHER EVENTS
Proposed AEP Merger United Kingdom Regulatory Action
On January 25, 2000, AEP and CSW announced that the United Kingdom's
Department of Trade and Industry approved the common ownership of United Kingdom
interests resulting from the proposed AEP Merger. This approval is the final
clearance for the merger required in the United Kingdom. The related news
release is attached as Exhibit 99.1 and is incorporated by reference.
Proposed AEP Merger United States Department of Justice Clearance On
February 2, 2000, AEP and CSW announced that the Department of Justice has
completed its investigation in accordance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and has closed the investigation, finding that no
further action is warranted. With this action, antitrust review of the proposed
merger by the Department of Justice is completed. The related news release is
attached as Exhibit 99.2 and is incorporated by reference.
CPL, Securitization Settlement Related to Texas Electric Utility
Restructuring Legislation
On February 10, 2000, the Texas Commission tentatively approved a
settlement, which will permit CPL to securitize approximately $764 million of
regulatory assets. The Texas Commission is expected to grant final approval on
February 28, 2000. The action is in accordance with the implementation of the
Texas Electric Utility Restructuring Legislation.
The settlement calls for CPL to reduce its proposed amount to be
securitized from $1.27 billion to approximately $764 million of regulatory
assets plus an estimated $28 million of other qualified costs. The settlement
also calls for $290 million of the amount originally requested to be included in
the calculation of stranded costs in CPL's April 2000 transmission and
distribution cost filing. This filing will establish stranded costs, of which
75% can be securitized and 25% can be recovered through a competitive transition
charge.
The securitization amount was reduced by an additional $186 million to
reflect customer benefits associated with accumulated deferred income taxes. CPL
previously had proposed to flow these benefits back to customers over a 14-year
transition period.
CPL could issue the transition bonds associated with securitization as
early as March or April 2000, depending on timing of receipt of a financing
order from the Texas Commission and depending on market conditions. A second
phase of securitization could occur later in 2000. CPL's stranded costs are
subject to a final determination by the Texas Commission in 2004.
The related news release is attached as Exhibit 99.3 and is incorporated
by reference.
CPL Financing, Floating Rate Notes
In anticipation of filing a Prospectus Supplement to a Prospectus dated
December 3, 1998, CPL provides the following information.
CPL Results of Operations
CPL's net income for common stock for 1999 was $173.2 million, which was
$18.5 million, or 12% higher than in 1998. Factors contributing to the increase
were higher electric operating revenues and a decrease in income taxes and
interest charges. The increase in net income for common stock was partially
offset by an increase in operating expenses.
Electric operating revenues for 1999 were $1,482.5 million, which was
$76.4 million, or 5% higher than in 1998. The increase consists of the
following: $13.4 million in residential markets, $16.1 million in commercial
markets, $21.1 million in industrial markets, $9.2 million in sales for resale
and $16.6 million in other revenues. Other revenues include adjustments related
to transmission revenues. A major portion of the increase in other revenues
represents increases in fuel related revenues. In addition, there were increases
in non-fuel revenues, which were partially offset by the implementation of lower
base rates as ordered by the Texas Commission.
Operating expenses and taxes for 1999 were $1,187.8 million, which was
$64.6 million higher than in 1998. Fuel and purchased power expense increased by
$46.1 million, or 11% when compared to 1998. The increase in fuel expense is
largely attributable to an increase in average unit fuel costs. Average unit
fuel costs increased from $1.59 per MMbtu in 1998 to $1.72 per MMbtu in 1999 as
a result of higher prices for natural gas purchased on the spot market. The
increase in purchased power expense is due to an increase in economy energy
<PAGE>
purchases. Other operating expenses increased by $29.2 million, or 11% when
compared to 1998. This increase is due primarily to increases in transmission,
distribution and outside service expenses. Maintenance expenses for 1999
increased $6.4 million, or 10% when compared to 1998. This change was the result
of scheduled power plant repairs and maintenance including the refueling and
10-year inspection of STP Units 1 and 2.
Depreciation and amortization expenses for 1999 decreased $7.1 million, or
4% when compared to 1998 due primarily to the reclassification of certain
regulatory assets designated for securitization, which was offset in part by the
recognition of accelerated capital recovery of stranded costs under provisions
of the recently enacted Texas legislation.
Taxes, other than income increased $2.9 million to $73.8 million resulting
from increases in franchise taxes for 1999. Income tax expenses associated with
utility operations decreased by $12.9 million, or 11% when compared to 1998 due
to lower taxable income, the reclassification of certain income tax related
regulatory assets designated for securitization consistent with the new Texas
legislation and adjustments related to prior year's taxes, offset in part by the
income tax related portion of the Texas state franchise tax.
Interest charges for 1999 were $114.4 million, a decrease of $7.7 million,
or 6% when compared to 1998. The decrease in interest charges was primarily the
result of the maturity and reacquisition of approximately $261.7 million of
long-term debt during the year. A portion of the long-term debt was replaced
with lower interest rate long-term debt.
Partially offsetting the increase in net income for common stock was a
loss of $2.8 million on the redemption of CPL preferred stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
(12) Ratio of Earnings to Fixed Charges
12.1 - CPL, Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
27.1 - CPL, Financial Data Schedule
(99) Additional Exhibits
99.1 - News release dated January 25, 2000, issued by AEP and CSW related to the
United Kingdom's Department of Trade and Industry's approval of common ownership
of United Kingdom interests resulting from the proposed AEP Merger.
99.2 - News release dated February 2, 2000, issued by AEP and CSW related to
antitrust clearance by the United States Department of Justice of the AEP
Merger.
99.3 - News release dated February 11, 2000, issued by CSW and CPL related to a
tentative settlement with the Texas Commission regarding securitization
associated with the Texas Electric Utility Restructuring Legislation.
<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: February 14, 2000
By: /s/ Lawrence B. Connors
Lawrence B. Connors
Controller and Chief Accounting Officer
(Principal Accounting Officer)
CENTRAL POWER AND LIGHT COMPANY
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
WEST TEXAS UTILITIES COMPANY
Date: February 14, 2000
By: /s/ R. Russell Davis
R. Russell Davis
Controller and Chief Accounting Officer
(Principal Accounting Officer)
Exhibit 12.1
Central Power and Light Company
Ratio of Earnings to Fixed Charges
For Years Ended December 31,
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---------------------------------------------------------
(thousands, except ratios)
<S> <C> <C> <C> <C> <C>
Operating income $294,672 $282,926 $251,367 $285,647 $282,184
Adjustments:
Income taxes 83,508 126,738 39,329 47,227 51,755
Provision for deferred
income taxes 17,337 (8,253) 34,484 51,476 (30,025)
Deferred investment tax
credits (5,207) (3,858) (4,819) (5,553) (5,789)
Charges for investments
and plant development
costs, net of tax -- -- (1,281) (15,569) --
Other income and deductions 2,596 709 7,834 3,997 14,880
Allowance for borrowed
and equity funds used
during construction 4,532 2,822 3,778 1,845 4,514
Mirror CWIP amortization -- -- -- -- 41,000
---------------------------------------------------------
Earnings $397,438 $401,084 $330,692 $369,070 $358,519
=========================================================
Fixed charges:
Interest on long-term debt $87,413 $93,301 $105,081 $110,375 $116,205
Interest on short-term
debt and other 19,498 19,506 20,613 18,494 19,926
Distributions on Trust
Preferred Securities 12,000 12,000 7,533 -- --
---------------------------------------------------------
Fixed charges $118,911 $124,807 $133,227 $128,869 $136,131
=========================================================
Ratio of earnings to fixed
charges 3.34 3.21 2.48 2.86 2.63
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000018734
<NAME> CENTRAL POWER AND LIGHT COMPANY
<SUBSIDIARY>
<NUMBER> 003
<NAME> CENTRAL POWER AND LIGHT COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,247,969
<OTHER-PROPERTY-AND-INVEST> 2,552
<TOTAL-CURRENT-ASSETS> 241,206
<TOTAL-DEFERRED-CHARGES> 50,551
<OTHER-ASSETS> 1,305,572
<TOTAL-ASSETS> 4,847,850
<COMMON> 168,888
<CAPITAL-SURPLUS-PAID-IN> 405,000
<RETAINED-EARNINGS> 764,225
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,338,113
0
5,967
<LONG-TERM-DEBT-NET> 1,454,541
<SHORT-TERM-NOTES> 322,158
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 150,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,577,071
<TOT-CAPITALIZATION-AND-LIAB> 4,847,850
<GROSS-OPERATING-REVENUE> 1,482,475
<INCOME-TAX-EXPENSE> 103,895
<OTHER-OPERATING-EXPENSES> 1,083,908
<TOTAL-OPERATING-EXPENSES> 1,187,803
<OPERATING-INCOME-LOSS> 294,672
<OTHER-INCOME-NET> 2,596
<INCOME-BEFORE-INTEREST-EXPEN> 297,268
<TOTAL-INTEREST-EXPENSE> 114,380
<NET-INCOME> 182,888
6,931
<EARNINGS-AVAILABLE-FOR-COMM> 173,194
<COMMON-STOCK-DIVIDENDS> 148,000
<TOTAL-INTEREST-ON-BONDS> 87,413
<CASH-FLOW-OPERATIONS> 303,184
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
Exhibit 99.1
UK REGULATOR CLEARS AEP-CSW MERGER
Columbus, Ohio, and Dallas, Jan. 25, 2000-- The United Kingdom's Department of
Trade and Industry (DTI) today gave its approval to the common ownership of UK
interests resulting from the pending merger of American Electric Power (NYSE:
AEP) and Central and South West Corp. (NYSE: CSR). This approval was conditional
on the companies agreeing to certain assurances concerning operation of the UK
interests.
The DTI, a UK government department with authority over mergers and
acquisitions, became involved because AEP and CSW each have an ownership
interest in UK regional electric companies. AEP owns 50 percent of Yorkshire
Electricity Group and CSW owns Seeboard. The merger of the U.S. parent companies
created a merger situation in the UK by virtue of the common ownership of the UK
companies that will result from completion of the U.S. merger. This is the final
clearance for the merger required in the UK.
"We welcome the announcement by the DTI and have agreed to the conditions the
regulators have placed on our UK operations," said E. Linn Draper Jr., AEP
chairman, president and chief executive officer. "The DTI decision eliminates
any uncertainty surrounding our continued involvement in the UK electricity
market and is a positive step for the AEP-CSW merger."
Among assurances listed by the DTI are:
- - Yorkshire and Seeboard have sufficient resources and facilities to meeT
customer service obligations;
- - reasonable effort will be made to ensure Yorkshire and Seeboard maintain
investment grade for all debt instruments; and
- - Yorkshire and Seeboard will have a full separation of distribution and
supply activities.
If the companies had not agreed to the assurances, the DTI could have referred
the merger to the Competition Commission for further review of any public
interest issues in the UK resulting from the AEP-CSW merger.
The assurances will take effect when the AEP-CSW merger is completed.
"The DTI decision is great news for our merger, but it does not mean we are
ready to announce a definitive plan for Yorkshire and Seeboard," Draper said.
"Any decision requires the agreement and support of New Century Energies (NYSE:
NCE), our equal partner in Yorkshire. We will work with NCE to explore potential
opportunities to continuously improve our operations and competitive position in
the UK. The DTI announcement provides a clearer regulatory framework as we
continue our discussions with NCE."
AEP and CSW announced their intention to merge on Dec. 22, 1997. The merger
requires approvals by the FERC, the Federal Communications Commission and the
Securities and Exchange Commission and clearance by the Department of Justice
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Upon completion
of the merger, the new company will be called American Electric Power.
The administrative law judge who presided over the FERC merger hearing found the
AEP-CSW merger to be consistent with the public interest. AEP and CSW also
reached a settlement with the FERC trial staff in which the staff supports a
finding that the merger will have no adverse effect on competition.
The merger has received approval from state regulatory commissions in Arkansas,
Louisiana, Oklahoma and Texas, the four states within CSW's service territory.
<PAGE>
AEP and CSW have announced settlement agreements with the International
Brotherhood of Electrical Workers (IBEW) and the Utility Workers Union of
America (UWUA) resulting in the IBEW and UWUA local unions withdrawing their
opposition to completion of the merger; as well as with the Indiana Utility
Regulatory Commission (IURC) resulting in Indiana customers receiving merger
benefits and including a commitment by the IURC not to oppose the merger during
consideration of the merger agreement by the FERC and the SEC. AEP and CSW also
have announced a settlement agreement with key parties in Kentucky that has been
approved by the Kentucky Public Service Commission; a settlement agreement with
the Michigan Public Service Commission; and a settlement agreement with the
Missouri Public Service Commission addressing that commission's concerns about
the effect of the merger on retail competition in the state. The Public Utility
Commission of Ohio (PUCO) has notified the FERC that the PUCO is no longer
opposing the pending merger or seeking conditions on the merger.
Additionally, AEP and CSW have reached settlements with a variety of wholesale
customers who had intervened in federal proceedings. The Nuclear Regulatory
Commission has approved a license transfer application related to the merger.
Central and South West Corp. is a global, diversified public utility holding
company based in Dallas. CSW owns four electric operating subsidiaries serving
1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional
electricity company in the United Kingdom; other international energy operations
and non-utility subsidiaries involved in energy-related investments,
telecommunications, energy efficiency and financial transactions.
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.
###
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.
Exhibit 99.2
AEP-CSW Merger Gets Antitrust Clearance from Department of Justice
Columbus, Ohio, and Dallas, Feb. 2, 2000-- The pending merger of American
Electric Power (NYSE: AEP) and Central and South West Corp. (NYSE: CSR) has
received antitrust clearance from the Department of Justice, the companies
announced today.
AEP and CSW have been notified by the Department of Justice that it has
completed its investigation in accordance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and has closed the investigation finding that no
further action is warranted. With this action, the Department's antitrust review
of the proposed merger is completed.
"The antitrust clearance is a very positive and significant step toward the
completion of our merger," said E. Linn Draper Jr., AEP's chairman, president
and chief executive officer. "The Department of Justice Antitrust Division
conducted a full and thorough investigation, one that required our companies to
provide massive volumes of documents for review. Its staff explored every
possible theory of potential competitive harm and concluded, as we have long
maintained, that this merger poses no threat to competition.
"With this review completed, we can now focus on gaining the final federal
approvals necessary to complete the merger," Draper said.
AEP and CSW announced their intention to merge on Dec. 22, 1997. Approvals that
remain include the Federal Energy Regulatory Commission (FERC), the Federal
Communications Commission (FCC) and the Securities and Exchange Commission
(SEC). Upon completion of the merger, the new company will be called American
Electric Power.
"The FERC has indicated it will act on our merger no later than February or
March," Draper said. "The SEC action follows the FERC's decision. We are on
track to complete the approvals in the spring."
The administrative law judge who presided over the FERC merger hearing found the
AEP-CSW merger to be consistent with the public interest. AEP and CSW also
reached a settlement with the FERC trial staff in which the staff supports a
finding that the merger will have no adverse effect on competition.
The merger has received approval from state regulatory commissions in Arkansas,
Louisiana, Oklahoma and Texas, the four states within CSW's service territory.
AEP and CSW have announced settlement agreements with the International
Brotherhood of Electrical Workers (IBEW) and the Utility Workers Union of
America (UWUA) resulting in the IBEW and UWUA local unions withdrawing their
opposition to completion of the merger; as well as with the Indiana Utility
Regulatory Commission (IURC) resulting in Indiana customers receiving merger
benefits and including a commitment by the IURC not to oppose the merger during
consideration of the merger agreement by the FERC and the SEC. AEP and CSW also
have announced a settlement agreement with key parties in Kentucky that has been
approved by the Kentucky Public Service Commission; a settlement agreement
approved by the Michigan Public Service Commission; and a settlement agreement
with the Missouri Public Service Commission addressing that commission's
concerns about the effect of the merger on retail competition in the state. The
<PAGE>
Public Utility Commission of Ohio (PUCO) has notified the FERC that the PUCO is
no longer opposing the pending merger or seeking conditions on the merger.
Additionally, AEP and CSW have reached settlements with a variety of wholesale
customers who had intervened in federal proceedings. The Nuclear Regulatory
Commission has approved a license transfer application related to the merger.
Central and South West Corp. is a global, diversified public utility holding
company based in Dallas. CSW owns four electric operating subsidiaries serving
1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional
electricity company in the United Kingdom; other international energy operations
and non-utility subsidiaries involved in energy-related investments,
telecommunications, energy efficiency and financial transactions.
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.
Exhibit 99.3
CSW
Central and South West Corporation
News Release
FOR IMMEDIATE RELEASE
PUCT Grants Tentative Approval of Settlement
Regarding CPL Securitization Request
Dallas, Texas (Feb. 11, 2000) -- The Public Utility Commission of Texas (PUCT)
on Thursday tentatively approved a settlement which will permit Central and
South West Corporation's (NYSE: CSR) Central Power and Light Company (CPL)
subsidiary to securitize approximately $764 million of regulatory assets. CPL
expects the PUCT to issue a final order by Feb. 28. The action is in accordance
with the implementation of Texas Senate Bill 7 on Electric Utility
Restructuring.
In October 1999, CPL originally filed a request with the PUCT to securitize
approximately $1.27 billion of its retail generation-related regulatory assets.
Since then, CPL has negotiated with various parties to the case in an effort to
reach a settlement on the appropriate securitization amount.
The settlement with the PUCT staff, the Office of Public Utility Counsel, the
Texas Industrial Energy Consumers, and the State of Texas calls for CPL to
reduce the amount to be securitized from the $1.27 billion originally requested
to approximately $764 million of regulatory assets plus other qualified costs
currently estimated to be $28 million. The settlement also calls for $290
million of the regulatory assets originally requested to be securitized in the
October 1999 filing to be included in the calculation of stranded costs in CPL's
April 2000 transmission and distribution cost filing. This filing will establish
stranded costs of which 75 percent can be securitized and 25 percent can be
recovered through a competitive transition charge.
The securitization amount was reduced by an additional $186 million to reflect
the present value customer benefits associated with accumulated deferred income
taxes. CPL previously had proposed to flow these benefits back to customers over
a 14-year transition period.
<PAGE>
"This settlement relating to the amount of stranded costs that CPL can
securitize is an important step in bringing lower rates to customers through
competition," said CPL President and General Manager Gonzalo Sandoval. "The
settlement will help create a robust competitive market when retail competition
is implemented and customers can choose their electricity provider."
Texas Senate Bill 7 on Electric Utility Restructuring provides a mechanism for
the recovery of costs left stranded as a result of implementing retail
competition. This mechanism is the securitization or the subsequent refinancing
of the debt and equity associated with facilities built under a regulated market
structure. Over the long-term, securitization will result in recovery of CPL's
regulatory assets over a shorter period of time. These costs currently are being
collected from customers in rates. Securitization allows the costs to be paid
off sooner, resulting in lower customer prices in the future than would
otherwise be possible.
CPL could issue the transition bonds as early as March or April 2000, depending
on timing of receipt of a financing order from the PUCT and depending on market
conditions. A second phase of securitization should occur later in 2000. CPL's
stranded costs are subject to a final determination by the PUCT in 2004.
CPL customers will not see any change in current rates as a result of the
securitization. Senate Bill 7 freezes existing base rates until Jan. 1, 2002. At
that point, residential and small commercial customers (those having an electric
load of less than 1 megawatt) who remain customers of the CPL's affiliate retail
electric provider will see an overall price reduction of 6 percent from the
price levels charged on Jan. 1, 1999. The investor-owned utility's retail
electric provider must continue to offer this "price to beat" for five years or
until 40 percent of the customers in that rate class switch electric providers.
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 non-utility 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
Columbus, Ohio-based American Electric Power Company, Inc. On Dec. 16, 1999, AEP
and CSW amended the agreement to extend the date after which either party may
terminate the merger agreement to June 30, 2000.
###
Media contact: Larry Jones, communications project coordinator for Central and
South West Corporation, 214 777-1276.
Financial community contact: Becky Hall, director of investor relations for
Central and South West Corporation, 214 777-1277.
