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: October 1, 1998
Date of report: October 9, 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
0-343 PUBLIC SERVICE COMPANY OF OKLAHOMA 73-0410895
(An Oklahoma Corporation)
212 East 6th Street
Tulsa, Oklahoma 74119-1212
(918) 599-2000
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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
CSW.......................................Central and South West Corporation,
Dallas, Texas
CSW System................................CSW and its subsidiaries
FORWARD LOOKING INFORMATION
This report made by CSW and its subsidiaries contains forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. 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
SWEPCO's proposed acquisition of Cajun Electric Cooperative; 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; 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
aforementioned factors would also apply, and, in addition, would 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 October 7, 1998, CSW issued a news release related to its proposed
merger with AEP, which is incorporated by reference and attached as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 CSW News Release dated October 7, 1998 relating to CSW and
AEP merger proceedings in Oklahoma.
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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: October 9, 1998
By: /S/ LAWRENCE B. CONNORS
Lawrence B. Connors
Controller
PUBLIC SERVICE COMPANY OF OKLAHOMA
Date: October 9, 1998
By: /S/ R. RUSSELL DAVIS
R. Russell Davis
Controller
EXHIBIT 99.1
AEP AND CSW TO WORK WITH OKLAHOMA INTERVENORS
WHILE DETERMINING NEXT STEP IN MERGER PROCEEDINGS
Columbus, Ohio, and Dallas, Texas (Oct. 7, 1998) - American Electric Power
Company, Inc. ("AEP")[NYSE: AEP] and Central and South West Corporation
("CSW")[NYSE: CSR] today said a recommendation from an Oklahoma Corporation
Commission (OCC) administrative law judge creates a procedural hurdle, but "does
not question the merits of the merger" and should not delay the overall
timetable for completing the merger.
OCC Administrative Law Judge Robert Goldfield on Oct. 1 said he would recommend
to the commission that the merger filing currently before the OCC be dismissed
for lack of information regarding the potential impact of the merger on the
retail electric market in Oklahoma. The administrative law judge's oral
recommendation was in response to motions from Oklahoma Gas and Electric
Company, the Municipal Electric Systems of Oklahoma, Inc., and the Oklahoma
Association of Electric Cooperatives.
"The administrative law judge's oral recommendation does not question the merits
of the merger," said Mark Roberson, CSW vice president, regulatory affairs. "We
believe that our original filing in Oklahoma met all procedural requirements. We
are interested in working with the various parties in the proceeding to address
any perceived deficiencies in our original filing. We're confident that this can
be resolved without delaying the overall time for completing the merger."
A dismissal "without prejudice" would allow AEP and CSW to submit an amended
application with the added information. An amended filing would reset Oklahoma's
90-day statutory time period for OCC action on the merger. AEP and CSW also have
the option of appealing such a dismissal to the OCC on Oct. 20.
AEP and CSW will continue to work with intervenors while determining the
appropriate actions to take in response to the administrative law judge's oral
recommendation. "If we determine that an amended filing is appropriate, we would
supplement the original Oklahoma filing in the near future with any additional
information required to address the issues raised by the intervenors," Roberson
said. "We would then expect the administrative law judge to reestablish a
procedural schedule which would result in a final order from Oklahoma in the
first quarter of 1999. If we file an amended application, the revision to the
Oklahoma proceeding schedule should not impact the timing of the overall merger
closing."
On Aug. 14 AEP and CSW jointly filed a request with the Oklahoma Corporation
Commission for approval of their proposed merger. Similar requests are currently
before the Arkansas Public Service Commission, the Louisiana Public Service
Commission, the Public Utility Commission of Texas and the Federal Energy
Regulatory Commission (FERC). Testimony submitted in those filings outlines the
expected combined company benefits of the merger to AEP and CSW customers and
shareholders, which include:
- $2 billion in net non-fuel cost savings over 10 years;
- $98 million in net fuel savings over 10 years;
- Improved capital structure and increased financial strength;
- Increased diversity in customer base, generating resources and
service territory;
- Optimization of business practices and continued high-quality
service;
- Support for restructuring of retail electric markets; and
- Support for an independent system operator.
AEP and CSW have proposed a regulatory plan in Oklahoma that provides for:
- Approximately $11.8 million in fuel cost savings to Oklahoma customers of
CSW's Public Service Company of Oklahoma (PSO) subsidiary during the 10
years following completion of the merger;
- A commitment not to raise base rates above current levels prior to Jan. 1,
2002, for PSO retail customers in Oklahoma and to share approximately
one-half of the savings from synergies created by the merger during the
first 10 years following the merger. Under this plan, approximately $78.6
million of these non-fuel merger-related savings will be used to reduce
future costs to PSO's retail customers; and
- A commitment to continue the current high level of customer service and to
identify opportunities and implement measures to further improve service
quality.
The Arkansas Commission has granted conditional approval of the merger subject
to approval of the regulatory proposal associated with the merger. The companies
are targeting completion of the merger during the first half of 1999.
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.
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