UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Public Utility Holding Company Act of 1935
File No. 70-8887
Report For Period: July 1, 1998 to December 31, 1998
In the Matter of:
PUBLIC SERVICE COMPANY OF OKLAHOMA
CENTRAL AND SOUTH WEST CORPORATION
This report is filed under Rule 24 of the Public Utility Holding Company Act
of 1935 by Public Service Company of Oklahoma (PSO) a subsidiary of Central and
South West Corporation (CSW). Pursuant to an Order of the Securities and
Exchange Commission dated December 30, 1996 (HCAR 35-26638), PSO must file
semi-annual reports providing the following information with respect to the
activities related to its investment in Nuvest, L.L.C.(Nuvest), which provides
services to public utility companies through its subsidiaries, Numanco, Inc. and
Numanco, L.L.C. (collectively, together with Nuvest, referred to as the Numanco
Companies or Numanco): 1) a description of all services performed by the Numanco
Companies during the most recent six month period (the reporting period), 2) a
description of any services provided to PSO by the Numanco Companies during the
reporting period, 3) a statement of any dividends or interest paid to PSO, both
for the reporting period and cumulatively, as a result of its equity interests
in the Numanco Companies, and 4) a statement regarding the nature and
consequences of any event of default under the member agreement occurring during
the reporting period. This report covers the period July 1, 1998 to December 31,
1998.
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1) Description of all services performed by the Numanco Companies during
the reporting period
o The Numanco Companies continue to provide services in each of the
following four areas: health physics services, mechanical services,
quality assurance services and training services. Of the services
listed, over 90% of all work performed was in commercial nuclear
power plants within the United States. Of the disciplines listed,
over 90% of revenues came from the provision of health physics
services.
o The Numanco Companies continue to provide specialized
environmental/hazardous waste cleaning equipment and services to
third parties. Total revenues from these activities are
estimated to be less than 15% of Numamco's total. Currently,
Numanco's only significant contract is with the U.S. Department
of Energy. These services use health physics and mechanical
personnel as well as specialized equipment that is developed and
manufactured by Numanco. The services can be turn-key manpower
and equipment, or either of the components sold separately. In
addition to electric utilities, target market for these services
include heavy industry, and the U.S. Department of Energy. The
strategy behind this venture is for the Numanco Companies to
utilize its personnel during the utility industries off-peak
season. While providing these types of services was
contemplated in the original U-1 application, the specific
applications were unknown.
o Numanco is also providing an additional service of designing,
engineering, manufacturing and installing a proprietary
radiation shielding technology in commercial nuclear
facilities. To date this business has been less than 1% of
Numanco's total revenues. Typically, Numanco employees install
temporary barriers during a plant outage. This system allows
these employees to install a permanent barrier for approximately
the same cost.
2) Description of any services provided to PSO by the Numanco Companies during
the reporting period
o Numanco provided a lineman trainee to PSO for approximately four
months during the reporting period.
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3) Statement of any dividends or interest paid to PSO, both for the reporting
period and cumulatively, as a result of its equity interests in the Numanco
Companies
o As a Limited Liability Company, all Nuvest's profits must be
distributed to its members. In the last six months of 1998, PSO
accrued $3,346,183 of equity earnings associated with its
investment in the Numanco Companies. Nuvest will offer a cash
distribution to members based on the members' tax liability
attributable to the net income of the company. The remainder will
be retained to support the growth of the Numanco Companies.
o No interest was paid to PSO during the reporting period nor
cumulatively.
o The cumulative amount of accrued equity earnings associated with
PSO's investment in the Numanco Companies is $2,236,878, which
includes an entry for impaired assets according to Statement of
Financial Accounting Standard No. 121 for $4,159,240.
4) Statement regarding the nature and consequences of any event of default
under the member agreement occurring during the period
o No events of default occurred during the reporting period.
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S I G N A T U R E
As requested by order of this Commission pursuant to the Public Utility
Holding Company Act of 1935, Public Service Company of Oklahoma has duly caused
this report to be signed on its behalf on this 16th day of February 1999.
Public Service Company
of Oklahoma
/s/R. Russell Davis
R. Russell Davis
Controller and Chief
Accounting Officer
