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 Report (Date of earliest event reported): August 17, 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
1-3146 SOUTHWESTERN ELECTRIC POWER COMPANY 72-0323455
(A Delaware Corporation)
428 Travis Street
Shreveport, Louisiana 71156-0001
(318) 222-2141
<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
CSW........................Central and South West Corporation, Dallas, Texas
CSW System.................CSW and its subsidiaries
PSO........................Public Service Company of Oklahoma, Tulsa, Oklahoma
SWEPCO.....................Southwestern Electric Power Company, Shreveport,
Louisiana
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 Monday, August 17, 1998, CSW issued news releases related to its
proposed merger with AEP, which are incorporated by reference and attached as
exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 CSW News Release dated August 17, 1998 relating to PSO.
Exhibit 99.2 CSW News Release dated August 17, 1998 relating to
SWEPCO.
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: August 20, 1998
By: /S/ LAWRENCE B. CONNORS
Lawrence B. Connors
Controller
PUBLIC SERVICE COMPANY OF OKLAHOMA
SOUTHWESTERN ELECTRIC POWER COMPANY
Date: August 20, 1998
By: /S/ R. RUSSELL DAVIS
R. Russell Davis
Controller
EXHIBIT 99.1
AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Contact for American Electric Power:
Pam Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
AMERICAN ELECTRIC POWER AND CENTRAL AND SOUTH WEST CORPORATION
JOINTLY FILE FOR MERGER APPROVAL FROM OKLAHOMA CORPORATION COMMISSION
Columbus, Ohio, and Dallas, Texas (August 17, 1998) -- American Electric Power
Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE: CSR) on
Friday jointly filed a request with the Oklahoma Corporation Commission for
approval of their proposed merger.
Testimony submitted in the filing 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.
<PAGE>
The Oklahoma filing provides that there will be minimal job reductions among
employees having direct contact with customers. CSW's U.S. work force currently
totals about 7,000 employees, and AEP's work force totals about 18,000
employees. AEP and CSW intend to use a combination of reduced hiring and
attrition to the maximum extent possible to minimize the need for employee
separations.
Friday's joint filing marks the sixth of several regulatory filings that will be
made to obtain approval of the proposed merger. As previously reported, on April
30, CSW and AEP submitted filings to the Public Utility Commission of Texas and
the Federal Energy Regulatory Commission seeking favorable rulings relating to
the proposed merger. On May 15, the companies submitted an application for
approval of the proposed merger to the Louisiana Public Service Commission, and
on June 12, the companies filed a similar request with the Arkansas Public
Service Commission.
In addition, CSW subsidiary Central Power and Light Company (CPL) on June 19
filed a license transfer application with the Nuclear Regulatory Commission
(NRC) in connection with the proposed merger. The application requests the NRC's
consent to the indirect transfer of control of CPL's interests in the NRC
licenses issued with respect to the South Texas Project (STP) nuclear power
plant to AEP.
AEP and CSW plan to make other required federal filings with the Securities and
Exchange Commission, the Federal Communications Commission, the Department of
Justice and the Federal Trade Commission later this year. However, there can be
no assurance that AEP and CSW will obtain all necessary regulatory approvals, or
when such approvals will be obtained.
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 December 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.
This news release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions and involve a number of risks and
<PAGE>
uncertainties. Among the factors that could cause actual results to differ
materially are: whether or not the proposed merger of AEP and CSW ultimately is
consummated, the timing of consummation and the effects of any conditions
imposed by regulators on the merged companies; electric load and customer
growth; abnormal weather conditions; available sources and cost of fuel and
generating capacity; the speed and degree to which competition enters the power
generation, wholesale and retail sectors of the electric utility industry; state
and federal legislative and regulatory initiatives that, among other things,
increase competition, threaten cost and investment recovery and affect rate
structures; the ability of the combined company to successfully reduce its cost
structure; the degree to which the combined company develops nonregulated
business ventures; the economic climate and growth in the service territories of
the two companies; the amount of savings generated by the merger; the
inflationary trends and interest rates and the other risks detailed from time to
time in the two companies' SEC reports.
###
EXHIBIT 99.2
AEP CSW
AMERICAN ==================================
ELECTRIC CENTRAL AND SOUTH WEST CORPORATION
POWER ==================================
Contact for American Electric Power:
Pam Hemlepp 614/223-1620
Contact for Central and South West:
Larry Jones 214/777-1276
ARKANSAS PUBLIC SERVICE COMMISSION APPROVES MERGER
BETWEEN AMERICAN ELECTRIC POWER AND CENTRAL AND SOUTH WEST
Columbus, Ohio, and Dallas, Texas (August 17, 1998) -- The Arkansas Public
Service Commission (APSC) on Thursday issued an order approving the proposed
merger between American Electric Power Company, Inc. (NYSE: AEP) and Central and
South West Corporation (NYSE: CSR).
CSW is the parent company of Southwestern Electric Power Company (SWEPCO).
SWEPCO serves portions of East Texas, Northwest Louisiana and West Arkansas,
including Fayetteville, Booneville, Rogers and Eureka Springs.
The commission's approval is subject to the findings issued when the commission
reviews the proposed regulatory plan associated with the merger. Hearings on the
regulatory proposals are scheduled to begin Nov. 10.
Approval also is subject to acceptance by AEP and CSW of certain conditions
including:
- Commitment to comply with prior agreements between CSW/SWEPCO and the
APSC;
- Agreement that the combined company would not withdraw from the Southwest
Power Pool (SPP) without prior approval from the commission;
- Clarification of federal and state jurisdictional issues; and
- Agreement to notify the commission of filings in other jurisdictions
relative to the merger.
The ASPC order marks the first approval of the merger by a state utility
commission. AEP and CSW jointly filed the request for approval June 12.
<PAGE>
Testimony submitted in that filing 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 Arkansas that provides for:
- Approximately $1.8 million in fuel cost savings to Arkansas
customers of CSW's Southwestern Electric Power Company (SWEPCO)
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 SWEPCO customers in Arkansas 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 $16.9 million of these non-fuel merger-related
savings will be used to reduce future costs to SWEPCO's Arkansas
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 filing provides that there will be minimal job reductions among
employees having direct contact with customers. CSW's work force currently
totals about 7,000 employees, and AEP's work force totals about 18,000
employees. AEP and CSW intend to use a combination of reduced hiring and
attrition to the maximum extent possible to minimize the need for employee
separations.
As previously reported, on April 30, CSW and AEP submitted filings to the Public
Utility Commission of Texas and the Federal Energy Regulatory Commission seeking
favorable rulings relating to the proposed merger. On May 15, the companies
submitted an application for approval of the proposed merger to the Louisiana
Public Service Commission. CSW and AEP on August 14 filed an application for
approval with the Oklahoma Corporation Commission.
In addition CSW subsidiary Central Power and Light Company (CPL) on June 19
filed a license transfer application with the Nuclear Regulatory Commission
(NRC) in connection with the proposed merger. The application requests the NRC's
consent to the indirect transfer of control of CPL's interests in the NRC
licenses issued with respect to the South Texas Project (STP) nuclear power
plant to AEP. The parties plan to make other required federal filings with the
Securities and Exchange Commission, the Federal Communications Commission, the
<PAGE>
Department of Justice and the Federal Trade Commission later this year. However,
there can be no assurance that AEP and CSW will obtain all necessary regulatory
approvals, or when such approvals will be obtained. 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
December 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.
This news release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions and involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are: whether or not the proposed merger of AEP and CSW ultimately is
consummated, the timing of consummation and the effects of any conditions
imposed by regulators on the merged companies; electric load and customer
growth; abnormal weather conditions; available sources and cost of fuel and
generating capacity; the speed and degree to which competition enters the power
generation, wholesale and retail sectors of the electric utility industry; state
and federal legislative and regulatory initiatives that, among other things,
increase competition, threaten cost and investment recovery and affect rate
structures; the ability of the combined company to successfully reduce its cost
structure; the degree to which the combined company develops nonregulated
business ventures; the economic climate and growth in the service territories of
the two companies; the amount of savings generated by the merger; the
inflationary trends and interest rates and the other risks detailed from time to
time in the two companies' SEC reports.
###
