-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AZXPR+x8XWNW7NZcIcXBadB+HK8otGLlRC6EIgOWxP49gh6vBLT/56JA6l/UcWBp JEXFFV1F9I5Nbbu6KzirxA== 0000018540-00-000019.txt : 20000215 0000018540-00-000019.hdr.sgml : 20000215 ACCESSION NUMBER: 0000018540-00-000019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000125 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL & SOUTH WEST CORP CENTRAL INDEX KEY: 0000018540 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 510007707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01443 FILM NUMBER: 543348 BUSINESS ADDRESS: STREET 1: 1616 WOODALL RODGERS FRWY CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 2147771000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL POWER & LIGHT CO /TX/ CENTRAL INDEX KEY: 0000018734 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 740550600 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12973 FILM NUMBER: 543349 BUSINESS ADDRESS: STREET 1: 539 N CARANCAHUA ST CITY: CORPUS CHRISTI STATE: TX ZIP: 78401 BUSINESS PHONE: 5128815300 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE CO OF OKLAHOMA CENTRAL INDEX KEY: 0000081027 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 730410895 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12945 FILM NUMBER: 543350 BUSINESS ADDRESS: STREET 1: 212 E 6TH ST CITY: TULSA STATE: OK ZIP: 74119 BUSINESS PHONE: 9185992000 MAIL ADDRESS: STREET 1: P O BOX 201 CITY: TULSA STATE: OK ZIP: 74119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN ELECTRIC POWER CO CENTRAL INDEX KEY: 0000092487 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720323455 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03146 FILM NUMBER: 543351 BUSINESS ADDRESS: STREET 1: 428 TRAVIS ST CITY: SHREVEPORT STATE: LA ZIP: 71156 BUSINESS PHONE: 3182222141 MAIL ADDRESS: STREET 1: C/O SOUTHWESTERN ELECTRIC POWER CO STREET 2: 428 TRAVIS STREET CITY: SHREVEPORT STATE: LA ZIP: 71156-0001 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEST TEXAS UTILITIES CO CENTRAL INDEX KEY: 0000105860 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 750646790 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-00340 FILM NUMBER: 543352 BUSINESS ADDRESS: STREET 1: 301 CYPRESS CITY: ABILENE STATE: TX ZIP: 79601 BUSINESS PHONE: 9156747000 8-K 1 8-K 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 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. 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 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. 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) EX-12.1 2 EXHIBIT 12.1 Exhibit 12.1 Central Power and Light Company Ratio of Earnings to Fixed Charges For Years Ended December 31,
1999 1998 1997 1996 1995 --------------------------------------------------------- (thousands, except ratios) 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
EX-27.1 3
UT 0000018734 CENTRAL POWER AND LIGHT COMPANY 003 CENTRAL POWER AND LIGHT COMPANY 1,000 12-MOS DEC-31-1999 DEC-31-1998 PER-BOOK 3,247,969 2,552 241,206 50,551 1,305,572 4,847,850 168,888 405,000 764,225 1,338,113 0 5,967 1,454,541 322,158 0 0 150,000 0 0 0 1,577,071 4,847,850 1,482,475 103,895 1,083,908 1,187,803 294,672 2,596 297,268 114,380 182,888 6,931 173,194 148,000 87,413 303,184 0.00 0.00
EX-99.1 4 EXHIBIT 99.1 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. 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. EX-99.2 5 EXHIBIT 99.2 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 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. EX-99.3 6 EXHIBIT 99.3 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. "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. -----END PRIVACY-ENHANCED MESSAGE-----