-----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, C/RQqX3hXihZ7l9An9/RbPFTIqaQthP01jHnXj7eO7mLBgklfCeQc0bo4/N7wBMv DNU17eFUCcFd8UWWlfykmQ== 0000018540-97-000139.txt : 19971002 0000018540-97-000139.hdr.sgml : 19971002 ACCESSION NUMBER: 0000018540-97-000139 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 19971001 SROS: NONE 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: POS AMC SEC ACT: SEC FILE NUMBER: 070-08557 FILM NUMBER: 97688901 BUSINESS ADDRESS: STREET 1: 1616 WOODALL RODGERS FRWY CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 2147541000 POS AMC 1 AMENDMENT NO. 7 File No. 70-8557 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 7 (POST-EFFECTIVE) TO FORM U-1 APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ----------------------------------- CENTRAL AND SOUTH WEST CORPORATION SOUTHWESTERN ELECTRIC POWER COMPANY 1616 Woodall Rodgers Freeway 428 Travis Street Dallas, Texas 75202 Shreveport, Louisiana 71156-0001 CENTRAL POWER AND LIGHT COMPANY WEST TEXAS UTILITIES COMPANY 539 North Carancahua Street 301 Cypress Street Corpus Christi, Texas 78401-2802 Abilene, Texas 79601-5820 PUBLIC SERVICE COMPANY OF OKLAHOMA CENTRAL AND SOUTH WEST 212 East Sixth Street SERVICES, INC. Tulsa, Oklahoma 74119-1212 1616 Woodall Rodgers Freeway Dallas, Texas 75202 CSW ENERGY, INC. CSW INTERNATIONAL, INC. 1616 Woodall Rodgers Freeway 1616 Woodall Rodgers Freeway Dallas, Texas 75202 Dallas, Texas 75202 CSW COMMUNICATIONS, INC. ENERSHOP, INC. 1705 South Capital of Texas Hwy. 1616 Woodall Rodgers Freeway Austin, Texas 78746 Dallas, Texas 75202 CSW ENERGY SERVICES, INC. 1616 Woodall Rodgers Freeway Dallas, Texas 75202 (Names of companies filing this statement and addresses of principal executive offices) ---------------------------------- CENTRAL AND SOUTH WEST CORPORATION (Name of top registered holding company parent) --------------------------------- Wendy G. Hargus, Treasurer Central and South West Corporation 1616 Woodall Rodgers Freeway Dallas, Texas 75202 Joris M. Hogan, Esq. Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, New York 10005 (Names and addresses of agents for service) Central and South West Corporation ("CSW"), a Delaware Corporation and a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"), and its subsidiary companies Central Power and Light Company ("CPL"), Public Service Company of Oklahoma ("PSO"), Southwestern Electric Power Company ("SWEPCO"), West Texas Utilities Company ("WTU"), Central and South West Services, Inc. ("CSWS"), CSW Energy, Inc. ("Energy"), CSW International, Inc. ("CSWI"), CSW Communications, Inc. ("Communications"), EnerShop, Inc. ("EnerShop") and CSW Energy Services, Inc. ("ESI"), each referred to as a "Subsidiary" and collectively referred to as the "Subsidiaries", hereby file this Post-Effective Amendment No. 7 (this "Amendment") to the Form U-1 Application-Declaration in File No. 70-8557 to request authority: (i) to increase the aggregate amount of authorized borrowings (a) by CSW from $1.2 billion to $2.5 billion, (b) by CPL from $300 million to $400 million, (c) by PSO from $125 million to $225 million, (d) by SWEPCO from $150 million to $250 million, (e) by WTU from $65 million to $165 million, and (f) by CSWS from $110 million to $210 million; and (ii) either (a) for Energy, CSWI, Communications, EnerShop, ESI and any other existing or future CSW first tier subsidiary or Rule 58 company that CSW may wish to include (collectively, the "New Participants") to participate in the system of intercorporate borrowings under the CSW system money pool (the "System Money Pool") or (b) for CSW and the New Participants to, currently or in the future, form and participate in a separate system of intercorporate borrowings (the "New Participants Money Pool") should CSW deem proper the formation of a separate money pool based on then existing regulatory or business considerations. The Subsidiaries together with CSW are referred to herein collectively as the "Applicants". Item 1. Description of Proposed Transaction. CSW and the Subsidiaries propose to expand the System Money Pool, as previously authorized by orders HCAR Nos. 25777 (March 31, 1993), 25897 (September 28, 1993), 26007 (March 18, 1994), 26066 (June 15, 1994), 26226 (February 1, 1995), 26254 (March 21, 1995) and 26697 (March 28, 1997), by increasing the borrowing limits of the existing participants and by permitting the New Participants to make loans to, and borrow from, the System Money Pool. CSW and the New Participants also request authority to form and participate in the New Participants Money Pool should CSW deem proper the formation of a separate money pool based on then existing regulatory or business considerations, in which case the System Money Pool and the New Participants Money Pool will both be supported by CSW's increased authorized borrowing level hereunder. New Participants Energy is primarily engaged in the development, ownership and operation of exempt wholesale generators ("EWGs"), as defined in Section 32 of the Act, and qualifying facilities ("QFs") under the Public Utility Regulatory Policy Act of 1978, as amended, as authorized by the following orders: HCAR Nos. 25162 (Sept. 28, 1990), 25414 (Nov. 22, 1991), 25728 (Dec. 31, 1992) and 26417 (Nov. 28, 1995) in File No. 70-7758; HCAR Nos. 26156 (Nov. 3, 1994) and 26383 (Sept. 27, 1995) in File No. 70-8423; and HCAR No. 26653 (Jan. 24, 1997) in File No. 70-8809. Energy is also permitted to engage in certain other activities pursuant to the aforementioned orders. In addition, Energy is also permitted to engage in certain other activities related to specific projects pursuant to the following orders: HCAR No. 25516 (Apr. 16, 1992) in File No. 70-7852; HCAR Nos. 25399 (Nov. 1, 1991) and 25553 (June 11, 1992) in File No. 70-7867; HCAR Nos. 25477 (Feb. 18, 1992), 25599 (Aug. 6, 1992) and 25762 (Mar. 19, 1993) in File No. 70-7918; HCAR No. 25782 (Apr. 2, 1993) in File No. 70-8097; HCAR Nos. 25796 (Apr. 15, 1993), 25988 (Feb. 9, 1994) and 26626 (Dec. 13, 1996) in File No. 70-8133; HCAR Nos. 25866 (Aug. 6, 1993) and 26416 (Nov. 28, 1995) in File No. 70-8205; HCAR No. 26155 (Nov. 2, 1994) in File No. 70-8209; HCAR Nos. 26184 (Dec. 9, 1994), 26522 (May 29, 1996) and 26614 (Nov. 26, 1996) in File No. 70-8469; and HCAR No. 26177 (Nov. 30, 1994) in File No. 70-8483. CSWI is primarily engaged in the development, ownership and operation of foreign EWGs and the investment in, and ownership and operation of, foreign utility companies ("FUCOs"), as defined in Section 33 of the Act, and certain other permitted activities, as authorized by the following orders: HCAR Nos. 26156 (Nov. 3, 1994) and 26383 (Sept. 27, 1995) in File No. 70-8423; and HCAR No. 26653 (Jan. 24, 1997) in File No. 70-8809. Energy and CSWI also intend to engage, indirectly through Rule 58 subsidiaries and foreign service companies, respectively, in various energy-related businesses in the United States and abroad (such foreign activities by foreign service companies outside of the United States are subject to separate Commission approval, which has been requested by post-effective amendment to the Form U-1 Application-Declaration in File No. 70-8423). In addition to using the System Money Pool as a source of short-term funds for their general corporate purposes and in connection with other permitted activities, Energy and CSWI propose to use the System Money Pool as a source of interim funding for investment in EWGs and FUCOs. Separate from CSW's authority to incur borrowings in support of the System Money Pool, CSW was authorized by order dated January 24, 1997 (HCAR No. 26653 in File No. 70-8809) (the "Financing Order") to incur borrowings or issue securities, including commercial paper, to finance investment in EWGs and FUCOs in an aggregate amount up to 100% of its consolidated retained earnings (the "Aggregate Limit"). Thus, Energy and CSWI are requesting authority to use borrowings from the System Money Pool, as a substitute for or in addition to direct borrowings by CSW under the Financing Order, for general corporate purposes and other permitted activities and as a means of interim financing for investment in EWGs and FUCOs. At present, under the Financing Order, CSW can borrow (or issue securities) to fund investments in EWGs and FUCOs up to the Aggregate Limit, and CSW can borrow for other purposes and to support the System Money Pool in an amount up to $1.2 billion pursuant to the order issued in File No. 70-8557, such that there are two separate sources of authority for CSW's borrowings for these two distinct purposes. This Amendment will maintain the separation of these sources of authority to borrow since CSW will retain separate authority to borrow to finance investments in EWGs and FUCOs under the Financing Order. Thus, if the Commission grants the Applicants' request herein, CSW would be authorized to borrow $2.5 billion in support of the System Money Pool in addition to an amount of borrowings (or issuances of securities) equal to the available authority under the Aggregate Limit of the Financing Order. Any borrowings (or issuances of securities) by CSW for the purpose of financing investment in EWGs and FUCOs will be made only under the Financing Order and will count only toward the Aggregate Limit; borrowings by CSW for other purposes and to support System Money Pool borrowings will be made only under the authority requested herein and will count only toward the borrowing limits set forth herein. Communications is an exempt telecommunications company ("ETC") under Section 34 of the Act and is engaged, directly and indirectly, in the business of providing telecommunications and information services. Communications proposes to use System Money Pool borrowings for general corporate purposes, and as interim financing for the expansion of its business and the acquisition of other ETCs from third parties. EnerShop is engaged in the business of providing demand-side management services to industrial and commercial customers of both associate and nonassociate companies as authorized by the following order: HCAR No. 26367 (Sept. 1, 1995) in File No. 70-8645 (the "EnerShop Order"). EnerShop proposes to use System Money Pool borrowings for general corporate purposes, and as interim financing for the expansion of its business and investments in energy-related companies under Rule 58 under the Act. ESI, which is expected to be organized prior to the time that the Commission takes action on this application, will qualify as an energy-related company under Rule 58, and will be primarily engaged in the business of marketing and brokering energy commodities, as well as other activities permitted by Rule 58. ESI would use System Money Pool borrowings for general corporate purposes, and as interim financing for the expansion of its business and investments in other energy-related businesses permitted under Rule 58. CSW system companies may from time to time organize additional Rule 58 companies, and CSW may from time to time organize additional first tier subsidiaries pursuant to an exemption under the Act or further Commission authorization. In either case, CSW proposes that any such new subsidiaries would be eligible to participate as New Participants in the System Money Pool or the New Participants Money Pool, as the case may be. Borrowing Limits CSW requests that the maximum aggregate amount of its short-term borrowings be increased from $1.2 billion to $2.5 billion for the following purposes: (i) to cover incremental borrowings of the New Participants. (ii) to provide authority for CSW to issue commercial paper for interim financing of acquisitions and investments consistent with the conversion of CSW's commercial paper program from one based upon the exemption provided by Section 3(a)(3) of the Securities Act of 1933 to a program based upon the Section 4(2) exemption thereunder (the "Money Pool Conversion"). Under Section 3(a)(3), CSW could only issue commercial paper for purposes of "current transactions", which limited its ability to use the System Money Pool as a source of interim financing for acquisitions and investments. In contrast, under Section 4(2), the amount of commercial paper that CSW can issue is not limited, nor are the use of proceeds. The Applicants propose to use commercial paper issuances and other borrowings that may be authorized by the Commission in this file as a source of interim financing for acquisitions and investments (other than for EWGs and FUCOs) by CSW and the participants in the System Money Pool. As set forth hereinabove, borrowings (including commercial paper issuances) to finance investment in EWGs and FUCOs would be conducted pursuant to authority provided by the Financing Order. (iii) to allow CSW to utilize its proposed additional borrowing capacity as a source of interim funding for open market repurchases of its common stock (subject to separate authorization by the Commission in File No. 70-9105); and (iv) to support the proposed increased limits of the existing parties to the System Money Pool. CPL seeks to increase its limit on System Money Pool borrowings from $300 million to $400 million, PSO seeks to increase its limit on System Money Pool borrowings from $125 million to $225 million, SWEPCO seeks to increase its limit on System Money Pool borrowings from $150 million to $250 million, WTU seeks to increase its limit on System Money Pool borrowings from $65 million to $165 million, and CSWS seeks to increase its limit on System Money Pool borrowings from $110 million to $210 million. CPL, PSO, SWEPCO and WTU each may utilize their proposed additional borrowing capacity for general corporate purposes and as a source of interim financing for the reacquisition of their respective securities. CSWS may utilize its proposed additional borrowing capacity for general corporate purposes and to refinance currently outstanding bank borrowings. CSW and the existing parties to the System Money Pool shall have authorized aggregate borrowing limits at the following levels: CSW $ 2,500,000,000 CPL $ 400,000,000 PSO $ 225,000,000 SWEPCO $ 250,000,000 WTU $ 165,000,000 CSWS $ 210,000,000 System Money Pool borrowings by the New Participants are either limited by order of the Commission, limited by Rule under the Act, or are not limited by Congress under the Act, such that separate limits on such borrowings are, in each case, as set forth below: (i) Energy's borrowings are subject to separate limits depending upon the purpose to which the funds are invested. If the funds are used to invest in EWGs and FUCOs, like CSWI, Energy's borrowings are limited by the Aggregate Limit of the Financing Order. If the funds are used to invest in QFs or other Rule 58 companies, Energy's borrowings may not exceed the aggregate investment limit under Rule 58. (ii) System Money Pool borrowings by CSWI may not exceed the amount of available authority under the Aggregate Limit of the Financing Order and the amount of CSWI's financing authority under other orders of the Commission (e.g., existing and future orders in File No. 70-8423). (iii) CSW's investment in Communications, as well as CSW's issuance of securities to fund such investments, are not limited under the Act. (iv) Investments and other financing by CSW related to EnerShop are limited to $100 million in the aggregate under the EnerShop Order so that System Money Pool borrowings by EnerShop also will be subject to the financing limit contained in the EnerShop Order (as such limit may be adjusted by any future orders of the Commission affecting the EnerShop Order). (v) ESI's System Money Pool borrowings are limited by the aggregate investment limit under Rule 58. Separate Money Pool for New Participants The electric utility industry is experiencing rapid changes in its regulatory environment. Many states are in the process of adopting comprehensive legislation regulating electric utilities within their jurisdictions. In addition, proposals to repeal the Act are currently pending in both houses of Congress. Given the uncertainty of the regulatory environment, CSW would like the flexibility to establish a New Participants Money Pool, either upon receipt of an Order hereunder or in the future, if then existing regulatory or other business considerations warrant. If and when a New Participants Money Pool is established, the New Participants would not participate in the System Money Pool, but CSW would rely on its increased authorized borrowing levels hereunder to support the System Money Pool and the New Participants Money Pool. A New Participants Money Pool would be established and administered in the same manner and subject to the same conditions as the System Money Pool. The aggregate borrowing limits under the New Participants Money Pool and the System Money Pool would not exceed the aggregate borrowing limit under the System Money Pool in effect immediately prior to establishment of the New Participants Money Pool. Benefits The participation of the New Participants in the System Money Pool would permit their available cash and/or short-term borrowing requirements to be matched on a daily basis with those of the other participants in the System Money Pool, thereby minimizing the need of the CSW system for external short-term borrowing. If the New Participants are authorized to participate in the System Money Pool, funds will be loaned from the System Money Pool in the form of open account advances under the same terms and limitations as currently authorized. Item 2. Fees, Commissions and Expenses. An estimate of the fees and expenses to be paid or incurred by the Applicants in connection with the proposed transactions additional to the fees and expenses as previously set forth in the Application-Declaration is set forth below: Amount -------- Counsel fees: Milbank, Tweed, Hadley & McCloy New York, New York....................... $ 6,000 Miscellaneous and incidental expenses including travel, telephone and postage.................................. 1,000 -------- Total $ 7,000 ======== Item 3. Applicable Statutory Provisions. Sections 6(a), 7, 9(a), 10, and 12(b) and Rules 43 and 45 thereunder are or may be applicable to the proposed transactions. To the extent any other sections of the Act may be applicable to the proposed transactions, the Applicants hereby request appropriate orders thereunder. The Applicants believe the Commission's supplemental order dated July 18, 1997 in favor of Consolidated Natural Gas Company, et al. (HCAR No. 26742; File No. 70-7258) provides precedent for the participation of non-utility subsidiaries in the system money pool of a registered holding company. Rule 54. Proceeds from the securities issuances that are proposed to be made under the authority requested herein may be used by CSW or any subsidiary thereof for the direct or indirect acquisition of an interest in an EWG or a FUCO. As stated above, CSW was authorized in the Financing Order to issue commercial paper, among other securities, to finance the acquisition of interests in EWGs and FUCOs in an aggregate amount up to 100% of its consolidated retained earnings as defined in Rule 53. As the Commission already has granted CSW authority to issue commercial paper to finance the acquisition of EWGs and FUCOs, CSW is not seeking such authority herein, and will not use the authority granted herein for such purposes. In this Amendment, CSW seeks to integrate the commercial paper issuance authority granted in the Financing Order with its commercial paper program in support of the System Money Pool. This integration is facilitated by the System Money Pool Conversion. Thus, when CSW issues commercial paper to finance the acquisition of EWGs and FUCOs by Energy and CSWI, it will be issuing securities under authority provided by the Financing Order (which was already approved by the Commission under Rule 53(c)), not in reliance on any authority that may be granted in respect of this Amendment. Open account advances between participants in the System Money Pool do not involve the issue or sale of a security under the Act and thus do not implicate Rule 54. Rule 54 promulgated under the Act states that in determining whether to approve the issue or sale of a security by a registered holding company for purposes other than the acquisition of an EWG or a FUCO, or other transactions by such registered holding company or its subsidiaries other than with respect to EWGs or FUCOs, the Commission shall not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company system if Rule 53(a), (b) and (c) are satisfied. As set forth below, all applicable conditions set forth in Rule 53(a) are currently satisfied and none of the conditions set forth in Rule 53(b) exist or will exist as a result of the transactions proposed herein. CSW's "aggregate investment" (as defined under Rule 53(a) of the Act) in EWGs and FUCOs as of September 11, 1997 was approximately $921 million, or about 47% of $1,970 million, CSW's average "consolidated retained earnings" for the four consecutive quarterly periods ended June 30, 1997. CSW thus satisfies Rule 53(a)(1). CSW will maintain and make available the books and records required by Rule 53(a)(2). No more than 2% of the employees of CSW's domestic operating subsidiaries will, at any one time, directly or indirectly, render services to an EWG or FUCO in which CSW directly or indirectly owns an interest, satisfying Rule 53(a)(3). And lastly, CSW will submit a copy of Item 9 and Exhibits G and H of CSW's Form U5S to each of the public service commissions having jurisdiction over the retail rates of CSW's operating utility subsidiaries, satisfying Rule 53(a)(4). None of the conditions described in Rule 53(b) exist with respect to CSW or any of its subsidiaries, thereby satisfying such rule and making Rule 53(c) inapplicable. CSW was authorized in the Financing Order to invest up to 100% of its consolidated retained earnings in EWGs and FUCOs. In connection with its consideration of CSW's application for the Financing Order, the Commission reviewed CSW's procedures for evaluating EWG or FUCO investments. Based on projected financial ratios and on procedures and conditions established to limit the risks to CSW involved with investments in EWGs and FUCOs, the Commission determined that permitting CSW to invest up to 100% of its consolidated retained earnings in EWGs and FUCOs would not have a substantial adverse impact upon the financial integrity of the CSW system, nor would it have an adverse impact on any of the Subsidiaries or their customers, or on the ability of State commissions to protect the Subsidiaries or their customers. Since similar considerations are involved hereunder with respect to Rule 54, Applicants should not be required to make subsequent Rule 54 filings once CSW's aggregate investment in EWGs and FUCOs exceeds 50% of its consolidated retained earnings. Item 4. Regulatory Approval. No state regulatory authority and no federal regulatory authority, other than the Commission under the Act, have jurisdiction over the proposed transactions. Item 5. Procedure. It is requested that the Commission issue and publish no later than October 3, 1997, the requisite notice under Rule 23 with respect to the filing of this Amendment, such notice to specify a date not later than October 27, 1997, as the date after which an order granting and permitting this amended Application-Declaration to become effective may be entered by the Commission and that the Commission enter not later than October 28, 1997, an appropriate order granting and permitting this amended Application-Declaration to become effective. The Applicants respectfully request that appropriate and timely action be taken by the Commission in this matter. No recommended decision by a hearing officer or other responsible officer of the Commission is necessary or required in this matter. The Division of Investment Management of the Commission may assist in the preparation of the Commission's decision in this matter. There should be no thirty-day waiting period between the issuance and the effective date of any order issued by the Commission in this matter, and it is respectfully requested that any such order be made effective immediately upon the entry thereof. Item 6. Exhibits and Financial Statements. Exhibit 1 - Preliminary opinion of Milbank, Tweed, Hadley & McCloy, counsel to the Applicants. Exhibit 2 - Financial statements as of June 30, 1997 of CSW and Subsidiaries. Exhibit 3 - Proposed Notice of Proceeding. Item 7. Information as to Environmental Effects. The Commission's action in this matter will not constitute any major federal action having a significant effect on the human environment. To the best of CSW's knowledge, no federal agency has prepared or is preparing an environmental impact statement with respect to the proposed transactions. S I G N A T U R E - - - - - - - - - Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned companies have duly caused this document to be signed on their behalf by the undersigned thereunto duly authorized. Dated: September 30, 1997 CENTRAL AND SOUTH WEST CORPORATION CENTRAL POWER AND LIGHT COMPANY PUBLIC SERVICE COMPANY OF OKLAHOMA SOUTHWESTERN ELECTRIC POWER COMPANY WEST TEXAS UTILITIES COMPANY CENTRAL AND SOUTH WEST SERVICES, INC. CSW ENERGY, INC. CSW INTERNATIONAL, INC. CSW COMMUNICATIONS, INC. ENERSHOP, INC. CSW ENERGY SERVICES, INC. By:/s/ WENDY G. HARGUS Wendy G. Hargus Treasurer INDEX OF EXHIBITS EXHIBIT TRANSMISSION NUMBER EXHIBIT METHOD - ------- ------- ------------ 1 Preliminary opinion of Milbank, Electronic Tweed, Hadley & McCloy, counsel to the Applicants. 2 Financial statements as of June 30, 1997 Electronic of CSW and Subsidiaries. 3 proposed Notice of Proceeding. Electronic EX-5 2 EXHIBIT 1 - LEGAL OPINION OF MTH&M EXHIBIT 1 Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, New York 10005 September 30, 1997 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Central and South West Corporation, et al. Post-Effective Amendment No. 7 to Form U-1 Application-Declaration Dear Sirs: We refer to Post-Effective Amendment No. 7 (the "Amendment") to the Form U-1 Application-Declaration (collectively with the Amendment, the "Application") under the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), filed by Central and South West Corporation ("CSW"), a Delaware corporation and a registered holding company, and Central and South West Services, Inc. ("Services"), a Texas corporation, Central Power and Light Company ("CPL"), a Texas corporation, Public Service Company of Oklahoma ("PSO"), an Oklahoma corporation, Southwestern Electric Power Company ("SWEPCO"), a Delaware corporation, West Texas Utilities Company ("WTU"), a Texas corporation, CSW Energy, Inc. ("Energy"), a Texas corporation, CSW International, Inc. ("CSWI"), a Delaware corporation, CSW Communications, Inc. ("Communications"), a Delaware corporation, CSW Energy Services, Inc. ("ESI"), a Delaware corporation, and EnerShop, Inc. ("EnerShop" and, collectively with CSW, Services, CPL, PSO, SWEPCO, WTU, Energy, CSWI, Communications and ESI, the "Companies"), a Delaware corporation. The Amendment relates to the Companies' request for authority to Energy, CSWI, Communications, EnerShop, ESI and future CSW first tier subsidiaries or Rule 58 companies to lend and borrow money as participants in the CSW System money pool or to lend and borrow money as participants in a separate money pool (the "Transactions"), as more fully described in the Amendment. We have acted as special counsel for the Companies in connection with the filing of the Amendment. We have examined originals, or copies certified to our satisfaction, of such corporate records of the Companies, certificates of public officials, certificates of officers and representatives of the Companies and other documents as we have deemed it necessary to require as a basis for the opinions hereinafter expressed. In such examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. As to various questions of fact material to such opinions we have, when relevant facts were not independently established, relied upon certificates by officers of the Companies and other appropriate persons and statements contained in the Application. Based upon the foregoing, and having regard to legal considerations which we deem relevant, we are of the opinion that, in the event that the proposed Transactions are consummated in accordance with the Application, as it may be amended, and subject to the assumptions and conditions set forth below: 1. All state laws applicable to the proposed Transactions as described in the Amendment will have been complied with. 2. The consummation of the proposed Transactions as described in the Amendment will not violate the legal rights of the lawful holders of any securities issued by the Companies or any associate company of the Companies. The opinions expressed above in respect of the proposed Transactions as described in the Amendment are subject to the following assumptions or conditions: a. The Transactions shall have been duly authorized and approved to the extent required by state law by the Board of Directors of the Companies. b. The Securities and Exchange Commission shall have duly entered an appropriate order or orders granting and permitting the Amendment to become effective with respect to the Transactions described therein. c. The Transactions shall have been accomplished in accordance with required approvals, authorizations, consents, certificates and orders of any state commission or regulatory authority with respect thereto and all such required approvals, authorizations, consents, certificates and orders shall have been obtained and remain in effect at the closing thereof. d. No act or event other than as described herein shall have occurred subsequent to the date hereof which would change the opinions expressed above. We hereby consent to the use of this opinion as an exhibit to the Amendment. Very truly yours, MILBANK, TWEED, HADLEY & McCLOY EX-99.2 3 EXHIBIT 2 INDEX EXHIBIT 2 TO FINANCIAL STATEMENTS Page Number CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES Consolidated Balance Sheets - Per Books and Pro Forma as of June 30, 1997 3 - 4 Consolidated Statement of Income for the Twelve Months Ended June 30, 1997 5 Consolidated Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 6 CENTRAL AND SOUTH WEST CORPORATION (CORPORATE) Balance Sheets - Per Books and Pro Forma as of June 30, 1997 7 Statement of Income for the Twelve Months Ended June 30, 1997 8 CENTRAL POWER AND LIGHT COMPANY Balance Sheets - Per Books and Pro Forma as of June 30, 1997 9 - 10 Statement of Income for the Twelve Months Ended June 30, 1997 11 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 12 PUBLIC SERVICE COMPANY OF OKLAHOMA Balance Sheets - Per Books and Pro Forma as of June 30, 1997 13 - 14 Statement of Income for the Twelve Months Ended June 30, 1997 15 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 16 SOUTHWESTERN ELECTRIC POWER COMPANY Balance Sheets - Per Books and Pro Forma as of June 30, 1997 17 - 18 Statement of Income for the Twelve Months Ended June 30, 1997 19 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 20 WEST TEXAS UTILITIES COMPANY Balance Sheets - Per Books and Pro Forma as of June 30, 1997 21 - 22 Statement of Income for the Twelve Months Ended June 30, 1997 23 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 24 CENTRAL AND SOUTH WEST SERVICES, INC. Balance Sheets - Per Books and Pro Forma as of June 30, 1997 25 - 26 Statement of Income for the Twelve Months Ended June 30, 1997 27 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 28 INDEX TO FINANCIAL STATEMENTS Page (CONTINUED) Number CSW ENERGY, INC. Balance Sheets - Per Books and Pro Forma as of June 30, 1997 29 Statement of Income for the Twelve Months Ended June 30, 1997 30 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 31 CSW INTERNATIONAL, INC. Balance Sheets - Per Books and Pro Forma as of June 30, 1997 32 Statement of Income for the Twelve Months Ended June 30, 1997 33 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 34 CSW COMMUNICATIONS, INC. Balance Sheets - Per Books and Pro Forma as of June 30, 1997 35 - 36 Statement of Income for the Twelve Months Ended June 30, 1997 37 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 38 ENERSHOP INC. Balance Sheets - Per Books and Pro Forma as of June 30, 1997 39 Statement of Income for the Twelve Months Ended June 30, 1997 40 Statement of Retained Earnings for the Twelve Months Ended June 30, 1997 41 PRO FORMA ADJUSTMENTS TO BALANCE SHEETS 42 STATEMENT OF CHANGES 43 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 44 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant Production $5,800 $5,800 Transmission 1,553 1,553 Distribution 4,321 4,321 General 1,369 1,369 Construction work in progress 185 185 Nuclear fuel 193 193 Other Diversified 171 171 -------------------------------- 13,592 13,592 Less - Accumulated depreciation 5,050 5,050 -------------------------------- 8,542 8,542 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 268 268 Accounts receivable 1,004 1,004 Materials and supplies, at average cost 181 181 Electric fuel inventory 83 83 Under-recovered fuel costs 59 59 Prepayments and other 86 86 -------------------------------- 1,681 1,681 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS Deferred plant costs 506 506 Mirror CWIP asset - net 292 292 Other non-utility investments 343 343 Income tax related regulatory assets, net 236 236 Goodwill 1,463 1,463 Other 360 360 -------------------------------- 3,200 3,200 -------------------------------- $13,423 $0 $13,423 ================================ CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock Equity - Common stock, $3.50 par value, authorized 350,000,000 shares; issued and outstanding 212,200,000 shares $743 $743 Paid-in capital 1,039 1,039 Retained earnings 1,887 1,887 Foreign currency translation and other 38 38 -------------------------------- Total Common Stock Equity 3,707 3,707 -------------------------------- Preferred stock Not subject to mandatory redemption 176 176 Subject to mandatory redemption 28 28 Subsidiary obligated, mandatorily redeemable, trust preferred securities 324 324 Long-term debt 3,979 3,979 -------------------------------- Total Capitalization 8,214 8,214 -------------------------------- CURRENT LIABILITIES Long-term debt/preferred stock due within twelve months 204 204 Short-term debt 400 400 Short-term debt - CSW Credit 708 708 Loan Notes 67 67 Accounts payable 494 494 Accrued taxes 245 245 Accrued interest 102 102 Other 249 249 -------------------------------- 2,469 2,469 -------------------------------- DEFERRED CREDITS Accumulated deferred income taxes 2,244 2,244 Investment tax credits 284 284 Other 212 212 -------------------------------- 2,740 2,740 -------------------------------- $13,423 $0 $13,423 ================================ CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) OPERATING REVENUES $5,135 ----------- OPERATING EXPENSES AND TAXES U.S. Electric fuel and purchased power 1,215 United Kingdom Cost of Sales 1,295 Operating and maintenance 1,064 Depreciation and amortization 468 Taxes, other than income 183 Income taxes 178 ----------- 4,403 ----------- OPERATING INCOME 732 ----------- OTHER INCOME AND DEDUCTIONS 34 ----------- INCOME BEFORE INTEREST CHARGES 766 ----------- INTEREST AND OTHER CHARGES Interest on long-term debt 332 Distributions on trust preferred securities 4 Interest on short-term debt and other 75 ----------- 411 ----------- INCOME FROM CONTINUING OPERATIONS 355 ----------- DISCONTINUED OPERATIONS Gain on the sale of discontinued operations, net of tax of $0.3 8 ----------- NET INCOME 363 Less: preferred stock dividends 16 Gain on reacquired preferred stock 10 ----------- NET INCOME FOR COMMON STOCK $357 =========== CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF RETAINED EARNINGS FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) RETAINED EARNINGS AT JUNE 30, 1996 $1,897 Add: Net income for common stock 357 ----------- 2,254 ----------- Deduct: Common stock dividends 367 Retained earnings adjustment 0 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $1,887 =========== CENTRAL AND SOUTH WEST CORPORATION BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant General $1 $1 Less - Accumulated depreciation (1) (1) -------------------------------- NET PLANT 0 0 INVESTMENTS IN COMMON STOCK OF SUBSIDIARY COMPANIES (at equity) 4,044 4,044 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 15 15 Accounts and interest receivable - Affiliated 106 106 Prepayments and other 4 4 -------------------------------- 125 125 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS 14 14 -------------------------------- $4,183 $0 $4,183 ================================ CAPITALIZATION Common Stock Equity - Common stock, $3.50 par value; authorized 350,000,000 shares; issued and outstanding 212,200,000 shares $743 $743 Paid-in capital 1,039 1,039 Retained earnings 1,887 1,887 Foreign currency translation and other 3 3 -------------------------------- Total Common Stock Equity 3,672 3,672 -------------------------------- Long-term debt 0 0 -------------------------------- Total Capitalization 3,672 3,672 -------------------------------- CURRENT LIABILITIES Short-term debt 400 400 Accounts payable and other 123 123 -------------------------------- 523 523 -------------------------------- DEFERRED CREDITS (12) (12) -------------------------------- $4,183 $0 $4,183 ================================ CENTRAL AND SOUTH WEST CORPORATION STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) INCOME Equity in earnings of subsidiaries Central Power and Light Company $121 Public Service Company of Oklahoma 69 Southwestern Electric Power Company 86 West Texas Utilities Company 25 SEEBOARD U.S.A. 103 CSW Credit, Inc. 8 CSW Energy, Inc. 6 CSW Leasing, Inc. 1 CSW International, Inc. (1) CSW Communications, Inc. (6) Enershop Inc. (2) Central and South West Services, Inc. 0 Other Income 20 ---------- $430 ---------- EXPENSES AND TAXES General and administrative expenses 60 Depreciation and amortization expense 1 Interest expense 42 Taxes, other than income 2 Federal income taxes (24) ---------- 81 ---------- DISCONTINUED OPERATIONS Gain on sale of discontinued operations, net of tax of $0.3 8 ---------- NET INCOME $357 ========== CENTRAL POWER AND LIGHT COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant Production $3,110 $3,110 Transmission 509 509 Distribution 984 984 General 281 281 Construction work in progress 84 84 Nuclear fuel 193 193 -------------------------------- 5,161 5,161 Less - Accumulated depreciation and amortization 1,759 1,759 -------------------------------- 3,402 3,402 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 26 26 Accounts receivable 146 146 Under-recovered fuel costs 31 31 Materials and supplies, at average cost 73 73 Fuel inventory 11 11 Prepayments and other 6 6 -------------------------------- 293 293 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS Deferred STP costs 486 486 Mirror CWIP asset 292 292 Income tax related regulatory assets, net 329 329 Other 102 102 -------------------------------- 1,209 1,209 -------------------------------- $4,904 $0 $4,904 ================================ CENTRAL POWER AND LIGHT COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustment Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $25 par value; authorized 12,000,000 shares; issued and outstanding 6,755,535 shares $169 $169 Paid-in capital 405 405 Retained earnings 855 855 -------------------------------- Total common stock equity 1,429 1,429 Preferred stock Not subject to mandatory redemption 163 163 CPL obligated, mandatorily redeemable, trust preferred securities 145 145 Long-term debt 1,327 1,327 -------------------------------- Total capitalization 3,064 3,064 -------------------------------- CURRENT LIABILITIES Long-term debt due within twelve months 200 200 Payables to affiliates 23 23 Accounts payable 83 83 Accrued taxes 67 67 Accumulated deferred income taxes 9 9 Accrued interest 31 31 Refund due customers 99 99 Other 32 32 -------------------------------- 544 544 -------------------------------- DEFERRED CREDITS Accumulated deferred income taxes 1,137 1,137 Investment tax credits 144 144 Other 15 15 -------------------------------- 1,296 1,296 -------------------------------- $4,904 $0 $4,904 ================================ CENTRAL POWER AND LIGHT COMPANY STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) ELECTRIC OPERATING REVENUE $1,301 ----------- OPERATING EXPENSES AND TAXES Fuel 349 Purchased power 58 Other operating 287 Maintenance 53 Depreciation and amortization 149 Taxes, other than income 76 Income taxes 76 ----------- 1,048 ----------- OPERATING INCOME 253 ----------- OTHER INCOME AND DEDUCTIONS Other 3 ----------- 3 ----------- INCOME BEFORE INTEREST CHARGES 256 ----------- INTEREST AND OTHER CHARGES Interest on long-term debt 110 Distributions on trust preferred securities 2 Interest on short-term debt and other 14 ----------- 126 ----------- NET INCOME 130 Less: preferred stock dividends 12 Gain on reacquired preferred stock 3 ----------- NET INCOME FOR COMMON STOCK $121 =========== CENTRAL POWER AND LIGHT COMPANY STATEMENT OF RETAINED EARNINGS FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) RETAINED EARNINGS AT JUNE 30, 1996 $858 Add: Net income (loss) for common stock 121 ----------- 979 Deduct: Common stock dividends 124 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $855 =========== PUBLIC SERVICE COMPANY OF OKLAHOMA BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant Production $903 $903 Transmission 372 372 Distribution 800 800 General 204 204 Construction work in progress 39 39 -------------------------------- 2,318 2,318 Less - Accumulated depreciation 1,016 1,016 -------------------------------- 1,302 1,302 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 5 5 Accounts receivable 32 32 Materials and supplies, at average cost 34 34 Fuel inventory 16 16 Accumulated deferred income taxes 6 6 Prepayments 5 5 -------------------------------- 98 98 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS 65 65 -------------------------------- $1,465 $0 $1,465 ================================ PUBLIC SERVICE COMPANY OF OKLAHOMA BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $15 par value; authorized 11,000,000 shares; issued 10,482,000 shares; outstanding 9,013,000 shares $157 $157 Paid-in capital 180 180 Retained earnings 156 156 -------------------------------- Total common stock equity 493 493 Preferred stock 5 5 PSO obligated, mandatorily redeemable, trust preferred securities 73 73 Long-term debt 421 421 -------------------------------- Total capitalization 992 992 -------------------------------- CURRENT LIABILITIES Payable to affiliates 24 24 Accounts payable 43 43 Payables to customers 15 15 Accrued taxes 27 27 Accrued interest 9 9 Other 5 5 -------------------------------- 123 123 -------------------------------- DEFERRED CREDITS Accumulated deferred income taxes 254 254 Investment tax credits 42 42 Income tax related regulatory liabilities, net 44 44 Other 10 10 -------------------------------- 350 350 -------------------------------- $1,465 $0 $1,465 ================================ PUBLIC SERVICE COMPANY OF OKLAHOMA STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) ELECTRIC OPERATING REVENUE $728 ----------- OPERATING EXPENSES AND TAXES Fuel 281 Purchased power 47 Other operating 122 Maintenance 36 Depreciation and amortization 79 Taxes, other than income 28 Income taxes 35 ----------- 628 ----------- OPERATING INCOME 100 ----------- OTHER INCOME AND DEDUCTIONS 1 ----------- INCOME BEFORE INTEREST CHARGES 101 ----------- INTEREST AND OTHER CHARGES Interest on long-term debt 31 Distributions on trust preferred securities 1 Interest on short-term debt and other 3 ----------- 35 ----------- NET INCOME 66 Less: preferred stock dividends 1 Gain on reacquisition of preferred stock 4 ----------- NET INCOME FOR COMMON STOCK $69 =========== PUBLIC SERVICE COMPANY OF OKLAHOMA STATEMENT OF RETAINED EARNINGS FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) RETAINED EARNINGS AT JUNE 30, 1996 $131 Add: Net income (loss) for common stock 69 ----------- 200 Deduct: Common stock dividends 44 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $156 =========== SOUTHWESTERN ELECTRIC POWER COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant Production $1,370 $1,370 Transmission 467 467 Distribution 848 848 General 310 310 Construction work in progress 45 45 -------------------------------- 3,040 3,040 Less - Accumulated depreciation 1,189 1,189 -------------------------------- 1,851 1,851 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 5 5 Accounts receivable 62 62 Materials and supplies, at average costs 28 28 Fuel inventory 41 41 Under-recovered fuel costs 12 12 Prepayments and other 15 15 -------------------------------- 163 163 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS 75 75 -------------------------------- $2,089 $0 $2,089 ================================ SOUTHWESTERN ELECTRIC POWER COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $18 par value; authorized 7,600,000 shares; issued and outstanding 7,536,640 shares $136 $136 Paid-in capital 245 245 Retained earnings 334 334 -------------------------------- Total common stock equity 715 715 Preferred stock Not subject to mandatory redemption 5 5 Subject to mandatory redemption 28 28 SWEPCO obligated, mandatorily redeemable, trust preferred securities 106 106 Long-term debt 548 548 -------------------------------- Total capitalization 1,402 1,402 -------------------------------- CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 4 4 Accounts payable 58 58 Payable to affiliates 62 62 Customer deposits 11 11 Accrued taxes 33 33 Accumulated deferred income taxes 5 5 Accrued interest 14 14 Other 12 12 -------------------------------- 199 199 -------------------------------- DEFERRED CREDITS Accumulated deferred income taxes 376 376 Investment tax credits 69 69 Income tax related regulatory liabilities, net 33 33 Other 10 10 -------------------------------- 488 488 -------------------------------- $2,089 $0 $2,089 ================================ SOUTHWESTERN ELECTRIC POWER COMPANY STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) ELECTRIC OPERATING REVENUE $914 ----------- OPERATING EXPENSES AND TAXES Fuel 382 Purchased power 22 Other Operating 143 Maintenance 44 Depreciation and amortization 94 Taxes, other than income 53 Income taxes 40 ----------- 778 ----------- OPERATING INCOME 136 ----------- OTHER INCOME AND DEDUCTIONS 1 ----------- INCOME BEFORE INTEREST CHARGES 137 ----------- INTEREST AND OTHER CHARGES Interest on long-term debt 43 Distributions on trust preferred securities 1 Interest on short-term debt and other 6 ----------- 50 ----------- NET INCOME 87 Less: preferred stock dividends 3 Gain on reacquired preferred stock 2 ----------- NET INCOME FOR COMMON STOCK $86 =========== SOUTHWESTERN ELECTRIC POWER COMPANY STATEMENT OF RETAINED EARNINGS FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) RETAINED EARNINGS AT JUNE 30, 1996 $310 Add: Net income (loss) for common stock 86 ----------- 396 Deduct: Common stock dividends 62 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $334 =========== WEST TEXAS UTILITIES COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS FIXED ASSETS Electric utility plant Production $417 $417 Transmission 206 206 Distribution 355 355 General 101 101 Construction work in progress 16 16 -------------------------------- 1,095 1,095 Less - Accumulated depreciation 426 426 -------------------------------- 669 669 -------------------------------- CURRENT ASSETS Cash and temporary cash investments 1 1 Accounts receivable 33 33 Materials and supplies, at average cost 16 16 Fuel inventory, at average cost 8 8 Coal inventory, at LIFO cost 7 7 Under-recovered fuel costs 14 14 Prepayments and other 1 1 -------------------------------- 80 80 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS Deferred Oklaunion costs 21 21 Regulatory assets 10 10 Other 41 41 -------------------------------- 72 72 -------------------------------- $821 $0 $821 ================================ WEST TEXAS UTILITIES COMPANY BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $25 par value; authorized 7,800,000 shares; issued and outstanding 5,488,560 shares $137 $137 Paid-in capital 2 2 Retained earnings 124 124 -------------------------------- Total common stock equity 263 263 Preferred stock Not subject to mandatory redemption 3 3 Long-term debt 277 277 -------------------------------- Total capitalization 543 543 -------------------------------- CURRENT LIABILITIES Advances from affiliates 26 26 Payables to affiliates 32 32 Accounts payable 8 8 Accrued taxes 9 9 Accrued interest 5 5 Accumulated deferred income taxes 2 2 Other 2 2 -------------------------------- 84 84 -------------------------------- DEFERRED CREDITS Accumulated deferred income taxes 145 145 Investment tax credits 29 29 Investment tax related regulatory liabilities, net 16 16 Other 4 4 -------------------------------- 194 194 -------------------------------- $821 $0 $821 ================================ WEST TEXAS UTILITIES COMPANY STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) ELECTRIC OPERATING REVENUE $379 ----------- OPERATING EXPENSES AND TAXES Fuel 124 Purchased power 38 Other Operating 76 Maintenance 14 Depreciation and amortization 41 Taxes, other than income 24 Income taxes 14 ----------- 331 ----------- OPERATING INCOME 48 ----------- OTHER INCOME AND DEDUCTIONS 1 ----------- INCOME BEFORE INTEREST CHARGES 49 ----------- INTEREST CHARGES Interest on long-term debt 21 Interest on short-term debt and other 4 ----------- 25 ----------- NET INCOME 24 Less: preferred stock dividends -- Gain on reacquisition of preferred stock 1 ----------- NET INCOME FOR COMMON STOCK $25 =========== WEST TEXAS UTILITIES COMPANY STATEMENT OF RETAINED EARNINGS FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) RETAINED EARNINGS AT JUNE 30, 1996 $116 Add: Net income (loss) for common stock 25 ----------- 141 Deduct: Common stock dividends 17 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $124 =========== CENTRAL AND SOUTH WEST SERVICES, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS General plant $121 $121 Less - Accumulated depreciation 34 34 -------------------------------- 87 87 -------------------------------- CURRENT ASSETS Accounts receivable affiliated 21 21 Accounts receivable non-affiliated 4 4 Prepayments and other 16 16 -------------------------------- 41 41 -------------------------------- DEFERRED CHARGES AND OTHER ASSETS 3 3 -------------------------------- $131 $0 $131 ================================ CENTRAL AND SOUTH WEST SERVICES, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Millions) Per Pro Forma Pro Books Adjustments Forma -------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Long-term debt $60 $60 -------------------------------- Total capitalization 60 60 -------------------------------- CURRENT LIABILITIES Accounts payable non-affiliated 11 11 Advances from affiliates and other 37 37 -------------------------------- 48 48 -------------------------------- DEFERRED CREDITS 23 23 -------------------------------- $131 $0 $131 ================================ CENTRAL AND SOUTH WEST SERVICES, INC. STATEMENT OF INCOME FOR THE TWELVE MONTHS JUNE 30, 1997 UNAUDITED (Millions) OPERATING REVENUE $0 ----------- OPERATING EXPENSES AND TAXES Fuel Expense 3 Other Operating 206 Maintenance 4 Depreciation and amortization 9 Taxes, other than income taxes 7 Income taxes 1 ----------- 230 ----------- OPERATING INCOME (230) ----------- OTHER INCOME AND DEDUCTIONS 236 ----------- INCOME BEFORE INTEREST CHARGES 6 ----------- INTEREST CHARGES 6 ----------- NET INCOME FOR COMMON STOCK $0 =========== CENTRAL AND SOUTH WEST SERVICES, INC. STATEMENT OF RETAINED EARNINGS AS OF JUNE 30, 1997 UNAUDITED (millions) RETAINED EARNINGS AT JUNE 30, 1996 $0 Add: Net income (loss) for common stock 0 ----------- RETAINED EARNINGS AT JUNE 30, 1997 $0 =========== CSW ENERGY, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Thousands) Per Pro Forma Pro Books Adjustments Forma -------------------------------- Assets Current Assets Cash and cash equivalents $ 10 $ 10 Accounts receivable 454 454 Prepaid expenses 59 59 -------------------------------- Total current assets 523 523 Investments In and Advances to Energy Projects 115,641 115,641 Notes Receivable - Affiliate 80,026 80,026 Other Assets Construction in progress and project developm costs 157,075 157,075 Other - net 7,913 7,913 -------------------------------- Total other assets 164,988 164,988 ================================ Total assets $ 361,178 $ 361,178 ================================ Liabilities and Shareholder's Equity Current Liabilities Accounts payable $ 12,166 $ 12,166 Accrued liabilities and other 4,836 4,836 -------------------------------- Total current liabilities 17,002 17,002 Long Term Debt 199,824 199,824 Deferred Income Taxes 37,102 37,102 Other 1,721 1,721 -------------------------------- Total liabilities 255,649 255,649 Shareholder's Equity Common stock 1 1 Additional paid-in-capital 108,139 108,139 Accumulated retained earnings (2,611) (2,611) -------------------------------- Total shareholder's equity 105,529 105,529 ================================ Total liabilities and shareholder's equity $ 361,178 $ 361,178 ================================ CSW ENERGY, INC. INCOME STATEMENT FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 UNAUDITED (Thousands) OPERATING REVENUE: Equity in income from energy projects $ 18,698 Operation and maintenance services 4,016 Other 450 ----------- Total operating revenue 23,164 OPERATING EXPENSES: Salaries, wages, and benefits 5,198 Loss on construction contract 7 Operation and maintenance services 2,879 General and administrative 2,867 Nonrecoverable project development costs - ----------- Total operating expenses 10,951 ----------- INCOME FROM OPERATIONS 12,213 OTHER INCOME (EXPENSE) Interest income 4,844 Interest expense (8,730) Other, net 872 ----------- Total other income (expense) (3,014) ----------- INCOME (LOSS) BEFORE INCOME TAXES 9,199 PROVISION (BENEFIT) FOR INCOME TAXES 3,575 ----------- Net income $ 5,624 =========== CSW ENERGY, INC. STATEMENT OF RETAINED EARNINGS AS OF JUNE 30, 1997 UNAUDITED (Thousands) Retained Earnings at June 30, 1996 $ (8,235) Add: Net income for common stock 5,624 ----------- Subtotal (2,611) Deduct: Common stock dividends - ----------- Retained Earnings at June 30, 1997 $ (2,611) =========== CSW INTERNATIONAL, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Thousands) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS Fixed Assets Electric distribution plant $ 1,383,867 $ 1,383,867 General plant 309,429 309,429 -------------------------------- Total Electric Plant 1,693,296 1,693,296 Less - Accumulated depreciation 623,808 623,808 -------------------------------- Total Fixed Assets 1,069,488 1,069,488 Current Assets Cash and cash equivalents 211,827 211,827 Short-term investments 29,786 29,786 Accounts receivable 128,578 128,578 Advances to affiliates 81,304 81,304 Inventories 29,983 29,983 Other current assets 44,843 44,843 -------------------------------- Total Current Assets 526,321 526,321 Other Assets Goodwill 1,463,120 1,463,120 Prepaid benefit costs 59,904 59,904 Equity investments and other 79,254 79,254 -------------------------------- Total Other Assets 1,602,278 1,602,278 Total Assets $ 3,198,087 $ 3,198,087 ================================ CAPITALIZATION AND LIABILITIES Capitalization Common stock $ 1 $ 1 Paid-in capital 829,000 829,000 Retained earnings 145,842 145,842 Foreign currency translation and other 34,965 34,965 -------------------------------- 1,009,808 1,009,808 -------------------------------- Long-term debt 1,146,771 1,146,771 Current Liabilities Accounts payable 253,871 253,871 Advances from affiliates 218,186 218,186 Accrued interest payable 39,838 39,838 Loan notes 67,448 67,448 Accrued taxes payable 49,823 49,823 Customer prepayments 11,552 11,552 Other 22,627 22,627 -------------------------------- 663,345 663,345 Deferred Credits Deferred tax liability 279,796 279,796 Other 98,367 98,367 -------------------------------- Total Deferred Credits 378,163 378,163 -------------------------------- Total Capitalization and Liabilities $ 3,198,087 $ 3,198,087 ================================ CSW INTERNATIONAL, INC. INCOME STATEMENT FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 UNAUDITED (Thousands) Operating Revenues Electric revenues $ 1,629,774 Other diversified 213,696 ----------- 1,843,470 ----------- Operating Expenses Cost of electric sales 1,143,245 General and administrative 230,124 Depreciation and amortization 91,245 Other diversified 151,514 ----------- 1,616,128 ----------- Operating Income 227,342 ----------- Other Income and (Deductions) Investment income 6,605 Interest income 16,626 Interest expense (119,598) ----------- (96,367) ----------- Income Before Income Taxes 130,975 ----------- Provision for Income Taxes 28,918 ----------- Net Income $ 102,057 =========== CSW INTERNATIONAL, INC. STATEMENT OF RETAINED EARNINGS AS OF JUNE 30, 1997 UNAUDITED (Thousands) Retained Earnings at June 30, 1996 $ 43,785 Add: Net income for common stock 102,057 ----------- Subtotal 145,842 Deduct: Common stock dividends - ----------- Retained Earnings at June 30, 1997 $ 145,842 =========== CSW COMMUNICATIONS, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Thousands) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS Current Assets Accounts Receivable - Trade $ 720 $ 720 Accounts Receivable - Other 388 388 Income Tax Receivable 1,367 1,367 -------------------------------- Total Receivables 2,475 2,475 Other Current Assets 220 220 -------------------------------- Total Current Assets 2,695 2,695 -------------------------------- Construction In Progress Construction In Progress - Profit Recognized 354 354 Construction In Progress - Resale Project Costs 1,116 1,116 Construction In Progress - CSWC Projects 3,781 3,781 -------------------------------- Total Construction In Progress 5,251 5,251 -------------------------------- Property, Plant & Equipment Plant In Service 14,713 14,713 Accumulated Depreciation (904) (904) -------------------------------- Plant In Service, net 13,809 13,809 Furniture & Fixtures 234 234 Accumulated Depreciation (85) (85) -------------------------------- Furniture & Fixtures, net 149 149 Other 5-Year Property 870 870 Accumulated Depreciation (107) (107) -------------------------------- Other 5-Year Property, net 763 763 -------------------------------- Net Property, Plant & Equipment 14,721 14,721 -------------------------------- Other Assets Organizational Costs 465 465 Accumulated Amortization (94) (94) -------------------------------- Organizational Costs, net 371 371 Brooks Fiber Investment, at market 4,091 4,091 Prepaid Pension Asset 40 40 -------------------------------- Total Other Assets 4,502 4,502 -------------------------------- TOTAL ASSETS $ 27,169 $ 27,169 ================================ CSW COMMUNICATIONS, INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Thousands) Per Pro Forma Pro Books Adjustments Forma -------------------------------- LIABILITIES & EQUITY Current Liabilities Accounts Payable - Affiliated $ 287 $ 287 Accounts Payable - Trade 460 460 Advance Billings and Payments 1,439 1,439 Interest Payable - Affiliated 128 128 Accrued Property & Sales Taxes 123 123 Accrued Payroll & Benefits 334 334 -------------------------------- Total Current Liabilities 2,771 2,771 -------------------------------- Long-Term Liabilities Note Payable - Affiliated 28,696 28,696 -------------------------------- Total Long-Term Liabilities 28,696 28,696 -------------------------------- Deferred Credits - - Deferred Income Taxes 1,298 1,298 Equity Common Stock 1 1 Additional Paid-in Capital - - Retained Earnings (8,688) (8,688) Unrealized Gain on Investments 3,091 3,091 -------------------------------- Total Equity (5,596) (5,596) -------------------------------- TOTAL LIABILITIES & EQUITY $ 27,169 $ 27,169 ================================ CSW COMMUNICATIONS, INC. INCOME STATEMENT FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 UNAUDITED (Thousands) REVENUES Construction $ 976 Leased Lines (Fiber Optics) 848 Miscellaneous 24 ----------- Total Revenue 1,848 COST OF GOODS SOLD Cost of Construction 622 ----------- NET REVENUE / (LOSS) 1,226 ----------- EXPENSES General & Administrative 7,463 Depreciation and Amortization 1,134 Interest 1,406 ----------- Total Expenses 10,003 ----------- TAXES Federal Income Tax - Current (3,853) Federal Income Tax - Deferred 636 Taxes Other than Income 424 ----------- Total Taxes (2,793) ----------- NET INCOME / (LOSS) $ (5,984) =========== CSW COMMUNICATIONS, INC. STATEMENT OF RETAINED EARNINGS AS OF JUNE 30, 1997 UNAUDITED (Thousands) BALANCE JUNE 30, 1996 $ (2,704) Net income / (loss) (5,984) ----------- BALANCE DECEMBER 31, 1996 $ (8,688) =========== ENERSHOP INC. BALANCE SHEETS PER BOOKS AND PRO FORMA AS OF JUNE 30, 1997 UNAUDITED (Thousands) Per Pro Forma Pro Books Adjustments Forma -------------------------------- ASSETS CurrentAssets Accounts Receivable $ 670 $ 670 Prepaid Assets 21 21 Federal Income Tax Benefit 466 466 Work in Progress 65 65 Other Assets 13 13 -------------------------------- Total Current Assets 1,235 1,235 -------------------------------- Office Furniture & Equipment 115 115 Accumulated Depreciation (20) (20) -------------------------------- Net Plant 95 95 -------------------------------- Other Assets Prepaid Benefit Plans 32 32 -------------------------------- Total Assets $ 1,362 $ 1,362 ================================ LIABILITIES & EQUITY Current Liabilities Accounts Payable $ 300 $ 300 Accounts Payable - affiliated 25 25 -------------------------------- Total Current Liabilities 325 325 -------------------------------- Long Term Liabilities Notes Payable 3,647 3,647 -------------------------------- Total Liabilites 3,972 3,972 -------------------------------- EQUITY Equity Common Stock -- -- Addtional Paid in Capital 1 1 Retained Earnings (2,611) (2,611) -------------------------------- Total Equity (2,610) (2,610) -------------------------------- Total Liabilities & Equity $ 1,362 $ 1,362 ================================ ENERSHOP INC. INCOME STATEMENT FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 UNAUDITED (Thousands) Contract Revenue $ 1,578 Maintenance Revenue 8 Other Misc Revenue 9 ----------- Total Revenue 1,595 Cost of Revenue 1,222 ----------- Operating Income 373 Gross Profit Margin 23.37% Selling & Admin Expenses Salaries & Employee Benefits 1,291 Marketing - General 300 Outside Services - Affiliate 239 Consulting & legal Fees 607 Travel and Entertainment 161 Administrative and General 402 Depreciation 22 ----------- Total Expenses 3,022 Other Deductions Interest Expense 132 Federal Income Taxes (1,033) ----------- Net Income (loss) $ (1,748) =========== ENERSHOP INC. STATEMENT OF RETAINED EARNINGS AS OF JUNE 30, 1997 UNAUDITED (Thousands) BALANCE JUNE 30, 1996 $ (863) Net Income (loss) (1,748) ----------- BALANCE JUNE 30, 1997 $ (2,611) =========== CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES PRO FORMA ADJUSTMENTS TO BALANCE SHEETS JUNE 30, 1997 UNAUDITED (Millions) DR CR --------------------- Note: None of the applicants have pro forma adjustments related to this request. CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES STATEMENT OF CHANGES There have been no significant changes in the financial statements of Central and South West Corporation and subsidiary companies subsequent to June 30, 1997, other than in the ordinary course of business. CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The notes to consolidated financial statements included in Central and South West Corporation's 1996 Combined Annual Report on Form 10-K are hereby incorporated by reference and made a part of this report. Page Reference 1996 Combined Annual Report on Form 10-K pages 2-39 through 2-71 EX-27.1 4
OPUR1 001 CENTRAL AND SOUTH WEST CORPORATION & SUBS 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 8,373 169 1,681 506 2,694 13,423 743 1,039 1,925 3,707 28 500 3,932 0 40 1,108 200 1 7 3 3,897 13,423 5,135 178 4,225 4,403 732 34 766 411 363 16 357 367 235 993 1.69 1.69
EX-27.2 5
OPUR1 0000018540 CENTRAL AND SOUTH WEST CORP. 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 0 4,044 125 0 14 4,183 743 1,039 1,890 3,672 0 0 0 0 0 400 0 0 0 0 111 4,183 0 (24) 63 39 (39) 430 391 42 357 0 357 367 0 151 1.69 1.69
EX-27.3 6
OPUR1 003 CENTRAL POWER AND LIGHT COMPANY 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 3,402 0 293 486 723 4,904 169 405 855 1,429 0 308 1,279 0 40 0 200 0 8 0 1,640 4,904 1,301 76 972 1,048 253 3 256 126 130 12 121 124 110 406 0.00 0.00
EX-27.4 7
OPUR1 004 PUBLIC SERVICE COMPANY OF OKLAHOMA 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 1,302 0 98 0 65 1,465 157 180 156 493 0 78 381 0 40 0 0 0 0 0 473 1,465 728 35 593 628 100 1 101 35 66 1 69 44 29 153 0.00 0.00
EX-27.5 8
OPUR1 005 SOUTHWESTERN ELECTRIC POWER COMPANY 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 1,851 0 163 0 75 2,089 136 245 334 715 28 111 541 0 0 0 0 1 7 3 683 2,089 914 40 738 778 136 1 137 50 87 3 86 62 42 226 0.00 0.00
EX-27.6 9
OPUR1 006 WEST TEXAS UTILITIES COMPANY 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 669 0 80 21 51 821 137 2 124 263 0 3 277 0 0 0 0 0 0 0 278 821 379 14 317 331 48 1 49 25 24 0 25 17 21 50 0.00 0.00
EX-27.7 10
OPUR1 008 CENTRAL AND SOUTH WEST SERVICES, INC. 1,000,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 87 0 41 0 3 131 0 0 0 0 0 0 60 0 0 0 0 0 0 0 71 131 0 1 229 230 (230) 236 6 6 0 0 0 0 0 7 0.00 0.00
EX-27.8 11
OPUR1 011 CSW ENERGY, INC. 1,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 0 115,641 523 0 245,014 361,178 1 108,139 (2,611) 105,529 0 0 199,824 0 0 0 0 0 0 0 55,825 361,178 23,164 3,575 10,951 14,526 8,638 5,716 14,354 8,730 5,624 0 5,624 0 0 (184,182) 0.00 0.00
EX-27.9 12
OPUR1 033 CSW INTERNATIONAL, INC. 1,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 1,069,488 79,254 526,321 0 1,523,024 3,198,087 1 829,000 180,807 1,009,808 0 0 1,146,771 0 0 0 0 0 0 0 1,041,508 3,198,087 1,843,470 28,918 1,616,128 1,645,046 198,424 23,231 221,655 119,598 102,057 0 102,057 0 25,888 323,784 0.00 0.00
EX-27.10 13
OPUR1 010 CSW COMMUNICATIONS, INC. 1,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 0 19,972 2,695 0 4,502 27,169 1 0 (5,597) (5,596) 0 0 28,696 0 0 0 0 0 0 0 4,069 27,169 1,848 (3,217) 9,643 6,426 (4,578) 0 (4,578) 1,406 (5,984) 0 (5,984) 0 0 (5,888) 0.00 0.00
EX-27.11 14
OPUR1 026 ENERSHOP INC. 1,000 12-MOS DEC-31-1997 Jun-30-1997 PER-BOOK 0 95 1,235 0 32 1,362 0 1 (2,611) (2,610) 0 0 3,647 0 0 0 0 0 0 0 325 1,362 1,595 (1,033) 4,244 3,211 (1,616) 0 (1,616) 132 (1,748) 0 (1,748) 0 0 (1,373) 0.00 0.00
EX-99 15 EXHIBIT 3 - PROPOSED NOTICE EXHIBIT 3 SECURITIES AND EXCHANGE COMMISSION (Release No. 35- ) Filings Under the Public Utility Holding Company Act of 1935 ("Act") _____________ ___, 1997 Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated thereunder. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) thereto is/are available for public inspection through the Commission's Office of Public Reference. Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by ______________, 1997, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit, or, in case of an attorney at law, by certificate) should be filed with the request. Any request for hearing shall identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After said date, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective. Central and South West Corporation, et al. (70-8557) Central and South West Corporation ("CSW"), a registered holding company, and Central and South West Services, Inc. ("Services"), Central Power and Light Company ("CPL"), Public Service Company of Oklahoma ("PSO"), Southwestern Electric Power Company ("SWEPCO"), West Texas Utilities Company ("WTU"), CSW Energy, Inc. ("Energy"), CSW International, Inc. ("CSWI"), CSW Communications, Inc. ("Communications"), CSW Energy Services, Inc. ("ESI") and EnerShop, Inc. ("EnerShop") (collectively, the "Subsidiaries") have filed an application-declaration under Sections 6(a), 7, 9(a), 10 and 12(b) of the Act and Rules 43 and 45 thereunder. CSW and the Subsidiaries propose to expand the System Money Pool, as previously authorized by orders in HCAR Nos. 25777 (March 31, 1993), 25897 (September 28, 1993), 26007 (March 18, 1994), 26066 (June 15, 1994), 26226 (February 1, 1995), 26254 (March 21, 1995) and 26697 (March 28, 1997), by increasing the borrowing limits of the existing participants and by permitting the New Participants to make loans to, and borrow from, the System Money Pool, or, should CSW deem it appropriate, to form a separate money pool for the New Participants. CSW requests authority: (i) to increase the aggregate amount of authorized borrowings (a) by CSW from $1.2 billion to $2.5 billion, (b) by CPL from $300 million to $400 million, (c) by PSO from $125 million to $225 million, (d) by SWEPCO from $150 million to $250 million, (e) by WTU from $65 million to $165 million, and (f) by CSWS from $110 million to $210 million; and (ii) either (a) for Energy, CSWI, Communications, EnerShop, ESI and any other existing or future CSW first tier subsidiary or Rule 58 company that CSW may wish to include (collectively, the "New Participants") to participate in the system of intercorporate borrowings under the CSW system money pool or (b) for CSW and the New Participants to, currently or in the future, form and participate in a separate system of intercorporate borrowings should CSW deem proper the formation of a separate money pool based on then existing regulatory or business considerations. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Jonathan G. Katz Secretary -----END PRIVACY-ENHANCED MESSAGE-----