-----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, V6l6tPBNfMGomFQrKGq3yyvTHQFAUMtqeOjDQKaKplPrRTDt/2r9WbhmP1EaJn+B GliVrY2N3EsNFaxekjnFXw== 0000018540-99-000064.txt : 19990705 0000018540-99-000064.hdr.sgml : 19990705 ACCESSION NUMBER: 0000018540-99-000064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990618 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990702 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: 99658465 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: 99658466 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: 99658467 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: 99658468 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: 99658469 BUSINESS ADDRESS: STREET 1: 301 CYPRESS CITY: ABILENE STATE: TX ZIP: 79601 BUSINESS PHONE: 9156747000 8-K 1 NEWS RELEASES 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: June 18, 1999 Date of report: July 2, 1999 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 (512) 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) 222-2141 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 CSW........................Central and South West Corporation, Dallas, Texas CSW System.................CSW and its subsidiaries SWEPCO.....................Southwestern Electric Power Company, Shreveport, Louisiana SWEPCO's Cajun Asset Proposal..................SWEPCO's Joint Reorganization Plan for Cajun Electric Power Cooperative, Inc., as amended Texas Electric Restructuring Legislation..............Senate Bill 7, June 18, 1999, effective September 1, 1999 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 general economic changes in the United States and in countries in which CSW either currently has made or in the future may make investments, - - the impact of the proposed AEP Merger including any regulatory conditions imposed on the merger, the inability to consummate the AEP Merger, or other merger and acquisition activity including SWEPCO's Cajun Asset Proposal, - - the impact of deregulation on the United States electric utility business, especially in the States comprising the CSW System's service territory - - increased competition and electric utility industry restructuring 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, - - 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. ITEM 5. OTHER EVENTS Texas Electric Restructuring Legislation On June 18, 1999, legislation was signed into law in Texas that will restructure the electric utility industry in that state. The new law gives Texas customers of investor-owned utilities the opportunity to choose their electric provider beginning on January 1, 2002. The legislation also provides a rate freeze until then followed by a 6 percent rate reduction for residential and small commercial customers, additional rate reductions for low income customers and a number of customer protections. Rural electric cooperatives and municipal electric systems can choose whether to participate in retail competition. Some of the key provisions of the legislation include: - - Beginning January 1, 2002, retail customers of investor-owned electric companies will be able to choose their electric provider. The affiliated retail electric provider of the utility that serves the customer on December 31, 2001 will continue to serve the customer unless the customer chooses another retail electric provider. Delivery of the electricity will continue to be the responsibility of the local electric utility company at regulated prices. Each utility must unbundle its business activities into a retail electric provider, a power generation company and a transmission and distribution utility. - - Retail electric cooperatives and municipal electric systems can choose whether to participate in retail competition. - - Investor-owned utilities must freeze their rates effective September 1, 1999, through the start of competition on January 1, 2002. Investor-owned utilities will then lower rates for residential and small commercial customers by 6 percent. This reduced rate is known as the "Price to Beat", which will be available to those customers for five years. - - The legislation establishes a System Benefit Fund for low-income customer assistance, customer education and to offset reductions in school property tax revenues. The fund will be funded through a charge on retail electric providers that can be set by the Public Utility Commission of Texas at up to 65 cents per megawatt-hour. - - Electric utilities are allowed to recover the reasonable excess costs over market of assets that otherwise may not be recoverable in the future competitive market. A majority of those regulatory assets and stranded costs can be recovered through securitization, which is a financing process to recover regulatory assets and stranded costs through the use of debt that lowers the carrying cost of assets compared to conventional utility financing methods. - - Each year during the 1999 through 2001 rate freeze period, utilities with stranded costs are required to apply any earnings in excess of the most recently approved cost of capital (if issued on or after January 1, 1992) to reduce stranded costs. Utilities without stranded costs must either flow such amounts back to customers or make capital expenditures to improve transmission or distribution facilities or to improve air quality. - - Investor-owned utilities will be required to auction entitlements to at least 15 percent of their generating capacity for five years or until 40 percent of the residential and small commercial consumption of electricity in the utility's service area is provided by a nonaffiliated retail electric provider. - - Grandfathered power plants, those built or started prior to implementation of the Texas Clean Air Act of 1972, must reduce emissions of Nitrogen Oxide (NOx) by 50 percent and Sulfur Dioxide (SO2) by 25 percent by May 2003. The law also requires an additional 2,000 megawatts of renewable power generation in Texas by 2009 from retail electric providers, municipally owned utilities and electric cooperatives. - - A Legislative Oversight Committee will be established to monitor the implementation and effectiveness of electric utility restructuring and make recommendations for any necessary further legislative action. CSW is currently analyzing the impact of the Texas Electric Restructuring Legislation on Central Power and Light Company, Southwestern Electric Power Company and West Texas Utilities Company, its three regulated electric companies that operate in Texas. SWEPCO's Cajun Asset Proposal On June 23, 1999, SWEPCO issued a news release related to SWEPCO's Joint Reorganization Plan for Cajun Electric Power Cooperative, Inc., which is attached as an exhibit and incorporated herein by reference. As reported in the SWEPCO release, on June 22, 1999 SWEPCO amended its plan to raise its base bid from $940.5 million to $990.5 million. On June 24, 1999 the other bidder, Louisiana Generating LLC, amended its plan to raise its base bid from $960 million to $995 million. The bankruptcy court released the schedule for final pleadings to be made in July 1999 in the Cajun bankruptcy but did not indicate when a decision will be issued. Proposed AEP Merger On June 25, 1999, AEP issued a news release, which is attached as an exhibit and incorporated herein by reference, announcing a plan to restart its Cook Nuclear Plant. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. Exhibit 99.1 SWEPCO News Release dated June 23, 1999 related to SWEPCO's Joint Reorganization Plan for Cajun Electric Power Cooperative, Inc. Exhibit 99.2 AEP News Release dated June 25, 1999. 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: July 2, 1999 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: July 2, 1999 By: /s/ R. Russell Davis R. Russell Davis Controller and Chief Accounting Officer (Principal Accounting Officer) EX-99.1 2 EXHIBIT 99.1 SWEPCO Southwestern Electric Power Company A Central and South West Company News Release FOR IMMEDIATE RELEASE Exhibit 99.1 CONTACTS: Peter Main for SWEPCO, 318-673-3530 Melanie Rovner Cohen for the Committee, 312-715-4040 John Sharp for the Committee, 225-755-1060 SWEPCO, Committee, WST Increase Proposed Purchase Price in Cajun Electric Bankruptcy SHREVEPORT, LA (June 23, 1999) - Southwestern Electric Power Company, the Committee of Certain Members and Washington-St. Tammany Electric Cooperative have increased the proposed purchase price in their joint reorganization plan for Cajun Electric Power Cooperative. The base bid has been increased to $990.5 million in a plan amendment filed June 22. The previous bid of $940.5 million was submitted on April 16, 1999. The plan calls for an affiliate of SWEPCO to acquire Cajun's non-nuclear assets and provide power to cooperatives through new, consensual, long-term power supply agreements. The new bid exceeds the rival Louisiana Generating bid by $30.5 million. The increase in purchase price is funded partially by a rate adjustment agreed to by the eight distribution cooperatives that support the joint plan. Rates under the amended plan remain below the level found to be "not presumptively unreasonable" by the Louisiana Public Service Commission. The revised rates remain below those proposed by rival Louisiana Generating. The competing reorganization plans are subject to confirmation by Bankruptcy Court and regulatory approvals. Confirmation hearings are under way, scheduled through June 25, in U.S. Bankruptcy Court in Opelousas, La. The Committee of Certain Members includes Beauregard Electric Cooperative, Inc., Dixie Electric Membership Corp., Jefferson Davis Electric Cooperative, Inc., Northeast Louisiana Power Cooperative, Inc., South Louisiana Electric Cooperative Association and Valley Electric Membership Corp. Washington-St.Tammany Electric Cooperative, Inc. (WST) is a co-proponent with SWEPCO and the Committee. Claiborne Electric Cooperative, Inc. which is not a membe of the Committee, also supports the SWEPCO/Committee/WST plan. Southwestern Electric Power Co., based in Shreveport, La., is a subsidiary of Central and South West Corp. (NYSE: CSR), a Dallas-based public utility holding company. # # # EX-99.2 3 EXHIBIT 99.2 Exhibit 99.2 AEP AMERICAN ELECTRIC POWER AEP: America's Energy Partner Media contacts: Pat D. Hemlepp Larry Jones American Electric Power Central and South West Corp. 614/223-1620 214/777-1276 Analysts contacts: John Bilacic Becky Hall American Electric Power Central and South West Corp. 614/223-2847 214/777-1277 FOR IMMEDIATE RELEASE AEP ANNOUNCES PLAN TO RESTART COOK NUCLEAR PLANT; UNITS SCHEDULED TO RETURN TO SERVICE IN APRIL AND SEPTEMBER 2000 COLUMBUS, Ohio, June 25, 1999 - American Electric Power Company Inc. (NYSE: AEP) today announced that its board of directors has approved a comprehensive plan to restart the idle Cook Nuclear Plant. Unit 2 is scheduled to return to service in April 2000 and Unit 1 is to return to service in September 2000. The announcement follows a comprehensive systems readiness review of all operating systems at the Cook plant. Plant officials shut down both units of the facility, located in Bridgman, Mich., in September 1997 because of questions raised during a design inspection by the Nuclear Regulatory Commission. E. Linn Draper Jr., chairman, president and chief executive officer of AEP, said, "After evaluating the difficult choices facing the future of the Cook plant, AEP management and its board of directors determined that restarting the plant is the best decision for our shareholders, customers and employees. The restart plan is comprehensive, realistic and deliverable and we are confident that it can be completed on schedule and on budget. Our confidence is based on the caliber of the team managing the restart effort, its effective working relationship with the regulatory authorities and the consistency of the timing and cost estimates of our plan with other comparable successful restarts." The company said that expenditures associated with the restart will total approximately $574 million, of which $192 million has already been spent. These costs will be accounted for primarily as expenses in 1999 and 2000. The company expects the outage and restart effects to reduce AEP's earnings per share by about 27 cents a share for the first half of 1999, another 37 cents per share for the second half of 1999, and $1.15 per share in the year 2000. A portion of 1999 restart costs have been deferred, so the earnings impact for 1999 is less than it would otherwise have been. The company indicated that the financial impact of this restart plan will not affect the company's dividend. Before making its decision, the board evaluated whether to restart the plant or to shut it down completely. In examining the restart option, the board considered cost estimates derived from a thorough readiness review by an experienced management group, the newly strengthened controls set in place to manage the project, and the likelihood that the anticipated expenditures would be recoverable in a competitive marketplace. In addition, the board considered the opportunities for improved operational performance that could be achieved from a successful restart, as well as the likelihood that the actions taken to qualify the plant for restart also will enable it to satisfy the NRC's rigorous requirements for relicensing and extended operation. Based on its evaluation, the board concluded that the risks associated with restart were manageable and appropriate, particularly when compared to the alternative of shutting down the plant, writing off the investment and losing significant sales opportunities. Draper added, "We have brought together seasoned nuclear executives to develop and implement the restart plan. They are unparalleled in experience and success in restarting idle nuclear facilities, truly a world-class team of highly experienced engineers and experts. Most of the key members have helped to direct successful plant restarts and all have effective working relationships with regulators and the industry that will contribute to the efficient and effective implementation of the restart plan." Bob Powers, AEP's senior vice president of nuclear generation said, "We have undertaken the most comprehensive, rigorous review of the Cook operations since the plant first came on line, in continuous contact with the NRC. During the course of our review, the team has uncovered many engineering and design issues that were masked by the successful operation of the Cook plant. Fortunately, all of these issues have been successfully dealt with in other restart programs and none will require untested solutions or major plant modifications." The company had previously indicated that it will replace a steam generator for Unit 1 before that unit would be returned to service. The expected costs of replacement have been set at approximately $165 million, of which $68 million has already been spent. These costs will be accounted for as a capital investment unrelated to the restart. "When the units are returned to service, Cook plant will be a more efficient and more predictable producer of energy and revenue," Powers said. "Moreover, as a result of the scope and thoroughness of the restart effort, the plant will be in the best possible position to satisfy the NRC's stringent requirements for relicensing and extended operation," he added. "The decision to restart Cook, like the decision to merge with Central and South West Corp. (NYSE: CSR) and to acquire Louisiana Intrastate Gas, underscores AEP's long term strategy of growing our already substantial energy commodity business by building a diversified portfolio of operations from a variety of fuels and strategically located geographic sources," Draper noted. "Restarting Cook and qualifying it for relicensing and extended operation expands the range of that portfolio," he added. E. R. Brooks, chairman and chief executive officer of Dallas-based CSW, AEP's merger partner, said, "We continue to believe in the strategic logic of this merger. We will continue with AEP to assess developments at Cook in the context of the overall transaction. The current projections by AEP for the Cook plant have not altered our continuing support for the transaction. We are continuing to cooperate fully in the activities necessary to achieve successful completion of the merger." 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. On Dec. 22, 1997, AEP announced a definitive merger agreement for a tax-free, stock-for-stock transaction with Central and South West Corp., a public utility holding company based in Dallas. --- This press release contains statements that are forward looking within the meaning of Section 21 E of the Securities Exchange Act of 1934. These forward looking statements reflect numerous assumptions and involve a number of risks and uncertainties. Key factors that could have a direct impact include various events that could impact the successful execution of the restart plan, such as the timing and the nature of actions by the NRC and other regulatory bodies, potential new plant modifications not foreseen at this time which could extend the outage further, the impact of the outage and restart activities on earnings, and other factors described in the Company's Securities and Exchange Commission filings. --- News releases and other information about AEP can be found on the World Wide Web at http://www.aep.com. ### -----END PRIVACY-ENHANCED MESSAGE-----