4/29/1999

Indiana Commission Approves Settlement Related to AEP-CSW merger

Columbus, Ohio, and Dallas, April 27, 1999 -- The Indiana Utility Regulatory Commission approved a settlement agreement Monday with American Electric Power (NYSE: AEP) related to the pending merger of AEP and Central and South West Corporation (NYSE: CSR). In approving the settlement agreement, announced last week, the IURC also has agreed to not oppose the merger at federal level. "The IURC has recognized -- as have many other states and customer groups -- that our merger provides many benefits for the consumer," said E. Linn Draper Jr., AEP's chairman, president and chief executive officer. "The combined companies will be a very efficient, low-cost energy provider. Our customers, who already receive electricity prices far below the national average, will reap the added benefit of sharing in the cost savings brought by the merger. "This merger is good for the consumer, for competition, for our industry, our employees and our shareholders," Draper said. "We have been confident since we announced the merger that we would gain the necessary approvals. These recent settlements have increased our momentum as we prepare to carry our message to the Federal Energy Regulatory Commission when the federal approval process begins." AEP and CSW announced their intent to merge on Dec. 22, 1997 and are seeking necessary regulatory approvals. Arkansas already has granted conditional approval. The companies also filed notice of a settlement in principle Friday with parties in Texas, with the settlement document expected to be signed and filed this week. The Indiana settlement and a partial settlement in Oklahoma were announced last week. On April 26, an Oklahoma administrative law judge recommended approval of the merger, subject to conditions that should be resolved by mid-June. Hearings have been postponed in Louisiana, as AEP and CSW work with all parties on settling all issues in that state. The merger also requires approval of the Federal Energy Regulatory Commission, the Securities and Exchange Commission and the Department of Justice. AEP and CSW have already settled with several intervenors at the federal level. The Nuclear Regulatory Commission has approved a license transfer application related to the merger. Once the merger is completed, the new company will be called American Electric Power. Under terms of the settlement that were announced last week, AEP has agreed to share merger savings with Indiana customers as well as AEP shareowners; establish performance standards that will maintain or improve customer service and system reliability; join a regional transmission organization by Dec. 31, 2000; and to establish affiliate rules to protect consumers and promote fair competition. The IURC will not oppose the merger during upcoming hearings or reviews by the Federal Energy Regulatory Commission and the Securities and Exchange Commission. Indiana's jurisdictional share of the guaranteed merger savings -- approximately $121.2 million over the next eight years -- will be split between Indiana customers and AEP shareowners, with customers receiving approximately 55 percent of the savings. Once the merger is consummated, Indiana customers will receive their share of the savings through credits of approximately 1 percent to 1.5 percent every year. The credits will continue for at least eight years and will not be affected by any changes to the current regulatory structure in Indiana. The settlement agreement extends by one year -- to Jan. 1, 2005 -- the base rate filing limitation currently in effect for AEP in Indiana. It also provides for additional annual deposits of $5.5 million in the Indiana Nuclear Decommissioning Trust Funds in the years 2001 through 2003. Central and South West Corp. is a global, diversified public utility holding company based in Dallas. CSW owns four electric operating subsidiaries serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional electricity company in the United Kingdom; other international energy operations and non-utility subsidiaries involved in energy-related investments, telecommunications, energy efficiency and financial transactions. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio.

For More Information, Contact: For American Electric Power Pat Hemlepp 614/223-1620 For Central and South West Larry Jones 214/777-1276

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