2/10/2000

AEP DISCUSSES POST-MERGER OPERATION IN PRESENTATION TO FINANCIAL ANALYSTS

New York, Feb. 10, 2000 -- As American Electric Power (NYSE: AEP) nears the completion of its merger with Central and South West Corporation (NYSE: CSR), the company is positioned for success, according to E. Linn Draper Jr., AEP chairman, president and chief executive officer. "AEP is uniquely positioned to emerge as one of the leading energy companies," Draper told financial analysts during a presentation today. "We will pursue growth opportunities created by the convergence between energy and information. We intend to set standards for both growth and innovation in the energy marketplace." AEP and CSW announced their intention to merge on Dec. 22, 1997. Approvals that remain include the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC) and the Securities and Exchange Commission (SEC). Upon completion of the merger, expected in the spring, the company will be called American Electric Power. Draper noted that an important focus of the post-merger AEP is the integration of market information, assets and operating skills. "By using our rapidly expanding -- and successful -- electricity and gas marketing and trading operation, we have a unique ability to unleash the value of our generating assets in the competitive marketplace," Draper said. "That asset base also becomes the foundation for expanding and reshaping our generation portfolio, to achieve further fuel diversity and geographic reach into different regional markets. "Our trading organization is already number two in electricity trading volumes and will continue to grow," Draper said. "We were early to recognize that value in the energy marketplace is driven by information. We also intend to grow our wholesale business by using our skills and experience to trade in new commodities and markets. We are expanding our presence in Europe, and developing new businesses and revenue sources." AEP will separate its regulated and competitive businesses to create value. The disaggregation is driven in part by industry restructuring initiatives. It is also designed to create a performance-based organization, Draper said. "You will know the new AEP because we are accountable for our performance," Draper said. "We will compensate people based on performance measures they can control. At the same time, in today's fast-moving world, we need to make decisions in market time, not in bureaucratic time. Our goal is to design structures and systems that will support employees in making decisions fast." Draper reviewed the framework of AEP's three-phase strategic focus. The first phase, covering the next 12 months, will include closing the merger and restarting the Cook nuclear plant. The second phase, covering the next two years, will include disaggregation and recapitalization of the generation, transmission and distribution businesses, and realization of merger savings. The third phase, for three years and beyond, will include operating the regulated and unregulated wholesale business and to continuously reassess the value of the company's assets. "Our focus on growth will center on the wholesale business," Draper said. "We have unparalleled 'bench strength' to make that happen. But wholesale will not be our only focus. By the third year, we will have the flexibility to reconfigure our portfolio of assets to insure optimal use of our capital. We will maximize our substantial investment in wires, and we will continually reassess the value to determine what lines of business to retain in which locations." AEP expects to produce 5 to 6 percent annual growth in earnings per share during the transition to competition, Draper said. "Our goal continues to be to deliver a total return to investors in the top quartile of our industry," Draper said. "And our dividend will support this goal. We are confident that we will produce even more aggressive growth as the transition to competition nears completion." Draper provided an update on the status of AEP's Cook nuclear plant. Plant officials shut down both units of the Bridgman, Mich., facility in September 1997 because of questions raised during a design inspection by the Nuclear Regulatory Commission. Earlier this month, the NRC informed AEP that it had closed the Confirmatory Action Letter concerning Cook, a key approval needed for restart of the plant. Draper itemized estimated dates for key steps toward restart of Unit 2, the first unit to return to service. According to the schedule, core reload for Unit 2 is estimated for March 5. The unit will go critical March 31, be synchronized to the power grid April 1 and reach full power April 11. Unit 1 will complete steam generator replacement in March and is expected to be at full power by Sept. 1. "We are on schedule and on budget," Draper said. Other presenters included: -- Tom Shockley, CSW's president and chief operating officer, who will become AEP's vice chairman upon completion of the merger. Shockley itemized merger approvals received and pending, and said the merger is expected to close in the April/May time frame. He also discussed the merger savings; the combination of SEEBOARD and Yorkshire Electricity Group, two regional electric companies in the United Kingdom; and the recent regulatory review in the UK. CSW owns SEEBOARD and AEP owns 50 percent of Yorkshire. He indicated that stand alone efforts by SEEBOARD and Yorkshire to reduce costs would only partially offset the impact of the regulatory review, but the combination of the two companies would result in substantial savings that would offset the regulatory review impact by 2002. -- Henry Fayne, executive vice president - Financial Services and chief financial officer. Fayne discussed industry restructuring and the related implementation of company restructuring. Fayne indicated that AEP expects 86 percent of the company's generating capacity will be deregulated within 24 months. That includes key states of Ohio, Texas, Virginia and West Virginia. -- Craig Baker, vice president - Transmission Policy. Baker discussed the Alliance regional transmission organization and outlined potential transmission business opportunities. -- Susan Tomasky, general counsel and executive vice president - Legal, Public Policy and Corporate Communications. Tomasky provided an update about the legal and regulatory challenges facing the company on the environmental front. -- John Norris, senior vice president - Power Generation. Norris discussed wholesale generation and steps necessary to optimize generation assets. These include process improvements, using size to the company's advantage and creating a technical services company. -- Paul Addis, president - AEP Energy Services and executive vice president - Wholesale. Addis discussed the growth of AEP's trading and wholesale business and the integration of AEP's trading with the operation of the company's generation assets. Central and South West Corp. is a global, diversified public utility holding company based in Dallas. CSW owns four electric operating subsidiaries serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional electricity company in the United Kingdom; other international energy operations and non-utility subsidiaries involved in energy-related investments, telecommunications, energy efficiency and financial transactions. AEP, a global energy company, is one of the United States’ largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio. --- News releases and other information about AEP -- including the slide presentation from today's meeting -- can be found on the World Wide Web at http://www.aep.com. News releases and other information about CSW can be found on the World Wide Web at http://www.csw.com. --- Statements made in this news release contain forward-looking statements which are subject to risks and uncertainties. These include legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry; the extent and timing of the entry of additional competition in the markets of the subsidiary companies; changes in environmental and other laws and regulations to which the company and its subsidiaries are subject; political, legal and economic conditions and developments in the United States and in foreign countries in which the subsidiaries operate; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather and other natural phenomena; the performance of projects undertaken by the nontraditional business and the success of efforts to invest in and develop new opportunities; and other factors discussed in reports, including Form 10-K, filed from time to time by the company with the SEC.

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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