7/30/1999

Louisiana Public Service Commission Approves AEP/CSW Merger; Merger Settlement Announced with Missouri Commission

Columbus, Ohio, and Dallas, July 29, 1999 -- The Louisiana Public Service Commission (LPSC) today granted conditional approval of the pending merger between American Electric Power Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE: CSR). AEP and CSW also announced a settlement with the Missouri Public Service Commission that resolves all issues raised by the Missouri commission related to the pending merger of the two companies. The LPSC commissioners unanimously approved the merger, subject to final approval by the Federal Energy Regulatory Commission (FERC). In granting approval, the LPSC also approved a stipulated settlement with the LPSC staff. CSW is the parent company of Southwestern Electric Power Company (SWEPCO). AEP and CSW have agreed to share with SWEPCO's Louisiana customers merger savings created as a result of the merger over the eight years following its completion. A savings mechanism will be implemented to calculate merger savings annually. AEP and CSW estimate that the customer rate credits in Louisiana will total more than $18 million during that eight-year period. During the second year following completion of the merger, customers will begin receiving a monthly rate credit for 50 percent of calculated merger savings. This credit will be updated annually and continue for the remainder of the eight-year period following the merger’s completion. The settlement also includes: · Sharing of the benefits for off-system sales · Establishment of conditions for affiliate transactions with other AEP and CSW subsidiaries. · Provisions to ensure continued quality of service; and · Provisions to hold SWEPCO's Louisiana customers harmless from adverse effects of the merger, if any. Neither company serves retail customers in the state of Missouri, but the Missouri Public Service Commission had expressed concerns about the effect of the merger on retail competition in the state and had asked the Federal Energy Regulatory Commission (FERC) to consider that as part of the merger proceeding. As part of the settlement, the Missouri commission will withdraw as an intervenor in the FERC merger proceeding. Missouri regulators had expressed concern that a reservation of 250 megawatts of capacity on Ameren Corp.’s transmission system by AEP and CSW could prevent competitors from gaining access to Missouri customers should the state decide to implement retail competition. The settlement provides the Missouri commission a means to initiate a FERC review of the merger’s effects on retail competition if the state implements a retail access program. The settlement also gives FERC discretion to decide if mitigation measures are warranted to the extent that the review finds the capacity reservation harmful to competition. Under terms of the settlement, the period for the action by the Missouri commission is limited to four years after AEP and CSW complete the merger. Any relief ordered by FERC can not extend beyond six years after the merger is completed. “We continue to talk with other intervenors to attempt to find reasonable solutions to their concerns as we work hard to complete this merger,” Draper said. “With each settlement, we bring our customers, shareholders, employees and our industry in general that much closer to attaining the substantial benefits that our merger offers.” AEP and CSW announced their intent to merge on Dec. 22, 1997. The merger previously had received conditional approval by state regulatory commissions in Arkansas and Oklahoma, two of the four states within CSW’s service territory. The Oklahoma order confirmed an Oklahoma Corporation Commission (OCC) staff settlement recommendation to the OCC to not oppose approval of the merger by the FERC. The companies have a pending merger settlement with key parties in Texas, a third CSW state, that awaits action by the Public Utility Commission of Texas. AEP and CSW have reached a settlement with the FERC trial staff, in which the staff supports a finding that the merger will have no adverse effect on competition. AEP and CSW are currently awaiting merger approval by the FERC. and the SEC. The Department of Justice also will review the merger application. AEP and CSW have also announced settlement agreements with the International Brotherhood of Electrical Workers (IBEW) resulting in the IBEW local unions withdrawing their opposition to completion of the merger; with the Indiana Utility Regulatory Commission (IURC) resulting in Indiana customers receiving merger benefits and including a commitment by the IURC to not oppose the merger during consideration of the merger agreement by the FERC and the SEC; with key parties in Kentucky addressing matters pertinent to the state regarding the pending merger; and with a variety of wholesale customers that had intervened in federal proceedings. 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 Company, Inc. 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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