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OCC Approves AEP, CSW Merger

OCC Approves AEP, CSW Merger

The Oklahoma Corporation Commission (OCC) unanimously approved the proposed merger of American Electric Power Co. of Columbus, OH, and Dallas-based Central and South West Corp.

The decision follows a partial settlement among AEP, CSW, the Attorney General's office, the OCC Public Utility Division and the OCC Consumer Services Division.

Among the terms of the Oklahoma settlement, AEP and CSW agreed to share net merger savings with customers of CSW subsidiary, Public Service Company of Oklahoma (PSO) effective with the merger closing; to not increase PSO's base rates above current levels prior to Jan. 1, 2003; to file to join a regional transmission organization by Dec. 31, 2001; and to implement additional quality-of-service standards for PSO. Oklahoma's share of the guaranteed net merger savings will be $50.2 million over the first five years after the merger is consummated and will be split between PSO's customers and AEP shareowners, with customers receiving 55% of the savings.

"OCC approval of the merger increases the momentum that has been building over the last few months," said E. Linn Draper Jr., AEP's CEO. "As progress continues in our state jurisdictions, we also are working to resolve issues with other parties in the upcoming proceeding before the FERC. We have announced settlements with six wholesale customers. We look forward to additional settlements as we prepare for the June hearing at the FERC."

Action by the OCC marks the second approval by a state regulatory commission within CSW's service territory and follows several announcements of settlements over the last few weeks. On April 26, the Indiana Utility Regulatory Commission (IURC) approved a merger settlement that will result in Indiana customers receiving merger benefits and included a commitment by the IURC to not oppose the merger during consideration of the agreement by the Federal Energy Regulatory Commission and the Securities and Exchange Commission.

AEP and CSW on May 4 announced a merger settlement with the general counsel of the Public Utility Commission of the Texas, the Texas Industrial Energy Consumers, the Low Income Intervenors, the Office of Public Utility Counsel and the Steering Committee of the Cities of McAllen, Corpus Christi, Victoria, Abilene, Big Lake, Vernon and Paducah. On April 28, a settlement agreement was reached with the International Brotherhood of Electrical Workers (IBEW). The Nuclear Regulatory Commission has approved a license transfer application related to the merger. AEP and CSW have already settled with several intervenors at the federal level.

The Arkansas Public Service Commission has granted conditional approval of the merger. Hearings have been postponed in Louisiana as AEP and CSW work with all parties in an attempt to settle all issues in that proceeding.

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