The Oklahoma Corporation Commission (OCC) unanimously approvedthe 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, theAttorney General’s office, the OCC Public Utility Division and theOCC Consumer Services Division.

Among the terms of the Oklahoma settlement, AEP and CSW agreedto share net merger savings with customers of CSW subsidiary,Public Service Company of Oklahoma (PSO) effective with the mergerclosing; to not increase PSO’s base rates above current levelsprior to Jan. 1, 2003; to file to join a regional transmissionorganization by Dec. 31, 2001; and to implement additionalquality-of-service standards for PSO. Oklahoma’s share of theguaranteed net merger savings will be $50.2 million over the firstfive years after the merger is consummated and will be splitbetween PSO’s customers and AEP shareowners, with customersreceiving 55% of the savings.

“OCC approval of the merger increases the momentum that has beenbuilding over the last few months,” said E. Linn Draper Jr., AEP’sCEO. “As progress continues in our state jurisdictions, we also areworking to resolve issues with other parties in the upcomingproceeding before the FERC. We have announced settlements with sixwholesale customers. We look forward to additional settlements aswe prepare for the June hearing at the FERC.”

Action by the OCC marks the second approval by a stateregulatory commission within CSW’s service territory and followsseveral announcements of settlements over the last few weeks. OnApril 26, the Indiana Utility Regulatory Commission (IURC) approveda merger settlement that will result in Indiana customers receivingmerger benefits and included a commitment by the IURC to not opposethe merger during consideration of the agreement by the FederalEnergy Regulatory Commission and the Securities and ExchangeCommission.

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

The Arkansas Public Service Commission has granted conditionalapproval of the merger. Hearings have been postponed in Louisianaas AEP and CSW work with all parties in an attempt to settle allissues in that proceeding.

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