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
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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