American Electric Power and Central and South West Corp. reacheda settlement with FERC trial staff that resolves the market powerand rate issues relating to the pending merger of the twocompanies. Under terms of the settlement, AEP would transfer theoperation and control of its bulk transmission facilities locatedin Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and WestVirginia to a regional transmission organization (RTO). Thesettlement also covers rates for transmission services andancillary services and confirms, subject to FERC guidance oncertain elements, that the previously announced generationdivestiture program will satisfy the market power concerns of theFERC staff. Once the merger is completed, the new company will beserve 4.7 million electric customers in 11 states.

El Paso Natural Gas’ planned Willcox lateral to the Mexicanborder (CP99-322) will divert up to 130 MMcf/d from mainlineservice to firm customers in Arizona, according to Southwest Gas.The pipeline has proposed construction of the 55-mile, 20″ lateralfrom the Willcox Compressor station to two points on the borderwith Mexico to serve two and possibly three power plants. The gaswould serve an existing power plant near the City of Hermosillo,another plant to be built in that area and possibly one near theCity of Agua Prieta, Sonora, Mexico. Southwest Gas claims theapplication for the lateral shows a reduction in available capacityused to serve existing El Paso customers. El Paso claims existingcustomers will not be impacted. The distributor asked FERC for atechnical conference and a hearing.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.