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Thursday, March 16, 2000
Electric merger nearer
CPL parent clears key federal hurdle
By Andrea Jares
Caller-Times
The proposed merger between American Electric Power and Central and South West Corp. cleared one of the largest and last regulatory hurdles Wednesday in the companies' more than two-year journey through federal and state regulatory commissions.
The Federal Energy Regulatory Commission in Washington, D.C., which regulates the interstate transmission and wholesale marketing of electricity, conditionally approved the merger. As part of the merger agreement, the company, which will be known as AEP, must meet the conditions that the regulatory commission designed to improve the benefit to the public.
"This is a very significant step in moving toward the completion of the merger," said Larry Jones, spokesman for Dallas-based CSW. "The only remaining hurdle is the Securities and Exchange Commission."
Central and South West Corp., is the parent company of Central Power and Light Co. "The commission has engaged in intensive fact-finding in this case, which involves a very important merger and potential reconfiguration of the market," said James J. Hoecker, chairman of the federal commission. "The process has been long and involved."
The companies filed their merger application with the commission in April 1998. More than 100 groups intervened in the merger hearings, raising issues about the potential such a merger would have on the marketplace.
As part of the agreement with the energy regulatory commission, CSW will have to divest 550 megawatts of energy capacity. That capacity - which includes power from a 500-megawatt power plant under construction near Mission - will be auctioned off two years after the completion of the merger.
CPL customers will get about a 2 percent discount on the price they pay per kilowatt-hour as a benefit of the merger, Jones said.
Business writer Andrea Jares can be reached at 886-3678 or by e-mail at jaresa@caller.com
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