Columbus, Ohio, and Dallas, June 15, 1999 -- The Kentucky Public Service Commission (PSC) on Monday approved a previously announced settlement between American Electric Power (NYSE: AEP), Central and South West Corporation (NYSE: CSR) and key parties in the state addressing matters pertinent to Kentucky regarding the pending merger between AEP and CSW. The settlement between AEP, CSW, the Kentucky Attorney General, Kentucky Industrial Utility Customers Inc. and Kentucky Electric Steel Inc. was announced May 24. By approving the settlement, the Kentucky PSC and the parties to the settlement will not oppose the merger during proceedings at the Federal Energy Regulatory Commission (FERC) or the Securities and Exchange Commission (SEC). When the merger is completed, the settlement guarantees AEP customers in Kentucky almost $28.4 million in bill reductions in the first eight years after consummation of the merger. Kentucky's jurisdictional share of the guaranteed merger savings -- approximately $51.6 million over the next eight years -- will be split between Kentucky customers and AEP shareowners, with customers receiving approximately 55 percent of the savings. AEP has also agreed to maintain or improve customer service and system reliability, and to establish affiliate rules to protect consumers and promote fair competition. "We appreciate that the Kentucky commission has recognized the many benefits this merger provides to our customers," said E. Linn Draper Jr., AEP's chairman, president and chief executive officer. "This approval adds another line to our rapidly growing list of positive developments as we prepare for the Federal Energy Regulatory Commission hearing later this month. "We've announced many important approvals and settlements in recent weeks, each one moving us a step closer to consummating the merger," Draper said. AEP and CSW announced their intent to merge on Dec. 22, 1997. The merger has received conditional approval by state regulatory commissions in Arkansas and Oklahoma, two of the four states within CSW's service territory. The Oklahoma order confirmed a Oklahoma Corporation Commission OCC staff settlement recommendation to the OCC to not oppose approval of the merger by the FERC. The companies have a pending merger settlement with key parties in Texas, a third CSW state, that awaits action by the Public Utility Commission of Texas. Hearings have been postponed in Louisiana, the fourth CSW state, as AEP and CSW work with all parties in an attempt to settle all issues in that proceeding. AEP and CSW have reached a settlement with the FERC trial staff, in which the staff supports a finding that the merger will have no adverse effect on competition. That settlement is expected to expedite hearings at the FERC, which begin June 29. AEP and CSW have also announced settlement agreements with the International Brotherhood of Electrical Workers (IBEW) resulting in the IBEW local unions withdrawing their opposition to completion of the merger; with the Indiana Utility Regulatory Commission (IURC) resulting in Indiana customers receiving merger benefits and including a commitment by the IURC to not oppose the merger during consideration of the merger agreement by the FERC and the SEC; and with a variety of wholesale customers that had intervened in federal proceedings. The Nuclear Regulatory Commission has approved a license transfer application related to the merger. The merger requires approval by the FERC, the SEC and the Department of Justice. Once the merger is completed, the new company will be called American Electric Power. Central and South West Corp. is a global, diversified public utility holding company based in Dallas. CSW owns four electric operating subsidiaries serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a regional electricity company in the United Kingdom; other international energy operations and non-utility subsidiaries involved in energy-related investments, telecommunications, energy efficiency and financial transactions. AEP, a global energy company, is one of the United States' largest investor-owned utilities, providing energy to 3 million customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP has holdings in the United States, the United Kingdom, China and Australia. Wholly owned subsidiaries provide power engineering, energy consulting and energy management services around the world. The company is based in Columbus, Ohio.