Central and South West Companies File Energy Resource Plan Incorporating Customer Feedback From Deliberative Polls.

DALLAS--(BUSINESS WIRE)--Feb. 3, 1997--Central Power and Light Company (CPL), West Texas Utilities Company (WTU) and Southwestern Electric Power Company (SWEPCO) on Friday filed with the Public Utility Commission of Texas (PUCT) a joint integrated resource plan outlining the companies' future electric needs over a 10-year forecast horizon and the manner in which the companies propose to meet those needs.

The filing is unique due to the unusually high level of customer involvement that helped shape the plan. CPL, WTU and SWEPCO are owned by Central and South West Corporation (CSW).

CPL has determined that additional resources are needed within the next 10 years (1997 - 2006) in order to continue providing reliable service to its customers. The most critical resource need is in the Rio Grande Valley, where the need for additional generating capacity is expected to reach 286 megawatts by the year 2002, while CPL's overall system need is expected to climb 1,077 megawatts by the year 2006. CPL proposes to issue an all-source solicitation for 290 megawatts of generation in the Rio Grande Valley to meet the need through 2002.

CPL expects the initial need to be met through a mix of energy resource options including generation, energy efficiency programs and renewable energy resources. CPL expects the renewables options including a 40-50 megawatt wind turbine farm (to be built in conjunction with SWEPCO and WTU and the installation of rooftop photovoltaic (PV) solar systems at selected schools in the CPL, WTU and SWEPCO service territories. CPL also envisions a "green power" program that will be introduced this spring.

WTU proposes to issue an all-source solicitation for 220 megawatts of generation to meet a need beginning in the year 2000. SWEPCO proposes to issue an all-source solicitation for 180 megawatts of generation to meet a need beginning in the year 2001. WTU and SWEPCO expect the initial need to be met through a mix of energy resource options including purchased power, generation, energy efficiency programs and renewable energy resources.

The filing is significant because this is the first time an electric utility has filed an integrated resource plan under the provisions of the Texas Public Utility Regulatory Act of 1995 (PURA 1995). In adopting PURA 1995, Texas lawmakers required that some type of public participation be incorporated in the planning process. Traditionally, these public participation activities would involve surveys, focus groups or public meetings.

The CSW companies that operate in Texas chose instead to use a public participation approach developed by Professor James Fishkin, chairman of the government department at the University of Texas at Austin. The process, known as Deliberative Polling(TM) is designed to go deeper than ordinary polls and surveys by collecting a random sample of all of the company's customers who then gather together to get more information and develop a truly informed, deliberated opinion. The filing marks the first use of a Deliberative Poll(TM) as a way of bringing customers into the electric utility planning process.

CPL's Deliberative Poll(TM) was held in June 1996 while WTU's and SWEPCO's Deliberative Polls(TM) were held in August 1996. First, a telephone poll was taken that measured public opinion about the energy resource options. Then, a scientific random sample of the company's customers was selected using random digit dialing. The group met over an entire weekend, during which time the members studied the issues in detail; they read through carefully balanced briefing materials, attended small group discussions and large group meetings; and had the opportunity to hear and question experts with differing views.

At the conclusion of the process, the group was surveyed a second time to determine whether the members' views on the various issues changed and, if so, to what extent. The resulting survey offered a representation of considered judgments of the entire population from which the sample was drawn.

Customers at all three polls overwhelmingly determined that a mix of energy resource options was preferable as a means to accomplish several objectives including low cost, reliability, maintenance of the environment and further development of renewable sources.

Because of the strong customer interest evidenced in the Deliberative Polls(TM), CPL, WTU and SWEPCO have each instituted targeted purchase goals for renewable energy resources and energy efficiency programs. The targets for renewable energy and efficiency are both based on acquiring resources with the equivalent net impact of an additional 25 cents a month for an average residential customer.

The renewables target program will produce an expected additional 40-50 megawatts of renewable resources to be added to the 6.5 megawatts of wind resources already on the CSW system. This would constitute the largest renewable installation in Texas and would be a significant contribution toward further development and commercialization of the renewable energy industries.

Participants in the Deliberative Polls(TM) voiced a personal interest in renewables on the local level and a desire that their children learn more about environmentally beneficial generation of electricity. For that reason, the CSW companies propose a pilot program for the installation of rooftop photovoltaic (PV) solar systems at schools. These installations will provide a community focus and will contain educational components useful in teaching about renewable resources. The current plan calls for 20 installations at CPL, 20 installations at SWEPCO and 10 installations at WTU where there is already high visibility for renewable resources.

The willingness to pay more per month for renewable resources varied considerably between customers. Over 80 percent indicated a willingness to pay at least $1 more, and there were blocks of customers who indicated a willingness to pay up to $10 more per month. For this reasons, the CSW companies are proposing a program of "green power" choices. A green pricing tariff will be filed in 1997 following additional customer consultation and research. The tariff will provide a means for those customers who are interested in acquiring a greater portion of their personal consumption from environmentally beneficial generation to exercise that choice.

In addition, if the targets are approved by the PUCT and bids are received in the expected price levels, then the overall amount of resources from energy efficiency will more than double when viewed as a whole for the three companies.

CSW Regulatory Case Manager Ron Ford noted that flexibility is an important characteristic of the jointly-filed plan. Although the 8-volume filing package addresses anticipated resource needs during the entire 10- year forecast horizon, the proposed plan and solicitations are intended to meet the immediate needs of customers through the year 2002.

"This planning process is occurring in a rapidly changing environment affecting the way we think about how we consume, market and regulate electricity," Ford said. "In such an environment, flexibility is an essential attribute. The best way to provide stability for customers is to design a planning and solicitation process that can react quickly and maintain options as conditions change between 1997 and 2002. This plan accomplishes that goal in partnership with our customers."

Central and South West Corporation is a public utility holding company based in Dallas. Central and South West owns four electric operating subsidiaries in the United States, a regional electricity company in the United Kingdom, and non-utility subsidiaries that offer independent power production, telecommunications, energy efficiency and financial transactions.

CONTACT: Media contact: Larry Jones, senior communications

consultant for Central and South West Corporation,

at 214/683-3703, or Financial community contact:

Sharon R. Peavy, director of investor relations for

Central and South West Corporation, 214/777-1277.