Federal Energy Regulatory Commission (FERC) administrative law judge Jerome Nelson has found the proposed merger between Central and South West Corp. (CSW) and the bankrupt El Paso Electric Co. (EPE) consistent with the public interest (Docket Nos. EC94-7-000 and ER94-898-000). However, Judge Nelson recommended that approval be subject to a FERC decision on a number of comparability issues. (The FERC had issued an earlier opinion imposing comparability as part of the merger deal, but excepting ERCOT members. On August 10, 1994, the two companies agreed to accept the comparability requirement, subject to appeal. The FERC has not yet addressed their request for rehearing.) Judge Nelson noted that many provisions in the companies' proposed tariffs comply with the FERC's March 29 Notice of Proposed Rulemaking (NOPR), requiring all electric utilities to file open access transmission tariffs available to all wholesale sellers and buyers of electricity.
The merger would produce between $202 and $252 million in cost savings during the first 10 years of post-merger operations, not including any projected production savings. Based on this estimate, Nelson rejected a request from Southwestern Public Service Co. (SPS) to preclude CSW and EPE from using its transmission system to coordinate post-merger operations. He also rejected a request from SPS and the City of Las Cruces, NM, to set aside for their use 80 megawatts (MW) of the 133 MW of capacity that EPE owns in the Eddy County high-voltage DC tie. Both SPS and Las Cruces had
argued that the set-aside would reduce potential "anticompetitive" effects of the merger.