(As filed April 19, 2005)
File No. 70-10180
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1/A
AMENDMENT NO. 2
TO
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
----------------------------------------
AMEREN CORPORATION CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
UNION ELECTRIC COMPANY 607 East Adams Street
1901 Chouteau Avenue Springfield, Illinois 62739
St. Louis, Missouri 63103
(Name of company or companies filing this statement
and address of principal executive offices)
-----------------------------------------
AMEREN CORPORATION
(Name of top registered holding company parent
of each applicant or declarant)
-----------------------------------------
Steven R. Sullivan, Senior Vice President,
General Counsel and Secretary
Ameren Services Company
1901 Chouteau Avenue
St. Louis, Missouri 63103
(Name and address of agent for service)
-----------------------------------------
The Commission is requested to mail signed copies of
all orders, notices and communications to:
Joseph H. Raybuck, Esq. William T. Baker, Jr., Esq.
Managing Associate General Counsel Thelen Reid & Priest LLP
Ameren Services Company 875 Third Avenue
1901 Chouteau Avenue New York, New York 10022
St. Louis, Missouri 63103
ii
The Application or Declaration filed in this proceeding on October 16,
2003, as previously amended and restated in its entirety by Amendment No. 1,
filed on April 30, 2004, is hereby further amended and restated in its entirety
to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
-----------------------------------
1.1. Introduction.
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Ameren Corporation ("Ameren"), whose principal business address is at 1901
Chouteau Avenue, St. Louis, Missouri 63103, is a registered holding company
under the Public Utility Holding Company Act of 1935, as amended (the "Act")./1/
Ameren directly owns all of the issued and outstanding common stock of Union
Electric Company (d/b/a "AmerenUE"), Central Illinois Public Service Company
(d/b/a "AmerenCIPS"), and Illinois Power Company (d/b/a "AmerenIP"), and
indirectly through CILCORP, Inc. ("CILCORP"), an exempt holding company, all of
the issued and outstanding common stock of Central Illinois Light Company (d/b/a
"AmerenCILCO") and AmerenEnergy Resources Generating Company ("AERG"), an
electric utility generating subsidiary of AmerenCILCO./2/ Together, AmerenUE,
AmerenCIPS, AmerenIP and AmerenCILCO provide retail and wholesale electric
service to approximately 2.3 million customers and retail natural gas service to
approximately 935,000 customers in portions of Missouri and Illinois./3/
AmerenUE generates, transmits and distributes electricity and distributes
natural gas at retail in a 24,500 square-mile area of central and eastern
Missouri and west central Illinois, including the greater St. Louis area.
AmerenUE provides electric service to approximately 1.2 million customers and
natural gas to approximately 140,000 customers. Approximately 95% of AmerenUE's
electric customers and 87% of its gas customers are located in Missouri. At
December 31, 2004, AmerenUE owned 8,425 MW (net) of generating capacity.
AmerenCIPS provides electric and natural gas transmission and distribution
service in a 20,000 square-mile area of central and southern Illinois.
AmerenCIPS provides electric service to approximately 325,000 customers and
natural gas service to approximately 170,000 customers. AmerenCIPS does not own
any generating capacity./4/
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1 See Ameren Corporation, et al., Holding Co. Act Release No. 26809 (Dec. 30,
1997) (the "Merger Order").
2 AERG owns and operates substantially all of the generating assets
previously owned by AmerenCILCO. AERG sells power at wholesale to
AmerenCILCO under a full requirements contract that extends through 2006.
3 The Commission authorized the formation of Ameren and Ameren's acquisition
of AmerenUE and AmerenCIPS in the Merger Order. Ameren was authorized to
acquire AmerenCILCO in Ameren Corporation, et al., Holding Company Act
Release No. 27645 (Jan. 29, 2003), and was authorized to acquire AmerenIP
in Ameren Corporation, et al., Holding Co. Act Release No. 27896 (Sept. 27,
2004).
4 AmerenIP serves approximately 600,000 electric customers and 415,00 gas
customers and AmerenCILCO serves approximately 203,000 electric customers
and 208,000 gas customers, all in Illinois.
1
AmerenUE and AmerenCIPS, indirectly through Grid America LLC, are
transmission-owning members of the Midwest Independent Transmission System
Operator, Inc. (the "Midwest ISO") and provide open access transmission service
over their combined transmission facilities pursuant to the terms of the Midwest
ISO Open Access Transmission Tariff on file at the Federal Energy Regulatory
Commission ("FERC"). AmerenUE and AmerenCIPS are also members of the Mid-America
Interconnected Network ("MAIN"), which is one of the ten regional electric
reliability councils organized for coordinating the planning and operation of
the nation's bulk power supply./5/
In May 2000, AmerenCIPS transferred all of its electric generation
facilities to Ameren Energy Generating Company ("Ameren GenCo"), an affiliated
generation-only company. Ameren GenCo, which has been certified by the FERC
pursuant to Section 32 of the Act as an "exempt wholesale generator" ("EWG"),/6/
has continued to acquire additional generation capacity since that time. Power
generated by Ameren GenCo is sold to wholesale purchasers under both cost-based
and market-based rates which are subject to the jurisdiction of the FERC. As of
December 31, 2004, Ameren GenCo had approximately 4,751 MW (net) of total
installed generating capacity. The generation facilities of AmerenUE and Ameren
GenCo are dispatched in a coordinated manner in accordance with the terms of a
Joint Dispatch Agreement on file at the FERC. The Joint Dispatch Agreement
requires each company to serve its load requirements from its own least-cost
generation first, but then allows the other company to have access to any
available excess generating capacity at cost./7/
In addition to AmerenUE, AmerenCIPS, AmerenIP and CILCORP and its
subsidiaries, Ameren owns directly all of the issued and outstanding common
stock of, inter alia, Ameren Energy Resources Company ("AERC"), which is an
intermediate non-utility holding company. AERC directly and indirectly holds the
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5 AmerenIP and AmerenCILCO are also members of the Midwest ISO and MAIN. The
MAIN member utilities operate in Illinois and portions of Michigan,
Wisconsin, Iowa, Minnesota and Missouri. In July 2004, AmerenUE, AmerenCIPS
and AmerenCILCO provided formal written notice to the MAIN Board of
Directors of their intent to withdraw from MAIN effective January 1, 2006,
provided that the configuration of MAIN remains the same. (AmerenIP had
previously given notice of its intent to withdraw from MAIN effective
December 31, 2004, but has remained a member pending its transition to
ownership by Ameren.) The four Ameren utilities intend to join another
regional electric reliability organization prior to their withdrawal from
MAIN. Until their withdrawal is effective, they will continue to honor all
of their obligations as members of MAIN. If they do not join another
regional electric reliability organization, they may withdraw their notice
of intent to withdraw from MAIN.
6 AmerenGenCo. filed an application for EWG status in FERC Docket No.
EG00-117-000 on March 23, 2000, as amended on May 18, 2000. The EWG status
of Ameren GenCo was affirmed by the FERC in Ameren Energy Generating
Company, 92 FERC P. 62,023 (July 14, 2000); Ameren Energy Generating
Company, 93 FERC P. 62,210 (December 18, 2000).
7 Power generated from AERG's generating units is not subject to the Joint
Dispatch Agreement, but instead is dispatched separately from AmerenCILCO's
control area, which is separate from, and adjacent to, the Ameren control
area.
2
securities of other exempt and authorized non-utility companies, including,
insofar as relevant to this Application/Declaration, Ameren GenCo, Ameren Energy
Marketing Company ("AEM"), and Ameren Energy Fuels and Services Company ("AFS"),
the last two of which are "energy-related" companies under Rule 58.
1.2 Summary of Requested Approvals.
------------------------------
Authorization is sought herein for certain transactions (the "Illinois
Asset Transfer") that will result in the acquisition by AmerenCIPS of AmerenUE's
electric transmission and distribution assets in Illinois other than those
associated with AmerenUE's Venice, Illinois generating plant, its Keokuk, Iowa
generating plant, and also minor amounts of property in Illinois to be retained
by AmerenUE to ensure the smooth operation of its electric utility system in
Missouri (the "Retained Assets"). The Illinois Asset Transfer will also result
in the acquisition by AmerenCIPS of AmerenUE's retail gas distribution
facilities in Illinois. The assets to be acquired by AmerenCIPS are identified
collectively herein as the "Acquired Assets."/8/ The Acquired Assets will be
transferred to AmerenCIPS at their net book value. Prior to closing, AmerenUE
will obtain a release of the Acquired Assets from the lien of its first mortgage
bond indenture by certifying unfunded property additions to the trustee, as
required under the terms of the indenture. Approximately one-half of the
Acquired Assets (designated as "Transferred Assets") will be transferred by
AmerenUE directly to AmerenCIPS in consideration for AmerenCIPS' promissory
note, the form of which is filed herewith as Exhibit B-3, and approximately
one-half of the Acquired Assets (designated as "Dividend Assets") will be
transferred to AmerenCIPS by means of a dividend in kind from AmerenUE to Ameren
followed by a contribution of the Dividend Assets by Ameren to AmerenCIPS./9/ In
connection with the Illinois Asset Transfer, AmerenCIPS will assume certain
obligations of AmerenUE that are associated with the Acquired Assets. These
transactions will be consummated in accordance with the Asset Transfer
Agreement, the form of which is filed herewith as Exhibit B-1.
In addition to the foregoing, AmerenUE is requesting authorization herein
to acquire from Ameren GenCo four 44 MW combustion turbine generator ("CTG")
units and four 35 MW CTG units located at Ameren GenCo's Pinckneyville, Illinois
facility (the "Pinckneyville Plant") and two 116 MW CTG units located at Ameren
GenCo's Kinmundy, Illinois generation facility (the "Kinmundy Plant") and, in
conjunction therewith, to assume certain liabilities and obligations of Ameren
GenCo related to such units (the "Generation Transfer"). These assets will also
be transferred at their net book value. The terms of these transactions are set
forth in the form of Asset Transfer Agreement-Pinckneyville Generation Station
between Ameren GenCo and AmerenUE (Exhibit B-5) and the form of Asset Transfer
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8 An application to implement the Illinois Asset Transfer was previously
filed with the Commission in December 2000 in Ameren Corporation, et al.,
File No. 70-9805. However, that application was subsequently withdrawn by
letter dated August 20, 2001 before the application was acted upon by the
Commission.
9 The Asset Transfer Agreement provides for AmerenUE to prepare a schedule to
be delivered at the time of closing which specifically enumerates the
assets, properties and rights to be acquired by AmerenCIPS. The schedule
will further designate whether such specific assets are to be conveyed as
Dividend Assets or Transferred Assets. The percentages of Acquired Assets
that are to be conveyed as Transferred Assets and as Dividend Assets,
respectively, will be determined by Ameren immediately prior to the
closing.
3
Agreement-Kinmundy Generation Station between Ameren GenCo and AmerenUE (Exhibit
B-6).
1.3 Reasons for Proposed Transactions.
---------------------------------
As indicated above, AmerenUE provides service to approximately 1.2 million
electric customers and 140,000 gas customers in parts of Missouri and Illinois.
AmerenUE also provides wholesale full requirements service to certain municipal
electric utilities in Missouri. AmerenUE's peak load in 2004 was 8,351 MW.
AmerenUE currently owns approximately 8,425 MW (net) of generation capacity.
Power from these generation resources, as supplemented by power purchased by
AmerenUE from others, is used to supply the demands of its electric service
customers. AmerenUE is subject to regulation with respect to retail sales of
natural gas and electricity in Missouri by the Missouri Public Service
Commission ("MoPSC") and with respect to retail sales of natural gas and
electricity in Illinois by the Illinois Commerce Commission ("ICC").
As a regulated electric utility in Missouri, it is incumbent upon AmerenUE
to have or to acquire sufficient generating capacity with which to serve the
forecasted demands of its electric service customers and to maintain an adequate
reserve margin. Standards established by MAIN require member utilities to meet
certain minimum short-term and long-term planning reserve requirements.
In July 2002, AmerenUE entered into a Stipulation and Agreement in order to
resolve certain retail rate issues in Missouri. The Stipulation and Agreement
(Exhibit B-4 hereto) fixes retail electric service rates for AmerenUE in
Missouri that, except under certain specified conditions, will remain in place
without modification through June 30, 2006. AmerenUE also agreed to undertake
commercially reasonable efforts to make energy infrastructure investments
totaling $2.25 billion to $2.75 billion from January 1, 2002 through June 30,
2006. This includes the obligation to acquire 700 MW of new generating capacity,
which may be satisfied by the purchase of generation facilities from an
affiliate "at net book value." The Stipulation and Agreement also requires
AmerenUE to make enhancements to its transmission infrastructure.
The Generation Transfer is intended as an efficient means of enabling
AmerenUE to meet its generation capacity obligations under the Stipulation and
Agreement and under the MAIN standards. AmerenUE needs a significant amount of
additional generation in 2005 and 2006 in order to meet the applicable MAIN
generation capacity requirements. The Generation Transfer will provide AmerenUE
with a total of 548 MW of additional generating capacity, which will be acquired
at the net book value of the Pinckneyville and Kinmundy Plants. Because both the
Pinckneyville Plant and the Kinmundy Plant are connected directly to the Ameren
transmission system with no operating guide restrictions, concerns over the
availability of transmission capacity to allow delivery of power from those
units reliably to AmerenUE are obviated. Additionally, the Pinckneyville Plant
has black start capability and can be ramped up quickly to provide service,
which will allow AmerenUE to respond quickly to system emergencies.
The regulatory regime under which AmerenUE operates in Illinois is very
different from that which exists in Missouri. Although Missouri law does not
authorize competition in retail electric service markets, the Illinois Electric
4
Service Customer Choice and Rate Relief Law (the "Customer Choice Law"), which
was enacted in 1997, permits retail electric service customers in Illinois to
purchase power from alternative power suppliers. Nevertheless, AmerenUE
continues to be regulated as an electric public utility in Illinois. Therefore,
as long as AmerenUE continues to provide retail electric utility service in
Illinois, it will need approval of the ICC to consummate the Generation
Transfer.
A Petition for Approval of Asset Transfer Agreements with AmerenGenCo was
filed by AmerenUE with the ICC in February 2003. However, the ICC Staff
expressed concerns about the terms of the Generation Transfer and has
recommended that the ICC deny approval of the Generation Transfer as proposed.
For that reason, AmerenUE has advised the ICC that it intends to limit its
public utility operations to Missouri and to discontinue operating as a public
utility subject to ICC regulation. In so doing, AmerenUE explained that the
concerns expressed by the ICC Staff regarding the means by which AmerenUE
proposes to satisfy its generating capacity needs, juxtaposed with the MoPSC
views of this matter, has demonstrated the difficulty for a single company to
operate as an electric utility in both a regulated generation jurisdiction such
as Missouri and an unregulated generation jurisdiction such as Illinois.
Accordingly, on May 30, 2003, AmerenUE filed a Notice of Withdrawal of its
petition to the ICC.
The effect of the proposed Illinois Asset Transfer is to transfer to and
consolidate within AmerenCIPS responsibility for serving electric and gas
utility customers in Illinois that are currently served by AmerenUE. Upon the
transfer of AmerenUE's retail electric and gas assets in Illinois, AmerenCIPS
will succeed to AmerenUE's retail utility operations in Illinois and will
provide the retail electric and gas services currently provided by AmerenUE
pursuant to the ICC-approved tariffs currently in effect for AmerenUE.
The Illinois Asset Transfer will realign the retail electric and gas
utility operations of Ameren so that AmerenUE will be regulated as a public
utility only in Missouri. Because AmerenUE will not be a regulated utility in
Illinois, it will not be required to make regulatory filings in Illinois after
the Illinois Asset Transfer./10/ Most significantly, after the Illinois Asset
Transfer has been consummated, it will not be necessary for AmerenUE to obtain
ICC authorization in order to acquire the Pinckneyville Plant and the Kinmundy
Plant from Ameren GenCo. The transfer to AmerenCIPS of retail electric service
loads in Illinois that are currently served by AmerenUE will also help to reduce
the amount of generation capacity that AmerenUE needs to maintain in order to
comply with MAIN generation capacity standards.
1.4 Illinois Asset Transfer.
-----------------------
Pursuant to the Asset Transfer Agreement, AmerenUE will transfer its
electric transmission and distribution and gas distribution assets and
associated general plant assets and related liabilities in Illinois to
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10 AmerenUE will continue to own and operate generation facilities that are
located in Illinois, together with minor amounts of other facilities to
ensure the smooth operation of its electric system. However, because it
will no longer have a public service obligation to provide retail electric
or natural gas service in Illinois, AmerenUE will not be subject to
regulatory requirements established by the ICC.
5
AmerenCIPS. AmerenCIPS will not assume any indebtedness of AmerenUE in the
transaction. As referenced above, AmerenUE would retain generating facilities
and also minor amounts of other facilities in Illinois. AmerenUE will also
assign all related obligations to AmerenCIPS, including without limitation, the
certificates of public convenience and necessity granted by the ICC authorizing
AmerenUE to provide electric utility service and gas utility service in
Illinois, environmental permits and obligations, all municipal and county
franchises, labor agreements (as applicable), and any other relevant agreements
that exist as of the transfer date. After the Illinois Asset Transfer, the
Acquired Assets will be utilized by AmerenCIPS in its electric and natural gas
utility business in Illinois.
At the present time, AmerenUE personnel operate and maintain the Acquired
Assets in conjunction with their other responsibilities. It is expected that
after the Illinois Asset Transfer has been consummated, certain AmerenUE
employees responsible for operation and maintenance of these facilities may be
transferred to AmerenCIPS. Other employees of AmerenUE, who are responsible for
substation and transmission maintenance and for protective relay installation,
testing and maintenance, may also spend a portion of their time operating and
maintaining the Acquired Assets for AmerenCIPS for the life of those
facilities./11/ The continued use of AmerenUE personnel will enable AmerenCIPS
to avoid the inconvenience and additional costs associated with hiring and
training additional personnel for this purpose.
The Illinois Asset Transfer is planned to be accomplished in the following
manner:
1. AmerenUE will transfer approximately 50% of the Acquired Assets to
AmerenCIPS in exchange for AmerenCIPS' subordinated promissory note in
a principal amount not to exceed $69 million, which is equal to
approximately 50% of the total net book value ($138 million) of such
Acquired Assets, net of liabilities, as of December 31, 2004./12/
2. AmerenUE will hold the note and receive payments including interest
from AmerenCIPS.
3. AmerenUE will declare an "in kind" dividend to Ameren equal to the
remaining balance (approximately 50%) of the net book value of the
Acquired Assets net of liabilities, or approximately $69 million as of
December 31, 2004.
4. Ameren will then contribute the Dividend Assets and associated
liabilities to AmerenCIPS.
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11 The Commission recognized in the Merger Order that AmerenUE may provide
services to AmerenCIPS, including services of linemen and gas trouble
crews, that are incidental to its utility business. These services will be
provided at cost in accordance with the standards of the Act and the
Commission's rules and regulations under the Act.
12 A list and description of the electric and gas utility assets to be
transferred to AmerenCIPS and the associated liabilities are contained in
Exhibit B-2 hereto.
6
The Commission determined in the Merger Order that the existing electric
transmission and distribution facilities of AmerenUE and AmerenCIPS are
physically interconnected and operated as a single integrated electric utility
system. Likewise, the Commission held in the Merger Order that the combined gas
utility properties of AmerenUE and AmerenCIPS constitute an integrated gas
utility system. The Illinois Asset Transfer will not affect the coordinated
operation of any electric transmission or distribution plant, which will
continue to be operated in the same manner, by the same personnel, and with the
same degree of safety and reliability, as they are today. Similarly, the
transfer of the gas distribution assets of AmerenUE will not affect the
coordinated operation of the existing gas utility properties of AmerenUE and
AmerenCIPS.
1.5 Generation Transfer.
-------------------
The Pinckneyville Plant and the Kinmundy Plant, which were installed by
Ameren GenCo in 2001, are integrated into the Ameren system. The Pinckneyville
Plant consists of four simple cycle CTGs rated at approximately 44 MW each at
summer peak conditions, and four CTGs rated at approximately 35 MW each at
summer peak conditions. The Kinmundy Plant consists of two CTGs with dual fuel
capability which are rated at approximately 116 MW each under summer peak
conditions. Since their acquisition by Ameren GenCo, these generating units have
proven themselves to be superior performing generating assets that have served
the Ameren system reliably.
Under the terms of the Transfer Agreements, AmerenUE will purchase the
Pinckneyville Plant and the Kinmundy Plant for cash and will acquire associated
assets and obligations from Ameren GenCo based on the net book value of the
assets and obligations being transferred as of the closing date. The net
depreciated book value of generation facilities at the Pinckneyville Plant as of
December 31, 2004 was approximately $150.0 million ($475/kW). The net
depreciated book value of generation facilities at the Kinmundy Plant as of
December 31, 2004 was approximately $90.3 million ($389/kW). AmerenUE will also
acquire certain assets (fuel stock, materials and supplies and prepaid
insurance) and assume certain obligations of Ameren GenCo (primarily property
tax accruals) that are associated with the generating units being transferred.
The detailed accounting treatment of the Generation Transfer is set forth in
Exhibit FS-10.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred by AmerenUE
and AmererCIPS in connection with the Illinois Asset Transfer will not exceed
$600,000 in the case of AmerenUE and $570,000 in the case of AmerenCIPS, and the
fees, commissions and expenses incurred or to be incurred by AmerenUE in
connection with the Generation Transfer will not exceed $1,000,000. These fees,
commissions and expenses consist primarily of outside legal fees, charges billed
or to be billed to AmerenUE and AmerenCIPS by Ameren Services, and a $165,600
fee to be paid to the ICC in connection with the issuance of AmerenCIPS'
subordinated promissory note to AmerenUE.
7
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
The following sections of the Act and the Commission's rules thereunder are
or may be applicable to the transactions proposed herein:
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SECTIONS OF THE ACT TRANSACTIONS TO WHICH SECTION
OR RULE MAY BE APPLICABLE
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6(a), 7, 9(a), 10 and 12 Issuance of a promissory note by AmerenCIPS in
connection with the acquisition of the Transferred
Assets and acquisition thereof by AmerenUE
--------------------------------------------------------------------------------
9(a)(1), 10 Acquisition of Acquired Assets by AmerenCIPS;
acquisition of Pinckneyville and Kinmundy Plant
assets by AmerenUE
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12(b) Assumption of obligations of AmerenUE by AmerenCIPS
in connection with Illinois Asset Transfer and
assumption of obligations of AmerenGenCo by AmerenUE
--------------------------------------------------------------------------------
12(c) In-kind distribution of Dividend Assets by AmerenUE
to Ameren
--------------------------------------------------------------------------------
12(b) Contribution of Dividend Assets by Ameren to
AmerenCIPS
--------------------------------------------------------------------------------
12(d), 12(f) Sale of Transferred Assets by AmerenUE to AmerenCIPS
--------------------------------------------------------------------------------
Rules
-----
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43, 44 Sale of Transferred Assets by AmerenUE to AmerenCIPS
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45 Contribution of Dividend Assets by Ameren to
AmerenCIPS and assumption by AmerenCIPS of
liabilities of AmerenUE
--------------------------------------------------------------------------------
46 In-kind distribution of Dividend Assets by AmerenUE
to Ameren
--------------------------------------------------------------------------------
AmerenCIPS' acquisition of the Transferred Assets will be exempt from the
requirements of Sections 9(a)(1) and 10 pursuant to Section 9(b)(1), as such
acquisition will be expressly authorized by the ICC (see Item 4).
8
Section 32 of the Act and Rule 54 thereunder are also generally applicable
to the transactions described above. To the extent that other sections of the
Act or the Commission's rules thereunder are deemed to be applicable to the
Illinois Asset Transfer, such sections and rules should be considered to be set
forth in this Item 3.
A. Illinois Asset Transfer
-----------------------
Section 6(a) of the Act provides that it is unlawful for any registered
holding company or subsidiary thereof "to issue or sell any security of such
company" except in accordance with an order of the Commission issued pursuant to
Section 7 of the Act. Correspondingly, Section 12(b) of the Act requires
Commission authorization for a registered public utility holding company or
subsidiary thereof "to lend or in any manner extend its credit to or indemnify
any company in the same holding-company system." As a result, the issuance of a
promissory note by AmerenCIPS to AmerenUE and the assumption by AmerenCIPS of
certain obligations of AmerenUE relating to the Acquired Assets require prior
Commission approval under Sections 6, 7, and 12(b) of the Act.
Section 9(a)(1) of the Act declares that it shall be unlawful for any
registered holding company or subsidiary thereof to acquire any utility assets
or any securities unless the acquisition of such assets or securities has been
approved by the Commission pursuant to Section 10 of the Act. However, Section
9(b)(1) of the Act exempts from the requirements of Section 9(a) any
"acquisition by a public-utility company of utility assets the acquisition of
which has been expressly authorized by a State commission."
Section 12(c) of the Act declares that it shall be unlawful for any
registered holding company or subsidiary thereof to declare or pay any dividend
on any security except in accordance with such rules and regulations or orders
as the Commission may adopt with respect to issuance of dividends. The
applicable standards for declaration and payment of dividends are set forth in
Rule 46.
Section 12(d) of the Act states that it is unlawful for a registered
holding company to sell any utility assets in contravention of rules and
regulations or orders as the Commission shall adopt. Section 12(f) of the Act
requires Commission approval for a subsidiary of a registered holding company to
sell utility assets to any affiliate or associate company.
As set forth below, the Illinois Asset Transfer complies with all of the
applicable provisions of the Act and should be approved by the Commission.
1. Sections 6(a) and 12(b)
-----------------------
As indicated, the promissory note to be issued by AmerenCIPS will be in an
amount equal to approximately 50% of the net book value of the Transferred
Assets, not to exceed $69 million. The promissory note will have a fixed rate of
interest based on interest rates charged for generally-comparable unsecured
five-year notes issued by companies whose credit quality and bond ratings are
9
comparable to those of AmerenCIPS. The yield of 5-year U.S. Treasury Notes and
of U.S. Treasury Notes and Bonds having 5 years remaining until maturity may be
used as a benchmark to establish the interest rate for the promissory note.
Based on the current yield of the 5-year U.S. Treasury Notes plus a credit
spread between yields of U.S. Treasury Notes and yields on generally-comparable
unsecured corporate notes derived from a variety of external sources, current
interest rate levels for the promissory note would be approximately 4.5%.
Although the initial term of the promissory note will be five years,
payments of amounts due under the promissory note will be based on a ten-year
amortization schedule. Accordingly, a balloon payment will become due at the end
of the fifth year unless the note's term is extended for an additional five
years by agreement of the parties and subject to further approval by the ICC.
The promissory note will be unsecured and will be subordinate to all other debt
of AmerenCIPS, whether incurred currently or in the future, except indebtedness
which, by its terms, provides that such indebtedness is not superior in right of
payment of principal of or interest on the promissory note or that such
indebtedness is subordinated to all other indebtedness of AmerenCIPS.
In addition, AmerenCIPS will assume all obligations of AmerenUE relating to
its utility business of transmitting and distributing electricity and natural
gas in Illinois. As shown in Exhibit B-2 hereto, these obligations include trade
payables relating to such businesses, accounts payable, accrued payroll, accrued
vacation liabilities, customer liabilities, environmental liabilities and taxes.
AmerenCIPS will also assume all maintenance and labor agreements (as applicable)
and any similar agreements relating to the Acquired Assets as those agreements
exist on the transfer date. AmerenCIPS will not assume any indebtedness of
AmerenUE in the transaction.
Section 6(a) requires the issuance of an order of the Commission pursuant
to Section 7 of the Act before a registered holding company or subsidiary
thereof may issue any security. Section 7(c)(2)(B) of the Act provides that the
Commission shall not permit a declaration regarding the issue or sale of any
security to become effective unless it finds, inter alia, that "such security is
to be issued or sold solely...for the purpose of financing the business of the
declarant as a public utility company." Section 7(d) further provides that if
the requirements of Section 7(c) and Section 7(g) of the Act are satisfied:
The Commission shall permit a declaration regarding the issue or sale
of a security to become effective unless the Commission finds that--
(1) the security is not reasonably adapted to the security
structure of the declarant and other companies in the same
holding company system;
(2) the security is not reasonably adapted to the earning
power of the declarant.
(3) financing by the issue and sale of the particular
security is not necessary or appropriate to the economical and
efficient operation of a business in which the applicant lawfully
is engaged or has an interest;
10
(4) the fees, commissions, or other remuneration, to
whomsoever paid, directly or indirectly, in connection with the
issue, sale or distribution of the security are not reasonable.
(5) in the case of a security that is a guaranty of, or
assumption of liability on, a security of another company, the
circumstances are such as to constitute the making of such
guaranty or the assumption of such liability an improper risk for
the declarant.
(6) the terms and conditions of the issue or sale of the
security are detrimental to the public interest or the interest
of investors or consumers.
In this case, the promissory note to be issued by AmerenCIPS is to be used
for the purpose of financing expansion of its business as a public utility
company in Illinois by acquiring the electric utility and gas utility operations
of AmerenUE in Illinois. Pursuant to the Asset Transfer Agreement, AmerenCIPS
will acquire not only certain transmission and distribution assets, but also
AmerenUE's retail electric business in Illinois, including the certificates of
public convenience and necessity granted by the ICC authorizing AmerenUE to
provide retail electric service in Illinois, environmental permits, all
municipal and county franchises, and any other relevant agreements.
Additionally, AmerenCIPS will acquire both AmerenUE's gas assets in Illinois and
all related obligations, including the certificates of public convenience and
necessity granted by the ICC authorizing AmerenUE to provide gas utility service
in Illinois, environmental permits, all municipal and county franchises, and any
other relevant agreements. As noted above, the Illinois Asset Transfer is being
financed in part by the issuance of the promissory note by AmerenCIPS. It is
therefore evident that issuance of the promissory note by AmerenCIPS is
consistent with Section 7(c)(2)(B) of the Act.
The issuance of the promissory note is also consistent with the criteria
established in Section 7(d) of the Act. At December 31, 2004, AmerenCIPS' total
capitalization ($1,008 million) consisted of approximately 43.7% common stock
equity, 5.0% preferred stock equity, 44.6% long-term debt (including current
maturities) and 6.7% short-term debt (including money pool borrowings). The
acquisition of assets by AmerenCIPS from AmerenUE is being financed in
approximately equal parts by the subordinated promissory note to be issued by
AmerenCIPS and by a capital contribution by Ameren. Because long-term debt and
equity of AmerenCIPS will increase in the same amounts, the capital structure of
AmerenCIPS after the Illinois Asset Transfer will be substantially the same as
its present capital structure. Thus, on a pro forma basis, assuming that the
transaction had closed on December 31, 2004, the capitalization of AmerenCIPS
will be approximately 44.4% common stock equity, 4.4% preferred stock equity,
45.3% long-term debt (including current maturities), and 5.9% short-term debt
(including money pool borrowings). (See Exhibit FS-8.)
Moreover, the combination of the utility assets of AmerenUE in Illinois
with the utility assets of AmerenCIPS will result in savings through elimination
of duplicative regulatory burdens in Illinois, without any loss of operating
economies and efficiencies.
It is believed that the fees and expenses paid or to be paid by AmerenUE
and AmerenCIPS in connection with the Illinois Asset Transfer (see Item 2 -
Fees, Commissions and Expenses) bear a fair relation to the book value of the
11
assets being transferred and the benefits to be achieved by AmerenUE and
AmerenCIPS as a result of the Illinois Asset Transfer.
To the extent that AmerenCIPS is assuming liabilities of AmerenUE that are
associated with the Acquired Assets, the assumption of such liabilities is not
an improper risk for AmerenCIPS. The Acquired Assets represent a part of a going
concern and are capable of generating revenues sufficient to meet the
obligations being assumed by AmerenCIPS. It is therefore reasonable for
AmerenCIPS to assume the risks associated with the Acquired Assets.
Finally, the terms and conditions of the promissory note as described above
are not detrimental to the public interest or the interest of investors or
consumers. The promissory note will carry a market rate of interest, will have a
relatively short term, and will be subordinated to other debt of AmerenCIPS.
2. Sections 12(d) and 12(f)
------------------------
Sections 12(d) and 12(f) of the Act contemplate that where a transaction
involves sale of utility assets by one utility in a holding company system to an
associate company, the Commission may evaluate the fairness of the consideration
to be paid and received for such sale by both the buyer and seller. In Entergy
Corporation, et al., 50 S.E.C. 305, 322 (1990), the Commission ruled that "as
noted above in the discussion of section 10(b)(2), the Commission believes that
section 12(d) is satisfied by the intrasystem sales of assets at depreciated
book value on an after tax basis." The terms of the Illinois Asset Transfer are
consistent with this policy.
The transfer of the Acquired Assets from AmerenUE to AmerenCIPS on the
basis of their net book value as recorded on the books and records of AmerenUE
is reasonable for several reasons. The Acquired Assets are primarily electric
and natural gas facilities for which there is a limited market. After the
Illinois Asset Transfer has occurred, those assets will continue to be used by
AmerenCIPS to provide electric and natural gas service at regulated rates that
are subject to regulation by the ICC. Electric service customers being
transferred from AmerenUE to AmerenCIPS will continue to pay the rates they are
currently charged under AmerenUE's tariff at least until December 31, 2006. It
is expected that any cost-of-service study performed thereafter in order to
evaluate the reasonableness of rates being charged for service to those
customers would impute a value to the Acquired Assets based on their book cost
depreciated.
3. Sections 9(a)(1) and 10
-----------------------
Section (9)(a)(1) of the Act requires the approval of the Commission
pursuant to Section 10 of the Act before a registered holding company or
subsidiary thereof may acquire utility assets or any securities. Section 10(b)
provides that, if the requirements of Section 10(f) are satisfied, the
Commission shall approve an acquisition under Section 9(a) unless the Commission
finds that:
12
(1) such acquisition will tend towards interlocking relations or the
concentration of control of public-utility companies, of a kind or to
an extent detrimental to the public interest or the interests of
investors or consumers;
(2) in case of the acquisition of securities or utility assets, the
consideration, including all fees, commissions, and other
remuneration, to whomsoever paid, to be given, directly or indirectly,
in connection with such acquisition is not reasonable or does not bear
a fair relation to the sums invested in or the earning capacity of the
utility assets to be acquired or the utility assets underlying the
securities to be acquired; or
(3) such acquisition will unduly complicate the capital structure of the
holding-company system of the applicant or will be detrimental to the
public interest or the interests of investors or consumers or the
proper functioning of such holding-company system.
Clearly, in this case, the acquisition of the Acquired Assets by AmerenCIPS
will not contribute to an undue concentration of control of public utility
assets. Both AmerenCIPS and AmerenUE are subsidiaries of Ameren, which, as their
corporate parent, has ultimate control over both subsidiaries and their public
utility assets. Ameren's control over these assets will not be affected by the
proposed Illinois Asset Transfer.
The amounts to be paid by AmerenCIPS bear a fair relation to the sums
invested in and the earning capacity of the Acquired Assets. The Acquired Assets
are being transferred at their net book values. At December 31, 2004, the net
book value of the electric transmission and distribution assets to be acquired
by AmerenCIPS net of liabilities was $109.4 million, and the net book value of
the gas assets to be acquired by AmerenCIPS net of liabilities was $17.1
million. The rates for electric and natural gas service provided by AmerenUE in
Illinois are cost-based rates that are predicated in part on the book value of
these assets. It is thus evident that the amount to be paid by AmerenCIPS is
consistent with Section 10(b)(2) of the Act. See Georgia Power Company, et al.,
49 S.E.C. 309, 312 (1984).
As noted above, the acquisition of the Acquired Assets by AmerenCIPS will
not unduly complicate its capital structure. Approximately one-half of the
Acquired Assets will be transferred to AmerenCIPS through distribution by
AmerenUE to Ameren followed by contribution of such assets to AmerenCIPS, and
the remainder will be transferred to AmerenCIPS in return for a promissory note.
As a result, the transaction will not have a significant effect on the capital
structure of AmerenCIPS.
The acquisition of the Acquired Assets by AmerenCIPS will not have an
adverse effect on the interests of consumers of either AmerenUE or AmerenCIPS.
Existing and new retail electric service customers of AmerenCIPS will continue
to be served in accordance with tariffs that have previously been approved by
the ICC. Rates of captive retail electric service customers currently served by
AmerenCIPS are not subject to change prior to January 1, 2007, when the
transition to full retail customer choice in Illinois will be completed.
13
AmerenCIPS has an electricity supply agreement with AEM pursuant to which
it purchases its full requirements for electricity at demand and energy charges
that are fixed and not subject to modification prior to December 31, 2006. AEM
has sufficient generation capacity available to be able to accommodate the
additional load being transferred to AmerenCIPS. The stability provided by this
contract will insulate retail electric service customers in Illinois that
transfer from AmerenUE to AmerenCIPS from any meaningful risk of a rate increase
during the term of that electricity supply agreement. After 2006, AmerenCIPS is
expected to purchase electricity needed to serve all of its customers under
competitive market conditions.
Finally, AmerenCIPS and AmerenUE have integrated their gas utility
operations and rely extensively on support services provided by Ameren Services
Company and AFS. Moreover, AmerenCIPS will adopt the service classifications and
rates in AmerenUE's retail tariffs for natural gas service in Illinois and will
assume the obligations of AmerenUE under certificates of public convenience and
necessity granted by the ICC and all municipal and county franchises authorizing
AmerenUE to provide gas utility service in Illinois. Therefore, insofar as the
natural gas service customers of AmerenUE in Illinois are concerned, the
Illinois Asset Transfer will simply result in a change in name of their service
provider without having any impact on the quality or cost of service provided.
Section 10(c) of the Act provides that, notwithstanding the provisions of
Section 10(b), the Commission shall not approve:
(1) an acquisition of securities or utility assets, or of any other
interest, which is unlawful under the provisions of section 8 or is
detrimental to the carrying out of the provisions under section 11; or
(2) the acquisition of securities or utility assets of a public utility or
public utility holding company unless the Commission finds that such
acquisition will serve the public interest by tending towards the
economical and the efficient development of an integrated public
utility system.
The Commission approved the formation of Ameren and its acquisition of
AmerenUE and AmerenCIPS in 1997. As indicated above, the Commission concluded in
the Merger Order that the combined electric properties of AmerenUE and
AmerenCIPS constitute an integrated electric system and that "the proposed
acquisition by Ameren of this electric integrated system will `ten[d] towards
the economical and efficient development of an integrated public-utility
system,' and so as to satisfy the requirements of section 10(c)(2) of the
Act."/13/ The Commission further concluded that the gas properties of AmerenUE
and AmerenCIPS "constitute a gas integrated system within the meaning of section
2(a)(29)(B) of the Act."/14/ The transfer of the Acquired Assets from AmerenUE
----------
13 See Merger Order, 66 SEC Docket at 490, fn. 17.
14 Id. at 491. The Commission reviewed its findings as to the integration of
the Ameren electric utility system and Ameren gas utility system in
connection with its subsequent approvals of the acquisitions of AmerenCILCO
and AmerenIP.
14
to AmerenCIPS will not affect the integrated operation of these facilities. It
is thus evident that Section 10(c) of the Act does not preclude issuance of a
Commission order authorizing acquisition of the Acquired Assets by AmerenCIPS.
4. Section 12(c)
-------------
The Dividend Assets are to be transferred through distribution of an
in-kind dividend by AmerenUE to Ameren, and a capital contribution by Ameren to
AmerenCIPS. Section 12(c) of the Act precludes the declaration or payment of a
dividend by a registered holding company or subsidiary thereof:
...in contravention of such rules and regulations or orders as the
Commission deems necessary or appropriate to protect the financial
integrity of companies in holding-company systems, to safeguard the
working capital of public-utility companies, to prevent the payment of
dividends out of capital or unearned surplus, or to prevent the
circumvention of the provisions of this title or the rules,
regulations, or orders thereunder.
The only relevant rule adopted by the Commission relating to declaration or
payment of dividends by a subsidiary company of a registered public utility
holding company is Rule 46(a), which precludes payment of a dividend "out of
capital or unearned surplus, except pursuant to a declaration notifying the
Commission of the proposed transaction, which has become effective in accordance
with the procedure specified in ss. 250.23." As of December 31, 2004, AmerenUE
had retained earnings of approximately $1,688,000,000. The distribution of the
Dividend Assets will result in a charge against retained earnings of AmerenUE of
approximately $69 million. It is therefore evident that AmerenUE has sufficient
retained earnings in which to make an in-kind dividend to Ameren for the purpose
of implementing the Illinois Asset Transfer.
B. Generation Transfer
-------------------
As noted above, Ameren GenCo is an EWG. Section 32(e) of the Act provides
in pertinent part that an EWG "shall be exempt from all provisions of this Act."
Therefore, the participation of Ameren GenCo in the Generation Transfer does not
require Commission authorization. However, the acquisition of the Pinckneyville
Plant and the Kinmundy Plant by AmerenUE is subject to the requirements of
Sections 9(a)(1) and 10 of the Act, and the assumption by AmerenUE of certain
obligations of Ameren GenCo is subject to Rule 45.
The standards established by Sections 9(a) and 10 of the Act for
acquisition of utility assets by a subsidiary of a registered public utility
holding company are set forth above. The Generation Transfer is consistent with
these standards.
The acquisition of the Pinckneyville Plant and the Kinmundy Plant by
AmerenUE will not contribute to an undue concentration of control of public
utility assets. AmerenUE and Ameren GenCo are affiliated entities within the
Ameren corporate family, and their respective generation facilities are already
being dispatched in accordance with the Joint Dispatch Agreement. Because the
transaction will involve only the intra-corporate transfer of generation
15
facilities, it will not affect concentration of control of generation assets.
Although the Generation Transfer will increase the amount of generation capacity
owned by AmerenUE, such capacity is needed by AmerenUE to meet its existing
public service obligations in Missouri and maintain an adequate generation
capacity reserve margin.
The amounts to be paid by AmerenUE bear a fair relation to the sums
invested in and the earning capacity of the Pinckneyville Plant and the Kinmundy
Plant. As noted above, these plants are to be acquired by AmerenUE at their net
book value (i.e., original cost of construction less accumulated depreciation).
Power from these units will be sold primarily to retail electric service
customers in Missouri at cost-based rates which are subject to regulation by the
MoPSC. The transaction will therefore be consistent with the standards for
intra-corporate asset transfers cited above.
The price at which AmerenUE will acquire the Pinckneyville Plant and the
Kinmundy Plant is also consistent with the price of capacity from alternative
sources that were considered by AmerenUE. Prior to entering into this
transaction, AmerenUE undertook an Asset Mix Optimization Analysis, which showed
that the addition of a mix of simple cycle and combined cycle combustion
turbines during its planning horizon would satisfy AmerenUE's needs on a
least-cost planning basis. AmerenUE then evaluated a number of options for
obtaining the energy and capacity needed to meet its reliability and customer
service obligations, including the purchase of power from other wholesale energy
suppliers, the purchase of existing generation assets from non-affiliated
generation owners, and the construction of new capacity, as well as the
Generation Transfer. None of these alternatives were entirely satisfactory.
In the fall of 2001, AmerenUE issued a Request for Proposals for capacity
and energy with the intent of purchasing up to 500 MW of capacity for the time
period of 2002 through 2011. The Net Present Value of offers of power submitted
in response to this RFP, coupled with the construction of simple cycle
combustion turbine generators at the end of the 10-year contracting period
(2002-2011), were comparable to the cost to AmerenUE of purchasing the
Pinckneyville Plant and the Kinmundy Plant from Ameren GenCo. However, the MoPSC
Staff expressed a preference for AmerenUE to own generation facilities rather
than to purchase power at wholesale. The possibility of purchasing generation
facilities from non-affiliated entities was unsuitable because of concerns over
the availability of a reliable transmission path for delivery of power to
AmerenUE customers, because of concerns about transmission constraints, and
because of concerns about the creditworthiness of such non-affiliated entities.
Finally, the cost of purchasing the Pinckneyville Plant and the Kinmundy Plant
from Ameren GenCo at net book value was comparable to or less than the estimated
cost of building new combustion turbine generating units that offer similar
flexibility and operating characteristics.
The acquisition of the Pinckneyville Plant and the Kinmundy Plant and
associated assets by AmerenUE will not unduly complicate AmerenUE's capital
structure. At December 31, 2004, AmerenUE's total capitalization ($5,435
million) consisted of approximately 53.1% common stock equity, 2.1% preferred
stock equity, 37.9% long-term debt (including current maturities) and 6.9%
short-term debt (including money pool borrowings). AmerenUE expects to finance
the acquisition of these assets initially with borrowings under the Ameren
16
System Utility Money Pool Agreement./15/ On a pro forma basis, taking into
account both the Illinois Asset Transfer and the Generation Transfer, and
assuming that both transactions had closed on December 31, 2004, the
capitalization of AmerenUE will be approximately 50.2% common stock equity, 2.0%
preferred stock equity, 36.8% long-term debt (including current maturities), and
11.0% short-term debt (including money pool borrowings). (See Exhibit FS-7.)
The acquisition of the Pinckneyville Plant and the Kinmundy Plant by
AmerenUE will not have an adverse effect on the interests of consumers of
AmerenUE. As noted above, the Stipulation and Agreement protects existing retail
customers of AmerenUE in Missouri from a change in rates for electric service,
except in limited circumstances, prior to 2006. Because AmerenUE is transferring
its current retail electric service obligations in Illinois to AmerenCIPS, it
will no longer have retail customers in Illinois that might be affected by the
Generation Transfer.
Finally, the acquisition of the Pinckneyville Plant and the Kinmundy Plant
by AmerenUE will enhance the integration of those facilities with the existing
AmerenUE generating units. As noted above, these units are connected directly to
the Ameren transmission system. However, the Joint Dispatch Agreement requires
AmerenUE and AmerenGenCo each to serve its load requirements from its own
least-cost generation facilities first, before relying on excess generation that
may be available from the other company. By acquiring these generating units,
AmerenUE will be able to dispatch them in the optimal manner to serve the needs
of its retail and wholesale electricity customers without consideration of the
use of those units by Ameren GenCo.
The transactions proposed herein are also subject to Section 12(b) of the
Act and Rule 45 thereunder. Rule 45 permits a subsidiary of a registered holding
company to make extensions of credit without interest in connection with
service, construction or sales contracts (including sales of materials and
supplies); provided that payment is made as soon as reasonably practicable.
In this case, the extensions of credit relate to the assumption by AmerenUE
of certain obligations of Ameren GenCo that are associated with the
Pinckneyville Plant and the Kinmundy Plant. These obligations include accrued
property taxes, state and federal deferred tax liabilities, and a small account
payable. Payment of these obligations will be made by AmerenUE in the ordinary
course of business without interest.
Ameren GenCo will utilize the proceeds of the sale of the Pinckneyville and
Kinmundy Plants to repay money pool borrowings and a portion of maturing
long-term debt, including, specifically, $225 million principal amount of
unsecured notes maturing on November 1, 2005, and for other corporate purposes.
----------
15 See Ameren Corporation, et al., Holding Co. Act Release No. 27655 (Feb. 27,
2003). Ultimately, AmerenUE expects to retire some or all of the money pool
borrowings with internally generated cash flow or with the proceeds of
long-term debt and/or equity, or a combination thereof.
17
C. Rule 54
-------
The transactions proposed herein are also subject to Section 32(h)(4) of
the Act and Rule 54 thereunder. Rule 54 provides that, in determining whether to
approve any transaction that does not relate to an EWG or "foreign utility
company" ("FUCO"), the Commission shall not consider the effect of the
capitalization or earnings of any subsidiary which is an EWG or FUCO upon the
registered holding company system if paragraphs (a), (b) and (c) are satisfied.
Ameren has complied or will comply with the record-keeping requirements of
Rule 53(a)(2), the limitation under Rule 53(a)(3) on the use of the Ameren
system's domestic public-utility company personnel to render services to EWGs
and FUCOs, and the requirements of Rule 53(a)(4) concerning the submission of
copies of certain filings under the Act to retail regulatory commissions.
Further, none of the circumstances described in Rule 53(b) has occurred or is
continuing. Rule 53(c) is inapplicable by its terms because the proposals
contained herein do not involve the issue and sale of securities (including any
guarantees) to finance an acquisition of an EWG or FUCO.
Rule 53(a)(1) limits a registered holding company's financing of
investments in EWGs if such holding company's "aggregate investment" in EWGs and
FUCOs exceed 50% of its "consolidated retained earnings." Ameren's "aggregate
investment"(as defined in Rule 53(a)(1)(i)) in all EWGs is approximately
$605,634,775, or 32.2% of Ameren's "consolidated retained earnings" (as defined
in Rule 53(a)(1)(ii)) for the four quarters ended December 31, 2004
($1,879,931,775). The sale of the Pinckneyville Plant and the Kinmundy Plant by
Ameren GenCo to AmerenUE and the associated transactions will have the effect of
reducing Ameren's "aggregate investment" in EWGs. Ameren does not hold an
interest in any FUCO.
ITEM 4. REGULATORY APPROVALS.
--------------------
The Illinois Asset Transfer has been approved by the ICC (see Exhibits D-4,
D-6 and D-6(a) hereto), the MoPSC (see Exhibits D-8 and D-8( a) hereto) and the
FERC (see Exhibit D-10 hereto). No other state commission, and no other federal
commission, other than the Commission, has jurisdiction over the proposed
transactions associated with the Illinois Asset Transfer.
The FERC has also approved the Generation Transfer (see Exhibit D-12
hereto). Although MoPSC approval is not required for the Generation Transfer,
the MoPSC has stated in filings with the FERC that this transaction is
consistent with and supported by the Stipulation and Agreement (Exhibit B-4
hereto), which was approved by the MoPSC in August 2002 (see Exhibit D-13
hereto). Because the Generation Transfer will not occur until the Illinois Asset
Transfer has been completed, approval of the ICC will not be required for the
Generation Transfer. No other state commission, and no other federal commission,
other than the Commission, has jurisdiction over the Generation Transfer.
18
ITEM 5. PROCEDURE.
---------
The Commission has published a notice under Rule 23 with respect to the
filing of this Application or Declaration and there has been no request for
hearing (Holding Co. Act Release No. 27841). It is respectfully requested that
the Commission's Order be issued as soon as the rules allow, and that there
should not be a 30-day waiting period between issuance of the Commission's order
and the date on which the order is to become effective. Ameren, AmerenUE and
AmerenCIPS hereby waive a recommended decision by a hearing officer or any other
responsible officer of the Commission and consent that the Division of
Investment Management may assist in the preparation of the Commission's decision
and/or order, unless the Division opposes the matters proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. Exhibits.
--------
A None.
B-1 Form of Illinois Asset Transfer Agreement among Union Electric
Company, Central Illinois Public Service Company, and Ameren
Corporation (previously filed).
B-2 Proposed Listing of Electric Assets and Liabilities and Gas
Assets and Liabilities Being Transferred from AmerenUE to
AmerenCIPS (previously filed).
B-3 Form of Promissory Note to be issued to AmerenUE by AmerenCIPS
(previously filed).
B-4 Stipulation and Agreement between the Staff of the MoPSC and
AmerenUE dated July 15, 2002 (previously filed).
B-5 Form of Asset Transfer Agreement-Pinckneyville Generating
Station (previously filed).
B-6 Form of Asset Transfer Agreement-Kinmundy Generating Station
(previously filed).
C None.
D-1 Notice to Illinois Commerce Commission of transfer of Electric
Distribution and Transmission Assets and Retail Electric
Business (previously filed).
19
D-2 Petition to Illinois Commerce Commission for authorization to
transfer certificates of public convenience and necessity
issued to AmerenUE to provide retail electric service in
Illinois (previously filed).
D-3 Petition to Illinois Commerce Commission for authorization to
transfer gas system assets and gas public utility business
(previously filed).
D-4 Order of Illinois Commerce Commission relating to transfer of
Electric Distribution and Transmission Assets, Retail Electric
Business and Certificates of Public Convenience and Necessity,
and Approval of Related Tariffs (previously filed).
D-5 [Intentionally Omitted]
D-6 Order of Illinois Commerce Commission relating to transfer of
gas system assets and gas public utility business (filed
herewith).
D-6(a) Order on Reopening of Illinois Commerce Commission Extending
Deadline For Consummating Transactions (filed herewith).
D-7 Application to Missouri Public Service Commission for
authorization to transfer assets and related contracts, dated
August 25, 2003 (previously filed).
D-8 Report and Order on Rehearing of Missouri Public Service
Commission (filed herewith).
D-8(a) Order of Missouri Public Service Commission Denying
Application for Rehearing and Granting Motion for
Clarification (filed herewith).
D-9 Application to Federal Energy Regulatory Commission pursuant
to Section 203 of Federal Power Act to transfer jurisdictional
assets associated with Illinois Asset Transfer (previously
filed).
D-10 Order of Federal Energy Regulatory Commission authorizing the
Illinois Asset Transfer (previously filed).
D-11 Application to Federal Energy Regulatory Commission pursuant
to Section 203 of the Federal Power Act to transfer
jurisdictional assets associated with the Generation Transfer,
dated February 5, 2003 (previously filed).
D-12 Order of Federal Energy Regulatory Commission authorizing the
Generation Transfer (filed herewith).
20
D-13 Report and Order of the Missouri Public Service Commission
approving the Stipulation and Agreement identified in Exhibit
B-4, dated July 25, 2002 (filed herewith).
E Map of combined service areas of AmerenUE and AmerenCIPS
(Paper format - Form SE) (filed herewith).
F Opinion of Counsel (filed herewith).
G Proposed Form of Federal Register Notice (previously filed).
B. Financial Statements.
--------------------
FS-1 Balance Sheet of Ameren and consolidated subsidiaries, as of
December 31, 2004 (incorporated by reference to the Annual
Report on Form 10-K of Ameren for the year ended December 31,
2004) (File No. 001-14756).
FS-2 Statement of Income of Ameren and consolidated subsidiaries
for the year ended December 31, 2004 (incorporated by
reference to the Annual Report on Form 10-K of Ameren for the
year ended December 31, 2004) (File No. 001-14756).
FS-3 Balance Sheet of AmerenUE and consolidated subsidiaries as of
December 31, 2004 (incorporated by reference to the Annual
Report on Form 10-K of AmerenUE for the year ended December
31, 2004) (File No. 001-02967).
FS-4 Statement of Income of AmerenUE and consolidated subsidiaries
for the year ended December 31, 2004 (incorporated by
reference to the Annual Report on Form 10-K of AmerenUE for
the year ended December 31, 2004) (File No. 001-02967).
FS-5 Balance Sheet of AmerenCIPS as of December 31, 2004
(incorporated by reference to the Annual Report on Form 10-K
of AmerenCIPS for the year ended December 31, 2004) (File No.
001-03672).
FS-6 Statement of Income of AmerenCIPS for the year ended December
31, 2004 (incorporated by reference to the Annual Report on
Form 10-K of AmerenCIPS for the year ended December 31, 2004)
(File No. 001-03672).
FS-7 Pro Forma Balance Sheet of AmerenUE as of December 31, 2004
(filed herewith).
21
FS-8 Pro Forma Balance Sheet of AmerenCIPS as of December 31, 2004
(filed herewith).
FS-9 Preliminary Accounting Entries for Transfer of Electric Assets
and Liabilities and Gas Assets and Liabilities from AmerenUE
to AmerenCIPS estimated at December 31, 2004 (filed herewith).
FS-10 Pro Forma Balance Sheet of Ameren GenCo as of December 31,
2004 and Preliminary Accounting Entries for Transfer of
Pinckneyville Plant and Kinmundy Plant estimated at December
31, 2004 (filed herewith).
FS-11 Pro Forma Balance Sheet of Ameren (stand-alone) as of December
31, 2004 (filed herewith).
FS-12 Preliminary Accounting Entries for Receipt of Dividend Assets
by Ameren from AmerenUE and Contribution of Dividend Assets by
Ameren to AmerenCIPS estimated at December 31, 2004 (filed
herewith).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
None of the matters that are the subject of this Application or Declaration
involve a "major federal action" nor do they "significantly affect the quality
of the human environment" as those terms are used in section 102(2)(C) of the
National Environmental Policy Act. The transactions that are the subject of this
Application or Declaration will not result in changes in the operation of
AmerenUE or AmerenCIPS that will have an impact on the environment. AmerenUE and
AmerenCIPS are not aware of any federal agency that has prepared or is preparing
an environmental impact statement with respect to the transactions that are the
subject of this Application or Declaration.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, as amended, the undersigned companies have duly caused this amended
Application or Declaration filed herein to be signed on their behalves by the
undersigned thereunto duly authorized.
AMEREN CORPORATION
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
UNION ELECTRIC COMPANY
By: /s/ Steven R. Sullivan
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Name: Steven R. Sullivan
Title: Senior Vice President,
General Counsel and Secretary
Date: April 19, 2005
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