[Federal Register Volume 62, Number 36 (Monday, February 24, 1997)]
[Notices]
[Pages 8283-8285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4444]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26669]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
February 14, 1997.
Notice is hereby given that the following filings(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments thereto is/are available for public
inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by March 10, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact or law that are
disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in the
matter. After said date, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become
effective.
Ameren Corporation (70-8945)
Ameren Corporation (``Ameren''), 1901 Chouteau Avenue, St. Louis,
Missouri 63103, a Missouri corporation not currently subject to the
Act, has filed an application-declaration under sections 4, 5, 6(a), 7,
8, 9(a), 10, 11, 12(b), (d) and (e), and 13(b) and Rules 42, 43, 45,
62, 65, 82, 83, 87, 88, 90 and 91 thereunder.
Ameren proposes to acquire by merger Union Electric Company
(``UE'') and Central Illinois Public Service Company (``CIPS''), a
wholly-owned utility subsidiary of CIPSCO Inc. (``CIPSCO''), and
acquire indirectly 60% of the outstanding common stock of Electric
Energy, Inc., (``EEI''). UE and CIPS will become wholly-owned
subsidiaries of Ameren (``Transaction''), and Ameren will register with
the Commission under section 4 of the Act.
Ameren also proposes to engage in other Transaction-related
activities, including the retention of combination gas and electric
public utilities, the retention of all of CIPSCO's and UE's nonutility
activities, formation of a service Company and the transfer of certain
utility assets from UE to CIPS.
UE is a combination gas and electric public-utility company and an
exempt public-utility holding company, pursuant to an order of the
Commission under section 3(a)(2) of the Act, authorized to do business
in Missouri and Illinois. The principal business of UE is to provide
electric energy to customers in a 24,500 square mile area of Missouri
and Illinois.
UE's Missouri electric service area includes the City of St. Louis
and St. Louis County, and all or portions of 65 other counties. Its
Illinois service area includes the cities of East St. Louis and Alton.
In addition to the retail electric business, UE serves 18 wholesale
electric customers, all of which are located in Missouri. Union
Electric also provides natural gas service to customers in 23 Missouri
counties and two Illinois counties. UE also provides steam service in
Jefferson City, Missouri.
UE provides retail electric service to approximately 1.069 million
customers in Missouri and 63,000 in Illinois. UE provides natural gas
service to approximately 102,000 customers in Missouri and 18,000
customers in Illinois. As of June 30, 1996, UE has 6,167 employees in
its two-state operations. UE owns 100 percent of Union Electric
Development Corporation (``UEDC'') (formerly known as Union Colliery),
a nonutility subsidiary, and 40 percent of EEI. UE funds UEDC's
investments through intercompany loans or advances. These intercompany
loans bear interest at a market rate and are short-term in nature or
due on demand.
UEDC's nonutility activities include the owning of and/or investing
in energy-related and civic and community development-related
investments in UE's service territory. EEI, which owns a coal-fired
generating plant and transmission lines, was formed in the early 1950s
to provide electric energy to a uranium enrichment plant located near
Paducah, Kentucky, which is now operated by the United States
Enrichment Corporation. The uranium enrichment facility is its only
end-user customer. EEI's common stock is held by four utility
companies: UE, 40%; CIPS, 20%; and two unaffiliated, utilities,
Kentucky Utilities Company, 20%; and Illinois Power Company, 20%. EEI
also sells electricity to its sponsoring utilities for resale.
CIPSCO, incorporated under the laws of the State of Illinois in
1986, is an exempt public utility holding company under section 3(a)(1)
of the Act, and owns all of the issued and outstanding common stock of
CIPS. CIPS, an Illinois corporation organized in 1902, supplies
electricity and natural gas services in a 20,000 square mile region of
central and southern Illinois, rendering service to approximately
319,000 retail electricity customers in 557 communities and
distributing natural gas to approximately 167,000 customers in 267
communities. CIPS' utility service territory has an estimated
population of 820,000 (about seven percent of Illinois' population) and
contains about 35% of the surface area of Illinois. In addition, CIPS
sells electricity in the wholesale and interchange markets to such
entities as Soyland Electric Cooperative, Illinois Municipal Electric
Agency, Wabash Valley Power Association, Inc., Mt. Carmel Public
Utility Company, individual municipal electric systems and other
public- and investor-owned electric systems. As noted above, CIPS owns
20 percent of the capital stock of EEI and is an exempt holding company
pursuant to section 3(a)(2) of the Act. As of June 30, 1996, CIPS had
approximately 2,360 employees.
CIPSCO owns 100 percent of CIPSCO Investment, the holding company
for
[[Page 8284]]
CIPSCO's nonutility activities. CIPSCO's nonutility investments include
leveraged leases, marketable securities and investments in energy
projects. CIPSCO Investment has four first-tier subsidiaries: CIPSCO
Securities Company, which manages a portfolio of equities and other
marketable securities; CIPSCO Leasing Company, which manages long-term
leveraged leases for various equipment and real estate; CIPSCO Energy
Company, which manages electric generation projects under leveraged
leases and a limited partnership; and CIPSCO Venture Company, which
makes investments in the CIPS service territory. CIPSCO Investment will
be wholly owned by Ameren, and Ameren expects that, following
consummation of the Transaction, CIPSCO Investment will continue to
operate much as it does today.
In the ordinary course of business, there have been and the
applicant proposes to continue to make intercompany loans and advances
among CIPSCO and its direct and indirect nonutility subsidiaries
including CIPSCO Investment. Generally, if any of CIPSCO Investment's
subsidiaries has excess cash, such excess is loaned to CIPSCO
Investment or CIPSCO Securities. These borrowed funds, as well as any
funds borrowed under a $30 million line of credit available to CIPSCO
Investment or other bank lines, are used by CIPSCO Investment to
finance its own activities or are loaned to its subsidiaries. Such
subsidiaries will borrow funds from CIPSCO Investment, to the extent
available, to finance their own activities or to finance the activities
of entities in which they have an equity investment. These intercompany
loans also bear interest at a market rate and are generally short-term
in nature or due on demand.
In 1992, CIPSCO entered into a support agreement and has agreed to
maintain the financial condition of CIPSCO Investment. In addition,
CIPSCO has entered into certain support letters and CIPSCO Investment
has entered into certain guarantees in connection with leveraged lease
investments. The applicant requests that the Commission approve the
continuance of all outstanding and committed intercompany loans and
advances, support arrangements and guarantees.
Ameren was incorporated under the laws of the State of Missouri to
become a holding company for UE and CIPS following the Transaction and
for the purpose of facilitating the Transaction. Ameren has, and prior
to the consummation of the Transaction will have, no operations other
than those contemplated by the merger agreement to accomplish the
Transaction (``Merger Agreement''). The authorized capital stock of
Ameren consists of 400 million shares of common stock and 100 million
shares of preferred stock par value $.01 per share. Upon consummation
of the Transaction, Ameren will be a public-utility holding company and
will directly own all of the issued and outstanding common stock of UE,
CIPS and CIPSCO Investment. At present, the common stock of Ameren is
owned 50% by UE and 50% by CIPSCO. No shares of Ameren preferred stock
have been issued.
Soley for the purpose of facilitating the Transaction, Arch Merger,
Inc. (``Arch Merger'') was incorporated under the laws of the State of
Missouri on August 5, 1995. Arch Merger has, and prior to the closing
of the Transaction will have, no operations other than the activities
contemplated by the Merger Agreement necessary to accomplish the
transaction.
Under the Merger Agreement executed by CIPSCO and UE on August 11,
1995, upon receipt of all necessary approvals, the Transaction will be
consummated by merging CIPSCO into Ameren, with Ameren as the surviving
corporation, and by merging UE with Arch Merger, with UE as the
surviving corporation. The shareholders of UE and CIPSCO have approved
the Transaction. Pursuant to the Merger Agreement, each outstanding
share of CIPSCO common stock will be converted into 1.03 shares of
Ameren Common Stock, par value $.01 per share (``Ameren Common
Stock''), and each outstanding share of UE common stock will be
converted into one share of Ameren Common Stock. The outstanding UE and
CIPS preferred stock will not be affected in the Transaction. Ameren is
expected to have a total of 137,215,462 shares of Ameren Common Stock
outstanding.
The Merger Agreement also provides that UE expects to transfer its
retail electric and gas distribution utility assets located in Illinois
to CIPS. As a result, after consummation of the Transaction, CIPS is
expected to begin providing service to the approximately 65,000
electric customers and 18,000 as customers currently served by UE in
Illinois.
Ameren proposes to issue and/or acquire in open market
transactions, from time to time during the first five years after the
date of the order issued by the Commission herein, up to 19 million
shares of Ameren Common Stock under Ameren's proposed dividend
reinvestment plan and certain employee benefit plans that will use
Ameren Common Stock.
Ameren Services will be incorporated in Missouri, prior to the
consummation of the Transaction, to serve as the service company for
the Ameren system. Ameren Services will provide UE and CIPS, and the
other companies of the Ameren system, with a variety of administrative,
management and support services. The authorized capital stock of Ameren
Services will consist of 1,000 shares of common stock, par value $.01
per share, and all issued and outstanding shares will be held by Ameren
upon consummation of the Transaction. Ameren Services will enter into a
General Services Agreement with Ameren, UE, CIPS and CIPSCO Investment.
Ameren Services will provide UE, CIPS, UEDC and CIPSCO Investment,
pursuant to a General Services Agreement, with one or more of the
following: building services, accounting, corporate communications,
corporate planning, customer services and division support, economic
development, energy supply, engineering and construction, environmental
services and safety, fossil fuel procurement, gas supply, general
counsel, human resources, industrial relations, information services,
internal audit, marketing, merger coordination, motor transportation,
purchasing, real estate, stores, tax, treasury operations, investor
services and other services. In accordance with the General Services
Agreement, services provided by Ameren Services will be directly
assigned, distributed or allocated by activity, project, program, work
order or other appropriate basis. Employees of Ameren Services will
record transactions utilizing existing data capture and accounting
systems. Costs of Ameren Services will be accumulated in accounts and
directly assigned, distributed and allocated to the appropriate company
in accordance with the guidelines set forth in the General Services
Agreement.
It is anticipated that Ameren Services will be staffed primarily by
transferring personnel from the current employee rosters of UE and
CIPS. Ameren Services' accounting and cost allocation methods and
procedures will be structured so as to comply with the Commission's
standards for service companies in registered holding company systems.
Ameren will structure a General Services Agreement so as to comply with
section 13 of the Act and the Commission's rules and regulations
thereunder. Thus, charges for all services provided by Ameren Services
to affiliated utility companies
[[Page 8285]]
and nonutility companies will be on an ``at cost'' basis as determined
under rules 90 and 91 of the Act.
In addition to the services to be provided by Ameren Services, UE
and CIPS may from time to time or in emergency situations provide one
another with certain services incidental to their utility businesses,
such as meter reading, materials management, transportation, and
services of linemen and gas trouble crews. These services will be
provided at cost in accordance with the standards of the Act and the
Commission's rules and regulations thereunder.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-4444 Filed 2-21-97; 8:45 am]
BILLING CODE 8010-01-M