[Federal Register Volume 62, Number 204 (Wednesday, October 22, 1997)]
[Notices]
[Pages 54865-54866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28000]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-483]


Union Electric Company Callaway Plant, Unit 1; Post Operating 
License Antitrust Review Finding Of No Significant Changes

    By letter dated February 23, 1996, as supplemented by letters dated 
April 24, 1996 and November 15, 1996, Union Electric Company (UEC), 
holder of the Operating License for the Callaway Nuclear Plant, 
requested NRC approval regarding a merger agreement with Central 
Illinois Public Service Company (CIPSCO), under which UEC would become 
a wholly-owned subsidiary of the newly formed Ameren Corporation, a 
registered public utility holding company. Presently, 50 percent of 
Ameren is owned by UEC, and 50 percent is owned by CIPSCO.
    The staff has examined, from a competitive standpoint, events which 
have occurred since issuance of the Callaway, Unit 1 construction 
permit to UEC and the operating license. In addition, the staff has 
considered the structure of the electric utility industry in the State 
of Missouri, and the record and testimony developed in related 
proceedings at the Federal Energy Regulatory Commission (FERC).
    The staff's analysis is as follows:

    After the merger, UEC will continue to own and operate the 
Callaway Nuclear Plant. UEC will continue to be engaged principally 
in the generation, transmission, distribution and retail and 
wholesale sale of electricity and in the distribution and retail 
sale of natural gas in Missouri.
    Based upon the information provided by the licensee, the 
proposed merger and restructuring will not adversely affect the 
operation of the Callaway facility nor the bulk power services 
market served by the Callaway facility. For the most part, the 
transmission systems of UEC and CIPSCO do not overlap, so the merger 
for the most part would not eliminate one independent and 
potentially competing transmission alternative. Also, the licensee 
has filed consolidated (one system) open access transmission 
tariffs, which make available all of the direct interconnections of 
both companies as receipt and delivery points. This has the 
potential to expand wholesale bulk power trading opportunities in 
the region. The single-system open access transmission tariffs 
should make entry by new non-utility generators easier than before 
the merger, which should increase competition for long term 
generating capacity.
    Market forces resulting from deregulation of the electric 
utility industry appear to be the driving force for the proposed 
merger. In testimony before FERC, licensee representatives stated 
that the rationale for the merger was to reduce the combined 
operating costs of UEC and CIPSCO. Both companies have been 
aggressively pursuing cost reductions to remain competitive, and 
have reached the practical limits of that strategy. Without a 
fundamental change in their way of doing business, it would become 
increasingly difficult to continue reducing costs. By combining 
utility operations, both companies have an opportunity to achieve 
more cost efficiency than either company could achieve 
independently.
    The staff recommends that the Director of the Office of Nuclear 
Reactor Regulation issue a no significant antitrust change finding 
in connection with UEC's request dated February 23, 1996, as 
supplemented by letters dated April 23, 1996, and November 15, 1996.

    Based on the staff's analysis, it is my finding that the proposed

[[Page 54866]]

implementation of the merger agreement between UEC and CIPSCO, which 
provides for UEC to become a wholly-owned subsidiary of the newly 
formed Ameren Corporation, does not represent a ``significant change.''

    Dated at Rockville, Maryland, this 16th day of October 1997.

    For the Nuclear Regulatory Commission.
Samuel J. Collins,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 97-28000 Filed 10-21-97; 8:45 am]
BILLING CODE 7590-01-P