[Federal Register Volume 69, Number 89 (Friday, May 7, 2004)]
[Notices]
[Pages 25624-25631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10396]



[[Page 25624]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27841]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

April 30, 2004.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. 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 amendment(s) is/are available for public 
inspection through the Commission's Branch 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 May 25, 2004, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, 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 the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts 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 May 25, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Interstate Power and Light Company (70-9375)

    Interstate Power and Light Company (``IP&L''), Alliant Energy 
Tower, 200 First Street, S.E., Cedar Rapids, IA 52401, a wholly-owned 
public-utility subsidiary of Alliant Energy Corporation (``Alliant 
Energy''), a registered holding company, has filed a post-effective 
amendment to a previously filed declaration under sections 6(a), 7 and 
12(b) of the Act and rules 45 and 54 under the Act.

I. Current Authority

    By orders dated November 25, 1998 (Holding Co. Act Release No. 
26945) and December 15, 2000 (Holding Co. Act Release No. 27306), as 
subsequently modified by order dated October 24, 2001 (Holding Co. Act 
Release No. 27456 and collectively, ``Prior Orders''), the Commission 
authorized IP&L to: (1) Issue and sell through June 30, 2004 (``Prior 
Authorization Period''), in one or more series, any combination of (a) 
collateral trust bonds (``Trust Bonds''), (b) senior unsecured 
debentures (``Senior Debentures''), and (c) unsecured subordinated 
debentures (``Subordinated Debentures''); and (2) enter into an 
agreement or agreements for the issuance and sale of one or more series 
of tax-exempt bonds (``Tax-Exempt Bonds'') for the financing or 
refinancing of air and water pollution control facilities and sewage 
and solid waste disposal facilities (``Facilities''). As security for 
IP&L's obligations under any agreement relating to the Tax-Exempt 
Bonds, IP&L is authorized to (1) issue its non-negotiable promissory 
note or notes to evidence the loan to IP&L of the proceeds of the Tax-
Exempt Bonds by the issuer thereof, (2) convey a subordinated security 
interest in any Facilities that are financed through the issuance of 
Tax-Exempt Bonds, (3) issue and pledge one or more new series of Trust 
Bonds (``Tax-Exempt Collateral Bonds''), (4) acquire and deliver 
letters of credit guaranteeing payment of the Tax-Exempt Bonds and 
enter into reimbursement agreements with respect to any such letters of 
credit, (5) acquire insurance policies guaranteeing payment of the Tax-
Exempt Bonds, and (6) provide a direct guarantee of payment of the 
principal of and premium, if any, and interest on the Tax-Exempt Bonds.
    Under the Prior Orders, the aggregate principal amount of the Trust 
Bonds, Senior Debentures, Subordinated Debentures, and Tax-Exempt Bonds 
issued during the Prior Authorization Period shall not exceed $300 
million, provided that such amount excludes the principal amount of any 
Tax-Exempt Collateral Bonds issued as collateral security for Tax-
Exempt Bond obligations and any other forms of collateral related to 
the Tax-Exempt Bonds. IP&L may not issue any long-term debt securities 
unless such securities are rated at the investment grade level as 
established by at least one nationally recognized statistical rating 
organization, as that term is used in paragraphs (c)(2)(vi)(E), (F) and 
(H) of Rule 15c3-1 under the Securities Exchange Act of 1934. Under the 
October 24, 2001 order, the Commission reserved jurisdiction over the 
issuance by IP&L of any such securities that are rated below investment 
grade.
    Through December 31, 2003, IP&L had issued and sold a total of $200 
million principal amount of long-term debt securities in accordance 
with the authorization under the Prior Orders. IP&L plans to issue an 
additional $100 million principal amount of Trust Bonds or Senior 
Debentures in the second quarter of 2004, the proceeds of which would 
be used to repay short-term debt that was incurred principally to 
finance IP&L's construction program and for other corporate purposes. 
Assuming the completion of this offering and an additional $100 million 
common equity investment by Alliant Energy, IP&L's projected 
capitalization ratios at December 31, 2004 would be 45.9% common 
equity, 7.5% preferred stock, 41.6% long-term debt (including current 
portion), and 5.0% short-term debt. In addition, IP&L plans to cause 
the redemption of approximately $20 million principal amount of Tax-
Exempt Bonds, also during the second quarter of 2004.
    The Prior Orders provide that no series of Trust Bonds will be 
issued at interest rates in excess of the lower of 15% per annum or 
those interest rates generally obtainable at the time of pricing for 
first mortgage bonds having reasonably similar maturities, issued by 
companies of the same or reasonably comparable credit quality and 
having reasonably similar terms, conditions and features (``Ceiling 
Rate''). Further, the Prior Orders provide that no series of Senior 
Debentures or Subordinated Debentures will be sold if their fixed 
interest rate or initial adjustable interest rate exceeds the Ceiling 
Rate.

II. Requested Authority

    IP&L requests that the Commission issue a further supplemental 
order that: (1) Extends the Prior Authorization Period under the Prior 
Orders from June 30, 2004 to December 31, 2004 (``New Authorization 
Period''); (2) increases the maximum aggregate principal amount of the 
Trust Bonds, Senior Debentures, Subordinated Debentures, and Tax-Exempt 
Bonds that IP&L may issue through the New Authorization Period from 
$300 million to $350 million, such that, taking into account previous 
issuances of such securities (totaling $200 million), IP&L would have 
authority to issue up to an additional $150 million of long-term debt 
securities during the remainder of 2004; (3) authorizes IP&L to enter 
into and perform interest rate hedging transactions in order to manage 
interest rate risk associated with outstanding long-term indebtedness 
and anticipated long-term debt offerings; and (4) modifies the 
investment grade criteria applicable to any securities issued by IP&L 
in reliance upon the authorization in this proceeding.
    IP&L requests a six-month extension in the Prior Authorization 
Period to make the expiration date under the Prior

[[Page 25625]]

Orders coterminous with the expiration of its authority to issue and 
sell short-term indebtedness. See Holding Co. Act Release No. 27542 
(June 21, 2002); Holding Co. Act Release No. 27575 (October 10, 2002); 
Holding Co. Act Release No. 27615 (December 13, 2002). The extension 
would also provide IP&L greater financing flexibility in the event that 
its currently planned offering of Trust Bonds or Senior Debentures and 
redemption of Tax-Exempt Bonds are delayed beyond the second quarter of 
2004.
    The proposed $50 million increase in the limit on new long-term 
debt securities that IP&L may issue (from $300 million to $350 million) 
would allow IP&L to complete in 2004 both its planned offering of Trust 
Bonds or Senior Debentures ($100 million) and redemption of 
approximately $20 million Tax-Exempt Bonds.
    IP&L requests authorization to enter into interest rate hedging 
transactions with respect to its outstanding long-term indebtedness 
(``Interest Rate Hedges'') to reduce or manage interest rate cost. 
Interest Rate Hedges would involve the use of financial instruments 
commonly used in today's capital markets, such as futures, interest 
rate swaps, caps, collars, floors, and structured notes (i.e., a debt 
instrument in which the principal and/or interest payments are 
indirectly linked to the value of an underlying asset or index), or 
transactions involving the purchase or sale, including short sales, of 
U.S. Treasury or Agency (e.g., FNMA) obligations or London Inter-Bank 
Offer Rate-based swap instruments. The transactions would be for fixed 
periods and stated notional amounts. In no case would the notional 
principal amount of any Interest Rate Hedge exceed that of the 
underlying debt instrument and related interest rate exposure.
    In addition, IP&L requests authorization to enter into interest 
rate hedging transactions with respect to anticipated debt offerings 
(``Anticipatory Hedges''). Anticipatory Hedges would be utilized to fix 
and/or limit the interest rate risk associated with any new issuance 
through (1) a forward sale of exchange-traded U.S. Treasury futures 
contracts, U.S. Treasury obligations and/or a forward swap (each, 
``Forward Sale''); (2) the purchase of put options on U.S. Treasury 
obligations (``Put Options Purchase''); (3) a Put Options Purchase in 
combination with the sale of call options on U.S. Treasury obligations 
(``Collar''); (4) transactions involving the purchase or sale, 
including short sales, of U.S. Treasury obligations; or (5) some 
combination of a Forward Sale, Put Options Purchase, Collar and/or 
other derivative or cash transactions, including, but not limited to 
structured notes, caps and collars, appropriate for the Anticipatory 
Hedges.
    Interest Rate Hedges and Anticipatory Hedges may be executed on-
exchange (``On-Exchange Trades'') with brokers through the opening of 
futures and/or options positions traded on the Chicago Board of Trade 
(``CBOT'') or other designated contract markets, the establishment of 
over-the-counter positions with one or more counterparties (``Off-
Exchange Trades''), or a combination of On-Exchange Trades and Off-
Exchange Trades. IP&L would determine the optimal structure of each 
Interest Rate Hedge or Anticipatory Hedge transaction at the time of 
execution. Interest Rate Hedges and Anticipatory Hedges in the over-
the-counter market would only be entered into with counterparties 
(``Approved Counterparties'') whose senior debt ratings, or the senior 
debt ratings of the parent companies of the counterparties, as 
published by Standard and Poor's Ratings Group, are equal to or greater 
than BBB, or an equivalent rating from Moody's Investors Service or 
Fitch, Inc. Fees, commissions and other amounts payable to a 
counterparty or exchange (excluding, however, the swap or option 
payments) in connection with any Interest Rate Hedge or Anticipatory 
Hedge would not exceed those generally obtainable in competitive 
markets for parties of comparable credit quality.
    IP&L would comply with Statement of Financial Accounting Standard 
(``SFAS'') 133 (Accounting for Derivative Instruments and Hedging 
Activities) and SFAS 138 (Accounting for Certain Derivative Instruments 
and Certain Hedging Activities) or other standards relating to 
accounting for derivative transactions as are adopted and implemented 
by the Financial Accounting Standards Board (``FASB''). IP&L represents 
that each Interest Rate Hedge and each Anticipatory Hedge would qualify 
for hedge accounting treatment under the current FASB standards in 
effect and as determined as of the date such Interest Rate Hedge or 
Anticipatory Hedge is entered into. IP&L would also comply with any 
future FASB financial disclosure requirements associated with hedging 
transactions.
    Lastly, IP&L requests that the Commission modify the investment 
grade criteria applicable to any securities issued by IP&L. IP&L 
represents that, except for securities issued for the purpose of 
funding money pool operations, no securities may be issued in reliance 
upon the authorization granted by the Commission pursuant to this 
application/declaration, as amended, unless: (1) The security to be 
issued, if rated, is rated investment grade; (2) all outstanding 
securities of IP&L that are rated are rated investment grade; and (3) 
all outstanding securities of Alliant Energy that are rated are rated 
investment grade (``Investment Grade Condition''). For purposes of the 
Investment Grade Condition, a security will be deemed to be rated 
``investment grade'' if it is rated investment grade by at least one 
nationally recognized statistical rating organization, as that term is 
used in paragraphs (c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the 
1934 Act.\1\
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    \1\ IP&L requests that the Commission reserve jurisdiction over 
the issuance at any time of securities if the Investment Grade 
Condition is not satisfied.
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Ameren Corporation, et al. (70-10180)

    Ameren Corporation (``Ameren''), a registered holding company, 
Union Electric Company (``Union Electric''), a direct public-utility 
company subsidiary of Ameren, both at 1901 Chouteau Avenue, St. Louis, 
Missouri 63103, and Central Illinois Public Service Company (``CIPSCO'' 
and collectively, ``Applicants''), 607 East Adams Street, Springfield, 
Illinois 62739, another direct public-utility company subsidiary of 
Ameren, have filed an application-declaration with the Commission under 
sections 6(a), 7, 9(a), 10, 12(b), 12(c), 12(f) of the Act and rules 
43, 44, 45, 46 and 54 under the Act.

I. Background

A. Ameren System
    Ameren holds, directly or indirectly, all of the issued and 
outstanding common stock of the following public-utility companies 
(collectively, ``Utility Subsidiaries''): Union Electric, CIPSCO, and 
Central Illinois Light Company (``CILCO'').\2\ Together, the Utility 
Subsidiaries provide retail and wholesale electric service to 
approximately 1.7 million customers and retail natural gas service to 
approximately 500,000 customers in portions of Missouri and Illinois. 
Ameren is a member of the Mid-America Interconnected Network 
(``MAIN''), one of the ten regional electric reliability councils 
organized to coordinate the planning and operation of the nation's bulk 
power supply. In addition, Ameren is engaged in various

[[Page 25626]]

exempt and authorized nonutility businesses, which it holds through 
Ameren Energy Resources Company, a wholly owned intermediate nonutility 
holding company.
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    \2\ Ameren holds all of the common stock of CILCO indirectly, 
through CILCORP, Inc. (``CILCORP''), an exempt holding company by 
order. See Ameren, Holding Co. Act Release No. 27645 (January 29, 
2003)(granting 3(a)(1) exemption).
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    Union Electric provides electric service to about 1.2 million 
retail and wholesale customers in Missouri and in parts of Illinois, 
and provides natural gas service to approximately 130,000 customers in 
those states. Union Electric also provides wholesale full requirements 
service to certain municipal electric utilities in Missouri. Union 
Electric's peak load in 2003 was 8,298 MW. Union Electric currently 
owns approximately 8,021 MW of generation capacity. Power from these 
generation resources, as supplemented by power purchased by Union 
Electric from others, is used to supply the demands of its electric 
service customers. Union Electric 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'').
    Union Electric and CIPSCO provide open access transmission service 
over their combined transmission facilities pursuant to a single Open 
Access Transmission Tariff (``OATT'') on file at the Federal Energy 
Regulatory Commission (``FERC''). The companies have received 
conditional authorization from the FERC to join the Midwest Independent 
Transmission System Operator, Inc. (``Midwest ISO'') through 
GridAmerica LLC, a new independent transmission company, and they 
expect to begin participating in the Midwest ISO in May of 2004, 
pending receipt of further regulatory approvals.
    In a 20,000 square-mile area of central and southern Illinois, 
CIPSCO, a direct subsidiary company of Ameren, provides electric 
transmission service to approximately 325,000 customers and natural gas 
transmission and distribution service to approximately 170,000 
customers. In May of 2000, CIPSCO transferred all of its electric 
generation facilities to Ameren Energy Generating Company (``GenCo''), 
an affiliated generation-only company.
    GenCo, an exempt wholesale generator (``EWG''), has continued to 
acquire additional generation capacity since that time. Power generated 
by GenCo is sold to wholesale purchasers under both cost-based and 
market-based rates that are subject to the jurisdiction of the FERC. As 
of December 31, 2003, GenCo had approximately 4,749 MW of total 
installed generating capacity. The generation facilities of Union 
Electric and GenCo, are dispatched in a coordinated manner in 
accordance with the terms of a joint dispatch agreement on file at the 
FERC. That 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.
    CILCO is also authorized to participate in the Midwest ISO as a 
transmission owner. Through its participation in the Midwest ISO, CILCO 
provides open access transmission services over its transmission 
facilities pursuant to the Midwest ISO OATT, which is on file at the 
FERC. Power generated from CILCO's generating units is not subject to 
the Joint Dispatch Agreement, but instead is dispatched separately from 
CILCO's control area, which is separate from, and adjacent to, the 
Ameren control area.
B. Obligations of Union Electric
    As a regulated electric utility in Missouri, Union Electric must 
have 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 Union Electric to 
meet certain minimum short-term and long-term planning reserve 
requirements, which currently are 15% for 2003 and 17% for 2006.
    In July 2002, Union Electric entered into a Stipulation and 
Agreement to resolve certain retail rate issues in Missouri. The 
Stipulation and Agreement fixes retail electric service rates for Union 
Electric in Missouri that, except under certain specified conditions, 
will remain in place without modification through June 30, 2006. Union 
Electric 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 
Union Electric to make enhancements to its transmission infrastructure.

II. Asset Transfers

A. Transmission and Distribution Assets
    Applicants intend to effect certain transactions (``Illinois Asset 
Transfer'') that would result in CIPSCO acquiring two sets of assets 
owned by Union Electric (collectively, ``Acquired Assets''): (1) Union 
Electric's electricity transmission and distribution assets in 
Illinois, with the exception of those associated with Union Electric's 
Venice, Illinois generating plant, its Keokuk, Iowa generating plant, 
and minor amounts of property in Illinois to be retained by Union 
Electric to ensure the smooth operation of its electric utility system 
in Missouri (``Retained Assets''); and (2) Union Electric's retail gas 
distribution facilities in Illinois.
    Union Electric would transfer the Acquired Assets to CIPSCO at 
their net book value. In connection with this transaction, CIPSCO would 
not assume any indebtedness of Union Electric. Approximately one-half 
of the Acquired Assets (``Transferred Assets'') to CIPSCO would be 
transferred in consideration for a promissory note issued by CIPSCO in 
a principal amount equal to approximately fifty percent of the total 
net book value of the Acquired Assets, approximately $69 million, net 
of liabilities, as of December 31, 2003. Union Electric would hold the 
note and receive payments including interest from CIPSCO. The remaining 
balance (approximately fifty percent) of the net book value of the 
Acquired Assets (approximately $69 million as of December 31, 2003, net 
of liabilities) would be transferred to CIPSCO through a dividend in 
kind from Union Electric to Ameren, and Ameren would then contribute 
the remaining Acquired Assets (``Dividend Assets'') to CIPSCO. Under 
the governing agreement, Union Electric would prepare a schedule to be 
delivered at the time of closing that identifies the assets, properties 
and rights to be acquired by CIPSCO and designates whether the specific 
assets are to be conveyed as Dividend Assets or Transferred Assets. The 
percentages of Acquired Assets to be conveyed as Transferred Assets and 
Dividend Assets would be determined by Ameren immediately prior to the 
closing.
    By the Illinois Asset Transfer, Ameren would consolidate in CIPSCO 
the responsibility to serve electric and gas utility customers in 
Illinois. CIPSCO would acquire Union Electric's electric transmission 
and distribution and gas distribution assets and associated general 
plant assets and related liabilities in Illinois,\3\ and Union Electric 
would also assign all related obligations to CIPSCO, including the 
certificates of public convenience and necessity granted by the ICC 
authorizing Union Electric to provide electric utility service and gas 
utility service in Illinois, environmental permits and obligations,

[[Page 25627]]

all municipal and county franchises, labor agreements (as applicable), 
and any other relevant agreements that exist as of the transfer date. 
Subsequently, CIPSCO would succeed Union Electric's Illinois retail 
utility operations and provide the retail electric and gas services 
currently provided by Union Electric under the ICC-approved tariffs 
currently in effect for Union Electric. After the Illinois Asset 
Transfer, Union Electric would be regulated as a public utility only in 
Missouri.
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    \3\ As mentioned above, Union Electric would continue to own and 
operate the Retained Assets.
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B. Generation Assets
    Additionally, Union Electric intends to acquire from GenCo four 44 
MW combustion turbine generator (``CTG'') units and four 35 MW CTG 
units located at GenCo's Pinckneyville, Illinois facility 
(``Pinckneyville Plant'') \4\ and two 116 MW CTG units located at 
GenCo's Kinmundy, Illinois generation facility (``Kinmundy Plant'') \5\ 
and, correspondingly, to assume certain liabilities and obligations of 
GenCo related to those units (``Generation Transfer''). The generation 
assets also would be transferred for cash at their net book value as of 
the closing date. Union Electric must obtain the approval of the ICC to 
consummate the Generation Transfer.
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    \4\ As of December 31, 2003, those eight units had a collective 
net book value of approximately $155.3 million.
    \5\ As of December 31, 2003, those two units had a net book 
value of approximately $93.3 million.
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    Applicants state that the Generation Transfer is intended to enable 
Union Electric to meet its generation capacity obligations under the 
Stipulation and Agreement and under the MAIN standards. Union Electric 
needs 991 MW of additional generation resources by 2006 in order to 
meet the applicable MAIN generation capacity requirements. The 
Generation Transfer would provide Union Electric with a total of 548 MW 
of additional generating capacity.\6\
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    \6\ Both the Pinckneyville Plant and the Kinmundy Plant are 
already connected directly to the Ameren transmission system with no 
operating guide restrictions.
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III. Requests for Authority

    Applicants request authority for: (1) Union Electric to sell the 
Transferred Assets to CIPSCO, its affiliate; (2) CIPSCO to issue a 
promissory note to Union Electric in connection with the acquisition of 
the Transferred Assets; (3) Union Electric to declare an in-kind 
dividend of the Dividend Assets to Ameren; (4) Ameren to contribute the 
Dividend Assets to CIPSCO; (5) CIPSCO to acquire the Acquired Assets; 
(6) CIPSCO to assume the obligations of Union Electric in connection 
with Illinois Asset Transfer; (7) Union Electric to acquire the 
Pinckneyville Plant and Kinmundy Plant from its affiliate, AmerenGenCo; 
and (8) Union Electric to assume the obligations of AmerenGenCo 
relating to the Pinckneyville Plant and Kinmundy Plant.

Ameren Corporation, et al. (70-10206)

    Ameren Corporation (``Ameren''), a registered holding company under 
the Act, and its wholly owned public-utility subsidiary Union Electric 
Company, d/b/a AmerenUE (``AmerenUE''), both located at 1901 Chouteau 
Avenue, St. Louis, Missouri 63103, and another of its wholly owned 
public-utility subsidiaries, Central Illinois Public Service Company, 
d/b/a AmerenCIPS (``AmerenCIPS''), 607 East Adams Street, Springfield, 
Illinois 62739 (collectively, ``Applicants''), have filed an 
application-declaration, as amended (``Application'') under sections 
6(a), 7, 9(a), 10 and 12(b) and rules 45 and 54.
    Applicants request authorization to engage in financing and other 
related transactions, as described below, during the period commencing 
with the effective date of this requested Commission order and ending 
June 30, 2007 (``Authorization Period''). Upon the effective date of 
the Commission's order in this proceeding, Ameren will relinquish its 
authority to issue securities and engage in the other transactions 
authorized under its current October 5, 2001, financing order.\7\ In 
the Current Financing Order, Ameren is authorized to issue and sell: 
(1) in public or private offerings, up to $2.5 billion at any time 
outstanding of its capital stock, which consists of 400,000,000 shares 
of common stock, $0.01 par value (``Common Stock'') or options, 
warrants or other stock purchase rights exercisable for Common Stock, 
its preferred stock, which consists of 100,000,000 shares, $0.01 par 
value (``Preferred Stock'') and other forms of preferred securities 
(including, without limitation, trust preferred securities) 
(``Preferred Securities''), equity-linked securities (``Equity-linked 
Securities'') and unsecured long-term debt securities (``Long-term 
Debt''); (2) in addition to the transactions described above, up to 25 
million shares of Common Stock through stock-based plans maintained for 
shareholders (including new investors), officers, employees and non-
employee directors, and (3) up to $1.5 billion principal amount at any 
time outstanding of commercial paper and/or other forms of unsecured 
short-term indebtedness (``Short-term Debt''). Ameren is also 
authorized to provide guarantees and other forms of credit support 
(``Guarantees'') for its nonutility subsidiaries in an aggregate amount 
at any one time outstanding not to exceed $1.5 billion and to enter 
into interest rate hedging transactions with respect to its outstanding 
indebtedness and anticipated debt offerings.
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    \7\ Ameren Corporation, Holding Co. Act Release No. 27449 (Oct. 
5, 2001) (``Current Financing Order''). At this time, the Current 
Financing Order is effective through September 30, 2004.
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I. Background

    AmerenUE, AmerenCIPS and Central Illinois Light Company d/b/a 
AmerenCILCO (``AmerenCILCO''), together, provide retail and wholesale 
electric service to approximately 1.7 million customers and retail 
natural gas service to approximately 500,000 customers in a 49,000 
square-mile area of Missouri and Illinois, including the St. Louis, 
Missouri and Peoria and Springfield, Illinois metropolitan areas.\8\ In 
addition, on February 2, 2004, Ameren entered into a definitive stock 
purchase agreement to acquire all of the securities of Illinois Power 
Company from Illinova Corporation, an exempt holding company and a 
subsidiary of Dynegy Inc. Ameren intends to seek Commission approval 
for that acquisition and other related transactions.
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    \8\ AmerenCILCO, a subsidiary of CILCORP Inc. (``CILCORP''), 
owns AmerenEnergy Resources Generating Company (f/k/a Central 
Illinois Generation, Inc.) (``AERG''), an electric public-utility 
subsidiary. AERG is a generating company only, formed by AmerenCILCO 
in November 2001 to facilitate AmerenCILCO's restructuring, required 
by the Illinois Electric Service Customer Choice and Rate Relief Law 
of 1997. In October 2003, AmerenCILCO transferred substantially all 
of its generating assets (in the aggregate approximately 1,100 
megawatts of generating capacity) to AERG.
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    Ameren directly owns CILCORP, an exempt holding company, which owns 
AmerenCILCO.\9\ Ameren also has five other direct wholly owned 
nonutility subsidiaries, in addition to CILCORP.\10\ AmerenUE has one 
direct wholly owned nonutility subsidiary, Union Electric

[[Page 25628]]

Development Corporation, which holds investments in affordable housing 
projects that qualify for federal income tax credits and other passive 
investments, and also directly holds 40% of Electric Energy, Inc. 
(``EEI''), an exempt wholesale generator (``EWG'') under section 32 of 
the Act, that owns and operates an electric generating station and 
transmission facilities in Joppa, Illinois.\11\
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    \9\ CILCORP was acquired pursuant to Commission order dated 
January 29, 2003). See Ameren Corporation, et al., Holding Co. Act 
Release Nos. 27645 and 27835 (Jan. 29, 2003 and Apr. 15, 2004, 
respectively). The acquisition was completed on Jan. 31, 2003. In 
the Jan. 29, 2003 order, the Commission also reserved jurisdiction 
over Ameren's retention of certain indirect nonutility subsidiaries 
and investments of CILCORP and, in the Apr. 15, 2004 order, 
addressed their retention and certain divestitures.
    \10\ The five wholly owned nonutility subsidiaries are: Ameren 
Services Company (a service company), Ameren Development Company (an 
intermediate nonutility holding company), Ameren Energy Resources 
Company (an intermediate nonutility holding company), Ameren Energy, 
Inc. (a rule 58 ``energy-related company'') and CIPSCO Investment 
Company.
    \11\ Twenty percent (20%) of EEI is directly held by Ameren 
Energy Resources Company, as well.
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    CILCORP directly owns three nonutility subsidiaries.\12\ 
AmerenCILCO also directly owns two nonutility subsidiaries, neither of 
which conducts any significant business at this time.\13\
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    \12\ CILCORP Investment Management Inc., CILCORP Ventures Inc. 
and QST Enterprises Inc.
    \13\ The two nonutility subsidiaries are: CILCO Exploration and 
Development Company (exploration and development of gas, oil and 
other mineral resources) and CILCO Energy Corporation (research and 
develop new energy sources).
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    AmerenUE, AmerenCIPS, AmerenCILCO, and AERG are referred to 
collectively as the ``Utility Subsidiaries.'' The nonutility 
subsidiaries (other than CILCORP) are referred to collectively as 
``Nonutility Subsidiaries.'' The Utility Subsidiaries and Nonutility 
Subsidiaries are referred to collectively as the ``Subsidiaries.'' The 
term Subsidiaries is also intended to include any other subsidiaries 
that may be acquired, directly or indirectly, by Ameren in a 
transaction that is exempt under the Act or the rules or that has 
otherwise been approved by the Commission.

II. The Proposed Authorizations

    Applicants request authorization for the following transactions 
during the Authorization Period:

    (1) For Ameren, to issue and sell, from time to time, directly, 
Common Stock, Preferred Stock,\14\ Equity-linked Securities \15\ 
and, directly or indirectly, through one or more of its financing 
subsidiaries (``Financing Subsidiaries''), Preferred Securities and/
or unsecured Long-term Debt in an aggregate amount at any time 
outstanding not to exceed $2.5 billion;
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    \14\ Applicants state that any shares of Preferred Stock issued 
under the authorization requested in this proceeding would be in 
addition to any Preferred Stock that may be issued under Ameren's 
shareholder rights plan, as authorized by the Commission in SEC File 
No. 70-9383. See Ameren Corporation, Holding Co. Act Release No. 
26961 (Dec. 29, 1998).
    \15\ Any Equity-linked Security would be linked only to a 
security that Ameren is otherwise authorized to issue directly.
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    (2) For Ameren, to issue up to 25 million shares of Common Stock 
pursuant to its dividend reinvestment and stock purchase plan and 
employee savings and incentive compensation plans maintained for its 
officers and employees, or other similar stock-based plans adopted 
in the future, such shares to be in addition to any shares of Common 
Stock issued under the authority requested in (1) above;
    (3) For Ameren, to issue and sell, from time to time, Short-term 
Debt in an aggregate principal amount at any time outstanding not to 
exceed $1.5 billion;
    (4) For Ameren, to provide Guarantees on behalf, or for the 
benefit, of its Subsidiaries in an aggregate principal or nominal 
amount not to exceed $1.5 billion at any one time outstanding, 
provided that the amount of any securities issued by a Financing 
Subsidiary of Ameren that are guaranteed or supported by other forms 
of credit enhancement provided by Ameren will not count against this 
limitation but will instead be counted against the limitation on 
long-term securities proposed in (1) above;
    (5) For Ameren, directly or indirectly through any of its 
Financing Subsidiaries, to enter into hedging transactions 
(``Interest Rate Hedges'') with respect to existing indebtedness, in 
order to manage and minimize interest rate costs, and to enter into 
hedging transactions (``Anticipatory Hedges'') with respect to 
anticipatory debt issuances, in order to lock-in current interest 
rates and/or manage interest rate risk exposure; and
    (6) For AmerenUE and AmerenCIPS, (a) to acquire the equity 
securities of one or more Financing Subsidiaries to facilitate the 
issuance of long-term debt and/or preferred securities (including, 
without limitation, trust preferred securities) and (b) for any of 
AmerenUE's and AmerenCIPS' Financing Subsidiaries to engage in 
Interest Rate Hedges with respect to existing indebtedness, in order 
to manage and minimize interest rate costs, and Anticipatory Hedges 
with respect to anticipatory debt issuances, in order to lock-in 
current interest rates and/or manage interest rate risk exposure, as 
described in subparagraph (5) above.
A. Use of Proceeds
    Ameren states that it will utilize the proceeds of the authorized 
financing for general and corporate purposes including: (a) Financing, 
in part, of the capital expenditures of Ameren and its Subsidiaries; 
(b) financing working capital requirements and capital spending of the 
Subsidiaries, including by making contributions to the Ameren System 
Utility Money Pool and Ameren System Non-State Regulated Subsidiary 
Money Pool; (c) financing exempt acquisitions of interests in EWGs and 
``foreign utility companies'' (``FUCOs''), subject to the limitations 
of rule 53; (d) financing exempt acquisitions of interests in ``energy-
related companies,'' as defined in rule 58, subject to the limitations 
of that rule; (e) the acquisition, retirement, refinancing or 
redemption of securities of which Ameren is the issuer under rule 42; 
and/or (f) the acquisition of the securities or assets of other 
companies, as may be authorized by the Commission in a separate 
proceeding.
B. Parameters Applicable to External Financing Transactions
    Applicants state that the following general terms will be 
applicable to the proposed external financing activities where 
appropriate (including, without limitation, securities issued for the 
purpose of refinancing or refunding outstanding securities of the 
issuer).
    1. Effective Cost of Money. The effective cost of capital on Long-
term Debt, Preferred Stock, Preferred Securities, Equity-linked 
Securities and Short-term Debt will not exceed competitive market rates 
available at the time of issuance for securities having the same or 
reasonably similar terms and conditions issued by similar companies of 
reasonably comparable credit quality; provided, that, in no event will 
the effective cost of capital: (1) On any series of Long-term Debt 
exceed 500 basis points over a U.S. Treasury security having a 
remaining term equal to the term of such series; (2) on any series of 
Preferred Stock, Preferred Securities or Equity-linked Securities 
exceed 700 basis points over a U.S. Treasury security having a 
remaining term equal to the term of such series; and (3) on Short-term 
Debt exceed 300 basis points over the London Interbank Offered Rate for 
maturities of less than one year.
    2. Maturity. The maturity of Long-term Debt will be between one and 
50 years after issuance. Preferred Securities and Equity-linked 
Securities will be redeemed no later than 50 years after issuance, 
unless converted into Common Stock. Preferred Stock issued directly by 
Ameren may be perpetual in duration.
    3. Issuance Expenses. The underwriting fees, commissions or other 
similar remuneration paid in connection with the non-competitive issue, 
sale or distribution of securities proposed in this Application will 
not exceed the greater of: (1) 6% of the principal or total amount of 
the securities being issued; or (2) issuance expenses that are 
generally paid at the time of the pricing for sales of the particular 
issuance, having the same or reasonably similar terms and conditions 
issued by similar companies of reasonably comparable credit quality.
    4. Common Equity Ratio. At all times during the Authorization 
Period, Ameren and each Utility Subsidiary will maintain common equity 
of at least 30% of its consolidated capitalization (common equity, 
preferred stock, long-term debt and short-term debt); provided that 
Ameren will in any event be authorized to issue Common Stock (including 
through stock-based plans

[[Page 25629]]

maintained for shareholders (including new investors, officers, 
employees and non-employee directors)) to the extent authorized in this 
proceeding.
    5. Investment Grade Ratings. Applicants further represent that, 
except for securities issued to fund intrasystem financings, no 
guarantees or other securities, other than Common Stock, may be issued 
in reliance upon the authorization granted by the Commission pursuant 
to this Application, unless: (1) The security to be issued, if rated, 
is rated investment grade; and (2) all outstanding securities of the 
issuer, that are rated, are rated investment grade; and (3) all 
outstanding securities of all the registered holding companies, that 
are rated, are rated investment grade. For purposes of this provision, 
a security will be deemed to be rated ``investment grade'' if it is 
rated investment grade by at least one nationally recognized 
statistical rating organization, as that term is used in paragraphs 
(c)(2)(vi)(E), (F) and (H) of rule 15c3-1 under the Securities Exchange 
Act of 1934, as amended. Applicants request that the Commission reserve 
jurisdiction over the issuance of any such securities that are rated 
below investment grade.\16\ Applicants further request that the 
Commission reserve jurisdiction over the issuance of any guarantee or 
other securities at any time that the conditions set forth in clauses 
(1) through (3) above are not satisfied.
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    \16\ See also Ameren Corporation, et al., Holding Co. Act 
Release Nos. 27645 and 27835 (Jan. 29, 2003 and Apr. 15, 2004, 
respectively) (recently, for CILCORP and AERG, the Commission 
modified these investment grade requirements for, respectively, 
certain refinancing transactions and long-term securities 
transactions).
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    6. Authorization Period. No security will be issued pursuant to the 
proposed authorization after the last day of the Authorization Period, 
June 30, 2007.

III. The Specific Transactions

    Ameren contemplates that Common Stock (including options, warrants 
and/or forward equity purchase contracts), Preferred Stock, Preferred 
Securities, Equity-linked Securities and Long-term Debt will be issued 
directly to one or more purchasers in privately-negotiated transactions 
or to one or more investment banking or underwriting firms or other 
entities who would resell such securities without registration under 
the Securities Act of 1933, as amended, in reliance upon one or more 
applicable exemptions from registration, or to the public.\17\
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    \17\ Ameren states that issuance may occur either (1) through 
underwriters selected by negotiation or competitive bidding; or (2) 
through selling agents acting either as agent or as principal for 
resale to the public either directly or through dealers. All 
securities sales will be at rates or prices and under conditions 
negotiated or based upon, or otherwise determined by, competitive 
capital markets.
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A. Common Stock
    Ameren proposes that it may issue and sell Common Stock through 
underwriters or dealers, through agents, or directly to a limited 
number of purchasers or a single purchaser. If underwriters are used in 
the sale of Common Stock, the securities will be acquired by the 
underwriters for their own account and may be resold from time to time 
in one or more transactions, including negotiated transactions, at a 
fixed public offering price or at varying prices determined at the time 
of sale.\18\
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    \18\ Common Stock may be offered to the public either through 
underwriting syndicates (which may be represented by a managing 
underwriter or underwriters designated by Ameren) or directly by one 
or more underwriters acting alone. Common Stock may be sold directly 
by Ameren or through agents designated by Ameren from time to time. 
If dealers are utilized in the sale of Common Stock, Ameren will 
sell such securities to the dealers, as principals. Any dealer may 
then resell the Common Stock to the public at varying prices to be 
determined by such dealer at the time of resale. If Common Stock is 
being sold in an underwritten offering, Ameren may grant the 
underwriters a ``green shoe'' option permitting the purchase from 
Ameren at the same price of additional shares.
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    Ameren also proposes that it be permitted to issue Common Stock or 
options, warrants or other stock purchase rights exercisable for Common 
Stock in public or privately-negotiated transactions as consideration 
for the equity securities or assets of other companies, provided that 
the acquisition of those equity securities or assets has been 
authorized in a separate proceeding or is exempt under the Act or the 
rules (specifically rule 58).
B. Preferred Stock, Preferred Securities, Equity-Linked Securities and 
Long-Term Debt
    Ameren proposes to issue, directly, Preferred Stock and Equity-
linked Securities, or, directly or indirectly, through one or more 
Financing Subsidiaries, Long-Term Debt, and Preferred Securities.
    Ameren proposes that Preferred Stock, Preferred Securities and 
Equity-linked Securities may be issued in one or more series with any 
rights, preferences, and priorities as may be designated in the 
instrument creating each series. These securities will be redeemed no 
later than 50 years after issuance, unless converted into Common Stock, 
except that Preferred Stock may be perpetual in duration.\19\
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    \19\ Dividends or distributions on Preferred Stock, Preferred 
Securities or Equity-linked Securities will be made periodically and 
to the extent funds are legally avaialble for the purpose, but may 
be made subject to terms that allow the issuer to defer dividend 
payments or distributions for specified periods. Preferred 
Securities and Equity-linked Securities may be convertible or 
exchangeable into shares of Common Stock and may be issued in the 
form of shares or units.
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    With respect to Long-term Debt, Ameren also proposes that Long-term 
Debt of a particular series (1) will be unsecured; (2) will have a 
maturity ranging from one to 50 years; (3) may be subject to optional 
and/or mandatory redemption, in whole or in part, at par or at various 
premiums above the principal amount; (4) may be entitled to mandatory 
or optional sinking fund provisions; (5) may provide for reset of the 
coupon as provided for in a remarketing or auction arrangement; and (6) 
may be called from existing investors by a third party. The maturity 
dates, interest rates, and redemption and sinking fund provisions, if 
any, with respect to the Long-term Debt of a particular series, as well 
as any associated placement, underwriting or selling agent fees, 
commissions and discounts, if any, will be established by negotiation 
or competitive bidding.
C. Short-term Debt
    Ameren proposes to issue and sell from time to time Short-term Debt 
in an aggregate principal amount at any time outstanding not to exceed 
$1.5 billion. Short-term Debt may include commercial paper notes, bank 
notes and other forms of short-term indebtedness.\20\ All Short-term 
Debt will be unsecured and will have maturities of less than one year 
from the date of issuance.
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    \20\ Commercial paper will be sold in established domestic or 
European commercial paper markets. Commercial paper would typically 
be sold to dealers at the discount rate per annum prevailing at the 
date of issuance for commercial paper of comparable quality and 
maturities sold to commercial paper dealers generally. It is 
expected that the dealers acquiring commercial paper will reoffer it 
at a discount to coporate, institutional and, with respect to 
European commercial paper, individual investors. It is anticipated 
that commercial paper will be reoffered to investors such as 
commercial banks, insurance companies, pension funds, investment 
trusts, foundations, colleges and universities, finance companies 
and and nonfinancial corporations.
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    Ameren also proposes to establish and maintain back-up credit lines 
with banks or other institutional lenders to support its commercial 
paper program(s) and other credit arrangements and/or borrowing 
facilities generally available to borrowers with comparable credit 
ratings as it may deem appropriate in light of its needs and existing 
market conditions. Only the amounts drawn and outstanding under these 
agreements and facilities will be counted against the proposed limit on 
Short-term Debt.

[[Page 25630]]

D. Common Stock Issued Under Stock-Based Plans
    Ameren also proposes to issue up to 25 million shares of Common 
Stock under stock-based plans that it or any of its subsidiaries 
maintain for shareholders, investors, employees and nonemployee 
directors. Ameren currently maintains a dividend reinvestment plan, the 
Ameren Long-term Incentive Plan, the Ameren Corporation Savings 
Investment Plan (formerly the Union Electric Savings Investment Plan) 
and the Ameren Corporation Employee Long-term Savings Plan.
E. Guarantees
    Ameren requests authorization to provide Guarantees with respect to 
financial or contractual obligations of any Subsidiary as may be 
appropriate in the ordinary course of such subsidiary's business, in an 
aggregate principal or nominal amount not to exceed $1.5 billion 
outstanding at any one time, provided however, that the amount of any 
Guarantees in respect of obligations of any Nonutility Subsidiaries 
shall also be subject to the limitations of rule 53(a)(1) and rule 
58(a)(1), as applicable, and provided further, that any Guarantee that 
is outstanding, on the last day of the Authorization Period, will 
expire or terminate in accordance with the stated terms of the 
Guarantee. In addition to providing direct parent guarantees, Ameren 
may also provide Guarantees in the form of formal credit enhancement 
agreements, including but not limited to ``keep well'' agreements and 
reimbursement undertakings under letters of credit. The proposed 
limitation on Guarantees shall not include the amount of any guarantees 
or other forms of credit support provided with respect to securities 
issued by any Financing Subsidiary of Ameren (the amounts of which 
would count only against the proposed limitations on the amounts of 
debt and equity securities that Ameren may issue). Guarantees may, in 
some cases, be provided to support obligations of Subsidiaries that are 
not readily susceptible of exact quantification or that may be subject 
to varying quantification. In such cases, Ameren will determine the 
exposure under the guarantee for purposes of measuring compliance with 
the proposed limitation on Guarantees by appropriate means, including 
estimation of exposure based on loss experience or projected potential 
payment amounts. If appropriate, estimates will be made in accordance 
with generally accepted accounting principles in the United States of 
America, i.e., U.S. GAAP. The estimations will be reevaluated 
periodically.\21\
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    \21\ Ameren may charge any Subsidiary a fee for each Guarantee 
provided on its behalf that is not greater than the cost, if any, of 
obtaining the liquidity necessary to perform the guarantee (for 
example, bank line commitment fees or letter of credit fees, plus 
other transactional expenses) for the period of time the Guarantee 
remains outstanding.
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F. Hedging Transactions
    Ameren, as well as AmerenUE and AmerenCIPS (these two, only to the 
extent described in subsection III.G. below), request authorization, 
directly or indirectly, through any of its Financing Subsidiaries, to 
enter into interest rate hedging transactions with respect to 
outstanding indebtedness (``Interest Rate Hedges''), subject to certain 
limitations and restrictions, in order to reduce or manage the 
effective interest rate cost.\22\ In no case will the notional amount 
of any Interest Rate Hedge exceed the principal amount of the 
underlying debt instrument. Transactions will be entered into for a 
fixed or determinable period. Applicants state that it will not engage 
in speculative transactions.
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    \22\ Interest Rate Hedges will involve the use of financial 
instruments commonly used in today's capital markets, such as 
exchange traded interest rate futures contracts and over the counter 
interest rate swaps, options, caps, collars, floors, and structured 
notes (i.e, a debt instrument in which the princiapl and/or interest 
payments are indirectly linked to the value of an underlying asset 
or index), or transactions involving the purchase or sale, including 
short sales, of U.S. Treasury Securities. The transactions would be 
for fixed periods and stated notional amounts. Fees, commissions and 
other amounts payable to the counterparty or exchange (excluding, 
however, the swap or option payments) in connection with an Interest 
Rate Hedge will not exceed those generally obtainable in competitive 
markets for parties of comparable credit quality.
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    Ameren, as well as AmerenUE and AmerenCIPS (these two, to the 
extent described in subsection III.G. below), also propose, directly or 
indirectly through any Financing Subsidiary, to enter into interest 
rate hedging transactions with respect to anticipated debt offerings 
(``Anticipatory Hedges''), subject to certain limitations and 
restrictions, in order to fix the interest rate and/or limit the 
interest rate risk associated with any new issuance.\23\ Interest Rate 
Hedges and Anticipatory Hedges (other than exchange-traded interest 
rate futures contracts) would only be entered into with counterparties 
(``Approved Counterparties'') whose senior debt ratings, or the senior 
debt ratings of any credit support providers who have guaranteed the 
obligations of such counterparties, as published by S&P, are equal to 
or greater than BBB, or an equivalent rating from Moody's or Fitch, 
Inc.
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    \23\ Anticipatory Hedges may be executed on-exchange (``On-
Exchange Trades'') through brokers by the opening of futures and/or 
options positions traded on the Chicago Board of Trade, Chicago 
Mercantile Exchange or other financial exchange, the opening of 
over-the-counter positions with one or more counterparties (``Off-
Exchange Trades''), or a combination of On-Exchange Trades and Off-
Exchange Trades. The optimal; structure of each Anticipatory hedge 
transaction will be determined at the time of execution. 
Anticipatory hedges would be utilized to fix the interest rate and/
or limit the interest rate risk associated with any new issuance 
through: (1) A forward sale of exchange-traded U.S. Treasury futures 
contracts, U.S. Treasury Securities and/or a forward swap (each a 
``Forward Sale''); (2) the purchase of put options on U.S. Treasury 
Securities (a ``Put Options Purchase''); (3) a Put Options Purchase 
in combination with the sale of call options on U.S. Treasury 
Securities (A ``Zero Cost Collar''), (4) transactions involving the 
purcahse or sale, including short sales, of U.S. Treasury 
Securities; or (5) some combination of a Forward Sale, Put Options 
Purchase, Zero Cost Collar and/or other derivative or cash 
transactions, including, but limited to, structred notes, caps and 
collars, appropriate for the Anticipatory Hedges.
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    Statement of Financial Accounting Standard (``SFAS'') 133 
(Accounting for Derivative Instruments and Hedging Activities) and SFAS 
138 (Accounting for Certain Derivative Instruments and Certain Hedging 
Activities) or other standards applicable to accounting for derivative 
transactions as are adopted and implemented by the Financial Accounting 
Standards Board (``FASB'') will be complied with. Applicants represent 
that each Interest Rate Hedge and each Anticipatory Hedge will qualify 
for hedge accounting treatment under the current FASB standards in 
effect and as determined as of the date such Interest Rate Hedge or 
Anticipatory Hedge is entered into. Applicants will also comply with 
any future FASB financial disclosure requirements associated with 
hedging transactions.
G. Financing Subsidiaries
    In connection with the issuance of long-term debt and preferred 
securities, AmerenUE and AmerenCIPS request authorization to acquire, 
directly or indirectly, the common stock or other equity securities of 
one or more Financing Subsidiaries formed exclusively for the purpose 
of facilitating the issuance of long-term debt securities and/or 
preferred securities (including, without limitation, trust preferred 
securities) and for the loan or other transfer of the resulting 
proceeds to AmerenUE or AmerenCIPS, as applicable. In connection with 
any of this kind of financing transactions, AmerenUE and AmerenCIPS may 
enter into one or more Guarantees in favor of its Financing Subsidiary. 
AmerenUE and AmerenCIPS also request authorization to enter into 
expense agreements with

[[Page 25631]]

its respective Financing Subsidiary, in which each company would agree 
to pay all expenses of the Financing Subsidiary.
    Applicants state that the proposed Financing Subsidiaries shall be 
organized only if, in management's opinion, the creation and 
utilization of a Financing Subsidiary will likely result in tax 
savings, increased access to capital markets and/or lower cost of 
capital for AmerenUE or AmerenCIPS, as the case may be. They state, 
further, that no Financing Subsidiary shall acquire or dispose of, 
directly or indirectly, any interest in any ``utility asset,'' as that 
term is defined under the Act.
    AmerenUE and AmerenCIPS also request authorization to issue to any 
Financing Subsidiary, at any time or from time to time in one or more 
series, unsecured debentures, unsecured promissory notes or other 
unsecured debt instruments or preferred securities (individually, a 
``Note'' and, collectively, the ``Notes'') governed by an indenture or 
indentures or other documents, and the Financing Subsidiary will apply 
the proceeds of any external financing by it, plus the amount of any 
equity contribution made to it, from time to time, to purchase the 
Notes. The terms (e.g., interest rate, maturity, amortization, 
prepayment terms, default provisions, etc.) of any the Notes would 
generally be designed to parallel the terms of the securities issued by 
the Financing Subsidiary to which the Notes relate.
    In addition, AmerenUE and AmerenCIPS request that any of their 
Financing Subsidiaries be authorized to engage in Interest Rate Hedges 
with respect to existing indebtedness, in order to manage and minimize 
interest rate costs, and Anticipatory Hedges with respect to 
anticipatory debt issuances, in order to lock-in current interest rates 
and/or manage interest rate risk exposure, as described in subsection 
III.F. above.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-10396 Filed 5-6-04; 8:45 am]
BILLING CODE 8010-01-P