[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

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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