SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U5S
ANNUAL REPORT
For the Year Ended December 31, 1998
Filed pursuant to the Public Utility Holding Company Act of 1935 by
AMEREN CORPORATION
1901 Chouteau Avenue, St. Louis, Missouri 63103
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TABLE OF CONTENTS
Page
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ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1998 1
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS 12
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES 12
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES 12
ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES 12
ITEM 6. OFFICERS AND DIRECTORS
Part I. Name, principal business address and positions held as of
December 31, 1998 13
Part II. Financial connections as of December 31, 1998 23
Part III. Compensation and other related information 24
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 25
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS 25
Part I. Intercompany sales and service
Part II. Contracts to purchase services or goods between any system company
and affiliate
Part III. Employment of any person by any system company for the performance
on a continuing basis of management services
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 25
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS 25
Index to Financial Statements
Financial Statements
Exhibits 26
SIGNATURES 29
APPENDIX 30
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ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1998.
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Number of
Common % of Issuer Owner's
Shares Voting Book Book
Name of Company Owned Power Value Value Business Type
--------------- ----- ----- ----- ----- -------------
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Ameren Corporation 3,011,673,650 3,011,673,650 Holding Company
Union Electric Co. 102,123,834 2,424,125,189 2,424,125,189 Electric & Gas Utility
Envirotech Investment (1) Energy-Related
Fund, L.L.C.
Electric Energy, Inc. 24,800 8,834,469 3,533,787 Electric
Union Electric Development Corp. 18,500 (14,646,636) (14,646,636) Community Develop-
ment & Energy-Related
Investments
Civic Ventures (2) Community
Investment Fund, LP Development
Civic Progress (3) Community
Development
Kiel Center Corporation (3) Community
Development
Kiel Investors, L.P. (3) Community
Development
Clark Enterprises Inc. (3) Community
Development
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Lewis & Clark Industrial (4) Community
Development Corporation Development
St. Louis Equity Fund 1988 (5) Community
Development
St. Louis Equity Fund 1990 (5) Community
Development
St. Louis Equity Fund 1991 (5) Community
Development
St. Louis Equity Fund 1992 (5) Community
Development
St. Louis Equity Fund 1993 (5) Community
Development
St. Louis Equity Fund 1994 (5) Community
Development
St. Louis Equity Fund 1995 (5) Community
Development
St. Louis Equity Fund 1996 (5) Community
Development
St. Louis Equity Fund 1997 (5) Community
Development
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St. Louis Equity Fund 1998#1 (5) Community
Development
Housing Missouri, Inc. Community
Development
Housing Missouri 1996 (6) Community
Development
Housing Missouri 1997 (6) Community
Development
Housing Missouri 1998#2 (6) Community
Development
Gateway Energy Systems, L.C. (7) Energy-Related
Gateway Energy Alliance, L.C. (8) Energy-Related
Central Ill. Pub. Service Co. 25,452,373 575,370,463 575,370,463 Electric & Gas
Electric Energy, Inc. 12,400 8,834,469 1,766,894 Electric
*CIPS Energy, Inc. 100 1,000 1,000 Inactive
*Illinois Steam Inc. 100 1,000 1,000 Inactive
CIPSCO Investment Company 100 2,261,814 2,261,814 Leasing and Energy-
Related Investments
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CIPSCO Securities Company 100 13,791,361 13,791,361 Investments
CIPSCO Venture Company 100 3,883,489 3,883,489 Civic and Economic
Development
Effingham Development (9) Investments
Building II, LLC
Mattoon Enterprise Park LLC (10) Investments
MACC, LLC (11) Investments
Illinois Equity Fund 1992 (12) Investments
Illinois Equity Fund 1994 (12) Investments
Illinois Equity Fund 1996 (12) Investments
Illinois Equity Fund 1998#3 (12) Investments
CIPSCO Leasing Company 100 (13) 35,202,658 35,202,658 Leveraged Leases
CLC Aircraft Leasing Co. 100 (14) Equipment Leasing
CLC Leasing Co. A 100 (15) Equipment Leasing
CLC Leasing Co. B 100 (16) Equipment Leasing
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CLC Leasing Co. C 100 (17) Inactive
CIPSCO Energy Company 100 33,816,975 33,816,975 Energy-Related
Investments
CEC-APL L.P. (18) Investments
CEC-APL-G Co. 100 (18) Equipment Leasing
CEC-APL-L Co. 100 (18) Equipment Leasing
CEC-PGE L.P. (19) Investments
CEC-PGE-G Co. 100 (19) Equipment Leasing
CEC-PGE-L Co. 100 (19) Equipment Leasing
CEC-PGE L.P. (20) Investments
CEC-PSLP-G Co. 100 (20) Equipment Leasing
CEC-PSLP-L Co. 100 (20) Equipment Leasing
CEC-MPS L.P. (21) Investments
CEC-MPS-G Co. 100 (21) Equipment Leasing
CEC-MPS-L Co. 100 (21) Equipment Leasing
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CEC-ACE L.P. (22) Investments
CEC-ACE-G Co. 100 (22) Equipment Leasing
CEC-ACE-L Co. 100 (22) Equipment Leasing
CEC-ACLP-Co. 100 (23) Investments
Ameren Energy, Inc.#4 1 (3,590,016) 3,590,016) Power & Gas
Marketing,
Energy-Related
Ameren Services Co. 1,000 16,231,478 16,231,478 Services to Ameren
and its affiliates
Ameren Development Company#5 1,000 122,407 122,407 Energy-Related
Ameren ERC, Inc.#6 1,000 122,465 122,465 Energy-Related
Ameren Energy Communication, Inc.#7 1,000 (663,596) 663,596) Communications-
Related
Notes Relating to Voting Power and Book Value
---------------------------------------------
Union Electric Company
(1) Envirotech Investment Fund, L.L.C.
Capital investments in energy-related businesses with Company
contributions amounting to $1,340,000 as of 12/31/98.
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Union Electric Development Corporation
(2) Civic Ventures Investment Fund, LP
Investment fund to promote growth and development of small and
minority business enterprises with Company contributions amounting to
$178,200 as of 12/31/98.
(3) Civic Progress, Kiel Center Corporation, Kiel Investors, LP and Clark
Enterprises, Inc.
Capital contributions related to an investment in the development of
the Kiel Center, amounted to $6,208,303 as of 12/31/98. No
established market value.
(4) Lewis and Clark Industrial Development Corporation
Capital contribution in civic development as of 12/31/98 of $5,000.
(5) St. Louis Equity Funds - 1988, 1990, 1991, 1992, 1993, 1994, 1995, 1996,
1997 and 1998
Real estate investment funds, with the Company's total contributions
as of 12/31/98 of $3,255,492.52. No established market value.
(6) Housing Missouri Funds - 1996, 1997 and 1998
Real estate investment funds with the Company's total contributions
as of 12/31/98 of $143,890.63. No established market value.
(7) Gateway Energy Alliance LLC
A total of $429,792 was invested in a 50% interest in the above named
Limited Liability Corporation. No established market value.
(8) Gateway Energy Systems, LLC
A 49% interest in the above named Limited Liability Company amounting
to $437,500. No established market value.
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CIPSCO Venture Company holdings:
Total equity interest in the investments listed below, except for the Illinois
Equity Funds which is provided separately below, is $872,598:
(9) Effingham Development Building II LLC
A 40% equity interest, but not the managing member, in the above
named limited liability company. No established market value.
(10) Mattoon Enterprise Park, LLC
A 20% equity interest, but not the managing member, in the above
named limited liability company. No established market value.
(11) MACC, LLC
A 33.33% interest, but not the managing member, in the above named
limited liability company. No established market value.
(12) Illinois Equity Funds - 1992, 1994, 1996 and 1998 Limited
Partnerships Various ownership interests of not more than 10% in four
limited partnerships. Total commitment to all limited partnerships of
$3.5 million. No established market value, book value is $3,010,891.
CIPSCO Leasing Company
Total current asset book value of investments listed below is $35,202,658:
(13) A 17.5% undivided interest in a leveraged lease financing of a natural
gas liquids plant held under the subsidiary name of CIPSCO Leasing
Company.
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(14) A 100% interest in a leveraged lease financing of a commercial aircraft
held under the subsidiary name CIPSCO Aircraft Leasing Company.
(15) A 25% undivided interest in a leveraged lease financing of various oil
and gas production equipment held under the subsidiary name CLC Leasing
Company A.
(16) A 100% interest in a leveraged lease financing of certain commercial
properties held under the subsidiary name CLC Leasing Company B.
(17) CLC Leasing Company C established for future investment opportunities; no
current investments.
CIPSCO Energy Company
Total current asset book value of investments listed below is $33,816,975:
(18) CEC-APL, LP
A 51% limited partnership interest in the above named Limited
Partnership. 1% and 50% of this investment are held in CEC-APL-G
Company and CEC-APL-L Company, respectively - both subsidiaries of
CIPSCO Energy Company. No established market value.
(19) CEC-PGE, LP
A 51% limited partnership interest in the above named Limited
Partnership. 1% and 50% of this investment is held in CEC-PGE-G
Company and CEC-PGE-L Company, respectively - both subsidiaries of
CIPSCO Energy Company. No established market value.
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(20) CEC-PSPL, LP
A 51% limited partnership interest in the above named Limited
Partnership. 1% and 50% of this investment are held in CEC-PSPL-G
Company and CEC-PSPL-L Company, respectively - both subsidiaries of
CIPSCO Energy Company. No established market value.
(21) CEC-MPS, LP
A 100% limited partnership interest in the above named Limited
Partnership. 1% and 99% of this investment are held in CEC-MPS-G and
CEC-MPS-L Company, respectively - both subsidiaries of CIPSCO Energy
Company. No established market value.
(22) CEC-ACE, LP
A 100% limited partnership interest in the above named Limited
Partnership. 1% and 99% of this investment are held in CEC-ACE-G
Company and CEC-ACE-L Company, respectively, - both subsidiaries of
CIPSCO Energy Company. No established market value.
(23) Appomattox Cogeneration L.P.
A 24.75% limited partnership interest in the above named Limited
Partnership. This investment is held in CEC-ACLP Company, a
subsidiary of CIPSCO Energy Company. No established market value.
Footnotes
#1 St. Louis Equity Fund 1998 is the 1998 commitment to the real estate invest-
ment fund.
#2 Housing Missouri 1998 is the 1998 commitment to the real estate investment
fund.
#3 Illinois Equity Fund 1998 is the 1998 commitment to the real estate invest-
ment fund.
#4 Ameren Energy, Inc. was incorporated in Missouri on 1/6/98 as an energy
marketing and trading company.
#5 Ameren Development Company was incorporated in Missouri on 2/26/98 as a
holding company.
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#6 Ameren ERC, Inc. was incorporated in Missouri on 2/26/98 to invest in
energy-related investments.
#7 Ameren Energy Communications, Inc. was incorporated in Missouri on 6/26/98 to
invest in energy communication investments.
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ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
No sales that require reporting.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
A. Central Illinois Public Service Company - Debt Issuance
1. Issuance of $15 million Senior Notes, 5.374%, Due 2008 secured by
First Mortgage Bonds. Issued on December 22, 1998.
2. Issuance of $40 million Senior Notes, 6.125%, Due 2028 secured by
First Mortgage Bonds. Issued on December 22, 1998.
B. Union Electric Company - Debt Issuance
1. Entered into a Loan Agreement with the State Environmental
Improvement and Energy Resources Authority of the State of Missouri
for the issuance of Environmental Improvement Revenue Refunding Bonds
issued in three series: $60 million, $50 million and $50 million, all
floating rate issuance, all due September 1, 2033.
C. Ameren Corporation - Guarantee
1. The registrant and its utility affiliates are self insured for
Workman's Compensation Insurance and the Parent (Ameren Corporation)
guarantees the payment of outstanding claims of subsidiaries (the
"reserve"0. At 12/31/98 this amounted to approximately $3.35 million.
The highest amount outstanding at any time during the year cannot be
readily determined.
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
A. Central Illinois Public Service Company - Debt Retirements
1. On or about December 22, 1998, this subsidiary terminated a $42
million long term line of credit and paid all associated borrowings
on this line of credit in full.
2. On December 22, 1998, this subsidiary provided notice for the
redemption of First Mortgage Bonds Series W, for $33 million.
B. Union Electric Company - Debt Retirements
1. On December 1, 1998, this subsidiary terminated the Loan Agreement
with the State Environmental Improvement and Energy Resources
Authority of the State of Missouri due to the redemption of the
associated Environmental Improvement Revenue Refund Bonds in the
amount of $160 million.
ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES
None.
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ITEM 6. OFFICERS AND DIRECTORS - PART I
The positions of officers and director of all system companies as of December
31, 1998 were as follows:
NAME AND ADDRESS POSITION
AMEREN CORPORATION
WARNER L. BAXTER (1) ST. LOUIS, MO VP, C
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO SVP
WILLIAM E.CORNELIUS ST. LOUIS, MO D
CLIFFORD L. GREENWALT (2) SPRINGFIELD, IL D
THOMAS A. HAYS ST. LOUIS, MO D
WILLIAM E. JAUDES (3) ST. LOUIS, MO VP & GC
RICHARD A.LIDDY ST. LOUIS, MO D
GORDON R.LOHMAN (2) CHICAGO, IL D
RICHARD A. LUMPKIN (2) MATTOON, IL D
JOHN PETERS MACCARTHY ST. LOUIS, MO D
HANNE M. MERRIMAN (2) WASHINGTON, D.C. D
PAUL L. MILLER JR. ST. LOUIS, MO D
CHARLES W. MUELLER ST. LOUIS, MO D, CM, P & CEO
ROBERT H. QUENON ST. LOUIS, MO D
HARVEY SALIGMAN ST. LOUIS, MO D
CHARLES J. SCHUKAI ST. LOUIS, MO D
STEVEN R. SULLIVAN (4) ST. LOUIS, MO VP, GC & S
JAMES C. THOMPSON (5) ST. LOUIS, MO S
JANET McAFEE WEAKLEY ST. LOUIS, MO D
JAMES W. WOGSLAND (2) PEORIA, IL D
(1) Mr. Baxter was elected Vice President on May 1, 1998. (2) Term began April
28, 1998.
(3) Mr. Jaudes retired on July 1, 1998.
(4) Mr. Sullivan was elected Vice President and General Counsel on July 1, 1998
and Secretary on September 1, 1998.
(5) Mr. Thompson retired on September 1, 1998.
UNION ELECTRIC COMPANY
PAUL A. AGATHEN (1) ST. LOUIS, MO D
WARNER L. BAXTER (2) ST. LOUIS, MO VP & C
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT (1) ST. LOUIS, MO D, SVP
WILLIAM J. CARR ST. LOUIS, MO VP
WILLIAM E. CORNELIUS (3) ST. LOUIS, MO D
THOMAS A. HAYS (3) ST. LOUIS, MO D
THOMAS H. JACOBSEN (3) ST. LOUIS, MO D
WILLIAM E. JAUDES (4) ST. LOUIS, MO VP & GC
RICHARD A. LIDDY (3) ST. LOUIS, MO D
JOHN PETERS MACCARTHY (3) ST. LOUIS, MO D
PAUL L. MILLER, JR. (3) ST. LOUIS, MO D
MICHAEL J. MONTANA ST. LOUIS, MO VP
CHARLES W. MUELLER ST. LOUIS, MO D, P & CEO
ROBERT H. QUENON (3) ST. LOUIS, MO D
GARY L. RAINWATER SPRINGFIELD, IL D
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
GARRY L. RANDOLPH ST. LOUIS, MO VP
HARVEY SALIGMAN (3) ST. LOUIS, MO D
CHARLES J. SCHUKAI (1) ST. LOUIS, MO D, SVP
ROBERT J. SCHUKAI ST. LOUIS, MO VP
WILLIAM C. SHORES ST. LOUIS, MO VP
STEVEN R. SULLIVAN (5) ST. LOUIS, MO VP, GC & S
JAMES C. THOMPSON (6) ST. LOUIS, MO S
JANET MCAFEE WEAKLEY (3) ST. LOUIS, MO D
(1) Term began April 28, 1998.
(2) Mr. Baxter was elected Vice President on May 1, 1998. (3) Term ended April
28, 1998.
(4) Mr. Jaudes retired on July 1, 1998.
(5) Mr. Sullivan was elected Vice President and General Counsel on June 11, 1998
and Secretary on August 27, 1998.
(6) Mr. Thompson retired on September 1, 1998.
ELECTRIC ENERGY, INC.
DONALD W. CAPONE ST. LOUIS, MO D
ALEC G. DREYER DECATUR, IL D
JAMES M. HELM JOPPA, IL S
R. ALAN KELLEY ST. LOUIS, MO D, P
WAYNE T. LUCAS LOUISVILLE, KY D
GILBERT W. MOORMAN SPRINGFIELD, IL D
CHARLES W. MUELLER ST. LOUIS, MO D
ROBERT L. POWERS JOPPA, IL VP
JOHN D. PRUNKL DECATUR, IL D
GARY L. RAINWATER SPRINGFIELD, IL D
UNION ELECTRIC DEVELOPMENT CORPORATION
JERRE E. BIRDSONG ST. LOUIS, MO D, VP, T
DONALD E. BRANDT ST. LOUIS, MO D, VP, C
WILLIAM E. JAUDES (1) ST. LOUIS, MO D, VP & GC
CHARLES W. MUELLER ST. LOUIS, MO D, P
JAMES C. THOMPSON (2) ST. LOUIS, MO D, S
(1) Mr. Jaudes retired on July 1, 1998.
(2) Mr. Thompson retired on September 1, 1998.
KIEL CENTER CORPORATION
CHARLES W. MUELLER ST. LOUIS, MO D
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
KIEL INVESTORS, L.P.
CHARLES W. MUELLER ST. LOUIS, MO D
CLARK ENTERPRISES INC.
CHARLES W. MUELLER ST. LOUIS, MO D
ST.LOUIS EQUITY FUND 1988, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998.
DONALD E. BRANDT ST. LOUIS, MO CM
HOUSING MISSOURI, INC. 1996, 1997, 1998
JERRE E. BIRDSONG ST. LOUIS, MO D
GATEWAY ENERGY SYSTEMS, L.C.
DONALD E. BRANDT ST. LOUIS, MO D
GATEWAY ENERGY ALLIANCE, L.C.
DONALD E. BRANDT ST. LOUIS, MO D
GATEWAY ENERGY WGK PROJECT LLC
DONALD E. BRANDT ST. LOUIS, MO D
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
PAUL A. AGATHEN (1) ST. LOUIS, MO D
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO T
JAMES T. BIRKETT SPRINGFIELD, IL VP
DONALD E. BRANDT (1) ST. LOUIS, MO D
CLIFFORD L. GREENWALT (2) SPRINGFIELD, IL D
JOHN L. HEATH PHOENIX, AZ D
ROBERT W.JACKSON SPRINGFIELD, IL D
WILLIAM E. JAUDES (3) ST. LOUIS, MO VP & GC
WILLIAM A. KOERTNER (4) SPRINGFIELD, IL VP, S
GORDON R. LOHMAN (2) CHICAGO, IL D
RICHARD A. LUMPKIN (2) MATTOON, IL D
HANNE M. MERRIMAN (2) WASHINGTON, D.C. D
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
MICHAEL J. MONTANA (1) ST. LOUIS, MO VP
GILBERT W. MOORMAN SPRINGFIELD, IL VP
CHARLES W. MUELLER (1) ST. LOUIS, MO D
CRAIG D. NELSON (1) ST. LOUIS, MO VP
GARY L. RAINWATER (5) SPRINGFIELD, IL D, P & CEO
CHARLES J. SCHUKAI (1) ST. LOUIS, MO D
THOMAS L. SHADE QUINCY, IL D
STEVEN R. SULLIVAN (6) ST. LOUIS, MO VP, GC & S
THOMAS R. VOSS (7) SPRINGFIELD, IL VP
JAMES W. WOGSLAND (2) PEORIA, IL D
(1) Term began April 28, 1998.
(2) Term ended April 28, 1998.
(3) Mr. Jaudes retired on July 1, 1998.
(4) Mr. Koertner resigned on November 6, 1998.
(5) Mr. Rainwater was elected President and Chief Executive Officer on January
1, 1998.
(6) Mr. Sullivan was elected Vice President, General Counsel and Secretary on
November 7, 1998.
(7) Mr. Voss was elected Vice President on July 1, 1998.
CIPS ENERGY, INC.
GARY L. RAINWATER SPRINGFIELD, IL D, P
ILLINOIS STEAM INC.
GARY L. RAINWATER SPRINGFIELD, IL D, P
CIPSCO INVESTMENT COMPANY
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CIPSCO SECURITIES COMPANY
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
CIPSCO VENTURE COMPANY
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
EFFINGHAM DEVELOPMENT BUILDING II, LLC
ROBERT C. PORTER ST. LOUIS, MO D
MATTOON ENTERPRISES PARK LLC
ROBERT C. PORTER ST. LOUIS, MO D
MACC, LLC
ROBERT C. PORTER ST. LOUIS, MO D
ILLINOIS EQUITY FUND 1992, 1994, 1996, 1998.
ROBERT C. PORTER ST. LOUIS, MO D
CIPSCO LEASING COMPANY
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CLC AIRCRAFT LEASING CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CLC LEASING CO. A
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CLC LEASING CO. B
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CLC LEASING CO. C
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CIPSCO ENERGY COMPANY
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-APL-G CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-APL-L CO.
DIANE L. BORTMESS SPRINGFIELD, IL D, T
RONALD K. EVANS ST. LOUIS, MO D, S
JOY D. HUSTON ST. LOUIS, MO D, C
GREGORY L. NELSON ST. LOUIS, MO D, PEO, P
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ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
CEC-PGE-G CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-PGE-L CO.
DIANE L. BORTMESS SPRINGFIELD, IL D, T
RONALD K. EVANS ST. LOUIS, MO D, S
JOY D. HUSTON ST. LOUIS, MO D, C
GREGORY L. NELSON ST. LOUIS, MO D, PEO, P
CEC-PSPL-G CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-PSPL-L CO.
DIANE L. BORTMESS SPRINGFIELD, IL D, T
RONALD K. EVANS ST. LOUIS, MO D, S
JOY D. HUSTON ST. LOUIS, MO D, C
GREGORY L. NELSON ST. LOUIS, MO D, PEO, P
CEC-MPS-G CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-MPS-L CO.
DIANE L. BORTMESS SPRINGFIELD, IL D, T
RONALD K. EVANS ST. LOUIS, MO D, S
JOY D. HUSTON ST. LOUIS, MO D, C
GREGORY L. NELSON ST. LOUIS, MO D, PEO, P
-19-
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
CEC-ACE-G CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
CEC-ACE-L CO.
DIANE L. BORTMESS SPRINGFIELD, IL D, T
RONALD K. EVANS ST. LOUIS, MO D, S
JOY D. HUSTON ST. LOUIS, MO D, C
GREGORY L. NELSON ST. LOUIS, MO D, PEO, P
CEC-ACLP- CO.
WARNER L. BAXTER ST. LOUIS, MO C
JERRE E. BIRDSONG ST. LOUIS, MO D, PEO, P, T
DONALD E. BRANDT ST. LOUIS, MO D
ROBERT C. PORTER ST. LOUIS, MO D, VP
STEVEN R. SULLIVAN ST. LOUIS, MO S
AMEREN ENERGY, INC
PAUL A. AGATHEN ST. LOUIS, MO D
WARNER L. BAXTER ST. LOUIS, MO VP, C
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO D, P
DANIEL F. COLE ST. LOUIS, MO VP
LESLIE MCNEW ST. LOUIS, MO VP
CHARLES W. MUELLER ST. LOUIS, MO D
STEVEN R. SULLIVAN ST. LOUIS, MO VP, GC & S
JAMES F.WHITESIDES ST. LOUIS, MO VP
AMEREN SERVICES CO.
PAUL A. AGATHEN ST. LOUIS, MO SVP
M. PATRICIA BARRETT ST. LOUIS, MO VP
WARNER L. BAXTER (1) ST. LOUIS, MO VP, C
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO D, SVP
CHARLES A. BREMER ST. LOUIS, MO VP
DONALD W. CAPONE ST. LOUIS, MO VP
JIMMY L. DAVIS ST. LOUIS, MO VP
JEAN M. HANNIS ST. LOUIS, MO VP
WILLIAM E. JAUDES (2) ST. LOUIS, MO VP & GC
-20-
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NAME AND ADDRESS POSITION
R. ALAN KELLEY ST. LOUIS, MO VP
MICHAEL J. MONTANA ST. LOUIS, MO VP
CHARLES W. MUELLER ST. LOUIS, MO D, P & CEO
CRAIG D. NELSON ST. LOUIS, MO VP
CHARLES J. SCHUKAI ST. LOUIS, MO D, SVP
STEVEN R. SULLIVAN (3) ST. LOUIS, MO VP, GC & S
JAMES C. THOMPSON (4) ST. LOUIS, MO S
SAMUEL E. WILLIS ST. LOUIS, MO VP
RONALD C. ZDELLAR ST. LOUIS, MO VP
(1) Mr. Baxter was elected Vice President on May 1, 1998. (2) Mr. Jaudes retired
on July 1, 1998.
(3) Mr. Sullivan was elected Vice President and General Counsel on June 11, 1998
and Secretary on August 27, 1998.
(4) Mr. Thompson retired on September 1, 1998.
AMEREN DEVELOPMENT COMPANY
PAUL A. AGATHEN ST. LOUIS, MO SVP
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO D, SVP
CHARLES W. MUELLER ST. LOUIS, MO D, P
CHARLES J. SCHUKAI ST. LOUIS, MO D, SVP
STEVEN R. SULLIVAN ST. LOUIS, MO VP, GC & S
AMEREN ERC, INC
PAUL A. AGATHEN ST. LOUIS, MO SVP
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO D, SVP
CHARLES W. MUELLER ST. LOUIS, MO D
CHARLES J. SCHUKAI ST. LOUIS, MO D, P
STEVEN R. SULLIVAN ST. LOUIS, MO VP, GC & S
AMEREN ENERGY COMMUNICATIONS, INC.
JERRE E. BIRDSONG ST. LOUIS, MO T
DONALD E. BRANDT ST. LOUIS, MO D
CHARLES W. MUELLER ST. LOUIS, MO D
CHARLES J. SCHUKAI ST. LOUIS, MO D, P
STEVEN R. SULLIVAN ST. LOUIS, MO S
-21-
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - PART I (continued)
NOTE: Positions are indicated above by the following symbols:
C - Controller
CEO - Chief Executive Officer
CM - Chairman
D - Director
GC - General Counsel
P - President
PEO - Principal Executive Officer
S - Secretary
SVP - Senior Vice President
T - Treasurer
VP - Vice President
-22-
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - PART II
Financial Connections - The following is a list, as of December 31, 1998, of all
officers and directors of each system company who have financial connections
within the provisions of Section 17(c) of the Public Utility Holding Company Act
of 1935.
<TABLE>
<CAPTION>
Position
Held in Applicable
Name of Officer Name and Location Financial Exemption
or Director of Financial Institution Institution Rules
(1) (2) (3) (4)
- -------------------------------------------------------------------------------------------------------------------
AMEREN CORPORATION
<S> <C> <C> <C>
Clifford L. Greenwalt National City Corporation Director Rule 70(b)
National City Bank of Michigan/Illinois
Thomas A. Hays Mercantile Bancorporation Director Rule 70(a)
Richard A. Lumpkin First Mid-Illinois Bancshares Inc. Director Rule 70(a)
First Mid-Illinois Bank & Trust NA Director Rule 70(a)
Harvey Saligman Mercantile Bancorporation Director Rule 70(a)
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
John L. Heath Johnson Bank of Arizona, N.A. of Director Rule 70(d)
Phoenix and Scottsdale, Arizona
</TABLE>
-23-
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS - PART III
(a) and (b) Directors' and Executive Officers' Compensation and Security
Interests.
Information concerning compensation and interests in system securities is set
forth in Exhibits A-4, A-5 and A-6 to this Form U5S and is incorporated herein
by reference.
(c) Directors' and Executive Officers' Contracts and Transactions with System
Companies.
None.
(d) Indebtedness of Directors or Executive Officers to System Companies.
None.
(e) Directors' and Executive Officers' Participation in Bonus and Profit-Sharing
Arrangements and Other Benefits.
See Exhibits A-4, A-5 and A-6 for descriptions of the participation of directors
and executive officers of System companies in bonus and profit-sharing
arrangements and other benefits.
(f) Directors' and Executive Officers' rights to Indemnity.
The state laws under which each of the companies is incorporated provide broadly
for indemnification of directors and officers against claims and liabilities
against them in their capacities as such. Each of the companies' charters or
by-laws also provides for indemnification of directors and officers. In
addition, directors and executive officers of Ameren and all subsidiary
companies are insured under directors' and officers' liability policies issued
to Ameren, et. al. by Great American Insurance Company, Reliance National
Insurance Company, Gulf Insurance Company and Executive Risk Indemnity, Inc. The
policies are for the period January 1, 1998 to March 1, 2002. The Corporation
has entered into a standard form of indemnity agreement with each of its
directors and officers.
-24-
<PAGE>
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
Part I None
Part II None
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. (1) Ameren Services/Ameren ERC - March 27, 1998 (see Appendix A)
(2) Ameren Services/Ameren Development Co. - March 27,
1998 (see Appendix B)
(3) Ameren Services/Ameren Energy Communications, Inc. - July 1,
1998 (see Appendix C)
(4) Ameren Services/Ameren Energy, Inc. - October 1, 1998 (see Appendix
D)
(5) Ameren Services/Ameren Energy, Inc. - October 30, 1998 (see
Appendix E)
(6) Ameren Services/Electric Energy Inc. - July 1,1998 (see Appendix F)
Part II. The System companies had no contracts to purchase services or goods
during 1998 from any affiliated (other than a System company) or from a
company, in which any officer or director of the receiving company is a
partner or owns 5 percent of more of any class of equity securities,
except as reported in Item 6.
Part III. The System company does not employ any other person for the
performance on a continuing basis of management, supervisory or
financial advisory services.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
None
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (continued)
FINANCIAL STATEMENTS
Filed confidentially as Appendix G on Form SE.
NOTES TO FINANCIAL STATEMENTS
Ameren Corporation Reference is made to "Notes to
Consolidated Financial Statements" contained
on pages 28 through 42 in the Ameren 1998
Annual Report to Shareholders, which
information is incorporated by reference.
Union Electric Reference is made to "Notes to
Financial Statements" contained on pages 23
through 37 in the Union Electric 1998 Annual
Report, which information is incorporated by
reference.
Central Illinois Public Service Reference is made to
"Notes to Financial Statements" contained on
pages 23 through 36 in the Central Illinois
Public Service 1998 Annual Report, which
information is incorporated by reference.
-25-
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (continued)
EXHIBITS
The following exhibits are incorporated by reference to the indicated SEC file
number, unless a single asterisk appears next to the exhibit reference. A single
asterisk indicates exhibits which are filed herewith.
EXHIBIT
NUMBER DESCRIPTION
A. ANNUAL REPORTS FILED UNDER THE SECURITIES AND EXCHANGE ACT OF 1934
A.1 1998 Annual Report on Form 10-K for Ameren Corporation. (File No.
1-14756)
A.2 1998 Annual Report on Form 10-K for Central Illinoi Public
Service Company. (File No. 1-3672)
A.3 1998 Annual Report on Form 10-K for Union Electric Company. (File
No. 1-2967)
A.4 1999 Proxy Statement of Ameren Corporation. (File No. 1-14756)
A.5 1999 Proxy Statement of Central Illinois Public Service Company.
(File No. 1-3672)
A.6 1999 Proxy Statement of Union Electric Company. (File No. 1-2967)
B. CHARTERS, ARTICLES OF INCORPORATION, TRUST AGREEMENTS, BY-LAWS, AND
OTHER FUNDAMENTAL DOCUMENTS OF ORGANIZATION
B.1 Ameren Energy Communications - Filed herewith on Form SE
C. (a) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
C.1 Union Electric Company
C1.1 Trust Indenture - Environmental Bonds, Series 1998 A (filed
herewith on Form SE)
C1.2 Loan Agreement - Environmental Bonds, Series 1998 A (filed
herewith on Form SE)
C1.3 Trust Indenture - Environmental Bonds, Series 1998 B (filed
herewith on Form SE)
C1.4 Loan Agreement - Environmental Bonds, Series 1998 B (filed
herewith on Form SE)
C1.5 Trust Indenture - Environmental Bonds, Series 1998 C (filed
herewith on Form SE)
C1.6 Loan Agreement - Environmental Bonds, Series 1998 C (filed
herewith on Form SE)
-26-
<PAGE>
C.2 Central Illinois Public Service Company
C2.1 Trust Agreement - $75,000,000 Senior Note First Mortgage
Bonds (filed herewith on Form SE)
*D. AGREEMENT ALLOCATING CONSOLIDATED INCOME TAX LIABILITY BY AMEREN
CORPORATION AND SUBSIDIARIES
*F. SCHEDULES SUPPORTING ITEMS OF THE REPORT
F-1 The opinion of the independent accountants as to the consolidated
financial statements and the footnotes are included in Exhibit
A.1, which is incorporated by reference.
F-2 Supporting plant, depreciation and reserve schedules for Union
Electric Company from FERC Form No. 1 - Annual Report of Major
Electric Utilities, Licensees, and Others, FERC Form No. 2 Annual
Report of Natural Gas Companies, and Form 21 ILCC - Annual Report
of Electri Utilities Licensees and/or Natural Gas Utilities as
follows: (filed herewith on From SE)
Summary of Utility Plant and Accumulated Provisions for
Depreciation, Amortization and Depletion (Electric & Gas)
Nuclear Fuel Materials
Electric Plant in Service
Gas Plant in Service
Electric Plant Held for Future Use
Construction Work in Progress - Electric
Construction Work in Progress - Gas
Accumulated Provision for Depreciation of Electric Utility Plant
Accumulated Provision for Depreciation of Gas Utility Plant
Gas Stored
Non-utility Property
Depreciation and Amortization of Electric Plant
Depreciation, Depletion and Amortization of Gas Plant
F-3 Supporting plant, depreciation and reserve schedules for Central
Illinois Public Service Company from FERC Form No. 1 - Annual
Report of Major Electric Utilities, Licensees, and Others and
Form 21 ILCC - Annual Report of Electric Utilities Licensees
and/or Natural Gas Utilities as follows: (filed herewith on
Form SE)
Summary of Utility Plant and Accumulated Provisions for
Depreciation, Amortization and Depletion (Electric & Gas)
-27-
<PAGE>
Electric Plant in Service
Gas Plant in Service
Manufactured Gas Production Plant - Supplemental Schedule
Electric Plant Held for Future Use
Gas Plant Held for Future Use
Construction Work in Progress - Electric
Construction Work in Progress - Gas
Accumulated Provision for Depreciation of Electric Utility Plant
Accumulated Provision for Depreciation of Gas Utility Plant
Gas Stored
Non-utility Property
Accumulated Provision for Depreciation and Amortization of Non-
utility Property
Depreciation and Amortization of Electric Plant
Depreciation, Depletion and Amortization of Gas Plant
*G. FINANCIAL DATA SCHEDULES (filed herewith on Form SE)
G.1 Financial Data Schedule of Ameren Corporation Consolidated
G.2 Financial Data Schedule of Ameren Corporation
G.3 Financial Data Schedule of Union Electric Company
G.4 Financial Data Schedule of Central Illinois Public Service
Company
G.5 Financial Data Schedule of Ameren Services
G.6 Financial Data Schedule of Electric Energy Inc
G.7 Financial Data Schedule of Ameren Energy
G.8 Financial Data Schedule of CIPSCO Investment Company
G.9 Financial Data Schedule of Ameren Development Company
G.10 Financial Data Schedule of Ameren Energy Communications
-28-
<PAGE>
SIGNATURE
Ameren Corporation, a registered holding company, has duly caused this annual
report for the year ended December 31, 1998 to be signed on its behalf
by the undersigned thereunto duly authorized, pursuant to the
requirements of the Public Utility Holding Company Act of 1935.
AMEREN CORPORATION
By: /s/ Steven R. Sullivan
------------------------
Steven R. Sullivan
Vice President, General Counsel
and Secretary
May 10, 1999
-29-
<PAGE>
APPENDIX
-30-
<PAGE>
Appendix A
SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
AMEREN ERC, INC.
THIS AGREEMENT, made and entered into this 27th day of March, 1998, by and
between the following Parties: AMEREN SERVICES COMPANY (hereinafter sometimes
referred to as "Service Company"), a Missouri corporation; and AMEREN ERC, INC.
and its subsidiaries ("Ameren ERC"), a Missouri Corporation (hereinafter
sometimes referred to collectively as "Client Companies");
WITNESSETH:
WHEREAS, Client Companies, desire to enter into this agreement providing
for the performance by Service Company for the Client Companies of certain
services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render to Ameren Corporation, and other subsidiaries of
Ameren Corporation, certain services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of persons employed or to be retained by Service
Company, and to
<PAGE>
compensate Service Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule 1 will be provided on an annual basis.
In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
As compensation for such services rendered to it by Service Company, Client
Companies hereby agree to pay to Service Company
-2-
<PAGE>
the cost of such services, computed in accordance with applicable rules and
regulations (including, but not limited to, Rules 90 and 91) under the Act and
appropriate accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture the various types of costs
incurred by Service Company. Costs will be charged to the appropriate service
requests, which will then be the basis for the billing of costs to Client
Companies.
Section 6. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
-3-
<PAGE>
Section 7. Ameren Corporation
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties. Section 8. Client Companies
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Ameren
system companies or their subsidiaries services herein referred to, under the
same conditions and terms as set out for Service Company.
Section 9. Effective Date and Termination
This Agreement shall remain in effect from the date executed unless
terminated by mutual agreement or by any Party giving at least sixty days'
written notice to the other Parties prior to the beginning of any calendar year,
each Party fully reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
AMEREN ERC, INC.
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
-5-
<PAGE>
Schedule 1
Page 1 of 9
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected direct
cost allocation factors are reflected below for each Ameren Services department.
a) Building Service
Description - Provide facility management services for owned and leased
facilities, excluding power plants. To the extent that leasing
arrangements are established between Ameren Services and/or Ameren
Corporation and its subsidiaries, lease costs will include rent for
space occupied and applicable services, such as operation and
maintenance of structures, capital improvements, interior space
planning, security and janitorial. As appropriate, lease costs will be
allocated based on square feet occupied and the allocation factors
listed below.
Expected Allocation Factors - 1) number of employees; 2) operations and
maintenance labor; 3) total capitalization; and 4) total assets
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its
subsidiaries. Provide investor relations services.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing efforts,
develop employee communication programs, coordinate community relations
efforts and develop policies and procedures for media relations.
<PAGE>
Schedule 1
Page 2 of 9
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing, resource
planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak load
[electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas
service usage and perform credit activities. Provide technical support
relating to planning, engineering, constructing and operating the
distribution and transmission systems. Provide technical support and
maintenance of protective relay schemes, station meter work, system
testing and data acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of em-
ployees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as
well as natural gas development services. Analyze community and
business development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh and
dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
<PAGE>
Schedule 1
Page 3 of 9
h) Engineering and Construction
Description - Provide professional services related to engineering
studies, design, procurement, planning, building and management of
projects. Study technology that may reduce costs of producing,
delivering and using electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and
legislative issues in the areas of environment, health and safety.
Communicate final regulatory requirements to operating groups. Provide
assistance and support and compliance review in meeting those
requirements. Oversee hazardous substance site investigation and
remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction
expenditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels.
Expected Allocation Factors - 1) total capitalization; 2) total assets;
and 3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the
fossil power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
<PAGE>
Schedule 1
Page 4 of 9
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings,
maintain minutes of the board of directors, conduct stockholder
meetings and procure property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans.
Provide employment services, including required regulatory reporting
and maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total capital-
ization; 3) total assets; and 4) operation and maintenance labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation
and maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct
business and engineering activities. Maintain all billing records and
process customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4) CPU cycles; and 5) operation and maintenance
labor
<PAGE>
Schedule 1
Page 5 of 9
q) Internal Audit
Description - Audit company operations, perform operational and
productivity reviews, review justifications for capital projects and
perform quality assurance reviews.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; and 4) operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2) to-
tal assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing of
vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than
fuel. Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
<PAGE>
Schedule 1
Page 6 of 9
v) Real Estate
Description - Acquire necessary land rights and permits including
coordination of site selection. Maintain existing land rights while
permitting licenses and leases to minimize investment or costs of
holding property.
Expected Allocation Factors - 1) composite*; 2) number of customers;
and 3) total assets
w) Stores
Description - Provide clerical, stenographic, administrative and
Electronic Data systems support. Provide engineering support and manage
and direct stores operations.
Expected Allocation Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters, including
the preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense; 3)
total capitalization; and 4)
total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4) total capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Schedule 1
Page 7 of 9
Allocation Factors
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and the denominator of
which is for all Operating Companies and affected affiliate companies. This
ratio will be determined annually, and/or at such time as may be required due to
a significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies
and/or affected affiliate companies. This ratio will be determined annually, or
at such time as may be required due to a significant change in circumstances.
Total Capitalization - Based on total capitalization (total common
<PAGE>
Schedule 1
Page 8 of 9
stockholder's equity, preferred stock, and long term debt) at the end of the
most recent calendar year. The numerator of which is for an Operating Company or
an affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most
<PAGE>
Schedule 1
Page 9 of 9
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to Ameren
Corporation and/or its subsidiaries, as appropriate, based upon one of the
factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
<PAGE>
Schedule 2
Page 1 of 1
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number of AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Appendix B
SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
AMEREN DEVELOPMENT CORPORATION
THIS AGREEMENT, made and entered into this 27th day of March, 1998, by and
between the following Parties: AMEREN SERVICES COMPANY (hereinafter sometimes
referred to as "Service Company"), a Missouri corporation; and AMEREN
DEVELOPMENT CORPORATION and its subsidiaries ("Ameren Development Corporation"),
a Missouri Corporation (hereinafter sometimes referred to collectively as
"Client Companies");
WITNESSETH:
WHEREAS, Client Companies, desire to enter into this agreement providing
for the performance by Service Company for the Client Companies of certain
services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render to Ameren Corporation, and other subsidiaries of
Ameren Corporation, certain services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of
<PAGE>
persons employed or to be retained by Service Company, and to compensate Service
Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule 1 will be provided on an annual basis.
In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
As compensation for such services rendered to it by Service
-2-
<PAGE>
Company, Client Companies hereby agree to pay to Service Company the cost of
such services, computed in accordance with applicable rules and regulations
(including, but not limited to, Rules 90 and 91) under the Act and appropriate
accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture the various types of costs
incurred by Service Company. Costs will be charged to the appropriate service
requests, which will then be the basis for the billing of costs to Client
Companies.
Section 6. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
-3-
<PAGE>
Section 7. Ameren Corporation
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties.
Section 8. Client Companies
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Ameren
system companies or their subsidiaries services herein referred to, under the
same conditions and terms as set out for Service Company.
Section 9. Effective Date and Termination
This Agreement shall remain in effect from the date executed unless
terminated by mutual agreement or by any Party giving at least sixty days'
written notice to the other Parties prior to the beginning of any calendar year,
each Party fully reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
AMEREN DEVELOPMENT CORPORATION
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
-5-
<PAGE>
Schedule 1
Page 1 of 9
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected
direct cost allocation factors are reflected below for each Ameren Services
department.
a) Building Service
Description - Provide facility management services for owned and leased
facilities, excluding power plants. To the extent that leasing arrange-
ments are established between Ameren Services and/or Ameren Corporation
and its subsidiaries, lease costs will include rent for space occupied
and applicable services, such as operation and maintenance of
structures, capital improvements, interior space planning, security and
janitorial. As appropriate, lease costs will be allocated based on
square feet occupied and the allocation factors listed below.
Expected Allocation Factors - 1) number of employees; 2) operations and
maintenance labor; 3) total capitalization; and 4) total assets
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its sub-
sidiaries. Provide investor relations services.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing efforts,
develop employee communication programs, coordinate community relations
efforts and develop policies and procedures for media relations.
<PAGE>
Schedule 1
Page 2 of 9
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing, resource
planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak load
[electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas ser-
vice usage and perform credit activities. Provide technical support
relating to planning, engineering, constructing and operating the
distribution and transmission systems. Provide technical support and
maintenance of protective relay schemes, station meter work, system
testing and data acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of em-
ployees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as
well as natural gas development services. Analyze community and busi-
ness development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh and
dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
<PAGE>
Schedule 1
Page 3 of 9
h) Engineering and Construction
Description - Provide professional services related to engineering
studies, design, procurement, planning, building and management of pro-
jects. Study technology that may reduce costs of producing, delivering
and using electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and legisla-
tive issues in the areas of environment, health and safety. Communicate
final regulatory requirements to operating groups. Provide assistance
and support and complianc review in meeting those requirements. Over-
see hazardous substance site investigation and remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction ex-
penditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels.
Expected Allocation Factors - 1) total capitalization; 2) total assets;
and 3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the
fossil power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
<PAGE>
Schedule 1
Page 4 of 9
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings,
maintain minutes of the board of directors, conduct stockholder
meetings and procure property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans.
Provide employment services, including required regulatory reporting
and maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total cap-
italization; 3) total assets; and 4) operation and maintenance labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation
and maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct
business and engineering activities. Maintain all billing records and
process customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4)CPU cycles; and 5) operation and maintenance
labor
<PAGE>
Schedule 1
Page 5 of 9
q) Internal Audit
Description - Audit company operations, perform operational and pro-
ductivity eviews, review justifications for capital projects and per-
form quality assurance reviews.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; and 4) operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2)
total assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing of
vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than
fuel. Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
<PAGE>
Schedule 1
Page 6 of 9
v) Real Estate
Description - Acquire necessary land rights and permits including co-
ordination of site selection. Maintain existing land rights while per-
mitting licenses and leases to minimize investment or costs of holding
property.
Expected Allocation Factors - 1) composite*; 2) number of customers;
and 3) total assets
w) Stores
Description - Provide clerical, stenographic, administrative and Elec-
tronic Data systems support. Provide engineering support and manage and
direct stores operations.
Expected Allocation Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters, including
the preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense; 3)
total capitalization; and 4) total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4) total capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Schedule 1
Page 7 of 9
Allocation Factors
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and the denominator of
which is for all Operating Companies and affected affiliate companies. This
ratio will be determined annually, and/or at such time as may be required due to
a significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies
and/or affected affiliate companies. This ratio will be determined annually, or
at such time as may be required due to a significant change in circumstances.
Total Capitalization - Based on total capitalization (total common
<PAGE>
Schedule 1
Page 8 of 9
stockholder's equity, preferred stock, and long term debt) at the end of the
most recent calendar year. The numerator of which is for an Operating Company or
an affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most
<PAGE>
Schedule 1
Page 9 of 9
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to Ameren
Corporation and/or its subsidiaries, as appropriate, based upon one of the
factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
<PAGE>
Schedule 2
Page 1 of 1
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number of AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Appendix C
SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
AMEREN ENERGY COMMUNICATIONS, INC.
THIS AGREEMENT, made and entered into this 1st day of July, 1998, by and
between the following Parties: AMEREN SERVICES COMPANY (hereinafter sometimes
referred to as "Service Company"), a Missouri corporation; and AMEREN ENERGY
COMMUNICATIONS, INC. and its subsidiaries ("Ameren Energy Communications") a
Missouri Corporation (hereinafter sometimes referred to collectively as "Client
Companies");
WITNESSETH:
WHEREAS, Client Companies, desire to enter into this agreement providing
for the performance by Service Company for the Client Companies of certain
services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render to Ameren Corporation, and other subsidiaries of
Ameren Corporation, certain services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of
<PAGE>
persons employed or to be retained by Service Company, and to compensate Service
Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule 1 will be provided on an annual basis.
In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
As compensation for such services rendered to it by Service
-2-
<PAGE>
Company, Client Companies hereby agree to pay to Service Company the cost of
such services, computed in accordance with applicable rules and regulations
(including, but not limited to, Rules 90 and 91) under the Act and appropriate
accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture the various types of costs
incurred by Service Company. Costs will be charged to the appropriate service
requests, which will then be the basis for the billing of costs to Client
Companies.
Section 6. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
-3-
<PAGE>
Section 7. Ameren Corporation
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties.
Section 8. Client Companies
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Ameren
system companies or their subsidiaries services herein referred to, under the
same conditions and terms as set out for Service Company.
Section 9. Effective Date and Termination
This Agreement shall remain in effect from the date executed unless
terminated by mutual agreement or by any Party giving at least sixty days'
written notice to the other Parties prior to the beginning of any calendar year,
each Party fully reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
AMEREN ENERGY COMMUNICATIONS, INC.
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
-5-
<PAGE>
Schedule 1
Page 1 of 9
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected direct
cost allocation factors are reflected below for each Ameren Services department.
a) Building Service
Description - Provide facility management services for owned and
leased facilities, excluding power plants. To the extent that leasing
arrangements are established between Ameren Services and/or Ameren
Corporation and its subsidiaries, lease costs will include rent for
space occupied and applicable services, such as operation and
maintenance of structures, capital improvements, interior space
planning, security and janitorial. As appropriate, lease costs will be
allocated based on square feet occupied and the allocation factors
listed below.
Expected Allocation Factors - 1) number of employees; 2) operations
and maintenance labor; 3) total capitalization; and 4) total assets
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its
subsidiaries. Provide investor relations services.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing
efforts, develop employee communication programs, coordinate community
relations efforts and develop policies and procedures for media
relations.
<PAGE>
Schedule 1
Page 2 of 9
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing,
resource planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak
load [electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas
service usage and perform credit activities. Provide technical support
relating to planning, engineering, constructing and operating the
distribution and transmission systems. Provide technical support and
maintenance of protective relay schemes, station meter work, system
testing and data acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of
employees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as
well as natural gas development services. Analyze community and
business development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh
and dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
<PAGE>
Schedule 1
Page 3 of 9
h) Engineering and Construction
Description - Provide professional services related to engineering
studies, design, procurement, planning, building and management of
projects. Study technology that may reduce costs of producing,
delivering and using electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and
legislative issues in the areas of environment, health and safety.
Communicate final regulatory requirements to operating groups. Provide
assistance and support and compliance review in meeting those
requirements. Oversee hazardous substance site investigation and
remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction
expenditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels.
Expected Allocation Factors - 1) total capitalization; 2) total
assets; and 3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the
fossil power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
<PAGE>
Schedule 1
Page 4 of 9
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings,
maintain minutes of the board of directors, conduct stockholder
meetings and procure property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans.
Provide employment services, including required regulatory reporting
and maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total
capitalization; 3) total assets; and 4) operation and maintenance
labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation
and maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct
business and engineering activities. Maintain all billing records and
process customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4)CPU cycles; and 5) operation and maintenance
labor
<PAGE>
Schedule 1
Page 5 of 9
q) Internal Audit
Description - Audit company operations, perform operational and
productivity reviews, review justifications for capital projects and
perform quality assurance reviews.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; and 4) operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2)
total assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing
of vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than
fuel. Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
<PAGE>
Schedule 1
Page 6 of 9
v) Real Estate
Description - Acquire necessary land rights and permits including
coordination of site selection. Maintain existing land rights while
permitting licenses and leases to minimize investment or costs of
holding property.
Expected Allocation Factors - 1) composite*; 2) number of customers;
and 3) total assets
w) Stores
Description - Provide clerical, stenographic, administrative and
Electronic Data systems support. Provide engineering support and
manage and direct stores operations.
Expected Allocation Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters,
including the preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense;
3) total capitalization; and 4) total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4) total capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Schedule 1
Page 7 of 9
Allocation Factors
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and the denominator of
which is for all Operating Companies and affected affiliate companies. This
ratio will be determined annually, and/or at such time as may be required due to
a significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies
and/or affected affiliate companies. This ratio will be determined annually, or
at such time as may be required due to a significant change in circumstances.
Total Capitalization - Based on total capitalization (total common
<PAGE>
Schedule 1
Page 8 of 9
stockholder's equity, preferred stock, and long term debt) at the end of the
most recent calendar year. The numerator of which is for an Operating Company or
an affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most
<PAGE>
Schedule 1
Page 9 of 9
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to Ameren
Corporation and/or its subsidiaries, as appropriate, based upon one of the
factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
<PAGE>
Schedule 2
Page 1 of 1
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number of AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Appendix D
SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
AMEREN ENERGY, INC.
THIS AGREEMENT, made and entered into this 1st day of October, 1998, by and
between the following Parties: AMEREN SERVICES COMPANY (hereinafter sometimes
referred to as "Service Company"), a Missouri corporation; and AMEREN ENERGY,
INC. and its subsidiaries ("Ameren Energy"), a Missouri Corporation (hereinafter
sometimes referred to collectively as "Client Companies");
WITNESSETH:
WHEREAS, Client Companies, desire to enter into this agreement providing
for the performance by Service Company for the Client Companies of certain
services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render to Ameren Corporation, and other subsidiaries of
Ameren Corporation, certain services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of
<PAGE>
persons employed or to be retained by Service Company, and to compensate Service
Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule 1 will be provided on an annual basis.
In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
As compensation for such services rendered to it by Service
-2-
<PAGE>
Company, Client Companies hereby agree to pay to Service Company the cost of
such services, computed in accordance with applicable rules and regulations
(including, but not limited to, Rules 90 and 91) under the Act and appropriate
accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture the various types of costs
incurred by Service Company. Costs will be charged to the appropriate service
requests, which will then be the basis for the billing of costs to Client
Companies.
Section 6. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
-3-
<PAGE>
Section 7. Ameren Corporation
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties.
Section 8. Client Companies
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Ameren
system companies or their subsidiaries services herein referred to, under the
same conditions and terms as set out for Service Company.
Section 9. Effective Date and Termination
This Agreement shall remain in effect from the date executed unless
terminated by mutual agreement or by any Party giving at least sixty days'
written notice to the other Parties prior to the beginning of any calendar year,
each Party fully reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
AMEREN ENERGY, INC.
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
-5-
<PAGE>
Schedule 1
Page 1 of 9
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected direct
cost allocation factors are reflected below for each Ameren Services department.
a) Building Service
Description - Provide facility management services for owned and
leased facilities, excluding power plants. To the extent that leasing
arrangements are established between Ameren Services and/or Ameren
Corporation and its subsidiaries, lease costs will include rent for
space occupied and applicable services, such as operation and
maintenance of structures, capital improvements, interior space
planning, security and janitorial. As appropriate, lease costs will be
allocated based on square feet occupied and the allocation factors
listed below.
Expected Allocation Factors - 1) number of employees; 2) operations
and maintenance labor; 3) total capitalization; and 4) total assets
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its
subsidiaries. Provide investor relations services.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing
efforts, develop employee communication programs, coordinate community
relations efforts and develop policies and procedures for media
relations.
<PAGE>
Schedule 1
Page 2 of 9
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing,
resource planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak
load [electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas
service usage and perform credit activities. Provide technical support
relating to planning, engineering, constructing and operating the
distribution and transmission systems. Provide technical support and
maintenance of protective relay schemes, station meter work, system
testing and data acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of
employees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as
well as natural gas development services. Analyze community and
business development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh
and dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
<PAGE>
Schedule 1
Page 3 of 9
h) Engineering and Construction
Description - Provide professional services related to engineering
studies, design, procurement, planning, building and management of
projects. Study technology that may reduce costs of producing,
delivering and using electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and
legislative issues in the areas of environment, health and safety.
Communicate final regulatory requirements to operating groups. Provide
assistance and support and compliance review in meeting those
requirements. Oversee hazardous substance site investigation and
remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction
expenditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels.
Expected Allocation Factors - 1) total capitalization; 2) total
assets; and 3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the
fossil power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
<PAGE>
Schedule 1
Page 4 of 9
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings,
maintain minutes of the board of directors, conduct stockholder
meetings and procure property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans.
Provide employment services, including required regulatory reporting
and maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total
capitalization; 3) total assets; and 4) operation and maintenance
labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation
and maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct
business and engineering activities. Maintain all billing records and
process customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4)CPU cycles; and 5) operation and maintenance
labor
<PAGE>
Schedule 1
Page 5 of 9
q) Internal Audit
Description - Audit company operations, perform operational and
productivity reviews, review justifications for capital projects and
perform quality assurance reviews.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; and 4) operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2)
total assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing
of vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than
fuel. Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
<PAGE>
Schedule 1
Page 6 of 9
v) Real Estate
Description - Acquire necessary land rights and permits including
coordination of site selection. Maintain existing land rights while
permitting licenses and leases to minimize investment or costs of
holding property.
Expected Allocation Factors - 1) composite*; 2) number of customers;
and 3) total assets
w) Stores
Description - Provide clerical, stenographic, administrative and
Electronic Data systems support. Provide engineering support and
manage and direct stores operations.
Expected Allocation Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters,
including the preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense;
3) total capitalization; and 4) total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4) total
capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Schedule 1
Page 7 of 9
Allocation Factors
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and the denominator of
which is for all Operating Companies and affected affiliate companies. This
ratio will be determined annually, and/or at such time as may be required due to
a significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies
and/or affected affiliate companies. This ratio will be determined annually, or
at such time as may be required due to a significant change in circumstances.
Total Capitalization - Based on total capitalization (total common
<PAGE>
Schedule 1
Page 8 of 9
stockholder's equity, preferred stock, and long term debt) at the end of the
most recent calendar year. The numerator of which is for an Operating Company or
an affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most
<PAGE>
Schedule 1
Page 9 of 9
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to Ameren
Corporation and/or its subsidiaries, as appropriate, based upon one of the
factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
<PAGE>
Schedule 2
Page 1 of 1
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number of AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Appendix E
AGENCY AGREEMENT
BETWEEN
AMEREN ENERGY, INC.
And
AMEREN SERVICES COMPANY
As Agent for
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
And
UNION ELECTRIC COMPANY
THIS AGENCY AGREEMENT, made and entered into as of October 30, 1998 by and
between AMEREN ENERGY, INC., a corporation organized under the laws of the State
of Missouri ("Ameren Energy"), and AMEREN SERVICES COMPANY, a corporation
organized under the laws of the State of Missouri ("Client Company") (Ameren
Energy and Client Company hereinafter sometimes referred to individually as a
"Party" and collectively as the "Parties"),
W I T N E S S E T H:
WHEREAS, Ameren Energy and Client Company are both direct subsidiaries of
Ameren Corporation ("Ameren"), a registered holding company under the Public
Utility Holding Company Act of 1935, and, together with Ameren's other direct
and indirect subsidiaries, form the Ameren System; and
WHEREAS, Ameren Energy is engaged in the business of electricity, gas and
energy commodity marketing and trading, and in the conduct of its business has
assembled a highly-trained staff and developed and acquired various
capabilities, programs, systems and other resources; and
WHEREAS, Client Company is authorized by order of the Securities and
Exchange
<PAGE>
2
Commission (the "Commission") dated December 30, 1997 (the "Merger Order") to
provide a variety of administrative, management, engineering, construction,
environmental, energy and fuel supply and support services to its associate
companies in the Ameren System, and has heretofore entered into a General
Service Agreement, dated as of January 1, 1998 (the "GSA"), with Union Electric
Company and Central Illinois Public Service Company (the "Operating Companies")
and certain other associate companies of Client; and
WHEREAS, pursuant to the GSA, Client Company provides services to the
Operating Companies in the areas of bulk power marketing and procurement, gas
supply, procurement and management, and other services relating to the Operating
Companies' power and gas marketing and trading functions; and
WHEREAS, economies and increased efficiencies will result from the
performance by Ameren Energy of certain support services for Client Company that
would enable Client Company to perform its obligations under the GSA; and
WHEREAS, subject to the terms and conditions herein described, Ameren Energy
will render such services and provide such resources to Client Company at cost,
determined in accordance with applicable rules, regulations and orders of the
Commission;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the Parties hereto hereby agree as follows:
<PAGE>
3
1. Agreement to Furnish Support Services.
Ameren Energy agrees to provide to Client Company the following services:
power trading and marketing; capacity management; business reporting;
transaction administration; contract and counter-party administration;
regulatory reporting, support and compliance; representation on industry groups;
the negotiation, execution and administration of contracts between any operating
company and third parties necessary to facilitate the above; and other related
activities as requested.
2. Appointment of Ameren Energy as Agent.
Ameren Energy's relationship to Client Company shall be that of an Agent.
Ameren Energy shall have no interest in the profits or revenues of Client
Company or any Operating Company in respect of any transaction in which Ameren
Energy provides services, and shall not be liable for the performance or other
obligations of Client Company or any Operating Company thereunder. Ameren Energy
shall be accountable for all funds advanced or collected on behalf of Client
Company or any Operating Company in connection with any transaction in respect
of which Ameren Energy provides services. The provision of services by Ameren
Energy pursuant to this Agreement shall in all cases and notwithstanding
anything herein contained to the contrary be subject to any limitations
contained in authorizations, rules or regulations of those governmental
agencies, if any, having jurisdiction over Ameren Energy or such provision of
services.
<PAGE>
4
3. Compensation of Ameren Energy.
As compensation for services actually requested by Client Company and
rendered to it by Ameren Energy, Client Company hereby agrees to reimburse
Ameren Energy for all costs properly chargeable or allocable thereto, as
controlled through a work order procedure.
4. Indemnification.
A. Client Company shall and does hereby agree to save harmless and defend
Ameren Energy, and its officers, employees, and agents, from the payment of any
sum or sums of money on account of, or resulting from, claims or suits growing
out of or losses under any transaction in respect of which Ameren Energy shall
agree to provide services, except to the extent that such claims, suits or
losses result from the gross negligence or willful misconduct of Ameren Energy.
Further, Client Company shall and does hereby indemnify and agree to save
harmless and defend Ameren Energy (a) from any and all liens, garnishments,
attachments, claims, suits, costs, attorneys' fees, cost of investigation and of
defense resulting from, incurred in connection with, or relating to any such
claims, (b) from the payment of any such sum or sums of money, and (c) from the
payment of any penalties, fines, damages, suits or claims (and any liens or
attachments asserted in connection therewith) arising out of any alleged or
actual violation of law, court order, or governmental agency rule or regulation
committed by or existing with respect to Client Company or its officers,
employees, agents or subcontractors (including Ameren Energy when such payments
relate to performing services hereunder).
B. Ameren Energy shall within five (5) business days after it receives
notice
5
<PAGE>
of any claims, action, damages or liability against which it will expect to be
indemnified pursuant to Article 4A, notify Client Company of such claims,
actions, damages or liabilities. Thereafter, Client Company may at its own
expense, upon notice to Ameren Energy, defend or participate in the defense of
such action or claim or any negotiation for settlement of such action or claim,
provided that, unless Client Company proceeds promptly and in good faith to pay
or defend such action or claim, then Ameren Energy shall have the right (but not
the obligation), in good faith, upon ten (10) days' notice to Client Company, to
pay, settle, compromise or proceed to defend any such action or claim without
the further participation by Client Company. Client Company will immediately pay
(or reimburse Ameren Energy, as the case may be) any payments, settlements,
compromises, judgments, costs or expenses made or incurred by Ameren Energy in
or resulting from the pursuit by Ameren Energy of such right. If any judgment is
rendered against Ameren Energy in any such action defended by Client Company or
Ameren Energy is otherwise entitled to indemnification under Article 4A, or if
any lien attaches to the assets of Ameren Energy in connection therewith, Client
Company shall immediately upon such entry or attachment pay the judgment in full
or discharge any such lien unless, at its expense and direction, appeal shall be
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final and unappealable judgment is rendered against Ameren
Energy in any such action, Client Company shall forthwith pay such judgment or
discharge such lien prior to the time that Ameren Energy would be legally held
to do so.
<PAGE>
6
6. Miscellaneous.
This Agreement shall be binding upon the successors and assigns of the
Parties hereto, provided that Ameren Energy shall not be entitled to assign or
subcontract out any of its obligations under this Agreement without the prior
written approval of Client Company. This Agreement may not be modified or
amended in any respect except in writing executed by the Parties hereto. This
Agreement shall be construed and enforced under and in accordance with the laws
of the State of Missouri. This Agreement may be executed in counterparts, each
one of which when fully executed shall be deemed to have the same dignity, force
and effect as if the original. No provision of this Agreement shall be deemed
waived nor breach of this Agreement consented to unless such waiver or consent
is set forth in writing and executed by the Party hereto making such waiver or
consent.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
AMEREN ENERGY, INC.
_____________________________
By:__________________________
Title:_________________________
Date Executed:________________
<PAGE>
7
AMEREN SERVICES COMPANY
As Agent For
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
UNION ELECTRIC COMPANY
________________________________
By:_____________________________
Title:___________________________
Date Executed:___________________
Acknowledged by:
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
________________________________
By:_____________________________
Title:___________________________
Date Executed:___________________
Acknowledged by:
UNION ELECTRIC COMPANY
_________________________________
By:______________________________
Title:____________________________
Date Executed:____________________
<PAGE>
Appendix F
SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
ELECTRIC ENERGY, INC.
THIS AGREEMENT, made and entered into this 1st day of July, 1998, by and
between the following Parties: AMEREN SERVICES COMPANY (hereinafter sometimes
referred to as "Service Company"), a Missouri corporation; and ELECTRIC ENERGY,
INC. ("Electric Energy"), an Illinois Corporation (hereinafter sometimes
referred to collectively as "Client Companies");
WITNESSETH:
WHEREAS, Client Companies, desire to enter into this agreement providing
for the performance by Service Company for the Client Companies of certain
services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render to Ameren Corporation, and other subsidiaries of
Ameren Corporation, certain services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of persons employed or to be retained by Service
Company, and to
<PAGE>
compensate Service Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule 1 will be provided on an annual basis.
In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
As compensation for such services rendered to it by Service Company, Client
Companies hereby agree to pay to Service Company
-2-
<PAGE>
the cost of such services, computed in accordance with applicable rules and
regulations (including, but not limited to, Rules 90 and 91) under the Act and
appropriate accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture the various types of costs
incurred by Service Company. Costs will be charged to the appropriate service
requests, which will then be the basis for the billing of costs to Client
Companies.
Section 6. Payment
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
-3-
<PAGE>
Section 7. Ameren Corporation
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties.
Section 8. Client Companies
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Ameren
system companies or their subsidiaries services herein referred to, under the
same conditions and terms as set out for Service Company.
Section 9. Effective Date and Termination
This Agreement shall remain in effect from the date executed unless
terminated by mutual agreement or by any Party giving at least sixty days'
written notice to the other Parties prior to the beginning of any calendar year,
each Party fully reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
-4-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
ELECTRIC ENERGY, INC.
By ______________________________
Title ___________________________
ATTEST:
By ______________________
Title ___________________
-5-
<PAGE>
Schedule 1
Page 1 of 9
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected direct
cost allocation factors are reflected below for each Ameren Services department.
a) Building Service
Description - Provide facility management services for owned and
leased facilities, excluding power plants. To the extent that leasing
arrangements are established between Ameren Services and/or Ameren
Corporation and its subsidiaries, lease costs will include rent for
space occupied and applicable services, such as operation and
maintenance of structures, capital improvements, interior space
planning, security and janitorial. As appropriate, lease costs will be
allocated based on square feet occupied and the allocation factors
listed below.
Expected Allocation Factors - 1) number of employees; 2) operations
and maintenance labor; 3) total capitalization; and 4) total assets
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its
subsidiaries. Provide investor relations services.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing
efforts, develop employee communication programs, coordinate community
relations efforts and develop policies and procedures for media
relations.
<PAGE>
Schedule 1
Page 2 of 9
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing,
resource planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak
load [electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas
service usage and perform credit activities. Provide technical support
relating to planning, engineering, constructing and operating the
distribution and transmission systems. Provide technical support and
maintenance of protective relay schemes, station meter work, system
testing and data acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of
employees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as
well as natural gas development services. Analyze community and
business development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh
and dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
<PAGE>
Schedule 1
Page 3 of 9
h) Engineering and Construction
Description - Provide professional services related to engineering
studies, design, procurement, planning, building and management of
projects. Study technology that may reduce costs of producing,
delivering and using electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and
legislative issues in the areas of environment, health and safety.
Communicate final regulatory requirements to operating groups. Provide
assistance and support and compliance review in meeting those
requirements. Oversee hazardous substance site investigation and
remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction
expenditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels.
Expected Allocation Factors - 1) total capitalization; 2) total
assets; and 3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the
fossil power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
<PAGE>
Schedule 1
Page 4 of 9
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings,
maintain minutes of the board of directors, conduct stockholder
meetings and procure property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans.
Provide employment services, including required regulatory reporting
and maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total
capitalization; 3) total assets; and 4) operation and maintenance
labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation
and maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct
business and engineering activities. Maintain all billing records and
process customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4)CPU cycles; and 5) operation and maintenance
labor
<PAGE>
Schedule 1
Page 5 of 9
q) Internal Audit
Description - Audit company operations, perform operational and
productivity reviews, review justifications for capital projects and
perform quality assurance reviews.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; and 4)
operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2)
total assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization;
and 3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing
of vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than
fuel. Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
<PAGE>
Schedule 1
Page 6 of 9
v) Real Estate
Description - Acquire necessary land rights and permits including
coordination of site selection. Maintain existing land rights while
permitting licenses and leases to minimize investment or costs of
holding property.
Expected Allocation Factors - 1) composite*; 2) number of customers;
and 3) total assets
w) Stores
Description - Provide clerical, stenographic, administrative and
Electronic Data systems support. Provide engineering support and
manage and direct stores operations.
Expected Allocation Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters,
including the preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense;
3) total capitalization; and 4) total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers;
3) number of employees; 4) total capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Schedule 1
Page 7 of 9
Allocation Factors
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator ofwhich is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and thedenominator of which
is for all Operating Companies and affected affiliate companies. This ratio will
be determined annually, and/or at such time as may be required due to a
significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies
and/or affected affiliate companies. This ratio will be determined annually, or
at such time as may be required due to a significant change in circumstances.
Total Capitalization - Based on total capitalization (total common
<PAGE>
Schedule 1
Page 8 of 9
stockholder's equity, preferred stock, and long term debt) at the end of the
most recent calendar year. The numerator of which is for an Operating Company or
an affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most
<PAGE>
Schedule 1
Page 9 of 9
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to Ameren
Corporation and/or its subsidiaries, as appropriate, based upon one of the
factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
<PAGE>
Schedule 2
Page 1 of 1
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number of AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
<PAGE>
Appendix G
Financial Statements under Item 10 (filed herewith on Form SE)
Exhibit D
AMEREN CORPORATION
AND ITS AFFILIATED CORPORATIONS
TAX ALLOCATION AGREEMENT
This agreement is made as of ______________, 19__ by and among Ameren
Corporation, a registered public utility holding and its affiliated
corporations, as identified in Exhibit A hereto (collectively, the "Group";
individually, "member of the Group").
WHEREAS, the members of the Group are affiliated corporations within the
meaning of section 1504 of the Internal Revenue Code of 1986, as amended, and
will join in the annual filing of a consolidated federal income tax return;
WHEREAS, the members of the Group intend to allocate the consolidated
income tax liabilities and benefits to each member of the Group in a fair and
equitable manner; and
WHEREAS, the members of the Group intend to allocate the liabilities and
benefits arising from the Group's annual consolidated income tax returns in
compliance with Title 17, section 250.45(c) of the Code of Federal Regulations,
section 1552(a)(1) of the Internal Revenue Code and Title 26, section
1.1502-33(d)(2) of the Code of Federal Regulations;
IT IS THEREFORE AGREED, as follows:
Section 1. Definitions
For purposes of this agreement, the following definitions shall apply:
(a) "Consolidated tax" shall mean the Group's aggregate tax liability
for a taxable year as shown on the consolidated federal income
tax return.
(b) "Consolidated refund" shall mean the Group's refund for a taxable
year as shown on the consolidated federal income tax return.
(c) "Corporate taxable income" or "corporate taxable loss" shall mean
the income or loss of a member of the Group for a taxable year,
computed as though the member had filed a separate federal income
tax return on the same basis as used in the consolidated return,
except that:
(1) Dividend income from other members of the Group shall be
disregarded, and
(2) Intercompany transactions that are eliminated in the
consolidated return shall be given appropriate treatment.
<PAGE>
(d) "Separate return tax" shall mean the federal income tax liability
or federal income tax refund, computed with respect to the
corporate taxable income or loss of a member of the Group as
though the member were not a member of the Group. If the separate
return tax is a liability, it shall be referred to as a "positive
separate return tax." If the separate return tax is a refund, it
shall be referred to as a "negative separate return tax."
(e) A "positive" allocation shall be the obligation to make a payment
to the Group. A "negative" allocation shall be the right to
receive a payment from the Group.
Section 2. General Allocation Method
Each taxable year, the members of the Group shall allocate the consolidated
tax or consolidated refund in accordance with the following procedures:
(a) A member, to include Ameren Corporation, that would have a
positive separate return tax shall receive a positive allocation
in an amount equal to such positive separate return tax.
(b) A member, other than Ameren Corporation, that would have a
negative separate return tax shall receive a negative allocation
in an amount equal to such negative separate return tax.
(c) If Ameren Corporation would have a negative separate return tax,
then each member having positive separate return tax shall
receive a negative allocation in an amount equal to such negative
separate return tax multiplied by the member's share of the sum
of the positive separate return tax.
Section 3. Special Allocation Rules
(a) Alternative Minimum Tax. In any year in which alternative minimum
tax (AMT) is payable by the Group, the consolidated tax shall be
separated into two parts: regular tax and AMT.
(1) Regular tax shall be allocated in accordance with the
general allocation method set forth in section 2, above.
(2) AMT will be allocated to each member of the Group based on
the proportion of:
(A) the excess of its separate company tentative minimum tax
over its separate company regular tax liability, to
<PAGE>
(B) the aggregate of the excesses of such companies'
tentative minimum tax amounts over their regular tax
liability amounts.
(3) Each member whose regular tax liability exceeds its
tentative minimum tax on a separate company basis shall be
excluded from this calculation and shall not be impacted by
the Group's AMT liability.
(4) The minimum tax credit shall be allocated to the members of
the Group to which the associated AMT was allocated, in
proportion to the associated AMT allocated to such members.
(b) Investment Tax Credits; Other Tax Benefits and Material Items
Taxed at Different Rates. Any investment tax credits, other tax
benefits and material items taxed at rates other than the rate
applicable to corporate taxable income shall be allocated
directly to the members of the Group giving rise to them.
Section 4. Maximum Allocation
The tax apportioned to any member shall not exceed the separate return tax
of such member.
Section 5. Payments
Each member of the Group is responsible for its own tax liability. Payment
of such liability shall be made in accordance with the following procedure:
(a) A member of the Group with a net positive allocation shall pay
Ameren Corporation the net amount allocated.
(b) A member of the Group with a net negative allocation shall
receive payment from Ameren Corporation in the amount of the net
negative allocation.
(c) Ameren Corporation shall pay to the Internal Revenue Service the
Group's net current federal income tax liability from the net of
the receipts and payments to and from members of the Group.
(d) Ameren Corporation shall make any calculations on behalf of the
members of the Group necessary to comply with the estimated tax
provisions of IRC section 6655. Based on such calculations,
Ameren Corporation shall charge the members appropriate amounts
at intervals consistent with the dates in that section.
<PAGE>
(e) If the Group has a consolidated net operating loss ("NOL") for a
taxable year (the "loss year") and the NOL cannot be used in full
by being carried back to a prior taxable year, the unused portion
of the NOL shall be allocated (as negative allocations) to the
members of the Group having negative allocations for the loss
year in proportion to the relative magnitude of such negative
allocations for the loss year. Each such member shall carry
negative allocation from the loss year forward to the following
taxable year and combine it with its allocation for such
following taxable year.
(f) A member shall make any payment required by this section within
60 days after receiving notice of such payment from Ameren
Corporation. Alternatively, in the case of any second tier
subsidiary (any company that is wholly-owned by Union Electric
Company, Central Illinois Public Service Company, or CIPSCO
Investment Company), the parent of such second-tier subsidiary
may make the payment required by the preceding sentence for
itself and all of its second-tier subsidiaries within the 60-day
period, with the second-tier subsidiaries to compensate such
parent within a reasonable time thereafter.
Section 6. Adjustments to Tax Liability Shown on Returns
(a) In the event that the consolidated tax or consolidated refund is
subsequently adjusted by the Internal Revenue Service or by a
court decision, the consolidated tax, consolidated refund and
separate return tax shall be adjusted accordingly consistent with
the methodology set forth previously in this agreement. Any prior
payments among the members of the Group shall be adjusted to
conform to the change.
(b) If any interest is paid or received as a result of an adjustment
to consolidated tax or consolidated refund, it will be allocated
to the parties in the proportion that each member's change in
separate tax in each affected year bears to the change in
consolidated tax or consolidated refund.
(c) Any penalty shall be paid by the member of the Group that is
responsible for the penalty. If the party at fault cannot be
determined, the penalty shall be allocated in the same manner as
if it were additional tax.
Section 7. State Income Taxes
(a) Any state income tax liability (including liability for interest
or penalties) associated with the filing of a separate state
income tax return by a member of the Group shall be allocated to
and paid directly by such member.
(b) Any state income tax liability (including liability for interest
or penalties) associated with the filing of a unitary or combined
state return shall be allocated to the members of the Group
participating in the returns following the procedures set forth
<PAGE>
above for federal income tax liabilities. Because certain states
utilize a unitary method, the Group's aggregate income tax
liability to a state may exceed the sum of the members' separate
return income tax liabilities to the state. If this occurs, the
excess of the Groups aggregate liability to such state over the
sum of the members' separate return liabilities for such state
shall be allocated to the member or members whose operations
caused the Group to be taxed by the state, following the
procedures set forth above for federal income tax liabilities.
Conversely, the sum of the members' separate return liabilities
may exceed the Group's aggregate liability to a state. If this
occurs, the excess of the sum of the members' separate return
liabilities for such state over the Group's aggregate liability
to such state shall be allocated to the member or members whose
operations caused the excess, following the procedures set forth
above for federal income tax liabilities.
Section 8. New Affiliates
The members of the Group will cause any corporation which becomes an
affiliated corporation within the meaning of IRC section 1504 to join in this
agreement.
<PAGE>
Section 9. Amendment
This agreement may be amended from time to time as the result of changes in
federal or state law or relevant facts and circumstances.
Section 10. Cooperation of Members
Each member shall execute and file such consent, elections and other
documents that may be required or appropriate for the proper filing of
consolidated income tax returns and for the allocations provided by this
consent.
* * * * * * * *
The above procedures for allocating the consolidated income tax liability
of the Group have been agreed to by each of the below listed members of the
Group, as evidenced by the signature of an officer of each member.
Ameren Corporation by: ________________________________
Ameren Services Company by: ________________________________
Union Electric Company by: ________________________________
Union Electric Development
Corporation by: ________________________________
Central Illinois Public Service
Company by: ________________________________
CIPSCO Investment Company by: ________________________________
Ameren Energy, Inc. by: ________________________________
CIPS Energy Inc. by: ________________________________
Illinois Steam, Inc. by: ________________________________
Ameren Development Company by: ________________________________
Ameren ERC, Inc. by: ________________________________
Ameren Energy Communications,
Inc. by: ________________________________
<PAGE>
EXHIBIT A
Ameren Corporation
Ameren Services Company
Union Electric Company
Union Electric Development Corporation
Central Illinois Public Service Company
CIPSCO Investment Company
Ameren Energy, Inc.
CIPS Energy Inc.
Illinois Steam, Inc.
Ameren Development Company
Ameren ERC, Inc.
Ameren Energy Communications, Inc.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
AMEREN CORPORATION CONSOLIDATED
PUBLIC UTILITY HOLDING COMPANIES
FORM U5S
ARTICLE OPUR1
(Thousands of Dollars)
</LEGEND>
<CURRENCY> USD
<S> <C>
<PERIOD-START> JAN-01-1998
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 6,928,039
<OTHER-PROPERTY-AND-INVEST> 248,571
<TOTAL-CURRENT-ASSETS> 771,160
<TOTAL-DEFERRED-CHARGES> 78,091
<OTHER-ASSETS> 821,578
<TOTAL-ASSETS> 8,847,439
<COMMON> 1,372
<CAPITAL-SURPLUS-PAID-IN> 1,582,548
<RETAINED-EARNINGS> 1,472,200
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3,056,120
0
235,197
<LONG-TERM-DEBT-NET> 2,239,794
<SHORT-TERM-NOTES> 58,528
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 184,444
0
<CAPITAL-LEASE-OBLIGATIONS> 49,630
<LEASES-CURRENT> 17,269
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,006,457
<TOT-CAPITALIZATION-AND-LIAB> 8,847,439
<GROSS-OPERATING-REVENUE> 3,318,208
<INCOME-TAX-EXPENSE> 267,673
<OTHER-OPERATING-EXPENSES> 2,479,314
<TOTAL-OPERATING-EXPENSES> 2,746,987
<OPERATING-INCOME-LOSS> 571,221
<OTHER-INCOME-NET> 2,392
<INCOME-BEFORE-INTEREST-EXPEN> 573,613
<TOTAL-INTEREST-EXPENSE> 174,554
<NET-INCOME> 386,497
12,562
<EARNINGS-AVAILABLE-FOR-COMM> 386,497
<COMMON-STOCK-DIVIDENDS> 348,527
<TOTAL-INTEREST-ON-BONDS> 152,689
<CASH-FLOW-OPERATIONS> 803,244
<EPS-PRIMARY> 2.82
<EPS-DILUTED> 2.82
</TABLE>
