EXHIBIT D-7
BEFORE THE PUBLIC SERVICE COMMISSION
OF THE STATE OF MISSOURI
In the matter of the Application of Union )
Electric Company (d/b/a AmerenUE) for )
an order to authorizing the sale, transfer )
and assignment of certain Assets, Real )
Estate Leased Property, Easements and ) Case No.
Contractual Agreements to Central Illinois ) ----------------
Public Service Company (d/b/a AmerenCIPS) )
and, in connection therewith, certain other )
related transactions. )
APPLICATION FOR TRANSFER OF ASSETS, CHANGE IN
---------------------------------------------
DECOMMISSIONING TRUST FUND, AND MOTION FOR
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EXPEDITED TREATMENT
-------------------
COMES NOW Union Electric Company, d/b/a AmerenUE ("AmerenUE"), a Missouri
corporation, and for its Application to the Missouri Public Service Commission
("Commission") pursuant to Section 393.190 and 4 CSR 240-2.060 for an order
authorizing the sale, transfer and assignment of certain Assets, Real Estate,
Leased Property, Easements and Contractual Agreements and, in connection
therewith, certain other related transactions, respectfully states as follows:
1. AmerenUE is a Missouri corporation, in good standing in all respects,
with its principal office and place of business located at 1901 Chouteau Avenue,
St. Louis, Missouri 63103. AmerenUE is engaged in providing electric, gas, and
steam heating utility services in portions of Missouri as a public utility under
the jurisdiction of the Commission. AmerenUE is also engaged in providing
electric and gas service in that portion of the St. Louis metropolitan area
located in the State of Illinois ("Metro East"). There is already on file with
the Commission a certified copy of AmerenUE's Restated Articles of Incorporation
(see MPSC Case No. EO-96-431), a Certificate of Corporate Good Standing (see
<PAGE>
MPSC Case No. EA-87-105) and a copy of AmerenUE's Fictitious Name Registration
as filed with the Missouri Secretary of State's Office (see Commission Case No.
GO-98-486), and said documents are incorporated herein by reference and made a
part hereof for all purposes.
2. Pleadings, notices, orders and other correspondence concerning this
Application and proceeding should be addressed to: James J. Cook
Managing Associate General Counsel
Ameren Services Company
1901 Chouteau Avenue
P. O. Box 66149 (MC 1310)
St. Louis, MO 63166-6149
3. AmerenUE has no pending action or final unsatisfied judgements or
decisions against it from any state or federal agency or court which involves
customer service or rates.
4. AmerenUE does not have any overdue annual report or assessment fees.
5. In support of its Application, AmerenUE is submitted herewith the
prepared direct testimony of Craig D. Nelson and Kevin L. Redhage.
TRANSFER OF ASSETS
------------------
6. Subject to the terms and conditions of an Asset Transfer Agreement,
AmerenUE proposes to transfer to an affiliate, Central Illinois Public Service
Company d/b/a AmerenCIPS ("AmerenCIPS") the assets and liabilities as described
in the form of Asset Transfer Agreement attached as Schedule 1 to the Direct
Testimony of Craig D. Nelson. AmerenUE and AmerenCIPS are operating company
subsidiaries of Ameren Corporation, a registered holding company subject to
regulation by the Securities and Exchange Commission ("SEC") under the Public
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Utility Holding Company Act of 1935 ("PUHCA"). AmerenCIPS provides retail
electric and gas service to the public in portions of the State of Illinois.
7. AmerenUE proposes to transfer to AmerenCIPS all of its Illinois
electric distribution assets and all Illinois transmission assets other than
those associated with AmerenUE's Venice, Illinois generating plant, and
associated liabilities and its retail electric business located in Metro East.
In conjunction therewith, AmerenUE will assign to AmerenCIPS all of its Illinois
certificates of convenience and necessity, franchises and licenses authorizing
it to provide retail electric service in Illinois as well as its maintenance and
labor agreements (as applicable), as those agreements exist as of the Transfer
Date, and any other similar agreements that exist as of the Transfer Date. The
specific assets and obligations to be transferred are described in the form of
Asset Transfer Agreement attached as Schedule 1 to Mr. Nelson's Direct
Testimony. Upon completion of the Transfer, the transmission facilities will
continue to be managed by its affiliate, Ameren Services Company.
8. AmerenUE will also transfer to AmerenCIPS all of its gas service
assets, as well as the associated general plant assets and related liabilities
in Metro East. These assets and liabilities are also described in the form of
Asset Transfer Agreement appended to Mr. Nelson's Direct Testimony as Schedule
1. Ameren's propane air mixing plant for supplementing natural gas on days of
peak requirements is included in the Metro East assets and obligations. In
conjunction therewith, AmerenUE will also assign all related obligations to
AmerenCIPS, including without limitation, the certificates of public convenience
and necessity authorizing AmerenUE to provide gas utility service in Illinois,
environmental permits, all municipal and county franchises, labor agreements (as
applicable), any other relevant agreements that exist as of the transfer date,
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and all obligations covered by AmerenUE's existing Illinois Gas Environmental
Adjustment clause rider.
9. The transfer of the combined electric and gas assets is planned to be
accomplished in the following manner:
A. AmerenUE will transfer approximately 50% of the combined assets
net of liabilities to AmerenCIPS in exchange for a promissory
note in an amount equal to approximately 50% of the total net
book value, estimated to be approximately $51 million.
B. AmerenUE will hold the note and receive payments including
interest from AmerenCIPS.
C. AmerenUE also will declare an "in kind" dividend to Ameren equal
to the remaining balance (approximately 50 percent) of the net
book value of the combined assets net of liabilities, estimated
to be approximately $51 million.
D. Ameren will then transfer the dividended assets and liabilities
to AmerenCIPS as a capital contribution.
10. Three agreements will be involved or affected in the transfer of
AmerenUE's retail electric and gas businesses to AmerenCIPS. These agreements
are as follows:
A. AmerenUE/AmerenCIPS/Ameren Corporation Asset Transfer Agreement
---------------------------------------------------------------
Under this agreement, AmerenUE will transfer to AmerenCIPS the
assets and liabilities discussed herein. As noted, a copy of the
form of this agreement is attached to Mr. Nelson's Direct
Testimony as Schedule 1.
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B. AmerenUE/AmerenCIPS Promissory Note
------------------------------------
Under this note, AmerenCIPS will pay AmerenUE approximately 50%
of the net book value of the transferred assets. A copy of a form
of promissory note is attached as Schedule 3 to Mr. Nelson's
Direct Testimony.
C. AmerenCIPS/Ameren Energy Marketing Company Power Supply Agreement
-----------------------------------------------------------------
This is the existing agreement under which AmerenCIPS would
obtain power and energy to serve the Metro East load. Until the
Power Supply Agreement ("PSA") expires on December 31, 2004,
Ameren Energy Marketing Company ("AEMC") must provide AmerenCIPS
with its full requirements (including planning and operating
reserve requirements and ancillary service generation products).
Commencing January 1, 2005, AmerenCIPS would obtain its full
requirements from market sources. "Market sources" could include
AEMC, Ameren Energy Generating Company or another affiliate, if
any of these entities offered the most economic source of power
and energy. There should be ample capacity to supply Metro East's
future needs at a reasonable, competitive cost. The PSA is
subject to the jurisdiction of, and has been approved by, the
Federal Energy Regulatory Commission ("FERC").
11. The proposed accounting entries to record the transfer of the Metro
East assets and liabilities are attached as Schedule 2 to Mr. Nelson's Direct
Testimony.
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12. None of the assets to be transferred are located within the State of
Missouri. Therefore, the proposed transactions will have no impact on the tax
revenues of the political subdivisions in Missouri in which any of AmerenUE's
structures, facilities or equipment are located.
13. AmerenUE will, as of the closing date of this transaction, reallocate
to its Missouri and wholesale jurisdictions the electric capacity and energy
currently allocated to the AmerenUE Illinois jurisdiction.
14. The transfer of assets and related transactions will benefit the
Missouri retail customers of AmerenUE. As further discussed in the Direct
Testimony of Mr. Nelson, the transfer will allow AmerenUE's Missouri customers
to avoid the costs associated with the construction of new generation to meet
capacity and energy needs through 2004.
15. Regulatory approvals of the proposed transfer are being or will be
sought from the FERC, the SEC and the Illinois Commerce Commission ("ICC").
16. Closing of the transfer will take place as promptly as possible after
all regulatory approvals are obtained.
17. On October 2, 2000, AmerenUE filed pleadings with the Illinois
Commerce Commission concerning this matter. Specifically, the Company filed a
"Notice of Transfer of Electric Distribution and Transmission Assets and Retail
Electric Business and Entry of Various Agreements Pursuant to Section 16-111(g)
of the Illinois Public Utilities Act" ("Notice"), a "Petition for Transfer of
Gas System Assets and Gas Public Utility Business" ("Gas Petition"), and a
Petition to transfer AmerenUE's retail electric certificates of convenience and
necessity ("Certificate Petition"). The Company expects action by the Illinois
Commerce Commission before the end of 2000 on the Notice and very early in 2001
on the Petitions.
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DECOMMISSIONING TRUST FUND
--------------------------
18. As discussed in the testimony of Kevin L. Redhage, submitted with this
Application, AmerenUE also requests that the Commission approve the following:
A. The reallocation of a portion of the Callaway Power Plant
decommissioning cost previously allocated to Illinois ratepayers
to Missouri ratepayers;
B. The reallocation of a portion of the funds currently in the
Illinois jurisdictional subaccount of the nuclear decommissioning
trust fund to the Missouri jurisdictional subaccount;
C. The use of the latest available 12-Month Coincident Peak Demand
Allocation Factors, adjusted for the elimination of the Illinois
demands, for the performance of the above reallocations; and
D. AmerenUE's continuing to accrue decommissioning expenses and to
make contributions to the trust fund at the current level of
$6,214,184.
19. AmerenUE also asks that the Commission confirm that the foregoing
decommissioning expenses for the Callaway Plant are included in the Company's
current cost of service and are reflected in its current rates for ratemaking
purposes; and, that the economic and financial input parameters used in the Zone
of Reasonableness analysis (identical to those presented in Case No.
EO-2000-205) contained in the Direct Testimony of Mr. Redhage continue to be
valid and acceptable to the Commission.
REQUEST FOR EXPEDITED TREATMENT
-------------------------------
20. As explained in detail in the Direct Testimony of Mr. Nelson, AmerenUE
respectfully requests the Commission grant expedited treatment to this
Application. Specifically, AmerenUE requests that the Commission issue an Order
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authorizing the transfer as requested herein prior to February 15, 2001. Action
by this date is required to allow AmerenUE to make the necessary arrangements
for its capacity and energy needs for the summer of 2001.
21. If no Commission action is received by February 15, 2001, the Company
will be required to issue Requests for Proposals for the acquisition of capacity
and energy for the summer of 2001. This will impose an increased administrative
cost on AmerenUE and may possibly result in the acquisition of resources that
would not be needed if an Order is later received.
WHEREFORE, AmerenUE respectfully requests that the Commission issue its
order:
(a) Authorizing AmerenUE to perform in accordance with the terms and
conditions of the form of Asset Transfer Agreement attached as
Schedule 1 to Mr. Craig Nelson's Direct Testimony;
(b) Authorizing AmerenUE to sell, transfer and assign to AmerenCIPS
the assets and liabilities as more particularly described in the
form of Asset Transfer Agreement, which assets and liabilities
generally constitute AmerenUE's Metro East, Illinois retail
electric and natural gas operations;
(c) Approving as reasonable and prudent the consideration received by
AmerenUE from AmerenCIPS for the transferred assets and
liabilities;
(d) Authorizing AmerenUE to enter into, execute and perform in
accordance with the terms of all other documents reasonably
necessary and incidental to the performance of the transactions
which are the subject of the form of Asset Transfer Agreement and
this Application;
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(e) Approving the reallocation of the capacity and energy associated
with these assets to AmerenUE's Missouri electric jurisdiction;
(f) Approving the reallocation of a portion of the decommissioning
cost previously allocated to Illinois ratepayers to Missouri
ratepayers;
(g) Approving the reallocation of a portion of the funds currently in
the Illinois jurisdictional subaccount of the nuclear
decommissioning trust fund to the Missouri jurisdictional
subaccount;
(h) Approving the use of the latest available 12-Month Coincident
Peak Demand Allocation Factors, adjusted for the elimination of
the Illinois demands, for the performance of the above
reallocations;
(i) Approving AmerenUE's continuing to accrue decommissioning expense
and to make contributions to the trust fund at the current level
of $6,214,184;
(j) Confirming that the decommissioning expenses for the Callaway
Plant are included in the Company's current cost of service and
are reflected in its current rate for ratemaking purposes;
(k) Confirming that the economic and financial input parameters used
in the Zone of Reasonableness analysis contained in the Direct
Testimony of Kevin L. Redhage (identical to those presented in
Case No. EO-2000-205) continue to be valid and acceptable to the
Commission; and
(l) Granting such other relief as deemed necessary to accomplish the
purposes of the Transfer Agreement and this Application and to
consummate the sale, transfer and assignment of the Assets and
related transactions.
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<PAGE>
Respectfully submitted,
UNION ELECTRIC COMPANY d/b/a
AmerenUE
By
-------------------------------------
James J. Cook, MBE #22697
Ameren Services Company
One Ameren Plaza
1901 Chouteau Avenue
P.O. Box 66149 (MC 1310)
St. Louis, MO 63166-6149
(314) 554-2237
(314) 554-4014 (fax)
[email protected]
----------
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VERIFICATION
------------
I, Craig D. Nelson, Vice President of Ameren Services Company, being first
duly sworn, states that I have read the foregoing Application, that I am
familiar with the statements therein, and that the statements therein are true
and correct to the best of my knowledge.
----------------------------------
Craig D. Nelson
Subscribed and sworn to before me this day of October, 2000.
----
----------------------------------
Notary Public
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CERTIFICATE OF SERVICE
----------------------
I hereby certify that a copy of the foregoing document was served on the
following parties of record via first-class mail on this day of
-----
, 2000:
-----------------
General Counsel
Missouri Public Service Commission
P. O. Box 360
Jefferson City, MO 65102
Office of the Public Counsel
P. O. Box 7800
Jefferson City, MO 65102
----------------------------------
James J. Cook
12
<PAGE>
BEFORE THE PUBLIC SERVICE COMMISSION
OF THE STATE OF MISSOURI
In the matter of the Application of Union )
Electric Company (d/b/a AmerenUE) for )
an order to authorizing the sale, transfer )
and assignment of certain Assets, Real )
Estate Leased Property, Easements and ) Case No. EM-2001-233
Contractual Agreements to Central Illinois ) -----------
Public Service Company (d/b/a AmerenCIPS) )
and, in connection therewith, certain other )
related transactions. )
AMENDMENT TO APPLICATION FOR TRANSFER OF ASSETS
-----------------------------------------------
COMES NOW Union Electric Company, d/b/a AmerenUE ("AmerenUE" or "Company"),
a Missouri corporation, and amends its Application to the Missouri Public
Service Commission ("Commission") pursuant to Section 393.190 and 4 CSR
240-2.060 for an order authorizing the sale, transfer and assignment of certain
Assets, Real Estate, Leased Property, Easements and Contractual Agreements. In
support thereof, AmerenUE respectfully states as follows:
1. On October 6, 2000, AmerenUE filed an Application for Transfer of
Assets, Change in Decommissioning Trust Fund and Motion for Expedited Treatment
("Application").
2. On October 18, 2000, the Commission issued an Order directing AmerenUE
to amend its application to comply with 4 CSR 240-2.060(7).
3. AmerenUE hereby incorporates by reference the Application in its
entirety.
4. A certified copy of the resolution of AmerenUE's Board of Directors
authorizing the proposed transfer of assets is attached hereto as Exhibit A and
incorporated herein by reference.
<PAGE>
5. AmerenUE's forecast shows that an additional supply of power and
energy beyond its current generation capacity will be required through 2004 and
beyond. This capacity shortfall will have to be met through: (a) the purchase of
power and energy at market prices; (b) the addition of new AmerenUE generation
capacity, or (c) some combination thereof. The proposed transfer of assets to
Central Illinois Public Service Company ("AmerenCIPS") includes the transfer of
520 MW of firm load. This reduction of 520 MW of firm load would alleviate
AmerenUE's capacity shortfall through 2004 and defer the construction of $218
million of new plants, resulting in a savings of $6 million per year in fixed
costs. This would allow AmerenUE's existing Missouri customers to: (a) have
increased capacity; (b) achieve greater benefits from an installed generating
base rather than constructing additional gas-fired capacity; and (c) benefit
from lower average production costs and fewer energy purchases during periods of
peak demand. Finally, the transfer of the assets will not result in any reduced
level of service or reliability for those retail customers presently being
served by AmerenUE in Missouri subject to the jurisdiction of the Commission.
For all of the above stated reasons, the proposed transfer of assets is not
detrimental to the public interest.
6. As indicated on page 6 of the Company's Application, none of the
assets to be transferred are located within the State of Missouri. Therefore,
the proposed transaction will have no impact on the tax revenues of the
political subdivisions in Missouri in which any of AmerenUE's structures,
facilities or equipment are located.
WHEREFORE, for the foregoing reasons, AmerenUE respectfully requests that
the Commission issue its order:
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(a) Authorizing AmerenUE to perform in accordance with the terms and
conditions of the form of Asset Transfer Agreement attached as
Schedule 1 to Mr. Craig Nelson's Direct Testimony;
(b) Authorizing AmerenUE to sell, transfer and assign to AmerenCIPS the
assets and liabilities as more particularly described in the form of
Asset Transfer Agreement, which assets and liabilities generally
constitute AmerenUE's Metro East, Illinois retail electric and natural
gas operations;
(c) Approving as reasonable and prudent the consideration received by
AmerenUE from AmerenCIPS for the transferred assets and liabilities;
(d) Authorizing AmerenUE to enter into, execute and perform in accordance
with the terms of all other documents reasonably necessary and
incidental to the performance of the transactions which are the
subject of the form of Asset Transfer Agreement and this Application;
(e) Approving the reallocation of the capacity and energy associated with
these assets to AmerenUE's Missouri electric jurisdiction;
(f) Approving the reallocation of a portion of the decommissioning cost
previously allocated to Illinois ratepayers to Missouri ratepayers;
(g) Approving the reallocation of a portion of the funds currently in the
Illinois jurisdictional subaccount of the nuclear decommissioning
trust fund to the Missouri jurisdictional subaccount;
(h) Approving the use of the latest available 12-Month Coincident Peak
Demand Allocation Factors, adjusted for the elimination of the
Illinois demands, for the performance of the above reallocations;
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(i) Approving AmerenUE's continuing to accrue decommissioning expense and
to make contributions to the trust fund at the current level of
$6,214,184;
(j) Confirming that the decommissioning expenses for the Callaway Plant
are included in the Company's current cost of service and are
reflected in its current rate for ratemaking purposes;
(k) Confirming that the economic and financial input parameters used in
the Zone of Reasonableness analysis contained in the Direct Testimony
of Kevin L. Redhage (identical to those presented in Case No.
EO-2000-205) continue to be valid and acceptable to the Commission;
and
(l) Granting such other relief as deemed necessary to accomplish the
purposes of the Transfer Agreement and this Application and to
consummate the sale, transfer and assignment of the Assets and related
transactions.
Respectfully submitted,
UNION ELECTRIC COMPANY
d/b/a AmerenUE
By
-------------------------------------
James J. Cook, MBE #22697
Ameren Services Company
One Ameren Plaza
1901 Chouteau Avenue
P.O. Box 66149 (MC 1310)
St. Louis, MO 63166-6149
(314) 554-2237
(314) 554-4014 (fax)
[email protected]
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<PAGE>
CERTIFICATE OF SERVICE
----------------------
I hereby certify that a copy of the foregoing document was served on the
following parties of record via first-class mail on this day of
-----
, 2000:
-----------------
General Counsel
Missouri Public Service Commission
P. O. Box 360
Jefferson City, MO 65102
Office of the Public Counsel
P. O. Box 7800
Jefferson City, MO 65102
---------------------------------------
James J. Cook
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