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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 23, 1999
AMEREN CORPORATION
(Exact name of registrant as specified in its charter)
Missouri 1-14756 43-1723446
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222
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ITEM 5. OTHER EVENTS
Reference is made to Note 5 - under Notes to Consolidated Financial
Statements in the Registrant's Form 10-Q for the quarter ended September 30,
1999, for a discussion of the regulatory proceedings before the Missouri Public
Service Commission (MoPSC) involving the experimental alternative regulation
plans approved by that agency with respect to the retail electric rates of Union
Electric Company (AmerenUE), a subsidiary of the Registrant. In July 1995, the
MoPSC approved an agreement among AmerenUE, the MoPSC Staff and other parties
which included a three-year experimental alternative regulation plan (the
Original Plan) that ran from July 1, 1995 through June 30, 1998. The Original
Plan provided that earnings in those years in excess of a 12.61% regulatory
return on equity (ROE) be shared equally between AmerenUE's electric customers
and shareholders, and earnings above a 14% ROE be credited to customers. The
formula for computing the credit used twelve-month results ending June 30,
rather than calendar year earnings. In 1998, AmerenUE recorded an estimated $43
million credit for the final year of the Original Plan.
Included in the joint agreement approved by the MoPSC in its February 1997
order authorizing the merger between AmerenUE and CIPSCO Incorporated was a new
three-year experimental alternative regulation plan (the New Plan) that runs
from July 1, 1998 through June 30, 2001. Like the Original Plan, the New Plan
requires that earnings over a 12.61% ROE up to a 14% ROE be shared equally
between electric customers and shareholders. The New Plan also returns to
customers 90% of all earnings above a 14% ROE up to a 16% ROE. Earnings above a
16% ROE are to be credited entirely to customers. In addition, the joint
agreement provides for a Missouri electric rate decrease, retroactive to
September 1, 1998, based on the weather-adjusted average annual credits to
customers under the Original Plan. AmerenUE estimated that its Missouri electric
rate decrease would approximate $20 million on an annualized basis and has
reduced revenues accordingly since September 1998.
In November 1998, the MoPSC Staff proposed adjustments to AmerenUE's
estimated credit for the third year of the Original Plan. In addition, the MoPSC
Staff proposed adjustments to AmerenUE's estimated Missouri electric rate
decrease based upon their methodology of calculating the weather-adjusted
credits. The determination of the credit for the third year of the Original
Plan, as well as the determination of the Missouri electric rate decrease, were
subject to regulatory proceedings before the MoPSC in 1999.
On December 23, 1999, the MoPSC issued a Report and Order (Order) relating
to the customer credit for the third year of the Original Plan. Certain of the
MoPSC Staff's proposed adjustments were accepted by the MoPSC in the Order. In
addition, the Order requires AmerenUE to capitalize and amortize certain costs
(including computer software cost) that had previously been expensed for its
Missouri electric operations. On December 30, 1999, AmerenUE filed an
application for rehearing of the Order requesting the MoPSC to reverse its
decision.
Based on the provisions of the Order, AmerenUE estimates that the credit
for the third year of the Original Plan will approximate $31 million. In
addition, with regard to the Missouri electric rate decrease, AmerenUE, the
MoPSC Staff and other parties reached a settlement relating to the calculation
of the weather-adjusted credits. As a result, AmerenUE estimates that the
annualized Missouri electric rate decrease will approximate $17 million. Both of
these estimates are subject to further approval by the MoPSC.
The provisions of the Order also have an impact on the estimated credit to
electric customers recorded by AmerenUE for the first year of the New Plan. As a
result, AmerenUE increased its estimated credit for the New Plan year ended June
30, 1999, from $20 million to $25 million. In addition, AmerenUE recorded an
estimated $20 million credit for the second year of the New Plan. Also, the
provision of the Order which requires AmerenUE to capitalize and amortize
certain costs (including computer software costs) that had been previously
expensed, resulted in the capitalization of approximately $20 million of costs
in the fourth quarter of 1999.
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In summary, the provisions of the Order and the resulting changes in
AmerenUE's estimates of the customer credits for the open years under the
Original Plan and the New Plan and of the electric rate decrease resulted in an
increase in earnings of approximately $9 million, or $.06 per share in the
fourth quarter of 1999.
SAFE HARBOR STATEMENT
Statements made in this Current Report which are not based on historical facts,
are "forward-looking" and, accordingly, involve risks and uncertainties that
could cause actual results to differ materially from those discussed. Although
such "forward-looking" statements have been made in good faith and are based on
reasonable assumptions, there is no assurance that the expected results will be
achieved. These statements include (without limitation) statements as to future
expectations, beliefs, plans, strategies, objectives, events, conditions, and
financial performance. In connection with the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the Registrant is providing
this cautionary statement to identify important factors that could cause actual
results to differ materially from those anticipated. The following factors, in
addition to those discussed elsewhere in this report and in the 1998 Annual
Report to Stockholders (which is incorporated by reference in the Registrant's
1998 Form 10-K) and in subsequent securities filings, could cause results to
differ materially from management expectations as suggested by such
"forward-looking" statements: the effects of regulatory actions; changes in laws
and other governmental actions; business and economic conditions; weather
conditions; and legal and administrative proceedings.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMEREN CORPORATION
(Registrant)
By /s/ Warner L. Baxter
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Warner L. Baxter
Vice President and Controller
(Principal Accounting Officer)
Date: January 20, 2000
