<PAGE>
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
UNION ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Missouri 1-2967 43-0559760
(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
<PAGE>
ITEM 5. OTHER EVENTS
Reference is made to Note 5 - under Notes to 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 the
Registrant, a subsidiary of Ameren Corporation. In July 1995, the MoPSC approved
an agreement among the Registrant, 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 the Registrant'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 the Registrant 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. The Registrant 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 the Registrant's
estimated credit for the third year of the Original Plan. In addition, the MoPSC
Staff proposed adjustments to the Registrant'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 the Registrant to capitalize and amortize certain
costs (including computer software costs) that had previously been expensed for
its Missouri electric operations. On December 30, 1999, the Registrant filed an
application for rehearing of the Order requesting the MoPSC to reverse its
decision.
Based on the provisions of the Order, the Registrant 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, the Registrant,
the MoPSC Staff and other parties reached a settlement relating to the
calculation of the weather-adjusted credits. As a result, the Registrant
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 the Registrant for the first year of the New
Plan. As a result, the Registrant increased its estimated credit for the New
Plan year ended June 30, 1999, from $20 million to $25 million. In addition, the
Registrant recorded an estimated $20 million credit for the second year of the
New Plan. Also, the provision of the Order which requires the Registrant 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.
<PAGE>
In summary, the provisions of the Order and the resulting changes in the
Registrant'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.
UNION ELECTRIC COMPANY
(Registrant)
By /s/ Warner L. Baxter
-----------------------
Warner L. Baxter
Vice President and Controller
(Principal Accounting Officer)
Date: January 20, 2000
