SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
September 13, 1996
Commission Registrants; State of Incorporation; IRS Employer
File Number Address; and Telephone Company Identification
No.
1-11327 Illinova Corporation 37-1319890
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
1-3004 Illinois Power Company 37-0344645
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
Total number of sequentially numbered pages is 3.
Item 5. Other Events
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Illinova Corporation (Illinova), parent of Illinois Power Company
(IP) and Illinova Power Marketing, Inc. (IPMI), announced an
agreement in principle with Soyland Power Cooperative (Soyland)
to replace the existing (Clinton) Ownership Participation
Agreement (OPA) and the Power Coordination Agreement (PCA)
between IP and Soyland, with a new agreement. Under terms of the
yet to be finalized agreement, a subsidiary of Illinova
would acquire Soyland's 13% ownership share of IP's
Clinton Power Station (Clinton), a nuclear generation facility,
with no capital outlay. Soyland's nuclear decommissioining
trust also will be transferred to the Illinova subsidiary
acquiring Soyland's share of Clinton. The acquiring subsidiary
would assume certain obligations related to Soyland's ownership
share of Clinton, including those related to decommissioning.
Under the agreement in principle, IPMI would become the exclusive
agent for all of Soyland's capacity and energy needs for a period
of ten to twenty years. Soyland's energy needs would be met under
the terms of a full requirements power purchase agreement which
would replace the energy currently acquired by Soyland from its
share of Clinton's generation under the OPA and from IP's fossil fuel-based
generating capacity under the PCA. Under the new agreement,
Soyland would be charged fixed fees designed to compensate
Illinova for Clinton costs currently recovered from Soyland
pursuant to the OPA. Furthermore, the new agreement would replace
energy currently provided to Soyland by Central Illinois Public Service
Company under its Power Supply Agreement (PSA) when the PSA expires at
the end of 1999.
During 1996, Soyland has developed and evaluated proposals to
reduce its debt to the Rural Utilities
Service (RUS). Soyland's board of directors has approved a
bankruptcy filing if the situation cannot be resolved. The RUS
has agreed to a debt reduction if Soyland obtains
financing for the stipulated debt restructuring and discontinues
its nuclear ownership.
The new agreement is expected to avoid a Soyland bankruptcy
while providing incremental value to Illinova over a ten-year
time period. Additionally, the agreement will establish IPMI as
a major power marketing presence in the Midwest.
SIGNATURES
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.
ILLINOVA CORPORATION
(Registrant)
By/s/Larry F. Altenbaumer
---------------------------
Larry F. Altenbaumer
Chief Financial Officer
Treasurer and Controller
on behalf of
Illinova Corporation
Date: September 13, 1996
SIGNATURES
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.
ILLINOIS POWER COMPANY
(Registrant)
By/s/Larry F. Altenbaumer
-----------------------------
Larry F. Altenbaumer
Senior Vice President,
Chief Financial Officer and
Treasurer on behalf of
Illinois Power Company
Date: September 13, 1996
