8-KOther Events

AMEREN CORP 8-K Report (Jul 6, 2001)

Filed July 6, 2001For Securities:AEE

Summary

This 8-K filing from Ameren Corporation reports on the expiration of its three-year experimental alternative regulation plan for its Missouri retail electric business, Union Electric Company (AmerenUE), on June 30, 2001. Following the plan's expiration, the Missouri Public Service Commission (MoPSC) staff filed an excess earnings complaint against AmerenUE, proposing a significant reduction in annual electric revenues ranging from $213 million to $250 million. The MoPSC staff's recommendation is based on factors including return on equity (ROE), revenue and customer growth, depreciation rates, and other cost of service expenses. The proposed ROE falls between 9.04% and 10.04%. The filing notes that evidentiary hearings are required, and the MoPSC is not bound by the staff's recommendation, with potential for court appeals. A final decision could extend into 2002, and Ameren cannot currently predict the outcome or its material impact on the company's financial position, results of operations, or liquidity. Ameren intends to vigorously contest the staff's recommendation and is also pursuing negotiations for a similar incentive regulation plan.

Key Highlights

  • 1Expiration of AmerenUE's three-year experimental alternative regulation plan on June 30, 2001.
  • 2MoPSC staff filed an excess earnings complaint against AmerenUE on July 2, 2001.
  • 3Proposed annual electric revenue reduction by MoPSC staff is between $213 million and $250 million.
  • 4Key factors cited by MoPSC staff include ROE, revenues, customer growth, depreciation, and cost of service.
  • 5Recommended ROE range by MoPSC staff is 9.04% to 10.04%.
  • 6A final decision is not expected until 2002, with potential for further appeals.
  • 7Ameren intends to contest the staff's recommendation and is seeking to negotiate a new incentive regulation plan.

Frequently Asked Questions

The primary event is the expiration of Ameren's (specifically its subsidiary Union Electric Company - AmerenUE) experimental alternative regulation plan and the subsequent filing of an excess earnings complaint by the Missouri Public Service Commission (MoPSC) staff. This complaint proposes a significant reduction in AmerenUE's annual electric revenues.

The MoPSC staff is proposing to reduce AmerenUE's annual electric revenues by $213 million to $250 million. Ameren states that the outcome of this proceeding could have a material impact on its financial position, results of operations, or liquidity, but the exact impact cannot be predicted at this time.

Ameren plans to "vigorously attack" the MoPSC staff's recommendation in proceedings before the Commission. Additionally, the company is actively engaged in negotiations with relevant parties to establish a new form of incentive regulation, similar to the expired plan.

The filing indicates that evidentiary hearings must be conducted, and the MoPSC is not bound by the staff's recommendation. Further appeals in the courts may also occur. As a result, Ameren anticipates that a final decision on this matter may not be reached until sometime in 2002.