8-KOther EventsExhibits & Filings

AMEREN CORP 8-K Report, Corporate Update (Oct 2, 2006)

Filed October 2, 2006For Securities:AEE

Summary

Ameren Corporation (AEE) announced on October 2, 2006, that its subsidiary, Union Electric Company (AmerenUE), has reached a stipulation and consent agreement with the Federal Energy Regulatory Commission (FERC) to resolve issues stemming from the December 2005 breach of the upper reservoir at the Taum Sauk pumped-storage hydroelectric facility. This agreement addresses alleged violations of license conditions and FERC regulations by AmerenUE, the facility's licensee. The settlement includes a $10 million civil penalty and a $5 million contribution to an escrow account for project enhancements at the Taum Sauk facility. AmerenUE will also implement a new dam safety program. The financial impact on Ameren's earnings for the quarter ended September 30, 2006, will be limited to $7 million after accounting for an $8 million accrual previously made. Importantly, investigations by state authorities regarding the breach are ongoing.

Key Highlights

  • 1FERC has approved a settlement agreement between AmerenUE and its Office of Enforcement concerning the December 2005 Taum Sauk reservoir breach.
  • 2AmerenUE will pay a $10 million civil penalty as part of the agreement.
  • 3An additional $5 million will be placed in an escrow account to fund project enhancements at or near the Taum Sauk facility.
  • 4AmerenUE is required to implement and comply with a new dam safety program.
  • 5The net after-tax charge to earnings for the quarter ended September 30, 2006, related to this settlement is $7 million, after an $8 million prior accrual.
  • 6State authority investigations into the Taum Sauk breach are still ongoing, indicating potential further developments or liabilities.
  • 7The settlement resolves issues related to alleged violations of license conditions and FERC regulations by AmerenUE.

Frequently Asked Questions

Ameren Corporation is reporting that its subsidiary, Union Electric Company (AmerenUE), has reached a settlement with the Federal Energy Regulatory Commission (FERC) regarding the December 2005 breach of the upper reservoir at the Taum Sauk pumped-storage hydroelectric facility. This settlement resolves FERC's investigation into alleged regulatory violations.

AmerenUE will pay a $10 million civil penalty and contribute $5 million to an escrow account for project enhancements. The net impact on Ameren's earnings for the quarter ending September 30, 2006, is a charge of $7 million, taking into account an $8 million accrual already made.

No, this settlement specifically resolves issues with the FERC. Investigations by state authorities into the December 2005 breach are still ongoing and have not yet concluded.

AmerenUE has agreed to pay the civil penalty and fund enhancements, and crucially, to implement and comply with a new dam safety program developed in connection with the settlement. This aims to prevent future incidents.