(As filed on September 22, 2003)
File No. 70-10133
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1/A
AMENDMENT NO. 1
TO
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
AMEREN CORPORATION
1901 Chouteau Avenue
St. Louis, Missouri 63103
(Names of companies filing this statement and addresses of
principal executive offices)
_____________________________________________________
NONE
(Name of top registered holding company parent of each applicant or declarant)
_______________________________________________________
Steven R. Sullivan, Vice President Regulatory Policy,
General Counsel and Secretary
Ameren Services Company
1901 Chouteau Avenue
St. Louis, Missouri 63103
(Name and address of agent for service)
________________________________________________________
The Commission is requested to mail copies of all orders, notices and
other communications to:
Ronald K. Evans, William T. Baker, Jr., Esq.
Managing Associate General Counsel Thelen Reid & Priest LLP
Ameren Services Company 875 Third Avenue
1901 Chouteau Avenue New York, New York 10022
St. Louis, Missouri 63103
The Application-Declaration filed in this proceeding on June 12, 2003
is hereby amended and restated in its entirety to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
------------------------------------
A. Background.
----------
Ameren Corporation, a registered holding company (the "Applicant"),
herein requests approval from the Commission pursuant to Sections 9(a)(1) and 10
of the Public Utility Holding Company Act of 1935, as amended (the "Act") to
acquire a membership interest in PowerTree Carbon Company, LLC (the "Company"),
a Delaware limited liability company formed to facilitate investments by the
Applicant and other energy companies in forestation projects in the Lower
Mississippi River Valley, and possibly other sites, as a means for removing
carbon dioxide (CO2) from the atmosphere. The Applicant proposes to acquire such
membership interest either directly or indirectly through one or more
subsidiaries, including a new subsidiary formed exclusively for the purpose of
acquiring and holding the membership interest.
The Applicant directly or indirectly owns all of the outstanding common
stock of Union Electric Company d/b/a AmerenUE ("AmerenUE"), Central Illinois
Public Service Company d/b/a AmerenCIPS ("AmerenCIPS"), and Central Illinois
Light Company, d/b/a AmerenCILCO ("AmerenCILCO," and together with AmerenUE and
AmerenCIPS, the "Utility Subsidiaries"). Together, the Utility Subsidiaries
provide retail and wholesale electric service to approximately 1.7 million
customers and retail natural gas service to approximately 500,000 customers in
parts of Missouri and Illinois. The Utility Subsidiaries and other non-regulated
generating subsidiaries of the Applicant own all or portions of electric
generating plants in the United States having a combined generating capability
of approximately 14,500 megawatts (MW).
The Company has been formed under the sponsorship of the electric
utility sector in cooperation with the Department of Energy ("DOE"). The Company
is part of an industry-wide effort to voluntarily address climate change through
measures designed to reduce greenhouse gas emissions in response to President
Bush's recent "Climate VISION" plan, or Climate, Voluntary Innovative Sector
Initiatives: Opportunities Now. Climate VISION is the first step in the
President's policy of encouraging industry to produce voluntary cuts in
greenhouse gas emissions. One proven means for reducing greenhouse gases is to
use trees to remove CO2 from the atmosphere and store it in tree biomass and
roots and soil. The Bush Administration is considering, as part of its Global
Climate Change program, the creation of transferable emission reduction credits
for measures which reduce greenhouse gas emissions.
The Company has obtained commitments totaling $3,275,000 from
approximately 25 electric utilities, electric utility holding companies and
other energy concerns that will be used to fund six forestation projects located
in Louisiana, Mississippi and Arkansas. These projects will provide multiple
environmental benefits, including removing from the atmosphere and storing over
2 million tons of CO2 over the projects' 100-year lifetimes. Other benefits will
include: restoring habitat for birds and animals; reducing fertilizer inputs to
waters; and stabilizing soils. Two of the projects will involve purchase and
2
donation of land to the U.S. Fish & Wildlife Service, while other projects will
involve obtaining easements for tree planting on private land. The contributions
of the members to the Company will be utilized for land acquisition and to pay
the cost of planting tree seedlings. It is estimated that these projects will
provide carbon benefits of more than 400 and 450 tons of CO2 per acre by years
70 and 100, respectively, at a cost of less that $2.00 per ton.
Unlike some earlier forestation projects that U.S. electricity
generators have supported in the past, the Company is being formed as a
for-profit limited liability company ("LLC"), which it is believed will allow
carbon or CO2 reduction credits, if and when they become available, to be more
readily transferred. The LLC structure will also allow the members of the
Company to take advantage of tax benefits of land donation. Nevertheless,
although formed as a for-profit LLC, the Company is essentially a passive medium
for making investments in projects that are not expected to have any operating
revenues, and will not engage in any active business operations.
The Applicant is also requesting authorization pursuant to Section
12(f) of the Act to sell all or a portion of its membership interest in the
Company at any time to any of its associate companies. Any sale by the Applicant
of its membership interest in the Company to an associate company shall be for
an amount equal to the Applicant's investment or pro rata share thereof in the
case of a sale of a portion of the Applicant's membership interest. No sale to
an associate company that requires approval by any other regulatory commission
shall take place until such approval has been obtained.
B. Capital Contribution Commitments of Initial Members.
---------------------------------------------------
The Applicant is one of eleven registered holding companies that have
committed, either directly or through subsidiaries, to make capital
contributions to the Company. The others are American Electric Power Company,
Inc., Cinergy Corp., Dominion Resources, Inc., Entergy Corporation, Exelon
Corporation, FirstEnergy Corp., Great Plains Energy Incorporated, PEPCO
Holdings, Inc., Progress Energy, Inc., and Xcel Energy, Inc. Other energy
companies that have committed to make capital contributions are: Arizona Public
Service Company (a subsidiary of Pinnacle West Capital Corporation), The Detroit
Edison Company, Diversified Lands LLC (a subsidiary of CLECO Corporation), Duke
Energy Corporation, Oglethorpe Power Corporation, Oklahoma Gas & Electric
Company (a subsidiary of OGE Energy Corp.), Peabody PowerTree Investments, LLC
(a subsidiary of Peabody Energy Corporation), Public Service Electric and Gas
Company, PNM Resources, Inc. (the parent of Public Service Company of New
Mexico), Reliant Resources, Inc., Tennessee Valley Authority, TXU Generation
Company LP (a subsidiary of TXU Corp.), We Energies (the trade name of Wisconsin
Electric Power Company and Wisconsin Gas Company), and Wisconsin Public Service
Corporation. The amount of the commitments of the eleven registered holding
companies is as follows:
3
--------------------------------------- ------------------------------------ ------------------------------------
Name of Registered Holding Company Total Capital Contribution Percentage Interest in Company
Commitment
--------------------------------------- ------------------------------------ ------------------------------------
Ameren Corp. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
American Electric Power Co. $300,000 9.16%
--------------------------------------- ------------------------------------ ------------------------------------
Cinergy Corp. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
Dominion Resources, Inc. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
Entergy Corp. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
Exelon Corp. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
FirstEnergy Corp. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
Great Plains Energy Inc. $ 50,000 1.53%
--------------------------------------- ------------------------------------ ------------------------------------
PEPCO Holdings, Inc. $ 50,000 1.53%
--------------------------------------- ------------------------------------ ------------------------------------
Progress Energy, Inc. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
Xcel Energy, Inc. $100,000 3.05%
--------------------------------------- ------------------------------------ ------------------------------------
$1,200,000 36.64%
Total
--------------------------------------- ------------------------------------ ------------------------------------
In the aggregate, the capital contribution commitments of the eleven
registered holding companies represent approximately 36.6% of the commitments of
all of the initial members.
C. Principal Terms of Operating Agreement.
--------------------------------------
Under the Company's Operating Agreement (Exhibit A hereto) (the
"Operating Agreement"), the business and affairs of the Company shall be managed
by its Board of Managers. Each member that commits to make a capital
contribution of at least $100,000 is entitled to appoint one representative to
the Board of Managers. In general, actions by the Board of Managers may be taken
by a majority of the managers present at a meeting. However, certain actions of
the Board of Managers or of any individual manager or any officer require
authorization by a two-thirds vote of the full board. These include, among
others actions: the sale, exchange or other disposition of any of the assets of
the Company greater that $20,000 in value; the commencement of a voluntary
bankruptcy proceeding; the declaration or making of any distributions to
members; the incurrence of any indebtedness by the Company; capital expenditures
exceeding $20,000; and the acquisition or lease of any real property and any
sale of, donation, lease or sublease affecting real property owned by the
Company.
New members may be admitted to the Company only upon the unanimous
approval of the then existing members. Upon admission of any new member, the
percentage interests of existing members shall be reduced accordingly. A member
may transfer all or a portion of its membership interest only upon receiving
approval of two-thirds of the existing members, except that, without the prior
approval of the other members, a member may transfer all or a part of its
membership interest to an affiliate of such member or to any other member. A
two-thirds vote of the members is also required for the election of officers of
the Company. The members have equal voting rights, regardless of their
percentage interests in the Company (as shown in the table above).
The Operating Agreement provides that, so long as any member is a
registered holding company or subsidiary company thereof, any voting rights in
the Company received or otherwise obtained by such member equal to or exceeding
4
10% of the total outstanding voting rights in the Company shall be automatically
(and without any requirement for consent on the part of the affected member)
allocated to the other members in equal portions such that no registered holding
company member will hold 10% or more of voting rights in the Company. In
addition, any member may elect to limit its voting rights to less than 5% of the
total voting rights in the Company, in which case the voting rights of such
member or members equal to or exceeding 5% of the total voting rights in the
Company would be automatically allocated in equal portions to the other members.
The Operating Agreement further provides that each member (or its
designee(s) or transferee(s)) shall be entitled to claim a pro rata share of all
carbon that is determined to be sequestered by the Company's efforts to which
legal rights, if any, have been obtained ("Carbon Reductions") based on the
member's percentage interest in the Company. A member may generally utilize such
member's share of any Carbon Reductions in connection with its participation in
any greenhouse gas reporting or regulatory program or transfer or assign such
Carbon Reductions to one or more other persons.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred in
connection with the preparation and filing of this Application/Declaration are
estimated not to exceed $2,000.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
A. General.
-------
Sections 9(a)(1) and 10 of the Act are applicable to the proposed
acquisition of a membership interest in the Company, as well as to the
acquisition of the securities of any new subsidiary formed exclusively for the
purpose of acquiring and holding the membership interest. The subsequent sale of
all or a portion of the membership interest in the Company acquired by the
Applicant to any associate company thereof is subject to Section 12(f) of the
Act.
B. Standards of Sections 9(a) and 10.
---------------------------------
The transaction proposed herein involves an acquisition of securities,
as well as an acquisition of an interest in an other (i.e., non-utility)
business, and is therefore subject to the approval of this Commission under
Section 10. The relevant standards for approval under Section 10 are set forth
in subsections (b), (c) and (f). As applied to interests in non-utility
businesses, Section 10(c)(1) of the Act provides that the Commission shall not
approve an acquisition that is "detrimental to the carrying out of the
provisions of section 11." Section 11(b)(1), in turn, directs the Commission to
limit the operations of a holding company system to a single integrated
public-utility system and such non-utility businesses as are "reasonably
incidental, or economically necessary or appropriate to the operations" of its
integrated system or systems. The Commission and the courts have interpreted
these provisions as expressing a Congressional policy against non-utility
5
activities that bear no operating or functional relationship to the utility
operations of the registered system.(1)
The Commission has previously authorized new registered holding
companies to retain, under the standards of Section 11(b)(1), interests in
ventures formed to invest in start-up companies that offer products or services
that will generate greenhouse gas emission reductions for submission to the DOE
as "Climate Challenge" credits pursuant to Title XVI of the Energy Policy Act of
1992.(2) Further, under Rule 58(b)(1)(ii), a registered holding company may,
without the need for prior approval by the Commission (subject to certain
investment limitations), acquire the securities of companies that engage in the
"development and commercialization of electrotechnologies related to energy
conservation, storage and conversion, energy efficiency, waste treatment,
greenhouse gas reduction, and similar innovations." (Emphasis supplied)
The Applicant's proposed investment in the Company is intended to
contribute positively to the national goal of reducing greenhouse gases through
voluntary industry specific efforts. The forestation projects that the Company
will fund have received strong backing from the DOE, Department of Agriculture
and Department of Interior. Moreover, the proposed investment in the Company
will provide the Applicant with a means to obtain carbon or CO2 reduction
credits, if and when such credits become available.
C. Compliance with Rule 54. The proposed transaction is also subject to
Rule 54. Rule 54 provides that, in determining whether to approve the issue or
sale of any securities for purposes other than the acquisition of any "exempt
wholesale generator" ("EWG") or "foreign utility company" ("FUCO") or other
transactions unrelated to EWGs or FUCOs, the Commission shall not consider the
effect of the capitalization or earnings of subsidiaries of a registered holding
company that are EWGs or FUCOs if the requirements of Rule 53(a), (b) and (c)
are satisfied. Under Rule 53(a), the Commission shall not make certain specified
findings under Sections 7 and 12 in connection with a proposal by a holding
company to issue securities for the purpose of acquiring the securities of or
other interest in an EWG, or to guarantee the securities of an EWG, if each of
the conditions in paragraphs (a)(1) through (a)(4) thereof are met, provided
that none of the conditions specified in paragraphs (b)(1) through (b)(3) of
Rule 53 exists.
Rule 53(a)(1): The Applicant's "aggregate investment" (as defined in
Rule 53(a)(1)) in EWGs as of June 30,2003 was $470,655,404, or approximately
26.5% of the Applicant's "consolidated retained earnings" (also as defined in
Rule 53(a)(1)) for the four quarters ended June 30, 2003 ($1,773,093,901). The
Applicant does not currently hold an interest in any FUCO.
Rule 53(a)(2): The Applicant will maintain books and records enabling
it to identify investments in and earnings from each EWG and FUCO in which it
directly or indirectly acquires and holds an interest. The Applicant will cause
----------
(1) See Michigan Consolidated Gas Co., 44 S.E.C. 361, 363-365 (1970), aff'd
444 F.2d 913 (D.C.Cir.1971).
(2) See Exelon Corp., Holding Co. Act Release No. 27256 (Oct. 19, 2000); and
CP&L Energy, Inc., Holding Co. Act Release No. 27284 (Nov. 27, 2000).
6
each domestic EWG in which it acquires and holds an interest, and each foreign
EWG and FUCO that is a majority-owned subsidiary, to maintain its books and
records and prepare its financial statements in conformity with U.S. generally
accepted accounting principles. All of such books and records and financial
statements will be made available to the Commission, in English, upon request.
Rule 53(a)(3): No more than 2% of the employees of Applicant's domestic
utility subsidiaries will, at any one time, directly or indirectly, render
services to EWGs and FUCOs.
Rule 53(a)(4): The Applicant will submit a copy of each
Application/Declaration relating to investments in EWGs and FUCOs and copies of
any related Rule 24 certificates, as well as a copy of the Applicant's Form U5S,
to each of the public service commissions having jurisdiction over the retail
rates of the Applicant's domestic utility subsidiaries.
In addition, the Applicant states that the provisions of Rule 53(a) are
not made inapplicable to the authorization herein requested by reason of the
occurrence or continuance of any of the circumstances specified in Rule 53(b).
Rule 53(c) is inapplicable by its terms.
ITEM 4. REGULATORY APPROVAL.
-------------------
No state commission, and no federal commission, other than this
Commission, has jurisdiction over the proposed transaction.
ITEM 5. PROCEDURE.
---------
The Commission has published a notice under Rule 23 with respect to the
filing of this Application/Declaration (Holding Co. Act Release No. 27699) and
no hearing has been requested. The Applicant requests that the Commission issue
an order approving the proposed transaction as soon as practicable. The
Applicant further requests that there should not be a 30-day waiting period
between issuance of the Commission's order and the date on which the order is to
become effective, hereby waives a recommended decision by a hearing officer or
any other responsible officer of the Commission, and consents to the assistance
of the Division of Investment Management in the preparation of the Commission's
decision and/or order, unless the Division of Investment Management opposes the
matters proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. Exhibits.
--------
A - Draft of Operating Agreement of PowerTree Carbon
Company, LLC (Previously filed)
B - None
C - Inapplicable
D - None
7
E - Inapplicable
F-1 - Opinion of Counsel for the Applicant (Previously
filed)
F-2 - Opinion of Morris, James, Hitchens & Williams LLP
(Previously filed)
G - Form of Federal Register Notice (Previously filed)
B. Financial Statements.
--------------------
(Deemed unnecessary because of the de minimis nature of the proposed
transaction)
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
None of the matters that are the subject of this
Application/Declaration involves a "major federal action" nor do such matters
"significantly affect the quality of the human environment" as those terms are
used in section 102(2)(C) of the National Environmental Policy Act. The
transaction that is the subject of this Application/Declaration will not result
in changes in the operation of the Applicant that will have an impact on the
environment. The Applicant is not aware of any federal agency that has prepared
or is preparing an environmental impact statement with respect to the
transaction that is the subject of this Application/Declaration.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this amended
statement to be signed on its behalf by the undersigned thereunto duly
authorized.
AMEREN CORPORATION
By: /s/ Steven R. Sullivan
------------------
Name: Steven R. Sullivan
Title: Vice President Regulatory Policy,
General Counsel and Secretary
Date: September 22, 2003
8