UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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):
January 20, 1998
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Illinois 1-3672 37-0211380
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
607 East Adams Street, Springfield, Illinois 62739
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (217) 523-3600
ITEM 5. Other Events
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Reference is made to Management's Discussion and Analysis under the
captions "Electric Industry Restructuring" and "Contingencies" in Exhibit 99-2
of Form 8-K dated December 31, 1997, to Form 8-K dated December 16, 1997 and to
Form 8-K dated November 24, 1997 filed by the Registrant with the Securities and
Exchange Commission for discussion of the potential impact to the Registrant of
the Electric Service Customer Choice and Rate Relief Law of 1997 (the "Act"),
which provides for utility restructuring in Illinois, and for information
regarding the coal contract restructuring with a major coal supplier.
In December 1997, the governor of Illinois signed electric industry
restructuring legislation which introduces competition for electric energy in
Illinois. The law includes a 5% rate decrease for electric residential
customers, beginning in August 1998. If the Registrant does not keep its rates
below the Midwest average, the Registrant would then be subject to additional
rate decreases in the years 2000 and 2002. The new law also includes the
phasing-in of retail direct access, which allows customers to choose their
electric generation supplier; the potential recovery of a portion of a utility's
stranded costs; and the option to eliminate the fuel adjustment clause, among
other provisions.
In a related matter, in November 1997, the Illinois Third District
Appellate Court reversed a December 1996 order of the Illinois Commerce
Commission ("ICC") related to the restructuring of a coal contract with a major
supplier. That ICC order, among other things, allowed recovery of a
restructuring payment and asssociated carrying cost through the fuel adjustment
clause. In December 1997, the Registrant requested a rehearing by the Court;
which was ultimately denied in January 1998. The Registrant expects to appeal
this decision to the Illinois Supreme Court.
After evaluating the impact of the new law, and taking into consideration
the recent appelate court decisions, the Registrant has determined that it will
be necessary to write-off its generation-related regulatory assets and
regulatory liablilties in the fourth quarter of 1997. The Registrant expects
this extraordinary charge to reduce earnings approximately $25 million, net of
income taxes.
On January 20, 1998, Ameren Corporation ("Ameren"), the parent corporation
of the Registrant, issued a news release stating, among other things, that
Ameren's 1998 earnings would be lower than expected 1997 earnings, after
excluding the effects of the extraordinary charge discussed above. A copy of
Ameren's January 20, 1998 news release has been filed with the Securities and
Exchange Commission as Exhibit 99 to a Form 8-K of Ameren dated January 20,
1998, and the contents of such news release are incorporated herein by
reference. The lower 1998 earnings expected of Ameren result from lower expected
earnings at Ameren's principal operating subsidiaries, which consist of the
Registrant and Union Electric Company ("UE"). However, the specific impact on
Ameren's expected 1998 earnings attributable to the Registrant, as opposed to
UE, has not been fully determined at this time.
Statements made in this filing 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 "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. Factors include, but are
not limited to, the effects of regulatory actions; changes in laws and other
governmental actions; competition; future market prices for electricity; average
rates for electricity in the Midwest; business and economic conditions; weather
conditions; fuel prices and availability; generation plant performance; monetary
and fiscal policies; and legal and administrative proceedings.
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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.
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
(Registrant)
By /s/ James C. Thompson
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James C. Thompson
Assistant Secretary
Date: January 20, 1998
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