UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
September 24, 1998
UNION ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Missouri 1-2967 43-0559760
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222
ITEM 5. OTHER EVENTS
In March 1998, Ameren Corporation, the parent company of Union Electric Company
(the Registrant), announced plans to reduce its operating expenses, including
plans to eliminate approximately 400 employee positions by mid-1999 through a
hiring freeze and a targeted separation plan (the Plan). (See the Registrant's
Form 10-Q for the quarterly period ended March 31, 1998.) In July 1998, Ameren
Corporation offered separation packages to employees whose positions are to be
eliminated. In the third quarter of 1998, the Registrant will record a one-time
charge of $18 million (which will reduce earnings $11 million) representing its
share of costs incurred to implement the Plan.
The Registrant expects that the hiring freeze and targeted separation plan will
reduce its operating expenses by approximately $7-$11 million in 1998 and
$14-$18 million annually thereafter.
In July 1997, the United States Environmental Protection Agency (EPA) issued
final regulations revising the National Ambient Air Quality Standards for ozone
and particulate matter. At that time, specific emission control requirements
were still being developed. In September 1998, the EPA issued a final rule
pertaining to nitrogen oxide emissions, which will require significant
additional reductions in emissions from coal-fired boilers. Missouri (where all
of the Registrant's coal-fired power plant boilers are located) is included in
the area targeted for nitrogen oxide emissions reductions as part of the EPA's
regional control program. Reduction requirements in nitrogen oxide emissions
from the Registrant's coal-fired boilers will exceed 75% from 1990 levels by the
year 2003. Because of the magnitude of these additional reductions, the
Registrant will be required to incur significantly higher capital costs to meet
future compliance obligations for its coal-fired boilers or purchase power from
other sources, either of which could have significantly higher operating
expenses associated with compliance. The significant nitrogen oxide emissions
reductions already achieved on several of the Registrant's coal-fired power
plants will help to reduce the costs of compliance with this regulation.
It is not yet possible to determine the exact magnitude of the nitrogen oxide
emission reductions required on the Registrant's power plants because each State
has up to one year to develop a plan to comply with the EPA rule. However,
preliminary analysis of the regulations indicate that selective catalytic
reduction technology will be required for some of the Registrant's units, as
well as other additional controls.
The full details of these requirements are under study by the Registrant.
Currently, the Registrant estimates that its additional capital expenditures to
comply with these regulations could range from $125-$175 million over the period
from 1999 to 2002. Associated operations and maintenance expenditures could
increase $5-$8 million annually, beginning in 2003. The Registrant will explore
alternatives to comply with these new regulations in order to minimize, to the
extent possible, its capital costs and operating expenses. At this time, the
Registrant is unable to predict the ultimate impact of these revised air quality
standards on its future financial condition, results of operations or liquidity.
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; changes in future technologies; business
and economic conditions; weather conditions; fuel prices and availability;
generation plant performance; monetary and fiscal policies; and legal and
administrative proceedings.
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.
UNION ELECTRIC COMPANY
(Registrant)
By /s/ Warner L. Baxter
-------------------------
Warner L. Baxter
Vice President and Controller
Date: October 8, 1998