Second Amended
EXHIBIT B-4
GENERAL SERVICES AGREEMENT
Between
AMEREN SERVICES COMPANY
and
AMEREN CORPORATION, UNION ELECTRIC COMPANY,
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, AND
CIPSCO INVESTMENT COMPANY
THIS AGREEMENT, made and entered into this _____ day of _________ 1998, by
and between the following Parties: AMEREN SERVICES COMPANY (hereinafter
sometimes referred to as "Service Company") , a Missouri corporation; and AMEREN
CORPORATION ("Ameren Corporation"), a Missouri Corporation; UNION ELECTRIC
COMPANY ("UE"), a Missouri corporation; CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
("CIPS"), an Illinois corporation, and CIPSCO INVESTMENT COMPANY, ("CIC"), an
Illinois corporation, (hereinafter sometimes referred to collectively as "Client
Companies");
WITNESSETH:
WHEREAS, Client Companies, including Ameren Corporation, which has filed
for registration under the terms of the Public Utility Holding Company Act of
1935 (the "Act") and its other subsidiaries, desire to enter into this agreement
providing for the performance by Service Company for the Client Companies of
certain services more particularly set forth herein; and
WHEREAS, Service Company is organized, staffed and equipped and has filed
with the Securities and Exchange Commission ("the SEC") to be a subsidiary
service company under Section 13 of the Public Utilities Holding Company Act of
1935 (the "Act") to render
to Ameren Corporation, and other subsidiaries of Ameren Corporation, certain
services as herein provided; and
WHEREAS, to maximize efficiency, and to achieve merger related savings, the
Client Companies desire to avail themselves of the advisory, professional,
technical and other services of persons employed or to be retained by Service
Company, and to compensate Service Company appropriately for such services,
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:
Section 1. Agreement to Furnish Services
----------------------------------------
Service Company agrees to furnish to Client Companies and their
subsidiaries, if any, upon the terms and conditions herein provided, the
services hereinafter referred to and described in Section 2, at such times, for
such period and in such manner as Client Companies may from time to time
request. Service Company will keep itself and its personnel available and
competent to render to Client Companies such services so long as it is
authorized so to do by the appropriate federal and state regulatory agencies.
Section 2. Services to be Performed
------------------------------------
The services to be provided by Service Company hereunder may, upon request,
include the services as set out in Schedule 1, attached hereto and made a part
hereof. A revised Schedule I will be provided on an annual basis.
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In addition to the Services set out in Schedule 1, Service Company shall
render advice and assistance in connection with such other matters as Client
Companies may request and Service Company determines it is able to perform with
respect to Client Companies' business and operations.
Section 3. Compensation of Service Company
-------------------------------------------
As compensation for such services rendered to it by Service Company, Client
Companies hereby agree to pay to Service Company the cost of such services,
computed in accordance with applicable rules and regulations (including, but not
limited to, Rules 90 and 91) under the Act and appropriate accounting standards.
Compensation to be paid by Client Companies shall include direct charges
and Client Companies' fairly allocated pro rata share of certain of Service
Company's costs, determined as set out on Schedule 2, attached hereto and made a
part hereof.
Section 4. Securities and Exchange Commission Rules
----------------------------------------------------
It is the intent of the Parties that the determination of the costs as used
in this Agreement shall be consistent with, and in compliance with the rules and
regulations of the SEC, as they now read or hereafter may be modified by the
Commission.
Section 5. Service Requests
----------------------------
Services will be performed in accordance with a Service Request system,
consisting of work orders established to capture
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the various types of costs incurred by Service Company. Costs will be charged to
the appropriate service requests, which will then be the basis for the billing
of costs to Client Companies.
Section 6. Payment
-------------------
Payment shall be by making remittance of the amount billed or by making
appropriate accounting entries on the books of the companies.
Payment shall be accomplished on a monthly basis, and remittance or
accounting entries shall be completed within 60 days of billing.
Section 7. Ameren Corporation
------------------------------
Except as authorized by rule, regulation, or order of the Securities and
Exchange Commission, nothing in this Agreement shall be read to permit Ameren
Corporation, or any person employed by or acting for Ameren Corporation, to
provide services for other Parties, or any companies associated with said
Parties.
Section 8. Client Companies
----------------------------
Except as limited by Section 7, nothing in this Agreement shall be read to
prohibit Client Companies or their subsidiaries from furnishing to other Client
Companies or their subsidiaries services herein referred to, under the same
conditions and terms as set out for Service Company.
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Section 9. Effective Date and Termination
------------------------------------------
This Agreement is executed subject to the consent and approval of all
applicable regulatory agencies, and if so approved in its entirety, shall become
effective as of the date the merger between Union Electric and CIPSCO is
consummated, and shall remain in effect from said date unless terminated by
mutual agreement or by any Party giving at least sixty days' written notice to
the other Parties prior to the beginning of any calendar year, each Party fully
reserving the right to so terminate the Agreement.
This Agreement may also be terminated to the extent that performance may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the making of this Agreement.
Section 10. Assignment
-----------------------
This Agreement and the rights hereunder may not be assigned without the
mutual written consent of all Parties hereto.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and attested by their authorized officers as of the day and year first
above written.
AMEREN SERVICES COMPANY
By______________________________
Title___________________________
ATTEST:
By____________________________
Title_________________________
AMEREN CORPORATION
By______________________________
Title___________________________
ATTEST:
By____________________________
Title_________________________
UNION ELECTRIC COMPANY
By______________________________
Title___________________________
ATTEST:
By____________________________
Title_________________________
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CENTRAL ILLINOIS PUBLIC SERVICE CO.
By______________________________
Title___________________________
ATTEST:
By____________________________
Title_________________________
CIPSCO INVESTMENT COMPANY
By______________________________
Title___________________________
ATTEST:
By____________________________
Title_________________________
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Schedule 1
Page 1 of 9
December 18, 1997
DESCRIPTION OF EXPECTED SERVICES
TO BE PROVIDED BY AMEREN SERVICES AND
EXPECTED DIRECT COST ALLOCATION FACTORS
Description of Expected Services to be Provided
A description of the expected services to be provided by Ameren Services is
detailed below. Identifiable costs for all of the functional organizations
listed below will be directly charged to Ameren Corporation and its
subsidiaries, whenever possible.
For costs that cannot be directly assigned or distributed, the expected direct
cost allocation factors are reflected below for each Ameren Services department.
a) Building Service
Description - Provide facility management services for owned and leased
facilities, excluding power plants. To the extent that leasing arrangements
are established between Ameren Services and/or Ameren Corporation and its
subsidiaries, lease costs will include rent for space occupied and
applicable services, such as operation and maintenance of structures,
capital improvements, interior space planning, security and janitorial. As
appropriate, lease costs will be allocated based on square feet occupied
and the allocation factors listed below.
Expected Allocation Factors - 1) number of employees; 2) operations and
maintenance labor; 3) total capitalization; and 4) total assets.
b) Controller's
Description - Perform all accounting services necessary to properly
maintain and report on the books and records of Ameren and its
subsidiaries. Provide investor relations services.
Expected Allocation Factors- 1) composite*; 2) total capitalization; and 3)
total assets
c) Corporate Communications
Description - Develop strategies for advertising and marketing efforts,
develop employee communication programs, coordinate community relations
efforts and develop policies and procedures for media relations.
Schedule 1
Page 2 of 9
December 18, 1997
Expected Allocation Factors - 1) composite*; 2) total capitalization; and
3) total assets
d) Corporate Planning
Description - Provide rate engineering, interchange marketing, resource
planning and business analysis services.
Expected Allocation Factors - 1) composite*; 2) kwh sales; 3) peak load
[electric]; 4) total capitalization; and 5) total assets
e) Customer Services/Division Support
Description - Answer customer inquiries pertaining to electric/gas service
usage and perform credit activities. Provide technical support relating to
planning, engineering, constructing and operating the distribution and
transmission systems. Provide technical support and maintenance of
protective relay schemes, station meter work, system testing and data
acquisition systems.
Expected Allocation Factors - 1) number of customers; 2) number of
employees; and 3) operations and maintenance labor
f) Economic Development
Description - Provide community and business development services, as well
as natural gas development services. Analyze community and business
development opportunities.
Expected Allocation Factors - 1) number of customers; 2) sales [kwh and
dekatherm]; 3) total capitalization; and 4) total assets
g) Energy Supply
Coordinate the use of the generating, transmission and interconnection
facilities to provide economical and reliable energy.
Expected Allocation Factors - 1) kwh sales
Schedule 1
Page 3 of 9
December 18, 1997
h) Engineering and Construction
Description - Provide professional services related to engineering studies,
design, procurement, planning, building and management of projects. Study
technology that may reduce costs of producing, delivering and using
electricity.
Expected Allocation Factors - 1) peak load [electric]; 2) generating
capacity; and 3) construction expenditures
i) Environmental Services & Safety
Description - Perform analysis and advocacy of regulatory and legislative
issues in the areas of environment, health and safety. Communicate final
regulatory requirements to operating groups. Provide assistance and support
and compliance review in meeting those requirements. Oversee hazardous
substance site investigation and remediation activities.
Expected Allocation Factors - 1) number of employees; 2) generating
capacity; 3) operations and maintenance labor; and 4) construction
expenditures
j) Executive
Description - Provide executive management duties for all applicable
activities at the department, function and officer levels
Expected Allocation Factors - 1) total capitalization; 2) total assets; and
3) sales [kwh and dekatherm]
k) Fossil Fuel Procurement
Description - Provide resources necessary to procure fuel for the fossil
power plants and minimize production costs.
Expected Allocation Factors - 1) kwh sales
l) Gas Supply
Description - Provide gas supply and pipeline capacity procurement and
management services. Develop policies, procedures and standards which
govern the design, construction and operation of the gas systems.
Schedule 1
Page 4 of 9
December 18, 1997
Expected Allocation Factors - 1) dekatherm sales; 2) gas throughput
[includes transportation]; and 3) peak load [gas]
m) General Counsel
Description - Provide general legal advice related to all applicable
activities and legal services in regards to legislative activities,
regulatory agencies and security matters. Make regulatory filings, maintain
minutes of the board of directors, conduct stockholder meetings and procure
property and casualty insurance bonds.
Expected Allocation Factors - 1) composite*; 2) total capitalization; and
3) total assets
n) Human Resources
Description - Administer and negotiate employee benefits including
pensions, major medical, long-term disability, life insurance, defined
contribution plans, executive benefit and flexible spending plans. Provide
employment services, including required regulatory reporting and
maintenance of personnel records. Provide employee training and
communications services.
Expected Allocation Factors - 1) number of employees; 2) total
capitalization; 3) total assets; and 4) operation and maintenance labor
o) Industrial Relations
Description - Negotiate, represent and administer provisions of labor
agreements applicable to unions representing union employees.
Expected Allocation Factors - 1) number of employees; and 2) operation and
maintenance labor
p) Information Services
Description - Provide for the development and operation of computer
software, telecommunications and other equipment used to conduct business
and engineering activities. Maintain all billing records and process
customer meter readings.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4) CPU cycles; and 5) operation and maintenance labor
Schedule 1
Page 5 of 9
December 18, 1997
q) Internal Audit
Description - Audit company operations, perform operational and
productivity reviews, review justifications for capital projects and
perform quality assurance reviews.
Expected Allocation Factors -1) composite*; 2) number of customers; 3)
number of employees; and 4) operation and maintenance labor
r) Marketing
Description - Provide marketing services including account management,
program development, market research and customer energy services.
Expected Allocation Factors - 1) sales [kwh and dekatherm]; and 2) total
assets
s) Merger Coordination
Description - Monitor programs to achieve savings, merger costs and
position reductions as they relate to the implementation plans.
Expected Allocation Factors - 1) composite*; 2) total capitalization; and
3) total assets
t) Motor Transportation
Description - Provide engineering, support, and mechanical servicing of
vehicles, procurement of vehicles and safety and training programs.
Expected Allocation Factors - 1) number of vehicles
u) Purchasing
Description - Provide procurement of goods and services other than fuel.
Provide materials inventory management services.
Expected Allocation Factors - 1) composite*; 2) total assets; and 3)
construction expenditures
Schedule 1
Page 6 of 9
December 18, 1997
v) Real Estate
Description - Acquire necessary land rights and permits including
coordination of site selection. Maintain existing land rights while
permitting licenses and leases to minimize investment or costs of holding
property.
Expected Allocation Factors - 1) composite*; 2) number of customers; and 3)
total assets
w) Stores
Description - Provide clerical, stenographic, administrative and Electronic
Data systems support. Provide engineering support and manage and direct
stores operations.
Expected Allocations Factors - 1) composite*
x) Tax
Description - Research and consult on tax issues in connection with
federal, state and local tax compliance and planning matters, including the
preparation and filing of returns.
Expected Allocation Factors - 1) composite*; 2) current tax expense; 3)
total capitalization; and 4) total assets
y) Treasurer's
Description - Provide treasury operation, mailing, financial planning,
investments, and executive payroll and pension disbursement services.
Expected Allocation Factors - 1) composite*; 2) number of customers; 3)
number of employees; 4) total capitalization; and 5) total assets
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
Schedule 1
Page 7 of 9
December 18, 1997
ALLOCATION FACTORS
The following allocation factors will be utilized as outlined above.
Number of Customers - Based on the number of customers (electric and/or gas) at
the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Sales - Based on the sales volume (kwh and/or dekatherms) for the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
Number of Employees - Based on the number of employees (contract and/or
non-contract, or electric operating and/or gas operating) at the end of the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Composite - Based on an equal weighting Sales (kwh & dekatherm), Number of
Customers (total), and Number of Employees (total) allocation factors. The
numerator of which is the simple average of the above three factors for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually and/or at such time as may be required
due to a significant change in circumstances.
Operations & Maintenance Labor - Based on the Operations & Maintenance Labor
(electric and/or gas) for the most recent calendar year. The numerator of which
is for an Operating Company or an affected affiliate and the denominator of
which is for all Operating Companies and affected affiliate companies. This
ratio will be determined annually, and/or at such time as may be required due to
a significant change in circumstances.
Revenues - Based on revenues (electric and/or gas) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and/
or affected affiliate companies. This ratio will be determined annually, or at
such time as may be required due to a significant change in circumstances.
Schedule 1
Page 8 of 9
December 18, 1997
Total Capitalization - Based on total capitalization (total common stockholder's
equity, preferred stock, and long term debt) at the end of the most recent
calendar year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually and/or at
such time as may be required due to a significant change in circumstances.
Total Assets - Based on total assets at the end of the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Construction Expenditures - Based on construction expenditures for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Peak Load (electric) - Based on the highest monthly maximum megawatt load
(60-minute integration) for the most recent calendar year. The numerator of
which is for an Operating Company and the denominator of which is for all
Operating Companies. This ratio will be determined annually, and/or at such time
as may be required due to a significant change in circumstances.
Peak Load (gas) - Based on the highest daily send out in therms (excluding
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company and the denominator of which is for all Operating
Companies. This ratio will be determined annually, and/or at such time as may be
required due to a significant change in circumstances.
Generating Capacity (nameplate) - Based on installed capacity nameplate ratings
at the end of the most recent calendar year. The numerator of which is for an
Operating Company and the denominator of which is for all Operating Companies.
This ratio will be determined annually, and/or at such time as may be required
due to a significant change in circumstances.
Gas Throughput - Based on gas throughput in dekatherms (sales and
transportation) for the most recent calendar year. The numerator of which is for
an Operating Company. The denominator of which is for all Operating Companies.
This ratio will be
Schedule 1
Page 9 of 9
December 18, 1997
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
CPU Cycles - Based on cpu cycles (by application) for the most recent calendar
year. The numerator of which is for an Operating Company or an affected
affiliate company. The denominator of which is for all Operating Companies and
affected affiliate companies. This ratio will be determined annually, and/or at
such time as may be required due to a significant change in circumstances.
Current Tax Expense - Based on taxes charged (income and other) for the most
recent calendar year. The numerator of which is for an Operating Company or an
affected affiliate company. The denominator of which is for all Operating
Companies and affected affiliate companies. This ratio will be determined
annually, and/or at such time as may be required due to a significant change in
circumstances.
Number of Vehicles - Based on number of vehicles at the end of the most recent
calendar year. The numerator of which is for an Operating Company and the
denominator of which is for all Operating Companies. This ratio will be
determined annually, and/or at such time as may be required due to a significant
change in circumstances.
In addition to the allocation factors listed above, appropriate direct
allocations will be made for costs benefiting a single affiliate. Indirect
allocations will also be made to all affiliates, including non-regulated
companies and Ameren Corporation.
It may be necessary to allocate a percentage of total costs allocated to
non-regulated companies or Ameren Corporation (see below). This will be done as
a sub-factor of existing allocation factors. For example, allocating a
percentage of customer service costs to non-regulated companies and allocating
remaining costs based on number of customers. Also, allocating a percentage of
video presentation costs to Ameren Corporation and allocating remaining costs
based on capitalization.
Non-Regulated - Based on a percentage of total costs allocated to non-regulated
companies when existing allocation methods do not adequately reflect the level
of services or benefits received. After allocating this percentage of total
costs to non-regulatory company, the remaining costs will be allocated to
Ameren Corporation and/or its subsidiaries, as appropriate, based upon one of
the factors above.
Corporate - Based on a percentage of total costs allocated to Ameren Corporation
(AMC) when existing allocation methods do not adequately reflect the level of
services or benefits received. After allocating this percentage of total costs
to AMC, the remaining costs will be allocated based upon one of the factors
above.
Schedule 2
Page 1 of 1
December 18, 1997
AMEREN SERVICES
EXPECTED ALLOCATED DIRECT COST FACTORS
ALLOCATION NUMBER DESCRIPTION
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001A Composite*
002A Number of customers
002B Number of gas transportation customers
002C Number of electric customers
002D Number of gas customers
002E % to unregulated company/number of customers
003A Sales (kwh and dekatherm)
003B Kwh sales
003C Dekatherm sales
004A Number of employees
004B Number of contract employees
004C Number of non-contract employees
004D Number if AMS & UEC employees
005A O&M labor
006A Total revenues
006B Electric revenues
006C Gas revenues
007A Total capitalization
007B % to Ameren Corporation/total capitalization
008A Total assets
009A Construction expenditures
010A Peak load (electric)
010B Peak load (gas)
011A Generating capacity
012A Gas throughput (includes transportation)
013A CPU cycles - mainframe
013B CPU cycles - UNIX
015A Current tax expense
016A Number of vehicles
*Composite consists of the following three factors (equal weight to each
factor):
Sales (kwh and dekatherm)
Number of customers
Number of employees
