Seventeen months after they proposed marriage, Union Electric
Co. and CIPSCO Inc. are chafing at delays in getting to the altar.
Having pushed the merger's closing date back 12 months to late
1997, the utilities recently wrote that the federal approval
process is "simply too long and extremely prejudicial."
UE and CIPSCO representatives soon will get a chance to say in
person what they already have told federal regulators by letter.
The Federal Energy Regulatory Commission (FERC) begins hearings
Jan. 29. A preliminary ruling is due by April 30 on the creation of
a new holding company, Ameren Corp. UE and CIPSCO would retain
separate operating identities and headquarters in St. Louis and
Springfield, Ill., respectively.
The utilities, which also need approval from Illinois and
Missouri regulators, say delays are hurting efforts to produce the
savings they had promised when they announced the merger - $760
million in savings over 10 years.
"It is becoming more and more difficult to operate the
companies separately on a stand-alone basis as time drags on," the
utilities wrote to the FERC in early November. The agency has not
The utilities said 252 employees had left both companies in the
12 months ended Sept. 30. Although UE and CIPSCO predicted that the
merger would cost about 300 jobs through attrition, they say
regulatory delays have created work force problems.
"It's not affecting service to our customers, but it is
beginning to pinch us in terms of staff," William E. Jaudes, UE's
general counsel, said last week. "It's hard to attract quality
people for temporary work."
The merger will consolidate white-collar functions like
accounting, investor relations and information services.
But people who know that their jobs won't exist after the
merger - or who aren't happy with post-merger assignments - have
found jobs elsewhere or have retired, leaving UE and CIPSCO to
scramble to fill their places.
UE isn't sure whether new federal regulations announced in
December will accelerate the merger review. The FERC said the rules
will hasten federal approval of merger proposals - which have
multiplied dramatically in recent years - enabling deals to be
evaluated within 15 months.
"The new guidelines are more than 70 pages long," Jaudes said.
"Based on the summaries we've seen, we don't think they will cause
any problems. I don't know whether it will speed things up or even
apply to us because we filed our application before the guidelines
The Edison Electric Institute, a trade group, also wonders
about the potential impact of the new rules. "FERC hasn't commented
on whether merger proposals filed beforehand would be subject to
the new rules," said Mary Kenkel, the group's director of media