Related Party Transactions

3 Months Ended

Mar. 31, 2013

Ameren and its subsidiaries have engaged in, and may in the future engage in, affiliate transactions in the normal course of business. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings.

Transactions between affiliates are reported as intercompany transactions on their financial statements, but are eliminated in consolidation for Ameren’s financial statements. For a discussion of our material related party agreements, see Note 14 - Related Party Transactions under Part II, Item 8, of the Form 10-K.

Put Option Agreement and Guaranty

On March 28, 2012, Genco entered into a put option agreement with AERG which gave Genco the option to sell to AERG all, but not less than all, of the Elgin, Gibson City, and Grand Tower gas-fired energy centers. The put option agreement required AERG to secure and maintain an Ameren guarantee of payment of contingent obligations under the agreement. Ameren provided such a guarantee on March 28, 2012.

On March 14, 2013, the put option agreement was novated and amended such that the rights and obligations of AERG under the agreement were assigned to and assumed by Medina Valley. The guarantee provided by Ameren was also modified to replace references to AERG with references to Medina Valley. The guarantee will remain in effect until either Medina Valley or Ameren satisfies all of the payment obligations under the put option agreement, or until the put option agreement is terminated and no further payments are owed by Medina Valley to Genco. On March 14, 2013, Genco exercised the option under the amended put option agreement with Medina Valley and received an initial payment of $100 million for the pending sale of the Elgin, Gibson City, and Grand Tower gas-fired energy centers to Medina Valley, which is subject to FERC approval. See Note 2 - Divestiture Transactions and Discontinued Operations for additional information.

Collateral Postings

Under the terms of the Illinois power procurement agreements entered into through a RFP process administered by the IPA, suppliers must post collateral under certain market conditions to protect Ameren Illinois in the event of nonperformance. The collateral postings are unilateral, meaning that only the suppliers would be required to post collateral. Therefore, Ameren Missouri and Marketing Company, as winning suppliers in the RFP process, may be required to post collateral. As of December 31, 2012, and March 31, 2013, there were no collateral postings required of Ameren Missouri or Marketing Company related to the Illinois power procurement agreements.

Marketing Company Sale of Trade Receivables to Ameren Illinois

In accordance with the Illinois Public Utilities Act, beginning in June 2012, Ameren Illinois is required to purchase alternative retail electric suppliers’ receivables relating to Ameren Illinois’ delivery service customers who elected to receive power supply from the alternative retail electric supplier. Marketing Company sells and Ameren Illinois purchases trade receivables relating to the power supply of residential customers using Marketing Company as their alternative retail electric supplier. Marketing Company has no continuing involvement with or control over the trade receivables after the sale is completed to Ameren Illinois, and neither company has any restrictions on the assets associated with these purchase and sale transactions. As of March 31, 2013, Ameren Illinois’ payable to Marketing Company for the purchase of trade receivables totaled $9 million. During the three months ended March 31, 2013, Ameren Illinois purchased $33 million of trade receivables from Marketing Company at a discount of less than $1 million. Marketing Company’s receivable from Ameren Illinois as well as Ameren Illinois’ payable to Marketing Company are eliminated in Ameren’s consolidated financial statements. After the New AER divestiture is complete, these transactions will no longer be eliminated in Ameren’s consolidated financial statements.

Parent Company Guarantees

In the ordinary course of business, Ameren (parent) enters into various agreements providing financial assurance to third parties on behalf of its subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit and reducing the amount of cash collateral required to be posted. These agreements guarantee performance by Ameren's subsidiaries of obligations already existing on Ameren's consolidated balance sheet.

Upon the divestiture of New AER, subject to certain exceptions, the transaction agreement requires Ameren (parent) to maintain its financial obligations with respect to all credit support provided to New AER as of the closing date of such divestiture and provide such additional credit support as required by contracts entered into prior to the closing date, in each case for up to 24 months after the closing. IPH shall indemnify Ameren for any payments it makes pursuant to these credit support obligations. IPH's indemnification obligation will be secured by certain AERG and Genco assets. In addition, Dynegy has provided a limited guarantee of $25 million to Ameren (parent) pursuant to which Dynegy will, among other things, guarantee IPH's indemnification obligations for a period of up to 24 months after the closing (subject to certain exceptions). See Note 2 - Divestiture Transactions and Discontinued Operations.

At March 31, 2013, Ameren had a total of $269 million in guarantees outstanding, which included:

•

$158 million related to Ameren's Merchant Generation segment, primarily for Marketing Company as support for physically and financially settled power transactions with its counterparties. As of March 31, 2013, this amount does not represent an incremental consolidated Ameren obligation; rather, it represents Ameren parental guarantees of subsidiary obligations to third parties, which may include affiliates, in order to allow the subsidiaries the flexibility needed to conduct business with counterparties without having to post other forms of collateral. Ameren's estimated exposure for obligations under transactions covered by these guarantees was $26 million at March 31, 2013, which represents the total amount Ameren (parent) could be required to fund based on March 31, 2013, market prices.


•	$33 million associated with the guarantee provided by Ameren for Medina Valley on March 14, 2013, relating to the amended put option agreement between Genco and Medina Valley. Genco exercised the put option in March 2013 and received an initial payment of $100 million. Genco advanced the initial payment amount it received into the non-state-regulated subsidiaries money pool.

•

$65 million provided to two clearing brokers acting as futures commission merchants for the clearing of certain power, natural gas, and fuels commodity transactions for AER. As of March 31, 2013, AER was transitioning from its existing futures commission merchant to a new futures commission merchant. As of May 1, 2013, following completion of this transition, only one guarantee for $25 million is required.


•	$13 million related to requirements for asset transactions, leasing, and other service agreements. At March 31, 2013, Ameren estimated it had no exposure to any of these guarantees.

Additionally, at March 31, 2013, Ameren had issued letters of credit totaling $37 million as credit support to certain subsidiaries.

Money Pools

See Note 4 - Short-term Debt and Liquidity for a discussion of affiliate borrowing arrangements.

The following table presents the impact on Ameren Missouri and Ameren Illinois of related party transactions for the three months ended March 31, 2013, and 2012. It is based primarily on the agreements discussed above and in Note 14 - Related Party Transactions under Part II, Item 8, of the Form 10-K, and the money pool arrangements discussed in Note 4 - Short-term Debt and Liquidity of this report.



			Three Months ended March 31
Agreement	Income Statement Line Item		Ameren Missouri		Ameren Illinois
Ameren Missouri power supply	Operating Revenues	2013	$	1	$ (a)
agreements with Ameren Illinois		2012	(b)		(a)
Ameren Missouri and Ameren Illinois	Operating Revenues	2013	5		(b)
rent and facility services		2012	5		(b)
Ameren Missouri and Genco gas	Operating Revenues	2013	(b)		(a)
transportation agreement		2012	(b)		(a)
Transmission services agreement	Operating Revenues	2013	(a)		6
with Marketing Company		2012	(a)		2
Total Operating Revenues		2013	$	6	$	6
		2012	5		2
Ameren Illinois power supply	Purchased Power	2013	$ (a)		$	26
agreements with Marketing Company		2012	(a)		87
Ameren Illinois power supply	Purchased Power	2013	(a)		1
agreements with Ameren Missouri		2012	(a)		(b)
Total Purchased Power		2013	$ (a)		$	27
		2012	(a)		87
Ameren Services support services	Other Operations and Maintenance	2013	$	31	$	25
agreement		2012	28		23
Insurance premiums^(c)	Other Operations and Maintenance	2013	(b)		(a)
		2012	(b)		(a)
Total Other Operations and		2013	$	31	$	25
Maintenance Expenses		2012	28		23
Money pool borrowings (advances)	Interest Charges	2013	$ (b)		$ (b)
		2012	—		(b)


(a)	Not applicable.


(b)	Amount less than $1 million.


(c)	Represents insurance premiums paid to Missouri Energy Risk Assurance Company, an affiliate for replacement power, property damage and terrorism coverage.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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+ Details

Ameren Illinois Co 10-Q