EARNINGS FOR UE ARE DOWN; MILD WEATHER LOWERS DEMAND FOR USAGE

ST. LOUIS - Despite a three-fold increase in fourth quarter earnings, Union Electric Company says its overall 1992 earnings declined more than five percent from the year earlier.

Most of the decline was blamed on unusually mild weather last summer, which reduced the need for electricity to power air conditioning. Last summer was Cape Girardeau's fifth coolest in 47 years. In addition, the cost of refueling the company's Callaway nuclear plant added more than 20 cents a share to expenses in 1992.

"Unusually mild weather caused a significant drop in kilowatt hour sales to residential customers. Despite an increase in industrial sales, overall KWH sales fell more than two percent for the year," explained Donald E. Brandt, senior vice president for finance and accounting.

Union Electric earnings for the final quarter of 1992 totaled $33 million, or 33 cents a share, compared to $11 million, or 11 cents a share, for the year ago quarter. Earnings for the year just ended were $289 million, or $2.83 a share, versus record earnings of $307 million, or $3.01 a share for 1991.

UE's gain from the recent sale of its Iowa-Northern Illinois retail properties contributed about $18 million, or 18 cents a share, to 1992 earnings. But company officials said the decline in electrical sales because of the mild summer weather and refueling of its Callaway nuclear plant offset the sale. The Callaway plant refuels on an 18-month cycle, so 1992, unlike previous years, included these expenses.

Kilowatt hour sales to residential customers decreased nine percent, and commercial electrical sales fell one percent. A combination of an improving economy and new customers in Southeast Missouri raised UE's industrial electrical sales by six percent in year-to-year comparisons, company officials said.

Most of the decline in electrical sales came during the company's third quarter (July-September) period, when UE residential customers, including those in Southeast Missouri, used 13 percent fewer kilowatt hours than they did during the same quarter of 1991.

According to Al Robertson, climatologist and professor of earth science at Southeast Missouri State University, the average temperature for the 92-day period (June 1-Aug. 31) of last summer was 75 degrees, down nearly 2 degrees from the long-term average of 77.6 degrees.

Robertson said August, normally one of the warmest months of summer, was unusually cool. The August 1992 temperature average was 73.6 degrees was down nearly 4 degrees from the long-term average, making it the third coolest August on record here.

To illustrate the unusually cool summer of 1992 another way, Robertson said the number of cooling degree days in Cape Girardeau during the three-month period was down a significant 8.5 percent below normal.

A cooling degree day (CDD) is defined as the difference between the actual daily average temperature and the base temperature of 65 degrees. Robertson explained 65 degrees is considered the ideal temperature for most people when neither air conditioning nor heating is needed in the home.

During June 1992, the number of CDDs dropped 22 percent. There was a slight 2 percent increase in July, but in August, the number of CDDs plunged over 30 percent.

The decline in sales of electricity had no impact on the UE's "dollar more" voluntary contribution program to help others with their utility bills. In fact, the company reported it was a record year for the program.

In 1992, UE customers donated $605,000 to the "dollar more" fund. The company added an additional $497,000 contribution, for a total of $1.1 million. A spokesman said the "dollar more" fund was "well used" last year because of the tough economy and the number of unemployed workers.

Despite the decrease in 1992 earnings, UE's chairman and chief executive officer, William E. Cornelius, said, "We're pleased with the year's results. UE employees met cost control objectives, we're meeting our targets for new sulfur dioxide and nitrogen oxide emission standards, and we completed two major property transactions.

"Our most noteworthy success was decreasing our Missouri customer rates for the second time in just over two years and, simultaneously, increasing service reliability," he added.

UE customers will also get another break on their monthly utility this year. A 2.5 percent decrease in electrical rates went into effect in January.

Union Electric provides electric service to more than 1.1 million customers in a 24,500-square-mile territory that includes all of eastern and southeastern Missouri and southwestern Illinois. The company provides natural gas to 110,000 customers.