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Ameren Energy Resources Signs FutureGen 2.0 Cooperative Agreement
Repowered Unit at Meredosia Power Plant Would Be Designed For Permanent Carbon Dioxide Capture and Storage

Sep 28, 2010

ST. LOUIS, Sept. 28 /PRNewswire-FirstCall/ -- Ameren Energy Resources Company, LLC (AER) —the holding company for merchant generation for Ameren Corporation (NYSE: AEE)—today announced that it has signed a cooperative agreement with the U.S. Department of Energy (DOE) that could lead to repowering an oil-fired unit at AER's Meredosia Power Plant near Jacksonville, Ill.  This would create the world's first, full-scale, oxy-combustion coal-fired plant designed for permanent carbon dioxide (CO2 ) capture and storage.

Capture and storage of the greenhouse gas CO2 is critical to reducing these power plant emissions, which have been linked to global climate change.  The project is part of the initiative known as FutureGen 2.0, which calls for transporting the captured CO2 over a new regional pipeline to a new, deep saline injection storage facility to be developed by others in Illinois.  It is estimated that FutureGen 2.0 could eventually bring as many as 900 jobs to central Illinois.

Now that this agreement has been signed, Ameren and its partners, The Babcock & Wilcox Company (B&W) and Air Liquide Process & Construction, Inc.  (Air Liquide), expect to spend the next nine months completing Phase 1 of the proposed project, which includes the initial engineering, design and economic analysis for repowering this unit.  In addition, during Phase 1, the partners will validate the project's scope, cost, schedule and commercial viability.  

If Phase 1 results determine the project to be technically and commercially sound, then DOE would authorize Phase 2 of the project, which would include detailed engineering design, schedule and cost analysis as well as environmental studies to support the National Environmental Policy Act (NEPA) process and effluent permitting.

In parallel with the Phase 2 studies, the partners will approach the Illinois legislature for a change in state law to establish a cost recovery mechanism for the project.  In addition, project leaders will address the issue of long-term liability with respect to the CO2 pipeline and sequestration, to be supplied by participants other than Ameren and its partners.

Successful completion of Phases 1 and 2 studies and enactment of the supporting legislation will be necessary before Phase 3 is authorized.

Phase 3 will include the procurement and construction activities necessary to repower the Meredosia Plant's 200-megawatt Unit 4.  If approved by the Ameren Board of Directors, these activities could begin in the second quarter of 2012 with a target completion date in the fourth quarter of 2015.  

In August, the three companies announced that they had been selected by the DOE to negotiate the installation of this technology, which is designed to produce clean energy from coal by capturing and storing approximately 1.3 million tons of CO2 each year, or 90 percent of the plant's expected CO2  emissions.

The AER plant would use an innovative coal-fired oxy-combustion CO2  capture technology, designed to use oxygen, instead of air, during combustion, removing the flyash, nitrogen oxide, and sulfur dioxide and leaving the flue gas composed of nearly pure CO2, suitable for compression and storage in deep geologic formations.  B&W and Air Liquide have successfully pilot-tested coal-fired oxy-combustion at B&W's research facility in Alliance, Ohio, supported by Air Liquide's technology developments at its research and development facility in Newark, Del.

"We are excited to move forward with our partners—B&W and Air Liquide—on the next step toward building a near-zero emission facility—a generating plant that will serve as an invaluable testing ground for these critical new clean energy technologies," said Charles Naslund, president and chief executive officer of AER.

About Ameren

Ameren's non-rate-regulated operations include AER's Ameren Energy Generating Company's and Ameren Energy Resources Generating Company's six coal-fired plants plus an 80 percent ownership in a seventh coal-fired plant, in addition to multiple natural gas-fired units and Ameren Energy Marketing, an energy marketing and trading operation. With assets of approximately $24 billion, Ameren companies serve 2.4 million electric customers and one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois. Ameren owns a diverse mix of electric generating plants strategically located in its Midwest market with a generating capacity of 16,900 megawatts.

Forward-looking Statements

Statements in this release not based on historical facts are considered "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 the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed elsewhere in this release and in our filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:

  • the effects of, or changes to, the Illinois power procurement process;
  • changes in laws and other governmental actions, including monetary and fiscal policies;
  • changes in laws or regulations that adversely affect the ability of electric distribution companies and other purchasers of wholesale electricity to pay their suppliers, including Ameren Energy Marketing Company;
  • the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at both the state and federal levels, and the implementation of deregulation, such as occurred when the electric rate freeze and power supply contracts expired in Illinois at the end of 2006;
  • the effects on demand for our services resulting from technological advances, including advances in energy efficiency and distributed generation sources, which generate electricity at the site of consumption;
  • increasing capital expenditure and operating expense requirements and our ability to recover these costs in a timely fashion in light of regulatory lag;
  • the effects of participation in the Midwest Independent Transmission System Operator, Inc.;
  • the cost and availability of fuel such as coal and natural gas used to produce electricity;
  • the effectiveness of our risk management strategies and the use of financial and derivative instruments;
  • prices for power in the Midwest, including forward prices; business and economic conditions, including their impact on interest rates, bad debt expense, and demand for our products;
  • disruptions of the capital markets or other events that make the Ameren companies' access to necessary capital, including short-term credit and liquidity, impossible, more difficult, or more costly;
  • our assessment of our liquidity;
  • the impact of the adoption of new accounting guidance and the application of appropriate technical accounting rules and guidance;
  • actions of credit rating agencies and the effects of such actions;
  • the impact of weather conditions and other natural phenomena on us and our customers;
  • the impact of system outages;
  • generation, transmission, and distribution asset construction, installation and performance;
  • impairments of long-lived assets or goodwill;
  • the effects of strategic initiatives, including mergers, acquisitions and divestitures;
  • the impact of current environmental regulations on utilities and power generating companies and the expectation that more stringent requirements, including those related to greenhouse gases and energy efficiency, will be enacted over time, which could limit or terminate the operation of certain of our generating units, increase our costs, result in an impairment of our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect;
  • labor disputes, workforce reductions, future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
  • the inability of our counterparties and affiliates to meet their obligations with respect to contracts, credit facilities and financial instruments;
  • the cost and availability of transmission capacity for the energy generated by the Ameren companies' facilities or required to satisfy energy sales made by the Ameren companies;
  • legal and administrative proceedings; and
  • acts of sabotage, war, terrorism or intentionally disruptive acts.
  • the distribution of AmerenEnergy Resources Generating Company common stock to Ameren and the subsequent contribution of the AmerenEnergy Resources Generating Company stock to Ameren Energy Resources Company, LLC.

Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.

SOURCE Ameren Energy Resources Company, LLC


 
 
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