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Ameren Receives Federal Energy Regulatory Commission Approval To Acquire Illinois Power, Transfer Generation Units To Regulated Company
Ameren Corporation (NYSE: AEE) received Federal Energy Regulatory Commission (FERC) approval of its application to acquire Illinois Power Company (IP) and a 20% interest in Electric Energy, Inc., (EEI) from Dynegy Inc. (NYSE: DYN) and approval of the transfer of two generating plants from a non rate-regulated entity to a rate-regulated entity. These actions were taken at the FERC's July 28 agenda session.

Ameren announced on Feb. 3 the proposed $2.3 billion purchase of the stock of Decatur, Ill.-based IP and Dynegy's 20 percent interest in EEI, owner of a Joppa, Ill., coal-fired power plant.

With its July 28 order, the FERC also approved a power supply contract for the annual purchase by IP of up to 2,800 megawatts of electricity from a subsidiary of Dynegy. That power supply contract would extend through 2006 and is expected to supply about 70 percent of IP's electric customer requirements. The FERC order also granted approval for IP to join the Midwest Independent Transmission System Operator Inc. (MISO)--an approval that will pave the way for Ameren to bring all of its operating companies' transmission systems into MISO. This regional transmission system organization acts as an agent to provide transmission service on behalf of its members, who continue to own the transmission assets. Ameren's March 25 FERC application for approval of the IP acquisition confirmed Ameren's plans to join MISO, and on May 1, Ameren transferred functional control of the AmerenUE and AmerenCIPS transmission systems to MISO through a contractual agreement with a for-profit independent transmission company, GridAmerica LLC.

In a separate July 28 order, the FERC also approved the transfer from Ameren's non rate-regulated AmerenEnergy Generating Company to the company's Missouri- based rate-regulated utility, AmerenUE, of approximately 550 megawatts of Illinois-based combustion turbine generating facilities. The facilities' approximate book value is $250 million.

This generating asset transfer is subject to the approval of the Securities and Exchange Commission (SEC) and will occur after the completion of the transfer of AmerenUE's Illinois-based electric and natural gas businesses and personnel to AmerenCIPS\-a transfer that is subject to state and federal regulatory approvals.

"We are pleased with the FERC's timely action on the IP acquisition filing and their thoughtful approach to the generating asset transfer," says Gary L. Rainwater, chairman, president and chief executive officer, Ameren Corporation. "Ameren's acquisition of IP and the resulting electric delivery system upgrades we plan to make will benefit general reliability and access to markets for IP and other customers. We believe this acquisition is a natural fit with our core energy growth strategy and will provide benefits to customers, employees, communities and our investors."

The acquisition is subject not only to the approval of the FERC, but also to the approval of the Illinois Commerce Commission (ICC), the SEC and the Federal Communications Commission (FCC). In April, the FCC consented to the transfer of control of FCC licenses held by IP to Ameren. Ameren and Dynegy have already completed the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. No approval is required from shareholders of Ameren. Ameren expects to receive all remaining regulatory approvals within the next several months and to complete the acquisition by year-end 2004.

With assets of $14.7 billion, Ameren serves 1.7 million electric customers and 500,000 natural gas customers in a 49,000-square-mile area of Missouri and Illinois. With this acquisition, Ameren will rank as Illinois' second largest electric utility, based on the number of customers, total assets and operating revenues, and the third largest distributor of natural gas in the state.

Illinois Power, based in Decatur, Ill., serves 600,000 electric and 415,000 natural gas customers in a 15,000 square-mile territory across Illinois. The company was founded more than 75 years ago and its parent company\-Illinova--was purchased in 2000 by Houston, Texas-based Dynegy Inc.

# # # Forward-Looking Statements

Statements made in this release, which are not based on historical facts, are "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, the company is 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 past and subsequent filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations as suggested by such "forward-looking" statements:

• the closing and timing of Ameren's acquisition of Illinois Power and the impact of any conditions imposed by regulators in connection with their approval thereof;

• the effects of the stipulation and agreement relating to the AmerenUE Missouri electric excess earnings complaint case and other regulatory actions, including changes in regulatory policy;

• changes in laws and other governmental actions, including monetary and fiscal policy;

• the impact on the company of current regulations related to the opportunity for customers to choose alternative energy suppliers in Illinois;

• the effects of increased competition in the future due to, among other things, deregulation of certain aspects of the company's business at both the state and federal levels;

• the effects of participation in a Federal Energy Regulatory Commission- approved regional transmission organization, including activities associated with the Midwest Independent Transmission System Operator;

• the availability of fuel for the production of electricity, such as coal and natural gas, and purchased power and natural gas for distribution, and the level and volatility of future market prices for such commodities, including the ability to recover any increased costs;

• the use of financial and derivative instruments;

• average rates for electricity in the Midwest;

• business and economic conditions;

• the impact of the adoption of new accounting standards and the application of appropriate technical accounting rules and guidance;

• interest rates and the availability of capital;

• actions of ratings agencies and the effects of such actions;

• weather conditions;

• generation plant construction, installation and performance;

• operation of nuclear power facilities, including planned and unplanned outages, and decommissioning costs;

• the effects of strategic initiatives, including acquisitions and divestitures;

• the impact of current environmental regulations on utilities and generating companies and the expectation that more stringent requirements will be introduced over time, which could potentially have a negative financial effect;

• future wages and employee benefits costs, including changes in returns on benefit plan assets;

• disruptions of the capital markets or other events making Ameren's access to necessary capital more difficult or costly;

• competition from other generating facilities, including new facilities that may be developed;

• difficulties in integrating AmerenCILCO and Illinois Power, if consummated, with Ameren's other businesses;

• changes in the energy markets, environmental laws or regulations, interest rates or other factors adversely impacting assumptions in connection with the CILCORP Inc. and Illinois Power (if consummated) acquisitions;

• cost and availability of transmission capacity for the energy generated by Ameren's generating facilities or required to satisfy energy sales made by Ameren; and • legal and administrative proceedings.

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