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Ameren Energy Resources Announces Staff Reductions at Three Illinois Power Plants in Response to Changes in Power Markets, Tough Economy

ST. LOUIS, Aug. 12 /PRNewswire-FirstCall/ -- Ameren Energy Resources Company, LLC, (AER), the merchant generation business segment for Ameren Corporation (NYSE: AEE), announced today that it expects to eliminate approximately 84 full-time, regular positions of a total 200 positions at three of the Illinois generating facilities of its subsidiary, Ameren Energy Generating Company. Affected are the Grand Tower Plant in Jackson County, Hutsonville Plant in Crawford County, and Meredosia Plant in Morgan County.

"While we regret having to take this action, the challenges we face demand a new model for our merchant generation business--we must build a leaner, more streamlined organization that can more effectively compete in today's difficult economy where we see much lower prices for our power," says AER President and Chief Executive Officer Chuck Naslund. "Our merchant generation business expects its 2010 non-fuel operations and maintenance spending to be about 5 to 10 percent below the 2008 level. We have also eliminated approximately $1 billion of planned capital expenditures for 2010 through 2013--as compared to earlier plans."

In the spring of 2009, AER discussed with several parties the possible sale of the three affected plants, but there were no offers that the company found acceptable.

Plans announced today call for:

  • Operating the 511-megawatt, natural gas-fired combined cycle Grand Tower Plant only in May through September with a very limited staff to maintain the plant in other months. Located on the Mississippi River about 120 miles south of St. Louis, Grand Tower Plant currently has a staff of 31. It is anticipated that the plant will operate from May through September with 27 employees and with 7 employees during the other months.
  • Retiring two of four units at the 464-megawatt, primarily coal-fired Meredosia Plant, located about 60 miles west of Springfield. At this time it is expected that approximately 47 positions will be eliminated.
  • It is currently anticipated that approximately 12 positions will be eliminated at the 151-megawatt, coal-fired Hutsonville Plant on the Wabash River in eastern Illinois near the Indiana state border.

This week AER announced these expected actions to employees at the three affected plants. Affected employees will likely include plant management and support staffs, operations engineers, mechanical maintenance staff, boiler operators, machinists and welders, among other job categories. The company is reviewing potential opportunities for placement of employees within other Ameren companies. It is expected that the position reductions and assignment of seasonal employment will be completed by the end of the first quarter of 2010.

"We hope that a more streamlined operation will allow us to operate successfully, long term. We will continue to focus on ensuring a safe environment for all," said Naslund.

This decision follows the reduction of AER senior management positions and of various Generation Technical Services (GTS) Group positions, both announced in July. AER's GTS employees are based throughout Illinois, including in Collinsville, Ill., and at the company's Peoria Resource Center (onsite at Edwards Power Station in Bartonville, Ill.) and the Effingham Resource Center, in Effingham, Ill.

"We certainly empathize with the employees affected by this restructuring and are working to support them during this difficult time," Naslund added. The company will be offering severance benefits and career-related programs and resources to affected employees.

Under the Ameren holding company structure, AER is the merchant generation business segment for Ameren Energy Generating Company's and AmerenEnergy Resources Generating Company's six coal-fired plants, plus multiple natural gas-fired units. AER also includes AmerenEnergy Medina Valley Cogen L.L.C., which operates a natural gas-fired facility in Mossville, Ill., Ameren Energy Marketing Company, which sells retail electricity to Illinois businesses and wholesale power throughout the United States, and an 80-percent ownership interest in Electric Energy, Inc., which operates coal and gas-fired generating facilities in Joppa, Ill.

With assets of approximately $23 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.

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:

  • regulatory or legislative actions, including changes in regulatory policies;
  • uncertainty as to the continued effectiveness of 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;
  • enactment of legislation taxing electric generators, in Illinois or elsewhere;
  • 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;
  • increasing capital expenditure and operating expense requirements;
  • 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 cost and availability of purchased power; and the level and volatility of future market prices for such commodities, including the ability to recover the costs for such commodities;
  • 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 standards 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;
  • generation plant construction, installation and performance;
  • impairments of long-lived assets or goodwill;
  • the effects of strategic initiatives, including acquisitions and divestitures;
  • the impact of current environmental regulations on power generating companies and the expectation that more stringent requirements, including those related to greenhouse gases, will be enacted over time, which could limit the operation of our generating units or otherwise have a negative financial effect; labor disputes, 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.

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

SOURCE: Ameren Energy Resources Company, LLC