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AmerenUE Natural Gas Customers Can Expect Lower Prices than Last Winter

AmerenUE Missouri natural gas customers would pay less for gas than they did last winter under a new Purchased Gas Adjustment (PGA) filed with the Missouri Public Service Commission (PSC). For residential customers, and commercial General Service customers, the PGA would be from about 10 to 25 percent lower than last winter, due to lower wholesale costs from UE’s suppliers. Subject to PSC review and approval, the new PGA would become effective Nov. 1, 2009, for the company’s 127,000 Missouri gas customers.

The PGA reflects the wholesale cost of gas from the company’s suppliers, plus the cost of transporting that gas to the UE system. UE passes these costs on to customers, dollar for dollar, through the PGA without any “markup” in price. Wholesale gas prices are not regulated and go up or down based on supply and demand. Since the wholesale costs change daily—while the PGA does not—the PGA also includes an adjustment to compensate for any under- or over-collection of actual costs in previous periods.

Under today’s filing, the PGA factor for most UE customers would be about 25 percent lower than at the same time last year. Since the PGA accounts for about two-thirds of an average residential gas bill, the net result for residential customers would be a reduction of about 17 percent in most customers’ total bills, or $23 per month, assuming comparable weather.

But for UE’s approximately 4,000 customers in Rolla, Salem and Owensville, the PGA reduction would be less—about 10 percent—due to a higher transportation charge from one pipeline that delivers gas to that area and the expiration of a credit from a previous period. For residential customers, this PGA would result in a net reduction of about 7 percent, or $10 per month, in these customers’ total gas bills.

However, UE cautions Rolla, Salem and Owensville customers that the pipeline supplier, MoGas Pipeline LLC, has filed a request with the Federal Energy Regulatory Commission (FERC) for a significant increase in the transportation charge, effective in January 2010. Under FERC rules, the pipeline would be allowed to put the increase into effect on an interim basis, subject to refund

When that occurs, UE will file for a new PGA for that area to more closely align these higher charges and the PGA. UE estimates that this would result in a PGA that is slightly higher than last winter.

UE has intervened in the FERC case in opposition to the transportation charge increase, but a final decision in the case is not expected until October 2010.

UE cites the global recession and the significant drop in worldwide demand for energy as key reasons for the overall reduction in the market price of natural gas.

“We’re pleased that most of our customers will enjoy lower natural gas prices this winter, but certainly share the concerns of customers in the part of our system that is not receiving the full benefits of the global decline in market prices for natural gas,” says Richard Mark, UE senior vice president, Customer Operations. “We wish to assure our Rolla, Salem and Owensville customers that we are working with regulators and through the legal system to maintain fair transportation rates in their area.”

Mark adds that the goal of UE’s natural gas purchasing practices is to achieve stable costs and reasonable rates for customers, while dampening the effects of market volatility and price spikes from the wholesale gas markets.

UE reminds customers who wish to reduce their natural gas usage by installing more efficient natural gas equipment that the UE’s Missouri Energy Efficient Natural Gas Equipment Rebate Program offers residential customers rebates for a portion of the cost of new ENERGY STAR® qualified gas furnaces and thermostats. For commercial customers, the program offers rebates for a portion of the cost of an ENERGY STAR-listed commercial gas utilization product—such as a furnace, dryer, fryer, steam cooker, or other kitchen appliance. The rebates are available for equipment purchased through Dec. 31, 2009, and installed by Jan. 31, 2010, subject to remaining funding for the program.

For more details about the rebate program, plus energy-saving tips and information about UE’s Budget Billing program which reduces the seasonal variations in energy bills, visit www.ameren.com, then click on Natural Gas Center & Rebates.

AmerenUE, founded in 1902, provides electric and gas service to approximately 1.2 million customers across central and eastern Missouri, including the greater St. Louis area. UE serves 57 Missouri counties and 500 towns. For more information, visit www.ameren.com.

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Contact: Mike Cleary, 573-681-7137