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Ameren Corporation Announces Federal Energy Regulatory Commission Approval of Rate Treatment for New Transmission Projects
Federal Approval Essential for Needed Projects of Newly Formed Ameren Transmission Company

ST. LOUIS, May 19, 2011 /PRNewswire/ -- Ameren Corporation (NYSE: AEE) announced today the Federal Energy Regulatory Commission (FERC) has approved rate treatments filed on behalf of Ameren's newly formed transmission company, Ameren Transmission Company (ATX), and Ameren's utility operating companies—Ameren Illinois and Ameren Missouri.  

The FERC granted the Ameren companies pre-approval of certain rate treatments for a significant portion of their proposed initial portfolio of transmission projects, the Grand Rivers Phase 1 projects.  The included projects are specifically the Illinois Rivers and the Big Muddy River Projects.  This collection of high voltage transmission projects in Missouri and Illinois represents a combined investment opportunity of over $1 billion.

"We appreciate FERC's commitment to the development of the transmission system in our region and nation.  The rate treatments approved by the FERC today provide the financial structure required for ATX to move forward with strengthening that system," says ATX Chairman, President and Chief Executive Officer Maureen Borkowski.

The 331-mile, 345,000-volt Illinois Rivers Project would extend from northeast Missouri to the Mississippi River and across north central Illinois to the Indiana border. The 345,000-volt, 185-mile Big Muddy River Project will have as its hub Ameren Energy Resources' Grand Tower Plant and consist of four line segments in southern Illinois, with one segment also crossing the Mississippi River and into southern Missouri.

Final approval of these projects is subject to their inclusion in the regional system plan of the Midwest Independent Transmission System Operator, Inc., (Midwest ISO).  The regional transmission organization serves a multi-state region, including the service territories of Ameren's utilities.

Formed in August 2010, ATX will invest in electric transmission infrastructure to expand Ameren's already robust transmission system of more than 7,400 circuit miles of high-voltage transmission lines in Missouri and Illinois.  

This new structure would support Ameren's integrated transmission system, which covers 64,000 square miles in Illinois and Missouri. While Ameren's regulated local electric utilities will continue to own and invest in existing transmission facilities and related new assets, ATX will invest in, and own, new major transmission projects.

ATX's transmission projects will be built initially within Illinois and Missouri, with the potential for expanding to other areas in the future.  The company has identified more than $3 billion of transmission investment opportunities that could be completed in the two states over the next 10 to 15 years.

"With these new transmission lines, customers will have increased reliability and access to more efficient energy markets," Borkowski added. "New transmission development will also help Ameren pursue its environmental goals by supporting the integration of renewable resources to meet renewable portfolio standards both in Illinois and Missouri."

In its ruling today, the FERC approved the following rate mechanisms:

  • Full recovery of financing costs associated with construction work in progress;
  • Recovery of prudently incurred costs in developing project facilities that might later be abandoned due to issues outside the company's control;
  • Use of a hypothetical capital structure reflecting the capital structure of the Ameren Illinois Company as of Dec. 31, 2009, which would afford ATX a capital structure that resembles that of a utility company; and
  • Permission to allow ATX to recover operating and maintenance costs incurred in the early development stages of the projects.

The transmission rates of ATX would be regulated by the FERC under the Midwest ISO tariff.

With assets of approximately $23 billion, Ameren companies serve approximately 2.4 million electric customers and almost 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 under Risk Factors in Ameren's Form 10-K for the year ended December 31, 2010, and elsewhere in this release and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:

  • regulatory, judicial, or legislative actions, including changes in regulatory policies and ratemaking determinations; and future regulatory, judicial, or legislative actions that seek to limit or reverse rate increases;
  • changes in laws and other governmental actions, including monetary, fiscal, and tax policies;
  • 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;
  • 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 through our regulatory frameworks;
  • the effects of our and other members' participation in, or potential withdrawal from, the Midwest ISO and the effects of new members joining the Midwest ISO;
  • the effectiveness of our risk management strategies
  • the level and volatility of future prices for power in the Midwest;
  • 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, performance and cost recovery;
  • 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, other emissions, 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 otherwise have a negative financial effect;
  • the impact of complying with renewable energy portfolio requirements in Missouri;
  • labor disputes, work force 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.

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 Corporation