SPRINGFIELD, Ill., June 19, 2002– On Wednesday Ameren Corporation filed with the Illinois Commerce Commission an application to acquire CILCORP, Inc., from The AES Corporation. In that filing, scheduled to be delivered to regulators today, Ameren pledges to enhance operations to improve CILCO’s customer service, preserve existing low electric rates, support community and economic development and maintain CILCO’s Peoria headquarters with minimal workforce reductions in the CILCO service area.
The agreement to purchase CILCORP, the parent company of Peoria, Ill.- based Central Illinois Light Co. (CILCO), was announced April 29. The $1.4 billion transaction would involve assumption of debt and a payment of cash to purchase the common stock of CILCORP, along with certain other assets. The purchase includes CILCO’s natural gas and electric businesses, including 1,200 megawatts of largely coal-fired generating capacity. Upon completion of the acquisition, CILCO would become an Ameren subsidiary known as AmerenCILCO.
Today’s state regulatory application outlines Ameren’s commitment to ensure that CILCO continues to operate as a separate utility with a strong local presence, including retaining its headquarters in Peoria for a minimum of five years after the change of control occurs.
In the application, Ameren also commits to providing high quality energy services at CILCO’s traditionally low rates and extending the freeze on retail electric rates for two years beyond that required under AES’s ownership. (Recent legislation signed by Gov. George Ryan provides that CILCO’s electric rates will be frozen until 2007, due to the acquisition of CILCORP by Ameren. Without the acquisition, CILCO would be allowed to increase electric rates beginning in 2005.)
The application also commits to expanding CILCO’s community involvement and cites customer service benefits that result from Ameren’s 100 years of utility experience in Illinois, as well as economies of scale associated with a larger energy delivery system.
With this acquisition, Ameren will rank as Illinois’ second largest electric utility based on the number of customers, total assets and operating revenues. The acquisition is subject not only to the approval of the Illinois Commerce Commission but to approval of the Securities and Exchange Commission, the Federal Energy Regulatory Commission and to the expiration of the waiting period under the Hart-Scott-Rodino Act. No approval is required from shareholders of either company. The company expects to make all regulatory filings within 30 days and for regulatory approvals to be completed by March 2003.