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Ameren

Ameren

Ameren Corporation was created December 31, 1997 by the merger of Missouri's Union Electric Company (formerly NYSE: UEP) and the neighboring Central Illinois Public Service Company (CIPSCO Inc. holding, formerly NYSE: CIP). It is now a holding company for several power companies and energy companies. The company is based in St. Louis, Missouri. Ameren is a portmanteau for "American" and "Energy".

Ameren is the holding company for the following:

  • AmerenUE, Union Electric Company, 1997
  • AmerenCIPS, Central Illinois Public Service Company, 1997
  • AmerenEnergy Resources, holding company, 2000
    • AmerenEnergy Marketing
    • AmerenEnergy Generating
  • AmerenCILCO, Central Illinois Light Company, 2003
  • AmerenIP, Illinois Power Company, 2004

The AmerenUE subsidiary owns Bagnell Dam on the Osage River, which forms the Lake of the Ozarks. AmerenUE is responsible for managing water levels on the lake according to federal regulations; if levels are not appropriate, the lake must be closed until Ameren can solve the problem.

History

Origins

Prior to the formation of Ameren, the first major development in the history of its constituent parts occurred in 1929, when the Bagnell Dam was completed on the Osage River and generated almost 175 megawatts of hydroelectricity for Missouri's Union Electric Company. The dam also created the Lake of the Ozarks with 1,400 miles of shoreline.

In 1931, Union Electric Light and Power sought additional generating sources (interurbans being one need) and the company began buying power from the Keokuk, IA dam, 150 miles north of St. Louis. Union Electric later bought the dam, providing 134 megawatts of hydroelectricity carried over a longer distance than had ever been achieved before.

By the 1950s Union Electric owned gas operations in and around Alton, Illinois, and acquired other utilities to become the third largest distributor of natural gas in Missouri.

In 1952, Ameren's second major constituent, the Central Illinois Public Service Company, became a major pooled energy power distributor with its future Ameren mate, Union Electric Company. The arrangement formed the Midwest Power Pool system. The CIPS Meredosia, Illinois Power Station became a key contributor to the pool, which also included the later Ameren subsidiary Illinois Power Company.

In 1963 Union Electric completed construction of one of the largest pumped storage plants at that time, the then-350-megawatt Taum Sauk Plant, in Reynolds County, Missouri.

In 1984 Union Electric added nuclear energy to the mix, when the Callaway Nuclear Generating Station began providing 1,143 megawatts of power from Callaway County, Missouri.

Ameren history

In 1995 shareholders of both CIPSCO Inc. and of its neighboring utility of twice its size, the S&P 500-listed Union Electric Company, approved the merger of the two companies, which were to then be combined as Ameren Corporation. Both of those former utilities had traded publicly on the New York Stock Exchange, under ticker symbol CIP and UEP, respectively. At the time of the merger, Union Electric had assets of nearly US$600 million, but still carried nearly US$1.8 billion in long-term debt, although down from US$2.5 billion which it had accumulated by the 1980s. CIPSCO had assets of about US$210 million, but still carried nearly half of US$1 billion in long-term debt, which it had also accumulated by the 1980s.

The merger was completed on December 31, 1997, when the two public companies became one, as Ameren Corporation, which then began to trade publicly on the New York Stock Exchange with the ticker symbol AEE.

The former CIPSCO Inc. utility, Central Illinois Public Services Company, is now a subsidiary of the Ameren Corporation holding company, known as AmerenCIPS.

Following the merger, Union Electric began doing business as AmerenUE. Today, with nine power plants AmerenUE serves 1.2 million power customers and 110,000 gas customers, primarily in Missouri, where more than half of its customers reside in the St. Louis metropolitan area. It also serves adjoining parts of Illinois, and formerly served Iowa as well through the mid-1990s.

In 2000, Ameren formed the holding company, AmerenEnergy Resources. It contained two further subsidiaries, AmerenEnergy Marketing, and AmerenEnergy Generating.

In 2003, Ameren acquired the Central Illinois Light Company. That utility's holding company, CILCORP, Inc., had traded on the NYSE with ticker symbol CER, and by the mid-1990s had become a member of the S&P Small Cap 600 index. CILCORP had been another pioneer utility in the region, which had paid a dividend since 1921. By 1996, it had grown to over US$150 million in assets, and carried US$330 million in long-term debt. Following the 2003 Ameren acquisition, that utility then became the subsidiary, AmerenCILCO.

In 2004, Ameren acquired (from Dynegy Inc.) its third partner from the 1952 Midwest Power Pool system, Illinois Power Company. That utility had traded publicly on the NYSE under the ticker symbol IPC through the 1980s, and paid dividends since 1947. As of the late 1980s, the company generated electricity and natural gas, almost entirely from coal plants, with less than 1% fueled from oil and gas. By then, with about $360 million in assets, it carried long-term debt of over US$2 billion. In 1991, Illinois Power became the subsidiary of holding company Illinova Corp., which traded on the NYSE with ticker symbol ILN. Illinova had grown to an S&P Midcap 400 stock by 1996, with over US$415 million in assets, and had brought the IP utility's debt down to US$1.8 billion by then. In a merger completed February 1, 2000, Illinova Corp. became a wholly-owned subsidiary of Dynegy Inc. in which Chevron Corporation also took a 28% stake. Dynegy in turn had been created in June 1998, from the merger of Chevron's natural gas and natural gas liquids businesses with Dynegy's predecessor, NGC Corp. (former ticker NGL). NGC had been an integrated natural gas services company around since 1994. Following the 2004 Ameren acquisition of the IP utility, that subsidiary became AmerenIP.

Taum Sauk pumped storage plant

AmerenUE owns the Taum Sauk pumped storage plant, which failed on December 14, 2005, because Ameren pumped water over the upper reservoir wall. FERC fined Ameren $15 million. The State of Missouri has sued Ameren for actual and punitive damages, alleging Ameren recklessly operated the plant and put financial considerations from sale of power to other companies over safety, maintenance and engineering. The plant was operated by remote control with no one onsite during pumping operations. Missouri Attorney General Jay Nixon has been criticized by Republican officials and others for soliciting campaign contributions from Ameren during the Taum Sauk investigation. He has been cleared by a state ethics panel and returned the money.

Power outages

Ameren has had a number of severe outages affecting hundreds of thousands of people. Many attribute this to cost cutting measures which limited the line inspection and tree trimming, though Ameren contends recent evidence has shown this is because property owners refuse to let Ameren trim their trees.

Environmental Record

Ameren was found to be the 91st worst corporate air polluter in a study conducted by the University of Massachusetts in 2002, with 15.91 million pounds of toxic air releases in that year. The Illinois Environmental Protection Agency has set a meeting to address concerns of the City of Greenville, Illinois pertaining to a proposed project that would construct a gate below the spillway in the East Fork of Shoal Creek that will allow Ameren to pump more water back into Coffeen Lake. The IPEA wants to carry out this project in order to maintain adequate water levels in the lake. Greenville residents are concerned because they feel it may diminish water flow in the east fork of Shoal Creek, which would in turn possibly interfere with the city’s plans to build a new lake by damming that creek. AmerenUE sponsors the Adopt-the-Shoreline program, which enables people to “adopt” portions of the shoreline for litter control. They also control other shoreline activities in the Lake of the Ozarks such as the regulation of boat docks, seawalls and other structures within the Osage Project boundary on the lake and downstream from Bagnell Dam The company maintains the Lake and Shoreline Protection Hotline that anyone who wishes to do so can use to report neglected docks or other concerns they may have about the lake.

Criticisms

2007 marked the end of a freeze on energy prices in Illinois. AmerenIP/AmerenCILCO/AmerenCIPS have been criticized for not making proper preparations for the hikes in energy prices which will be passed on to customers. According to Ameren, customers can expect to see their electricity bills increase by 22% to 55%. However, the media reports that some bills are increasing much more, up to 300%.

References

External links

Taum Sauk

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