BYLAWS

                              ILLINOVA CORPORATION
                            (An Illinois Corporation)

                            As Amended April 8, 1998


                                    ARTICLE I

                                  Stockholders

                           Section 1. The annual meeting of the  stockholders of
         the  Corporation  shall be held on such date and at such time and place
         as may be fixed  from  time to time by the  Board of  Directors  of the
         Corporation  pursuant  to a  resolution  adopted by a  majority  of the
         members  of the Board  then in  office,  for the  purpose  of  electing
         directors  and of  transacting  such other  business as may properly be
         brought before the meeting.

                           Section 2. Special  meetings of the  stockholders may
         be held upon call of the Chairman,  the  President,  or of the Board of
         Directors  or of  stockholders  holding not less than  one-fifth of the
         shares of the capital stock of the Corporation  issued and outstanding,
         at such time and as such place  within the State of  Illinois as may be
         stated in the call and notice. In the event of war,  rebellion or other
         catastrophe,  if the surviving  members of the Board of Directors shall
         be reduced to less than a majority of the number fixed by these Bylaws,
         then any  surviving  member  of the  Board of  Directors  may so call a
         special meeting of stockholders,  at such time and at such place as may
         be stated in the call and notice.

                           Section 3. Notice stating the place,  day and hour of
         every meeting of the stockholders, and in the case of a special meeting
         further stating the purpose for which such meeting is called,  shall be
         mailed at least ten days  before  the  meeting to each  stockholder  of
         record who shall be  entitled to vote  thereat,  at the last known post
         office address of each such stockholder as it appears upon the books of
         the   Corporation.   Such  further  notice  shall  be  given  by  mail,
         publication or otherwise, as may be required by law. Any meeting may be
         held  without  notice if all of the  stockholders  entitled to vote are
         present  or  represented  at the  meeting,  or all of the  stockholders
         entitled to notice of the meeting sign a waiver thereof in writing.

                           Section 4. The holders of record of a majority of the
         shares of the capital stock of the Corporation  issued and outstanding,
         entitled to vote thereat,  present in person or  represented  by proxy,
         shall constitute a quorum at all meetings of the stockholders,  and the
         vote  of  a  majority  of  such  quorum  shall  be  necessary  for  the
         transaction of any business,  unless otherwise  provided by law, by the
         Articles of  Incorporation  or by the Bylaws.  If at any meeting  there
         shall be no  quorum,  the  holders of record,  entitled  to vote,  of a
         majority of such shares of stock so present or represented  may adjourn
         the meeting from time to time,  without notice other than  announcement
         at the  meeting,  until a quorum  shall  have been  obtained,  when any
         business  may be  transacted  which might have been  transacted  at the
         meeting as first convened had there been a quorum.

                           Section  5.  Meetings  of the  stockholders  shall be
         presided over by the Chairman, or, if he is not present, the President,
         or a Vice President,  in that order, or, if no such officer is present,
         by a  chairman  to be  chosen  at the  meeting.  The  Secretary  of the
         Corporation,  or, if he is not present,  an Assistant  Secretary of the
         Corporation, or, if neither the Secretary nor an Assistant Secretary is
         present,  a  secretary  to be  chosen  at  the  meeting,  shall  act as
         secretary of the meeting.

                           Section 6. At all meetings of the stockholders  every
         holder of record of the shares of the capital stock of the Corporation,
         entitled  to vote  thereat,  may vote  thereat  either  in person or by
         proxy, provided that no stockholder may appoint more than three persons
         as proxies at any time,  and that no proxy shall be valid after  eleven
         months  from the  date of its  execution,  except  where  the  stock is
         pledged as security for a debt to the person holding the Proxy.

                           Section 7. At all  elections of directors  the voting
         shall be by written ballot and stockholders may cumulate their votes.

                           Section   8.  The   stock   transfer   books  of  the
         Corporation may, if so determined by the Board of Directors,  be closed
         before any  meeting  of the  stockholders,  and for any other  purpose,
         including the payment of any  dividend,  for such length of time as the
         Board may from time to time determine.


                                   ARTICLE II

                                    Directors

                           Section 1.  Initially,  the Board of Directors of the
         Corporation  shall  consist of between one and five members  unless and
         until IP Merging  Corporation  shall have merged with and into Illinois
         Power Company,  with Illinois Power Company  surviving such merger (the
         "Merger").  Upon consummation of the Merger,  the Board of Directors of
         the Corporation shall consist of between ten and fifteen members,  with
         all of the directors of Illinois Power Company  replacing the directors
         of the Corporation and serving in such capacity until their  successors
         are duly elected at the next regular annual meeting of the stockholders
         of the  Corporation.  The  directors  shall be elected  at the  regular
         annual meeting of the stockholders; but if the election of directors is
         not held on the day of the annual  meeting,  the directors  shall cause
         the election to be held as soon thereafter as conveniently  may be. The
         directors  shall  hold  office  for a term of one year and until  their
         successors  are elected and  qualified.  No director who is not also an
         employee of the Corporation  shall be elected to serve more than twelve
         (12) terms as a member of the Board of Directors  with the initial term
         beginning in April,  1992, with respect to those  directors  elected in
         April of 1994 or earlier.  A majority of the members of the Board shall
         constitute  a quorum for the  transaction  of  business,  but if at any
         meeting  of the  Board  there  shall be less than a quorum  present,  a
         majority of the directors  present may adjourn the meeting from time to
         time,  without notice other than  announcement at the meeting,  until a
         quorum shall have been  obtained,  when any business any be  transacted
         which might have been  transacted at the meeting as first  convened had
         there been a quorum. The acts of a majority of the directors present at
         any  meeting  at which  there is a quorum  shall,  except as  otherwise
         provided by law, by the Articles of Incorporation or by the Bylaws,  be
         the acts of the Board.

                           No  person  shall  be  eligible  for  election  as  a
         director  after  he has  attained  the  age of 70,  and no  officer  or
         employee of the  Corporation  other than the Chairman or the President,
         shall be eligible  for  election as director  after he has attained the
         age of 65.

                           Section  2.  Vacancies  in the  Board  of  Directors,
         caused by death, resignation or otherwise, may be filled at any meeting
         of the Board of  Directors  and the  directors  so  elected  shall hold
         office  until the next  annual  meeting of the  stockholders  and until
         their successors are elected and qualified.

                           Section 3.  Meetings of the Board of Directors  shall
         be held at such place  within or without  the State of  Illinois as may
         from  time to time be fixed  by  resolution  of the  Board or as may be
         specified  in the call of any  meeting.  Regular  meetings of the Board
         shall  be held  at  such  time as may  from  time to time be  fixed  by
         resolution of the Board, and notice of such meetings need not be given.
         Special  meetings of the Board may be held at any time upon call of the
         President or a Vice President,  by oral  telegraphic or written notice,
         duly  served on or sent or mailed  to each  director  not less than two
         days  before  any such  meeting.  A  meeting  of the  Board may be held
         without notice immediately after the annual meeting of the stockholders
         at the same place at which such  meeting it held.  Any  meeting  may be
         held without notice if all of the directors are present at the meeting,
         or if all of the directors sign a waiver thereof in writing.

                           Section 4.  Meetings of the Board of Directors  shall
         be  presided  over  by  the  Chairman  or,  if he is not  present,  the
         President,  or a Vice President,  in that order, or, if no such officer
         if present, by a chairman to be chosen at the meeting. The Secretary of
         the Corporation or, if he is not present, an Assistant Secretary of the
         Corporation or, if neither the Secretary nor an Assistant  Secretary is
         present, a secretary to be chosen at the meeting shall act as secretary
         of the meeting.

                           Section 5. The Board of Directors, by the affirmative
         vote  of a  majority  of the  whole  Board  may  appoint  an  Executive
         Committee  and a Finance  Committee,  in each case to include  three or
         more  Directors,  one of whom  shall  be a  resident  of the  State  of
         Illinois,  as the  Board  may from  time to time  determine.  Each such
         Committee  shall have and may exercise  such powers as may from time to
         time be  specified in the  resolution  or  resolutions  of the Board of
         Directors creating such Committee,  respectively.  The Board shall have
         the power at any time to fill vacancies in, to change the membership of
         or to dissolve,  either such  Committee.  Each Committee may make rules
         for the conduct of its business,  and may appoint such  committees  and
         assistants as it shall from time to time deem necessary.  A majority of
         the members of each Committee shall  constitute a quorum and the action
         of a  majority  thereof  shall be the  action  of such  Committee.  All
         actions taken by such  Committee  shall be reported to the Board at its
         meeting next succeeding such action.

                           Section 6. The Board of  Directors  may also  appoint
         one or more other committees to consist of such number of directors and
         to have such powers as the Board may from time to time  determine.  The
         Board shall have the power at any time to fill  vacancies in, to change
         the membership of, or to dissolve,  any such  committee.  A majority of
         the members of any such  committee  shall  constitute  a quorum and may
         determine its action and fix the time and place of its meetings  unless
         the  Board  shall  otherwise  provide.  All  action  taken  by any such
         committee shall be reported to the Board at its meeting next succeeding
         such action.

                           Section 7. Each member of the Board of Directors  who
         is not a  salaried  officer or  employee  of the  Corporation  shall be
         compensated  for his  services  as a director of the  Corporation.  The
         Board of Directors shall fix the amount of such compensation.

                           Section 8.  Nomination of persons for election to the
         Board of Directors of the  Corporation  shall be made only at a meeting
         of  stockholders  and only (i) by or at the  direction  of the Board of
         Directors  or a  Committee  thereof or (ii) by any  stockholder  of the
         Corporation  entitled  to vote for the  election  of  Directors  at the
         meeting  who  complies  with the  notice  procedure  set  forth in this
         Section. Such nominations, other than those made by or at the direction
         of the Board, shall be made pursuant to timely notice in writing to the
         committee  of the  Board of  Directors  which  has  responsibility  for
         nominating  persons for election to the Board of  Directors,  or in the
         event  there  is no such  committee  to the  Chairman  of the  Board of
         Directors,  or in the event there is no such person to the President of
         the Company (the "Notice").  To be timely,  a Notice shall be delivered
         to, or mailed and received at, the principal  executive  offices of the
         Corporation  not less than  ninety  (90) days nor more than one hundred
         twenty (120) days prior to the Annual Meeting; provided,  however, that
         in the event that  Directors are to be elected by the  stockholders  at
         any other  time,  the  Notice  shall be  delivered  to,  or mailed  and
         received at, the principal  executive  offices of the  Corporation  not
         later than the tenth day  following the day on which Notice of the date
         of the meeting was first mailed to  stockholders.  For purposes of this
         Section,  any  adjournment  or  postponement  of the  original  meeting
         whereby the meeting  will  reconvene  within  thirty (30) days from the
         original   date  will  be  deemed  for  purposes  of  Notice  to  be  a
         continuation  of  the  original  meeting,   and  no  nominations  by  a
         stockholder of persons to be elected  Directors of the  Corporation may
         be made at any such  reconvened  meeting  unless  pursuant  to a Notice
         which was timely for the meeting on the date originally scheduled.

                           The  Notice  shall set forth:  (i) as to each  person
         whom the  stockholder  proposes to nominate for election or re-election
         as a Director, all information relating to such person that is required
         to be disclosed in  solicitations of proxies for election of Directors,
         or as  otherwise  required,  in each case  pursuant  to the  Securities
         Exchange Act of 1934 (including such person's  written consent to being
         named in the proxy  statement as a nominee and to serving as a Director
         if elected);  and (ii) as to the stockholder  giving the Notice (A) the
         name and address of the  stockholder (B) the class and number of shares
         of voting stock of the Corporation which are beneficially owned by such
         stockholder,  and (C) a representation  that the stockholder intends to
         appear in person or by proxy at the meeting to  nominate  the person or
         persons specified in the Notice. Notwithstanding the foregoing, nothing
         in this  Section  shall be  interpreted  or  construed  to require  the
         inclusion of information  about any such nominee in any proxy statement
         distributed by, at the direction of, or on the behalf of, the Board.


                                   ARTICLE III

                                    Officers

                           Section 1. As soon as may be after the election  held
         in each year, the Board of Directors shall elect a President (who shall
         be a director), one or more Vice Presidents, one or more of whom may be
         designated as Executive Vice President or Senior Vice President,  and a
         Secretary and a Treasurer  and a  Controller,  and may elect a Chairman
         (who shall be a director); provided, however, that unless and until the
         consummation of the Merger, the officers of the Corporation may consist
         only of a President (who shall be a director), a Treasurer, a Secretary
         and a Chairman  (who shall be a director).  The Board of Directors  may
         from  time  to  time  appoint  such  Assistant  Secretaries,  Assistant
         Treasurers and other  officers and agents of the  Corporation as it may
         deem  proper.  The same person may be elected or appointed to more than
         one office.

                           Section 2. The term of office of all  officers  shall
         be one year or until their respective  successors are elected,  but any
         officer or agent may be removed,  with or without cause, at any time by
         the affirmative  vote of a majority of the members of the Board then in
         office.

                           Section 3. The officers of the Corporation shall each
         have such powers and duties as may be  prescribed  from time to time by
         the Board of  Directors  or, in the absence of such  prescription,  the
         officers of the  Corporation  shall each have such powers and duties as
         generally  pertain to their  respective  offices.  The  Treasurer,  the
         Assistant  Treasurers  and  any  other  officers  or  employees  of the
         Corporation may be required to give bond for the faithful  discharge of
         their duties,  in such sum and of such  character as the Board may from
         time to time prescribe.

                           Section 4. The salaries of all officers and agents of
         the Corporation  shall be fixed by the Board of Directors,  or pursuant
         to such authority as the Board may from time to time prescribe.


                                   ARTICLE IV

                              Certificates of Stock

                           Section 1. The  interest of each  stockholder  in the
         Corporation  shall be evidenced by a certificate  or  certificates  for
         shares  of  stock  of the  Corporation,  in such  form as the  Board of
         Directors may from time to time prescribe.  The certificates for shares
         of stock of the Corporation  shall be signed by the President or a Vice
         President and the Secretary or an Assistant Secretary,  sealed with the
         seal of the Corporation  (which seal may be a facsimile),  and shall be
         countersigned  and registered in such manner,  if any, as the Board may
         by resolution prescribe.

                           Section  2. The  shares  of stock of the  Corporation
         shall be  transferable  on the books of the  Corporation by the holders
         thereof in person or by a duly authorized attorney,  upon surrender for
         cancellation  of  certificates  for a like number of shares of the same
         class of stock,  with a duly executed  assignment and power of transfer
         endorsed thereon or attached thereto and such proof of the authenticity
         of the  signatures  as the  Corporation  or its agents  may  reasonably
         require.

                           Section 3. No certificate  for shares of stock of the
         Corporation shall be issued in place of any certificate alleged to have
         been lost, stolen or destroyed, except upon production of such evidence
         of the loss,  theft, or destruction,  and upon  indemnification  of the
         Corporation  and its agents to such  extent  and in such  manner as the
         Board of Directors may from time to time prescribe.


                                    ARTICLE V

                               Checks, Notes, etc.

                           All  checks  and  drafts  on the  Corporation's  bank
         accounts  and all  bills of  exchange  and  promissory  notes,  and all
         acceptances,  obligations  and other  instruments  for the  payment  of
         money,  shall be signed by such  officer or officers or agent or agents
         as shall be  thereunto  authorized  from  time to time by the  Board of
         Directors;  provided  that  checks  drawn  on  the  Corporation's  bank
         accounts may bear facsimile signature or signatures, affixed thereto by
         a mechanical device, of such officer or officers and/or agent or agents
         as the Board of Directors shall authorize.



                                   ARTICLE VI

                                   Fiscal Year

                           The fiscal year of the Corporation shall begin on the
         first day of January in each year and shall end on the thirty-first day
         of December following.



                                   ARTICLE VII

                                 Corporate Seal

                           The corporate seal shall have inscribed thereon, the
name of the Corporation and the words "Corporate Seal 1994 Illinois."


                                  ARTICLE VIII

                                 Indemnification

                           Section 1. Indemnification of Directors, Officers and
         Employees.  The Corporation shall, to the fullest extent to which it is
         empowered to do so by the Business Corporation Act of 1983 or any other
         applicable  laws, as may from time to time be in effect,  indemnify any
         person who was or is a party or is threatened to be made a party to any
         threatened,  pending or completed action,  suit or proceeding,  whether
         civil, criminal, administrative or investigative, by reason of the fact
         that he is or was a director,  officer, employee, trustee, or fiduciary
         of    the    Corporation,    or   of   a    Corporation-sponsored    or
         Corporation-administered trust or benefit plan, or is or was serving at
         the request of the Board of Directors of the Corporation as a director,
         officer,  employee,  trustee,  or  fiduciary  of  another  corporation,
         partnership,  joint venture,  trust, benefit plan, or other enterprise,
         against all expenses (including attorneys' fees), judgments,  fines and
         amounts paid in settlement  actually and reasonably  incurred by him in
         connection with such action, suit or proceedings.

                           Section 2. The  provisions of this Article VIII shall
         be deemed to be a contract between the Corporation and each director or
         officer who serves in any such  capacity at any time while this Article
         is in effect,  and any repeal or modification of this Article shall not
         affect any rights or obligations hereunder with respect to any state of
         facts then or  theretofore  existing or any action,  suit or proceeding
         theretofore  or thereafter  brought or threatened  based in whole or in
         part upon any such state of facts.

                           Section 3. The indemnification  provided or permitted
         by this  Article  shall not be deemed  exclusive of any other rights to
         which those indemnified may be entitled by law or otherwise,  and shall
         continue  as to a person  who has  ceased  to be a  director,  officer,
         employee  or  agent  and  shall  inure  to the  benefit  of the  heirs,
         executors and administrators of such person.

                           Section 4. The  provisions  of this Article are to be
given retroactive effect.

                                   ARTICLE IX

                                   Amendments

                           These Bylaws,  or any part  thereof,  may be altered,
         amended or repealed at any meeting of the Board of Directors,  provided
         that  notice of such  meeting  shall set  forth the  substance  of such
         proposed change.


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