UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 
 FORM
        10-Q
 
 (X)
 Quarterly
        report pursuant to Section
        13 or 15(d)
 of
        the Securities Exchange Act of
        1934
 for
        the Quarterly Period Ended March 31,
        2007
 OR
 (
 )  Transition
        report pursuant to Section 13 or 15(d)
 of
        the
        Securities Exchange Act of 1934
 for
        the
        transition period from ___ to
        ___ .
 
 Commission
                File
                  Number
              Exact
                  name of registrant as specified in its charter;
                State
                  of Incorporation;
                Address
                  and Telephone Number
              IRS
                  Employer
                Identification
                  No.1-14756
              **Ameren
                  Corporation**
              43-1723446(Missouri
                  Corporation)1901
                  Chouteau AvenueSt.
                  Louis, Missouri 63103(314)
                  621-32221-2967
              **Union
                  Electric Company**
              43-0559760(Missouri
                  Corporation)1901
                  Chouteau AvenueSt.
                  Louis, Missouri 63103(314)
                  621-32221-3672
              **Central
                  Illinois Public Service Company**
              37-0211380(Illinois
                  Corporation)607
                  East Adams StreetSpringfield,
                  Illinois 62739(888)
                  789-2477333-56594
              **Ameren
                  Energy Generating Company**
              37-1395586(Illinois
                  Corporation)1901
                  Chouteau AvenueSt.
                  Louis, Missouri 63103(314)
                  621-32222-95569
              **CILCORP
                  Inc.**
              37-1169387(Illinois
                  Corporation)300
                  Liberty StreetPeoria,
                  Illinois 61602(309)
                  677-52711-2732
              **Central
                  Illinois Light Company**
              37-0211050(Illinois
                  Corporation)300
                  Liberty StreetPeoria,
                  Illinois 61602(309)
                  677-52711-3004
              **Illinois
                  Power Company**
              37-0344645(Illinois
                  Corporation)370
                  South Main StreetDecatur,
                  Illinois 62523(217)
                  424-6600
  
 Indicate
          by check mark whether the registrants: (1) have filed all reports required
          to be
          filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
          the
          preceding 12 months (or for such shorter period that the registrant was
          required
          to file such reports), and (2) have been subject to such filing require-ments
          for the past 90 days. Yes (X)  No
          (
          )
 
 Indicate
          by check mark whether each registrant is a large accelerated filer, an
          accelerated filer, or a non-accelerated filer. See definitions of accelerated
          filer and large accelerated filer in Rule 12b-2 of the Securities Exchange
          Act
          of 1934.
 
 Large
                    Accelerated Filer
                Accelerated
                    Filer
                Non-Accelerated
                    FilerAmeren
                    Corporation
                (X)
                ( 
                     )
                ( 
                     )Union
                    Electric Company
                ( 
                     )
                (  
                    )
                (X)Central
                    Illinois Public Service Company
                ( 
                     )
                (  
                    )
                (X)Ameren
                    Energy Generating Company
                ( 
                     )
                ( 
                     )
                (X)CILCORP
                    Inc.
                ( 
                     )
                (  
                    )
                (X)Central
                    Illinois Light Company
                ( 
                     )
                ( 
                     )
                (X)Illinois
                    Power Company
                (  
                    )
                (  
                    )
                (X)
 
 Indicate
          by check mark whether each registrant is a shell company (as defined in
          Rule
          12b-2 of the Securities Exchange Act of 1934).
 
 Ameren
                    Corporation
                Yes
                (  
                    )
                No
                (X)Union
                    Electric Company
                Yes
                ( 
                     )
                No
                (X)Central
                    Illinois Public Service Company
                Yes
                ( 
                     )
                No
                (X)Ameren
                    Energy Generating Company
                Yes
                ( 
                     )
                No
                (X)CILCORP
                    Inc.
                Yes
                (  
                    )
                No
                (X)Central
                    Illinois Light Company
                Yes
                (  
                    )
                No
                (X)Illinois
                    Power Company
                Yes
                ( 
                     )
                No
                (X)
  The
          number of shares outstanding of each registrant’s classes of common stock as of
          April 30, 2007, was as follows:
 
 Ameren
                    Corporation
                Common
                    stock, $.01 par value per share - 207,021,691Union
                    Electric Company
                Common
                    stock, $5 par value per share, held by Ameren
                  Corporation
                    (parent company of the registrant) - 102,123,834Central
                    Illinois Public Service Company
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the registrant) - 25,452,373Ameren
                    Energy Generating Company
                Common
                    stock, no par value, held by Ameren Energy
                  Development
                    Company (parent company of the
                  registrant
                    and indirect subsidiary of Ameren
                  Corporation)
                    - 2,000CILCORP
                    Inc.
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the registrant) - 1,000Central
                    Illinois Light Company
                Common
                    stock, no par value, held by CILCORP Inc.
                  (parent
                    company of the registrant and subsidiary of
                  Ameren
                    Corporation) - 13,563,871Illinois
                    Power Company
                Common
                    stock, no par value, held by Ameren
                  Corporation
                    (parent company of the registrant) -
                    23,000,000
 
 **OMISSION
          OF CERTAIN INFORMATION**
 
 Ameren
          Energy Generating Company and CILCORP Inc. meet the conditions set forth
          in
          General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing
          this
          form with the reduced disclosure format allowed under that General
          Instruction.
  
 This
          combined Form 10-Q is separately filed by Ameren Corporation, Union Electric
          Company, Central Illinois Public Service Company, Ameren Energy Generating
          Company, CILCORP Inc., Central Illinois Light Company, and Illinois Power
          Company. Each registrant hereto is filing on its own behalf all of the
          information contained in this quarterly report that relates to such registrant.
          Each registrant hereto is not filing any information that does not relate
          to
          such registrant, and therefore makes no representation as to any such
          information.
  
 **TABLE
        OF CONTENTS**
 **Page**Glossary
                  of Terms and
                  Abbreviations..........................................................................................................................................................................................................................................
              5Forward-looking
                  Statements...........................................................................................................................................................................................................................................................
              6**PART
                  I****Financial
                  Information**Item
                  1.Financial
                  Statements (Unaudited)**Ameren
                  Corporation**Consolidated
                  Statement of
                  Income........................................................................................................................................................................................................................
              8Consolidated
                  Balance
                  Sheet...................................................................................................................................................................................................................................
              9Consolidated
                  Statement of Cash
                  Flows................................................................................................................................................................................................................
              10**Union
                  Electric Company**Consolidated
                  Statement of
                  Income........................................................................................................................................................................................................................
              11Consolidated
                  Balance
                  Sheet...................................................................................................................................................................................................................................
              12Consolidated
                  Statement of Cash
                  Flows................................................................................................................................................................................................................
              13**Central
                  Illinois Public Service Company**Statement
                  of
                  Income.................................................................................................................................................................................................................................................
              14Balance
                  Sheet.............................................................................................................................................................................................................................................................
              15Statement
                  of Cash
                  Flows..........................................................................................................................................................................................................................................
              16**Ameren
                  Energy Generating Company**Consolidated
                  Statement of
                  Income.........................................................................................................................................................................................................................
              17Consolidated
                  Balance
                  Sheet....................................................................................................................................................................................................................................
              18Consolidated
                  Statement of Cash
                  Flows.................................................................................................................................................................................................................
              19**CILCORP
                  Inc.**Consolidated
                  Statement of
                  Income........................................................................................................................................................................................................................
              20Consolidated
                  Balance
                  Sheet....................................................................................................................................................................................................................................
              21Consolidated
                  Statement of Cash
                  Flows.................................................................................................................................................................................................................
              22**Central
                  Illinois Light Company**Consolidated
                  Statement of
                  Income.........................................................................................................................................................................................................................
              23Consolidated
                  Balance
                  Sheet....................................................................................................................................................................................................................................
              24Consolidated
                  Statement of Cash
                  Flows.................................................................................................................................................................................................................
              25**Illinois
                  Power Company**Consolidated
                  Statement of
                  Income.........................................................................................................................................................................................................................
              26Consolidated
                  Balance
                  Sheet....................................................................................................................................................................................................................................
              27Consolidated
                  Statement of Cash
                  Flows.................................................................................................................................................................................................................
              28Combined
                  Notes to Financial
                  Statements.....................................................................................................................................................................................................................
              29Item
                  2.Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations..............................................................................................................................
              54Item
                  3.Quantitative
                  and Qualitative Disclosures About Market
                  Risk...................................................................................................................................................................................
              73Item
                  4.Controls
                  and
                  Procedures..................................................................................................................................................................................................................................................
              77**PART
                  II****Other
                  Information**Item
                  1.Legal
                  Proceedings............................................................................................................................................................................................................................................................
              77Item
                  1A.Risk
                  Factors.......................................................................................................................................................................................................................................................................
              77Item
                  2.Unregistered
                  Sales of Equity Securities and Use of
                  Proceeds..................................................................................................................................................................................
              81Item
                  6.Exhibits...............................................................................................................................................................................................................................................................................
              81Signatures...........................................................................................................................................................................................................................................................................................
              83


This
        Form
        10-Q contains “forward-looking” statements within the meaning of Section 21E of
        the Securities Exchange Act of 1934, as amended. Forward-looking statements
        are
        all statements other than statements of historical fact, including those
        statements that are identified by the use of the words “anticipates,”
“estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” and similar
        expressions. Forward-looking statements should be read with the cautionary
        statements and important factors included on page 6 of this Form 10-Q under
        the
        heading “Forward-looking Statements.”
 4
 **GLOSSARY
          OF TERMS AND ABBREVIATIONS**
 
 We
          use
          the words “our,” “we” or “us” with respect to certain information that relates
          to all Ameren Companies, as defined below. When appropriate, subsidiaries
          of
          Ameren are named specifically as we discuss their various business
          activities.
 
 ***AERG*** -
          AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates
          a
          non-rate-regulated electric generation business in Illinois.
 ***AFS*** -
          Ameren
          Energy Fuels and Services Company, a Development Company subsidiary that
          procures fuel and natural gas and manages the related risks for the Ameren
          Companies.
 ***Ameren*** -
          Ameren
          Corporation and its subsidiaries on a consolidated basis. In references
          to
          financing activities, acquisition activities, or liquidity arrangements,
          Ameren
          is defined as Ameren Corporation, the parent.
 ***Ameren
          Companies*** -
          The
          individual registrants within the Ameren consolidated group.
 ***Ameren
          Energy*** -
          Ameren
          Energy, Inc., an Ameren Corporation subsidiary that is a power marketing
          and
          risk management agent for UE.
 ***Ameren
          Illinois Utilities*** - CIPS,
          IP and the rate-regulated electric and gas utility operations of
          CILCO.
 ***Ameren
          Services*** - ****** Ameren
          Services Company, an Ameren Corporation subsidiary that provides support
          services to Ameren and its subsidiaries.
 ***ARO*** - Asset
          retirement obligations.
 ***Baseload*** *-* The
          minimum amount of electric power delivered or required over a given period
          of
          time at a steady rate.
 ***Capacity
          factor*** - A
          percentage measure that indicates how much of an electric power generating
          unit’s capacity was used during a specific period.
 ***CILCO*** -
          Central
          Illinois Light Company, a CILCORP subsidiary that operates a rate-regulated
          electric and natural gas transmission and distribution business and a
          non-rate-regulated electric generation business through AERG, all in Illinois,
          as AmerenCILCO. CILCO owns all of the common stock of AERG.
 ***CILCORP*** -
          CILCORP
          Inc., an Ameren Corporation subsidiary that operates as a holding company
          for
          CILCO and various non-rate-regulated subsidiaries.
 ***CIPS*** -
          Central
          Illinois Public Service Company, an Ameren Corporation subsidiary that
          operates
          a rate-regulated electric and natural gas transmission and distribution
          business
          in Illinois as AmerenCIPS.
 ***CIPSCO*** - ****** CIPSCO
          Inc., the former parent of CIPS.
 ***CT*** -
          Combustion turbine electric generation equipment used primarily for peaking
          capacity.
 ***CUB*** -
          Citizens Utility Board.
 ***Development
          Company*** -
          Ameren
          Energy Development Company, which is a Resources Company subsidiary and
          Genco,
          Marketing Company and AFS parent.
 ***DOE*** -
          Department of Energy, a U.S. government agency.
 ***DRPlus*** -
          Ameren
          Corporation’s dividend reinvestment and direct stock purchase plan.
 ***Dynegy*** -
          Dynegy
          Inc.
 ***EEI*** -
          Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary (40%
          owned by
          UE and 40% owned by Development Company) that operates non-rate-regulated
          electric generation facilities and FERC-regulated transmission facilities
          in
          Illinois. The remaining 20% is owned by Kentucky Utilities Company.
 ***ELPC*** -
          Environmental Law and Policy Center.
 ***EPA*** -
          Environmental Protection Agency, a U.S. government agency.
 ***Exchange
          Act*** -
          Securities Exchange Act of 1934, as amended.
 ***FASB*** -
          Financial Accounting Standards Board, a rulemaking organization that establishes
          financial accounting and reporting standards in the United States.
 ***FERC*** -
          The
          Federal Energy Regulatory Commission, a U.S. government agency.
 ***FIN*** -
          FASB
          Interpretation. A FIN statement is an explanation intended to clarify accounting
          pronouncements previously issued by the FASB.
 ***Fitch*** -
          Fitch
          Ratings, a credit rating agency.
 ***GAAP*** -
          Generally accepted accounting principles in the United States.
 ***Genco*** -
          Ameren
          Energy Generating Company, a Development Company subsidiary that operates
          a
          non-rate-regulated electric generation business in Illinois and
          Missouri.
 ***Gigawatthour*** -
          One
          thousand megawatthours.
 ***Heating
          degree-days*** -
          The
          summation of negative differences between the mean daily temperature and
          a 65-
          degree Fahrenheit base. This statistic is useful as an indicator of demand
          for
          electricity and natural gas for winter space heating for residential and
          commercial customers.
 ***ICC*** -
          Illinois Commerce Commission, a state agency that regulates the Illinois
          utility
          businesses and the rate-regulated operations of CIPS, CILCO and IP.
 ***Illinois
          Customer Choice Law*** -
          Illinois Electric Service Customer Choice and Rate Relief Law of 1997,
          which
          provided for electric utility restructuring and introduced competition
          into the
          retail supply of electric energy in Illinois.
 ***Illinois
          EPA*** -
          Illinois Environmental Protection Agency, a state government
          agency.
 ***Illinois
          Regulated*** -
          A
          financial reporting segment consisting of the regulated electric and gas
          transmission and distribution businesses of CIPS, CILCO and IP.
 ***IP*** - ****** Illinois
          Power Company, an Ameren Corporation subsidiary. IP operates a rate-regulated
          electric and natural gas transmission and distribution business in Illinois
          as
          AmerenIP.
 ***IP
          LLC*** -
          Illinois Power Securitization Limited Liability Company, which is a
          special-purpose Delaware limited-liability company. Under FIN 46R, Consolidation
          of Variable-interest
  5
 Entities,
          IP LLC was no longer consolidated within IP’s financial statements as of
          December 31, 2003.
 ***IP
          SPT*** -
          Illinois Power Special Purpose Trust, which was created as a subsidiary
          of IP
          LLC to issue TFNs as allowed under the Illinois Customer Choice Law. Pursuant
          to
          FIN 46R, IP SPT is a variable-interest entity, as the equity investment
          is not
          sufficient to permit IP SPT to finance its activities without additional
          subordinated debt.
 ***JDA*** -
          The
          joint dispatch agreement among UE, CIPS, and Genco under which UE and Genco
          jointly dispatched electric generation prior to its termination on December
          31,
          2006.
 ***Kilowatthour*** - ****** A
          measure
          of electricity consumption equivalent to the use of 1,000 watts of power
          over a
          period of one hour.
 ***Marketing
          Company*** - ****** Ameren
          Energy Marketing Company, a Development Company subsidiary that markets
          power
          for Genco, AERG and EEI.
 ***Medina
          Valley*** -
          AmerenEnergy ****** Medina
          Valley Cogen (No. 4) LLC and its subsidiaries, all Development Company
          subsidiaries, which indirectly own a 40-megawatt gas-fired electric generation
          plant.
 ***Megawatthour*** -
          One
          thousand kilowatthours.
 ***MGP*** - ****** Manufactured
          gas plant.
 ***MISO*** - ****** Midwest
          Independent Transmission System Operator, Inc.
 ***MISO
          Day Two Energy Market*** - ****** A
          market
          that uses market-based pricing, incorporating transmission congestion and
          line
          losses, to compensate market participants for power. ***Missouri
          Regulated*** -
          A
          financial reporting segment consisting of all the operations of UE’s business,
          except for UE’s 40% interest in EEI and other non-rate-regulated
          activities.
 ***Money
          pool*** - ****** Borrowing
          agreements among Ameren and its subsidiaries to coordinate and provide
          for
          certain short-term cash and working capital requirements. Separate money
          pools
          are maintained between rate-regulated and non-rate-regulated businesses.
          These
          are referred to as the utility money pool and the non-state-regulated subsidiary
          money pool, respectively.
 ***Moody’s*** - ****** Moody’s
          Investors Service Inc., a credit rating agency.
 ***MoPSC*** -
          Missouri Public Service Commission, a state agency that regulates the Missouri
          utility business and operations of UE.
 ***Non-rate-regulated
          Generation*** -
          A
          financial reporting segment consisting of the operations or activities
          of Genco,
          CILCORP holding company, AERG, EEI and Marketing Company.
 ***NO*** ***x*** ****** - ****** Nitrogen
          oxide.
 ***NRC*** -
          Nuclear
          Regulatory Commission, a U.S. government agency.
 ***NYMEX*** -
          New
          York Mercantile Exchange.
 ***OCI*** - ****** Other
          comprehensive income (loss) as defined by GAAP.
 ***PGA*** -
          Purchased Gas Adjustment tariffs, which allow the passing through of the
          actual
          cost of natural gas to utility customers.
 ***PUHCA
          1935*** -
          The
          Public Utility Holding Company Act of 1935, which was repealed effective
          February 8, 2006, by the Energy Policy Act of 2005 that was enacted on
          August 8,
          2005.
 ***PUHCA
          2005*** - The
          Public Utility Holding Company Act of 2005, enacted as part of the Energy
          Policy
          Act of 2005, effective February 8, 2006.
 ***Resources
          Company*** -
          Ameren
          Energy Resources Company, an Ameren Corporation subsidiary that consists
          of
          non-rate-regulated operations, including Development Company, Genco, Marketing
          Company, AFS, and Medina Valley.
 ***S&P*** -
          Standard & Poor’s Ratings Services, a credit rating agency that is a
          division of The McGraw-Hill Companies, Inc.
 ***SEC*** -
          Securities and Exchange Commission, a U.S. government agency.
 ***SFAS*** - ****** Statement
          of Financial Accounting Standards, the accounting and financial reporting
          rules
          issued by the FASB.
 ***SO*** ***2*** - ****** Sulfur
          dioxide.
 ***TFN*** -
          Transitional Funding Trust Notes issued by IP SPT as allowed under the
          Illinois
          Customer Choice Law. IP must designate a portion of cash received from
          customer
          billings to pay the TFNs. The proceeds received by IP are remitted to IP
          SPT.
          The proceeds are restricted for the sole purpose of making payments of
          principal
          and interest on, and paying other fees and expenses related to, the TFNs.
          Since
          the application of FIN 46R, IP does not consolidate IP SPT. Therefore,
          the
          obligation to IP SPT appears on IP’s balance sheet.
 ***TVA*** -
          Tennessee Valley Authority, a public power authority.
 ***UE*** - ****** Union
          Electric Company, an Ameren Corporation subsidiary that operates a
          rate-regulated electric generation, transmission and distribution business,
          and
          a rate-regulated natural gas transmission and distribution business in
          Missouri
          as AmerenUE.
 _________________________________________________
  **FORWARD-LOOKING
            STATEMENTS**
 
 Statements
            in this report 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


6
 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 and elsewhere in this report and in our other
          filings with the SEC, could cause actual results to differ materially from
          management expectations suggested in such forward-looking
          statements:
 
 ·
              regulatory
                  or legislative actions, including changes in regulatory policies
                  and
                  ratemaking determinations, such as in UE’s pending electric rate case and
                  the outcome of CIPS, CILCO and IP rate rehearing proceedings, or
                  the
                  enactment of legislation rolling back and freezing electric rates
                  at 2006
                  levels or similar actions that impair the full and timely recovery
                  of
                  costs in Illinois; ·
              the
                  contribution by the Ameren Illinois Utilities, Genco or AERG to
                  an
                  electric rate increase phase-in plan, customer credits or energy
                  efficiency and assistance programs to avoid electric rate rollback
                  and
                  freeze, generation tax or similar legislation in
                  Illinois; ·
              the
                  impact of the termination of the JDA; ·
              changes
                  in laws and other governmental actions, including monetary and
                  fiscal
                  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, such as
                  occurred
                  when the electric rate freeze and power supply contracts expired
                  in
                  Illinois at the end of 2006; ·
              the
                  effects of participation in the MISO; ·
              the
                  availability of fuel such as coal, natural gas, and enriched uranium
                  used
                  to produce electricity; the availability of purchased power and
                  natural
                  gas for distribution; and the level and volatility of future market
                  prices
                  for such commodities, including the ability to recover the costs
                  for such
                  commodities; ·
              the
                  effectiveness of our risk management strategies and the use of
                  financial
                  and derivative instruments; ·
              prices
                  for power in the Midwest; ·
              business
                  and economic conditions, including their impact on interest rates; ·
              disruptions
                  of the capital markets or other events that make the Ameren Companies’
                  access to necessary capital more difficult or costly; ·
              the
                  impact of the adoption of new accounting standards and the application
                  of
                  appropriate technical accounting rules and guidance; ·
              actions
                  of credit rating agencies and the effects of such actions; ·
              weather
                  conditions and other natural phenomena; ·
              the
                  impact of system outages caused by severe weather conditions or
                  other
                  events; ·
              generation
                  plant construction, installation and performance, including costs
                  associated with UE’s Taum Sauk pumped-storage hydroelectric plant incident
                  and the plant’s future operation; ·
              recoverability
                  through insurance of costs associated with UE’s Taum Sauk pumped-storage
                  hydroelectric plant incident; ·
              operation
                  of UE’s nuclear power facility, including planned and unplanned outages,
                  and decommissioning costs; ·
              the
                  effects of strategic initiatives, including 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, will be introduced
                  over time,
                  which could have a negative financial effect; ·
              labor
                  disputes, future wage and employee benefits costs, including changes
                  in
                  returns on benefit plan assets; ·
              the
                  inability of our counterparties and affiliates to meet their obligations
                  with respect to contracts 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.
  7
 
 PART
            I.
            FINANCIAL INFORMATION
 **ITEM
            1. FINANCIAL STATEMENTS**
 **AMEREN
                        CORPORATION****CONSOLIDATED
                        STATEMENT OF INCOME****(Unaudited)
                        (In millions, except per share amounts)****Three
                        Months Ended****March
                        31,****2007**
                    
                    
                    **2006****Operating
                        Revenues:**Electric
                    **$**
                    **1,458**
                    
                    $
                    1,211Gas
                    
                    **561**
                    
                    
                    589Total
                        operating revenues
                    
                    **2,019**
                    
                    
                    1,800**Operating
                        Expenses:**Fuel
                    
                    **263**
                    
                    
                    252Purchased
                        power
                    
                    **373**
                    
                    
                    273Gas
                        purchased for resale
                    
                    **421**
                    
                    
                    453Other
                        operations and maintenance
                    
                    **396**
                    
                    
                    352Depreciation
                        and amortization
                    
                    **176**
                    
                    
                    161Taxes
                        other than income taxes
                    
                    **102**
                    
                    
                    113Total
                        operating expenses
                    
                    **1,731**
                    
                    
                    1,604**Operating
                        Income**
                    
                    **288**
                    
                    
                    196**Other
                        Income and Expenses:**Miscellaneous
                        income
                    
                    **16**
                    
                    
                    4Total
                        other income
                    
                    **16**
                    
                    
                    4**Interest
                        Charges**
                    
                    **100**
                    
                    
                    76**Income
                        Before Income Taxes, Minority Interest and Preferred Dividends
                        of****Subsidiaries**
                    
                    **204**
                    
                    
                    124**Income
                        Taxes**
                    
                    **71**
                    
                    
                    44**Income
                        Before Minority Interest and Preferred Dividends of
                        Subsidiaries**
                    
                    **133**
                    
                    
                    80**Minority
                        Interest and Preferred Dividends of Subsidiaries**
                    
                    **10**
                    
                    
                    10**Net
                        Income**
                    **$**
                    **123**
                    
                    $
                    70**Earnings
                        per Common Share – Basic and Diluted**
                    **$**
                    **0.59**
                    
                    $
                    0.34**Dividends
                        per Common Share**
                    **$**
                    **0.635**
                    
                    $
                    0.635**Average
                        Common Shares Outstanding**
                    
                    **206.6**
                    
                    
                    204.8
 The
            accompanying notes are an integral part of these consolidated financial
            statements.


8




**AMEREN
                  CORPORATION****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except per share amounts)****March
                  31,**
              
              
              **December
                  31,****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **161**
              
              $
              137Accounts
                  receivables – trade (less allowance for doubtfulaccounts
                  of $25 and $11, respectively)
              
              **687**
              
              
              418Unbilled
                  revenue
              
              **216**
              
              
              309Miscellaneous
                  accounts and notes receivable
              
              **177**
              
              
              160Materials
                  and supplies
              
              **489**
              
              
              647Other
                  current assets
              
              **130**
              
              
              203Total
                  current assets
              
              **1,860**
              
              
              1,874**Property
                  and Plant, Net**
              
              **14,353**
              
              
              14,286**Investments
                  and Other Assets:**Investments
                  in leveraged leases
              
              **13**
              
              
              13Nuclear
                  decommissioning trust fund
              
              **288**
              
              
              285Goodwill
              
              **831**
              
              
              831Intangible
                  assets
              
              **210**
              
              
              217Other
                  assets
              
              **650**
              
              
              641Regulatory
                  assets
              
              **1,421**
              
              
              1,431Total
                  investments and other assets
              
              **3,413**
              
              
              3,418**TOTAL
                  ASSETS**
              **$**
              **19,626**
              
              $
              19,578**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **303**
              
              $
              456Short-term
                  debt
              
              **953**
              
              
              612Accounts
                  and wages payable
              
              **454**
              
              
              671Taxes
                  accrued
              
              **137**
              
              
              58Other
                  current liabilities
              
              **402**
              
              
              405Total
                  current liabilities
              
              **2,249**
              
              
              2,202**Long-term
                  Debt, Net**
              
              **5,260**
              
              
              5,285**Preferred
                  Stock of Subsidiary Subject to Mandatory
                  Redemption**
              
              **18**
              
              
              18**Deferred
                  Credits and Other Liabilities:**Accumulated
                  deferred income taxes, net
              
              **2,000**
              
              
              2,144Accumulated
                  deferred investment tax credits
              
              **116**
              
              
              118Regulatory
                  liabilities
              
              **1,185**
              
              
              1,234Asset
                  retirement obligations
              
              **557**
              
              
              549Accrued
                  pension and other postretirement benefits
              
              **1,086**
              
              
              1,065Other
                  deferred credits and liabilities
              
              **385**
              
              
              169Total
                  deferred credits and other liabilities
              
              **5,329**
              
              
              5,279**Preferred
                  Stock of Subsidiaries Not Subject to Mandatory
                  Redemption**
              
              **195**
              
              
              195**Minority
                  Interest in Consolidated Subsidiaries**
              
              **18**
              
              
              16**Commitments
                  and Contingencies (Notes 2, 8, and 9)****Stockholders'
                  Equity:**Common
                  stock, $.01 par value, 400.0 shares authorized –shares
                  outstanding of 207.0 and 206.6, respectively
              
              **2**
              
              
              2Other
                  paid-in capital, principally premium on common stock
              
              **4,521**
              
              
              4,495Retained
                  earnings
              
              **2,011**
              
              
              2,024Accumulated
                  other comprehensive income
              
              **23**
              
              
              62Total
                  stockholders’ equity
              
              **6,557**
              
              
              6,583**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **19,626**
              
              $
              19,578


The
      accompanying notes are an integral part of these consolidated financial
      statements.





9




**AMEREN
                  CORPORATION****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **123**
              
              $
              70Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Gains
                  on sale of emission allowances
              
              **(4**
              **)**
              
              (4
              )Depreciation
                  and amortization
              
              **182**
              
              
              169Amortization
                  of nuclear fuel
              
              **9**
              
              
              9Amortization
                  of debt issuance costs and premium/discounts
              
              **5**
              
              
              4Deferred
                  income taxes and investment tax credits, net
              
              **(12**
              **)**
              
              8Minority
                  interest
              
              **7**
              
              
              7Other
              
              **6**
              
              
              7Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(193**
              **)**
              
              104Materials
                  and supplies
              
              **158**
              
              
              151Accounts
                  and wages payable
              
              **(81**
              **)**
              
              (282
              )Taxes
                  accrued
              
              **77**
              
              
              (1
              )Assets,
                  other
              
              **24**
              
              
              44Liabilities,
                  other
              
              **36**
              
              
              40Pension
                  and other postretirement benefit obligations, net
              
              **21**
              
              
              47Net
                  cash provided by operating activities
              
              **358**
              
              
              373**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(357**
              **)**
              
              (220
              )CT
                  acquisitions
              
              **-**
              
              
              (292
              )Nuclear
                  fuel expenditures
              
              **(23**
              **)**
              
              (24
              )Purchases
                  of securities – Nuclear Decommissioning Trust Fund
              
              **(47**
              **)**
              
              (30
              )Sales
                  of securities – Nuclear Decommissioning Trust Fund
              
              **43**
              
              
              27Purchases
                  of emission allowances
              
              **(5**
              **)**
              
              (38
              )Sales
                  of emission allowances
              
              **2**
              
              
              4Other
              
              **1**
              
              
              -Net
                  cash used in investing activities
              
              **(386**
              **)**
              
              (573
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(131**
              **)**
              
              (130
              )Short-term
                  debt, net
              
              **341**
              
              
              274Dividends
                  paid to minority interest
              
              **(5**
              **)**
              
              (7
              )Redemptions,
                  repurchases, and maturities of long-term debt
              
              **(174**
              **)**
              
              (31
              )Issuances
                  of common stock
              
              **21**
              
              
              27Net
                  cash provided by financing activities
              
              **52**
              
              
              133Net
                  change in cash and cash equivalents
              
              **24**
              
              
              (67
              )Cash
                  and cash equivalents at beginning of year
              
              **137**
              
              
              96Cash
                  and cash equivalents at end of period
              **$**
              **161**
              
              $
              29


The
      accompanying notes are an integral part of these consolidated financial
      statements.




10




**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Operating
                  Revenues:**Electric
                  - excluding off-system
              **$**
              **451**
              
              $
              501Electric
                  - off-system
              
              **122**
              
              
              66Gas
              
              **76**
              
              
              69Other
              
              **1**
              
              
              -Total
                  operating revenues
              
              **650**
              
              
              636**Operating
                  Expenses:**Fuel
              
              **125**
              
              
              125Purchased
                  power
              
              **33**
              
              
              67Gas
                  purchased for resale
              
              **49**
              
              
              44Other
                  operations and maintenance
              
              **224**
              
              
              171Depreciation
                  and amortization
              
              **87**
              
              
              80Taxes
                  other than income taxes
              
              **57**
              
              
              59Total
                  operating expenses
              
              **575**
              
              
              546**Operating
                  Income**
              
              **75**
              
              
              90**Other
                  Income and Expenses:**Miscellaneous
                  income
              
              **10**
              
              
              3Miscellaneous
                  expense
              
              **(2**
              **)**
              
              (2
              )Total
                  other income
              
              **8**
              
              
              1**Interest
                  Charges**
              
              **48**
              
              
              35**Income
                  Before Income Taxes and Equity****in
                  Income of Unconsolidated Investment**
              
              **35**
              
              
              56**Income
                  Taxes**
              
              **11**
              
              
              19**Income
                  Before Equity in Income****of
                  Unconsolidated Investment**
              
              **24**
              
              
              37**Equity
                  in Income of Unconsolidated Investment, Net of
                  Taxes**
              
              **14**
              
              
              14**Net
                  Income**
              
              **38**
              
              
              51**Preferred
                  Stock Dividends**
              
              **1**
              
              
              1**Net
                  Income Available to Common Stockholder**
              **$**
              **37**
              
              $
              50


The accompanying notes as they relate to UE are an integral
      part of these consolidated financial statements.




11




**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except per share amounts)****March
                  31,**
              
              
              **December
                  31****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **-**
              
              $
              1Accounts
                  receivable – trade (less allowance for doubtfulaccounts
                  of $8 and $6, respectively)
              
              **164**
              
              
              145Unbilled
                  revenue
              
              **96**
              
              
              120Miscellaneous
                  accounts and notes receivable
              
              **110**
              
              
              128Advances
                  to money pool
              
              **14**
              
              
              18Accounts
                  receivable – affiliates
              
              **106**
              
              
              33Materials
                  and supplies
              
              **234**
              
              
              236Other
                  current assets
              
              **47**
              
              
              45Total
                  current assets
              
              **771**
              
              
              726**Property
                  and Plant, Net**
              
              **7,931**
              
              
              7,882**Investments
                  and Other Assets:**Nuclear
                  decommissioning trust fund
              
              **288**
              
              
              285Intangible
                  assets
              
              **57**
              
              
              58Other
                  assets
              
              **472**
              
              
              526Regulatory
                  assets
              
              **801**
              
              
              810Total
                  investments and other assets
              
              **1,618**
              
              
              1,679**TOTAL
                  ASSETS**
              **$**
              **10,320**
              
              $
              10,287**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **4**
              
              $
              5Short-term
                  debt
              
              **448**
              
              
              234Intercompany
                  note payable – Ameren
              
              **214**
              
              
              77Accounts
                  and wages payable
              
              **120**
              
              
              313Accounts
                  payable – affiliates
              
              **102**
              
              
              185Taxes
                  accrued
              
              **97**
              
              
              66Other
                  current liabilities
              
              **174**
              
              
              191Total
                  current liabilities
              
              **1,159**
              
              
              1,071**Long-term
                  Debt, Net**
              
              **2,935**
              
              
              2,934**Deferred
                  Credits and Other Liabilities:**Accumulated
                  deferred income taxes, net
              
              **1,250**
              
              
              1,293Accumulated
                  deferred investment tax credits
              
              **88**
              
              
              89Regulatory
                  liabilities
              
              **825**
              
              
              827Asset
                  retirement obligations
              
              **498**
              
              
              491Accrued
                  pension and other postretirement benefits
              
              **381**
              
              
              374Other
                  deferred credits and liabilities
              
              **80**
              
              
              55Total
                  deferred credits and other liabilities
              
              **3,122**
              
              
              3,129**Commitments
                  and Contingencies (Notes 2, 8 and 9)****Stockholders'
                  Equity:**Common
                  stock, $5 par value, 150.0 shares authorized – 102.1 shares
                  outstanding
              
              **511**
              
              
              511Preferred
                  stock not subject to mandatory redemption
              
              **113**
              
              
              113Other
                  paid-in capital, principally premium on common stock
              
              **739**
              
              
              739Retained
                  earnings
              
              **1,742**
              
              
              1,783Accumulated
                  other comprehensive income (loss)
              
              **(1**
              **)**
              
              7Total
                  stockholders' equity
              
              **3,104**
              
              
              3,153**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **10,320**
              
              $
              10,287


The accompanying notes as they relate to UE are an integral
      part of these consolidated financial statements.




12




**UNION
                  ELECTRIC COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **38**
              
              $
              51Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Gain
                  on sales of emission allowances
              
              **(3**
              **)**
              
              (2
              )Depreciation
                  and amortization
              
              **87**
              
              
              80Amortization
                  of nuclear fuel
              
              **9**
              
              
              9Amortization
                  of debt issuance costs and premium/discounts
              
              **1**
              
              
              1Deferred
                  income taxes and investment tax credits, net
              
              **9**
              
              
              -Coal
                  contract settlement
              
              **-**
              
              
              11Other
              
              **2**
              
              
              (1
              )Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(50**
              **)**
              
              55Materials
                  and supplies
              
              **2**
              
              
              11Accounts
                  and wages payable
              
              **(195**
              **)**
              
              (177
              )Taxes
                  accrued
              
              **31**
              
              
              17Assets,
                  other
              
              **54**
              
              
              13Liabilities,
                  other
              
              **(42**
              **)**
              
              (1
              )Pension
                  and other postretirement obligations, net
              
              **7**
              
              
              19Net
                  cash provided by (used in) operating activities
              
              **(50**
              **)**
              
              86**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(200**
              **)**
              
              (113
              )CT
                  acquisitions
              
              **-**
              
              
              (292
              )Nuclear
                  fuel expenditures
              
              **(23**
              **)**
              
              (24
              )Changes
                  in money pool advances
              
              **4**
              
              
              -Proceeds
                  from intercompany note receivable – CIPS
              
              **-**
              
              
              1Purchases
                  of securities – Nuclear Decommissioning Trust Fund
              
              **(47**
              **)**
              
              (30
              )Sales
                  of securities – Nuclear Decommissioning Trust Fund
              
              **43**
              
              
              27Sales
                  of emission allowances
              
              **2**
              
              
              2Net
                  cash used in investing activities
              
              **(221**
              **)**
              
              (429
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(80**
              **)**
              
              (42
              )Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Short-term
                  debt, net
              
              **214**
              
              
              365Changes
                  in money pool borrowings
              
              **-**
              
              
              1Intercompany
                  note payable - Ameren
              
              **137**
              
              
              -Capital
                  contribution from parent
              
              **-**
              
              
              1Net
                  cash provided by financing activities
              
              **270**
              
              
              324Net
                  change in cash and cash equivalents
              
              **(1**
              **)**
              
              (19
              )Cash
                  and cash equivalents at beginning of year
              
              **1**
              
              
              20Cash
                  and cash equivalents at end of period
              **$**
              **-**
              
              $
              1


The accompanying notes as they relate to UE are an integral
        part of these consolidated financial statements.
  13




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****STATEMENT
                  OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Operating
                  Revenues:**Electric
              **$**
              **211**
              
              $
              160Gas
              
              **101**
              
              
              97Other
              
              **2**
              
              
              -Total
                  operating revenues
              
              **314**
              
              
              257**Operating
                  Expenses:**Purchased
                  power
              
              **150**
              
              
              117Gas
                  purchased for resale
              
              **74**
              
              
              72Other
                  operations and maintenance
              
              **43**
              
              
              38Depreciation
                  and amortization
              
              **17**
              
              
              16Taxes
                  other than income taxes
              
              **9**
              
              
              12Total
                  operating expenses
              
              **293**
              
              
              255**Operating
                  Income**
              
              **21**
              
              
              2**Other
                  Income and Expenses:**Miscellaneous
                  income
              
              **3**
              
              
              5Miscellaneous
                  expense
              
              **-**
              
              
              (1
              )Total
                  other income
              
              **3**
              
              
              4**Interest
                  Charges**
              
              **8**
              
              
              7**Income
                  (Loss) Before Income Taxes**
              
              **16**
              
              
              (1
              )**Income
                  Taxes**
              
              **5**
              
              
              -**Net
                  Income (Loss)**
              
              **11**
              
              
              (1
              )**Preferred
                  Stock Dividends**
              
              **1**
              
              
              1**Net
                  Income (Loss) Available to Common Stockholder**
              **$**
              **10**
              
              $
              (2
              )


The accompanying notes as they relate to CIPS are an
        integral
        part of these consolidated financial statements.


14




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****BALANCE
                  SHEET****(Unaudited)
                  (In millions)****March
                  31,**
              
              
              **December
                  31,****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **46**
              
              $
              6Accounts
                  receivable – trade (less allowance for doubtfulaccounts
                  of $6 and $2, respectively)
              
              **104**
              
              
              55Unbilled
                  revenue
              
              **31**
              
              
              43Accounts
                  receivable – affiliates
              
              **12**
              
              
              10Current
                  portion of intercompany note receivable – Genco
              
              **37**
              
              
              37Current
                  portion of intercompany tax receivable – Genco
              
              **9**
              
              
              9Advances
                  to money pool
              
              **15**
              
              
              1Materials
                  and supplies
              
              **33**
              
              
              71Other
                  current assets
              
              **45**
              
              
              46Total
                  current assets
              
              **332**
              
              
              278**Property
                  and Plant, Net**
              
              **1,157**
              
              
              1,155**Investments
                  and Other Assets:**Intercompany
                  note receivable – Genco
              
              **126**
              
              
              126Intercompany
                  tax receivable – Genco
              
              **113**
              
              
              115Other
                  assets
              
              **25**
              
              
              27Regulatory
                  assets
              
              **144**
              
              
              146Total
                  investments and other assets
              
              **408**
              
              
              414**TOTAL
                  ASSETS**
              **$**
              **1,897**
              
              $
              1,847**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities:**Short-term
                  debt
              **$**
              **100**
              
              $
              35Accounts
                  and wages payable
              
              **50**
              
              
              36Accounts
                  payable – affiliates
              
              **33**
              
              
              81Taxes
                  accrued
              
              **14**
              
              
              10Other
                  current liabilities
              
              **39**
              
              
              36Total
                  current liabilities
              
              **236**
              
              
              198**Long-term
                  Debt, Net**
              
              **471**
              
              
              471**Deferred
                  Credits and Other Liabilities:**Accumulated
                  deferred income taxes and investment tax credits, net
              
              **282**
              
              
              297Regulatory
                  liabilities
              
              **218**
              
              
              224Accrued
                  pension and other postretirement benefits
              
              **90**
              
              
              90Other
                  deferred credits and liabilities
              
              **46**
              
              
              24Total
                  deferred credits and other liabilities
              
              **636**
              
              
              635**Commitments
                  and Contingencies (Notes 2 and 8)****Stockholders'
                  Equity:**Common
                  stock, no par value, 45.0 shares authorized – 25.5 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **190**
              
              
              190Preferred
                  stock not subject to mandatory redemption
              
              **50**
              
              
              50Retained
                  earnings
              
              **312**
              
              
              302Accumulated
                  other comprehensive income
              
              **2**
              
              
              1Total
                  stockholders' equity
              
              **554**
              
              
              543**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              **$**
              **1,897**
              
              $
              1,847


The accompanying notes as they relate to CIPS are an integral
      part of these consolidated financial statements.




15




**CENTRAL
                  ILLINOIS PUBLIC SERVICE COMPANY****STATEMENT
                  OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income (loss)
              **$**
              **11**
              
              $
              (1
              )Adjustments
                  to reconcile net income (loss) to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **17**
              
              
              16Deferred
                  income taxes and investment tax credits, net
              
              **(3**
              **)**
              
              (2
              )Other
              
              **(1**
              **)**
              
              (1
              )Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(37**
              **)**
              
              26Materials
                  and supplies
              
              **38**
              
              
              36Accounts
                  and wages payable
              
              **(31**
              **)**
              
              (21
              )Taxes
                  accrued
              
              **4**
              
              
              (10
              )Assets,
                  other
              
              **9**
              
              
              22Liabilities,
                  other
              
              **3**
              
              
              2Net
                  cash provided by operating activities
              
              **10**
              
              
              67**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(20**
              **)**
              
              (17
              )Changes
                  in money pool advances
              
              **(14**
              **)**
              
              (47
              )Net
                  cash used in investing activities
              
              **(34**
              **)**
              
              (64
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Short-term
                  debt, net
              
              **65**
              
              
              -Changes
                  in money pool borrowings
              
              **-**
              
              
              (2
              )Net
                  cash provided by (used in) financing activities
              
              **64**
              
              
              (3
              )Net
                  change in cash and cash equivalents
              
              **40**
              
              
              -Cash
                  and cash equivalents at beginning of year
              
              **6**
              
              
              -Cash
                  and cash equivalents at end of period
              **$**
              **46**
              
              $
              -
 The accompanying notes as they relate to CIPS are an
        integral
        part of these consolidated financial statements.






16




**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Operating
                  Revenues**
              **$**
              **243**
              
              $
              247**Operating
                  Expenses:**Fuel
              
              **81**
              
              
              69Purchased
                  power
              
              **21**
              
              
              96Other
                  operations and maintenance
              
              **34**
              
              
              32Depreciation
                  and amortization
              
              **18**
              
              
              18Taxes
                  other than income taxes
              
              **6**
              
              
              6Total
                  operating expenses
              
              **160**
              
              
              221**Operating
                  Income**
              
              **83**
              
              
              26**Interest
                  Charges**
              
              **14**
              
              
              15**Income
                  Before Income Taxes**
              
              **69**
              
              
              11**Income
                  Taxes**
              
              **26**
              
              
              5**Net
                  Income**
              **$**
              **43**
              
              $
              6


The accompanying notes as they relate to Genco are an integral
      part of these consolidated financial statements.




17




**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except shares)****March
                  31,**
              
              
              **December
                  31,****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **1**
              
              $
              1Accounts
                  receivable – affiliates
              
              **86**
              
              
              96Accounts
                  receivable – trade
              
              **12**
              
              
              19Materials
                  and supplies
              
              **96**
              
              
              96Other
                  current assets
              
              **6**
              
              
              5Total
                  current assets
              
              **201**
              
              
              217**Property
                  and Plant, Net**
              
              **1,536**
              
              
              1,539**Intangible
                  Assets**
              
              **66**
              
              
              74**Other
                  Assets**
              
              **19**
              
              
              20**TOTAL
                  ASSETS**
              **$**
              **1,822**
              
              $
              1,850**LIABILITIES
                  AND STOCKHOLDER'S EQUITY****Current
                  Liabilities:**Current
                  portion of intercompany notes payable – CIPS
              **$**
              **37**
              
              $
              37Borrowings
                  from money pool
              
              **130**
              
              
              123Accounts
                  and wages payable
              
              **19**
              
              
              52Accounts
                  payable – affiliates
              
              **35**
              
              
              66Current
                  portion of intercompany tax payable – CIPS
              
              **9**
              
              
              9Taxes
                  accrued
              
              **38**
              
              
              22Other
                  current liabilities
              
              **28**
              
              
              22Total
                  current liabilities
              
              **296**
              
              
              331**Long-term
                  Debt, Net**
              
              **474**
              
              
              474**Intercompany
                  Notes Payable – CIPS**
              
              **126**
              
              
              126**Deferred
                  Credits and Other Liabilities:**Accumulated
                  deferred income taxes, net
              
              **144**
              
              
              165Accumulated
                  deferred investment tax credits
              
              **8**
              
              
              9Intercompany
                  tax payable – CIPS
              
              **113**
              
              
              115Asset
                  retirement obligations
              
              **31**
              
              
              31Accrued
                  pension and other postretirement benefits
              
              **35**
              
              
              34Other
                  deferred credits and liabilities
              
              **29**
              
              
              2Total
                  deferred credits and other liabilities
              
              **360**
              
              
              356**Commitments
                  and Contingencies (Notes 2 and 8)****Stockholder's
                  Equity:**Common
                  stock, no par value, 10,000 shares authorized – 2,000 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **428**
              
              
              428Retained
                  earnings
              
              **160**
              
              
              156Accumulated
                  other comprehensive loss
              
              **(22**
              **)**
              
              (21
              )Total
                  stockholder's equity
              
              **566**
              
              
              563**TOTAL
                  LIABILITIES AND STOCKHOLDER'S EQUITY**
              **$**
              **1,822**
              
              $
              1,850


The accompanying notes as they relate to Genco are an integral
      part of these consolidated financial statements.




18




**AMEREN
                  ENERGY GENERATING COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **43**
              
              $
              6Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Gain
                  on sales of emission allowances
              
              **(1**
              **)**
              
              (1
              )Depreciation
                  and amortization
              
              **26**
              
              
              27Deferred
                  income taxes and investment tax credits, net
              
              **2**
              
              
              (1
              )Other
              
              **1**
              
              
              1Changes
                  in assets and liabilities:Receivables,
                  net
              
              **18**
              
              
              28Materials
                  and supplies
              
              **-**
              
              
              (12
              )Accounts
                  and wages payable
              
              **(42**
              **)**
              
              18Taxes
                  accrued, net
              
              **16**
              
              
              (3
              )Assets,
                  other
              
              **(2**
              **)**
              
              1Liabilities,
                  other
              
              **7**
              
              
              6Pension
                  and other postretirement obligations, net
              
              **1**
              
              
              2Net
                  cash provided by operating activities
              
              **69**
              
              
              72**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(37**
              **)**
              
              (17
              )Purchases
                  of emission allowances
              
              **-**
              
              
              (26
              )Sales
                  of emission allowances
              
              **-**
              
              
              1Net
                  cash used in investing activities
              
              **(37**
              **)**
              
              (42
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **(39**
              **)**
              
              (22
              )Changes
                  in money pool borrowings
              
              **7**
              
              
              (8
              )Net
                  cash used in financing activities
              
              **(32**
              **)**
              
              (30
              )Net
                  change in cash and cash equivalents
              
              **-**
              
              
              -Cash
                  and cash equivalents at beginning of year
              
              **1**
              
              
              -Cash
                  and cash equivalents at end of period
              **$**
              **1**
              
              $
              -


The accompanying notes as they relate to Genco are an
        integral
        part of these consolidated financial statements.




19




**CILCORP
                  INC.****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Operating
                  Revenues:**Electric
              **$**
              **175**
              
              $
              92Gas
              
              **135**
              
              
              150Total
                  operating revenues
              
              **310**
              
              
              242**Operating
                  Expenses:**Fuel
              
              **23**
              
              
              24Purchased
                  power
              
              **72**
              
              
              2Gas
                  purchased for resale
              
              **103**
              
              
              119Other
                  operations and maintenance
              
              **42**
              
              
              45Depreciation
                  and amortization
              
              **19**
              
              
              18Taxes
                  other than income taxes
              
              **8**
              
              
              9Total
                  operating expenses
              
              **267**
              
              
              217**Operating
                  Income**
              
              **43**
              
              
              25**Other
                  Income and Expenses:**Miscellaneous
                  income
              
              **2**
              
              
              -Miscellaneous
                  expense
              
              **(1**
              **)**
              
              (1
              )Total
                  other income and expenses
              
              **1**
              
              
              (1
              )**Interest
                  Charges**
              
              **14**
              
              
              12**Income
                  Before Income Taxes and Preferred Dividends of****Subsidiaries**
              
              **30**
              
              
              12**Income
                  Taxes**
              
              **10**
              
              
              3**Income
                  Before Preferred Dividends of Subsidiaries**
              
              **20**
              
              
              9**Preferred
                  Dividends of Subsidiaries**
              
              **-**
              
              
              1**Net
                  Income**
              **$**
              **20**
              
              $
              8


The accompanying notes as they relate to CILCORP are an
      integral part of these consolidated financial statements.




20




**CILCORP
                  INC.****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions, except shares)****March
                  31,**
              
              
              **December
                  31,****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **27**
              
              $
              4Accounts
                  receivables – trade (less allowance for doubtfulaccounts
                  of $3 and $1, respectively)
              
              **77**
              
              
              47Unbilled
                  revenue
              
              **26**
              
              
              45Accounts
                  receivables – affiliates
              
              **37**
              
              
              10Advances
                  to money pool
              
              **-**
              
              
              42Materials
                  and supplies
              
              **45**
              
              
              93Other
                  current assets
              
              **25**
              
              
              42Total
                  current assets
              
              **237**
              
              
              283**Property
                  and Plant, Net**
              
              **1,291**
              
              
              1,277**Investments
                  and Other Assets:**Goodwill
              
              **542**
              
              
              542Intangible
                  assets
              
              **46**
              
              
              48Other
                  assets
              
              **19**
              
              
              16Regulatory
                  assets
              
              **80**
              
              
              75Total
                  investments and other assets
              
              **687**
              
              
              681**TOTAL
                  ASSETS**
              **$**
              **2,215**
              
              $
              2,241**LIABILITIES
                  AND STOCKHOLDER'S EQUITY****Current
                  Liabilities:**Current
                  maturities of long-term debt
              **$**
              **-**
              
              $
              50Short-term
                  debt
              
              **289**
              
              
              215Borrowings
                  from money pool, net
              
              **31**
              
              
              -Intercompany
                  note payable – Ameren
              
              **-**
              
              
              73Accounts
                  and wages payable
              
              **42**
              
              
              54Accounts
                  payable – affiliates
              
              **30**
              
              
              60Taxes
                  accrued
              
              **8**
              
              
              3Other
                  current liabilities
              
              **61**
              
              
              58Total
                  current liabilities
              
              **461**
              
              
              513**Long-term
                  Debt, Net**
              
              **541**
              
              
              542**Preferred
                  Stock of Subsidiary Subject to Mandatory
                  Redemption**
              
              **18**
              
              
              18**Deferred
                  Credits and Other Liabilities:**Accumulated
                  deferred income taxes, net
              
              **181**
              
              
              201Accumulated
                  deferred investment tax credits
              
              **7**
              
              
              7Regulatory
                  liabilities
              
              **65**
              
              
              73Accrued
                  pension and other postretirement benefits
              
              **173**
              
              
              171Other
                  deferred credits and liabilities
              
              **59**
              
              
              26Total
                  deferred credits and other liabilities
              
              **485**
              
              
              478**Preferred
                  Stock of Subsidiary Not Subject to Mandatory
                  Redemption**
              
              **19**
              
              
              19**Commitments
                  and Contingencies (Notes 2 and 8)****Stockholder's
                  Equity:**Common
                  stock, no par value, 10,000 shares authorized – 1,000 shares
                  outstanding
              
              **-**
              
              
              -Other
                  paid-in capital
              
              **627**
              
              
              627Retained
                  earnings
              
              **30**
              
              
              11Accumulated
                  other comprehensive income
              
              **34**
              
              
              33Total
                  stockholder's equity
              
              **691**
              
              
              671**TOTAL
                  LIABILITIES AND STOCKHOLDER'S EQUITY**
              **$**
              **2,215**
              
              $
              2,241


The accompanying notes as they relate to CILCORP are an
      integral part of these consolidated financial statements.


21


**CILCORP
                  INC.****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **20**
              
              $
              8Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **20**
              
              
              26Deferred
                  income taxes and investment tax credits
              
              **(2**
              **)**
              
              (2
              )Gain
                  on sales of emission allowances
              
              **-**
              
              
              (1
              )Other
              
              **(1**
              **)**
              
              2Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(38**
              **)**
              
              5Materials
                  and supplies
              
              **48**
              
              
              46Accounts
                  and wages payable
              
              **(30**
              **)**
              
              (43
              )Taxes
                  accrued
              
              **2**
              
              
              13Assets,
                  other
              
              **11**
              
              
              19Liabilities,
                  other
              
              **10**
              
              
              2Pension
                  and postretirement benefit obligations, net
              
              **2**
              
              
              3Net
                  cash provided by operating activities
              
              **42**
              
              
              78**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(43**
              **)**
              
              (25
              )Changes
                  in money pool advances
              
              **42**
              
              
              -Purchases
                  of emission allowances
              
              **-**
              
              
              (12
              )Sales
                  of emission allowances
              
              **-**
              
              
              1Net
                  cash used in investing activities
              
              **(1**
              **)**
              
              (36
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **-**
              
              
              (50
              )Short-term
                  debt, net
              
              **74**
              
              
              -Changes
                  in money pool borrowings
              
              **31**
              
              
              6Redemptions,
                  repurchases, and maturities:Long-term
                  debt
              
              **(50**
              **)**
              
              (3
              )Intercompany
                  note payable – Ameren
              
              **(73**
              **)**
              
              -Issuances:Intercompany
                  note payable – Ameren
              
              **-**
              
              
              5Net
                  cash used in financing activities
              
              **(18**
              **)**
              
              (42
              )Net
                  change in cash and cash equivalents
              
              **23**
              
              
              -Cash
                  and cash equivalents at beginning of year
              
              **4**
              
              
              3Cash
                  and cash equivalents at end of period
              **$**
              **27**
              
              $
              3


The accompanying notes as they relate to CILCORP are
          an
          integral part of these consolidated financial statements.
  22
 **CENTRAL
                      ILLINOIS LIGHT COMPANY****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions)****Three
                      Months Ended****March
                      31,****2007**
                  
                  
                  **2006****Operating
                      Revenues:**Electric
                  **$**
                  **175**
                  
                  $
                  92Gas
                  
                  **135**
                  
                  
                  150Total
                      operating revenues
                  
                  **310**
                  
                  
                  242**Operating
                      Expenses:**Fuel
                  
                  **22**
                  
                  
                  23Purchased
                      power
                  
                  **72**
                  
                  
                  2Gas
                      purchased for resale
                  
                  **103**
                  
                  
                  119Other
                      operations and maintenance
                  
                  **41**
                  
                  
                  41Depreciation
                      and amortization
                  
                  **18**
                  
                  
                  17Taxes
                      other than income taxes
                  
                  **8**
                  
                  
                  9Total
                      operating expenses
                  
                  **264**
                  
                  
                  211**Operating
                      Income**
                  
                  **46**
                  
                  
                  31**Other
                      Income and Expenses:**Miscellaneous
                      income
                  
                  **1**
                  
                  
                  -Miscellaneous
                      expense
                  
                  **(1**
                  **)**
                  
                  (1
                  )Total
                      other expenses
                  
                  **-**
                  
                  
                  (1
                  )**Interest
                      Charges**
                  
                  **6**
                  
                  
                  4**Income
                      Before Income Taxes**
                  
                  **40**
                  
                  
                  26**Income
                      Taxes**
                  
                  **14**
                  
                  
                  9**Net
                      Income**
                  **$**
                  **26**
                  
                  $
                  17
 The accompanying notes as they relate to CILCO are
            an integral
            part of these consolidated financial statements.
  23
 **CENTRAL
                        ILLINOIS LIGHT COMPANY****CONSOLIDATED
                        BALANCE SHEET****(Unaudited)
                        (In millions)****March
                        31,**
                    
                    
                    **December
                        31****2007**
                    
                    
                    **2006****ASSETS****Current
                        Assets:**Cash
                        and cash equivalents
                    **$**
                    **25**
                    
                    $
                    3Accounts
                        receivable – trade (less allowance for doubtfulaccounts
                        of $3 and $1, respectively)
                    
                    **77**
                    
                    
                    47Unbilled
                        revenue
                    
                    **26**
                    
                    
                    45Accounts
                        receivable – affiliates
                    
                    **32**
                    
                    
                    9Advances
                        to money pool
                    
                    **-**
                    
                    
                    42Materials
                        and supplies
                    
                    **45**
                    
                    
                    93Other
                        current assets
                    
                    **24**
                    
                    
                    32Total
                        current assets
                    
                    **229**
                    
                    
                    271**Property
                        and Plant, Net**
                    
                    **1,290**
                    
                    
                    1,275**Intangible
                        Assets**
                    
                    **1**
                    
                    
                    2**Other
                        Assets**
                    
                    **21**
                    
                    
                    18**Regulatory
                        Assets**
                    
                    **80**
                    
                    
                    75**TOTAL
                        ASSETS**
                    **$**
                    **1,621**
                    
                    $
                    1,641**LIABILITIES
                        AND STOCKHOLDERS' EQUITY****Current
                        Liabilities:**Current
                        maturities of long-term debt
                    **$**
                    **-**
                    
                    $
                    50Short-term
                        debt
                    
                    **135**
                    
                    
                    165Borrowings
                        from money pool
                    
                    **31**
                    
                    
                    -Accounts
                        and wages payable
                    
                    **42**
                    
                    
                    54Accounts
                        payable – affiliates
                    
                    **30**
                    
                    
                    47Taxes
                        accrued
                    
                    **17**
                    
                    
                    3Other
                        current liabilities
                    
                    **44**
                    
                    
                    47Total
                        current liabilities
                    
                    **299**
                    
                    
                    366**Long-term
                        Debt, Net**
                    
                    **148**
                    
                    
                    148**Preferred
                        Stock Subject to Mandatory Redemption**
                    
                    **18**
                    
                    
                    18**Deferred
                        Credits and Other Liabilities:**Accumulated
                        deferred income taxes, net
                    
                    **146**
                    
                    
                    166Accumulated
                        deferred investment tax credits
                    
                    **7**
                    
                    
                    7Regulatory
                        liabilities
                    
                    **197**
                    
                    
                    206Accrued
                        pension and other postretirement benefits
                    
                    **173**
                    
                    
                    171Other
                        deferred credits and liabilities
                    
                    **59**
                    
                    
                    24Total
                        deferred credits and other liabilities
                    
                    **582**
                    
                    
                    574**Commitments
                        and Contingencies (Notes 2 and 8)****Stockholders'
                        Equity:**Common
                        stock, no par value, 20.0 shares authorized – 13.6 shares
                        outstanding
                    
                    **-**
                    
                    
                    -Preferred
                        stock not subject to mandatory redemption
                    
                    **19**
                    
                    
                    19Other
                        paid-in capital
                    
                    **429**
                    
                    
                    415Retained
                        earnings
                    
                    **124**
                    
                    
                    99Accumulated
                        other comprehensive income
                    
                    **2**
                    
                    
                    2Total
                        stockholders' equity
                    
                    **574**
                    
                    
                    535**TOTAL
                        LIABILITIES AND STOCKHOLDERS' EQUITY**
                    **$**
                    **1,621**
                    
                    $
                    1,641
 The accompanying notes as they relate to CILCO
              are an integral
              part of these consolidated financial statements
 24


**CENTRAL
                  ILLINOIS LIGHT COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **26**
              
              $
              17Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **19**
              
              
              21Deferred
                  income taxes and investment tax credits, net
              
              **(3**
              **)**
              
              (3
              )Gain
                  on sales of emission allowances
              
              **-**
              
              
              (1
              )Other
              
              **(1**
              **)**
              
              1Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(34**
              **)**
              
              9Materials
                  and supplies
              
              **48**
              
              
              48Accounts
                  and wages payable
              
              **(17**
              **)**
              
              (43
              )Taxes
                  accrued
              
              **11**
              
              
              12Assets,
                  other
              
              **2**
              
              
              1Liabilities,
                  other
              
              **5**
              
              
              10Pension
                  and postretirement benefit obligations, net
              
              **2**
              
              
              6Net
                  cash provided by operating activities
              
              **58**
              
              
              78**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(43**
              **)**
              
              (25
              )Changes
                  in money pool advances
              
              **42**
              
              
              -Purchases
                  of emission allowances
              
              **-**
              
              
              (12
              )Sales
                  of emission allowances
              
              **-**
              
              
              1Net
                  cash used in investing activities
              
              **(1**
              **)**
              
              (36
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **-**
              
              
              (50
              )Short-term
                  debt, net
              
              **(30**
              **)**
              
              -Changes
                  in money pool borrowings
              
              **31**
              
              
              7Redemptions,
                  repurchases, and maturities of long-term debt
              
              **(50**
              **)**
              
              -Capital
                  contribution from parent
              
              **14**
              
              
              -Net
                  cash used in financing activities
              
              **(35**
              **)**
              
              (43
              )Net
                  change in cash and cash equivalents
              
              **22**
              
              
              (1
              )Cash
                  and cash equivalents at beginning of year
              
              **3**
              
              
              2Cash
                  and cash equivalents at end of period
              **$**
              **25**
              
              $
              1


The accompanying notes as they relate to CILCO are an integral
      part of these consolidated financial statements.




25




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  STATEMENT OF INCOME****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              **2006****Operating
                  Revenues:**Electric
              **$**
              **272**
              
              $
              242Gas
              
              **241**
              
              
              255Other
              
              **2**
              
              
              -Total
                  operating revenues
              
              **515**
              
              
              497**Operating
                  Expenses:**Purchased
                  power
              
              **189**
              
              
              177Gas
                  purchased for resale
              
              **185**
              
              
              201Other
                  operations and maintenance
              
              **59**
              
              
              59Depreciation
                  and amortization
              
              **21**
              
              
              19Amortization
                  of regulatory assets
              
              **4**
              
              
              -Taxes
                  other than income taxes
              
              **21**
              
              
              22Total
                  operating expenses
              
              **479**
              
              
              478**Operating
                  Income**
              
              **36**
              
              
              19**Other
                  Income and Expenses:**Miscellaneous
                  income
              
              **2**
              
              
              1Miscellaneous
                  expense
              
              **(1**
              **)**
              
              (1
              )Total
                  other income
              
              **1**
              
              
              -**Interest
                  Charges**
              
              **16**
              
              
              12**Income
                  Before Income Taxes**
              
              **21**
              
              
              7**Income
                  Taxes**
              
              **8**
              
              
              3**Net
                  Income**
              
              **13**
              
              
              4**Preferred
                  Stock Dividends**
              
              **1**
              
              
              1**Net
                  Income Available to Common Stockholder**
              **$**
              **12**
              
              $
              3


The accompanying notes as they relate to IP are an integral
        part of these consolidated financial statements.
  26




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  BALANCE SHEET****(Unaudited)
                  (In millions)****March
                  31,**
              
              
              **December
                  31,****2007**
              
              
              **2006****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              **$**
              **43**
              
              $
              -Accounts
                  receivable - trade (less allowance for doubtfulaccounts
                  of $8 and $3, respectively)
              
              **177**
              
              
              105Unbilled
                  revenue
              
              **61**
              
              
              101Accounts
                  receivable – affiliates
              
              **5**
              
              
              1Advances
                  to money pool
              
              **16**
              
              
              -Materials
                  and supplies
              
              **52**
              
              
              122Other
                  current assets
              
              **20**
              
              
              27Total
                  current assets
              
              **374**
              
              
              356**Property
                  and Plant, Net**
              
              **2,147**
              
              
              2,134**Investments
                  and Other Assets:**Investment
                  in IP SPT
              
              **8**
              
              
              8Goodwill
              
              **214**
              
              
              214Other
                  assets
              
              **48**
              
              
              62Regulatory
                  assets
              
              **397**
              
              
              401Total
                  investments and other assets
              
              **667**
              
              
              685**TOTAL
                  ASSETS**
              **$**
              **3,188**
              
              $
              3,175**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****Current
                  Liabilities**:Current
                  maturities of long-term debt to IP SPT
              **$**
              **49**
              
              $
              51Short-term
                  debt
              
              **190**
              
              
              75Borrowings
                  from money pool
              
              **-**
              
              
              43Accounts
                  and wages payable
              
              **84**
              
              
              119Accounts
                  payable – affiliates
              
              **48**
              
              
              67Taxes
                  accrued
              
              **3**
              
              
              7Other
                  current liabilities
              
              **70**
              
              
              72Total
                  current liabilities
              
              **444**
              
              
              434**Long-term
                  Debt, Net**
              
              **770**
              
              
              772**Long-term
                  Debt to IP SPT**
              
              **69**
              
              
              92**Deferred
                  Credits and Other Liabilities:**Regulatory
                  liabilities
              
              **77**
              
              
              110Accrued
                  pension and other postretirement benefits
              
              **232**
              
              
              230


Accumulated
                deferred income taxes
            
            **130**
            
            
            138Other
                deferred credits and other noncurrent liabilities
            
            **108**
            
            
            53Total
                deferred credits and other liabilities
            
            **547**
            
            
            531**Commitments
                and Contingencies (Notes 2 and 8)****Stockholders’
                Equity:**Common
                stock, no par value, 100.0 shares authorized – 23.0 shares outstanding
            
            **-**
            
            
            -Other
                paid-in-capital
            
            **1,194**
            
            
            1,194Preferred
                stock not subject to mandatory redemption
            
            **46**
            
            
            46Retained
                earnings
            
            **113**
            
            
            101Accumulated
                other comprehensive income
            
            **5**
            
            
            5Total
                stockholders’ equity
            
            **1,358**
            
            
            1,346**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            **$**
            **3,188**
            
            $
            3,175


The accompanying notes as they relate to IP are an integral
      part of these consolidated financial statements.




27




**ILLINOIS
                  POWER COMPANY****CONSOLIDATED
                  STATEMENT OF CASH FLOWS****(Unaudited)
                  (In millions)****Three
                  Months Ended****March
                  31,****2007**
              
              
              **2006****Cash
                  Flows From Operating Activities:**Net
                  income
              **$**
              **13**
              
              $
              4Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              **22**
              
              
              7Amortization
                  of debt issuance costs and premium/discounts
              
              **2**
              
              
              1Deferred
                  income taxes
              
              **5**
              
              
              7Changes
                  in assets and liabilities:Receivables,
                  net
              
              **(36**
              **)**
              
              21Materials
                  and supplies
              
              **70**
              
              
              75Accounts
                  and wages payable
              
              **(40**
              **)**
              
              (46
              )Assets,
                  other
              
              **17**
              
              
              15Liabilities,
                  other
              
              **3**
              
              
              (23
              )Pension
                  and other postretirement benefit obligations, net
              
              **2**
              
              
              4Net
                  cash provided by operating activities
              
              **58**
              
              
              65**Cash
                  Flows From Investing Activities:**Capital
                  expenditures
              
              **(46**
              **)**
              
              (38
              )Changes
                  in money pool advances
              
              **(16**
              **)**
              
              -Net
                  cash used in investing activities
              
              **(62**
              **)**
              
              (38
              )**Cash
                  Flows From Financing Activities:**Dividends
                  on common stock
              
              **-**
              
              
              -Dividends
                  on preferred stock
              
              **(1**
              **)**
              
              (1
              )Short-term
                  debt, net
              
              **115**
              
              
              -Changes
                  in money pool borrowings, net
              
              **(43**
              **)**
              
              3Redemptions,
                  repurchases and maturities of long-term debt
              
              **(22**
              **)**
              
              (23
              )Overfunding
                  of transitional funding trust notes
              
              **(2**
              **)**
              
              (5
              )Net
                  cash provided by (used in) financing activities
              
              **47**
              
              
              (26
              )Net
                  change in cash and cash equivalents
              
              **43**
              
              
              1Cash
                  and cash equivalents at beginning of year
              
              **-**
              
              
              -Cash
                  and cash equivalents at end of period
              **$**
              **43**
              
              $
              1


The accompanying notes as they relate to IP are an integral
      part of these consolidated financial statements.






28




**AMEREN
        CORPORATION** **(Consolidated)**
 **UNION
        ELECTRIC COMPANY** **(Consolidated)**
 **CENTRAL
        ILLINOIS PUBLIC SERVICE COMPANY**
 **AMEREN
        ENERGY GENERATING COMPANY** **(Consolidated)**
 **CILCORP
        INC.** **(Consolidated)**
 **CENTRAL
        ILLINOIS LIGHT COMPANY** **(Consolidated)**
 **ILLINOIS
        POWER COMPANY** **(Consolidated)**
 
 **COMBINED
        NOTES TO FINANCIAL STATEMENTS**
 **(Unaudited)**
 **March
        31, 2007**
 
 **NOTE
        1 -** **SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES** ****
 
 **General**
 
 Ameren,
        headquartered in St. Louis, Missouri, is a public utility holding company
        under
        PUHCA 2005, administered by FERC. Ameren’s primary assets are the common stock
        of its subsidiaries. Ameren’s subsidiaries, which are separate, independent
        legal entities with separate businesses, assets and liabilities, operate
        rate-regulated electric generation, transmission and distribution businesses,
        rate-regulated natural gas transmission and distribution businesses and
        non-rate-regulated electric generation businesses in Missouri and Illinois.
        Dividends on Ameren’s common stock depend on distributions made to it by its
        subsidiaries. Ameren’s principal subsidiaries are listed below. Also see the
        Glossary of Terms and Abbreviations at the front of this report.
 
 ·
            UE,
                or Union Electric Company, also known as AmerenUE, operates a
                rate-regulated electric generation, transmission and distribution
                business, and a rate-regulated natural gas transmission and distribution
                business in Missouri. ·
            CIPS,
                or Central Illinois Public Service Company, also known as AmerenCIPS,
                operates a rate-regulated electric and natural gas transmission and
                distribution business in Illinois. ·
            Genco,
                or Ameren Energy Generating Company, operates a non-rate-regulated
                electric generation business in Illinois and Missouri. ·
            CILCO,
                or Central Illinois Light Company, also known as AmerenCILCO, is
                a
                subsidiary of CILCORP (a holding company). It operates a rate-regulated
                electric and natural gas transmission and distribution business and
                a
                non-rate-regulated electric generation business (through its subsidiary
                AERG), all in Illinois. ·
            IP,
                or Illinois Power Company, also known as AmerenIP, operates a
                rate-regulated electric and natural gas transmission and distribution
                business in Illinois.  Ameren
        has various other subsidiaries responsible for the short- and long-term
        marketing of power, procurement of fuel, management of commodity risks, and
        provision of other shared services. Ameren has an 80% ownership interest
        in EEI
        through UE and Development Company, which each own 40% of EEI. Ameren
        consolidates EEI for financial reporting purposes, while UE reports EEI under
        the equity method. The following table presents summarized financial information
        of EEI for the three months ended March 31, 2007 and 2006.
 
 **Three
                  Months****2007**
              
              **2006**Operating
                  revenues
              **$**
              **97**
              
              $
              97Operating
                  income
              
              **54**
              
              
              56Net
                  income
              
              **34**
              
              
              35
 
 The
        financial statements of the Ameren Companies (except CIPS) are prepared on
        a
        consolidated basis and therefore include the accounts of their majority-owned
        subsidiaries as applicable. All significant intercompany transactions have
        been
        eliminated. All tabular dollar amounts are in millions, unless otherwise
        indicated.
 
 Our
        accounting policies conform to GAAP. Our financial statements reflect all
        adjustments (which include normal, recurring adjustments) necessary, in our
        opinion, for a fair presentation of our results. The preparation of financial
        statements in conformity with GAAP requires management to make certain estimates
        and assumptions. Such estimates and assumptions affect reported amounts of
        assets and liabilities, the disclosure of contingent assets and liabilities
        at
        the dates of financial statements, and the reported amounts of revenues and
        expenses during the reported periods. Actual results could differ from those
        estimates. The results of operations of an interim period may not give a
        true
        indication of results for a full year. These financial statements should
        be read
        in conjunction with the financial statements and the notes thereto included
        in
        the Ameren Companies’ combined Annual Report on Form 10-K for the fiscal year
        ended December 31, 2006.
 
 **Earnings
        Per Share**
 
 There
        were no material differences between Ameren’s basic and diluted earnings per
        share amounts for the three months ended March 31, 2007 and 2006, due to
        an
        immaterial number of stock options, restricted stock units and performance
        share
        units outstanding.
 
 
 29
  **Long-term
        Incentive Plan of 1998 and 2006 Omnibus Incentive Compensation
        Plan**
 
 A
        summary
        of nonvested shares as of March 31, 2007, and changes during the quarter
        ended
        March 31, 2007, under the Long-term Incentive Plan of 1998, as amended, and
        the
        2006 Omnibus Incentive Compensation Plan (2006 Plan) is presented
        below:
 
 **Performance
                  Share Units**
              
              **Restricted
                  Shares****Shares**
              
              **Weighted-average
                  Fair Value Per Unit**
              
              **Shares**
              
              **Weighted-average
                  Fair Value Per Share**Nonvested
                  at January 1, 2007
              
              338,516
              
              $
              56.07
              
              
              377,776
              
              $
              45.79Granted(a)
              
              357,573
              
              
              59.60
              
              
              -
              
              
              -Dividends
              
              -
              
              
              -
              
              
              3,886
              
              
              50.22Forfeitures
              
              (6,851
              )
              
              56.07
              
              
              (5,841
              )
              
              46.47Vested(b)
              
              (9,946
              )
              
              59.60
              
              
              (70,391
              )
              
              43.84Nonvested
                  at March 31, 2007
              
              679,292
              
              $
              57.88
              
              
              305,430
              
              $
              46.24
  (a)
            Includes
                performance share units (share units) granted to certain executive
                and
                non-executive officers and other eligible employees in February 2007
                under
                the 2006 Plan. (b)
            Share
                units vested due to attainment of retirement eligibility by certain
                employees. Actual shares issued for retirement-eligible employees
                will
                vary depending on actual performance over the three-year measurement
                period. 
 The
        fair
        value of each share unit awarded in February 2007 under the 2006 Plan was
        determined to be $59.60 based on Ameren’s closing common share price of $53.99
        per share at the grant date and lattice simulations used to estimate expected
        share payout based on Ameren’s attainment of certain financial measures relative
        to the designated peer group. The significant assumptions used to calculate
        fair
        value also included a three-year risk-free rate of 4.735%, dividend yields
        of
        2.3% to 5.2% for the peer group, volatility of 12.91% to 18.33% for the peer
        group, and Ameren’s maintenance of its $2.54 annual dividend over the
        performance period.
 
 Ameren
        recorded compensation expense of $5 million and $2 million for the three-month
        period ended March 31, 2007 and 2006, respectively, and a related tax benefit
        of
        $2 million and $1 million for the three-month period ended March 31, 2007
        and
        2006, respectively. As of March 31, 2007, total compensation cost of $33
        million
        related to nonvested awards not yet recognized is expected to be recognized
        over
        a weighted-average period of 3 years.
  **Accounting
        Changes and Other Matters**
 
 **FASB
        Interpretation No. 48,** ***Accounting
        for Uncertainty in Income Taxes - an Interpretation of SFAS No.
        109*** **(FIN 48)**
 
 FIN
        48
        addresses the determination of whether tax benefits claimed or expected to
        be
        claimed on a tax return should be recorded in the financial statements. Under
        FIN 48, Ameren may recognize the tax benefit from an uncertain tax position
        only
        if it is more likely than not that the tax position will be sustained on
        examination by the taxing authorities, based on the technical merits of the
        position. The tax benefits recognized in the financial statements from such
        a
        position should be measured based on the largest benefit that has a greater
        than
        50% likelihood of being realized upon ultimate settlement. FIN 48 also provides
        guidance on derecognition of income tax assets and liabilities, classification
        of current and deferred income tax assets and liabilities, accounting for
        interest and penalties on income taxes, accounting for income taxes in interim
        periods and requires expanded disclosures.
 
 The
        Ameren Companies adopted the provisions of FIN 48 on January 1, 2007. The
        amount
        of unrecognized tax benefits as of January 1, 2007, was $155 million, $58
        million,
 $15
        million, $36 million, $18 million, $18 million and $12 million for Ameren,
        UE,
        CIPS, Genco, CILCORP, CILCO and IP, respectively. Of these unrecognized tax
        benefits on January 1, 2007, $20 million, $6 million, less than $1 million,
        less
        than $1 million, and less than $1 million for Ameren, UE, CIPS, Genco, and
        CILCORP, respectively, would impact the respective company’s effective tax rate,
        if recognized.
 
 As
        of
        January 1, 2007, the Ameren Companies adopted a policy of recognizing interest
        and penalties accrued on tax liabilities on a gross basis as interest expense
        or
        penalty expense in the statements of income. Prior to January 1, 2007, the
        Ameren Companies recognized such items in the provision for taxes on a
        net-of-tax basis. As of January 1, 2007, Ameren, UE, CIPS, Genco, CILCORP,
        CILCO, and IP had recorded a liability of approximately $12 million, $5 million,
        less than $1 million, $4 million, $1 million, less than $1 million, and less
        than $1 million, respectively, for the payment of interest with respect to
        unrecognized tax benefits and no amount for penalties with respect to
        unrecognized tax benefits.
 
 All
        of
        the Ameren Companies’ federal income tax returns are closed through 2001. The
        Ameren Companies are currently under federal income tax return examination
        for
        years 2002 through 2004. State income tax returns are generally subject to
        examination for a period of three years after filing of the respective return.
        The state impact of any federal changes remains subject to examination by
        various states for a period of up to one year after formal notification to
  30
  the
        states. The Ameren Companies do not have state income tax returns in the
        process
        of examination. The Ameren Companies also do not have material state income
        tax
        issues in the process of administrative appeals or litigation.
  The
        Ameren Companies are not aware of an event that is reasonably possible of
        occurring that would cause the total amount of unrecognized tax benefits
        to
        significantly increase or decrease within twelve months after the date of
        the
        Ameren Companies’ adoption of FIN 48.
 
 **SFAS
        No. 159,** ***The
        Fair Value Option for Financial Assets and Financial Liabilities, Including
        an
        Amendment of SFAS No. 115***
  In
        February 2007, the FASB issued SFAS No. 159, which permits companies
        to choose to measure many financial instruments and certain assets and
        liabilities at fair value that are not currently required to be measured
        at fair
        value on an instrument-by-instrument basis. Entities electing the fair value
        option will be required to recognize changes in fair value in earnings and
        to
        expense upfront cost and fees associated with the item for which the fair
        value
        option is elected. SFAS No. 159 is effective as of the beginning of our 2008
        fiscal year. We are currently evaluating whether we will elect the fair value
        option for any of our eligible financial instruments and other items.
  **Goodwill
        and Intangible Assets**
 
 *Goodwill.* Goodwill
        represents the excess of the purchase price of an acquisition over the fair
        value of the net assets acquired. We evaluate goodwill for impairment in
        the
        fourth quarter of each year, or more frequently if events and circumstances
        indicate that the asset might be impaired. See Note 2 - Rate and Regulatory
        Matters for a discussion of events in Illinois that could lead to a triggering
        event for the evaluation of goodwill. Ameren’s and IP’s goodwill relates to the
        acquisitions of IP and an additional 20% ownership interest in EEI in 2004,
        and
        Ameren’s and CILCORP’s goodwill relates to the acquisitions of CILCORP and
        Medina Valley in 2003. For the period from January 1, 2007 to March 31, 2007,
        there were no changes in the carrying amount of goodwill.
  *Intangible
        Assets.* ****** At
        March
        31, 2007, intangible assets consisted of emission allowances of $210 million
        at
        Ameren, $57 million at UE, $66 million at Genco, $46 million at CILCORP and
        $1
        million at CILCO. Emission allowances consist of various individual emission
        allowance certificates and do not have expiration dates. Emission allowances
        are
        charged to fuel expense as they are used in operations. During the first
        quarter
        of 2006, a $4 million impairment was recorded for customer contracts, which
        had
        been amortized over an average life of 10 years.
 
 The
        following table presents the net carrying value of emission allowances consumed
        or (sold) for Ameren, UE, Genco, CILCORP and CILCO during the three months
        ended
        March 31, 2007 and 2006.
 
 **2007**
              
              **2006**Ameren(a)
              $
              7
              
              $
              11UE
              
              (3
              )
              
              (2
              )Genco
              
              7
              
              
              8CILCORP(b)
              
              2
              
              
              5CILCO
              
              1
              
              
              3
  (a)
            Includes
                amounts for Ameren registrant and nonregistrant subsidiaries and
                intercompany eliminations. (b)
            Includes
                allowances consumed that were recorded through purchase
                accounting. 
 31
  **Excise
        Taxes**
  Excise
        taxes reflected on Missouri electric, Missouri gas, and Illinois gas customer
        bills are imposed on us. They are recorded gross in Operating Revenues and
        Taxes
        Other than Income Taxes on the statement of income. Excise taxes reflected
        on
        Illinois electric customer bills are imposed on the consumer and are therefore
        not included in revenues and expenses. They are recorded as tax collections
        payable and included in Taxes Accrued. The following table presents excise
        taxes
        recorded in Operating Revenues and Taxes Other
        than Income Taxes for the three months ended March 31, 2007 and
        2006:
 
 **Three
                  Months****2007**
              
              **2006**Ameren
              **$**
              **42**
              
              $
              47UE
              
              **23**
              
              
              25CIPS
              
              **5**
              
              
              6CILCORP
              
              **4**
              
              
              5CILCO
              
              **4**
              
              
              5IP
              
              **11**
              
              
              11
  **Asset
        Retirement Obligations**
 
 AROs
        at
        Ameren and UE increased compared to December 31, 2006, to reflect the accretion
        of obligations to their fair values.
 
 **NOTE
        2 -** **RATE
        AND REGULATORY MATTERS** ****
 
 Below
        is
        a summary of significant regulatory proceedings and related lawsuits. We
        are
        unable to predict the ultimate outcome of these matters, the timing of the
        final decisions of the various agencies and courts, or the impact on our
        results
        of operations, financial position, or liquidity.
 
 **Missouri**
 
 *Electric*
 
 With
        the
        expiration of an electric rate moratorium that provided for no changes in
        UE’s
        electric rates before July 1, 2006, UE filed in July 2006 a request with
        the
        MoPSC for an increase in base rates for electric service. UE’s original filing
        included a proposed average increase in electric rates of 17.7%, or $361
        million
        based on a requested return on equity of 12.0%. This rate increase filing
        was
        based on a test year ended June 30, 2006, and was updated for known and
        measurable items through January 1, 2007. In December 2006, the MoPSC staff
        and
        other stakeholders filed their direct testimony in response to UE’s electric
        rate increase filing. The MoPSC staff recommended in their testimony an electric
        rate reduction of $136 million to $168 million based on a return on equity
        of
        9.75% to 9.0%. The Missouri attorney general recommended a $53 million rate
        reduction based on a 9.0% return on equity. The Missouri Office of Public
        Counsel recommended a return on equity of 9.65%.
  Subsequently,
        parties in this rate case have settled certain issues. As a result, UE and
        the
        MoPSC staff revised their positions in testimony filed with the MoPSC in
        April
        2007. UE’s revised position is an electric rate increase request of $245 million
        based on a return on equity of 12.0%, and the MoPSC staff’s revised
        recommendation is an electric rate reduction of $39 million to $75 million
        based
        on a return on equity of 9.75% to 9.0%. The major factors contributing to
        the
        difference between the revised UE rate increase request and the MoPSC staff
        revised rate reduction recommendation include return on equity, depreciation
        levels, the treatment of a cost-based contract between UE and EEI, which
        expired
        in December 2005, margins for interchange sales, and the treatment of emission
        allowance sales, among other matters. In addition, the MoPSC staff and
        intervenors have recommended that UE not be granted the right to use a fuel
        and
        purchased power cost recovery mechanism.
 
 Evidentiary
        hearings in this rate case were completed in March 2007. A decision from
        the
        MoPSC is expected no later than June 2007.
 
 *Gas*
 
 In
        March
        2007, a stipulation and agreement was approved by the MoPSC, which resolved
        a
        July 2006 request by UE to the MoPSC to increase annual natural gas delivery
        revenues by $11 million. The stipulation and agreement authorized an increase
        in
        annual natural gas delivery revenues of $6 million, effective April 1, 2007.
        Other principal provisions of the stipulation and agreement
        include:
 
 ·
            UE’s
                agreement to not file a natural gas delivery rate case before March
                15,
                2010. This agreement does not prevent UE from filing to recover
                infrastructure costs through a statutory infrastructure system replacement
                surcharge (ISRS) during this three-year rate moratorium. The return
                on
                equity to be used by UE for purposes of any future ISRS tariff filing
                is
                10.0%. ·
            Authorization
                for UE to transition from four PGA rates to a single PGA rate for
                all its
                gas customers. 
 **Illinois**
 
 *Electric*
  Under
        the
        Illinois Customer Choice Law, as amended with
        the
        consent of the Illinois utilities, CIPS’,
        CILCO’s and IP’s rates were frozen through January
        1, 2007.  New
        electric rates for CIPS, CILCO and IP went into effect on January 2, 2007,
        reflecting delivery service tariffs approved by the ICC in November 2006
        and
        full cost recovery of power procurement costs. As
        a
        result of these new electric rates going into effect, the estimated average
        annual residential rate overall increase is expected to be 40% to 55%. The
        estimated average annual residential rate overall increase for electric heat
        customers is
  32
  expected
        to be 60% to 80%.  The
        following is a discussion of the current status of significant regulatory
        and
        legislative matters affecting our Illinois electric operations.
  Illinois
        Power Procurement
  In
        February 2005, CIPS, CILCO and IP filed with the ICC a proposed process for
        power procurement through an ICC-monitored auction, including, among other
        things, a rate mechanism to pass power supply costs directly through to
        customers, to take effect after the Illinois electric freeze expired on January
        1, 2007 and supply contracts expired on December 31, 2006. The form of power
        supply would meet the full requirements of each utility, and the risk of
        fluctuations in power supply requirements would be borne by the supplier.
        In
        January 2006, the ICC issued an order that unanimously approved the Ameren
        Illinois Utilities’ proposed power procurement auction and the related tariffs
        for use commencing January 2, 2007, including the retail rates by which power
        supply costs would be passed through to customers.
 
 In
        accordance with the January 2006 ICC order, the power procurement auction
        was
        held at the beginning of September 2006. On September 14, 2006, the ICC
        determined that it would not investigate the results of the auction to procure
        power for fixed-price customers, which include the vast majority of electric
        customers of CIPS, CILCO and IP. On September 15, 2006, the independent auction
        manager, NERA Economic Consulting, declared a successful result in the auction
        for fixed-price customers. The auction clearing price was about $65 per
        megawatthour for the fixed-price residential and small commercial customers
        and
        about $85 per megawatthour for large commercial and industrial customers.
        Marketing Company was awarded sales in the auction. See Note 7 - Related
        Party
        Transactions for a discussion of affiliate power supply agreements. As a
        result
        of the high auction clearing price for large commercial and industrial
        customers, almost all of these customers chose a different supplier.
 
 Certain
        Illinois legislators, the Illinois attorney general, the Illinois governor
        and
        other parties sought to block the power procurement auction. They continue
        to
        challenge the auction and the structure for the recovery of costs for power
        supply resulting from the auction through rates to customers. Opponents of
        the
        power procurement auction and related tariffs claim that the ICC did not
        have
        authority to approve market-based rates for electric service that have not
        been
        declared “competitive” pursuant to Section 16-113 of the Illinois Customer
        Choice Law. They further claim that the energy component of CIPS’, CILCO’s and
        IP’s retail rates for electricity should not be based on the costs to procure
        energy and capacity in the wholesale market. CIPS, CILCO and IP have received
        favorable rulings from the ICC and the circuit court of Cook County, Illinois,
        on opposition claims filed by the Illinois attorney general, CUB and
        ELPC.
 
 Various
        parties, including CIPS, CILCO, IP, the Illinois attorney general, CUB, and
        ELPC, appealed to Illinois district appellate courts the ICC’s denial of
        rehearing requests with respect to its January 2006 order. Although CIPS,
        CILCO
        and IP are generally supportive of the ICC order, they filed a request for
        rehearing with regard to the provision of the January 2006 order requiring
        an
        annual postauction prudence review to be performed by the ICC. In June 2006,
        the
        Illinois attorney general filed a petition with the Supreme Court of Illinois
        seeking a direct and expedited review of appeals filed with Illinois district
        courts by various parties of the ICC’s January 2006 order approving the Illinois
        power procurement auction and a stay on implementation of the order. In this
        petition, the Illinois attorney general raised similar arguments to those
        discussed above. In August 2006, the Supreme Court of Illinois denied the
        Illinois attorney general’s petition and ordered that the appeals be
        consolidated in the appellate court for the Second District in Illinois.
        The
        Second District appellate court granted a motion of the Illinois attorney
        general to dismiss CIPS’, CILCO’s and IP’s appeal regarding the need for an
        annual postauction prudence review claiming that it was filed prematurely.
        CIPS,
        CILCO and IP appealed that decision to the Illinois Supreme Court, where
        it is
        now pending. In addition, in December 2006, the Illinois attorney general
        filed
        a motion to stay the effectiveness of the retail rates approved by the ICC
        in
        its January 2006 order. The motion was denied by the Second District appellate
        court in December 2006, and upon appeal, denied by the Illinois Supreme Court
        in
        January 2007. The Illinois attorney general’s, CUB’s and ELPC’s appeals at the
        Second District appellate court are still pending.
 
 In
        March
        2007, the Illinois attorney general filed a complaint with FERC against 16
        electricity suppliers, including Marketing Company, which are selling power
        to
        CIPS, CILCO, IP and Commonwealth Edison Company pursuant to contracts entered
        into as a result of the September 2006 power procurement auction discussed
        above. The complaint requests that FERC, among other things, suspend the
        rates
        that the power suppliers are charging the Ameren Illinois Utilities and
        Commonwealth Edison Company and commence a proceeding to determine whether
        such
        rates are just and reasonable, and investigate evidence of price manipulation
        in
        the power procurement auction; revise the contracts and require refunds of
        sales
        at rates that are not just and reasonable; assess civil penalties against
        power
        suppliers that violated prohibitions against market manipulation and require
        any
        violators to disgorge excess profits and direct certain currently unidentified
        power suppliers to show cause why their market-based rate authority should
        not
        be revoked.
 
 Additionally,
        Ameren, CIPS, CILCO, IP, Commonwealth Edison Company and its parent company,
        Exelon
 33
 
 Corporation,
        and 15 electricity suppliers, including Marketing Company, which are selling
        power to the Illinois utilities pursuant to contracts entered into as a result
        of the September 2006 power procurement auction, were named as defendants
        in two
        similar class action lawsuits filed in the Circuit Court of Cook County,
        Illinois in March 2007. The class asserted to be represented by the Commonwealth
        Edison Company electric customers who filed the complaints are all customers
        who
        purchased electric service from Commonwealth Edison Company or the Ameren
        Illinois Utilities. Both lawsuits allege, among other things, that the Illinois
        utilities and the power suppliers illegally manipulated prices in the September
        2006 power procurement auction. The relief sought in both lawsuits is actual
        damages to be determined at trial and legal costs, including attorneys’ fees.
        One of the lawsuits also seeks punitive damages and recovery of illegal profits
        and excludes the Ameren Illinois Utilities from the requests for relief.
        In
        April 2007, the defendants in these lawsuits filed notices removing these
        cases
        to the U.S. District Court for the Northern District of Illinois.
 
 Delivery
        Service Rate Cases
 
 CIPS,
        CILCO and IP filed rate cases with the ICC in December 2005 to modify their
        electric delivery service rates effective January 2, 2007. CIPS, CILCO and
        IP
        requested to increase their annual revenues for electric delivery service
        by
        $202 million in the aggregate (CIPS - $14 million, CILCO - $43 million and
        IP -
        $145 million). In November 2006, the ICC issued an order approving an annual
        revenue increase for electric delivery service of $97 million in the aggregate
        (CIPS - $8 million decrease, CILCO - $21 million increase and IP - $84 million
        increase). The ICC’s order was based on a return on equity of 10.08%, 10.08% and
        10.12% for CIPS, CILCO and IP, respectively. In December 2006, the ICC granted
        the Ameren Illinois Utilities’ petition for rehearing of the November 2006 order
        on the recovery of certain administrative and general expenses, totaling
        $50
        million, that were disallowed. The administrative law judges rehearing the
        November 2006 order issued a proposed order in April 2007 recommending no
        recovery of these expenses by CIPS, CILCO and IP. The ICC’s decision on the
        recovery of these expenses is due in May 2007. The ICC denied requests for
        rehearings filed by other parties to this case. Prior to January 2, 2007,
        most
        customers of the Ameren Illinois Utilities were taking service under a frozen
        bundled electric rate, which included the cost of power, so these delivery
        service revenue changes do not directly correspond to a change in CIPS’, CILCO’s
        or IP’s revenues or earnings under the new electric delivery service
        rates.
  Electric
          Rate Increase Phase-in Plan
 
 As
          a
          result of the downgrade by Moody's of CIPS', CILCO's and IP's issuer credit
          ratings to below investment grade (junk) status on March 12, 2007, CIPS,
          CILCO
          and IP informed the ICC on March 14, 2007, that the Ameren Illinois Utilities
          would be unable to offer the $20 million one-time customer bill credit
          intended
          to assist high-use residential customers that was initially proposed on
          March 7,
          2007. They also indicated that the Ameren Illinois Utilities would be unable
          to
          offer the Customer Elect phase-in plan, including the March 2007 amendment,
          which would have provided for 0% interest on a deferred portion of customers'
          bills in excess of a 14% annual increase in electric rates in 2007 through
          2009.
          The Ameren Illinois Utilities also notified the ICC that the $15 million
          contribution that the utilities announced in 2006 and intended to make
          to fund
          energy assistance and energy efficiency initiatives would not be made. As a
          result, the Ameren Illinois Utilities reversed a $15 million charge in
          the first
          quarter of 2007 that was originally recorded in 2006. The Ameren Illinois
          Utilities took such steps because of the need to fund ongoing utility
          operations.
 
 Potential
          Electric Rate Freeze and Recovery of Post-2006 Power Supply Costs
 
 On
          April
          20, 2007, the Illinois Senate approved legislation, known as Senate Bill
          1592,
          that, if enacted into law, would reduce electric rates of CIPS, CILCO and
          IP to
          the rates which were in effect prior to January 2, 2007. As passed by the
          Illinois Senate, Senate Bill 1592 would not impact other Illinois utilities.
          Senate Bill 1592 provides that the cost of electric energy reflected in
          the
          Ameren Illinois Utilities’ electric rates in effect prior to January 2, 2007,
          cannot be changed for a period of one year after enactment into law. This
          would
          prevent the Ameren Illinois Utilities from recovering from retail customers
          substantial portions of the cost of electric energy the Ameren Illinois
          Utilities are purchasing under wholesale contracts entered into as a result
          of
          the September 2006 power procurement auction discussed above for at least
          one
          year after enactment into law, and would cause the Ameren Illinois Utilities
          to
          under recover their delivery service costs until the ICC could approve
          higher
          delivery service rates. Senate Bill 1592 also includes a requirement for
          refunds, with interest, of charges collected from customers since January
          2,
          2007 in excess of the pre-January 2, 2007 rates. If this refund requirement
          was
          enacted into law, CIPS, CILCO and IP may have been required to refund
          approximately $37 million, $21 million, and $49 million, respectively,
          of such
          charges collected from customers during the three months ended March 31,
          2007.
          On March 6, 2007, the Illinois House of Representatives approved legislation
          that would apply to the Ameren Illinois Utilities and Commonwealth Edison
          Company and which provides for a three-year rate freeze and included a
          similar
          refund requirement. To become law in Illinois, legislation must be passed
          by the
          House of Representatives and Senate and signed by the Governor. The Governor
          has
          previously expressed support for rate rollback and freeze legislation.
          Despite
          passage by the Illinois House of Representatives and the Illinois Senate
          of
          similar rate rollback
  34
  and
          freeze legislation and statements by the Illinois Governor in support of
          rate
          rollback and freeze legislation, it is uncertain whether Senate Bill 1592,
          the
          House legislation, or any rate freeze legislation will ultimately be enacted
          into law.
 
 Ameren,
          CIPS, CILCORP, CILCO and IP believe that any legislation reducing electric
          rates
          to pre-January 2, 2007, levels is unlawful and unconstitutional. In the
          event
          that such legislation is enacted into law, the Ameren Illinois Utilities
          intend
          to vigorously pursue all available legal actions and strategies to protect
          their
          legal and financial interests, including seeking immediate injunctive relief
          to
          prevent the implementation of such legislation. The Ameren Illinois Utilities
          believe that such actions will be successful in both enjoining the
          implementation of, and ultimately invalidating, such legislation.
 
 Even
          if
          efforts to promptly enjoin the implementation of legislation to reduce
          electric
          rates to pre-January 2, 2007 levels were successful, Ameren, CIPS, CILCORP,
          CILCO and IP believe that the mere enactment into law of such legislation
          would
          nonetheless result in material adverse consequences to CIPS, CILCORP, CILCO
          and
          IP until final resolution of any litigation challenging such legislation.
          These
          material adverse consequences would include a significant drop in credit
          ratings
          to deep junk (or speculative) status, requirements to post collateral or
          other
          assurances for certain obligations, a reduction in access to the capital
          markets
          on reasonable terms and higher borrowing costs. These material adverse
          consequences could also include higher power supply costs, an inability
          to make
          timely energy infrastructure investments, disruption in electric and gas
          service
          and significant job losses. Consequently, the Ameren Illinois Utilities
          and
          CILCORP anticipate that their results of operations, financial position
          and
          liquidity would be materially adversely affected. Ameren’s results of
          operations, financial position and liquidity could also be materially adversely
          affected.
 
 If
          legislation to reduce electric rates to pre-January 2, 2007 levels is enacted
          into law and the implementation of such legislation is not promptly enjoined,
          Ameren, CIPS, CILCORP, CILCO and IP believe that their results of operations,
          financial position, and liquidity would be materially adversely affected.
          Any
          action, including any legislation to reduce electric rates to pre-January
          2,
          2007, levels, that impairs the ability of the Ameren Illinois Utilities
          to fully
          recover purchased power or distribution costs from their electric customers
          in a
          timely manner would result in material adverse consequences to CIPS, CILCORP,
          CILCO and IP and, potentially, Ameren. These material adverse consequences
          would
          include a significant drop in credit ratings to deep junk (or speculative)
          status, a severe limitation on their ability to procure reasonable financing
          from third party lending sources, higher borrowing costs, higher power
          supply
          costs, an inability to make timely energy infrastructure investments,
          requirements to post collateral or other assurances for certain obligations,
          the
          likely disruption in electric and gas service, significant job losses,
          and
          ultimately the financial insolvency and bankruptcy of CIPS, CILCORP, CILCO
          and
          IP.
 
 The
          Ameren Illinois Utilities, Commonwealth Edison Company and others have
          been in
          discussions with members of the Illinois General Assembly and other stakeholders
          to develop a constructive solution to provide rate relief to Illinois customers
          in lieu of reducing electric rates to pre-January 2, 2007, levels or applying
          a
          tax on electric generation in Illinois. Through discussions with Senate
          leaders
          prior to the Senate’s passage of Senate Bill 1592 on April 20, 2007, the Ameren
          Illinois Utilities, Commonwealth Edison Company and others had agreed to
          offer
          more than $150 million in relief to the Illinois electric customers affected
          most by the rate increases. Over $85 million of electric customer bill
          credits
          and other assistance were specifically targeted for the Ameren Illinois
          Utilities’ customers. The customer assistance proposal was primarily aimed at
          residential, small business and not-for-profit users, particularly those
          Ameren
          Illinois Utilities’ customers who depend on electricity for heating their homes.
          Those customers, who since January 1, 2007, have absorbed the largest rate
          increases, had been in line to receive the most benefit from the rate proposal.
          The Ameren Illinois Utilities were prepared to reinstate their Customer-Elect
          rate increase phase-in plan capping annual rate increases at 14 percent
          with no
          carrying costs on deferred balances. This proposal was not instituted and
          the
          Customer-Elect rate increase phase-in plan has not been reinstated because
          the
          Illinois General Assembly continued to support rolling back and freezing
          electric rates at pre-January 2, 2007 levels. The Ameren Illinois Utilities
          believe that a constructive solution to the current rate situation remains
          in
          the best interests of all customers of the Ameren Illinois Utilities, and
          the
          Ameren Illinois Utilities remain committed to working with stakeholders
          to reach
          such a solution.
  Summary
 
 We
          are
          unable to predict the results of the court appeals of the January 2006
          ICC order
          approving CIPS’, CILCO’s and IP’s power procurement auction and the related
          tariffs, the results of the two class action lawsuits and the Illinois
          attorney
          general’s complaint filed with FERC alleging price manipulation in the September
          2006 auction, or the actions the Illinois General Assembly and Governor
          may take
          that might affect electric rates or the power procurement process for CIPS,
          CILCO and IP. Any decision or action that impairs the ability of CIPS,
          CILCO and
          IP to fully recover purchased power or distribution costs from their electric
          customers in a timely manner would result in material adverse consequences
          to
          Ameren, CIPS, CILCORP, CILCO and IP. These consequences would include a
          significant drop in credit ratings to deep junk (or speculative) status,
          the
          inability to access the capital markets on reasonable terms, higher borrowing
          costs, higher power supply costs, an inability to
  35
  make
          timely energy infrastructure investments, requirements to post collateral
          or
          other assurances for certain obligations, significant risk of disruption
          in
          electric and gas service, significant job losses, and the financial insolvency
          and bankruptcy of CIPS, CILCORP, CILCO and IP. In addition, Ameren, CILCORP
          and
          IP would need to assess whether they are required to record a charge for
          goodwill impairment for the goodwill that was recorded when Ameren acquired
          CILCORP and IP. Furthermore, if the Ameren Illinois Utilities are unable to recover their
          costs
          from customers, the utilities could be required to cease applying for the
          electric portions of their businesses SFAS No. 71, “Accounting for the Effects
          of Certain Types of Regulation,” which allows the Ameren Illinois Utilities to
          defer certain costs pursuant to actions of rate regulators and to recover
          such
          costs in rates charged to customers. This could result in the elimination
          of the
          Ameren Illinois Utilities’ regulatory assets and liabilities recorded on their,
          CILCORP’s and Ameren’s balance sheets and a one time extraordinary charge on
          their, CILCORP’s and Ameren’s statements of income that could be material.
          Ameren’s, CILCORP’s and IP’s assessment of any goodwill impairment and Ameren’s,
          CIPS’, CILCORP’s, CILCO’s and IP’s continued application of SFAS No. 71, for the
          electric portions of the Ameren Illinois Utilities’ businesses, would include
          consideration of, among other things, their views on the ultimate success
          of
          their legal actions and strategies to enjoin the implementation of, and
          ultimately invalidate, any enacted rate freeze legislation.
  Ameren,
          CIPS, CILCORP, CILCO and IP will continue to explore a number of legal
          and
          regulatory actions, strategies and alternatives to address these Illinois
          electric issues. CIPS, CILCORP, CILCO and IP expect to take whatever actions
          are
          necessary to protect their financial interests, including seeking the protection
          of the bankruptcy courts. However, there can be no assurance that Ameren
          and the
          Ameren Illinois Utilities will prevail over the stated opposition by various
          Illinois legislators, the Illinois attorney general, the Illinois governor,
          and
          other stakeholders, or that the legal and regulatory actions, strategies
          and
          alternatives that Ameren and the Ameren Illinois Utilities are considering
          will
          be successful.
 
 **Federal**
 
 *Hydroelectric
          License Renewal*
 
 On
          March
          30, 2007, FERC granted a new 40-year license, subject to rehearing, for
          UE’s
          Osage hydroelectric plant and approved a settlement agreement among UE,
          the U.S.
          Department of the Interior and various state agencies that was submitted
          in May
          2005 in support of the license renewal.
  **NOTE
          3 - CREDIT FACILITIES AND LIQUIDITY**
 
 The
          liquidity needs of the Ameren Companies are typically supported through
          the use
          of available cash, commercial paper issuances and drawings under committed
          bank
          credit facilities.
 
 The
          following table summarizes the borrowing activity and relevant interest
          rates as
          of March 31, 2007, under the $1.15 billion credit facility and 2007 and
          2006
          $500 million credit facilities:
 **$1.15
                    Billion Credit Facility**
                **Ameren
                    (Parent)**
                
                **UE**
                
                **Ameren
                    Total****March
                    31, 2007:**Average
                    daily borrowings outstanding during 2007
                $
                96
                
                $
                361
                
                $
                457Borrowings
                    outstanding at period end
                
                -
                
                
                448
                
                
                448Weighted-average
                    interest rate during 2007
                
                5.77
                %
                
                5.58
                %
                
                5.62
                %Peak
                    short-term borrowings during 2007
                $
                275
                
                $
                448
                
                $
                667Peak
                    interest rate during 2007
                
                8.25
                %
                
                8.25
                %
                
                8.25
                %
  **2007
                          $500 Million Credit Facility**
                      
                      **CIPS**
                      
                      
                      **CILCORP**
                      
                      
                      **CILCO
                          (Parent****)**
                      
                      **IP**
                      
                      
                      **AERG**
                      
                      
                      **Total****March
                          31, 2007:**Average
                          daily borrowings outstanding during 2007
                      $
                      -
                      
                      $
                      43
                      
                      $
                      -
                      
                      $
                      8
                      
                      $
                      29
                      
                      $
                      80Borrowings
                          outstanding at period end
                      
                      -
                      
                      
                      104
                      
                      
                      -
                      
                      
                      115
                      
                      
                      95
                      
                      
                      314Weighted-average
                          interest rate during 2007
                      
                      -
                      %
                      
                      6.38
                      %
                      
                      -
                      %
                      
                      4.69
                      %
                      
                      6.23
                      %
                      
                      6.16
                      %Peak
                          short-term borrowings during 2007
                      $
                      -
                      
                      $
                      104
                      
                      $
                      -
                      
                      $
                      115
                      
                      $
                      95
                      
                      $
                      314Peak
                          interest rate during 2007
                      
                      -
                      %
                      
                      8.63
                      %
                      
                      -
                      %
                      
                      6.57
                      %
                      
                      6.95
                      %
                      
                      8.63
                      %
 
 **2006
                          $500 Million Credit Facility****March
                          31, 2007:**Average
                          daily borrowings outstanding during 2007
                      $
                      62
                      
                      $
                      50
                      
                      $
                      66
                      
                      $
                      87
                      
                      $
                      92
                      
                      $
                      357Borrowings
                          outstanding at period end
                      
                      100
                      
                      
                      50
                      
                      
                      -
                      
                      
                      75
                      
                      
                      40
                      
                      
                      265Weighted-average
                          interest rate during 2007
                      
                      6.44
                      %
                      
                      6.75
                      %
                      
                      6.25
                      %
                      
                      6.36
                      %
                      
                      6.93
                      %
                      
                      6.56
                      %Peak
                          short-term borrowings during 2007
                      $
                      115
                      
                      $
                      50
                      
                      $
                      100
                      
                      $
                      110
                      
                      $
                      125
                      
                      $
                      435Peak
                          interest rate during 2007
                      
                      8.25
                      %
                      
                      6.75
                      %
                      
                      6.40
                      %
                      
                      6.57
                      %
                      
                      6.98
                      %
                      
                      8.25
                      %
   36
 At
          March
          31, 2007, Ameren and certain of its subsidiaries had $2.15 billion of committed
          credit facilities, consisting of the three facilities shown above, in the
          amounts of
 $1.15
          billion, $500 million and $500 million maturing in July 2010, January 2010
          and
          January 2010, respectively.
 
 The
          2007
          $500 million credit facility was entered into on February 9, 2007, by CIPS,
          CILCORP, CILCO, IP and AERG. Borrowing authority under this facility was
          effective immediately for CILCORP and AERG, and effective for CIPS, CILCO
          and IP
          on March 9, 2007, upon the receipt of regulatory approvals.
 
 The
          obligations of IP under the 2007 $500 million credit facility were secured
          by
          the issuance on March 9, 2007, of mortgage bonds in the amount of $200
          million.
          CIPS and CILCO cannot utilize any amount of their borrowing authority under
          the
          2007 $500 million credit facility until they reduce their borrowing authority
          by
          an equal amount under the 2006
 $500
          million credit facility. If CIPS or CILCO elect to transfer borrowing authority
          from the 2006 $500 million credit facility to the 2007 $500 million credit
          facility, that company must retire an appropriate amount of first mortgage
          bonds
          issued with respect to the 2006 $500 million credit facility and issue
          new bonds
          in an equal amount to secure its obligations under the 2007 $500 million
          credit
          facility.
 
 The
          $1.15
          billion credit facility was used to support the commercial paper programs
          that
          included all outstanding external short-term debt of Ameren and UE as of
          March
          31, 2007. Access to the $1.15 billion credit facility, the 2007 $500 million
          credit facility and the 2006 $500 million credit facility for the Ameren
          Companies is subject to reduction as borrowings are made by affiliates.
          Ameren
          and UE are currently limited in their access to the commercial paper market
          as a
          result of downgrades in their short-term credit ratings.
 
 **Money
          Pools**
 
 Ameren
          has money pool agreements with and among its subsidiaries to coordinate
          and
          provide for certain short-term cash and working capital requirements. Separate
          money pools are maintained for utility and non-state-regulated entities.
          Ameren
          Services is responsible for operation and administration of the money pool
          agreements.
 
 *Utility*
 
 CIPS,
          CILCO and IP borrow from each other through the utility money pool agreement
          subject to applicable regulatory short-term borrowing authorizations. AERG
          may
          make loans to, but may not borrow from, the utility money pool. Although
          UE and
          Ameren Services are parties to the utility money pool agreement, they are
          not
          currently borrowing or lending under the agreement. The average interest
          rate
          for borrowing under the utility money pool for the three months ended March
          31,
          2007, was 6.1% (2006 - 4.5%).
 
 *Non-state-regulated
          subsidiaries*
 
 Ameren
          Services, Resources Company, Genco, AERG, Marketing Company, AFS, Ameren
          Energy
          and other non-state-regulated Ameren subsidiaries have the ability, subject
          to
          Ameren parent company authorization, to access funding from Ameren’s $1.15
          billion credit facility through a non-state-regulated subsidiary money
          pool
          agreement subject to applicable regulatory short-term borrowing authorizations.
          At March 31, 2007, $697 million was available through the non-state-regulated
          subsidiary money pool, excluding additional funds available through excess
          cash
          balances. The
          average interest rate for borrowing under the non-state-regulated subsidiary
          money pool for the three months ended March 31, 2007, was 4.7% (2006 -
          4.4%).
 
 See
          Note
          7 - Related Party Transactions for the amount of interest income (expense)
          from
          the money pool arrangements recorded by the Ameren Companies for the three
          months ended March 31, 2007 and 2006.
 
 **Indebtedness
          Provisions and Other Covenants**
 
 The
          information below presents a summary of the Ameren Companies’ compliance with
          indenture provisions and other
          covenants. See Note 5 - Credit Facilities and Liquidity in the Ameren Companies’
combined Annual Report on Form 10-K for the fiscal year ended December
          31, 2006,
          for a detailed description of those provisions.
 
 The
          Ameren Companies’ bank credit facilities contain provisions which, among other
          things, place restrictions on the ability to incur liens, sell assets,
          and merge
          with other entities. The $1.15 billion credit facility contains provisions
          that
          limit total indebtedness of each of Ameren, UE and Genco to 65% of consolidated
          total capitalization pursuant to a calculation defined in the facility.
          Exceeding these debt levels would result in a default under the $1.15 billion
          credit facility.
 
 The
          $1.15
          billion credit facility also contains default provisions, including cross
          defaults, with respect to a borrower under the facility that can result
          from the
          occurrence of an event of default under any other facility covering indebtedness
          of that borrower or certain of its subsidiaries in excess of $50 million
          in the
          aggregate. The obligations of Ameren, UE and Genco under the facility are
          several and not joint, and except under limited circumstances, the obligations
          of UE and Genco are not guaranteed by Ameren or any other subsidiary. CIPS,
          CILCORP, CILCO, AERG and IP are not considered subsidiaries for purposes
          of the
          cross-default or other provisions.
 
 37
 Under
          the
          $1.15 billion credit facility, restrictions apply limiting investments
          in and
          other transfers to CIPS, CILCORP, CILCO, IP, AERG and their subsidiaries
          by
          Ameren and certain subsidiaries. Additionally, CIPS, CILCORP, CILCO, IP,
          AERG
          and their subsidiaries are excluded for purposes of determining compliance
          with
          the 65% total consolidated indebtedness to total consolidated capitalization
          financial covenant in the facility.
 
 Both
          the
          2007 $500 million credit facility and the 2006 $500 million credit facility
          entered into by CIPS, CILCORP, CILCO, IP and AERG, discussed above, limit
          the
          indebtedness of each borrower to 65% of consolidated total capitalization
          pursuant to a calculation set forth in the facilities. Events of default
          under
          these facilities apply separately to each borrower (and, except in the
          case of
          CILCORP, to their subsidiaries), and an event of default under these facilities
          does not constitute an event of default under the $1.15 billion credit
          facility
          and vice versa. In addition, if CIPS’, CILCO’s or IP’s senior secured long-term
          debt securities or first mortgage bonds, or CILCORP’s senior unsecured long-term
          debt securities, have received a below-investment-grade credit rating by
          either
          Moody’s or S&P, then such borrower will be limited to capital stock dividend
          payments of $10 million per year each, while such below-investment-grade
          credit
          rating is in effect. On July 26, 2006, Moody’s downgraded CILCORP’s senior
          unsecured long-term debt credit rating to below investment-grade, causing
          it to
          be subject to this dividend payment limitation. A similar restriction applies
          to
          AERG if its debt-to-operating cash flow ratio, as set forth in these facilities,
          is above a 3.0 to 1.0 ratio. As of March 31, 2007, AERG was in compliance
          with
          this test in the 2007 $500 million credit facility and the 2006 $500 million
          credit facility. CIPS, CILCO and IP are not currently limited in their
          dividend
          payments by this provision of the 2007 $500 million or 2006 $500 million
          credit
          facilities. Ameren’s access to dividends from CILCO and AERG is limited by
          dividend restrictions at CILCORP.
  The
          2007
          $500 million credit facility and the 2006 $500 million credit facility
          also
          limit the amount of other secured indebtedness issuable by each borrower.
          For
          CIPS, CILCO and IP, other secured debt is limited to that permitted under
          their
          respective mortgage indentures. For CILCORP, other secured debt is limited
          to
          $425 million under the 2007 $500 million credit facility and $550 million
          under
          the 2006 $500 million credit facility, secured by the pledge of CILCO stock.
          For
          AERG, other secured debt is limited to $100 million under the 2007
 $500
          million credit facility and $200 million under the 2006 $500 million credit
          facility secured on an equal basis with its obligations under the facilities.
          In
          addition, the 2007 $500 million credit facility and the 2006 $500 million
          credit
          facility prohibit CILCO from issuing any preferred stock if, after giving
          effect
          to such issuance, the aggregate liquidation value of all CILCO preferred
          stock
          issued after February 9, 2007 and July 14, 2006, respectively, would exceed
          $50
          million.
 
 The
          2007
          $500 million credit facility provides that CIPS, CILCO and IP will agree
          to
          reserve future bonding capacity under their respective mortgage indentures
          (that
          is, agree to forego the issuance of additional mortgage bonds otherwise
          permitted under the terms of each mortgage indenture) in the following
          amounts:
          CIPS, prior to December 31, 2007 -
 $50
          million, on and after December 31, 2007, but prior to December 31, 2008
          - $100
          million, on and after December 31, 2008, but prior to December 31, 2009
          - $150
          million, on and after December 31, 2009 - $200 million; CILCO, prior to
          December
          31, 2007 - $25 million, on and after December 31, 2007, but prior to December
          31, 2008 - $50 million, on and after
 December
          31, 2008, but prior to December 31, 2009 - $75 million, on and after December
          31, 2009 - $150 million; and IP, prior to December 31, 2008 - $100 million,
          on
          and after
 December
          31, 2008, but prior to December 31, 2009 - $200 million, on and after December
          31, 2009 - $350 million.
  The
          2006
          $500 million credit facility provides that CIPS, CILCO and IP will agree
          to
          reserve future bonding capacity under their respective mortgage indentures
          in
          the following amounts: CIPS, prior to December 31, 2007 - $50 million,
          on and
          after December 31, 2007, but prior to December 31, 2008 - $100 million,
          on and
          after December 31, 2008 - $150 million; CILCO - $25 million; and IP - $100
          million.
  As
          of
          March 31, 2007, the ratio of total indebtedness to total consolidated
          capitalization, calculated in accordance with the provisions of the $1.15
          billion credit facility for Ameren, UE and Genco was 50%, 52% and 46%,
          respectively. The ratios for CIPS, CILCORP, CILCO, IP and AERG, calculated
          in
          accordance with the provisions of the 2007 $500 million credit facility
          and 2006
          $500 million credit facility, were 52%, 53%, 36%, 44% and 32%,
          respectively.
 
 None
          of
          Ameren’s credit facilities or financing arrangements contain credit rating
          triggers that would cause an event of default or acceleration of repayment
          of
          outstanding balances. At March 31, 2007, the Ameren Companies were in compliance
          with their credit facility provisions and covenants *.*
 
 **NOTE
          4 -** **LONG-TERM
          DEBT AND EQUITY FINANCINGS**
 
 **Ameren**
 
 Under
          DRPlus, pursuant to an effective SEC Form S-3 registration statement, and
          under
          our 401(k) plans, pursuant to effective SEC Form S-8 registration statements,
          Ameren issued a total of 0.4 million new shares of common stock valued
          at $21
          million in the three months ended March 31, 2007.
 
 In
          February 2007, $100 million of Ameren’s 2002 5.70% notes matured and were
          retired.
  38
 **CIPS**
 
 See
          Note
          3 - Credit Facilities and Liquidity in this report and Note 5 - Credit
          Facilities and Liquidity in the Ameren Companies’ combined Annual Report on Form
          10-K for the fiscal year ended December 31, 2006, regarding mortgage bonds
          authorized by CIPS as security for its obligations under the 2007 $500
          million
          credit facility and issued under the 2006
 $500
          million credit facility.
 
 **CILCORP**
 
 In
          conjunction with Ameren’s acquisition of CILCORP, CILCORP’s long-term debt was
          recorded at fair value. Amortization related to these fair value adjustments
          was
          $1 million for the three months ended March 31, 2007, (2006 - $1 million)
          and
          was included as a reduction to interest expense in the Consolidated Statements
          of Income of Ameren and CILCORP. See Note 3 - Credit Facilities and Liquidity
          in
          this report and Note 5 - Credit Facilities and Liquidity in the Ameren
          Companies’ combined Annual Report on Form 10-K for the fiscal year ended
          December 31, 2006, regarding CILCORP’s pledge of the common stock of CILCO as
          security for CILCORP’s obligations under the 2007 $500 million credit facility
          and the 2006 $500 million credit facility.
 
 **CILCO**
 
 In
          January 2007, $50 million of CILCO’s 7.50% first mortgage bonds matured and were
          retired.
 
 See
          Note
          3 - Credit Facilities and Liquidity in this report and Note 5 - Credit
          Facilities and Liquidity in the Ameren Companies’ combined Annual Report on Form
          10-K for the fiscal year ended December 31, 2006, regarding mortgage bonds
          authorized by CILCO as security for its obligations under the 2007 $500
          million
          credit facility and issued under the 2006
 $500
          million credit facility.
 
 **IP**
 
 In
          conjunction with Ameren’s acquisition of IP, IP’s long-term debt was recorded at
          fair value. Amortization related to these fair value adjustments was $3
          million
          for the three months ended March 31, 2007, (2006 - $3 million) and was
          included
          as a reduction to interest expense in the Consolidated Statements of Income
          of
          Ameren and IP.
 
 See
          Note
          3 - Credit Facilities and Liquidity in this report and Note 5 - Credit
          Facilities and Liquidity in the Ameren Companies’ combined Annual Report on Form
          10-K for the fiscal year ended December 31, 2006, regarding mortgage bonds
          issued by IP as security for its obligations under the 2007 $500 million
          credit
          facility and the 2006 $500 million credit facility.
 
 **Indenture
          Provisions and Other Covenants**
 
 The
          information below presents a summary of the Ameren Companies’ compliance with
          indenture provisions and other
          covenants. See Note 6 - Long-term Debt and Equity Financings in the Ameren
          Companies’ combined Annual Report on Form 10-K for the fiscal year ended
          December 31, 2006, for a detailed description of those provisions.
  UE’s,
          CIPS’, CILCO’s and IP’s indenture provisions and articles of incorporation
          include covenants and provisions related to the issuances of first mortgage
          bonds and preferred stock. The following table includes the required and
          actual
          earnings coverage ratios for interest charges and preferred dividends and
          bonds
          and preferred stock issuable based on the 12 months ended March 31, 2007,
          at an
          assumed interest and dividend rate of 7%.
 
 **Required
                    Interest**
                  **Coverage
                    Ratio****(a)(b)**
                **Actual
                    Interest**
                  **Coverage
                    Ratio**
                **Bonds**
                  **Issuable****(c)(d)**
                **Required
                    Dividend**
                  **Coverage
                    Ratio****(e)**
                **Actual**
                  **Dividend**
                  **Coverage
                    Ratio**
                **Preferred**
                  **Stock**
                  **Issuable**UE
                ≥2.0
                4.7
                $2,462
                ≥2.5
                45.6
                $1,466CIPS
                ≥2.0
                4.2
                169
                ≥1.5
                2.4
                215CILCO
                ≥2.0(f)
                10.5
                58
                ≥2.5
                28.8
                288(g)IP
                ≥2.0
                3.6
                240
                ≥1.5
                2.1
                333
  (a) Coverage
          required on the annual interest charges on mortgage bonds outstanding and
          to be
          issued.
 (b) Coverage
            is not required in certain cases when additional mortgage bonds are issued on
            the basis of retired bonds.
 (c)
                Amount
                    of bonds issuable based on either meeting required coverage ratios
                    or
                    unfunded property additions, whichever is more restrictive. In
                    addition to
                    these tests, UE, CIPS, CILCO and IP have the ability to issue
                    bonds based
                    upon retired bond capacity of $18 million, $3 million, $175 million,
                    and
                    $914 million, respectively, for which no earnings coverage test
                    is
                    required. (d)
                Amounts
                    are net of future bonding capacity restrictions agreed to by
                    CIPS, CILCO
                    and IP under the 2007 $500 million credit facility and the 2006
                    $500
                    million credit facility entered into by these companies. See
                    Note 3 -
                    Credit Facilities and Liquidity for further
                    discussion. (e)
                Coverage
                    required on the annual interest charges on all long-term debt
                    (CIPS-only)
                    and the annual dividend on preferred stock outstanding and to
                    be issued,
                    as required in the respective company’s articles of incorporation. For
                    CILCO, this ratio must be met for a period of 12 consecutive
                    calendar
                    months within the 15 months immediately preceding the
                    issuance. (f)
                In
                    lieu of meeting the interest coverage ratio requirement, CILCO
                    may attempt
                    to meet an earnings requirement of at least 12% of the principal
                    amount of
                    all mortgage bonds outstanding and to be issued. For the three
                    months
                    ended March 31, 2007, CILCO had earnings equivalent to at least
                    40% of the
                    principal amount of all mortgage bonds
                    outstanding. (g)
                See
                    Note 3 - Credit Facilities and Liquidity for a discussion regarding
                    a
                    restriction on the issuance of preferred stock by CILCO under
                    the 2007
                    $500 million credit facility and the 2006 $500 million credit
                    facility.
       
 39
  UE’s
          mortgage indenture contains certain provisions that restrict the amount
          of
          common dividends that can be paid by UE. Under this mortgage indenture,
          $31
          million of retained earnings was restricted against payment of common dividends,
          except those dividends payable in common stock, which left $1.7 billion
          of free
          and unrestricted retained earnings at March 31, 2007.
 
 Genco’s
          and CILCORP’s indentures include provisions that require the companies to
          maintain certain debt service coverage and debt-to-capital ratios in order
          for
          the companies to pay dividends, to make certain principal or interest payments,
          to make certain loans to affiliates, or to incur additional indebtedness.
          The
          following table summarizes these ratios for the 12 months ended March 31,
          2007:
 
 **Required**
                  **Interest**
                  **Coverage**
                  **Ratio**
                **Actual**
                  **Interest**
                  **Coverage**
                  **Ratio**
                **Required**
                  **Debt-to-**
                  **Capital**
                  **Ratio**
                **Actual**
                  **Debt-to-**
                  **Capital**
                  **Ratio**Genco(a)
                ≥1.75(b)
                5.3
                ≤60%
                45%CILCORP(c)
                ≥2.2
                2.9
                ≤67%
                32%
  (a)
              Interest
                  coverage ratio relates to covenants regarding certain dividend,
                  principal
                  and interest payments on certain subordinated intercompany borrowings.
                  The
                  debt-to-capital ratio relates to a debt incurrence covenant, which
                  also
                  requires an interest coverage ratio of 2.5 for the most recently
                  ended
                  four fiscal quarters. (b)
              Ratio
                  excludes amounts payable under Genco’s intercompany note to CIPS and must
                  be met for both the prior four fiscal quarters and for the four
                  succeeding
                  six-month periods. (c)
              CILCORP
                  must maintain the required interest coverage ratio and debt-to-capital
                  ratio in order to make any payment of dividends or intercompany
                  loans to
                  affiliates other than to its direct or indirect
                  subsidiaries.  Genco’s
          ratio restrictions under its indenture may be disregarded if both Moody’s and
          S&P reaffirm the ratings of Genco in place at the time of the debt
          incurrence after considering the additional indebtedness. In the event
          CILCORP
          is not in compliance with these restrictions, CILCORP may make payments
          of
          dividends or intercompany loans if its senior long-term debt rating is
          at least
          BB+ from S&P, Baa2 from Moody’s, and BBB from Fitch. At March 31, 2007,
          CILCORP’s senior long-term debt ratings from S&P, Moody’s and Fitch were B+,
          Ba2, and BB+, respectively. The common stock of CILCO is pledged as security
          to
          the holders of CILCORP’s senior notes and credit facility
          obligations.
 
 In
          order
          for the Ameren Companies to issue securities in the future, they will have
          to
          comply with any applicable tests in effect at the time of any such
          issuances.
 
 **Off-Balance-Sheet
          Arrangements**
 
 At
          March
          31, 2007, none of the Ameren Companies had any off-balance-sheet financing
          arrangements, other than operating leases entered into in the ordinary
          course of
          business. None of the Ameren Companies expect to engage in any significant
          off-balance-sheet financing arrangements in the near future.
  **NOTE
          5** **-
          OTHER INCOME AND EXPENSES**
 
 The
          following table presents Other Income and Expenses for each of the Ameren
          Companies for the three months ended March 31, 2007 and 2006:
 
 **Three
                    Months****2007**
                
                **2006****Ameren:****(a)**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **14**
                
                $
                1Allowance
                    for equity funds used during construction
                
                **-**
                
                
                1Other
                
                **2**
                
                
                2Total
                    miscellaneous income
                **$**
                **16**
                
                $
                4**UE:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **10**
                
                $
                1Allowance
                    for equity funds used during construction
                
                **-**
                
                
                1Other
                
                **-**
                
                
                1Total
                    miscellaneous income
                **$**
                **10**
                
                $
                3Miscellaneous
                    expense:Other
                **$**
                **(2**
                **)**
                $
                (2
                )Total
                    miscellaneous expense
                **$**
                **(2**
                **)**
                $
                (2
                )**CIPS:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **3**
                
                $
                4Other
                
                **-**
                
                
                1Total
                    miscellaneous income
                **$**
                **3**
                
                $
                5
 40
 **Three
                    Months****2007**
                
                
                **2006**Miscellaneous
                    expense:Other
                **$**
                **-**
                
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **-**
                
                $
                (1
                )**CILCORP:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **2**
                
                $
                -Total
                    miscellaneous income
                **$**
                **2**
                
                $
                -Miscellaneous
                    expense:Other
                **$**
                **(1**
                **)**
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **(1**
                **)**
                $
                (1
                )**CILCO:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **1**
                
                $
                -Total
                    miscellaneous income
                **$**
                **1**
                
                $
                -Miscellaneous
                    expense:Other
                **$**
                **(1**
                **)**
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **(1**
                **)**
                $
                (1
                )**IP:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **1**
                
                $
                -Other
                
                **1**
                
                
                1Total
                    miscellaneous income
                **$**
                **2**
                
                $
                1Miscellaneous
                    expense:Other
                **$**
                **(1**
                **)**
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **(1**
                **)**
                $
                (1
                )
  (a)
              Includes
                  amounts for Ameren registrant and nonregistrant subsidiaries and
                  intercompany eliminations.  **NOTE
          6 - DERIVATIVE FINANCIAL INSTRUMENTS**
 
 The
          pretax net gain or loss on power hedges is included in Operating Revenues
          -
          Electric, and the pretax net gain or loss on hedges related to SO 2 emission  allowances,
          fuel or power supply, and natural gas is included in Operating Expenses
          - Fuel
          and Purchased Power. This pretax net gain or loss represents the impact
          of
          discontinued cash flow hedges, the ineffective portion of cash flow hedges, and
          the
          reversal of amounts previously recorded in OCI due to transactions being
          delivered or settled, resulting in a $7
          million gain for Ameren, a $5 million gain for UE, and a $2 million loss
          for
          CILCO for the quarter ended March 31, 2007 (2006 - $3 million loss for
          Ameren,
          $1 million loss for Genco and a $2 million loss for IP).
  The
          following table presents the carrying value of all derivative instruments
          and
          the amount of pretax net gains (losses) on derivative instruments in Accumulated
          OCI for cash flow hedges as of March 31, 2007:
 
 **Ameren(a)**
                
                **UE**
                
                **CIPS**
                
                **Genco**
                
                **CILCORP/**
                  **CILCO**
                
                **IP**Derivative
                    instruments carrying value:Other
                    assets
                $
                51
                
                $
                4
                
                $
                5
                
                $
                -
                
                $
                11
                
                $
                -Other
                    deferred credits and liabilities
                
                20
                
                
                4
                
                
                2
                
                
                1
                
                
                5
                
                
                -Gains
                    (losses) deferred in Accumulated OCI:Power
                    forwards(b)
                
                17
                
                
                (4
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Interest
                    rate swaps(c)
                
                3
                
                
                -
                
                
                -
                
                
                3
                
                
                -
                
                
                -Gas
                    swaps and futures contracts(d)
                
                11
                
                
                2
                
                
                3
                
                
                -
                
                
                7
                
                
                -SO2futures contracts
                
                (1
                )
                
                -
                
                
                -
                
                
                (1
                )
                
                -
                
                
                -
  (a)
              Includes
                  amounts for Ameren registrant and nonregistrant subsidiaries and
                  intercompany eliminations. (b)
              Represents
                  the mark-to-market value for the hedged portion of electricity
                  price
                  exposure for periods of up to three years, including $15 million
                  over the
                  next year. (c)
              Represents
                  a gain associated with interest rate swaps at Genco that were a
                  partial
                  hedge of the interest rate on debt issued in June 2002. The swaps
                  cover
                  the first 10 years of debt that has a 30-year maturity and the
                  gain in OCI
                  is amortized over a 10-year period that began in June
                  2002. (d)
              Represents
                  gains associated with natural gas swaps and futures contracts.
                  The swaps
                  are a partial hedge of our natural gas requirements through March
                  2008. 
 41
  **Other
          Derivatives**
 
 The
          following table presents the net change in market value for the three months
          ended March 31, 2007 and 2006, of option and swap transactions used to
          manage
          our positions in SO 2 allowances, coal and heating oil. Certain of these transactions are treated
          as
          nonhedge transactions under SFAS No. 133, “Accounting for Derivative Instruments
          and Hedging Activities,” as amended. The net change in the market value of
          SO 2 ,
          coal
          and heating oil options and swaps is recorded as Operating Expenses - Fuel
          and
          Purchased Power.
 
 **Three
                    Months****Gains
                    (Losses)**
                **2007**
                
                **2006****SO****2****options and swaps:**Ameren
                **$**
                **4**
                
                $
                (1
                )UE
                
                **4**
                
                
                3Genco
                
                **-**
                
                
                (3
                )CILCORP/CILCO
                
                **-**
                
                
                (1
                )**Coal
                    options:**Ameren
                
                **1**
                
                
                -UE
                
                **1**
                
                
                -**Heating
                    oil:**Ameren
                
                **3**
                
                
                -
 
 **NOTE
          7 -** **RELATED
          PARTY TRANSACTIONS**
 
 The
          Ameren Companies have engaged in, and may in the future engage in, affiliate
          transactions in the normal course of business. These transactions primarily
          consist of gas and power purchases and sales, services received or rendered,
          and
          borrowings and lendings. Transactions between affiliates are reported as
          intercompany transactions on their financial statements, but are eliminated
          in
          consolidation for Ameren’s financial statements. For a discussion of our material related party agreements,
          see Note 13 - Related Party Transactions under Part II, Item 8 of the Ameren
          Companies’ combined Annual
          Report on Form 10-K for the fiscal year ended December 31, 2006. Below
          are
          updates to several of these related party agreements.
  **Electric
          Power Supply Agreements**
 
 The
          following table presents the amount of gigawatthour sales under related
          party
          electric power supply agreements for the three months ended March 31, 2007
          and
          2006:
 
 **Three
                    Months****2007**
                
                **2006**Genco
                    sales to Marketing Company(a)
                
                -
                
                
                5,591Marketing
                    Company sales to CIPS(a)
                
                -
                
                
                3,079Genco
                    sales to Marketing Company(b)
                
                4,119
                
                
                -AERG
                    sales to Marketing Company(c)
                
                1,488
                
                
                -Marketing
                    Company sales to CIPS(d)
                
                619
                
                
                -Marketing
                    Company sales to CILCO(d)
                
                288
                
                
                -Marketing
                    Company sales to IP(d)
                
                826
                
                
                -
   (a)
              These
                  agreements expired or terminated on December 31,
                  2006. (b)
              In
                  December 2006, Genco and Marketing Company entered into a new power
                  supply
                  agreement (Genco PSA) whereby Genco sells and Marketing Company
                  purchases
                  all the capacity available from Genco’s generation fleet and such amount
                  of associated energy commencing on January 1, 2007. (c)
              In
                  December 2006, AERG and Marketing Company entered into a power
                  supply
                  agreement (AERG PSA) whereby AERG sells and Marketing Company purchases
                  all the capacity available from AERG’s generation fleet and such amount of
                  associated energy commencing on January 1, 2007. (d)
              In
                  accordance with the January 2006 ICC order, discussed in Note 2
                  - Rate and
                  Regulatory Matters, an auction was held in September 2006 to procure
                  power
                  for CIPS, CILCO and IP after their previous power supply contracts
                  expired
                  on December 31, 2006. Through the auction, Marketing Company contracted
                  with CIPS, CILCO and IP to provide power for their customers. See
                  also
                  Note 3 - Rate and Regulatory Matters under Part II, Item 8 of the
                  Ameren
                  Companies’ combined Annual Report on Form 10-K for the fiscal year ended
                  December 31, 2006 for further details of the power procurement
                  auction in
                  Illinois. 
 **Joint
          Dispatch Agreement**
 
 UE,
          CIPS
          and Genco mutually consented to waive the one-year termination notice
          requirement of the JDA and agreed to terminate it on December 31, 2006.
          This
          action with respect to the JDA was accepted by FERC in September
          2006.
 
 For
          the
          three months ended March 31, 2006, UE sales to Genco under the JDA were
          2,795
          gigawatthours, and Genco sales to UE under the JDA were 606 gigawatthours.
          Also
          for the three months ended March 31, 2006, the short-term power sales margins
          under the JDA for UE and Genco were $33 million and $12 million,
          respectively.
  42
 **Money
          Pools**
  See
          Note
          3 - Credit Facilities and Liquidity for discussion of affiliate borrowing
          arrangements.
 
 **Intercompany
          Promissory Notes**
 
 Genco’s
          subordinated note payable to CIPS associated with the transfer in 2000
          of CIPS’
electric generating assets and related liabilities to Genco matures on
          May 1,
          2010. Interest income and expense for this note recorded by CIPS and Genco,
          respectively, was $3 million for the three months ended March 31, 2007
          (2006 -
          $4 million).
 
 CILCORP
          has been granted authority by FERC in a 2006 order to borrow up to $250
          million
          directly from Ameren. The outstanding borrowings were zero and $191 million
          at
          March 31, 2007 and 2006, respectively. The average interest rate on these
          borrowings was 6.1% for the three months ended March 31, 2007 (2006 - 4.4%).
          CILCORP recorded interest expense of less than $1 million for these borrowings
          for the three months ended March 31, 2007 (2006 - $2 million).
  The
          following table presents the impact on UE, CIPS, Genco, CILCORP, CILCO,
          and IP
          of related party transactions for the three months ended March 31, 2007
          and
          2006. It is based primarily on the agreements discussed above and in Note
          13 -
          Related Party Transactions under Part II, Item 8 of the Ameren Companies’
combined Annual Report on Form 10-K for the fiscal year ended December
          31, 2006,
          and the money pool arrangements discussed above in Note 3 - Credit Facilities
          and Liquidity of this report.
  **Agreement**
                  **Financial
                    Statement Line Item**
                  
                  
                  
                  **UE**
                  
                  
                  **CIPS**
                  
                  
                  **Genco**
                  
                  **CILCORP****(a****)**
                  
                  **IP****Operating
                      Revenues:**Genco
                      and AERG power supply
                  Operating
                      Revenues
                  
                  **2007**
                  
                  **$**
                  **(b**
                  **)**
                  **$**
                  **(b**
                  **)**
                  **$**
                  **211**
                  
                  **$**
                  **72**
                  
                  **$**
                  **(b**
                  **)**agreements
                      with Marketing CompanyAncillary
                      service agreement with CIPS,
                  Operating
                      Revenues
                  
                  **2007**
                  
                  
                  **4**
                  
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**CILCO
                      and IPPower
                      supply agreement with Marketing
                  Operating
                      Revenues
                  
                  2006
                  
                  
                  (b
                  )
                  
                  2
                  
                  
                  195
                  
                  
                  4
                  
                  
                  (b
                  )Company
                      - expired December 31, 2006UE
                    and Genco gas Transportation
                  Operating
                      Revenues
                  
                  **2007**
                  
                  
                  **(c**
                  **)**
                  
                  (b
                  )
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**agreement
                  
                  2006
                  
                  
                  (c
                  )
                  
                  (b
                  )
                  
                  (b
                  )
                  
                  (b
                  )
                  
                  (b
                  )JDA
                    - terminated December 31, 2006
                  Operating
                      Revenues
                  
                  2006
                  
                  
                  72
                  
                  
                  (b
                  )
                  
                  19
                  
                  
                  (b
                  )
                  
                  (b
                  )**Total
                      Operating Revenues**
                  
                  
                  
                  **2007**
                  
                  **$**
                  **4**
                  
                  **$**
                  **(b**
                  **)**
                  **$**
                  **211**
                  
                  **$**
                  **72**
                  
                  **$**
                  **(b**
                  **)**2006
                  
                  
                  72
                  
                  
                  2
                  
                  
                  214
                  
                  
                  4**Fuel
                      and Purchased Power:**CIPS,
                      CILCO and IP agreements with
                  Fuel
                      and Purchased Power
                  
                  **2007**
                  
                  **$**
                  **(b**
                  **)**
                  **$**
                  **42**
                  
                  **$**
                  **(b**
                  **)**
                  **$**
                  **19**
                  
                  **$**
                  **55**Marketing
                      Company (auction)Ancillary
                      service agreement with UE
                  Fuel
                      and Purchased Power
                  
                  **2007**
                  
                  
                  **(b**
                  **)**
                  
                  **1**
                  
                  
                  **(b**
                  **)**
                  
                  **1**
                  
                  
                  **2**Ancillary
                      service agreement with Marketing
                  Fuel
                      and Purchased Power
                  
                  **2007**
                  
                  
                  **(b**
                  **)**
                  
                  **1**
                  
                  
                  **(b**
                  **)**
                  
                  **(c**
                  **)**
                  
                  **1**CompanyJDA
                      - terminated December 31, 2006
                  Fuel
                      and Purchased Power
                  
                  2006
                  
                  
                  19
                  
                  
                  (b
                  )
                  
                  72
                  
                  
                  (b
                  )
                  
                  (b
                  )Power
                      supply agreement with Marketing
                  Fuel
                      and Purchased Power
                  
                  2006
                  
                  
                  (b
                  )
                  
                  108
                  
                  
                  (b
                  )
                  
                  (d
                  )
                  
                  (b
                  )Company
                      - expired December 31, 2006Executory
                      tolling agreement with Medina
                  Fuel
                      and Purchased Power
                  
                  **2007**
                  
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **12**
                  
                  
                  **(b**
                  **)**Valley
                  
                  
                  
                  
                  
                  2006
                  
                  
                  (b
                  )
                  
                  (b
                  )
                  
                  (b
                  )
                  
                  13
                  
                  
                  (b
                  )UE
                      and Genco gas transportation
                  Fuel
                      and Purchased Power
                  
                  **2007**
                  
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(c**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**agreement
                  
                  
                  
                  
                  
                  2006
                  
                  
                  (b
                  )
                  
                  (b
                  )
                  
                  (c
                  )
                  
                  (b
                  )
                  
                  (b
                  )**Total
                      Fuel and Purchased Power**
                  
                  
                  
                  
                  
                  **2007**
                  
                  **$**
                  **(b**
                  **)**
                  **$**
                  **44**
                  
                  **$**
                  **(c**
                  **)**
                  **$**
                  **32**
                  
                  **$**
                  **58**2006
                  
                  
                  19
                  
                  
                  108
                  
                  
                  72
                  
                  
                  13
                  
                  
                  (b
                  )**Other
                      Operating Expense:**Ameren
                      Services support services agreement
                  Other
                      Operating Expenses
                  
                  **2007**
                  
                  **$**
                  **36**
                  
                  **$**
                  **12**
                  
                  **$**
                  **6**
                  
                  **$**
                  **13**
                  
                  **$**
                  **19**2006
                  
                  
                  33
                  
                  
                  11
                  
                  
                  5
                  
                  
                  12
                  
                  
                  17Ameren
                      Energy support services agreement
                  Other
                      Operating Expenses
                  
                  **2007**
                  
                  
                  **3**
                  
                  
                  **(b**
                  **)**
                  
                  **(c**
                  **)**
                  
                  **(b**
                  **)**
                  
                  **(b**
                  **)**2006
                  
                  
                  2
                  
                  
                  (b
                  )
                  
                  1
                  
                  
                  (b
                  )
                  
                  (b
                  )AFS
                      support services agreement
                  Other
                      Operating Expenses
                  
                  **2007**
                  
                  
                  **2**
                  
                  
                  **(c**
                  **)**
                  
                  **1**
                  
                  
                  **1**
                  
                  
                  **(c**
                  **)**2006
                  
                  
                  1
                  
                  
                  (c
                  )
                  
                  1
                  
                  
                  (c
                  )
                  
                  1Insurance
                      premiums
                  Other
                      Operating Expenses
                  
                  **2007**
                  
                  
                  **4**
                  
                  
                  **(b**
                  **)**
                  
                  **1**
                  
                  
                  **(c**
                  **)**
                  
                  **(b**
                  **)****Total
                      Other Operating Expenses**
                  
                  
                  
                  
                  
                  **2007**
                  
                  **$**
                  **45**
                  
                  **$**
                  **12**
                  
                  **$**
                  **8**
                  
                  **$**
                  **14**
                  
                  **$**
                  **19**2006
                  
                  
                  36
                  
                  
                  11
                  
                  
                  7
                  
                  
                  12
                  
                  
                  18
   43
 **Agreement**
                      **Financial
                        Statement Line Item**
                      
                      
                      **UE**
                      
                      **CIPS**
                      
                      **Genco**
                      
                      **CILCORP****(a)**
                      
                      **IP**Money
                          pool borrowings (advances)
                      Interest
                          (Expense)
                      
                      **2007**
                      
                      **$**
                      **-**
                      
                      **$**
                      **(c**
                      **)**
                      **$**
                      **2**
                      
                      **$**
                      **(c**
                      **)**
                      **$**
                      **(c**
                      **)**Income
                      
                      2006
                      
                      
                      -
                      
                      
                      (c
                      )
                      
                      2
                      
                      
                      2
                      
                      
                      1
 (a)
              Amounts
                  represent CILCORP and CILCO activity. (b)
              Not
                  applicable. (c)
              Amount
                less than $1 million. **NOTE
          8 -** **COMMITMENTS
          AND CONTINGENCIES**
 
 As
          a
          result of issues generated in the course of daily business, we are involved
          in
          legal, tax and regulatory proceedings before various courts, regulatory
          commissions, and governmental agencies, some of which involve substantial
          amounts of money. We believe that the final disposition of these proceedings,
          except as otherwise disclosed in these notes to our financial statements,
          will
          not have a material adverse effect on our results of operations, financial
          position, or liquidity.
 
 Reference
          is made to Note 1 - Summary of Significant Accounting Policies, Note 3
          - Rate
          and Regulatory Matters, Note 13 - Related Party Transactions, and Note
          14 -
          Commitments and Contingencies under Part II, Item 8 of the Ameren Companies’
combined Annual Report on Form 10-K for the fiscal year ended December
          31, 2006.
          See also Note 1 - Summary of Significant Accounting Policies, Note 2 -
          Rate and
          Regulatory Matters and Note 7 - Related Party Transactions in this
          report.
 
 **Callaway
          Nuclear Plant**
 
 The
          following table presents insurance coverage at UE’s Callaway nuclear plant at
          March 31, 2007. The property coverage was renewed on October 1, 2006. The
          nuclear liability coverage anniversary was January 1, 2007.
 
 **Type
                    and Source of Coverage**
                **Maximum
                    Coverages**
                **Maximum
                  Assessments for Single Incidents**Public
                    liability:American
                    Nuclear Insurers
                $
                300
                
                $
                -Pool
                    participation
                
                10,461
                
                
                101
                (a)$
                10,761
                (b)
                $
                101Nuclear
                    worker liability:American
                    Nuclear Insurers
                $
                300
                (c)
                $
                4Property
                    damage:Nuclear
                    Electric Insurance Ltd.
                $
                2,750
                (d)
                $
                24Replacement
                    power:Nuclear
                    Electric Insurance Ltd.
                $
                490
                (e)
                $
                9
  (a)
                Retrospective
                  premium under the Price-Anderson liability provisions of the Atomic
                  Energy
                  Act of 1954, as amended.  This is subject to retrospective assessment
                  with respect to a covered loss in excess of $300 million from an
                  incident
                  at any licensed U.S. commercial reactor, payable at $15 million
                  per
                  year. (b)
                Limit
                    of liability for each incident under
                    Price-Anderson.
 (c)
                Industry
                    limit for potential liability from workers claiming exposure
                    to the
                    hazards of nuclear radiation.
 (d)
                Includes
                    premature decommissioning costs.
 (e)
                Weekly
                    indemnity of $4.5 million for 52 weeks, which commences after
                    the first
                    eight weeks of an outage, plus $3.6 million per week for 71.1
                    weeks
                    thereafter.
 
 Price-Anderson
          limits the liability for claims from an incident involving any licensed
          United
          States commercial nuclear power facility. The limit is based on the number
          of
          licensed reactors. The limit of liability and the maximum potential annual
          payments are adjusted at least every five years for inflation to reflect
          changes
          in the Consumer Price Index. Utilities owning a nuclear reactor cover this
          exposure through a combination of private insurance and mandatory participation
          in a financial protection pool, as established by Price-Anderson.
 
 If
          losses
          from a nuclear incident at the Callaway nuclear plant exceed the limits
          of, or
          are not subject to, insurance, or if coverage is unavailable, UE is at
          risk for
          any uninsured losses. If a serious nuclear incident occurred, it could
          have a
          material adverse effect on Ameren’s and UE’s results of operations, financial
          position, or liquidity.
 
 **Other
          Obligations**
 
 To
          supply
          a portion of the fuel requirements of our generating plants, we have entered
          into various long-term commitments for the procurement of coal, natural
          gas and
          nuclear fuel. In addition, we have entered into various long-term commitments
          for the purchase of electricity and natural gas for distribution. For a
          complete
          listing of our obligations and commitments, see
 44
  Note
          14 -
          Commitments and Contingencies under Part II, Item 8 of the Ameren Companies’
combined Annual Report on Form 10-K for the fiscal year ended December
          31,
          2006.
 
 As
          of
          March 31, 2007, the commitments for the procurement of natural gas have
          materially changed from amounts previously disclosed as of December 31,
          2006.
          The following table presents the total estimated natural gas purchase
          commitments at March 31, 2007:
 
 **2007**
                
                **2008**
                
                **2009**
                
                **2010**
                
                **2011**
                
                **Thereafter****(a)**Ameren(b)
                **$**
                **558**
                
                $
                483
                
                $
                326
                
                $
                219
                
                $
                197
                
                $
                1,960UE
                
                **72**
                
                
                65
                
                
                46
                
                
                29
                
                
                25
                
                
                56CIPS
                
                **104**
                
                
                111
                
                
                73
                
                
                53
                
                
                38
                
                
                69Genco
                
                **24**
                
                
                20
                
                
                8
                
                
                8
                
                
                8
                
                
                13CILCORP/CILCO
                
                **134**
                
                
                131
                
                
                80
                
                
                46
                
                
                55
                (c)
                
                839
                (c)IP
                
                **213**
                
                
                152
                
                
                118
                
                
                82
                
                
                69
                (c)
                
                983
                (c)
  (a)
                Commitments
                    for natural gas are until 2017.
 (b)
                Includes
                    amounts for Ameren registrant and nonregistrant subsidiaries
                    and
                    intercompany eliminations.
 (c)
                Commitments
                    for natural gas purchases for CILCO and IP include projected
                    synthetic
                    natural gas purchases pursuant to a 20-year supply contract beginning
                    in
                    April 2011.
 
 As
          of
          March 31, 2007, the commitments for the procurement of nuclear fuel have
          materially changed from amounts previously disclosed as of December 31,
          2006.
          The following table presents the total estimated nuclear fuel purchase
          commitments at March 31, 2007:
 
 **2007**
                
                
                **2008**
                
                
                **2009**
                
                
                **2010**
                
                
                **2011**
                
                
                **Thereafter****(a****)**Ameren
                $
                49
                
                $
                51
                
                $
                37
                
                $
                113
                
                $
                33
                
                $
                139UE
                
                49
                
                
                51
                
                
                37
                
                
                113
                
                
                33
                
                
                139
  (a)
                Commitments
                    for nuclear fuel are until 2020.
  **Environmental
          Matters**
 
 We
          are
          subject to various environmental laws and regulations by federal, state
          and
          local authorities. From the beginning phases of siting and development
          to the
          ongoing operation of existing or new electric generating, transmission
          and
          distribution facilities, natural gas storage plants, and natural gas
          transmission and distribution facilities, our activities involve compliance
          with
          diverse laws and regulations. These laws and regulations address noise,
          emissions, and impacts to air and water, protected and cultural resources
          (such
          as wetlands, endangered species, and archeological and historical resources),
          and chemical and waste handling. Our activities often require complex and
          lengthy processes as we obtain approvals, permits or licenses for new,
          existing
          or modified facilities. Additionally, the use and handling of various chemicals
          or hazardous materials (including wastes) requires preparation of release
          prevention plans and emergency response procedures. As new laws or regulations
          are promulgated, we assess their applicability and implement the necessary
          modifications to our facilities or our operations, as required. The more
          significant matters are discussed below.
 
 *Clean
          Air Act*
  In
          May
          2005, the EPA issued final regulations with respect to SO 2 and
          NO x emissions (the Clean Air Interstate Rule) and mercury emissions (the Clean
          Air
          Mercury Rule) from coal-fired power plants. The new rules require significant
          reductions in these emissions from UE, Genco, AERG and EEI power plants
          in
          phases, beginning in 2009. States are required to finalize rules to implement
          the federal Clean Air Interstate Rule and Clean Air Mercury Rule. Although
          the
          federal rules mandate a specific cap for SO 2 ,
          NO x and
          mercury emissions by state from utility boilers, the states have considerable
          flexibility in allocating emission allowances to individual utility boilers.
          In
          addition, a state may choose to hold back certain emission allowances for
          growth
          or other reasons, and it may implement a more stringent program than the
          federal
          program. Illinois has enacted rules to implement the federal Clean Air
          Interstate Rule program that will reduce the number of NO x allowances automatically allocated to Genco’s, AERG’s and EEI’s plants; however
          it is anticipated that the rules will not be finalized until the third
          quarter
          of 2007. As a result of the Illinois rules, Genco, AERG and EEI would need
          to
          procure allowances and install pollution control equipment in order to
          continue
          to operate.
 
 The
          Missouri Department of Natural Resources formally proposed rules to implement
          the federal Clean Air Mercury and Clean Air Interstate Rules in November
          2006.
          These rules substantially follow the federal rules. The Missouri Air
          Conservation Commission approved the rules at their February 2007 meeting.
          The
          rules became effective after publication in the Missouri Register in April
          2007
          by the EPA. When fully implemented, it is estimated that these rules will
          reduce
          mercury emissions 81% by 2018 and reduce NO x emissions 30% and SO 2 emissions 75% by 2015.
 
 Illinois
          has adopted rules for mercury that are significantly stricter than the
          federal
          rules. In 2006, Genco,
  45
  CILCO,
          EEI, and the Illinois EPA entered into an agreement that was incorporated
          into
          Illinois’ mercury regulations. Under the regulations, Illinois generators may
          defer until 2015 the requirement to reduce mercury emissions by 90% in
          exchange
          for accelerated installation of NO x and
          SO 2 controls
          Genco, AERG and EEI will begin installing equipment designed to reduce
          mercury
          emissions in 2009. When fully implemented, it is estimated that these rules
          will
          reduce mercury emissions 90%, NO x emissions 50% and SO 2 emissions 70% by 2015 in Illinois.
 
 The
          table
          below presents estimated capital costs based on current technology to comply
          with both the federal Clean Air Interstate Rule and Clean Air
          Mercury  Rule
          through 2016 and related state implementation plans. The estimates described
          below could change depending upon additional federal or state requirements,
          new
          technology, variations in costs of material or labor or alternative compliance
          strategies, among other reasons. The timing of estimated capital costs
          may also
          be influenced by whether emission allowances are used to comply with the
          proposed rules, thereby deferring capital investment.
 
 **2007**
                **2008
                    - 2011**
                **2012
                    - 2016**
                **Total**UE(a)
                $110
                $                          
                    630-830
                $                            
                    910-1,180
                $                           
                    1,650-2,120Genco
                110
                820-1,060
                180-260
                1,110-1,430CILCO
                    (AERG)
                100
                185-240
                95-140
                380-480EEI
                10
                185-240
                165-220
                360-470Ameren
                $330
                $1,820-2,370
                $1,350-1,800
                $                            3,500-4,500
  (a)
                UE’s
                    expenditures are expected to be recoverable in rates over
                    time.
 
 Illinois
          and Missouri must also develop attainment plans to meet the federal eight-hour
          ozone ambient standard by June 2007 and the federal fine particulate ambient
          standard by April 2008. The costs in the table assume that emission controls
          required for the Clean Air Interstate Rule regulations will be sufficient
          to
          meet this new standard in the St. Louis region. Should Missouri develop
          an
          alternative plan to comply with this standard, the cost impact could be
          material
          to UE. Illinois is planning to impose additional requirements beyond the
          Clean
          Air Interstate Rule as part of the attainment plans for ozone and fine
          particulate. At this time, we are unable to determine the impact such state
          actions would have on our results of operations, financial position, or
          liquidity.
 
 *Emission
          Allowances*
  Both
          federal and state laws require significant reductions in SO 2 and
          NO x emissions that result from burning fossil fuels. The Clean Air Act and
          NO x Budget
          Trading Program created marketable commodities called allowances. Currently
          each
          allowance gives the owner the right to emit one ton of SO 2 or
          NO x .
          All
          existing generating facilities have been allocated allowances based on
          past
          production and the statutory emission reduction goals. If additional allowances
          are needed for new generating facilities, they can be purchased from facilities
          that have excess allowances or from allowance banks. Our generating facilities
          comply with the SO 2 limits
          through the use and purchase of allowances, through the use of low-sulfur
          fuels,
          and through the application of pollution control technology. The NO x Budget
          Trading Program limits emissions of NO x during
          the ozone season (May through September). The NO x Budget
          Trading Program has applied to all electric generating units in Illinois
          since
          the beginning of 2004; it was applied to the eastern third of Missouri,
          where
          UE’s coal-fired power plants are located, beginning in 2007. Our generating
          facilities are expected to comply with the NO x limits
          through the use and purchase of allowances or through the application of
          pollution control technology, including low-NO x burners,
          over-fire air systems, combustion optimization, rich-reagent injection,
          selective noncatalytic reduction, and selective catalytic reduction
          systems.
 
 The
          following table presents the SO 2 and
          NO x emission
          allowances held and the related SO 2 and
          NO x book
          values that are carried as intangible assets as of March 31, 2007.
 
 **SO****2********(a)**
                **NO****x********(b)**
                
                **Book
                    Value**UE
                
                1.666
                
                15,667
                
                $
                57Genco
                
                0.647
                
                16,233
                
                
                66CILCO
                    (AERG)
                
                0.307
                
                4,198
                
                
                1EEI
                
                0.306
                
                5,594
                
                
                9Ameren
                
                2.926
                
                41,692
                
                
                210
                (c)
  (a)
                Vintages
                    are from 2007 to 2016. Each company possesses additional allowances
                    for
                    use in periods beyond 2016. Units are in millions of SO2allowances (currently one allowance equals one ton
                    emitted).
 (b)
                Vintages
                    are from 2007 to 2008. Units are in NOxallowances (one allowance equals one ton
                    emitted).
 (c)
                Includes
                    value assigned to AERG and EEI allowances as a result of purchase
                    accounting of $77 million.
 
 The
          following table presents the distribution by company and year of the
          NO x emission
          allowances that were allocated by the Illinois EPA in September 2006, for
          2007
          and 2008.
 
 **2007****(a)**
                
                **2008****(a)**UE
                
                156
                
                
                130Genco
                
                4,656
                
                
                4,679CILCO
                    (AERG)
                
                2,052
                
                
                2,053EEI
                
                2,746
                
                
                2,713Ameren
                
                9,610
                
                
                9,575
  (a)
                These
                    NOxallowances are included in the total allowances table above.
                    Units are in
                    NOxallowances (one allowance equals one ton
                    emitted).
 
 Allocations
          of NO x allowances for UE’s Missouri generating facilities will be 10,166 allowances per
          emissions season in 2007 and 2008. In addition, UE expects to receive 4,081
          allowances from the compliance supplement pool for early NO x emission
          reductions.
 
 UE,
          Genco, CILCO and EEI expect to use a substantial portion of the SO 2 and
          NO x allowances for ongoing operations. New environmental regulations, including
          the
          Clean Air Interstate Rule, the timing of the installation of pollution
          control
          equipment and the level of operations will have a significant impact on
          the
          amount of allowances actually
  46
 required
          for ongoing operations. The Clean Air Interstate Rule requires a reduction
          in
          SO 2 emissions by increasing the ratio of Acid Rain Program allowances surrendered.
          The current Acid Rain Program requires the surrender of one SO 2 allowance for every ton of SO 2 that is
          emitted. The Clean Air Interstate Rule program will require that SO 2 allowances be surrendered at a ratio of two allowances for every ton of
          emission
          in 2010 through 2014. Beginning in 2015, the Clean Air Interstate Rule
          program
          will require SO 2 allowances to be surrendered at a ratio of 2.86 allowances for every ton
          of
          emission. In order to accommodate this change in surrender ratio and to
          comply
          with the federal and state regulations, UE, Genco, AERG and EEI expect
          to
          install control technology designed to further reduce SO 2 emissions.
 
 *Global
          Climate*
 
 Future
          initiatives regarding greenhouse gas emissions and global warming are the
          subjects of much debate. As a result of our diverse fuel portfolio, our
          contribution to greenhouse gases varies. Coal-fired power plants are significant
          sources of carbon dioxide, a principal greenhouse gas. Six electric power
          sector
          trade associations, including the Edison Electric Institute, of which Ameren
          is
          a member, and the TVA, signed a Memorandum of Understanding (MOU) with
          the DOE
          in December 2004 calling for a 3% to 5% voluntary decrease in carbon intensity
          from ****** the
          utility sector between 2002 and 2012. Currently, Ameren is considering
          various
          initiatives to comply with the MOU, including enhanced generation at our
          nuclear
          and hydroelectric power plants, increased efficiency measures at our coal-fired
          units, and investments in renewable energy and carbon sequestration
          projects.
 
 In
          April
          2007, the U.S. Supreme Court issued a decision that determined that the
          EPA has
          authority to regulate carbon dioxide and other greenhouse gases from cars
          as
“air pollutants” under the Clean Air Act. The Supreme Court sent the case back
          to the EPA, which must conduct a rulemaking to determine whether greenhouse
          gas
          emissions contribute to climate change “which may reasonably be anticipated to
          endanger public health or welfare.” Unless the U.S. Congress enacts legislation
          directing otherwise, the EPA could begin to regulate greenhouse gas
          emissions.
 
 The
          impact of future initiatives related to greenhouse gas emissions and global
          warming on us are unknown. Although compliance costs are unlikely in the
          near
          future, our costs of complying with any mandated federal greenhouse gas
          program
          could have a material impact on our future results of operations, financial
          position, or liquidity.
 
 *New
          Source Review*
  The
          EPA
          has been conducting an enforcement initiative to determine whether modifications
          at a number of coal-fired power plants owned by electric utilities in the
          United
          States are subject to New Source Review (NSR) requirements or New Source
          Performance Standards under the Clean Air Act. The EPA’s inquiries focus on
          whether the best available emission control technology was or should have
          been
          used at such power plants when major maintenance or capital improvements
          were
          performed.
  In
          April
          2007, the U.S. Supreme Court in *Environmental
          Defense v. Duke Energy Corp.,* issued a
          decision which effectively reduced the statutory defenses available to
          NSR and
          Prevention of Significant Deterioration (PSD) claims. The key issue before
          the
          Supreme Court was whether EPA requirements to obtain permits under the
          NSR and
          PSD programs are triggered when a “modification” at an industrial facility
          results in an increase in an hourly emissions rate, as upheld by the U.S.
          Court
          of Appeals for the Fourth Circuit, or in total annual emissions, as asserted
          by
          environmental groups. The U.S. Supreme Court found that the NSR and PSD
          regulations can be triggered by either an hourly or annual increase in
          the
          emissions. The Supreme Court decision did not address other potential defenses
          or potential exceptions under the NSR and PSD programs.
 
 In
          April
          2005, Genco received a request from the EPA for information pursuant to
          Section
          114(a) of the Clean Air Act seeking detailed operating and maintenance
          history
          data with respect to its Meredosia, Hutsonville, Coffeen and Newton facilities,
          EEI’s Joppa facility, and AERG’s E.D. Edwards and Duck Creek facilities. In
          December 2006, the EPA issued a second Section 114(a) request to Genco
          regarding
          projects at the Newton facility. All of these facilities are coal-fired
          power
          plants. We are currently in discussions with the EPA and interested stakeholders
          regarding resolution of these matters, but we are unable to predict the
          outcome
          of these discussions.
 
 *Remediation*
 
 We
          are
          involved in a number of remediation actions to clean up hazardous waste
          sites as
          required by federal and state law. Such statutes require that responsible
          parties fund remediation actions regardless of degree of fault, legality
          of
          original disposal, or ownership of a disposal site. UE, CIPS, CILCO and
          IP have
          each been identified by the federal or state governments as a potentially
          responsible party at several contaminated sites. Several of these sites
          involve
          facilities that were transferred by CIPS to Genco in May 2000 and facilities
          transferred by CILCO to AERG in October 2003. As part of each transfer,
          CIPS and
          CILCO have contractually agreed to indemnify Genco and AERG for remediation
          costs associated with preexisting environmental contamination at the transferred
          sites.
 
 As
          of
          March 31, 2007, CIPS, CILCO and IP owned or were otherwise responsible
          for 14,
          four, and 25 former MGP
  47
 sites,
          respectively, in Illinois. All of these sites are in various stages of
          investigation, evaluation and remediation. Under its current schedule,
          Ameren
          anticipates that remediation at these sites should be completed by 2015.
          The ICC
          permits each company to recover remediation and litigation costs associated
          with
          their former MGP sites in Illinois from their Illinois electric and natural
          gas
          utility customers through environmental adjustment rate riders. To be
          recoverable, such costs must be prudently and properly incurred, and costs
          are
          subject to annual reconciliation review by the ICC. As of March 31, 2007,
          CIPS,
          CILCO and IP had recorded liabilities of $25 million, $5 million and $78
          million, respectively, to represent estimated minimum obligations.
 
 In
          addition, UE owns or is otherwise responsible for 10 MGP sites in Missouri
          and
          one in Iowa. UE does not currently have in effect in Missouri a rate rider
          mechanism that permits remediation costs associated with MGP sites to be
          recovered from utility customers. UE does not have any retail utility operations
          in Iowa that would provide a source of recovery of these remediation costs.
          Because of the unknown and unique characteristics of each site (such as
          amount
          and type of residues present, physical characteristics of the site, and
          the
          environmental risk) and uncertain regulatory requirements, we are not able
          to
          determine the maximum liability for the remediation of these sites. As
          of March
          31, 2007, UE had recorded $7 million to represent its estimated minimum
          obligation for its MGP sites. UE also is responsible for four electric
          sites in
          Missouri that have corporate cleanup liability, most as a result of federal
          agency mandates. As of March 31, 2007, UE had recorded $4 million to represent
          its estimated minimum obligation for these sites. At this time, we are
          unable to
          determine what portion of these costs, if any, will be eligible for recovery
          from insurance carriers.
 
 In
          June
          2000, the EPA notified UE and numerous other companies, including Solutia,
          that
          former landfills and lagoons in Sauget, Illinois, may contain soil and
          groundwater contamination. These sites are known as Sauget Area 2. From
          about
          1926 until 1976, UE operated a power generating facility adjacent to Sauget
          Area
          2. UE currently owns a parcel of property that was used as a landfill.
          Under the
          terms of an Administrative Order and Consent, UE has joined with other
          potentially responsible parties (PRPs) to evaluate the extent of potential
          contamination with respect to Sauget Area 2.
 
 Sauget
          Area 2 investigation activities under the oversight of the EPA are largely
          completed and will be submitted to the EPA by the end of 2007. Following
          this
          submission, the EPA will ultimately select a remedy alternative and begin
          negotiations with various PRPs to implement the selected alternative. Over
          the
          last several years, numerous other parties have joined the PRP group and
          presumably will participate in the funding of any required remediation.
          In
          addition, Pharmacia Corporation and Monsanto Company have agreed to assume
          the
          liabilities of Solutia related to Solutia’s former chemical waste landfill in
          the Sauget Area 2, notwithstanding Solutia’s filing for bankruptcy
          protection.
 
 In
          December 2004, AERG submitted a comprehensive package to the Illinois EPA
          to
          address groundwater and surface water issues associated with the recycle
          pond,
          ash ponds, and reservoir at the Duck Creek power plant facility. Information
          submitted by AERG is currently under review by the Illinois EPA. CILCORP
          and
          CILCO both have a liability of
 $4
          million at March 31, 2007, included on their Consolidated Balance Sheets
          for the
          estimated cost of the remediation effort, which involves treating and
          discharging recycle-system water in order to address these groundwater
          and
          surface water issues.
 
 In
          addition, our operations, or those of our predecessor companies, involve
          the
          use, disposal and, in appropriate circumstances, the cleanup of substances
          regulated under environmental protection laws. We are unable to determine
          the
          impact these actions may have on our results of operations, financial position,
          or liquidity.
 
 *Pumped-storage
          Hydroelectric Facility Breach*
 
 In
          December 2005, there was a breach of the upper reservoir at UE’s Taum Sauk
          pumped-storage hydroelectric facility. This resulted in significant flooding
          in
          the local area, which damaged a state park. At the FERC’s direction, outside
          experts were hired by UE to review the cause of the incident. Their reports
          and
          reports by FERC staff indicated design, construction, and human error as
          causes
          of the breach. In their report, UE’s outside experts concluded that restoration
          of the upper reservoir, if undertaken, will require a complete rebuild
          of the
          entire dam with a completely different design concept, not simply a repair
          of
          the breached area. FERC agreed with this conclusion and rejected repair
          as an
          option.
 
 The
          FERC
          investigation of the incident has been completed. In October 2006, the
          FERC
          approved a stipulation and consent agreement between UE and the FERC’s Office of
          Enforcement that resolves all issues arising from an investigation that
          the
          FERC’s Office of Enforcement conducted into alleged violations of license
          conditions and FERC regulations by UE as the licensee of the Taum Sauk
          hydroelectric facility that may have contributed to the breach of the upper
          reservoir. As part of the stipulation and consent agreement, UE agreed,
          among
          other things, (1) to pay a civil penalty of $10 million, (2) to pay $5
          million
          into an interest-bearing escrow account to fund project enhancements at
          or near
          the Taum Sauk facility, and (3) to implement and comply with a new dam
          safety
          program developed in connection with the settlement.
 
 In
          February 2007, UE submitted plans and an environmental report to FERC to
          rebuild
          the upper reservoir at its Taum Sauk Plant, assuming successful resolution
          of
  48
  outstanding
          issues with authorities of the state of Missouri. Should the decision be
          made to
          rebuild the Taum Sauk plant, UE would expect it to be out of service through
          at
          least the middle of 2009, if not longer.
  UE
          has
          accepted responsibility for the effects of the incident. At this time,
          UE
          believes that substantially all damages and liabilities (but not penalties)
          caused by the breach, plus the cost of rebuilding the plant, will be covered
          by
          insurance. UE expects the total cost for clean up, damage and liabilities,
          excluding costs to rebuild the facility, resulting from the Taum Sauk incident
          to range from $137 million to $157 million. As of March 31, 2007, UE had
          paid
          $76 million and accrued a $61 million liability, including costs resulting
          from
          the FERC-approved stipulation and consent agreement discussed above, while
          expensing $30 million and recording a $107 million receivable due from
          insurance
          companies. As of March 31, 2007, UE has received $30 million from insurance
          companies, which reduced the insurance receivable balance to $77 million.
          As of
          March 31, 2007, UE had a $10 million receivable due from insurance companies
          related to rebuilding the facility. Under UE’s insurance policies, all claims by
          or against UE are subject to review by its insurance carriers.
  In
          December 2006, the state of Missouri through its attorney general and 10
          business owners filed separate lawsuits regarding the Taum Sauk breach.
          The
          attorney general’s suit, which was originally filed in the Missouri circuit
          court in St. Louis, and subsequently transferred to the Missouri circuit
          court
          in Reynolds County, alleges negligence, violations of the Missouri Clean
          Water
          Act and various other statutory and common law claims. The business owners’
suit, which was filed in the Missouri circuit court in Reynolds County,
          contains
          similar allegations and seeks damages relating to business losses and lost
          profit. Both suits seek unspecified punitive damages. In January 2007,
          the
          Missouri Department of Natural Resources filed a petition to intervene
          as a
          plaintiff in the attorney general’s lawsuit.
 
 Until
          the
          reviews conducted by state authorities have concluded, litigation has been
          resolved, the insurance review is completed, a final decision about whether
          the
          plant will be rebuilt is made, and future regulatory treatment for the
          facility
          is determined, among other things, we are unable to determine the impact
          the
          breach may have on Ameren’s and UE’s results of operations, financial position,
          or liquidity beyond those amounts already recognized.
  **Asbestos-related
          Litigation**
  Ameren,
          UE, CIPS, Genco, CILCO and IP have been named, along with numerous other
          parties, in a number of lawsuits filed by plaintiffs claiming varying degrees
          of
          injury from asbestos exposure. Most have been filed in the circuit court
          of
          Madison County, Illinois. The total number of defendants named in each
          case is
          significant; as many as 188 parties are named in some pending cases and
          as few
          as six in others. However, in the cases that were pending as of March 31,
          2007,
          the average number of parties was 70.
  The
          claims filed against Ameren, UE, CIPS, Genco, CILCO and IP allege injury
          from
          asbestos exposure during the plaintiffs’ activities at our present or former
          electric generating plants. Former CIPS plants are now owned by Genco,
          and
          former CILCO plants are now owned by AERG. Most of IP’s plants were transferred
          to a Dynegy subsidiary prior to Ameren’s acquisition of IP. As a part of the
          transfer of ownership of the CIPS and CILCO generating plants, CIPS or
          CILCO has
          contractually agreed to indemnify Genco or AERG for liabilities associated
          with
          asbestos-related claims arising from activities prior to the transfer.
          Each
          lawsuit seeks unspecified damages in excess of $50,000, which, if awarded,
          typically would be shared among the named defendants.
  From
          January 1, 2007, through March 31, 2007, seven additional asbestos-related
          lawsuits were filed against UE, CIPS, CILCO and IP, mostly in the circuit
          court
          of Madison County, Illinois. Four lawsuits were dismissed and two were
          settled.
          The following table presents the status as of March 31, 2007, of the
          asbestos-related lawsuits that have been filed against the Ameren
          Companies:
 
 **Specifically
                    Named as Defendant****Total(a)**
                
                
                **Ameren**
                
                
                **UE**
                
                
                **CIPS**
                
                
                **Genco**
                
                
                **CILCO**
                
                
                **IP**Filed
                
                327
                
                
                31
                
                
                181
                
                
                138
                
                
                2
                
                
                45
                
                
                158Settled
                
                107
                
                
                -
                
                
                53
                
                
                44
                
                
                -
                
                
                14
                
                
                53Dismissed
                
                151
                
                
                26
                
                
                98
                
                
                51
                
                
                2
                
                
                9
                
                
                69Pending
                
                69
                
                
                5
                
                
                30
                
                
                43
                
                
                -
                
                
                22
                
                
                36
  (a)
                Addition
                    of the numbers in the individual columns does not equal the total
                    column
                    because some of the lawsuits name multiple Ameren entities as
                    defendants.
 
 49
 
 As
          of
          March 31, 2007, eight asbestos-related lawsuits were pending against EEI.
          The
          general liability insurance maintained by EEI provides coverage with respect
          to
          liabilities arising from asbestos-related claims.
 
 The
          ICC
          order approving Ameren’s acquisition of IP effective September 30, 2004, also
          approved a tariff rider to recover the costs of asbestos-related litigation
          claims, subject to the following terms. Beginning in 2007, 90% of cash
          expenditures in excess of the amount included in base electric rates will
          be
          recovered by IP from a $20 million trust fund established by IP financed
          with
          contributions of $10 million each by Ameren and Dynegy. If cash expenditures
          are
          less than the amount in base rates, IP will contribute 90% of the difference
          to
          the fund. Once the trust fund is depleted, 90% of allowed cash expenditures
          in
          excess of base rates will be recovered through charges assessed to customers
          under the tariff rider.
 
 The
          Ameren Companies believe that the final disposition of these proceedings
          will
          not have a material adverse effect on their results of operations, financial
          position, or liquidity.
 
 **NOTE
          9 - CALLAWAY NUCLEAR PLANT**
 
 Under
          the
          Nuclear Waste Policy Act of 1982, the DOE is responsible for the permanent
          storage and disposal of spent nuclear fuel. The DOE currently charges one
          mill,
          or 1 / 10 of one
          cent, per nuclear-generated kilowatthour sold for future disposal of spent
          fuel.
          Pursuant to this act, UE collects one mill from its electric customers
          for each
          kilowatthour of electricity that it generates and sells from its Callaway
          nuclear plant. Electric utility rates charged to customers provide for
          recovery
          of such costs. The DOE is not expected to have its permanent storage facility
          for spent fuel available until at least 2017. UE has sufficient installed
          storage capacity at its Callaway nuclear plant until 2020. It has the capability
          for additional storage capacity through the licensed life of the plant.
          The
          delayed availability of the DOE’s disposal facility is not expected to adversely
          affect the continued operation of the Callaway nuclear plant through its
          currently licensed life.
 
 Electric
          utility rates charged to customers provide for the recovery of the Callaway
          nuclear plant’s decommissioning costs, which include decontamination,
          dismantling, and site restoration costs, over an assumed 40-year life of
          the
          plant, ending with the expiration of the plant’s operating license in 2024. It
          is assumed that the Callaway nuclear plant site will be decommissioned
          based on
          immediate dismantlement method and removal from service. Ameren and UE
          have
          recorded an ARO
          for
          the Callaway nuclear plant decommissioning costs at fair value, which represents
          the present value of estimated future cash outflows. Decommissioning costs
          are
          charged to the costs of service used to establish electric rates for UE’s
          customers. These costs amounted to $7 million in each of the years 2006,
          2005
          and 2004. Every three years, the MoPSC requires UE to file an updated cost
          study
          for decommissioning its Callaway nuclear plant. Electric rates may be adjusted
          at such times to reflect changed estimates. The latest study was filed
          in 2005.
          Minor tritium contamination was discovered on the Callaway nuclear plant
          site in
          the summer of 2006. Existing facts and regulatory requirements indicate
          that
          this discovery will not cause any significant increase in a decommissioning
          cost
          estimate when the next study is conducted. Costs collected from customers
          are
          deposited in an external trust fund to provide for the Callaway nuclear
          plant’s
          decommissioning. If the assumed return on trust assets is not earned, we
          believe
          that it is probable that any such earnings deficiency will be recovered
          in
          rates. The fair value of the nuclear decommissioning trust fund for UE’s
          Callaway nuclear plant is reported in Nuclear Decommissioning Trust Fund
          in
          Ameren’s and UE’s Consolidated Balance Sheets. This amount is legally
          restricted. It may be used only to fund the costs of nuclear decommissioning.
          Changes in the fair value of the trust fund are recorded as an increase
          or
          decrease to the nuclear decommissioning trust fund and to a regulatory
          asset.
  **NOTE
          10** **-** **** **OTHER
          COMPREHENSIVE INCOME**
 
 Comprehensive
          income includes net income as reported on the statements of income and
          all other
          changes in common stockholders’ equity, except those resulting from transactions
          with common shareholders. A reconciliation of net income to comprehensive
          income
          for the three months ended March 31, 2007 and 2006, is shown below for
          the
          Ameren Companies:
 
 
 **Three
                    Months****2007**
                
                **2006****Ameren:****(a)**Net
                    income
                **$**
                **123**
                
                $
                70Unrealized
                    (loss) on derivative hedging instruments, net of taxes (benefit)
                    of $(15)
                    and $(11), respectively
                
                **(28**
                **)**
                
                (17
                )Reclassification
                    adjustments for (gain) included in net income, net of taxes of
                    $7 and $2,
                    respectively
                
                **(13**
                **)**
                
                (3
                )Adjustment
                    to pension and benefit obligation, net of taxes of $1 and $-,
                    respectively
                
                **2**
                
                
                -Total
                    comprehensive income, net of taxes
                **$**
                **84**
                
                $
                50**UE:**Net
                    income
                **$**
                **38**
                
                $
                51Unrealized
                    (loss) on derivative hedging instruments, net of taxes (benefit)
                    of $(3)
                    and $(2), respectively
                
                **(5**
                **)**
                
                (3
                )Reclassification
                    adjustments for (gain) included in net income, net of taxes of
                    $2 and $-,
                    respectively
                
                **(3**
                **)**
                
                -Total
                    comprehensive income, net of taxes
                **$**
                **30**
                
                $
                48
  50
  
 **Three
                    Months****2007**
                
                
                **2006****CIPS:**Net
                    income (loss)
                **$**
                **11**
                
                $
                (1
                )Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes (benefit)
                    of
                    $- and $(2), respectively
                
                **1**
                
                
                (3
                )Reclassification
                    adjustments for (gain) included in net income, net of taxes of
                    $- and $1,
                    respectively
                
                **-**
                
                
                (1
                )Total
                    comprehensive income (loss), net of taxes
                **$**
                **12**
                
                $
                (5
                )**Genco:**Net
                    income
                **$**
                **43**
                
                $
                6Unrealized
                    (loss) on derivative hedging instruments, net of taxes (benefit)
                    of $(1)
                    and $-, respectively
                
                **(2**
                **)**
                
                -Reclassification
                    adjustments for loss included in net income, net of taxes of
                    $- and $-,
                    respectively
                
                **-**
                
                
                1Adjustment
                    to pension and benefit obligation, net of taxes of $- and $-,
                    respectively
                
                **1**
                
                
                -Total
                    comprehensive income, net of taxes
                **$**
                **42**
                
                $
                7**CILCORP:**Net
                    income
                **$**
                **20**
                
                $
                8Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes (benefit)
                    of
                    $2 and $(8), respectively
                
                **3**
                
                
                (11
                )Reclassification
                    adjustments for (gain) included in net income, net of taxes of
                    $2 and $-,
                    respectively
                
                **(3**
                **)**
                
                -Adjustment
                    to pension and benefit obligation, net of taxes of $- and $-,
                    respectively
                
                **1**
                
                
                -Total
                    comprehensive income (loss), net of taxes
                **$**
                **21**
                
                $
                (3
                )**CILCO:**Net
                    income
                **$**
                **26**
                
                $
                17Unrealized
                    gain (loss) on derivative hedging instruments, net of taxes (benefit)
                    of
                    $2 and $(8), respectively
                
                **3**
                
                
                (11
                )Reclassification
                    adjustments for (gain) included in net income, net of taxes of
                    $2 and $-,
                    respectively
                
                **(3**
                **)**
                
                -Total
                    comprehensive income, net of taxes
                **$**
                **26**
                
                $
                6**IP:**Net
                    income
                **$**
                **13**
                
                $
                4Unrealized
                    (loss) on derivative hedging instruments, net of taxes of $-
                    and $2,
                    respectively
                
                **-**
                
                
                3Reclassification
                    adjustments for loss included in net income, net of taxes of
                    $- and $2,respectively
                
                **-**
                
                
                (3
                )Total
                    comprehensive income, net of taxes
                **$**
                **13**
                
                $
                4
  (a)
                Includes
                    amounts for Ameren registrant and nonregistrant subsidiaries
                    and
                    intercompany eliminations.
  **NOTE
          11** **-
          RETIREMENT BENEFITS**
 
 Ameren’s
          pension plans are funded in compliance with income tax regulations and
          federal
          funding requirements. Based on our assumptions at December 31, 2006, and
          the new
          contribution requirements in the Pension Protection Act of 2006, in order
          to
          maintain minimum funding levels for Ameren’s pension plans, we do not expect
          future contributions to be required until 2009, at which time we would
          expect a
          required contribution of $100 million to $150 million. Required contributions
          of
          $150 million to $200 million each year are also expected for 2010 and 2011.
          These amounts are estimates and may change with actual stock market performance,
          changes in interest rates, any pertinent changes in government regulations,
          and
          any voluntary contributions.
  The
          following table presents the components of the net periodic benefit cost
          for our
          pension and postretirement benefit plans for the three months ended March
          31,
          2007 and 2006:
 
 **Pension
                    Benefits****(a)**
                
                **Postretirement
                    Benefits****(a)****2007**
                
                **2006**
                
                **2007**
                
                **2006**Service
                    cost
                **$**
                **16**
                
                $
                16
                
                **$**
                **6**
                
                $
                6Interest
                    cost
                
                **45**
                
                
                43
                
                
                **19**
                
                
                18Expected
                    return on plan assets
                
                **(52**
                **)**
                
                (49
                )
                
                **(13**
                **)**
                
                (12
                )Amortization
                    of:Prior
                    service cost
                
                **3**
                
                
                2
                
                
                **(2**
                **)**
                
                (1
                )Actuarial
                    loss
                
                **6**
                
                
                11
                
                
                **7**
                
                
                10Net
                    periodic benefit cost
                **$**
                **18**
                
                $
                23
                
                **$**
                **17**
                
                $
                21
  (a)
                Includes
                    amounts for Ameren registrant and nonregistrant
                    subsidiaries.
   51
 UE,
          CIPS,
          Genco, CILCORP, CILCO and IP are participants in Ameren’s plans and are
          responsible for their proportional share of the pension and postretirement
          costs. The following table presents the pension costs and the postretirement
          benefit costs incurred for the three months ended March 31, 2007 and 2006:
 
 **Pension
                    Costs**
                
                **Postretirement
                    Costs****2007**
                
                **2006**
                
                **2007**
                
                **2006**Ameren
                **$**
                **18**
                
                $
                23
                
                **$**
                **17**
                
                $
                21UE
                
                **10**
                
                
                13
                
                
                **9**
                
                
                11CIPS
                
                **2**
                
                
                3
                
                
                **2**
                
                
                2Genco
                
                **1**
                
                
                2
                
                
                **1**
                
                
                1CILCORP(a)
                
                **3**
                
                
                3
                
                
                **2**
                
                
                3IP
                
                **2**
                
                
                2
                
                
                **3**
                
                
                4
  (a)
                CILCORP
                    includes CILCO.
  **NOTE
          12 -** **SEGMENT
          INFORMATION** ****
  Ameren
          has three reportable segments: Missouri Regulated, Illinois Regulated and
          Non-rate-regulated Generation. The Missouri Regulated segment for Ameren
          includes all the operations of UE’s business as described in Note 1 - Summary of
          Significant Accounting Policies, except for UE’s 40% interest in EEI and other
          non-rate regulated activities, which are included in Other. The Illinois
          Regulated segment for Ameren consists of the regulated electric and gas
          transmission and distribution businesses of CIPS, CILCO, and IP, as described in
          Note 1 - Summary of Significant Accounting Policies. The Non-rate-regulated
          Generation segment for Ameren primarily consists of the operations or activities
          of Genco, the CILCORP parent company, AERG, EEI, and Marketing Company.
          Other
          primarily includes Ameren parent company activities and the leasing activities
          of CILCORP, AERG, Resources Company, and CIPSCO Investment Company.
  UE
          has
          one reportable segment: Missouri Regulated. The Missouri Regulated segment
          for
          UE includes all the operations of UE’s business as described in Note 1 - Summary
          of Significant Accounting Policies, except for UE’s 40%
          interest in EEI and other non-rate-regulated activities, which are included
          in
          Other.
 
 CILCORP
          and CILCO have two reportable segments: Illinois Regulated and
          Non-rate-regulated Generation. The Illinois Regulated segment for CILCORP
          and
          CILCO comprises the regulated electric and gas transmission and distribution
          businesses of CILCO. The Non-rate-regulated Generation segment for CILCORP
          and
          CILCO consists of the generation business of AERG. Other for CILCORP and
          CILCO
          comprises leveraged lease investments, parent company activity, and minor
          activities not reported in the Illinois Regulated or Non-rate-regulated
          Generation segments for CILCORP.
  The
          following table presents information about the reported revenues and net
          income
          of Ameren for the three months ended March 31, 2007 and 2006, and total
          assets
          as of March 31, 2007 and December 31, 2006.
 
 **Missouri**
                  **Regulated**
                
                **Illinois**
                  **Regulated**
                
                **Non-rate-regulated
                    Generation**
                
                **Other**
                
                **Intersegment
                    Eliminations**
                
                **Consolidated****2007:**External
                    revenues
                **$**
                **638**
                
                **$**
                **1,054**
                
                **$**
                **318**
                
                **$**
                **9**
                
                **$**
                **-**
                
                **$**
                **2,019**Intersegment
                    revenues
                
                **12**
                
                
                **7**
                
                
                **133**
                
                
                **10**
                
                
                **(162**
                **)**
                
                **-**Net
                    income(a)
                
                **23**
                
                
                **29**
                
                
                **70**
                
                
                **1**
                
                
                **-**
                
                
                **123****2006:**External
                    revenues
                $
                558
                
                $
                984
                
                $
                239
                
                $
                19
                
                $
                -
                
                $
                1,800Intersegment
                    revenues
                
                78
                
                
                2
                
                
                191
                
                
                12
                
                
                (283
                )
                
                -Net
                    income (loss)(a)
                
                35
                
                
                9
                
                
                27
                
                
                (1
                )
                
                -
                
                
                70**As
                    of March 31, 2007:**Total
                    assets
                $
                10,269
                
                $
                6,234
                
                $
                3,796
                
                $
                1,024
                
                $
                (1,697
                )
                $
                19,626**As
                    of December 31, 2006:**Total
                    assets
                
                10,251
                
                
                6,226
                
                
                3,612
                
                
                1,161
                
                
                (1,672
                )
                
                19,578
  (a)
                Represents
                    net income available to common shareholders; 100% of CILCO’s preferred
                    stock dividends are included in the Illinois Regulated
                    segment.
 
 
 52
 
 The
          following table presents information about the reported revenues and net
          income
          of UE for the three months ended March 31, 2007 and 2006, and total assets
          as of
          March 31, 2007 and December 31, 2006.
 **Missouri
                    Regulated**
                
                **Other****(a)**
                
                **Consolidated**
                  **UE****2007:**Revenues
                **$**
                **650**
                
                **$**
                **-**
                
                **$**
                **650**Net
                    income(b)
                
                **23**
                
                
                **13**
                
                
                **37****2006:**Revenues
                $
                636
                
                $
                -
                
                $
                636Net
                    income(b)
                
                35
                
                
                15
                
                
                50**As
                    of March 31, 2007:**Total
                    assets
                $
                10,286
                
                $
                34
                
                $
                10,320**As
                    of December 31, 2006:**Total
                    assets
                
                10,251
                
                
                36
                
                
                10,287
  (a)
                Includes
                    40% interest in EEI and other non-rate-regulated
                    activities.
 (b)
                Represents
                    net income available to the common shareholder
                    (Ameren).
 
 The
          following table presents information about the reported revenues and net
          income
          of CILCORP for the three months ended March 31, 2007 and 2006, and total
          assets
          as of March 31, 2007 and December 31, 2006.
 
 **Illinois**
                  **Regulated**
                
                **Non-rate-regulated
                    Generation**
                
                **CILCORP**
                  **Other**
                
                **Intersegment**
                  **Eliminations**
                
                **Consolidated**
                  **CILCORP****2007:**External
                    revenues
                **$**
                **234**
                
                **$**
                **76**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **310**Intersegment
                    revenues
                
                **-**
                
                
                **1**
                
                
                **-**
                
                
                **(1**
                **)**
                
                **-**Net
                    income(a)
                
                **7**
                
                
                **13**
                
                
                **-**
                
                
                **-**
                
                
                **20****2006:**External
                    revenues
                $
                233
                
                $
                9
                
                $
                -
                
                $
                -
                
                $
                242Intersegment
                    revenues
                
                -
                
                
                41
                
                
                -
                
                
                (41
                )
                
                -Net
                    income(a)
                
                8
                
                
                -
                
                
                -
                
                
                -
                
                
                8**As
                    of March 31, 2007:**Total
                    assets(b)
                $
                1,150
                
                $
                1,241
                
                $
                4
                
                $
                (180
                )
                $
                2,215**As
                    of December 31, 2006:**Total
                    assets(b)
                
                1,208
                
                
                1,246
                
                
                4
                
                
                (217
                )
                
                2,241
  (a)
                Represents
                    net income available to the common shareholders (Ameren); 100%
                    of CILCO’s
                    preferred stock dividends are included in the Illinois Regulated
                    segment.
 (b)
                Total
                    assets for Illinois Regulated include an allocation of goodwill
                    and other
                    purchase accounting amounts related to CILCO that are recorded
                    at CILCORP
                    (parent company).
 
 The
          following table presents information about the reported revenues and net
          income
          of CILCO for the three months ended March 31, 2007 and 2006, and total
          assets as
          of March 31, 2007 and December 31, 2006.
 
 **Illinois**
                  **Regulated**
                
                **Non-rate-regulated
                    Generation**
                
                **CILCO**
                  **Other**
                
                **Intersegment**
                  **Eliminations**
                
                **Consolidated**
                  **CILCO****2007:**External
                    revenues
                **$**
                **234**
                
                **$**
                **76**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **310**Intersegment
                    revenues
                
                **-**
                
                
                **1**
                
                
                **-**
                
                
                **(1**
                **)**
                
                **-**Net
                    income(a)
                
                **7**
                
                
                **19**
                
                
                **-**
                
                
                **-**
                
                
                **26****2006:**External
                    revenues
                $
                233
                
                $
                9
                
                $
                -
                
                $
                -
                
                $
                242Intersegment
                    revenues
                
                -
                
                
                41
                
                
                -
                
                
                (41
                )
                
                -Net
                    income(a)
                
                8
                
                
                10
                
                
                -
                
                
                -
                
                
                18**As
                    of March 31, 2007:**Total
                    assets
                $
                967
                
                $
                656
                
                $
                1
                
                $
                (3
                )
                $
                1,621**As
                    of December 31, 2006:**Total
                    assets
                
                1,020
                
                
                642
                
                
                1
                
                
                (22
                )
                
                1,641
  (a)
                Represents
                    net income available to the common shareholder (CILCORP); 100%
                    of CILCO’s
                    preferred stock dividends are included in the Illinois Regulated
                    segment.
 
 
 53
  **ITEM
            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
            OPERATIONS.**
  **OVERVIEW** **
 
 **Ameren
            Executive Summary**
  Ameren’s
            earnings in the first quarter of 2007 were favorably affected by higher
            electric
            margins in its non-rate-regulated electric generation business segment
            due to
            the replacement of below-market power sales contracts that expired in
            2006.
            Those contracts were replaced with higher-priced contracts in 2007. Electric
            and
            gas margins in Ameren’s Missouri and Illinois rate-regulated business segments
            benefited from greater heating demand caused by colder winter weather.
            In fact,
            heating degree days were up 13 percent in the first quarter of 2007 over
            the
            same period in 2006. Ameren’s first quarter 2007 earnings also benefited
            from new ICC-approved rate tariffs for the delivery of electricity. However,
            these positive results were reduced by increases in fuel and related
            transportation costs, labor and benefit costs, bad debt expenses, higher
            depreciation expenses, greater dilution and rising financing costs. In
            addition,
            costs related to participation in the MISO market were higher in the
            first
            quarter of 2007 over the same period in 2006 because of a March 2007
            FERC order
            that reallocated costs among market participants retroactive to
            2005.
 
 Ameren’s
            earnings in the first quarter of 2007 were reduced by $19 million (after
            taxes),
            or 9 cents per share, as a result of the cost of restoration efforts
            associated
            with severe January ice storms. Storm-related costs in the first quarter of
            2006 reduced net income by an estimated $6 million (after taxes), or
            3 cents per
            share. Ameren’s net income in the first quarter of 2007 benefited from the
            reversal of a $10 million charge (after taxes), or 5 cents per share,
            originally
            recorded in 2006 related to funding for low-income energy assistance
            and energy
            efficiency programs. These commitments were terminated in the first quarter
            of
            2007 as a result of credit rating downgrades resulting from Illinois
            legislative
            actions in the first quarter of 2007.
 
 More
            noteworthy is the Ameren Illinois Utilities’ continued focus on developing a
            constructive solution for their customers to help them adjust to higher
            electric
            rates resulting from the end of a decade-long rate freeze and expiration
            of
            power supply contracts. If enacted, legislation proposed in the Illinois
            General
            Assembly during the first quarter to roll back rates to 2006 levels,
            freeze
            rates and provide refunds would render the Ameren Illinois utilities
            financially
            insolvent and bankrupt unless the courts quickly intervene. A rate rollback
            would mean that reliability would suffer and our customers would face
            even
            higher electric bills, as was the case in California a few years ago.
            Notably,
            if rate rollback legislation had been in place on January 1, 2007, the
            Ameren
            Illinois utilities would have collected approximately $100 million less
            in
            revenues in the first quarter of 2007. Just the threat of rate rollback
            and
            freeze legislation in Illinois has already resulted in credit rating
            downgrades,
            increased collateral and prepayment requirements, higher borrowing costs
            and
            increased use of liquidity for the Ameren Illinois utilities.
  **General**
  Ameren,
            headquartered in St. Louis, Missouri, is a public utility holding company
            under
            PUHCA 2005 administered by FERC. Ameren’s primary assets are the common stock of
            its subsidiaries. Ameren’s subsidiaries, which are separate, independent legal
            entities with separate businesses, assets and liabilities, operate
            rate-regulated electric generation, transmission and distribution businesses,
            rate-regulated natural gas transmission and distribution businesses and
            non-rate-regulated electric generation businesses in Missouri and Illinois,
            as
            discussed below. Dividends on Ameren’s common stock are dependent on
            distributions made to it by its subsidiaries. Ameren’s principal subsidiaries
            are listed below.
 
 ·
                  UE
                      operates a rate-regulated electric generation, transmission
                      and
                      distribution business, and a rate-regulated natural gas transmission
                      and
                      distribution business in Missouri.
 ·
                  CIPS
                      operates a rate-regulated electric and natural gas transmission
                      and
                      distribution business in Illinois.
 ·
                  Genco
                      operates a non-rate-regulated electric generation business.
 ·
                  CILCO,
                      a subsidiary of CILCORP (a holding company), operates a rate-regulated
                      electric and natural gas transmission and distribution business
                      and a
                      non-rate-regulated electric generation business (through its
                      subsidiary,
                      AERG) in Illinois.
 ·
                  IP
                      operates a rate-regulated electric and natural gas transmission
                      and
                      distribution business in Illinois.
 In
            addition
            to presenting results of operations and earnings amounts in total, we
            present
            certain information in cents per share. These amounts reflect factors
            that
            directly affect Ameren’s earnings. We believe this per share information helps
            readers to understand the impact of these factors on Ameren’s earnings per
            share. All references in this report to earnings per share are based
            on average
            diluted common shares outstanding during the
  54
 applicable
            period. All tabular dollar amounts are in millions, unless otherwise
            indicated.
 
 **RESULTS
            OF OPERATIONS**
 
 **Earnings
            Summary**
 
 Our
            results of operations and financial position are affected by many factors.
            Weather, economic conditions, and the actions of key customers or competitors
            can significantly affect the demand for our services. Our results are
            also
            affected by seasonal fluctuations: winter heating and summer cooling
            demands.
            About 90% of Ameren’s 2006 revenues were directly subject to state or federal
            regulation. This regulation can have a material impact on the price we
            charge
            for our services. Non-rate-regulated sales are subject to market conditions
            for
            power. We principally use coal, nuclear fuel, natural gas, and oil in
            our
            operations. The prices for these commodities can fluctuate significantly
            due to
            the global economic and political environment, weather, supply and demand,
            and
            many other factors. We do not currently have
            fuel
            or purchased power cost recovery mechanisms in Missouri for our electric
            utility
            business. We do
            have natural gas cost recovery mechanisms for our Illinois and Missouri
            gas
            delivery businesses and purchased power recovery mechanisms for our Illinois
            electric delivery businesses. See Note 2 - Rate and Regulatory Matters
            to our
            financial statements under Part I, Item 1, for a discussion of pending
            rate
            cases and the Illinois power procurement auction process and related
            tariffs.
            Fluctuations in interest rates affect our cost of borrowing and our pension
            and
            postretirement benefits costs. We employ various risk management strategies
            to
            reduce our exposure to commodity risk and other risks inherent in our
            business.
            The reliability of our power plants and transmission and distribution
            systems,
            the level of purchased power costs, operating and administrative costs,
            and
            capital investment are key factors that we seek to control to optimize
            our
            results of operations ,
            financial position, and liquidity .
 
 Ameren’s
            net income increased to $123 million, or 59 cents per share, in the first
            quarter of 2007 from $70 million, or 34 cents per share, in the first
            quarter of
            2006. Net income in the Illinois Regulated and Non-rate-regulated segments
            increased by $20 million and $43 million, respectively, while net earnings
            in
            the Missouri Regulated segment declined by
 $12
            million.
 
 Earnings
            were favorably impacted in the first quarter of 2007 as compared with
            the first
            quarter of 2006 by:
 
 ·
                  increased
                      margins on interchange sales from the Missouri Regulated
                      segment;
 ·
                  higher
                      delivery service rates on Illinois Regulated
                      sales;
 ·
                  higher
                      margins in the Non-rate-regulated Generation segment due to
                      the
                      replacement of below-market power sales contracts, which expired
                      in 2006,
                      with higher priced contracts;
 ·
                  the
                      reversal of an accrual originally recorded in 2006 in the Illinois
                      Regulated segment for contributions to assist customers through
                      the
                      Illinois Customer-Elect electric rate increase phase-in plan
                      (5 cents per
                      share);
 ·
                  favorable
                      weather conditions (estimated at 5 cents per share);
                      and
 ·
                  other
                      factors, including organic growth.
  Earnings
            were negatively impacted in the first quarter of 2007 as compared with
            the first
            quarter of 2006 by:
 
 ·
                  costs
                      associated with electric outages caused by a severe ice storm
                      in January
                      2007 (9 cents per share);
 ·
                  higher
                      labor and employee benefit costs (6 cents per
                      share);
 ·
                  increased
                      depreciation expense (5 cents per
                      share);
 ·
                  higher
                      financing costs (4 cents per share);
                      and
 ·
                  other
                      factors, including higher fuel and transportation prices.
 An
            increase
            in the number of common shares outstanding also reduced Ameren’s earnings per
            share in 2007 compared with 2006. Per share information presented above
            is based
            on average shares outstanding in 2006.
 
 Because
            it is a holding company, Ameren’s net income and cash flows are primarily
            generated by its principal subsidiaries: UE, CIPS, Genco, CILCORP and
            IP. The
            following table presents the contribution by Ameren’s principal subsidiaries to
            Ameren’s consolidated net income for the three months ended March 31, 2007 and
            2006:
 
 **2007**
                  
                  
                  **2006**Net
                      income (loss):UE(a)
                  **$**
                  **37**
                  
                  $
                  50CIPS
                  
                  **10**
                  
                  
                  (2
                  )Genco
                  
                  **43**
                  
                  
                  6CILCORP
                  
                  **20**
                  
                  
                  8IP
                  
                  **12**
                  
                  
                  3Other(b)
                  
                  **1**
                  
                  
                  5Ameren
                      net income
                  **$**
                  **123**
                  
                  $
                  70
 
 (a)
                  Includes
                      earnings from a non-rate-regulated 40% interest in
                      EEI.
 (b)
                  Includes
                      earnings from non-rate-regulated operations and a 40% interest
                      in EEI held
                      by Development Company, corporate general and administrative
                      expenses, and
                      intercompany eliminations.
 
 55
  Below
            is
            a table of income statement components by segment for the three months
            ended
            March 31, 2007 and 2006:
 
 **2007**
                  **Missouri
                      Regulated**
                  
                  **Illinois**
                    **Regulated**
                  
                  **Non-rate-regulated
                      Generation**
                  
                  **Other
                      / Intersegment**
                    **Eliminations**
                  
                  **Total**Electric
                      margin
                  **$**
                  **415**
                  
                  **$**
                  **172**
                  
                  **$**
                  **250**
                  
                  **$**
                  **(15**
                  **)**
                  **$**
                  **822**Gas
                      margin
                  
                  **27**
                  
                  
                  **115**
                  
                  
                  **-**
                  
                  
                  **(2**
                  **)**
                  
                  **140**Other
                      revenues
                  
                  **1**
                  
                  
                  **2**
                  
                  
                  **-**
                  
                  
                  **(3**
                  **)**
                  
                  **-**Other
                      operations and maintenance
                  
                  **(223**
                  **)**
                  
                  **(126**
                  **)**
                  
                  **(68**
                  **)**
                  
                  **21**
                  
                  
                  **(396**
                  **)**Depreciation
                      and amortization
                  
                  **(87**
                  **)**
                  
                  **(55**
                  **)**
                  
                  **(27**
                  **)**
                  
                  **(7**
                  **)**
                  
                  **(176**
                  **)**Taxes
                      other than income taxes
                  
                  **(57**
                  **)**
                  
                  **(36**
                  **)**
                  
                  **(8**
                  **)**
                  
                  **(1**
                  **)**
                  
                  **(102**
                  **)**Other
                      income and (expenses)
                  
                  **9**
                  
                  
                  **4**
                  
                  
                  **1**
                  
                  
                  **2**
                  
                  
                  **16**Interest
                      expense
                  
                  **(48**
                  **)**
                  
                  **(29**
                  **)**
                  
                  **(25**
                  **)**
                  
                  **2**
                  
                  
                  **(100**
                  **)**Income
                      taxes
                  
                  **(13**
                  **)**
                  
                  **(16**
                  **)**
                  
                  **(46**
                  **)**
                  
                  **4**
                  
                  
                  **(71**
                  **)**Minority
                      interest and preferred dividends
                  
                  **(1**
                  **)**
                  
                  **(2**
                  **)**
                  
                  **(7**
                  **)**
                  
                  **-**
                  
                  
                  **(10**
                  **)**Net
                      income
                  **$**
                  **23**
                  
                  **$**
                  **29**
                  
                  **$**
                  **70**
                  
                  **$**
                  **1**
                  
                  **$**
                  **123****2006**Electric
                      margin
                  $
                  374
                  
                  $
                  140
                  
                  $
                  184
                  
                  $
                  (12
                  )
                  $
                  686Gas
                      margin
                  
                  25
                  
                  
                  110
                  
                  
                  -
                  
                  
                  1
                  
                  
                  136Other
                      revenues
                  
                  1
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1
                  )
                  
                  -Other
                      operations and maintenance
                  
                  (171
                  )
                  
                  (124
                  )
                  
                  (69
                  )
                  
                  12
                  
                  
                  (352
                  )Depreciation
                      and amortization
                  
                  (80
                  )
                  
                  (47
                  )
                  
                  (26
                  )
                  
                  (8
                  )
                  
                  (161
                  )Taxes
                      other than income taxes
                  
                  (59
                  )
                  
                  (43
                  )
                  
                  (8
                  )
                  
                  (3
                  )
                  
                  (113
                  )Other
                      income and (expenses)
                  
                  1
                  
                  
                  2
                  
                  
                  -
                  
                  
                  1
                  
                  
                  4Interest
                      expense
                  
                  (35
                  )
                  
                  (23
                  )
                  
                  (25
                  )
                  
                  7
                  
                  
                  (76
                  )Income
                      taxes
                  
                  (20
                  )
                  
                  (4
                  )
                  
                  (22
                  )
                  
                  2
                  
                  
                  (44
                  )Minority
                      interest and preferred dividends
                  
                  (1
                  )
                  
                  (2
                  )
                  
                  (7
                  )
                  
                  -
                  
                  
                  (10
                  )Net
                      income
                  $
                  35
                  
                  $
                  9
                  
                  $
                  27
                  
                  $
                  (1
                  )
                  $
                  70
 
 **Margins**
  The
            following table presents the favorable (unfavorable) variations in the
            registrants’ electric and gas margins for the three months ended March 31, 2007,
            as compared with the year-ago period. Electric margins are defined as
            electric
            revenues less fuel and purchased power costs. Gas margins are defined
            as gas
            revenues less gas purchased for resale. We consider electric, interchange
            and
            gas margins useful measures to analyze the change in profitability of
            our
            electric and gas operations between periods. We have included the analysis
            below
            as a complement to the financial information we provide in accordance
            with GAAP.
            However, these margins may not be a presentation defined under GAAP and
            may not
            be comparable to other companies’ presentations or more useful than the GAAP
            information we provide elsewhere in this report.
 
 **Three
                      Months**
                  
                  **Ameren****(a**
                  **)**
                  
                  **UE**
                  
                  
                  **CIPS**
                  
                  
                  **Genco**
                  
                  
                  **CILCORP**
                  
                  
                  **CILCO**
                  
                  
                  **IP**Electric
                      revenue change:Effect
                      of weather (estimate)
                  $
                  18
                  
                  $
                  7
                  
                  $
                  5
                  
                  $
                  -
                  
                  $
                  4
                  
                  $
                  4
                  
                  $
                  2Interchange
                      revenues
                  
                  61
                  
                  
                  61
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Other
                      (estimate)
                  
                  168
                  
                  
                  (62
                  )
                  
                  46
                  
                  
                  (4
                  )
                  
                  79
                  
                  
                  79
                  
                  
                  28Total
                  $
                  247
                  
                  $
                  6
                  
                  $
                  51
                  
                  $
                  (4
                  )
                  $
                  83
                  
                  $
                  83
                  
                  $
                  30Fuel
                      and purchased power change:Fuel:Generation
                      and other
                  $
                  (9
                  )
                  $
                  5
                  
                  $
                  -
                  
                  $
                  (15
                  )
                  $
                  2
                  
                  $
                  2
                  
                  $
                  -Emissions
                      allowance costs
                  
                  13
                  
                  
                  3
                  
                  
                  -
                  
                  
                  5
                  
                  
                  4
                  
                  
                  4
                  
                  
                  -Price
                  
                  (18
                  )
                  
                  (11
                  )
                  
                  -
                  
                  
                  (2
                  )
                  
                  (5
                  )
                  
                  (5
                  )
                  
                  -Purchased
                      power
                  
                  (100
                  )
                  
                  34
                  
                  
                  (33
                  )
                  
                  75
                  
                  
                  (70
                  )
                  
                  (70
                  )
                  
                  (12
                  )Storm-related
                      energy costs
                  
                  3
                  
                  
                  3
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      fuel and purchased power changeTotal
                  $
                  (111
                  )
                  $
                  34
                  
                  $
                  (33
                  )
                  $
                  63
                  
                  $
                  (69
                  )
                  $
                  (69
                  )
                  $
                  (12
                  )**Net
                      change in electric margins**
                  **$**
                  **136**
                  
                  **$**
                  **40**
                  
                  **$**
                  **18**
                  
                  **$**
                  **59**
                  
                  **$**
                  **14**
                  
                  **$**
                  **14**
                  
                  **$**
                  **18****Net
                      change in gas margins**
                  **$**
                  **4**
                  
                  **$**
                  **2**
                  
                  **$**
                  **2**
                  
                  **$**
                  **-**
                  
                  **$**
                  **1**
                  
                  **$**
                  **1**
                  
                  **$**
                  **2**
 
 (a)
                  Includes
                      amounts for Ameren registrant and nonregistrant subsidiaries
                      and
                      intercompany eliminations.
  Ameren
  Ameren’s
            electric margin increased by $136 million, or 20%, for the three months
            ended
            March 31, 2007, compared with the same period in 2006. The following
            items had a
            favorable impact on electric margins for the first quarter of 2007 as
            compared
            to the year-ago period:
  ·
                  an
                      increase in electric margins as a result of Non-rate-regulated
                      Generation
                      selling more power at market-based prices in the first quarter
                      of 2007
                      compared with sales under cost-based power supply agreements
                      which expired
                      on December 31, 2006;
 56
  ·
                  Illinois
                      electric delivery service rate increases which commenced January
                      1,
                      2007; ·
                  lower
                      emissions allowance costs totaling $13 million for the quarter
                      ended March
                      31, 2007;
 ·
                  favorable
                      weather conditions increased electric margin by $9
                      million;
 ·
                  the
                      lack of $6 million in fees levied by FERC in the first quarter
                      of 2006,
                      upon completion of its cost study for generation benefits provided
                      to UE’s
                      Osage hydroelectric plant; and
 ·
                  storm-related
                      outages in the first quarter of 2006 decreased interchange
                      margin by $3
                      million at Ameren and UE.
 
 The
            following items had an unfavorable impact on electric margins for the
            first
            quarter of 2007 as compared to the year-ago period:
 
 ·
                  a
                      10% increase in coal and related transportation
                      prices;
 ·
                  elimination
                      of bundled tariffs in Illinois Regulated operations;
 ·
                  reduced
                      power plant availability, primarily at the UE and AERG plants;
                      and
 ·
                  MISO
                      costs, which were $19 million higher for the three months ended
                      March 31,
                      2007, compared with the same period in 2006. Costs related
                      to
                      participation in the MISO Day Two Energy Market were higher
                      in the first
                      quarter of 2007 over the same period in 2006 because of a March
                      2007 FERC
                      order that reallocated costs among market participants retroactive
                      to
                      2005.
 
 Ameren’s
            gas margin increased by $4 million, or 3%, for the three months ended
            March 31,
            2007, compared with the same period in 2006 primarily because of favorable
            weather conditions as was evidenced by a 13% increase in heating
            degree-days.
 
 *Missouri
            Regulated*
  UE
  UE’s
            electric margin increased by $40 million, or 11%, for the three months
            ended
            March 31, 2007, compared to the same period in 2006. The increase was
            primarily
            due to:
 
 ·
                  a
                      $36 million increase in margins on interchange sales primarily
                      because of
                      the termination of the JDA on December 31, 2006. This termination
                      of the
                      JDA provided UE with the ability to sell its excess power,
                      originally
                      obligated under the JDA at cost, in the spot market at higher
                      market
                      prices;
 ·
                  the
                      lack of $6 million in fees levied by FERC in the first quarter
                      of 2006,
                      upon completion of its cost study for generation benefits provided
                      to UE’s
                      Osage hydroelectric plant;
 ·
                  favorable
                      weather conditions which increased electric margin by $3 million;
                      and
 ·
                  spring
                      storm-related outages in the first quarter of 2006, which reduced
                      2006
                      electric margins by $3 million.
 
 Factors
            that reduced the increase in electric margin for the three months ended
            March
            31, 2007, as compared to the same period in the prior year were as
            follows:
 
 ·
                  reduced
                      power plant availability because of planned maintenance
                      activities;
 ·
                  an
                      increase in coal and related transportation prices; and
 ·
                  increased
                      MISO costs totaling $13 million, primarily related to the March
                      2007 FERC
                      order referenced above.
  UE’s
            gas
            margin increased by $2 million, or 8%, for the three months ended March
            31,
            2007, compared with the same period in 2006 primarily because of favorable
            weather conditions as evidenced by an 11% increase in heating
            degree-days.
 
 *Illinois
            Regulated*
 
 Illinois
            Regulated’s electric margin increased by $32 million, or 23%, for the three
            months ended March 31, 2007, compared with the same period in 2006. Illinois
            Regulated’s gas margin increased by $5 million, or 5%, for the three months
            ended March 31, 2007, compared with the same period in 2006.
  CIPS
  CIPS’
            electric margin increased by $18 million, or 42%, for the three months
            ended
            March 31, 2007, compared to the same period in 2006. The increase in
            electric
            margin was primarily because of:
 
 ·
                  the
                      combined effect of the elimination of bundled tariffs, including
                      below-average seasonal rates, the expiration of below-market
                      power supply
                      contracts, and the January 1, 2007, implementation of delivery
                      service
                      tariffs and the pass-through of purchased power costs;
                      and
 ·
                  favorable
                      weather conditions which increased electric margin by $4
                      million.
  CIPS’
gas
            margin increased by $2 million, or 8%, for the three months ended March
            31,
            2007, compared with the same period in 2006 primarily because of favorable
            weather conditions as evidenced by a 5% increase in heating
            degree-days.
  CILCO
              (Illinois Regulated)
  The
              following table provides a reconciliation of CILCO’s change in electric margin
              by segment to CILCO’s total change
 57
 in
              electric margin for the three months ended March 31, 2007, as compared
              with the
              same period in 2006:
 **Three
                      Months**CILCO
                      (Illinois Regulated)
                  **$**
                  **(4**
                  **)**CILCO
                      (AERG)
                  
                  **18**Total
                      change in electric margin
                  **$**
                  **14**
  CILCO’s
            Illinois Regulated electric margin decreased by $4 million, or 13%, for
            the
            three months ended March 31, 2007, compared to the same period in 2006.
            The
            margin decrease was a result of the combined effect of the elimination
            of
            bundled tariffs, including below-average seasonal rates, the expiration
            of
            below-market power supply contracts, and the
 January
            1, 2007, implementation of delivery service tariffs and the pass-through
            of
            purchased power costs. In addition, MISO costs increased $2 million.
            The
            decrease in electric margin was reduced by favorable weather conditions
            which
            increased electric margin by $3 million.
  See
            Non-rate-regulated Generation under Results of Operations for a detailed
            explanation of CILCO’s (AERG) change in electric margin for the three months
            ended March 31, 2007, as compared with the same period in 2006.
  CILCO’s
            (Illinois Regulated) gas margin increased by $1 million, or 3%, for the
            three
            months ended March 31, 2007, compared to the same period in 2006. Favorable
            weather conditions resulted in a $2 million increase in gas
            margins, as evidenced by a 15% increase in heating degree-days, but was
            offset
            by unfavorable customer sales mix.
  IP
  IP’s
            electric margin increased by $18 million, or 28%, for the three months
            ended
            March 31, 2007, compared with the same period in 2006 primarily because
            of the
            combined effect of the elimination of bundled tariffs, including below-average
            seasonal rates, the expiration of below-market power supply contracts,
            and the
            January 1, 2007, implementation of delivery service tariffs and the pass-through
            of purchased power costs. In addition, MISO costs increased $13 million,
            primarily as a result of the March 2007 FERC order referenced
            above.
  IP’s
            gas
            margin increased by $2 million, or 4%, for the three months ended March
            31,
            2007, compared to the same period in 2006, primarily because of favorable
            weather conditions evidenced by a 12% increase in heating degree-days.
  *Non-rate-regulated
            Generation*
  Non-rate-regulated
            Generation’s electric margin increased by $66 million, or 36%, for the three
            months ended March 31, 2007, compared with the same period in 2006.
  Genco
 
 Genco’s
            electric margin increased by $59 million, or 72%, for the three months
            ended
            March 31, 2007, compared with the same period in 2006, primarily because
            of:
 
 ·
                  an
                      increase in electric margins as a result of selling power at
                      market-based
                      prices in the first quarter of 2007 compared with cost-based
                      power supply
                      agreements which expired on December 31,
                      2006;
 ·
                  increased
                      plant availability; and
 ·
                  lower
                      MISO costs totaling $8 million, primarily as a result of the
                      March 2007
                      FERC order referenced above.
  Genco’s
            increase in electric margin was reduced by:
 
 ·
                  the
                      loss of margins on sales supplied with power acquired through
                      the JDA;
                      and
 ·
                  an
                      increase in coal and related transportation
                      prices.
  CILCO
            (AERG)
  For
            the
            three-month period ended March 31, 2007, AERG’s electric margin increased by $18
            million, or 51%, compared with the same period in 2006 primarily because
            of:
 
 ·
                  an
                      increase in electric margins of AERG selling its power at market-based
                      prices in the first quarter of 2007 compared with sales under
                      cost-based
                      power supply agreements which expired on December 31, 2006;
                      and
 ·
                  lower
                      MISO costs totaling $4 million, primarily as a result of the
                      march 2007
                      FERC order referenced above.
  The
            increase in electric margin was reduced by:
 
 ·
                  an
                      increase in coal and related transportation prices; and
 ·
                  reduced
                      plant availability because of planned maintenance
                      activities.
  EEI
  EEI’s
            electric margins decreased by $3 million for the three months ended March
            31,
            2007, compared with the same period in 2006 primarily because of an increase
            in
            coal and related transportation prices.
 
 58
 
 **Operating
            Expenses and Other Statement of Income Items**
 
 ***Other
            Operations and Maintenance***
 
 *Ameren*
  Ameren’s
            other operations and maintenance expenses increased $44 million in the
            first
            quarter of 2007 compared with the first quarter of 2006, primarily because
            of
            expenditures of $29 million related to a severe ice storm in January
            2007 in
            UE’s and CIPS’ service territories, higher labor costs and increased bad debt
            reserves. Reducing the effect of these items was the reversal of an accrual
            of $15
            million established in 2006 for contributions to assist customers
            through the Illinois Customer Elect electric rate increase phase-in plan.
            The
            commitment to make these contributions was terminated in the first quarter
            of
            2007 as a result of credit rating agency downgrades resulting from recent
            Illinois legislative actions.
 
 Variations
            in other operations and maintenance expenses in Ameren’s, CILCORP’s and CILCO’s
            business segments and for the Ameren Companies for the three months ended
            March
            31, 2007, compared with the same period in 2006 were as follows:
 
 *Missouri
            Regulated*
 
 UE
 
 Other
            operations and maintenance expenses increased $53 million primarily because
            of
            storm repair expenditures of $26 million, increased labor costs of $13
            million,
            higher maintenance expenses of $4 million, and
            insurance premiums paid to an affiliate for replacement power coverage
            of $4
            million.
  *Illinois
            Regulated*
 
 Other
            operations and maintenance expenses increased $2 million in the Illinois
            Regulated segment in the first quarter of 2007 compared with the first
            quarter
            of 2006.
 
 CIPS
 
 Other
            operations and maintenance expenses increased $5 million primarily because
            of
            storm repair expenditures of $3 million, higher labor costs and increased
            bad
            debt reserves. The reversal of an accrual for customer assistance programs
            of $4
            million established in 2006, as noted above, reduced the impact of
            these increases.
 
 CILCO
            (Illinois Regulated)
 
 Other
            operations and maintenance expenses decreased $3 million primarily because
            of
            the reversal of the customer assistance program accrual of $3
            million established in 2006, as noted above.
  IP
 
 Other
            operations and maintenance expenses were comparable with the prior-year
            period
            as the reversal of the customer assistance program accrual of $8
            million established in 2006 noted above was offset by higher employee
            benefit costs.
 
 *Non-rate-regulated
            Generation*
 
 Other
            operations and maintenance expenses decreased $1 million in the
            Non-rate-regulated Generation segment in the first quarter of 2007 compared
            with
            the first quarter of 2006.
 
 Genco,
            CILCO (AERG) and EEI
 
 Other
            operations and maintenance expenses were comparable at Genco, CILCO (AERG)
            and
            EEI for the first quarter of 2007 compared with the first quarter of
            2006.
 
 CILCORP
            (Parent Company Only)
 
 Other
            operations and maintenance expenses decreased $3 million primarily because
            of
            the write-off in the prior-year period of an intangible asset established
            in
            conjunction with Ameren’s acquisition of CILCORP.
 
 ***Depreciation
            and Amortization***
 
 *Ameren*
  Ameren’s
            depreciation and amortization expenses increased $15 million in the first
            quarter of 2007, compared with the first quarter of 2006, primarily because
            of
            capital additions in 2006 and the start of amortization of a regulatory
            asset
            associated with acquisition integration costs at IP in 2007 as required
            by an
            ICC order.
  Variations
            in depreciation and amortization expenses in Ameren’s business segments and for
            the Ameren Companies for the three months ended March 31, 2007, compared
            with
            the same period in 2006 were as follows:
 
 59
 *Missouri
            Regulated*
 
 UE
  Depreciation
            and amortization expenses increased $7 million primarily because of capital
            additions in 2006, including
            CTs purchased in the first quarter of 2006 and storm-related
            expenditures.
 
 *Illinois
            Regulated*
 
 Depreciation
            and amortization expenses increased $8 million in the Illinois Regulated
            segment
            for the three months ended March 31, 2007, compared with the same period
            in
            2006.
  CIPS
            & CILCO (Illinois Regulated)
 
 Depreciation
            and amortization expenses were comparable between periods.
  IP
 
 Depreciation
            and amortization expenses increased $6 million, primarily because of
            amortization in the first quarter of 2007 of a regulatory asset associated
            with
            acquisition integration costs as required by an ICC order.
  *Non-rate-regulated
            Generation*
  Depreciation
            and amortization expenses were comparable in the Non-rate-regulated Generation
            segment, and for Genco, CILCORP (Parent Company Only), CILCO (AERG) and
            EEI for
            the first quarter of 2007 compared with the first quarter of 2006.
 
 ***Taxes
            Other Than Income Taxes***
 
 *Ameren*
  Ameren’s
            taxes other than income taxes decreased $11 million in the first quarter
            of 2007
            from the first quarter of 2006, primarily because of lower gross receipts
            and
            property taxes.
  Variations
            in taxes other than income taxes in Ameren’s business segments and for the
            Ameren Companies for the three months ended March 31, 2007, compared
            with the
            same period in 2006 were as follows:
 
 *Missouri
            Regulated*
  UE
 
 Taxes
            other than income taxes decreased $2 million, primarily because of lower
            gross
            receipts taxes.
 
 *Illinois
            Regulated*
 
 Taxes
            other than income taxes decreased $7 million in the Illinois Regulated
            segment
            in the first quarter of this year compared to the first quarter of the
            prior
            year.
  CIPS
 
 Taxes
            other than income taxes decreased $3 million, primarily because of lower
            property taxes.
  CILCO
            (Illinois Regulated)
 
 Taxes
            other than income taxes decreased $2 million, primarily because of lower
            gross
            receipts taxes.
  IP
 
 Taxes
            other than income taxes decreased $1 million, primarily because of lower
            gross
            receipts taxes.
 
 *Non-rate-regulated
            Generation*
 
 Taxes
            other than income taxes were comparable in the Non-rate-regulated Generation
            segment, and at Genco, CILCORP (Parent Company Only), CILCO (AERG) and
            EEI for
            the first quarter of 2007 compared with the first quarter of 2006.
 
 ***Other
            Income and Expenses***
 
 *Ameren*
  Miscellaneous
            income increased $12 million in the first quarter of 2007 compared with
            the
            first quarter of 2006, primarily as a result of interest income on an
            industrial
            development revenue bond acquired by UE in conjunction with its purchase
            of a CT
            in the first quarter of 2006. This amount is offset by an equivalent
            amount of
            interest expense associated with a capital lease for the CT recorded
            in interest
            charges on Ameren’s and UE’s statements of income. Miscellaneous expense was
            comparable between periods.
 
 Variations
            in other income and expenses in Ameren’s, CILCORP’s and CILCO’s business
            segments and for the Ameren Companies for the three months ended March
            31, 2007,
            compared with the same period in 2006 were as follows:
 
 *Missouri
            Regulated*
  UE
 
 Miscellaneous
            income increased $8 million, primarily as a result of increased interest
            income
            related to an industrial
 60
 development
            revenue bond as noted above. Miscellaneous expense was comparable between
            periods.
 
 *Illinois
            Regulated*
  Other
            income and expenses were comparable in the Illinois Regulated segment,
            and at
            CIPS, CILCO (Illinois Regulated),
            and IP in the first quarter of 2007 compared with the first quarter of
            the prior
            year.
 
 *Non-rate-regulated
            Generation*
 
 Other
            income and expenses were comparable in the Non-rate-regulated Generation
            segment, and at Genco, CILCORP (Parent Company Only), CILCO (AERG) and
            EEI for
            the first quarter of 2007 compared with the first quarter of 2006.
 
 ***Interest***
 
 *Ameren*
 
 Interest
            expense increased $24 million in the first quarter of 2007, compared
            with the
            first quarter of 2006, primarily because of increased short-term borrowings
            and
            other items noted below.
 
 Variations
            in interest expense in Ameren’s, CILCORP’s and CILCO’s business segments and for
            the Ameren Companies for the three months ended March 31, 2007, compared
            with
            the same period in 2006, were as follows:
 
 *Missouri
            Regulated*
  UE
 
 Interest
            expense increased $13 million, primarily because of interest expense
            recognized
            on UE’s capital lease associated with the purchase of a CT in the first quarter
            of 2006. This amount was offset by an equivalent amount of interest income
            recorded in other income and expenses on Ameren’s and UE’s statements of income.
            Additionally, increased short-term borrowings resulted in higher interest
            expense in the first quarter of 2007.
 
 *Illinois
            Regulated*
 
 Interest
            expense increased $6 million in the Illinois Regulated segment in the
            first
            quarter of this year compared to the first quarter of the prior year.
  CIPS
            & CILCO (Illinois Regulated)
 
 Interest
            expense was comparable between periods.
  IP
 
 Interest
            expense increased $4 million, primarily because of the issuance of $75
            million
            senior secured notes in 2006 and increased short-term borrowings.
  *Non-rate-regulated
            Generation*
 
 Interest
            expense was comparable at Non-rate-regulated Generation, Genco, CILCORP
            (Parent
            Company Only), CILCO (AERG) and EEI for the first quarter of 2007 compared
            with
            the first quarter of 2006.
 
 ***Income
            Taxes***
 
 *Ameren*
  Ameren’s
            effective tax rate was comparable between 2007 and 2006.
 
 Variations
            in effective tax rates in Ameren’s, CILCORP’s and CILCO’s business segments and
            for the Ameren Companies for the three months ended March 31, 2007, compared
            with the same period in 2006 were as follows:
 
 *Missouri
            Regulated*
  UE
  Effective
            tax rate decreased in 2007 from 2006, primarily because of an increase
            in
            expenses deductible for tax purposes which were not expensed for book
            purposes.
 
 *Illinois
            Regulated*
 
 Effective
            tax rate increased in the first quarter of 2007 compared with the first
            quarter
            of 2006 at Illinois Regulated due to items detailed below:
  CIPS
  Effective
            tax rate increased primarily because of an increase in reserves for uncertain
            tax positions in 2006 for tax returns filed in the prior year.
  CILCO
            (Illinois Regulated) and IP
  Effective
            tax rate increased primarily because of an increase in non-deductible
            expenses.
 
 *Non-rate-regulated
            Generation*
 
 Effective
            tax rate decreased in the first quarter of 2007 compared with the first
            quarter
            of 2006 in the Non-rate-regulated Generation segment due to items detailed
            below:
  61
 Genco
  Effective
            tax rate decreased primarily because of an increase in reserves for uncertain
            tax positions in 2006 for tax returns filed in the prior year, along
            with an
            increase in expenses in 2007 that were deductible for tax purposes, but
            were not
            expensed for book purposes.
  CILCO
            (AERG)
  Effective
            tax rate decreased primarily because of an increase in expenses deductible
            for
            tax purposes which were not expensed for book purposes.
  CILCORP
            (Parent Company Only)
  Effective
            tax rate increased primarily because of an increase in non-deductible
            expenses.
  EEI
  Effective
            tax rate decreased primarily because of an increase in expenses deductible
            for
            tax purposes which were not expensed for book purposes.
 
  **LIQUIDITY
            AND CAPITAL RESOURCES**
 
 The
            tariff-based gross margins of Ameren’s rate-regulated utility operating
            companies (UE, CIPS, CILCO and IP) continue to be the principal source
            of cash
            from operating activities for Ameren and its rate-regulated subsidiaries.
            A
            diversified retail customer mix of primarily rate-regulated residential,
            commercial and industrial classes and a commodity mix of gas and electric
            service provide a reasonably predictable source of cash flows for Ameren,
            UE,
            CIPS, CILCO and IP. For operating cash flows, Genco and AERG principally
            rely on
            power sales to Marketing Company, which sells power through the Illinois
            power
            procurement auction and is selling power through other primarily market-based
            contracts with wholesale and retail customers. The amount of power that
            Genco,
            AERG, EEI, Marketing Company and their affiliates may supply to CIPS,
            CILCO and
            IP through the Illinois power procurement auction is limited to 35% of
            CIPS’,
            CILCO’s and IP’s aggregate annual load. In addition to cash flows from operating
            activities, each of the Ameren Companies uses available cash, money pool
            or
            other short-term borrowings from affiliates, commercial paper, or credit
            facilities to support normal operations and other temporary capital
            requirements. The use of operating cash flows and short-term borrowings
            to fund
            capital expenditures and other investments may periodically result in
            a working
            capital deficit, as was the case at March 31, 2007, for Ameren, UE, Genco,
            CILCORP, CILCO, and IP. The Ameren Companies will reduce their short-term
            borrowings with cash from operations or discretionarily with long-term
            borrowings and in the case of Ameren subsidiaries, equity infusions from
            Ameren.
            See Note 2 - Rate and Regulatory Matters to our financial statements
            under Part
            I, Item 1 of this report for a discussion of an Illinois legislative
            proposal to
            rollback and freeze electric rates at 2006 levels for CIPS, CILCO and
            IP. If
            such legislation is enacted and the implementation of such legislation
            is not
            promptly enjoined, CIPS, CILCORP, CILCO and IP will not have enough operating
            cash flow to support normal operations, which would lead to financial
            insolvency
            and bankruptcy.
  The
            following table presents net cash
            provided by (used in) operating, investing and financing activities for
            the
            three months ended March 31, 2007 and 2006:
 **Net
                      Cash Provided By**
                    **(Used
                      In) Operating Activities**
                  **Net
                      Cash Provided By**
                    **(Used
                      In) Investing Activities**
                  **Net
                      Cash Provided By**
                    **(Used
                      In) Financing Activities****2007**
                  
                  
                  **2006**
                  
                  
                  **Variance**
                  
                  
                  **2007**
                  
                  
                  **2006**
                  
                  
                  **Variance**
                  
                  
                  **2007**
                  
                  
                  **2006**
                  
                  
                  **Variance**Ameren(a)
                  **$**
                  **358**
                  
                  $
                  373
                  
                  $
                  (15
                  )
                  **$**
                  **(386**
                  **)**
                  $
                  (573
                  )
                  $
                  187
                  
                  **$**
                  **52**
                  
                  $
                  133
                  
                  $
                  (81
                  )UE
                  
                  **(50**
                  **)**
                  
                  86
                  
                  
                  (136
                  )
                  
                  **(221**
                  **)**
                  
                  (429
                  )
                  
                  208
                  
                  
                  **270**
                  
                  
                  324
                  
                  
                  (54
                  )CIPS
                  
                  **10**
                  
                  
                  67
                  
                  
                  (57
                  )
                  
                  **(34**
                  **)**
                  
                  (64
                  )
                  
                  30
                  
                  
                  **64**
                  
                  
                  (3
                  )
                  
                  67Genco
                  
                  **69**
                  
                  
                  72
                  
                  
                  (3
                  )
                  
                  **(37**
                  **)**
                  
                  (42
                  )
                  
                  5
                  
                  
                  **(32**
                  **)**
                  
                  (30
                  )
                  
                  (2
                  )CILCORP
                  
                  **42**
                  
                  
                  78
                  
                  
                  (36
                  )
                  
                  **(1**
                  **)**
                  
                  (36
                  )
                  
                  35
                  
                  
                  **(18**
                  **)**
                  
                  (42
                  )
                  
                  24CILCO
                  
                  **58**
                  
                  
                  78
                  
                  
                  (20
                  )
                  
                  **(1**
                  **)**
                  
                  (36
                  )
                  
                  35
                  
                  
                  **(35**
                  **)**
                  
                  (43
                  )
                  
                  8IP
                  
                  **58**
                  
                  
                  65
                  
                  
                  (7
                  )
                  
                  **(62**
                  **)**
                  
                  (38
                  )
                  
                  (24
                  )
                  
                  **47**
                  
                  
                  (26
                  )
                  
                  73
  **(a)**
                  Includes
                      amounts for Ameren registrant and nonregistrant subsidiaries
                      and
                      intercompany eliminations.
 
 **Cash
            Flows from Operating Activities**
  Ameren’s
            cash from operations decreased in the first three months of 2007, as
            compared
            with the first three months of 2006. Working capital investment increased
            as a
            result of the collection of higher electric rates from customers lagging
            payments for power purchases. Positive impacts on cash flow from operations
            included increases in electric and gas margins, and a decrease in income
            taxes
            paid (net of refunds) of $68 million.
  At
            UE, cash from operating activities decreased in the
            first three months of 2007, as compared with the first three months of
            2006.
            Increases in electric margins were reduced
  62
 by
            storm
            repair costs, as discussed in Results of Operations. Negatively impacting
            cash from
            operations was an increase in accounts receivable, primarily because
            of sales to
            MISO. Compared to the prior year period, cash paid for Taum Sauk costs
            (net of
            insurance recoveries) decreased $23 million benefiting cash flow from
            operations. Income tax payments (net of refunds) decreased by $33 million
            benefiting cash flows from operations.
  At
            CIPS,
            cash from operating activities decreased in the first three months of
            2007, as
            compared with the first three months of 2006. Electric margins were higher,
            but
            other operations and maintenance expenses also increased, as discussed
            in
            Results of Operations. An increased investment in working capital, as a
            result of the collection of higher electric rates from customers lagging
            payments for power purchases was the primary reason for the overall decrease
            in
            operating cash flows.  Income tax payments (net of refunds) decreased $16
            million, benefiting cash flows from operations.
  Genco’s
            cash from operating activities decreased in the first three months of
            2007
            compared to the 2006 period primarily because of the timing of payments
            to
            affiliates for purchased power under the JDA, which expired at the end
            of 2006,
            compared with the timing of receipts from the wholesale sales associated
            with
            that purchased power. Income tax payments (net of refunds) also decreased
            in
            2007 by $6 million compared to 2006 improving cash flows from
            operations.
  Cash
            from
            operating activities decreased for CILCORP and CILCO in the three months
            ended
            March 31, 2007 compared with the same period of 2006. The positive cash
            effect
            of the increased electric margins discussed in Results of Operations
            was reduced
            by an increased investment in working capital, as a result of the collection
            of
            higher electric rates from customers lagging payments for power
            purchases.  Income tax payments (net of refunds) were the same year
            over year for CILCORP and decreased $8 million for CILCO.
  IP’s
            cash
            from operations decreased in the three months ended March 31, 2007, compared
            with the 2006 period despite higher electric margins as discussed in
            Results of
            Operations. An increased investment in working capital, as a result of the
            collection of higher electric rates from customers lagging payments for
            power
            purchases was the primary reason for the overall decrease in operating
            cash
            flows.  Income tax payments (net of refunds) decreased by $20 million
            reducing the impact on cash flows of higher receivables.
 
 **Cash
            Flows from Investing Activities**
  Ameren’s
            decrease in cash used in investing activities was primarily because of
            $292
            million used for CT purchases in 2006 and a $33 million reduction in
            emission
            allowance purchases in the first three months of 2007 compared to the
            first
            three months of 2006. Excluding the effect of the prior year CT purchase,
            capital expenditures increased by $137 million in 2007, principally due
            to
            capital expenditures paid in 2007 related to the December 2006 and January
            2007
            severe storms, scrubber projects at UE, Genco, and AERG power plants,
            and
            expenditures made in preparation for UE’s April 2007 Callaway nuclear plant
            refueling and maintenance outage.
 
 UE’s
            cash
            used in investing activities decreased in the first three months of 2007,
            compared to the same period in 2006, principally because of the $292
            million
            expended for CT purchases in 2006, partially offset by an $87 million
            increase
            in capital expenditures in the first three months of 2007 as compared
            with the
            first three months of 2006. The increased capital expenditures were related
            to
            storm costs paid in 2007, scrubber projects at a power plant, and expenditures
            incurred in preparation for the April 2007 Callaway nuclear plant refueling
            and
            maintenance outage.
 
 CIPS’
            cash used in investing activities decreased for the three months ended
            March 31,
            2007, compared with the 2006 period, primarily due to a $33 million reduction
            of
            net advances to the money pool.
  Genco’s
            cash used in investing activities decreased a net $5 million in the first
            three
            months of 2007 compared with the 2006 period. Capital expenditures increased
            $20
            million, principally due to a scrubber project at one of its plants,
            while
            emission allowance purchases decreased by $26 million.
  CILCORP’s
            and CILCO’s cash used in investing activities decreased in the three months
            ended March 31, 2007, compared with the same period in 2006 primarily
            as a
            result of
 $42
            million received from the money pool in 2007 in repayment of prior year
            advances. In addition, there was a $12 million decrease in emission allowance
            purchases for the first three months of 2007 compared to the first three
            months
            of 2006. For $18 million increase in capital expenditures primarily due
            to a
            scrubber project and plant upgrades at CILCO subsidiary AERG reduced
            the benefit
            of these increases in cash flows.
  IP’s
            cash
            used in investing activities increased in the first three months of 2007
            compared to the same period in 2006, primarily because of net money pool
            advances of $16 million, and an $8 million increase in capital expenditures
            for
            the first three months of 2007 compared to the same period in 2006.
  See
            Note
            8 - Commitments and Contingencies to our financial statements under Part
            I, Item
            1, of this report for a discussion of future environmental capital expenditure
            estimates.
  63
 
  We
                continually review our power supply needs. As a result, we could
                modify plans
                for generation capacity, which could include changing the times when
                certain
                assets will be added to or removed from our portfolio, the type of
                generation
                asset technology that will be employed, and whether capacity may
                be purchased,
                among other things. Any changes that we may plan to make for future
                generating
                needs could result in significant capital expenditures or losses
                being incurred,
                which could be material.
  **Cash
            Flows from Financing Activities**
  Cash
            from
            financing activities decreased for Ameren in the first three months of
            2007 from
            the year-ago period. Negative effects on cash included a $143 million
            increase
            in long-term debt redemptions, repurchases and maturities, including
            the
            maturity of $100 million in 5.70% notes during the quarter. As a result
            of these
            maturities, there was an increase in short-term debt. Positive effects
            on cash
            included a net increase of $67 million in net short-term debt proceeds
            in the
            2007 period, compared to the 2006 period.
  UE’s
            cash
            from financing activities decreased for the first three months of 2007,
            compared
            to the same period last year. UE had $151 million less in short-term
            borrowings
            in the first quarter of 2007 than the 2006 period. Short-term borrowings
            were
            used in 2006 principally to fund the acquisition of CTs. In addition,
            dividend
            payments increased $38 million in the 2007 period compared to 2006. Cash
            was
            positively affected by $137 million in net proceeds from an intercompany
            borrowing arrangement with Ameren.
  CIPS’
had
            a net source of cash from financing activities for the three months ended
            March
            31, 2007, compared to a net use of cash in the 2006 period, primarily
            because of
            a net increase of $65 million in net short-term debt proceeds in
            2007.
  Genco
            had
            a $2 million increase in cash used in financing activities for the first
            three
            months of 2007, compared with 2006. This net increase resulted from a
            $17
            million increase in dividend payments in the 2007 period compared with
            the 2006
            period partially offset by Genco having $7 million in net borrowings
            from the
            money pool in the 2007 period, compared to net repayments of $8 million
            in the
            prior year period.
  CILCORP’s
            and CILCO’s cash used in financing activities decreased for the first three
            months of 2007, compared to the same period last year. Cash used for
            redemptions, repurchases, and maturities increased by $120 million at
            CILCORP
            and $50 million at CILCO. The absence in 2007 of $50 million in dividends
            paid
            in the prior year benefited cash at both companies. In addition, a net
            increase
            of $74
            million in short-term debt at CILCORP and a net increase in money pool
            borrowings of $25 million at CILCORP and $24 million at CILCO benefited
            cash.
  IP
            had a
            net source of cash from financing activities in the first three months
            of 2007,
            compared to a net use of cash in the same period of the prior year. This
            increase was primarily because of $115
            million in net short-term debt proceeds in the 2007 period, partially
            offset by
            $43 million in net repayments to the money pool in the 2007 period, compared
            to
            net borrowings of $3 million in the prior year period.
 
 *Short-term
            Borrowings and Liquidity*
 
 Short-term
            borrowings typically consist of commercial paper issuances and drawings
            under
            committed bank credit facilities with maturities of 1 to 45 days. For
            additional
            information on credit facilities, short-term borrowing activity, relevant
            interest rates, and borrowings under Ameren’s utility and non-state-regulated
            subsidiary money pool arrangements, see Note 3 - Credit Facilities and
            Liquidity
            to our financial statements under Part I, Item 1, of this report.
 
 The
            following table presents the various committed bank credit facilities
            of the
            Ameren Companies and AERG and their availability as of April 30,
            2007:
 
 **Credit
                      Facility**
                  **Expiration**
                  
                  
                  **Amount
                      Committed**
                  
                  
                  **Amount
                      Available****Ameren,
                      UE and Genco:**Multiyear
                      revolving(a)
                  July
                      2010
                  
                  $
                  1,150
                  
                  $
                  697**CIPS,
                      CILCORP, CILCO, IP and AERG:**2007
                      Multiyear revolving(b)
                  January
                      2010
                  
                  
                  500
                  
                  
                  1862006
                      Multiyear revolving(c)
                  January
                      2010
                  
                  
                  500
                  
                  
                  235
  (a)
                  Ameren
                      Companies may access this credit facility through intercompany
                      borrowing
                      arrangements. The maximum amount available to Ameren, UE and
                      Genco is
                      $1.15 billion,
                    $500
                      million and$156
                      million, respectively.
 (b)
                  The
                      maximum amount available to each borrower, including for the
                      issuance of
                      letters of credit, is limited as follows: CILCORP - $125 million,
                      IP -
                      $200 million and AERG -
                    $100
                      million. CIPS and CILCO have the option of permanently reducing
                      their
                      ability to borrow under the 2006 $500 million credit facility
                      and shifting
                      such capacity, up to the same limits, to the 2007 $500 million
                      credit
                      facility. Borrowings by CIPS, CILCO and IP under this facility
                      are on a
                      364-day basis.
 (c)
                  The
                      maximum amount available to each borrower, including for issuance
                      of
                      letters of credit, is limited as follows: CIPS - $135 million,
                      CILCORP -
                      $50 million, CILCO - $150 million, IP - $150 million and AERG
                      - $200
                      million. Borrowings by CIPS, CILCO and IP under this facility
                      are on a
                      364-day basis.
 
 64
 
 In
            addition to committed credit facilities, a further source of liquidity
            for
            Ameren from time to time is available cash and cash equivalents. At March
            31,
            2007, Ameren had
 $161
            million of cash and cash equivalents.
 
 The
            issuance of short-term debt securities by Ameren’s utility subsidiaries is
            subject to approval by FERC under the Federal Power Act. In March 2006,
            FERC
            issued an order authorizing these subsidiaries to issue short-term debt
            securities subject to the following limits on outstanding balances: UE
            - $1
            billion; CIPS - $250 million; and CILCO - $250 million. The authorization
            was
            effective as of April 1, 2006, and terminates on March 31, 2008. IP has
            unlimited short-term debt authorization from FERC.
 
 Genco
            is
            authorized by FERC in its March 2006 order to have up to $300 million
            of
            short-term debt outstanding at any time. AERG and EEI have unlimited
            short-term
            debt authorization from FERC.
 
 With
            the
            repeal of PUHCA 1935, the issuance of short-term unsecured debt securities
            by
            Ameren and CILCORP, which was previously subject to SEC approval under
            PUHCA
            1935, is no longer subject to approval by any regulatory body.
  The
            Ameren Companies  continually
            evaluate the adequacy and appropriateness of their credit arrangements
            given
            changing business conditions. When business conditions warrant, changes
            may be
            made to existing credit agreements or other short-term borrowing
            arrangements.
 
 *Long-term
            Debt and Equity*
  The
            following table presents the issuances of common stock and the issuances,
            redemptions, repurchases and maturities of long-term debt (net of any
            issuance
            discounts and including any redemption premiums) for the three months
            ended
            March 31, 2007 and 2006, for the Ameren Companies. For additional information
            related to the terms and uses of these issuances and the sources of funds
            and
            terms for the redemptions, see Note 4 - Long-term Debt and Equity Financings
            to
            our financial statements under Part I, Item 1, of this report.
 
 **Three
                      Months****Month
                      Issued, Redeemed,**
                    **Repurchased
                      or Matured**
                  **2007**
                  
                  **2006****Issuances***Common
                      stock***Ameren:**DRPlus
                      and 401(k)
                  
                  Various
                  
                  **$**
                  **21**
                  
                  $
                  **27**Total
                      common stock issuances
                  
                  
                  
                  **$**
                  **21**
                  
                  $
                  **27****Redemptions,
                      Repurchases and Maturities***Long-term
                      debt***Ameren:**2002
                      5.70% notes due 2007
                  
                  February
                  
                  
                  **100**
                  
                  
                  **-****CILCORP:**9.375%
                      Senior notes due 2029
                  
                  March
                  
                  
                  **-**
                  
                  
                  **3****CILCO:**7.50%
                      First mortgage bonds due 2007
                  
                  January
                  
                  
                  **50**
                  
                  
                  **-****IP:**Note
                      payable to IP SPT:5.65%
                      Series due 2008
                  
                  Various
                  
                  
                  **24**
                  
                  
                  **28**Total
                      Ameren long-term debt redemptions, repurchases and
                      maturities
                  
                  
                  
                  **$**
                  **174**
                  
                  $
                  **31**
 
 The
            following table presents the authorized amounts under Form S-3 shelf
            registration statements filed and declared effective for certain Ameren
            Companies as of March 31, 2007:
 
 **Effective**
                    **Date**
                  
                  
                  **Authorized**
                    **Amount**
                  
                  
                  **Issued**
                  
                  
                  **Available**Ameren
                  June
                      2004
                  
                  $
                  2,000
                  
                  $
                  459
                  
                  $
                  1,541UE
                  October
                      2005
                  
                  
                  1,000
                  
                  
                  260
                  
                  
                  740CIPS
                  May
                      2001
                  
                  
                  250
                  
                  
                  211
                  
                  
                  39
  In
            March
            2004, the SEC declared effective a Form S-3 registration statement filed
            by
            Ameren in February 2004, authorizing the offering of 6 million additional
            shares
            of its common stock under DRPlus. Shares of common stock sold under DRPlus
            are,
            at Ameren’s option, newly issued shares, treasury shares, or shares purchased in
            the open market or in privately negotiated transactions. Ameren is currently
            selling newly issued shares of its common stock under DRPlus. Ameren
            is also
            currently selling newly issued shares of its common stock under certain
            of its
            401(k) plans pursuant to effective SEC Form S-8 registration statements.
            Under
            DRPlus and its 401(k) plans, Ameren issued a total of 0.4 million new
            shares of
            common stock valued at $21 million in the three months ended March 31,
            2007.
 
 Ameren,
            UE and CIPS may sell all or a portion of the remaining securities registered
            under their effective registration statements if market conditions and
            capital
            requirements warrant such a sale.  Any offer and sale will be made only by
            means of a prospectus that meets the
  65
  requirements
            of the Securities Act of 1933 and the rules and regulations
            thereunder.
 
 **Indebtedness
            Provisions and Other Covenants**
  See
            Note
            3 - Credit Facilities and Liquidity to our financial statements under
            Part I,
            Item 1, of this report for a discussion of the covenants and provisions
            contained in our bank credit facilities and applicable cross-default
            provisions.
            Also see Note 4 - Long-term Debt and Equity Financings to our financial
            statements under Part I, Item 1, of this report for a discussion of covenants
            and provisions contained in certain of the Ameren Companies’ indenture
            agreements and articles of incorporation.
 
 At
            March
            31, 2007, the Ameren Companies were in compliance with their credit facility,
            indenture, and articles of incorporation provisions and covenants.
 
 We
            consider access to short-term and long-term capital markets a significant
            source
            of funding for capital requirements not satisfied by our operating cash
            flows.
            Inability to raise capital on favorable terms, particularly during times
            of
            uncertainty in the capital markets, could negatively affect our ability
            to
            maintain and expand our businesses. After assessing our current operating
            performance, liquidity, and credit ratings (see Credit Ratings below),
            we
            believe that we will continue to have access to the capital markets.
            However,
            events beyond our control, such as the legislation proposed to rollback
            and
            freeze electric rates at 2006 levels in Illinois for CIPS, CILCO and
            IP, may
            create uncertainty in the capital markets. Such events would increase
            our cost
            of capital and adversely affect our ability to access the capital markets.
            See
            Note 2 - Rate and Regulatory Matters to our financial statements under
            Part I,
            Item 1, of this report for further discussion.
 
 **Dividends**
 
 Dividends
            paid by Ameren to shareholders during the first three months of 2007
            totaled
            $131 million, or 63.5 cents per share (2006 - $130 million or 63.5 cents
            per
            share). On
 April
            24,
            2007, Ameren’s board of directors declared a quarterly common stock dividend of
            63.5 cents per share payable on June 29, 2007, to shareholders of record
            on June
            6, 2007.
 
 The
            amount and timing of dividends payable on Ameren’s common stock are within the
            sole discretion of Ameren’s board of directors. The board of directors has not
            set specific targets or payout parameters when declaring common stock
            dividends.
            However, the board considers various issues, including Ameren’s historical
            earnings and cash flow, projected earnings, projected cash flow and potential
            cash flow requirements, dividend payout rates at other utilities, return
            on
            investments with similar risk characteristics, impacts of regulatory
            orders or
            legislation and overall business considerations.
  See
            Note
            3 - Credit Facilities and Liquidity and Note 4 - Long-term Debt and Equity
            Financings to our financial statements under Part I, Item 1, of this
            report for
            a discussion of covenants and provisions contained in certain of the
            Ameren
            Companies’ financial agreements and articles of incorporation that would
            restrict the Ameren Companies’ payment of dividends in certain circumstances. At
            March 31, 2007, except as discussed below with respect to the 2007 $500
            million
            credit facility and the 2006 $500 million credit facility, none of these
            circumstances existed at the other Ameren Companies and, as a result,
            they were
            allowed to pay dividends.
 
 The
            2007
            $500 million credit facility and 2006 $500 million credit facility limit
            CIPS,
            CILCORP, CILCO and IP to common and preferred stock dividend payments
            of $10
            million per year each if CIPS’, CILCO’s or IP’s senior secured long-term debt
            securities or first mortgage bonds, or CILCORP’s senior unsecured long-term debt
            securities, have received a below investment-grade credit rating from
            either
            Moody’s or S&P. With respect to AERG, which currently is not rated by
            Moody’s or S&P, the common and preferred stock dividend restriction will not
            apply if its ratio of consolidated total debt to consolidated operating
            cash
            flow, pursuant to a calculation defined in the facilities, is less than
            or equal
            to 3.0 to 1. On July 26, 2006, Moody’s downgraded CILCORP’s senior unsecured
            credit rating to below investment-grade, causing it to be subject to
            this
            dividend payment limitation. As of
 March
            31,
            2007, AERG was in compliance with the debt-to-operating cash flow ratio
            test in
            the 2007 and 2006 $500
            million credit facilities. The other borrowers are not currently limited
            in
            their dividend payments by this provision of the 2007 or 2006 $500 million
            credit facilities.
 
 The
            following table presents dividends paid by Ameren Corporation and by
            Ameren’s
            subsidiaries to their respective parents for the three months ended March
            31,
            2007 and 2006.
 
 **Three
                      Months****2007**
                  
                  
                  **2006**UE
                  **$**
                  **80**
                  
                  **$**
                  **42**Genco
                  
                  **39**
                  
                  
                  **22**CILCORP(a)
                  
                  **-**
                  
                  
                  **50**Nonregistrants
                  
                  **12**
                  
                  
                  **16**Dividends
                      paid by Ameren
                  **$**
                  **131**
                  
                  **$**
                  **130**
  (a)
                  CILCO
                      paid to CILCORP dividends of $50 million for the three months
                      ended March
                      31, 2006.
 
 **Contractual
            Obligations**
 
 For
            a
            complete listing of our obligations and commitments, see Contractual
            Obligations
            under Part II, Item 7 and Note 14 - Commitments and Contingencies under
            Part II,
            Item 8 of the Ameren Companies’ combined Annual Report on Form 10-K for the
            fiscal year ended December 31, 2006,
  66
 and
            Other
            Obligations in Note 8 - Commitments and Contingencies under Part I, Item
            1, of
            this report. See Note 11 - Retirement Benefits to our financial statements
            under
            Part I, Item 1, of this report for information regarding expected minimum
            funding levels for our pension plan.
  Subsequent
            to December 31, 2006, obligations related to the procurement of natural
            gas and
            nuclear fuel materially changed at Ameren, UE, CIPS, Genco, CILCORP,
            CILCO and
            IP to $4,165 million, $715
            million, $448 million, $81 million, $1,285 million, $1,285 million and
            $1,617
            million, respectively, as of March 31, 2007. Total other obligations
            at March
            31, 2007, for Ameren, UE, CIPS, Genco, CILCORP, CILCO and IP were $6,352
            million, $2,057 million, $473 million, $393 million, $1,473 million,
            $1,473
            million and $1,749 million, respectively.
 
 **Credit
            Ratings**
  The
            following table presents the principal credit ratings of the Ameren Companies
            by
            Moody’s, S&P and Fitch effective on the date of this
            report:
 
 **Moody’s**
                  
                  
                  **S&P**
                  
                  
                  **Fitch****Ameren:**Issuer/corporate
                      credit rating
                  Baa2
                  
                  
                  BBB-
                  
                  
                  BBB+Unsecured
                      debt
                  Baa2
                  
                  
                  BB+
                  
                  
                  BBB+Commercial
                      paper
                  P-2
                  
                  
                  A-3
                  
                  
                  F2**UE:**Issuer/corporate
                      credit rating
                  Baa1
                  
                  
                  BBB-
                  
                  
                  A-Secured
                      debt
                  A3
                  
                  
                  BBB-
                  
                  
                  A+Commercial
                      paper
                  P-2
                  
                  
                  A-3
                  
                  
                  F2**CIPS:**Issuer/corporate
                      credit rating
                  Ba1
                  
                  
                  BB
                  
                  
                  BB+Secured
                      debt
                  Baa3
                  
                  
                  BBB-
                  
                  
                  BBB**Genco:**Issuer/corporate
                      credit rating
                  -
                  
                  
                  BBB-
                  
                  
                  BBB+Unsecured
                      debt
                  Baa2
                  
                  
                  BBB-
                  
                  
                  BBB+**CILCORP:**Issuer/corporate
                      credit rating
                  -
                  
                  
                  BB
                  
                  
                  BB+Unsecured
                      debt
                  Ba2
                  
                  
                  B+
                  
                  
                  BB+**CILCO:**Issuer/corporate
                      credit rating
                  Ba1
                  
                  
                  BB
                  
                  
                  BB+Secured
                      debt
                  Baa2
                  
                  
                  BBB-
                  
                  
                  BBB**IP:**Issuer/corporate
                      credit rating
                  Ba1
                  
                  
                  BB
                  
                  
                  BB+Secured
                      debt
                  Baa3
                  
                  
                  BBB-
                  
                  
                  BBB
  On
            March
            12, 2007, Moody’s downgraded the credit ratings of Ameren, UE, CIPS, CILCORP,
            CILCO, and IP as set forth in the above table. In addition, Moody’s assigned to
            CILCORP a corporate family credit rating of “Ba1” and a probability of default
            rating of “Ba1.” Moody’s indicated that the ratings of Ameren, CIPS, CILCORP,
            CILCO and IP remain on review for possible further downgrade. Moody’s also
            placed Ameren’s “Prime-2” short-term credit rating for commercial paper on
            review for possible downgrade. The ratings of UE are no longer on review
            although the rating outlook is negative.
 
 Moody’s
            indicated that the downgrade of the ratings of Ameren, CIPS, CILCORP,
            CILCO and
            IP was prompted by the passage of rate freeze legislation by both the
            Illinois
            House of Representatives on March 6, 2007, and the Environment and Energy
            Committee of the Illinois Senate on March 7, 2007, and the growing support
            for a
            rate freeze in both chambers of the Illinois General Assembly. In the
            event of
            the passage and enactment of rate freeze legislation, Moody’s indicated that the
            Ameren Illinois Utilities could be downgraded further into speculative
            (junk)
            grade.
 
 Moody’s
            indicated that the downgrade of UE was prompted by higher costs, lower
            financial
            metrics and a continued challenging regulatory environment in Missouri.
            The
            downgrade also reflects Moody’s expectation that Ameren may have to rely more
            heavily on UE for upstreamed dividends if rate freeze legislation is
            passed and
            enacted in Illinois.
 
 On
            April
            24, 2007, Moody’s stated that the passage of rate freeze legislation by the
            Illinois Senate on April 20, 2007, was a negative development although
            it will
            not have an immediate impact on the credit ratings of Ameren or the Ameren
            Illinois Utilities. The legislation would roll back electric rates to
            2006
            levels, freeze rates at those levels for at least one year, and provide
            for
            refunds to customers. See Note 2 - Rates and Regulatory Matters to our
            financial
            statements under Part I, Item 1 of this report. Moody’s also stated that any
            progress toward passage of the legislation by the Illinois House of
            Representatives could result in a ratings downgrade of the Ameren Illinois
            Utilities. Further, Moody’s said that enactment into law of such legislation
            could result in multi-notch downgrades of the ratings of the Ameren Illinois
            Utilities well into speculative grade due to concerns about the impact
            on the
            financial performance of the Ameren Illinois Utilities.
 
 On
            March
            9, 2007, S&P issued a report in response to the passage by the Environment
            and Energy Committee of the Illinois Senate of legislation which would
            roll back
            rates to 2006 levels and freeze rates for at least six months. S&P indicated
            in its report that if such bill was passed by the full Senate, the issuer
            credit
            ratings on the Ameren Illinois Utilities would be immediately lowered
            to “BB+.”
According to S&P, such a downgrade would reflect growing sentiment in both
            chambers of the Illinois General Assembly of the need for rate relief
            for
            certain affected customers of the Ameren Illinois Utilities. S&P indicated
            that it would further lower the ratings on the Ameren Illinois Utilities
            if rate
            freeze legislation “of any meaningful length” is approved by both chambers of
            the Illinois General Assembly, and such ratings may be lowered precipitously
            in
            such circumstance.
 
 On
            April
            23, 2007, S&P lowered its long-term corporate credit ratings of Ameren, UE,
            and Genco from “BBB” to “BBB-”. Issuer credit ratings at CIPS, CILCORP, CILCO,
            and IP were lowered from “BBB-” to “BB ” and
            secured debt ratings
  67
 were
              lowered at CIPS and CILCO from “BBB” to “BBB-”. The downgrades follow the
              passage of rate rollback and freeze legislation on April 20, 2007,
              by the
              Illinois Senate as discussed above.
  On
            April
            2, 2007, Fitch downgraded the issuer default ratings of Ameren from “A-” to
“BBB+” and the issuer default ratings of each of CIPS, CILCORP and CILCO from
            “BBB+” to “BB+,” in addition to other rating downgrades with respect to Ameren,
            UE, CIPS, CILCORP and CILCO on that date. The ratings for Ameren, CIPS,
            CILCORP,
            CILCO and IP remain on “negative watch.” Fitch stated that the downgrade of
            CIPS, CILCORP and CILCO “follows the inability of the Illinois utilities to
            reach an agreement concerning the recovery of purchased power costs with
            the
            Illinois Senate before it adjourned before the mid-term break” on March 30,
            2007, and that the downgrade of Ameren was “based upon an increased overall
            corporate risk profile due to the regulatory environment in
            Illinois.”
  The
            recent adverse ratings actions and any further adverse change in the
            Ameren
            Companies’ credit ratings may reduce access to capital and trigger additional
            collateral postings and prepayments. They may also increase the cost
            of
            borrowing and fuel, power and gas supply, among other things, resulting
            in a
            negative impact on earnings. Collateral postings and prepayments were
            made
            during the first quarter of 2007 of $33 million, $2 million, $4 million,
            $4
            million, and $20 million at Ameren, CIPS, CILCORP, CILCO and IP, respectively,
            resulting from our reduced corporate and issuer credit ratings.
            Sub-investment-grade issuer ratings for securities (less than “BBB-” or “Baa3”)
            at March 31, 2007, could have resulted in Ameren, UE, CIPS, Genco, CILCORP,
            CILCO or IP being required to post additional collateral or other assurances
            for
            certain trade obligations amounting to $196 million, $67 million, $20
            million,
            $36 million, $28 million, $28 million, or $19 million, respectively.
            In
            addition, the cost of borrowing under our credit facilities can increase
            or
            decrease depending upon the credit ratings of the borrower. A credit
            rating is
            not a recommendation to buy, sell or hold securities. It should be evaluated
            independently of any other rating. Ratings are subject to revision or
            withdrawal
            at any time by the rating organization.
 
 **OUTLOOK**
  Below
            are
            some key trends that may affect the Ameren Companies’ financial condition,
            results of operations, or liquidity in 2007 and beyond.
 
 **Revenues**
  ·
                  In
                      2006, electric rate freezes or adjustment moratoriums and power
                      supply
                      contracts expired in Ameren’s regulatory jurisdictions. At the end of
                      2006, electric rates for Ameren’s operating subsidiaries had been fixed or
                      declining for periods ranging from 15 years to 25 years.  In
                      January 2006, the ICC approved a framework for CIPS, CILCO
                      and IP to
                      procure power for use by their customers through an auction.
                      It also
                      approved the related tariffs to collect these costs from customers
                      for the
                      period commencing January 2, 2007. This approval is subject
                      to pending
                      court appeals. In September 2006, the power procurement auction
                      was held
                      and declared successful with respect to power for fixed-price
                      customers,
                      which include the vast majority of electric customers of CIPS,
                      CILCO and
                      IP. The auction clearing price was about $65 per megawatthour
                      for the
                      fixed-price residential and small commercial product and about
                      $85 per
                      megawatthour for large commercial and industrial customers.
                      Marketing
                      Company participated in the auction with power being acquired
                      from Genco
                      and AERG, subject to an auction rules limitation of providing
                      no more than
                      35% of the Ameren Illinois Utilities’ expected annual load, and it was
                      awarded sales in the auction. As a result of the high auction
                      price for
                      the large commercial and industrial customers, almost all of
                      these
                      customers chose a different
                      supplier. ·
                  CIPS,
                      CILCO and IP filed rate cases with the ICC in December 2005
                      to modify
                      their electric delivery service rates effective January 2,
                      2007. CIPS,
                      CILCO and IP requested to increase their annual revenues for
                      electric
                      delivery service by $202 million in the aggregate (CIPS - $14
                      million,
                      CILCO - $43 million and IP - $145 million). In November 2006,
                      the ICC
                      issued an order approving an annual revenue increase for electric
                      delivery
                      service of $97 million in the aggregate (CIPS - $8 million
                      decrease, CILCO
                      - $21 million increase and IP - $84 million increase) based
                      on an allowed
                      return on equity of approximately 10%. In December 2006, the
                      ICC granted
                      the Ameren Illinois Utilities’ petition for rehearing of the November 2006
                      order on the recovery of certain administrative and general
                      expenses,
                      totaling approximately $50 million, which were disallowed.
                      The
                      administrative law judges issued a proposed order in April
                      2007
                      recommending no recovery of these expenses for CIPS, CILCO
                      and IP. The
                      ICC’s decision on the recovery of these expenses is due in May
                      2007.
                      Because of the ICC’s cost disallowances and regulatory lag, the Ameren
                      Illinois Utilities are not expected to earn their allowed return
                      on equity
                      in 2007. Prior to January 2, 2007, most customers were taking
                      service
                      under a frozen bundled electric rate in 2006, which included the cost of
                      power, so any delivery service revenue changes will not directly
                      correspond to a change in CIPS’, CILCO’s or IP’s revenues or earnings
                      under the new electric delivery service rates. The necessity
                      and timing of
                      new Illinois delivery service rate cases for the Ameren Illinois
                      Utilities
                      will be driven by several factors, including the results of
                      the pending
                      rehearing.
   68
 ·
                  Average
                      residential electric rates for CIPS, CILCO and IP increased
                      significantly
                      following the expiration of a rate freeze at the end of 2006.
                      Electric
                      rates rose because of the increased cost of power purchased
                      on behalf of
                      the Ameren Illinois Utilities’ customers based on the results of the
                      Illinois power procurement auction held in early September
                      2006 and
                      increases resulting from the delivery service rate cases. CIPS
                      and IP
                      average residential rates are expected to increase in 2007
                      by
                      approximately 40% over 2006 rates, and CILCO average residential
                      rates are
                      expected to increase approximately 55% over 2006 rates. The
                      estimated
                      average annual residential overall increase for electric heat
                      customers is
                      expected to be 60% to 80% over 2006 rates. Due to the impact
                      to electric
                      heat customers of eliminating subsidizations from other customer
                      classes,
                      the ICC initiated, in March 2007, an investigation into all
                      aspects of
                      rate design for all customer classes of CIPS, CILCO and IP.
                      Any rate
                      design change is not expected to change total revenues. Due
                      to the
                      magnitude of these increases, various Illinois legislators,
                      the Illinois
                      attorney general, the Illinois governor and other parties sought
                      to block
                      the power procurement auction. They continue to challenge the
                      auction and
                      the structure for the recovery of costs for power supply resulting
                      from
                      the auction through rates to customers. CIPS, CILCO and IP
                      have received
                      favorable rulings from the ICC and the circuit court of Cook
                      County,
                      Illinois on opposition claims filed by the Illinois attorney
                      general, CUB
                      and ELPC. These rulings are currently under court appeals.
                      In addition,
                      the Illinois attorney general filed a complaint with FERC in
                      March 2007
                      asking for an investigation into alleged price manipulation
                      by suppliers
                      in the power procurement auction. Two similar class action
                      lawsuits were
                      filed in the circuit court of Cook County, Illinois also alleging
                      price
                      manipulation.
 ·
                  On
                      April 20, 2007, the Illinois Senate approved legislation, known
                      as Senate
                      Bill 1592, that, if enacted into law, would reduce electric
                      rates of CIPS,
                      CILCO and IP to the rates which were in effect prior to January
                      2, 2007.
                      As passed by the Illinois Senate, Senate Bill 1592 would not
                      impact other
                      Illinois utilities. Senate Bill 1592 provides that the cost
                      of electric
                      energy reflected in the Ameren Illinois Utilities’ electric rates in
                      effect prior to January 2, 2007, cannot be changed for a period
                      of one
                      year after enactment into law. This would prevent the Ameren
                      Illinois
                      Utilities from recovering from retail customers substantial
                      portions of
                      the cost of electric energy the Ameren Illinois Utilities are
                      purchasing
                      under wholesale contracts entered into as a result of the September
                      2006
                      power procurement auction for at least one year after enactment
                      into law,
                      and would cause the Ameren Illinois Utilities to under recover
                      their
                      delivery service costs until the ICC could approve higher delivery
                      service
                      rates. Senate Bill 1592 also includes a requirement for refunds,
                      with
                      interest, of charges collected from customers since January
                      2, 2007, in
                      excess of the pre-January 2, 2007 rates. If this requirement
                      were enacted,
                      CIPS, CILCO and IP would have to refund approximately $37 million,
                      $21
                      million, and $49 million, respectively, of such charges collected
                      from
                      customers during the three months ended March 31, 2007. On
                      March 6, 2007,
                      the Illinois House of Representatives approved legislation
                      that would
                      apply to the Ameren Illinois Utilities and Commonwealth Edison
                      Company and
                      which provides for a three-year rate freeze and included a
                      similar refund
                      requirement. To become law in Illinois, legislation must be
                      passed by the
                      House of Representatives and Senate and signed by the Governor.
                      The
                      Governor has previously expressed support for rate rollback
                      and freeze
                      legislation. Despite passage by the Illinois House of Representatives
                      and
                      the Illinois Senate of similar rate freeze legislation and
                      statements by
                      the Illinois Governor in support of rate rollback and freeze
                      legislation,
                      it is uncertain whether Senate Bill 1592, the House legislation
                      or any
                      rate rollback and freeze legislation will ultimately be enacted
                      into law.
                      Ameren, CIPS, CILCORP, CILCO and IP believe that any legislation
                      reducing
                      electric rates to pre-January 2, 2007, levels is unlawful and
                      unconstitutional. In the event that such legislation is enacted
                      into law,
                      the Ameren Illinois Utilities intend to vigorously pursue all
                      available
                      legal actions and strategies to protect their legal and financial
                      interests, including seeking immediate injunctive relief to
                      prevent the
                      implementation of such legislation. They believe that such
                      actions will be
                      successful in both enjoining the implementation of, and ultimately
                      invalidating, such legislation.
 ·
                  Any
                      decision or action that impairs the ability of CIPS, CILCO
                      and IP to fully
                      recover purchased power or distribution costs from their electric
                      customers in a timely manner would result in material adverse
                      consequences
                      to Ameren, CIPS, CILCORP, CILCO and IP. These consequences
                      would include a
                      significant drop in credit ratings to deep junk (or speculative)
                      status,
                      the inability to access the capital markets on reasonable terms,
                      higher
                      borrowing costs, higher power supply costs, an inability to
                      make timely
                      energy infrastructure investments, requirements to post collateral
                      or
                      other assurances for certain obligations, significant risk
                      of disruption
                      in electric and gas service, significant job losses, and the
                      financial
                      insolvency and bankruptcy of CIPS, CILCORP, CILCO and IP. In
                      addition,
                      Ameren, CILCORP and IP would need to assess whether they are
                      required to
                      record a charge for goodwill impairment for the goodwill that
                      was recorded
                      when Ameren acquired CILCORP and IP. Furthermore, if the Ameren
                      Illinois
                      Utilities are unable to recover their costs from customers,
                      the utilities
                      could be required to cease applying for the electric portions
                      of their
                      businesses SFAS No. 71, “Accounting for the Effects of Certain Types of
  69
 Regulation,”
                      which allows the Ameren Illinois Utilities to defer certain
                      costs pursuant
                      to actions of rate regulators and to recover such costs in
                      rates charged
                      to customers.
 ·
                  The
                      Ameren Illinois Utilities, Commonwealth Edison Company and
                      others have
                      been in discussions with members of the Illinois General Assembly
                      and
                      other stakeholders to develop a constructive solution to provide
                      rate
                      relief to Illinois customers in lieu of reducing electric rates
                      to
                      pre-January 2, 2007 levels or applying a tax on electric generation
                      in
                      Illinois. Through discussions with Senate leaders prior to
                      the Senate’s
                      passage of Senate Bill 1592 on April 20, 2007, the Ameren Illinois
                      Utilities, Commonwealth Edison Company and others had agreed
                      to offer more
                      than $150 million in relief to the Illinois electric customers
                      affected
                      most by the rate increases. Over $85 million of electric customer
                      bill
                      credits and other assistance were specifically targeted for
                      the Ameren
                      Illinois Utilities’ customers. The customer assistance proposal was
                      primarily aimed at residential, small business and not-for-profit
                      users,
                      particularly those Ameren Illinois Utilities’ customers who depend on
                      electricity for heating their homes. Those customers, who since
                      January 1,
                      2007, have absorbed the largest rate increases, had been in
                      line to
                      receive the most benefit from the rate proposal. The Ameren
                      Illinois
                      Utilities were prepared to reinstate their Customer-Elect rate
                      increase
                      phase-in plan capping annual rate increases at 14 percent with
                      no carrying
                      costs on deferred balances. This proposal was not instituted
                      and the
                      Customer-Elect rate increase phase-in plan has not been reinstated
                      because
                      the Illinois General Assembly continued to support rolling
                      back and
                      freezing electric rates at pre-January 2, 2007 levels. The
                      Ameren Illinois
                      Utilities believe that a constructive solution to the current
                      rate
                      situation remains in the best interests of all customers of
                      the Ameren
                      Illinois Utilities and the Ameren Illinois Utilities remain
                      committed to
                      working with stakeholders to reach such a solution. Even a
                      constructive
                      solution could cause Ameren, CIPS, Genco, CILCO, CILCORP and
                      IP to incur
                      significant costs.
 ·
                  See
                      Note 2 - Rate and Regulatory Matters to our financial statements
                      under
                      Part I, Item 1, of this report for a further discussion of
                      Illinois rate
                      matters.
 ·
                  The
                      Illinois General Assembly may consider changes to the Illinois
                      power
                      procurement process in the future. The ICC is currently reviewing
                      the
                      auction process to determine whether any changes should be
                      implemented
                      prior to the next auction. The next Illinois power procurement
                      auction for
                      the Ameren Illinois Utilities is scheduled to take place in
                      January
                      2008.
 ·
                  In
                      July 2006, UE filed requests with the MoPSC for an increase
                      in electric
                      rates of $361 million and in natural gas delivery rates of
                      $11 million.
                      The MoPSC staff recommended in their testimony an electric
                      rate reduction
                      of $136 million to $168 million. Other stakeholders also made
                      recommendations. As the result of the settlement of some issues
                      in the
                      electric case in April 2007 UE’s request for an increase in annual
                      electric revenues was changed to $245 million and the MoPSC
                      staff
                      recommended revenue reduction was changed to $39 million to
                      $75 million. A
                      decision from the MoPSC is expected no later than June 2007.
                      In March
                      2007, a stipulation and agreement was approved by the MoPSC,
                      authorizing
                      an increase in annual natural gas delivery revenues of $6 million,
                      effective April 1, 2007. In addition, UE agreed to not file
                      a natural gas
                      delivery rate case before March 15, 2010. This agreement does
                      not prevent
                      UE from filing to recover infrastructure costs through a statutory
                      surcharge. See Note 2 - Rate and Regulatory Matters to our
                      financial
                      statements under Part I, Item 1, of this report for a further
                      discussion
                      of Missouri rate matters.
 ·
                  In
                      2006, the Non-rate-regulated Generation segment generated 30
                      million
                      megawatthours of power (Genco - 15 million, AERG - 7 million,
                      EEI - 8
                      million). Power previously supplied by Genco to CIPS (through
                      Marketing
                      Company) and by AERG to CILCO was subject to below-market-priced
                      contracts
                      that expired on December 31, 2006. All but 5 million megawatthours
                      of
                      Genco’s pre-2006 wholesale and retail electric power supply agreements
                      also expired during 2006. About 1 million megawatthours of
                      these contracts
                      expire by the end of 2007 and another 2 million contracted
                      megawatthours
                      expire by the end of 2008. These agreements had an average
                      embedded
                      selling price of $36 per megawatthour, which is below current
                      market
                      prices. In 2006, Genco also sold 2.1 million net megawatthours
                      of power in
                      the spot market at an average market price of $38 per megawatthour.
                      In
                      2006, AERG’s power was sold principally to CILCO, at an average price
                      of
                      $32 per megawatthour. In addition, AERG sold 1.5 million net
                      megawatthours
                      of power in the spot market at an average price of $37 per
                      megawatthour in
                      2006. The Non-rate-regulated Generation segment expects to
                      generate 32
                      million megawatthours of power in 2007 (Genco - 17 million,
                      AERG - 7
                      million, EEI - 8 million). Genco, AERG and EEI have contracts
                      to sell all
                      of their power to Marketing Company. Marketing Company resells
                      this power
                      and provides the net proceeds to Genco, AERG and EEI.
 ·
                  The
                      marketing strategy for Non-rate-regulated Generation is to
                      optimize
                      generation output in a low risk manner to minimize earnings
                      and cash flow
                      volatility, while capitalizing on its low-cost generation fleet
                      to provide
                      for solid, sustainable returns. Through a mix of physical and
                      financial
                      sales contracts and the Illinois 2006 power procurement auction,
                      as of
                      March 31, 2007, Non-rate-regulated Generation has sold approximately
                      90%
                      of its expected 2007 generation output (29 million megawatthours)
                      at an
                      average price of $51 per megawatthour. Expected sales in 2007
                      include an
                      estimated
                    7.6
                      million megawatthours of power sold
  70
 through
                      the Illinois power procurement auction at about $65 per megawatthour
                      (2008
                      - 6.8 million, 2009 - 4.3 million). Including Illinois auction
                      sales,
                      approximately 55% to 60% of the expected generation output
                      in
                      2008 was sold as of March 31,
                      2007.
 ·
                  We
                      expect continued economic growth in our service territory to
                      benefit
                      energy demand in 2007 and beyond, but higher energy prices
                      could result in
                      reduced demand from consumers, especially in
                      Illinois.
 ·
                  UE,
                      Genco and CILCO are seeking to raise the equivalent availability
                      and
                      capacity factors of their power plants through greater investments
                      and a
                      process improvement program and
                      investment.
 ·
                  Very
                      volatile power prices in the Midwest affect the amount of revenues
                      Ameren,
                      UE, Genco and CILCO (through AERG) can generate by marketing
                      power into
                      the wholesale and spot markets and influence the cost of power
                      purchased
                      in the spot markets. These companies hedged approximately 86%
                      of estimated
                      available 2007 generation (2008 - 70%,
                    2009
                      - 60%).
 
 **Fuel
            and Purchased Power**
 
 *·*
                  In
                      2006, 85% of Ameren’s electric generation (UE - 77%, Genco - 97%, CILCO -
                      99%) was supplied by its coal-fired power plants. About 93%
                      of the coal
                      used by these plants
                    (UE
                      - 97%, Genco - 87%, CILCO - 69%) was delivered by railroads
                      from the
                      Powder River Basin in Wyoming. In the past, deliveries from
                      the Powder
                      River Basin have been restricted because of rail maintenance,
                      weather and
                      derailments. As of March 31, 2007, coal inventories for UE,
                      Genco, AERG
                      and EEI were adequate, and consistent with historical levels.
                      Disruptions
                      in coal deliveries could cause UE, Genco, AERG and EEI to pursue
                      a
                      strategy that could include reducing sales of power during
                      low-margin
                      periods, buying higher-cost fuels to generate required electricity,
                      and
                      purchasing power from other
                      sources.
 ·
                  Ameren’s
                      coal and related transportation costs are expected to increase
                      15% to 20%
                      in 2007 and 5% to 10% in 2008. Ameren’s nuclear fuel costs are also
                      expected to rise over the next few years. In addition, power
                      generation
                      from higher-cost,
                      gas-fired plants is expected to increase in the next few years.
                      See Item 3
                      - Quantitative and Qualitative Disclosures about Market Risk
                      in Part I of
                      this report for information about the percentage of fuel and
                      transportation requirements that are price-hedged for 2007
                      through
                      2011.
 ·
                  In
                      Illinois, Ameren and IP will also experience higher year-over-year
                      purchased power expenses as the amortization of certain favorable
                      purchase
                      accounting adjustments associated with the IP acquisition was
                      completed in
                      2006.
 ·
                  In
                      July 2005, a new law was enacted that enables the MoPSC to put in
                      place fuel, purchased power, and environmental cost recovery
                      mechanisms
                      for Missouri’s utilities. The law also includes rate case filing
                      requirements, a 2.5% annual rate increase cap for the environmental
                      cost
                      recovery mechanism, and prudency reviews, among other things.
                      Rules for
                      the fuel and purchased power cost recovery mechanism were approved
                      by the
                      MoPSC in September 2006. We are unable to predict when rules
                      implementing
                      the environmental cost recovery mechanism will be formally
                      proposed and
                      adopted. UE requested a fuel and purchased power cost recovery
                      mechanism
                      in its electric rate case filed with the MoPSC in July 2006.
                      The MoPSC
                      staff and intervenors in the electric rate case have recommended
                      that UE
                      not be granted the right to use such a mechanism. UE also requested
                      an
                      environmental cost recovery mechanism as part of its pending
                      Missouri
                      electric case, but no rules have been established for such
                      a mechanism.
                      UE’s requests are subject to approval by the MoPSC. A decision
                      from the
                      MoPSC is expected no later than June
                      2007.
 ·
                  In
                      2007, Ameren expects to reduce levels of emission allowance
                      sales in order
                      to retain remaining allowances for future environmental compliance
                      needs.
 
 **Other
            Costs**
 
 ·
                  In
                      December 2005, there was a breach of the upper reservoir at
                      UE’s Taum Sauk
                      pumped-storage hydroelectric facility. This resulted in significant
                      flooding in the local area, which damaged a state park. Until
                      reviews
                      conducted by state authorities have concluded, litigation has
                      been
                      resolved, the insurance review is completed, a final decision
                      about
                      whether the plant will be rebuilt is made, and future regulatory
                      treatment
                      for the plant is determined, Taum Sauk will remain out of service.
                      In
                      February 2007, UE submitted plans and an environmental report
                      to FERC to
                      rebuild the upper reservoir at its Taum Sauk plant, assuming
                      successful
                      resolution of outstanding issues with authorities of the state
                      of
                      Missouri. Should the decision be made to rebuild the Taum Sauk
                      plant, UE
                      would expect it to be out of service through at least the middle
                      of 2009,
                      if not longer.UE
                      has accepted responsibility for the effects of the incident.
                      At this time,
                      UE believes that substantially all of the damage and liabilities
                      (but not
                      penalties) caused by the breach, including rebuilding the plant,
                      will be
                      covered by insurance. UE expects the total cost for clean up,
                      damage and
                      liabilities, excluding costs to rebuild the facility, resulting
                      from the
                      Taum Sauk incident to range from $137 million to $157 million.
                      As of March
                      31, 2007, UE had paid $76 million and accrued a $61 million
                      liability,
                      including costs resulting from the FERC stipulation and consent
                      agreement,
                      while expensing $30 million, and recording a $107 million receivable
                      due
                      from insurance companies. As of March 31, 2007, UE had
                      received
                    $30
                      million from insurance companies
  71
 reducing
                      the insurance receivable to $77 million. As of March 31, 2007,
                      UE had a
                      $10 million receivable duefrom insurance companies related
                      to rebuilding
                      the facility. Under UE’s insurance policies, all claims by or against UE
                      are subject to review by its insurance carriers. As a result
                      of this
                      breach, UE is engaged in litigation initiated by certain private
                      parties
                      and by state authorities. We are unable to determine the impact
                      the breach
                      may have on Ameren’s and UE’s results of operations, financial position,
                      or liquidity beyond those amounts already
                      recognized.
 ·
                  UE’s
                      Callaway nuclear plant’s scheduled refueling and maintenance outage which
                      commenced April 1, 2007 was completed on May 10, 2007. During
                      an outage,
                      which occurs every 18 months, maintenance and purchased power
                      costs
                      increase, and the amount of excess power available for sale
                      decreases,
                      versus non-outage years.
 ·
                  Over
                      the next few years, we expect rising employee benefit costs
                      as well as
                      higher insurance and security costs associated with additional
                      measures we
                      have taken, or may need to take, at UE’s Callaway nuclear plant and at our
                      other facilities. Insurance premiums may also increase as a
                      result of the
                      Taum Sauk incident, among other
                      things.
 ·
                  Bad
                      debts may increase due to rising electric
                      rates.
 ·
                  We
                      are currently undertaking cost reduction and control initiatives
                      associated with the strategic sourcing of purchases and streamlining
                      of
                      all aspects of our business.
 
 **Capital
            Expenditures**
 
 ·
                  The
                      EPA has issued more stringent emission limits on all coal-fired
                      power
                      plants. Between 2007 and 2016, Ameren expects that certain
                      Ameren
                      Companies will be required to invest between $3.5 billion and
                      $4.5 billion
                      to retrofit their power plants with pollution control equipment.
                      These
                      investments will also result in significantly higher ongoing
                      operating
                      expenses. Approximately 50% of this investment will be in Ameren’s
                      regulated UE operations, and it is therefore expected to be
                      recoverable
                      from ratepayers. The recoverability of amounts expended in
                      non-rate-regulated operations will depend on whether market
                      prices for
                      power adjust as a result of this increased investment.
 ·
                  Ameren
                      will provide a report on how it is responding to rising regulatory,
                      competitive, and public pressure to significantly reduce carbon
                      dioxide
                      and other emissions from current and proposed power plant operations.
                      The
                      report will include Ameren’s climate change strategy and activities,
                      current greenhouse gas emissions, and analysis with respect
                      to plausible
                      future greenhouse gas scenarios. Ameren will publish this report
                      on its
                      Web site by September 1, 2007. Investments to control carbon
                      emissions at
                      Ameren’s coal-fired plants would significantly increase future capital
                      expenditures.  UE
                      continues to evaluate its longer-term needs for new baseload
                      and peaking
                      electric generation capacity. At this time, UE does not expect
                      to require
                      new baseload generation capacity until at least 2018. However,
                      due to the
                      significant time required to plan, acquire permits for and
                      build a
                      baseload power plant, UE is actively studying future plant
                      alternatives,
                      including those that would use coal or nuclear fuel. In April
                      2007, UE
                      signed an agreement with UniStar Nuclear to assist UE in the
                      preparation
                      of a combined construction and operating license application
                      (COLA) for
                      filing with the NRC. A COLA describes how a nuclear plant would
                      be
                      designed, constructed and operated. Preparing a COLA does not
                      mean a
                      decision has been made to build a nuclear plant. It is only
                      the first step
                      in the regulatory licensing process. UE and UniStar Nuclear
                      must submit
                      the COLA to the NRC in 2008 to be eligible for incentives available
                      under
                      provisions of the 2005 Energy Policy
                      Act.
 ·
                  Over
                      the next few years, we expect to make significant investments
                      in our
                      electric and gas infrastructure to improve overall system reliability
                      in
                      addition to addressing environmental compliance requirements.
                      We are
                      projecting higher labor and material costs for these capital
                      expenditures.
 
 **Other**
 
 ·
                  Severe
                      storms in 2006 and early 2007 resulted in electric outages
                      for more than
                      1.5 million customers and an increased focus on alternatives
                      for improving
                      reliability during severe storms. UE’s, CIPS’, CILCO’s and IP’s
                      performance during these storms is subject to regulatory and
                      legislative
                      review and media attention. Recommendations
                      to improve service during severe stormsresulting
                      from regulatory and internal reviews could include more aggressive
                      tree
                      removal and trimming programs, comprehensive pole and line
                      inspections and
                      burial of more electric services, among other things. In 2007,
                      UE will
                      begin to spend an additional $100 million per year on converting
                      overhead
                      circuits to underground lines. We would expect any additional
                      costs or
                      investments to be recovered in
                      rates.
 ·
                  In
                      2006, Ameren realized gains on sales of noncore properties,
                      including
                      leveraged leases. The net benefit of these sales to Ameren
                      in 2006 was 16
                      cents per share. Ameren continues to pursue the sale of its
                      interests in
                      its remaining three leveraged lease assets. Ameren does not
                      expect to
                      achieve similar sales levels of noncore properties in
                      2007.
 
 **Affiliate
            Transactions**
 
 ·
                  As
                      a result of the termination of the JDA on December 31, 2006,
                      UE and Genco
                      no longer have the obligation to
  72
 provide
                      power to each other. UE is able to sell any excess power it
                      has at market
                      prices, which we believe will most likely be higher than it
                      was paid by
                      Genco. Genco will no longer receive the margins on sales that
                      it made,
                      which were fulfilled with power from UE. Ameren’s and UE’s earnings will
                      be affected by the termination of the JDA when UE’s rates are adjusted by
                      the MoPSC. UE’s requested electric rate increase filed in July 2006 is net
                      of the decrease in its revenue requirement from increased margins
                      expected
                      to result from the termination of the JDA. See Note 7 - Related
                      Party
                      Transactions to our financial statements under Part I, Item
                      1, of this
                      report for a discussion of the effects of terminating the
                      JDA.
 
 The
            above
            items could have a material impact on our results of operations, financial
            position, or liquidity. Additionally, in the ordinary course of business,
            we
            evaluate strategies to enhance our results of operations, financial position,
            or
            liquidity. These strategies may include acquisitions, divestitures,
            opportunities to reduce costs or increase revenues, and other strategic
            initiatives to increase Ameren’s shareholder value. We are unable to predict
            which, if any, of these initiatives will be executed. The execution of
            these
            initiatives may have a material impact on our future results of operations,
            financial position, or liquidity.
 
 **REGULATORY
            MATTERS**
  See
            Note
            2 - Rate and Regulatory Matters to our financial statements under Part
            I, Item
            1, of this report.
 
 **ITEM
            3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
            RISK.**
 
 Market
            risk is the risk of changes in value of a physical asset or a financial
            instrument, derivative or nonderivative, caused by fluctuations in market
            variables such as interest rates, commodity prices and equity security
            prices. A
            derivative is a contract whose value is dependent on, or derived from,
            the value
            of some underlying asset. The following discussion of our risk management
            activities includes forward-looking statements that involve risks and
            uncertainties. Actual results could differ materially from those projected
            in
            the forward-looking statements. We handle market risks in accordance
            with
            established policies, which may include entering into various derivative
            transactions. In the normal course of business, we also face risks that
            are
            either nonfinancial or nonquantifiable. Such risks, principally business,
            legal
            and operational risks, are not part of the following discussion.
 
 Our
            risk
            management objective is to optimize our physical generating assets within
            prudent risk parameters. Our risk management policies are set by a risk
            management steering committee, which is composed of senior-level Ameren
            officers.
  Except
            as
            discussed below, there have been no material changes to the quantitative
            and
            qualitative disclosures about market risk in the Ameren Companies’ combined
            Annual Report on Form 10-K for the fiscal year ended December 31, 2006.
            See Item
            7A under Part II of the 2006 Form 10-K for a more detailed discussion
            of our
            market risks.
 
 **Interest
            Rate Risk**
  We
            are
            exposed to market risk through changes in interest rates. The following
            table
            presents the estimated increase in our annual interest expense and decrease
            in
            net income if interest rates were to increase by 1% on variable-rate
            debt
            outstanding at March 31, 2007:
 **Interest
                      Expense**
                  
                  
                  **Net
                      Income****(a)**Ameren
                  $
                  18
                  
                  $
                  (11)UE
                  
                  11
                  
                  
                  (7)CIPS
                  
                  1
                  
                  
                  (1)Genco
                  
                  1
                  
                  
                  (1)CILCORP
                  
                  3
                  
                  
                  (2)CILCO
                  
                  2
                  
                  
                  (1)IP
                  
                  5
                  
                  
                  (3)
  (a)
                  Calculations
                      are based on an effective tax rate of 38%.
 
 The
            estimated changes above do not consider potential reduced overall economic
            activity that would exist in such an environment. In the event of a significant
            change in interest rates, management would probably act to further mitigate
            our
            exposure to this market risk. However, due to the uncertainty of the
            specific
            actions that would be taken and their possible effects, this sensitivity
            analysis assumes no change in our financial structure.
 
 **Credit
            Risk**
 
 Credit
            risk represents the loss that would be recognized if counterparties fail
            to
            perform as contracted. NYMEX-traded futures contracts are supported by
            the
            financial and credit quality of the clearing members of the NYMEX and
            have
            nominal credit risk. In all other transactions, we are exposed to credit
            risk in
            the event of nonperformance by the counterparties to the
            transaction.
 
 Our
            physical and financial instruments are subject to credit risk consisting
            of
            trade accounts receivables and executory contracts with market risk exposures.
            The risk associated with trade receivables is mitigated by the large
 73
 
 number
              of
              customers in a broad range of industry groups who make up our customer
              base. At
              March 31, 2007, no nonaffiliated customer represented more than 10%, in the
              aggregate, of our accounts receivable. Our revenues are primarily derived
              from
              sales or delivery of electricity and natural gas to customers in Missouri
              and
              Illinois. UE, CIPS, Genco, CILCO, AERG, IP, AFS and Marketing Company
              may have
              credit exposure associated with power purchase and sale activity with
              nonaffiliated companies.   These companies also have credit exposure
              to affiliates.  At March 31, 2007, UE’s, CIPS’, Genco’s, CILCO’s, AERG’s,
              IP’s, AFS’ and Marketing Company’s combined credit exposure to nonaffiliated
              non-investment-grade purchases and sales was each less than $1 million,
              net of
              collateral (2006 - $1 million). We establish credit limits for these
              counterparties and monitor the appropriateness of these limits on an
              ongoing
              basis through a credit risk management program that involves daily
              exposure
              reporting to senior management, master trading and netting agreements,
              and
              credit support, such as letters of credit and parental guarantees.
              We also
              analyze each counterparty’s financial condition before we enter into sales,
              forwards, swaps, futures or option contracts, and we monitor counterparty
              exposure associated with our leveraged leases. We estimate our credit
              exposure
              to MISO associated with the MISO Day Two Energy Market to be $22 million
              at
              March 31, 2007 (2006
              -
              $32 million).
  **Equity
            Price Risk**
 
 Our
            costs
            of providing defined benefit retirement and postretirement benefit plans
            are
            dependent upon a number of factors, including the rate of return on plan
            assets.
            To the extent the value of plan assets declines, the effect would be
            reflected
            in net income and OCI, and in the amount of cash required to be contributed
            to
            the plans.
 
 **Commodity
            Price Risk**
  We
            are
            exposed to changes in market prices for electricity, fuel, and natural
            gas.
            UE’s, Genco’s, AERG’s and EEI’s risks of changes in prices for power sales are
            partially hedged through sales agreements. Genco, AERG and EEI also seek
            to sell
            power forward to wholesale, municipal and industrial customers to limit
            exposure
            to changing prices. We also attempt to mitigate financial risks through
            structured risk management programs and policies, which include structured
            forward-hedging programs, and the use of derivative financial instruments
            (primarily forward contracts, futures contracts, option contracts, and
            financial
            swap contracts). However, a portion of the generation capacity of UE,
            Genco,
            AERG and EEI is not contracted through physical or financial hedge arrangements
            and is therefore exposed to volatility in market prices.
 
 Similar
            techniques are used to manage risks associated with fuel exposures for
            generation. Most UE, Genco, AERG and EEI fuel supply contracts are physical
            forward contracts. UE, Genco, AERG and EEI do not have a provision similar
            to
            the PGA clause for electric operations, so UE, Genco, AERG and EEI have
            entered
            into long-term contracts with various suppliers to purchase coal and
            nuclear
            fuel to manage their exposure to fuel prices. The coal hedging strategy
            is
            intended to secure a reliable coal supply while reducing exposure to
            commodity
            price volatility. Price and volumetric risk mitigation is accomplished
            primarily
            through periodic bid procedures, whereby the amount of coal purchased
            is
            determined by the current market prices and the minimum and maximum coal
            purchase guidelines for the given year. We generally purchase coal up
            to five
            years in advance, but we may purchase coal beyond five years to take
            advantage
            of favorable deals or market conditions. The strategy also allows for
            the
            decision not to purchase coal to avoid unfavorable market conditions.
            As part of
            its pending electric rate case filed in July 2006, UE has requested approval
            by
            the MoPSC for a fuel and purchased power cost recovery mechanism.
  Transportation
            costs for coal and natural gas can be a significant portion of fuel costs.
            We
            typically hedge coal transportation forward to provide supply certainty
            and to
            mitigate transportation price volatility. The natural gas transportation
            expenses for the distribution utility companies and the gas-fired generation
            units are controlled by FERC via published tariffs with rights to extend
            the
            contracts from year to year. Depending on our competitive position, we
            are able
            in some instances to negotiate discounts to these tariffs for our requirements.
  The
            following table presents the percentages of the projected required supply
            of
            coal and coal transportation for our coal-fired power plants, nuclear
            fuel for
            UE’s Callaway nuclear plant, natural gas for our CTs and retail distribution,
            as
            appropriate, and purchased power needs of CIPS, CILCO and IP, which own
            no
            generation, that are price-hedged over the remainder of 2007 through
            2011:
 
 **2007**
                  
                  
                  **2008**
                  
                  
                  **2009**-**2011****Ameren:**Coal
                  100
                  %
                  
                  95
                  %
                  
                  41
                  %Coal
                      transportation
                  100
                  
                  
                  95
                  
                  
                  43Nuclear
                      fuel
                  100
                  
                  
                  91
                  
                  
                  51Natural
                      gas for generation
                  85
                  
                  
                  14
                  
                  
                  -Natural
                      gas for distribution(a)
                  (a)
                  
                  
                  23
                  
                  
                  8Purchased
                      power for Illinois Regulated(b)
                  100
                  
                  
                  81
                  
                  
                  21
   74
 **2007**
                  
                  
                  **2008**
                  
                  
                  **2009**-**2011**
 **UE:**Coal
                  100
                  %
                  
                  94
                  %
                  
                  41
                  %Coal
                      transportation
                  100
                  
                  
                  97
                  
                  
                  61
 Nuclear
                      fuel
                  100
                  
                  
                  91
                  
                  
                  51Natural
                      gas for generation
                  81
                  
                  
                  7
                  
                  
                  -Natural
                      gas for distribution(a)
                  (a)
                  
                  
                  21
                  
                  
                  5**CIPS:**Natural
                      gas for distribution(a)
                  (a)
                  
                  
                  34
                  
                  
                  13Purchased
                      power(b)
                  100
                  
                  
                  81
                  
                  
                  21**Genco:**Coal
                  100
                  %
                  
                  96
                  %
                  
                  38
                  %Coal
                      transportation
                  100
                  
                  
                  97
                  
                  
                  35Natural
                      gas for generation
                  100
                  
                  
                  53
                  
                  
                  -**CILCORP/CILCO:**Coal
                      (AERG)
                  100
                  %
                  
                  96
                  %
                  
                  42
                  %Coal
                      transportation (AERG)
                  100
                  
                  
                  71
                  
                  
                  23Natural
                      gas for distribution(a)
                  (a)
                  
                  
                  21
                  
                  
                  7Purchased
                      power(b)
                  100
                  
                  
                  81
                  
                  
                  21**IP:**Natural
                      gas for distribution(a)
                  (a)
                  
                  
                  21
                  
                  
                  7Purchased
                      power(b)
                  100
                  
                  
                  81
                  
                  
                  21**EEI:**Coal
                  100
                  %
                  
                  96
                  %
                  
                  43
                  %Coal
                      transportation
                  100
                  
                  
                  100
                  
                  
                  -
  (a)
                  Represents
                      the percentage of natural gas price-hedged for the peak winter
                      season of
                      November through March. The year 2007 represents the period
                      January 2007
                      through
                    March
                      2007 and is therefore non-applicable for this report. The year
                      2008
                      represents November 2007 through March 2008. This continues
                      each
                      successive year through
                    March
                      2011.
 (b)
                  Represents
                      the percentage of purchased power price-hedged for fixed-price
                      residential
                      and small commercial customers with less than 1 megawatt of
                      demand as part
                      of the Illinois power procurement auction held in early September
                      2006. Excluded from the percent hedged amount is purchased power
                      for
                      fixed-price large commercial and industrial customers with
                      1 megawatt of
                      demand or higher. Nearly all of these customers chose a third-party
                      supplier. However, regardless of whether customers choose a
                      third-party
                      supplier, the purchased power needed to serve this load is
                      100%
                      price-hedged through May 31, 2008, due to the Illinois auction. Also
                      excluded from the percent hedged amount is purchased power
                      to serve large
                      service real-time pricing customers. See Note 2 - Rate and
                      Regulatory
                      Matters and Note 8 - Commitments and Contingencies to our financial
                      statements under Part I, Item 1, of this report for a discussion
                      of this
                      matter.
 
 The
            following table shows how our total fuel expense might increase and how
            our net
            income might decrease if coal and coal transportation costs were to increase
            by
            1% on any requirements not currently covered by fixed-price contracts
            for the
            five-year period 2007 through 2011:
 
 **Coal**
                  **Transportation****Fuel**
                    **Expense**
                  
                  
                  **Net**
                    **Income**(a)
                  
                  
                  **Fuel**
                    **Expense**
                  
                  
                  **Net**
                    **Income**(a)Ameren(b)
                  $
                  18
                  
                  $
                  (11)
                  
                  $
                  14
                  
                  $
                  (9)UE
                  
                  8
                  
                  
                  (5)
                  
                  
                  5
                  
                  
                  (3)Genco
                  
                  6
                  
                  
                  (4)
                  
                  
                  4
                  
                  
                  (3)CILCORP
                  
                  3
                  
                  
                  (2)
                  
                  
                  2
                  
                  
                  (1)CILCO
                      (AERG)
                  
                  3
                  
                  
                  (2)
                  
                  
                  2
                  
                  
                  (1)EEI
                  
                  2
                  
                  
                  (1)
                  
                  
                  3
                  
                  
                  (2)
  (a)
                  Calculations
                      are based on an effective tax rate of
                      38%.
 (b)
                  Includes
                      amounts for Ameren registrant and nonregistrant
                      subsidiaries.
  In
            the
            event of a significant change in coal prices, UE, Genco, AERG and EEI
            would
            probably take actions to further mitigate their exposure to this market
            risk.
            However, due to the uncertainty of the specific actions that would be
            taken and
            their possible effects, this sensitivity analysis assumes no change in
            our
            financial structure or fuel sources. As
            discussed in Note 2 - Rate and Regulatory Matters under Part I, Item
            1, of this
            report. UE is seeking approval of the MoPSC of a fuel and purchased power
            cost
            recovery mechanism in its pending electric rate case filed in July 2006,
            which
            if approved could mitigate the impact of increased fuel cost at Ameren
            and
            UE.
  See
            Note
            8 - Commitments and Contingencies to our financial statements under Part
            I, Item
            1, of this report for further information regarding the long-term commitments
            for the procurement of coal, natural gas and nuclear fuel.
  
 75
  **Fair
            Value of Contracts**
 
 Most
            of
            our commodity contracts qualify for treatment as normal purchases and
            sales. We
            use derivatives principally to manage the risk of changes in market prices
            for
            natural gas, fuel, electricity and emission credits. The following table
            presents the favorable (unfavorable) changes in the fair value of all
            derivative
            contracts marked-to-market during the quarter ended March 31, 2007. The
            sources
            used to determine the fair value of these contracts were active quotes,
            other
            external sources, and other modeling and valuation methods. All of these
            contracts have maturities of less than five years.
 
 **Ameren****(a)**
                  
                  
                  **UE**
                  
                  
                  **CIPS**
                  
                  
                  **Genco****(b)**
                  
                  
                  **CILCORP/**
                    **CILCO**
                  
                  
                  **IP**Fair
                      value of contracts at beginning of period, net
                  $
                  98
                  
                  $
                  12
                  
                  $
                  2
                  
                  $
                  (1
                  )
                  $
                  6
                  
                  $
                  2Contracts
                      realized or otherwise settled during the period
                  
                  (17
                  )
                  
                  (4
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (2
                  )
                  
                  -Changes
                      in fair values attributable to changes in valuation technique
                      and
                      assumptions
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Fair
                      value of new contracts entered into during the period
                  
                  (2
                  )
                  
                  (1
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Other
                      changes in fair value
                  
                  (48
                  )
                  
                  (7
                  )
                  
                  1
                  
                  
                  -
                  
                  
                  2
                  
                  
                  (2
                  )Fair
                      value of contracts outstanding at end of period, net
                  $
                  31
                  
                  $
                  -
                  
                  $
                  3
                  
                  $
                  (1
                  )
                  $
                  6
                  
                  $
                  -
  (a)
                  Includes
                      amounts for Ameren registrant and nonregistrant subsidiaries
                      and
                      intercompany eliminations.
 (b)
                  In
                      conjunction with the new power supply agreement between Marketing
                      Company
                      and Genco that went into affect January 1, 2007, the mark-to-market
                      value
                      of hedges entered into during 2006 for Genco was transferred
                      from Genco to
                      Marketing Company.
 
 The
            following table presents maturities of derivative contracts as of March
            31,
            2007:
 
 **Sources
                      of Fair Value**
                  
                  
                  **Maturity**
                    **Less than**
                    **1 Year**
                  **Maturity**
                    **1-3 Years**
                  **Maturity**
                    **4-5 Years**
                  
                  **Maturity in**
                    **Excess of**
                    **5 Years**
                  
                  **Total**
                    **Fair Value****Ameren:**Prices
                      actively quoted
                  
                  
                  5
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5Prices
                      provided by other external sources(a)
                  
                  
                  4
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  6Prices
                      based on models and other valuation methods(b)
                  
                  
                  18
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  20Total
                  
                  
                  27
                  
                  
                  4
                  
                  
                  -
                  
                  
                  -
                  
                  
                  31**UE:**Prices
                      actively quoted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      provided by other external sources(a)
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2Prices
                      based on models and other valuation methods(b)
                  
                  
                  (2
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (2
                  )Total
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -**CIPS:**Prices
                      actively quoted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      provided by other external sources(a)
                  
                  
                  3
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3Prices
                      based on models and other valuation methods(b)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                  
                  
                  3
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3**GENCO:**Prices
                      actively quoted
                  
                  
                  (1
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1
                  )Prices
                      provided by other external sources(a)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      based on models and other valuation methods(b)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                  
                  
                  (1
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1
                  )**CILCORP/CILCO:**Prices
                      actively quoted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      provided by other external sources(a)
                  
                  
                  4
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  6Prices
                      based on models and other valuation methods(b)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                  
                  
                  4
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  6**IP:**Prices
                      actively quoted
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      provided by other external sources(a)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Prices
                      based on models and other valuation methods(b)
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
  (a)
                  Principally
                      fixed price vs. floating over-the-counter power swaps, power
                      forwards and
                      fixed price vs. floating over-the-counter natural gas
                      swaps.
 (b)
                  Principally
                      coal and SO2option values based on a Black-Sholes model that includes information
                      from
                      external sources and our estimates. Also includes interruptible
                      power
                      forward and option contract values based on our
                      estimates.
 
  76
 **ITEM
            4. CONTROLS AND PROCEDURES.**
 
 (a)
                  Evaluation
                      of Disclosure Controls and
                      Procedures
 
 As
            of
            March 31, 2007, evaluations were performed, under the supervision and
            with the
            participation of management, including the principal executive officer
            and
            principal financial officer of each of the Ameren Companies, of the
            effectiveness of the design and operation of such registrant’s disclosure
            controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
            of the
            Exchange Act). Based upon those evaluations, the principal executive
            officer and
            principal financial officer of each of the Ameren Companies have concluded
            that
            such disclosure controls and procedures are effective to provide assurance
            that
            information required to be disclosed in such registrant’s reports filed or
            submitted under the Exchange Act is recorded, processed, summarized and
            reported
            within the time periods specified in the SEC’s rules and forms and such
            information is accumulated and communicated to its management, including
            its
            principal executive and principal financial officers, to allow timely
            decisions
            regarding required disclosure.
 
 (b)
                  Change
                      in Internal Controls
 
 There
            has
            been no change in the Ameren Companies’ internal control over financial
            reporting during their most recent fiscal quarter that has materially
            affected,
            or is reasonably likely to materially affect, their internal control
            over
            financial reporting.
 
 **PART
            II. OTHER INFORMATION**
 
 **ITEM
            1. LEGAL PROCEEDINGS.**
 
 We
            are
            involved in legal and administrative proceedings before various courts
            and
            agencies with respect to matters that arise in the ordinary course of
            business,
            some of which involve sub-stantial amounts of money. We believe that
            the final
            disposition of these proceedings, except as otherwise disclosed in this
            report,
            will not have a material adverse effect on our results of operations,
            financial
            position, or liquidity. Risk of loss is mitigated, in some cases, by
            insurance
            or contractual or statutory indemnification. We believe that we have
            established
            appropriate reserves for potential losses.
 
 For
            additional information on legal and administrative proceedings, see Note
            2 -
            Rate and Regulatory Matters, Note 7 - Related Party Transactions and
            Note 8 -
            Commitments and Contingencies to our financial statements under Part
            I, Item 1,
            and Item 1A, Risk Factors, below of this report.
  **ITEM
            1A. RISK FACTORS.**
 
 The
            Ameren Companies’ combined Annual Report on Form 10-K for the fiscal year ended
            December 31, 2006, includes a detailed discussion of our risk factors.
            The
            information presented below updates and should be read in conjunction
            with the
            risk factors and information disclosed in that Form 10-K.
 
 **The
            electric and gas rates that UE, CIPS, CILCO and IP are allowed to charge
            are
            currently the subject of rate case proceedings and potential legislative
            action.
            The outcome of these proceedings and of other potential legislative action
            or
            future rate proceedings is largely outside of our control. Should these
            events
            result in the inability of UE, CIPS, CILCO or IP to recover their respective
            costs and earn an appropriate return on investment, it could have a material
            adverse effect on our future results of operations, financial position
            or
            liquidity. In particular, we believe rolling back and freezing electric
            rates at
            2006 levels in Illinois would lead to the financial insolvency and bankruptcy
            of
            CIPS, CILCORP, CILCO and IP.**
  The
            rates
            that certain Ameren Companies are allowed to charge for their services
            are the
            single most important item influencing the results of operations, financial
            position, or liquidity of the Ameren Companies. The electric and gas
            utility
            industry is highly regulated. The regulation of the rates that we charge
            our
            customers is determined, in large part, by governmental entities outside
            of our
            control, including the MoPSC, the ICC, and FERC. Decisions made by these
            entities could have a material adverse effect on our results of operations,
            financial position, or liquidity.
  Increased
            costs and investments, when combined with rate reductions and moratoriums,
            have
            caused decreased returns in Ameren’s utility businesses. Ameren expects that
            many of its operating expenses will continue to rise. Ameren further
            expects to
            continue to make significant investment in its energy infrastructure.
            These are
            the two principal factors underlying the pending electric rate increase
            request
            with the MoPSC and the rate increase requests recently acted upon and
            pending
            rehearing with the ICC. We cannot predict the outcome of
 77
 these
              rate case proceedings or of potential Illinois legislative action to
              deny full
              recovery of costs. In addition, in response to competitive, economic,
              political,
              legislative and regulatory pressures, in connection with the resolution
              of our
              current rate case proceedings or otherwise, we may be subject to further
              rate
              moratoriums, rate refunds, limits on rate increases, or rate reductions,
              including phase-in plans. Any or all of these could have a material
              adverse
              effect on our results of operations, financial position, or
              liquidity.
 
 **Illinois**
 
 *Electric
            Delivery Service Rate Cases*
 
 A
            provision of the Illinois Customer Choice Law related to the restructuring
            of
            the Illinois electric industry put a rate freeze into effect through
            January 1, 2007, for CIPS, CILCO and IP. CIPS, CILCO and IP filed rate
            cases with the ICC in December 2005 to modify their electric delivery
            service
            rates effective January 2, 2007. CIPS, CILCO and IP requested to increase
            their
            annual revenues for electric delivery service by $202 million in the
            aggregate
            (CIPS - $14 million, CILCO - $43 million and IP - $145 million). In
            November 2006, the ICC issued an order that approved an aggregate revenue
            increase of $97 million effective January 2, 2007 (CIPS - an $8 million
            decrease, CILCO - a $21 million increase and IP - an $84 million increase)
            based
            on an allowed return on equity of 10%. In December 2006, the ICC granted
            the
            Ameren Illinois Utilities’ petition for rehearing of the November 2006 order on
            the recovery of certain administrative and general expenses, totaling
            $50
            million, that were disallowed. The administrative law judges issued a
            proposed
            order in April 2007 recommending no recovery of these expenses for CIPS,
            CILCO
            and IP. The ICC’s decision on the recovery of these expenses is due in May 2007.
            The ICC denied requests for rehearings filed by other parties in this
            case.
            Because of the ICC’s cost disallowances and regulatory lag, the Ameren Illinois
            Utilities are not expected to earn their allowed return on equity of
            10% in
            2007. Most customers were taking service under a frozen bundled electric
            rate in
            2006, which included the cost of power, so these delivery service revenue
            changes will not directly correspond to a change in CIPS’, CILCO’s or IP’s
            revenues or earnings under the new electric delivery service rates that
            became
            effective January 2, 2007.
 
 *Potential
            Electric Rate Rollback and Freeze, and Recovery of Post-2006 Power Supply
            Costs*
  Consistent
            with the Illinois Customer Choice Law that froze electric rates for CIPS,
            CILCO
            and IP through January 1, 2007, these companies entered into power supply
            contracts that expired on December 31, 2006. In January 2006, the ICC
            approved a
            framework for CIPS, CILCO and IP to procure power for use by their customers
            through an auction. It also approved the related tariffs to collect these
            costs
            from customers for the period commencing January 2, 2007. This approval
            is
            subject to pending court appeals. In accordance with the January 2006
            ICC order,
            a power procurement auction was held in September 2006.
  Subsequently,
            the ICC determined that it would not investigate the results of the auction
            to
            procure power for fixed-price customers, and the independent auction
            manager
            declared a successful result in the auction for these fixed-price customers,
            which include the vast majority of electric customers of CIPS, CILCO
            and IP.
            Various Illinois legislators, the Illinois attorney general, the Illinois
            governor, and other parties sought to block the power procurement auction.
            They
            continue to challenge the auction and the structure for the recovery
            of costs
            for power supply resulting from the auction through rates to customers.
  On
            April
            20, 2007, the Illinois Senate approved legislation, known as Senate Bill
            1592,
            that, if enacted into law, would reduce electric rates of CIPS, CILCO
            and IP to
            the rates which were in effect prior to January 2, 2007. As passed by
            the
            Illinois Senate, Senate Bill 1592 would not impact other Illinois utilities.
            Senate Bill 1592 provides that the cost of electric energy reflected
            in the
            Ameren Illinois Utilities’ electric rates in effect prior to January 2, 2007,
            cannot be changed for a period of at least one year after enactment into
            law.
            This would prevent the Ameren Illinois Utilities from recovering from
            retail
            customers substantial portions of the cost of electric energy the Ameren
            Illinois Utilities are purchasing under wholesale contracts entered into
            as a
            result of the September 2006 auction discussed above for at least one
            year after
            enactment into law, and would cause the Ameren Illinois Utilities to
            under
            recover their delivery service costs until the ICC could approve higher
            delivery
            service rates. Senate Bill 1592 also includes a requirement for refunds,
            with
            interest, of charges collected from customers since January 2, 2007,
            in excess
            of the pre-January 2, 2007 rates. If this requirement were enacted, CIPS,
            CILCO
            and IP would have to refund approximately $37 million, $21 million, and
            $49
            million, respectively, of such charges collected from customers during
            the three
            months ended March 31, 2007.  On March
            6,
            2007, the Illinois House of Representatives approved legislation that
            would
            apply to the Ameren Illinois Utilities and Commonwealth Edison Company
            and which
            provides for a three-year rate freeze and included a similar refund requirement.
            To become law in Illinois, legislation must be passed by the House of
            Representatives and Senate and signed by the Governor. The Governor has
            previously expressed support for rate rollback and freeze legislation.
            Despite
            passage by each of the Illinois House of Representatives and the Illinois
            Senate
            of similar rate
 78
 rollback
              and freeze legislation and statements by the Illinois Governor in support
              of
              rate rollback and freeze legislation, it is uncertain whether Senate
              Bill 1592,
              the House legislation or any rate rollback and freeze legislation will
              ultimately be enacted into law.
  Ameren,
            CIPS, CILCORP, CILCO and IP believe that any legislation reducing electric
            rates
            to pre-January 2, 2007, levels is unlawful and unconstitutional. In the
            event
            that such legislation is enacted into law, the Ameren Illinois Utilities
            intend
            to vigorously pursue all available legal actions and strategies to protect
            their
            legal and financial interests, including seeking immediate injunctive
            relief to
            prevent the implementation of such legislation. They believe that such
            actions
            will be successful in both enjoining the implementation of, and ultimately
            invalidating, such legislation.
  Even
            if
            efforts to promptly enjoin the implementation of legislation to reduce
            electric
            rates to pre-January 2, 2007 levels were successful, Ameren, CIPS, CILCORP,
            CILCO and IP believe that the mere enactment into law of such legislation
            would
            nonetheless result in material adverse consequences to CIPS, CILCORP,
            CILCO and
            IP until final resolution of any litigation challenging such legislation.
            These
            material adverse consequences would include a significant drop in credit
            ratings
            to deep junk (or speculative) status, requirements to post collateral
            or other
            assurances for certain obligations, a reduction in access to the capital
            markets
            on reasonable terms and higher borrowing costs. These material adverse
            consequences could also include higher power supply costs, an inability
            to make
            timely energy infrastructure investments, disruption in electric and
            gas service
            and significant job losses. Consequently, the Ameren Illinois Utilities
            anticipate that their results of operations, financial position and liquidity
            would be materially adversely affected. Ameren’s results of operations,
            financial position and liquidity could also be materially adversely
            affected.
  If
            legislation to reduce electric rates to pre-January 2, 2007 levels is
            enacted
            into law and the implementation of such legislation is not promptly enjoined,
            Ameren, CIPS, CILCORP, CILCO and IP believe that their results of operations,
            financial position, and liquidity would be materially adversely affected.
            These
            material adverse consequences would include a significant drop in credit
            ratings
            to deep junk (or speculative) status, a severe limitation on their ability
            to
            procure reasonable financing from third party lending sources, higher
            borrowing
            costs, higher power supply costs, an inability to make timely energy
            infrastructure investments, requirements to post collateral or other
            assurances
            for certain obligations, the likely disruption in electric and gas service,
            significant job losses, and ultimately the financial insolvency and bankruptcy
            of CIPS, CILCORP, CILCO and IP.
  Ameren,
            CIPS, CILCORP, CILCO and IP will continue to explore a number of legal
            and
            regulatory actions, strategies and alternatives to address these Illinois
            electric issues. CIPS, CILCORP, CILCO and IP expect to take whatever
            actions are
            necessary to protect their financial interests, including seeking the
            protection
            of the bankruptcy courts. However, there can be no assurance that Ameren
            and the
            Ameren Illinois Utilities will prevail over the stated opposition by
            various
            Illinois legislators, the Illinois attorney general, the Illinois governor,
            and
            other stakeholders, or that the legal and regulatory actions, strategies
            and
            alternatives that Ameren and the Ameren Illinois Utilities are considering
            will
            be successful.
  We
            are
            unable to predict the results of the court appeals of the January 2006
            ICC order
            approving CIPS’, CILCO’s and IP’s power procurement auction and the related
            tariffs, the results of the two class action lawsuits and the Illinois
            attorney
            general’s complaint filed with FERC alleging price manipulation in the September
            2006 auction, nor the actions the Illinois General Assembly and Governor
            may
            take that might affect electric rates or the power procurement process
            for CIPS,
            CILCO and IP. Any decision or action that impairs the ability of CIPS,
            CILCO and
            IP to fully recover purchased power or distribution costs from their
            electric
            customers in a timely manner would result in material adverse consequences
            to
            Ameren, CIPS, CILCORP, CILCO and IP. These consequences would include
            a
            significant drop in credit ratings to deep junk (or speculative) status,
            the
            inability to access the capital markets on reasonable terms, higher borrowing
            costs, higher power supply costs, an inability to make timely energy
            infrastructure investments, requirements to post collateral or other
            assurances
            for certain obligations, the likely disruption in electric and gas service,
            significant job losses, and the financial insolvency and bankruptcy of
            CIPS,
            CILCORP, CILCO and IP. In addition, Ameren, CILCORP and IP would need
            to assess
            whether they are required to record a charge for goodwill impairment
            for the
            goodwill that was recorded when Ameren acquired CILCORP and IP. Furthermore,
            if
            the Ameren Illinois Utilities are unable to recover their costs from
            customers,
            the utilities could be required to cease applying for the electric portions
            of
            their businesses SFAS No. 71, “Accounting for the Effects of Certain Types of
            Regulation,” which allows the Ameren Illinois Utilities to defer certain costs
            pursuant to actions of rate regulators and to recover such costs in rates
            charged to customers. This could result in the elimination of the Ameren
            Illinois Utilities’ regulatory assets and liabilities recorded on their,
            CILCORP’s and Ameren’s balance sheets and a one time extraordinary charge on
            their, CILCORP’s and Ameren’s statements of income that could be material.
            Ameren’s, CILCORP’s and IP’s assessment of any goodwill impairment and Ameren’s,
            CIPS’, CILCORP’s, CILCO’s and IP’s continued application of SFAS No. 71, for the
            electric portions of the Ameren
 79
 Illinois
              Utilities’ businesses, would include consideration of, among other things, their
              views on the ultimate success of their legal actions and strategies
              to enjoin
              the implementation of, and ultimately invalidate, any enacted rate
              freeze
              legislation.
 
 **Missouri**
  With
            the
            expiration of multiyear electric and gas rate moratoriums, effective
            July 1,
            2006, UE filed requests with the MoPSC in July 2006 for an electric rate
            increase of $361 million and for a natural gas delivery rate increase
            of $11
            million. In December 2006, the MoPSC staff and other stakeholders filed
            direct
            testimony in response to UE’s electric rate case filing. The MoPSC staff
            recommended in their testimony an electric rate reduction of $136 million
            to
            $168 million. Subsequently, parties in this rate case have settled certain
            issues. As a result, UE and the MoPSC staff revised their positions in
            testimony
            filed with the MoPSC in April 2007. UE’s revised position is an electric rate
            increase request of $245 million and the MoPSC staff’s revised position is an
            electric rate reduction request of $39 million to $75
            million. Other parties also filed testimony in the case. A decision from
            the
            MoPSC is expected no later than June 2007. In March 2007, a stipulation
            and
            agreement was approved by the MoPSC authorizing an increase in annual
            natural
            gas delivery revenues of $6 million, effective April 1, 2007. As part
            of this
            stipulation and agreement, UE agreed to not file a natural gas delivery
            rate
            case before March 15, 2010. This agreement does not prevent UE from filing
            to
            recover infrastructure costs through a statutory infrastructure system
            replacement surcharge (ISRS) during this three-year rate moratorium.
            The return
            on equity to be used by UE for purposes of any future ISRS tariff filing
            is
            10.0%. Any change in electric or gas rates may not directly correspond
            to a
            change in UE’s earnings.
 
 UE
            does
            not currently have a rate-adjustment clause for its electric operations
            in
            Missouri that would allow it to recover from customers the costs for
            purchased
            power, fuel, or infrastructure investment. Therefore, insofar as UE has not
            hedged its fuel and power costs, UE is exposed to changes in fuel and
            power
            prices to the extent they exceed the costs embedded in current electric
            rates.
            In its Missouri electric rate case filed in July 2006, UE requested a
            fuel and
            purchased power cost recovery mechanism that would be subject to MoPSC
            approval.
            The MoPSC staff and intervenors in the electric rate case have recommended
            that
            UE not be granted the right to use such a mechanism. UE also requested
            an
            environmental cost-recovery mechanism as part of its pending Missouri
            electric
            rate case, but no rules have been established for such a mechanism. Any
            new
            energy infrastructure investment could result in increased financing
            requirements for UE, which could increase further depending on rate case
            outcomes. The lack of timely recovery of these costs could have a material
            adverse effect on UE’s results of operations, financial position, or liquidity.
            We are unable to predict whether the MoPSC will approve our request for
            a fuel
            and purchased power cost recovery mechanism in our pending electric rate
            case.
            We also are unable to predict when rules implementing the environmental
            cost
            recovery mechanism will be formally proposed and adopted.
  **Our
            businesses are dependent on our ability to access the capital markets
            successfully. We may not have access to sufficient capital in the amounts
            and at
            the times needed.**
  We
            use
            short-term and long-term capital markets as a significant source of liquidity
            and funding for capital requirements not satisfied by our operating cash
            flow,
            including those related to future environmental compliance. The inability
            to
            raise capital on favorable terms, particularly during times of uncertainty
            in
            the capital markets, could negatively affect our ability to maintain
            and to
            expand our businesses. Our current credit ratings cause us to believe
            that we
            will continue to have access to the capital markets. However, events
            beyond our
            control may create uncertainty that could increase our cost of capital
            or impair
            our ability to access the capital markets. See the Credit Ratings section
            in
            Liquidity and Capital Resources in Management’s Discussion and Analysis of
            Financial Condition and Results of Operations under Part I, Item 2, of
            this
            report for a discussion of credit rating changes in response to actions
            in
            Illinois with respect to legislation to rollback and freeze rates at
            2006
            levels.
 
 
 80
 **ITEM
            2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
            PROCEEDS.**
 
 The
            following table presents Ameren Corporation’s purchases of equity securities
            reportable under Item 703 of Regulation S-K:
 
 **Period**
                  **(a)
                      Total Number**
                    **of
                      Shares**
                    **(or
                      Units)**
                    **Purchased****(a)**
                  
                  
                  **(b)
                      Average Price**
                    **Paid
                      per Share**
                    **(or
                      Unit)**
                  
                  
                  **(c)
                      Total Number of Shares**
                    **(or
                      Units) Purchased as Part**
                    **of
                      Publicly Announced Plans**
                    **or
                      Programs**
                  
                  
                  **(d)
                      Maximum Number (or Approximate Dollar Value) of Shares (or
                      Units) that May
                      Yet Be Purchased Under the Plans or Programs**January
                      1 - January 31, 2007
                  13,000
                  
                  $
                  54.15
                  
                  
                  -
                  
                  
                  -February
                      1 - February 28, 2007
                  3,000
                  
                  
                  54.15
                  
                  
                  -
                  
                  
                  -March
                      1 - March 31, 2007
                  29,108
                  
                  
                  52.33
                  
                  
                  -
                  
                  
                  -Total
                  45,108
                  
                  $
                  52.97
                  
                  
                  -
                  
                  
                  -
  (a)
                  Included
                      in January were 12,000 shares of Ameren common stock purchased
                      by Ameren
                      in open-market transactions pursuant to Ameren’s 2006 Omnibus Incentive
                      Compensation Plan in satisfaction of Ameren’s obligations for director
                      compensation awards. Included in March were 29,108 shares of
                      Ameren common
                      stock purchased by Ameren from employee participants to satisfy
                      participants’ tax obligations incurred by the release of restricted shares
                      of Ameren common stock under Ameren’s Long-term Incentive Plan of 1998.
                      The remaining shares of Ameren common stock were purchased
                      by Ameren in
                      open-market transactions in satisfaction of Ameren’s obligation upon the
                      exercise by employees of options issued under Ameren’s Long-term Incentive
                      Plan of 1998. Ameren does not have any publicly announced equity
                      securities repurchase plans or
                      programs.
  None
            of
            the other registrants purchased equity securities reportable under Item
            703 of
            Regulation S-K during the January 1 to March 31, 2007 period.
 
 **ITEM
            6. EXHIBITS.**
  (a)  Exhibits. The documents listed below are being filed on behalf of Ameren,
            UE,
            CIPS, Genco, CILCORP, CILCO and IP as indicated.
  **Exhibit
                        Designation**
                    **Registrant(s)**
                    **Nature
                        of Exhibit****Material
                        Contracts**10.1
                    Ameren
                        Companies
                    *Amended
                        and Restated Ameren Corporation Change of Control Severance
                        Plan (filed to
                        correct and replace in its entirety due to an administrative
                        error the
                        Amended and Restated Ameren Corporation Change of Control
                        Severance Plan
                        previously filed as Exhibit 10.5 to the Ameren Companies’ Current Report
                        on Form 8-K dated February 16, 2006 and to update Schedule
                        I
                        thereto).10.2
                    Ameren
                        Companies
                    *2007
                        Base Salary Table for Named Executive Officers**Statement
                        re: Computation of Ratios**12.1
                    Ameren
                    Ameren’s
                        Statement of Computation of Ratio of Earnings to Fixed Charges12.2
                    UE
                    UE’s
                        Statement of Computation of Ratio of Earnings to Fixed Charges
                        and
                        Combined Fixed Charges and Preferred Stock Dividend
                        Requirements12.3
                    CIPS
                    CIPS’
                        Statement of Computation of Ratio of Earnings to Fixed Charges
                        and
                        Combined Fixed Charges and Preferred Stock Dividend
                        Requirements12.4
                    Genco
                    Genco’s
                        Statement of Computation of Ratio of Earnings to Fixed
                        Charges12.5
                    CILCORP
                    CILCORP’s
                        Statement of Computation of Ratio of Earnings to Fixed
                        Charges12.6
                    CILCO
                    CILCO’s
                        Statement of Computation of Ratio of Earnings to Fixed Charges
                        and
                        Combined Fixed Charges and Preferred Stock Dividend
                        Requirements12.7
                    IP
                    IP’s
                        Statement of Computation of Ratio of Earnings to Fixed Charges
                        and
                        Combined Fixed Charges and Preferred Stock Dividend
                        Requirements**Rule
                        13a-14(a) / 15d-14(a) Certifications**31.1
                    Ameren
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of Ameren31.2
                    Ameren
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        Ameren31.3
                    UE
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        UE31.4
                    UE
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        UE31.5
                    CIPS
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        CIPS31.6
                    CIPS
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        CIPS31.7
                    Genco
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        Genco
    81
  **Exhibit
                        Designation**
                    **Registrant(s)**
                    **Nature
                        of Exhibit**31.8
                    Genco
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        Genco31.9
                    CILCORP
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        CILCORP31.10
                    CILCORP
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        CILCORP31.11
                    CILCO
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        CILCO31.12
                    CILCO
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        CILCO31.13
                    IP
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Executive
                        Officer of
                        IP31.14
                    IP
                    Rule
                        13a-14(a)/15d-14(a) Certification of Principal Financial
                        Officer of
                        IP**Section
                        1350 Certifications**32.1
                    Ameren
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of Ameren32.2
                    UE
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of UE32.3
                    CIPS
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of CIPS32.4
                    Genco
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of Genco32.5
                    CILCORP
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of CILCORP32.6
                    CILCO
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of CILCO32.7
                    IP
                    Section
                        1350 Certification of Principal Executive Officer and Principal
                        Financial
                        Officer of IP**Additional
                        Exhibits**99.1**
                    Ameren
                    Press
                        release regarding earnings for the quarter ended March 31,
                        2007, issued on
                        May 10, 2007 by Ameren Corporation
 *
                  Management
                      compensatory plan or arrangement.
 **
                  This
                      exhibit has been furnished and shall not be deemed “filed” for purposes of
                      Section 18 of the Exchange Act or otherwise subject to the
                      liabilities
                      under that Section and shall not be deemed to be incorporated
                      by reference
                      into any filing under the Securities Act of 1933 or the Exchange
                      Act.
 
 
 
 82
 
 **SIGNATURES**
 
 Pursuant
            to the requirements of the Exchange Act, each registrant has duly caused
            this
            report to be signed on its behalf by the undersigned thereunto duly authorized.
            The signature for each undersigned company shall be deemed to relate
            only to
            matters having reference to such company or its subsidiaries.
  
 AMEREN
            CORPORATION
 (Registrant)
  /s/
            Martin J. Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller   ****
 (Principal
            Accounting Officer)
 
 
  
 UNION
            ELECTRIC COMPANY
 (Registrant)
 
 /s/ Martin J.
            Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller
 (Principal
            Accounting Officer)
 
 
 
 
 CENTRAL
            ILLINOIS PUBLIC SERVICE COMPANY
 (Registrant)
 
 /s/ Martin J.
            Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller   ****
 (Principal
            Accounting Officer)
 
 
 
 AMEREN
            ENERGY GENERATING COMPANY
 (Registrant)
  /s/ Martin J. Lyons
 Martin
            J.
            Lyons
 Vice
            President and Controller
 (Principal
            Accounting Officer)
 
 
 
 83
 
 
 
 CILCORP INC .
 (Registrant)
  /s/ Martin J.
            Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller
 (Principal
            Accounting Officer)
 
 
 
 
 CENTRAL
            ILLINOIS LIGHT COMPANY
 (Registrant)
 
 /s/ Martin J.
            Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller
 (Principal
            Accounting Officer)
 
 
 
 
 ILLINOIS
            POWER COMPANY
 (Registrant)
 
 /s/ Martin J.
            Lyons
 Martin
            J.
            Lyons
 ** Vice
            President and Controller
 (Principal
            Accounting Officer)
 
 
 
 Date:
            May
            10, 2007
 84