UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-K
                (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                                       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 1-3672

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
             (Exact name of registrant as specified in its charter)
                    Illinois                                         37-0211380
(State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation or organization)

               607 East Adams Street, Springfield, Illinois 62739
              (Address of principal executive offices and Zip Code)
       Registrant's telephone number, including area code: (217) 523-3600

        Securities Registered Pursuant to Section 12(b) of the Act: None.

           Securities Registered Pursuant to Section 12(g) of the Act:
                                 Title Of Class

                    Cumulative Preferred Stock, par value $100 per share

                    Depositary Shares,  each representing  one-fourth of a share
                      of 6.625%  Cumulative  Preferred Stock, par value $100 per
                      share

        Indicate by check mark whether the  registrant (1) has 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) has been subject to such
filing requirements for the past 90 days.
Yes  X .   No    .

        Indicate by check mark if disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. (X).

        Aggregate  market  value of voting  stock held by  non-affiliates  as of
March 8, 2001  determined by trader derived  valuations  based on current market
conditions on a spread basis (excluding Preferred Stock for which prices are not
publicly available): $19,156,000.

        Shares of Common  Stock  without par value,  outstanding  as of March 8,
2001: 25,452,373 shares (all owned by Ameren Corporation).

                      Documents incorporated by references.

        Portions of the  registrant's  definitive  proxy  statement for the 2001
annual meeting are incorporated by reference into Part III.

<PAGE>


                                TABLE OF CONTENTS

PART I                                                                     Page

Item   1    -  Business
                    General...............................................   1
                    Capital Program and Financing.........................   2
                    Rates.................................................   3
                    Regulation............................................   3
                    Industry Issues.......................................   4
Item   2    -  Properties.................................................   4
Item   3    -  Legal Proceedings..........................................   5
Item   4    -  Submission of Matters to a Vote of Security Holders<F1>

Executive Officers of the Registrant (Item 401(b) of Regulation S-K)......   6

PART II

Item   5    -  Market for Registrant's Common Equity and Related
                    Stockholder Matters...................................   6
Item   6    -  Selected Financial Data....................................   7
Item   7    -  Management's Discussion and Analysis of Financial Condition
                    and Results of Operations.............................   7
Item   7A   -  Quantitative and Qualitative Disclosures about Market Risk.  16
Item   8    -  Financial Statements and Supplementary Data................  18
Item   9    -  Changes in and Disagreements with Accountants on Accounting
                    and Financial Disclosure<F1>

PART III

Item 10     -  Directors and Executive Officers of the Registrant<F2>.....  35
Item 11     -  Executive Compensation<F2>.................................  35
Item 12     -  Security Ownership of Certain Beneficial Owners
                    and Management<F2>....................................  35
Item 13     -  Certain Relationships and Related Transactions<F2>.........  35

PART IV

Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K   36

SIGNATURES     ...........................................................  38
EXHIBITS       ...........................................................  39

[FN]
<F1> Not applicable and not included herein.
<F2> Incorporated by reference.
</FN>



<PAGE>





                                     PART I

ITEM    1.    BUSINESS.

                                     GENERAL

               Central  Illinois  Public  Service  Company  (AmerenCIPS  or  the
Registrant) is a subsidiary of Ameren  Corporation  (Ameren),  a holding company
which is registered  under the Public  Utility  Holding  Company Act of 1935. On
December 31, 1997,  CIPSCO  Incorporated  (CIPSCO)  and Union  Electric  Company
(AmerenUE)  combined with the result that the common  shareholders of CIPSCO and
AmerenUE became the common  shareholders of Ameren,  and Ameren became the owner
of 100% of the common stock of AmerenUE and CIPSCO's operating subsidiaries, the
Registrant and CIPSCO Investment Company (the Merger).  Since the Merger, Ameren
has  formed a number  of other  subsidiaries  including  AmerenEnergy  Resources
Company (Resources Company) which is a holding company for Ameren's nonregulated
electric  generation,  related  marketing and fuel  procurement  businesses  and
Ameren  Services   Company  which  provides  shared  support   services  to  the
Registrant.   For   additional   information   on  the   Registrant's   business
organization,  see Note 1 to the "Notes to  Financial  Statements"  under Item 8
herein.

               The Registrant,  an Illinois corporation,  was organized in 1902.
AmerenCIPS  is a  public  utility  operating  company  engaged  in the  sale  of
electricity  and natural gas in portions of central and southern  Illinois.  The
Registrant  furnishes  electric service in 557  incorporated and  unincorporated
communities and adjacent suburban and rural areas. The Registrant also furnishes
natural gas service to retail customers in 267  incorporated and  unincorporated
communities  and  adjacent  suburban  and rural areas  located in 41 counties of
central and southern Illinois. The Registrant supplies electric service to about
325,000 customers and natural gas service to about 175,000 customers.

               The  AmerenCIPS  service  territory is  predominantly  made up of
small towns and rural areas. The territory served by the Registrant,  located in
66 counties in Illinois,  has an estimated  population of 820,000 and is devoted
principally to agriculture and diversified industrial operations. Key industries
include  petroleum  and  petrochemical   industries,   food  processing,   metal
fabrication and coal mining.

               In conjunction with the Illinois Electric Service Customer Choice
and Rate  Relief  Law of 1997,  on May 1,  2000,  following  the  receipt of all
required state and federal regulatory approvals,  the Registrant transferred all
of its electric  generating  assets and related  liabilities,  at historical net
book value, to a newly created nonregulated  affiliate,  AmerenEnergy Generating
Company (Generating  Company), a subsidiary of Resources Company (the Transfer).
The Transfer was made in exchange for a subordinated  promissory from Generating
Company  in the  principal  amount of $552  million  and  shares  of  Generating
Company's  common  stock.  The assets  transferred  by  AmerenCIPS  included the
generating  facilities located in Newton,  Coffeen,  Meredosia,  Grand Tower and
Hutsonville,  Illinois as described under Item 2 herein along with related fuel,
supply,  transportation,  maintenance  and labor  agreements  and other  rights,
assets  and  liabilities  related  to  the  generation  of  electricity  by  the
Registrant.  Seven  hundred and fifty  employees,  or  approximately  45% of the
Registrant's  workforce were also  transferred to Generating  Company as part of
the Transfer.  As a result of the Transfer,  from May 1, 2000, the  Registrant's
business  is  exclusively  traditional  utility  transmission  and  distribution
operations.  For  additional  information  on the Transfer  including  the power
supply  arrangement  the  Registrant has entered into to meet its public utility
obligations,   see  "Overview"   and  "Electric   Industry   Restructuring"   in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  under Item 7 herein and Notes 1, 2 and 3 to the "Notes to Financial
Statements" under Item 8 herein.

               For the year 2000,  80% of total  operating  revenues was derived
from the sale of electric energy and 20% from the sale of natural gas.  Electric
operating  revenues as a percentage of total operating revenues in both 1999 and
1998 were 85%.

                                      -1-

<PAGE>


               The  Registrant  employed 905 persons at December  31, 2000.  For
information  on labor  agreements  and other labor  matters,  see Note 11 to the
"Notes to Financial Statements" under Item 8 herein.

               For additional  information  regarding the Registrant's  business
operations, see "Management's Discussion and Analysis of Financial Condition and
Results  of  Operations"  under  Item 7 herein  and  "Financial  Statements  and
Supplementary Data" under Item 8 herein.


                          CAPITAL PROGRAM AND FINANCING

               For information on the  Registrant's  capital  program,  external
cash sources and intercompany borrowings,  see "Liquidity and Capital Resources"
in "Management's  Discussion and Analysis of Financial  Condition and Results of
Operations"  under  Item 7  herein  and  Notes 3, 7, 8 and 11 to the  "Notes  to
Financial Statements" under Item 8 herein.

               Financing Restrictions.  The Mortgage Indenture of AmerenCIPS, as
presently operative,  permits the issuance of additional first mortgage bonds up
to 60% of available net  expenditures for bondable  property,  provided the "net
earnings" of  AmerenCIPS  (before  income taxes and otherwise as provided in the
Mortgage Indenture) for a recent 12-month period equal at least twice the annual
interest  requirements  on all  first  mortgage  bonds  outstanding  (and on all
equally secured and prior lien indebtedness) and on the bonds then to be issued.
As a result of the transfer of all of AmerenCIPS' electric generating assets and
liabilities to Generating  Company,  the more restrictive of these requirements,
at December 31, 2000,  was the  limitation on the issuance of  additional  first
mortgage bonds to the extent of 60% of available net  expenditures  for bondable
property.  At December 31, 2000, the 60% limitation would permit the issuance of
approximately  $84 million of additional  first  mortgage  bonds on the basis of
available net expenditures  for bondable  property.  In addition,  the amount of
retired  first  mortgage  bonds would  permit the  issuance  of $100  million of
additional  first  mortgage  bonds as of March 15, 2001.  The "net  earnings" of
AmerenCIPS  for the year ended  December 31, 2000,  were equal to 7.08 times the
interest for one year on the  aggregate  amount of bonds  outstanding  under the
Mortgage Indenture at December 31, 2000.

               The Articles of Incorporation of AmerenCIPS  provide,  in effect,
that so long as any AmerenCIPS preferred stock is outstanding,  AmerenCIPS shall
not,  without the requisite vote of the holders of preferred  stock,  unless the
retirement  of such stock is  provided  for,  (a) issue any  preferred  or equal
ranking  stock  (except to retire or in exchange  for an equal  amount  thereof)
unless the "gross income  available  for  interest" of  AmerenCIPS  for a recent
12-month  period is at least one and one-half  (1-1/2)  times the sum of (i) one
year's  interest on all funded debt and notes maturing more than 12 months after
the date of issuance of such shares and (ii) one year's dividend  requirement on
all preferred  stock to be outstanding  after such issue, or (b) issue or assume
any  unsecured  debt  securities  maturing  less than two years from the date of
issuance or assumption (except for certain refunding or retirement  purposes) if
immediately  after such  issuance  or  assumption  the total  amount of all such
unsecured  debt  securities  would  exceed  20% of the sum of all  secured  debt
securities  and the  capital  and  surplus  of  AmerenCIPS.  For the year  ended
December 31, 2000,  the "gross  income  available  for  interest" of  AmerenCIPS
equalled  3.16  times  the  sum of the  annual  interest  charges  and  dividend
requirements on all such funded debt,  notes and preferred stock  outstanding at
December 31, 2000.  Such "gross income  available  for interest" was  sufficient
under the test to support the issuance of additional  preferred  stock (assuming
an annual dividend rate on such preferred stock of 7.25%) in an amount in excess
of the maximum amount ($185 million) of authorized and unissued  preferred stock
under the Articles of Incorporation.

                                      -2-



<PAGE>


                                      RATES

               For the year 2000, approximately 81% of the Registrant's electric
operating  revenues  were  based on rates  regulated  by the  Illinois  Commerce
Commission  (ICC)  and 19%  were  regulated  by the  Federal  Energy  Regulatory
Commission  (FERC) of the U. S.  Department  of  Energy.  The  Registrant's  gas
operating  revenues for the year 2000 were based on rates regulated  exclusively
by the ICC. For information on rate matters in these jurisdictions, see "Results
of Operations" and "Electric Industry Restructuring" in "Management's Discussion
and  Analysis of Financial  Condition  and Results of  Operations"  under Item 7
herein and Note 2 to the "Notes to Financial Statements" under Item 8 herein.


                                   REGULATION

               General  Matters.  The Registrant is subject to regulation by the
Securities  and Exchange  Commission  (SEC) and, as a subsidiary  of Ameren,  is
subject to the provisions of the Public Utility Holding Company Act of 1935. The
Registrant is subject to regulation by the ICC as to rates,  service,  accounts,
issuance of equity  securities,  issuance of debt having a maturity of more than
twelve  months,  mergers,  and various  other  matters.  The  Registrant is also
subject to regulation by the FERC as to rates and charges in connection with the
transmission  of electric  energy in  interstate  commerce  and the sale of such
energy at wholesale in interstate commerce,  mergers, and certain other matters.
Authorization  to issue  debt  having a  maturity  of  twelve  months or less is
obtained from the SEC.

               For  information  on regulatory  matters in these  jurisdictions,
including the current status of electric utility restructuring in Illinois,  see
"Liquidity  and Capital  Resources"  and "Electric  Industry  Restructuring"  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  under  Item  7  herein  and  Note  2 to  the  "Notes  to  Financial
Statements" under Item 8 herein.

               Environmental   Matters.  The  Registrant,   in  certain  of  its
operations,  is subject to federal,  state and local  environmental  regulations
relating to the safety and health of personnel,  the public and the environment.
Failure to comply with those statutes or regulations could have material adverse
effects  on the  Registrant,  including  the  imposition  of  criminal  or civil
liability  by  regulatory  agencies  or civil  fines and  liability  to  private
parties,  and the required  expenditure  of funds to bring the  Registrant  into
compliance.  The Registrant is in material compliance with existing regulations.
In  connection  with the  Transfer,  the  Registrant  has  agreed  to  indemnify
Generating  Company  for  environmental   claims  relating  to  the  transferred
generating facilities for events or occurrences arising prior to May 1, 2000.

               On December 22, 1995, a complaint  was filed in the Circuit Court
for  the  Seventh  Judicial  Circuit,  Sangamon  County,  Illinois  against  the
Registrant  and several  other  defendants.  The  complaint  sought  unspecified
monetary  damages and  alleged  that,  as a result of  exposure  to  carcinogens
contained in coal tar at the AmerenCIPS Taylorville manufactured gas plant site,
plaintiffs'  children had suffered from a rare form of childhood cancer known as
"neuroblastoma". In 1998, a jury awarded plaintiffs $3.2 million. In March 2000,
the Illinois Appellate Court, on an appeal by AmerenCIPS, upheld the plaintiffs'
verdict.  In October 2000, the Illinois  Supreme Court granted the  Registrant's
request  to review the  Illinois  Appellate  Court's  decision.  The  Registrant
believes that final  disposition of this matter will not have a material adverse
effect on its financial position, results of operations or liquidity.

               On  August  24,  2000,  Steven  and  Tina  Brannon  sued  Ameren,
AmerenCIPS  and  Generating  Company in the Circuit  Court of Christian  County,
Illinois.  The suit alleges  that  AmerenCIPS  and others were  negligent in the
manner in which  AmerenCIPS'  manufactured  gas  plant  site was  remediated  in
Taylorville, Illinois, therefore, wrongfully causing the death of their son. The
Brannon's son was born in 1992,  diagnosed with  neuroblastoma in 1996, and died
in  1998.  The  remediation  occurred  in  1987.   Plaintiffs  seek  unspecified
compensatory  damages in excess of $50,000.  The  Registrant  believes  that the
final  resolution of this lawsuit will not have a material adverse effect on its
financial position, results of operations or liquidity.

                                      -3-

<PAGE>

               On  August  2,  1996,  the  Illinois  Attorney  General  filed  a
complaint with the Illinois  Pollution Control Board alleging various violations
of  wastewater  discharge  permit  conditions  and  ground  water  standards  at
AmerenCIPS' (now Generating Company's)  Hutsonville Power Station. The complaint
sought monetary penalties and the award of attorney fees. In accordance with the
terms of a  settlement  agreement  with the  Illinois  Environmental  Protection
Agency and the Illinois Attorney General,  Generating  Company has constructed a
new lined fly ash basin at the  Hutsonville  Power  Station and intends to close
the existing  unlined basin.  The proposed  settlement has been presented to the
Board for approval.  The Registrant  believes that the final  resolution of this
matter  will not have a  material  adverse  effect  on its  financial  position,
results of operations or liquidity.

               See Note 11 to the "Notes to Financial  Statements"  under Item 8
herein for a further discussion of environmental matters.


                                 INDUSTRY ISSUES

               The  Registrant  is facing  issues common to the electric and gas
utility  industries  which have  emerged  during the past several  years.  These
issues include:  the potential for more intense competition and for changing the
structure of regulation; changes in the structure of the industry as a result of
changes in federal  and state  laws,  including  the  formation  of  unregulated
generating  entities;  on-going  consideration  of  additional  changes  of  the
industry by federal and state authorities;  continually developing environmental
laws, regulations and issues; public concern about the siting of new facilities;
proposals for demand side management  programs;  and global climate issues.  The
Registrant is monitoring these issues and is unable to predict at this time what
impact, if any, these issues will have on its operations,  financial  condition,
or liquidity.

               For  additional  information  on  certain  of these  issues,  see
"Electric  Industry  Restructuring"  in Management's  Discussion and Analysis of
Financial  Condition and Results of Operations"  under Item 7 herein and Notes 2
and 11 to the "Notes to Financial Statements" under Item 8 herein.

ITEM    2.    PROPERTIES.

               For  information  on  the  Registrant's   construction   program,
electric  transmission  assets,  the Transfer and the proposed AmerenUE Illinois
property transfer,  see "General" under Item 1 herein,  "Results of Operations",
"Liquidity  and Capital  Resources"  and "Electric  Industry  Restructuring"  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  under Item 7 herein  and Notes 2 and 11 to the "Notes to  Financial
Statements" under Item 8 herein.

               The Registrant owns 20% of the capital stock of Electric  Energy,
Inc. (EEI), and its affiliate,  AmerenUE, owns 40% of such stock. The balance is
held by two other sponsoring  companies -- Kentucky Utilities Company and Dynegy
Midwest  Generation,  Inc.  EEI owns and/or  operates  electric  generating  and
transmission  facilities in Illinois that supply  electric power  primarily to a
uranium enrichment plant located in Paducah, Kentucky.

               As of December 31, 2000, the Registrant owned approximately 1,900
circuit miles of electric  transmission  lines.  The Registrant also owned 4,800
miles of natural gas transmission and distribution  mains,  four underground gas
storage  fields and one  propane-air  gas plant used to supplement the available
pipeline supply of natural gas during periods of abnormally high demands.  Other
properties of the Registrant  include  distribution  lines,  underground  cable,
office buildings, warehouses, garages and repair shops.

               Substantially  all of  AmerenCIPS'  property  is  subject  to the
direct first lien of an Indenture of Mortgage or Deed of Trust dated  October 1,
1941, as amended and supplemented.

                                      -4-

<PAGE>

               The following  table sets forth  information  with respect to the
Registrant's electric generating facilities which were transferred to Generating
Company on May 1, 2000. As a part of the Transfer, these facilities and the real
property  on which they are  located  were  released  from the above  referenced
mortgage lien.

 Energy                                                          Rated Capacity
 Source           Plant                    Location             (net Megawatts)
 ------           -----                    --------             ---------------
 Coal         Newton                   Newton, IL                    1,110
              Coffeen                  Coffeen, IL                     900
              Grand Tower*             Grand Tower, IL                 190
              Hutsonville
                (Units 3 & 4)          Hutsonville, IL                 153
              Meredosia
                (Units 1, 2 & 3)       Meredosia, IL                   339
                                                                   -------
                                       Total Coal                    2,692
 Oil          Meredosia
                (Unit 4)               Meredosia, IL                   168
              Hutsonville
                (Diesel)               Hutsonville, IL                   3
                                                                 ---------
                                       Total Oil                       171
                                                                   -------

                                              TOTAL                  2,863
                                                                    ======

             * The Grand Tower Plant is being repowered with two
               gas-fired combustion turbine generating units.


ITEM     3.   LEGAL PROCEEDINGS.

               The   Registrant   is  involved   in  legal  and   administrative
proceedings  before various courts and agencies with respect to matters  arising
in the ordinary course of business,  some of which involve substantial  amounts.
Management  believes that the final  disposition of these  proceedings  will not
have a material adverse effect on its financial position,  results of operations
or liquidity.

               For   additional   information   on  legal   and   administrative
proceedings,  see  "Regulation  -  Environmental  Matters"  under Item 1 herein,
"Liquidity  and Capital  Resources"  and "Electric  Industry  Restructuring"  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  under Item 7 herein,  and Notes 2 and 11 to the "Notes to Financial
Statements" under Item 8 herein.

                 ------------------------------------------


               Statements  made in this report which are not based on historical
facts, are "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,  the  Registrant  is
providing this  cautionary  statement to identify  important  factors that could
cause actual results to differ materially from those anticipated.  The following
factors,  in  addition  to  those  discussed  elsewhere  in this  report  and in
subsequent  securities  filings,  could cause results to differ  materially from
management expectations as suggested by such "forward-looking"  statements:  the
effects of regulatory actions,  including changes in regulatory policy;  changes
in laws and other governmental  actions; the impact on the Registrant of current

                                      -5-

<PAGE>


regulations  related to the phasing-in of the  opportunity for some customers to
choose  alternative  energy  suppliers  in  Illinois;  the effects of  increased
competition  in the future due to, among other things,  deregulation  of certain
aspects of the Registrant's  business at both the state and federal levels;  the
effects of withdrawal  from the Midwest ISO and  membership in the Alliance RTO;
future market prices for purchased  power and natural gas,  including the use of
financial  instruments;  average rates for electricity in the Midwest;  business
and economic  conditions;  interest  rates;  weather  conditions;  the impact of
current  environmental  regulations on utilities;  monetary and fiscal policies;
future  wages  and  employee  benefits  costs;  and  legal  and   administrative
proceedings.

INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF
REGULATION S-K:

                   Age At                                    Date First Elected
         Name     12/31/00    Present Position                    or Appointed
         ----     --------    ----------------                    -------------

G. L. Rainwater       54      President, Chief Executive Officer       1/1/98
                              and Director                            12/2/97
T. R. Voss            53      Senior Vice President                    6/1/99
W. L. Baxter          39      Vice President,                         4/22/99
                              Controller and                         12/31/97
                              Director                                4/22/99
M. J. Montana         54      Vice President                          4/28/98
G. W. Moorman         57      Vice President                           6/1/88
C. D. Nelson          47      Vice President                          4/28/98
S. R. Sullivan        40      Vice President, General Counsel
                              and Secretary                           11/7/98
J. E. Birdsong        46      Treasurer                              12/31/97

All  officers  are  elected  or  appointed  annually  by the Board of  Directors
following the election of such Board at the annual meeting of stockholders  held
in April.  Except for Mr. Sullivan,  each of the above-named  executive officers
has been  employed by the  Registrant  for more than five years in  executive or
management  positions.  Mr.  Sullivan was previously  employed by Anheuser Busch
Companies, Inc.

                                     PART II

ITEM  5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

               There is no market for the  Registrant's  Common  Stock since all
shares are owned by its parent, Ameren.

                                      -6-




<PAGE>


ITEM    6.    SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>


For the Years Ended
December 31 (In Thousands)                   2000          1999           1998           1997           1996
--------------------------                   ----          ----           ----           ----           ----
<S>                                      <C>            <C>            <C>           <C>            <C>
Operating revenues                       $  893,898     $  928,122     $  847,424    $  852,075     $  881,102
Operating income                             91,813         94,715        120,044       102,495        116,531
Net income                                   79,362         53,980         80,147        38,620         77,393
Preferred stock dividends                     3,882          3,833          3,745         3,715          3,721
Net income after preferred
  stock dividends                            75,480         50,147         76,402        34,905         73,672
Common stock dividends                       54,614         90,342         72,285        43,300         62,950

As of December 31,

Total assets                             $1,867,141     $1,781,754     $1,764,397    $1,788,707     $1,795,353
Long-term debt                              463,174        493,625        528,446       558,474        421,228
Total common stockholder's equity           555,244        534,378        575,370       572,759        581,224
</TABLE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

Central  Illinois  Public Service  Company  (AmerenCIPS or the  Registrant) is a
subsidiary of Ameren  Corporation  (Ameren),  a holding company registered under
the Public Utility Holding Company Act of 1935 (PUHCA).  In December 1997, Union
Electric Company  (AmerenUE) and CIPSCO  Incorporated  (CIPSCO) combined to form
Ameren,  with  AmerenUE and CIPSCO's  subsidiaries,  the  Registrant  and CIPSCO
Investment Company (CIC), becoming subsidiaries of Ameren (the Merger).

On May 1,  2000,  following  the  receipt  of all  required  state  and  federal
regulatory approvals,  the Registrant transferred its electric generating assets
and liabilities,  at historical net book value, to a newly created  nonregulated
company,  AmerenEnergy  Generating Company (Generating Company), a subsidiary of
AmerenEnergy  Resources  Company  (Resources  Company),  which is a wholly owned
subsidiary  of  Ameren  (the  Transfer).   Discussion  below  under  Results  of
Operations  reflects  that as a result of the  Transfer,  from May 1, 2000,  the
Registrant's  operating  revenues  will only include  revenues  derived from its
traditional  transmission  and  distribution  operations,  and those revenues it
receives from its native load customers,  or new customers  allowed choice of an
electric supplier under state law. Sales under certain  wholesale  contracts and
interchange  sales will no longer be  reflected  in  operating  revenues  of the
Registrant.  Instead,  those revenues will be recorded at Resources Company. The
Registrant's operating expenses will only include those expenses it incurs under
its traditional  transmission  and  distribution  operations,  and for purchased
power under an electric power supply  agreement with Resources  Company's  newly
created marketing subsidiary,  AmerenEnergy  Marketing Company (the Power Supply
Agreement).  See "Electric Industry Restructuring" below and Note 2 - Regulatory
Matters under Notes to Financial Statements for further discussion.

RESULTS OF OPERATIONS

Earnings
Earnings for 2000, 1999 and 1998, were $75 million, $50 million and $76 million,
respectively.  Earnings  fluctuated  due to many  conditions,  primarily:  sales
growth, weather variations,  electric rate reductions,  the Transfer, a gas rate
increase,  competitive  market forces,  fluctuating  operating  costs,  expenses
relating  to the  withdrawal  from the  electric  transmission  related  Midwest
Independent   System   Operator   (Midwest  ISO),   charges  for  coal  contract
terminations,  a targeted  employee  separation plan (TSP),  changes in interest
expense and changes in income and property taxes.

In  the  fourth  quarter  of  2000,  the  Registrant   recorded  an  $8  million
nonrecurring  charge to  earnings in  connection  with its  withdrawal  from the
Midwest ISO. The charge  reduced  earnings $5 million,  net of income taxes (see
discussion below under "Electric Industry Restructuring" and Note 2 - Regulatory
Matters under Notes to Financial

                                      -7-

<PAGE>

Statements  for  further  information).   In  thefourth  quarter  of  1999,  the
Registrant recorded a $52 million  nonrecurring charge to earnings in connection
with coal contract  terminations  with two coal  suppliers.  The charge  reduced
earnings $31 million,  net of income taxes (see discussion below under "Electric
Operations" and Note 11 - Commitments and Contingencies under Notes to Financial
Statements  for  further  information).  In  1998,  the  Registrant  recorded  a
nonrecurring charge to earnings in connection with a targeted separation plan it
offered to employees in July 1998. That charge reduced earnings $4 million,  net
of income taxes, (see Note 4 - Targeted Separation Plan under Notes to Financial
Statements for further  information).  The significant items affecting revenues,
expenses and earnings for the years ended  December 31, 2000,  1999 and 1998 are
detailed in the following pages.

Electric Operations
Electric Revenues                          Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                            2000         1999          1998
--------------------------------------------------------------------------------
Rate variations                        $    -         $ (7)          $(5)
Effect of abnormal weather                (11)         (16)           13
Growth and other                           15            9            14
Interchange sales                         (82)          88            (1)
--------------------------------------------------------------------------------
                                         $(78)         $74           $21
--------------------------------------------------------------------------------

Electric  revenues for 2000 decreased $78 million compared to 1999 primarily due
to a decrease in interchange  sales as a result of the Transfer and  unfavorable
weather.  These decreases were offset in part by an increase in industrial sales
of 29 percent,  resulting  primarily from a new contract with a large industrial
customer.

Electric  revenues for 1999 increased $74 million,  compared to 1998,  primarily
due to an 11% increase in total kilowatthour  sales. This increase was primarily
driven by a 37% increase in interchange  sales, due to strong marketing efforts.
This increase was partially  offset by a residential rate decrease (see Note 2 -
Regulatory Matters under notes to Financial Statements for further information).
In addition, revenues were lower due to a 1% decrease in native sales, resulting
from milder weather.

Electric  revenues for 1998  increased $21 million,  compared to 1997.  Revenues
increased  primarily  due  to  higher  sales  to  retail  customers  within  the
Registrant's service territory,  as a result of warm summer weather and economic
growth in the service area.  Weather-sensitive  residential and commercial sales
increased  6% and 4%,  respectively,  while  industrial  sales  grew  4%.  These
increases were partially  offset by a 5% rate decrease to residential  customers
beginning  in August  1998  (see  Note 2 -  Regulatory  Matters  under  Notes to
Financial Statements for further information).

Fuel and Purchased Power                        Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                                 2000         1999         1998
--------------------------------------------------------------------------------
Fuel:
    Generation                               $(110)         $17         $(25)
    Price                                       (5)         (18)          (2)
    Generation efficiencies and other           (4)          (7)          (6)
    Coal contract termination payments         (52)          52            -
Purchased power                                227           40           21
--------------------------------------------------------------------------------
                                            $   56          $84         $(12)
--------------------------------------------------------------------------------

Fuel and purchased power costs for 2000 increased $56 million  compared to 1999,
primarily  due to an overall net  increase  in  purchased  power and  generation
resulting  from higher native sales and higher  purchased  power costs under the
provisions of the Power Supply  Agreement  entered into as part of the Transfer,
partially  offset by lower fuel  costs due to the  termination  of certain  coal
contracts in the fourth quarter of 1999 and the Transfer.

The $84 million increase in fuel and purchased power costs for 1999, compared to
1998, was primarily due to increased  generation and purchased power,  resulting
from higher sales volume and coal contract termination payments discussed below,
partially offset by lower fuel costs.

In the fourth  quarter of 1999,  the  Registrant  and two of its coal  suppliers
executed  agreements to terminate their existing coal supply contracts effective
December 31, 1999.  Under these  agreements,  the  Registrant  made  termination
payments to the suppliers totaling  approximately $52 million. These termination
payments were recorded as a

                                      -8-

<PAGE>

nonrecurring  charge in the fourth quarter of 1999.  Total estimated pretax fuel
cost  savings of $27  million  were  realized  in 2000 by Ameren.  See Note 11 -
Commitments and  Contingencies  under Notes to Financial  Statements for further
information.

The $12 million decrease in fuel and purchased power costs for 1998, compared to
1997,  was  primarily  driven by lower fuel  costs due to lower fuel  prices and
utilizing joint dispatch generation.  Upon consummation of the Merger,  AmerenUE
and AmerenCIPS began jointly dispatching  generation,  therefore allowing Ameren
to utilize the most cost efficient  plants of both operating  companies to serve
customers in either service territory.

Gas Operations
Gas revenues for 2000  increased $44 million  compared to 1999, due primarily to
higher gas costs  recovered  through the  Registrant's  purchased gas adjustment
clause and higher residential and commercial sales as a result of colder weather
in the  fourth  quarter  of 2000.  Gas  revenues  in 1999  increased  $7 million
compared to 1998, primarily due to a gas rate increase which became effective in
February  1999  (see  Note 2 -  Regulatory  Matters  under  Notes  to  Financial
Statements for further  information) and higher gas costs recovered  through the
Registrant's  purchased gas adjustment  clause.  These  increases were partially
offset by a decline in retail  sales of 10%,  resulting  primarily  from  milder
winter weather,  as well as a decrease in off-system sales of gas to others. Gas
revenues in 1998 decreased $26 million  compared to 1997,  primarily due to a 7%
decline in retail sales resulting from milder winter weather and lower gas costs
recovered through the Registrant's purchase gas adjustment clause.

Gas costs in 2000  increased  $37  million  compared to 1999,  primarily  due to
higher  retail  sales and  higher gas  prices.  Gas costs in 1999  increased  $4
million compared to 1998. This increase in gas costs was primarily due to higher
gas prices,  partially  offset by lower total sales.  Gas costs in 1998 declined
$28 million  compared to 1997. This decrease in gas costs was due to lower sales
and lower gas prices.

Other Operating Expenses
Other  operating  expense  variations in 1998 through 2000  reflected  recurring
factors such as growth,  inflation,  the Transfer,  labor and benefit costs, and
charges for estimated  costs relating to withdrawal from the Midwest ISO and the
TSP, as discussed below.

In November  2000, the  Registrant  announced  that it is  withdrawing  from the
Midwest  ISO  to  become  a  member  of  the  Alliance   Regional   Transmission
Organization  (Alliance  RTO).  In the fourth  quarter of 2000,  the  Registrant
recorded a pretax  nonrecurring  charge to  earnings  of $8 million  ($5 million
after income  taxes) as a result of the  Registrant's  decision to withdraw from
the Midwest ISO. This charge relates to the  Registrant's  estimated  obligation
under the Midwest ISO  agreement  for costs  incurred by the Midwest  ISO,  plus
estimated  exit  costs.   See  discussions   below  under   "Electric   Industry
Restructuring"  and  Note  2 -  Regulatory  Matters  under  Notes  to  Financial
Statements for further information.

In 1998,  Ameren  announced  plans  to  reduce  its  other  operating  expenses,
including plans to eliminate  approximately  400 employee  positions by mid-1999
through a hiring  freeze  and the TSP.  During  the  third  quarter  of 1998,  a
nonrecurring,  pretax  charge  of $7  million  was  recorded,  representing  the
Registrant's  share of costs  incurred to implement the TSP. The  elimination of
these positions,  exclusive of the nonrecurring charge, reduced the Registrant's
operating expenses approximately $4 million in 1998 and approximately $7 million
in 1999,  and is  expected  to reduce the  Registrant's  operating  expenses  by
approximately  $6  million  to $7  million  each year  thereafter.  See Note 4 -
Targeted  Separation  Plan  under  Notes to  Financial  Statements  for  further
information.

Other operations expenses, excluding the Midwest ISO related nonrecurring charge
discussed above,  decreased $65 million in 2000, compared to 1999, primarily due
to lower  employee  benefit costs  resulting  from the Transfer as well as lower
information system-related costs. Other operating expenses increased $11 million
in 1999, compared to 1998,  primarily due to increased  postretirement  expenses
resulting from changes in actuarial assumptions,  increased injuries and damages
expenses based on claims experience,  expenses associated with electric industry
deregulation  in  Illinois  and the Year  2000  project.  These  increases  were
partially  offset  by a  reduced  workforce,  coupled  with the fact  that  1998
expenses  included  the charge for the TSP.  The $19  million  increase in other
operating  expenses in 1998,  compared to 1997, were primarily due to the charge
for the TSP and increased information system-related costs.

Maintenance  expenses decreased $59 million in 2000, compared to 1999, primarily
due  to  decreased  power  plant   maintenance   resulting  from  the  Transfer.
Maintenance  expenses  increased  $32 million in 1999,  compared  to 1998.  This
increase  was  primarily  due to  increased  power plant  maintenance.  In 1998,
maintenance  expenses decreased $4 million from the prior year, primarily due to
less scheduled power plant maintenance.

                                      -9-

<PAGE>


Depreciation and amortization expense decreased $19 million in 2000, compared to
1999,  due to  decreased  depreciable  property,  primarily  resulting  from the
Transfer.  Depreciation and amortization  expense  increased $6 million in 1999,
compared to 1998.  This  increase was  primarily  due to  increased  depreciable
property.  In 1998,  depreciation and amortization  expense decreased $8 million
from the prior year due to the write-off of generation-related regulatory assets
in Illinois during the fourth quarter of 1997.

Taxes
Income tax expense from  operations  increased $13 million in 2000,  compared to
1999,  due to a  higher  pretax  income.  Income  tax  expense  from  operations
decreased  $15 million in 1999,  compared to 1998,  due to lower pretax  income.
Income tax expense from  operations  increased $12 million in 1998,  compared to
1997, due to higher pretax income and a higher effective tax rate.

Other tax expense decreased $17 million in 1999, compared to 1998, primarily due
to a  decrease  in gross  receipts  taxes.  This  decrease  is the result of the
restructuring  of the Illinois  public  utility tax whereby gross receipts taxes
are no longer recorded as electric revenue and gross receipts tax expense.

Other Income and Deductions
Miscellaneous,  net increased $26 million in 2000,  compared to 1999,  primarily
due to interest  income earned on the promissory note receivable from Generating
Company as part of the Transfer. (See "Electric Industry Restructuring" and Note
2  -  Regulatory  Matters  under  Notes  to  Financial  Statements  for  further
discussion of the  promissory  note.) In 1999,  miscellaneous,  net increased $3
million,  compared to 1998,  primarily due to losses on the disposal of property
realized in 1998. In 1998, miscellaneous, net increased $3 million primarily due
to higher merger-related expenses incurred in the prior year.

Interest
Interest expense decreased $2 million in 2000,  compared to 1999,  primarily due
to the  redemption  of  long-term  debt,  partially  offset  by an  increase  in
intercompany  notes  payable  resulting  from funds  borrowed from the regulated
money  pool  (see  Note 7 -  Short-Term  Borrowings  under  Notes  to  Financial
Statements for further  information)  and funds owed to Generating  Company as a
result of the Transfer.  Interest expense increased $3 million in 1999, compared
to 1998, due to an increase in intercompany  notes payable  resulting from funds
borrowed from the regulated money pool (see Note 7 - Short-Term Borrowings under
Notes to Financial Statements for further information),  partially offset by the
redemption of short-term debt.  Interest  expense  increased $3 million in 1998,
compared to 1997, due to a higher amount of debt  outstanding,  partially offset
by a decrease in other interest.

Balance Sheet
The $36 million  increase in trade  accounts  receivable  was due  primarily  to
higher sales and revenues in November  and December  2000,  compared to the same
1999 period.

The  variations  in property  and plant,  net,  intercompany  notes  receivable,
intercompany  tax  receivable,  materials  and  supplies  inventory,  regulatory
assets, accumulated deferred income taxes and regulatory deferred investment tax
credits were due to the Transfer. See "Electric Industry Restructuring" and Note
2  -  Regulatory  Matters  under  Notes  to  Financial  Statements  for  further
discussion.

The changes in accounts and wages  payable and taxes  accrued  resulted from the
timing of various  payments to taxing  authorities and suppliers,  including the
accrual  for  the  nonrecurring  charge  in  connection  with  the  Registrant's
withdrawal  from  the  Midwest  ISO,  as well as a  decrease  in the  number  of
employees, resulting from the Transfer. The $90 million increase in intercompany
notes payable was due to funds borrowed from the regulated  money pool (see Note
7 -  Short-Term  Borrowings  under  Notes to  Financial  Statements  for further
discussion) and funds owed to Generating Company as a result of the Transfer.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating  activities totaled $62 million for 2000, compared to
$166 million for 1999 and $123 million in 1998.

Cash flows used in investing activities totaled $41 million, $95 million and $68
million,  for the years ended  December 31, 2000,  1999 and 1998,  respectively.
Expenditures in 2000 for constructing new or improving existing  facilities were
$41 million.  Construction  expenditures  in 2000 decreased from 1999 due to the
effects of the Transfer.

                                      -10-

<PAGE>

See  "Electric  Industry  Restructuring"  and Note 2 - Regulatory  Matters under
Notes to Financial Statements for further discussion.

Capital  expenditures  are expected to approximate  $54 million in 2001. For the
five-year period 2001 through 2005,  construction  expenditures are estimated at
$319 million.

Cash flows used in financing  activities  were $4 million for 2000,  compared to
$68  million  for 1999 and $74  million  for 1998.  The  Registrant's  financing
activities  during 2000  included the issuance of $51 million of long-term  debt
and $90 million of intercompany notes payable,  the redemption of $87 million of
long-term debt and the payment of dividends.

The Registrant  plans to continue  utilizing  short-term  debt to support normal
operations and other temporary requirements. The Registrant is authorized by the
Securities and Exchange  Commission (SEC) under PUHCA to have up to $250 million
of short-term unsecured debt instruments outstanding at any one time. Short-term
borrowings  consist of commercial  paper  (maturities  generally  within 1 to 45
days) and bank loans.  At December 31, 2000,  the  Registrant had committed bank
lines of credit  aggregating $25 million,  all of which was unused and available
at such date,  which  make  available  interim  financing  at  various  rates of
interest based on LIBOR,  the bank certificate of deposit rate or other options.
The lines of credit are renewable annually at various dates throughout the year.
At year-end, the Registrant had no outstanding short-term borrowings.

Also, the Registrant has the ability to borrow up to approximately  $914 million
from Ameren or AmerenUE through a regulated money pool agreement.  The regulated
money pool was established to coordinate and provide for certain short-term cash
and working capital requirements and is administered by Ameren Services Company,
another  subsidiary  of Ameren.  Interest  is  calculated  at  varying  rates of
interest  depending on the  composition  of internal  and external  funds in the
regulated  money pool. At December 31, 2000,  the Registrant had $197 million of
intercompany  borrowings  outstanding  under the  regulated  money pool and $727
million  available  through the  regulated  money pool.  See Note 7 - Short-Term
Borrowings under Notes to Financial Statements for further information.

Subject  to certain  approvals,  the  Registrant  intends  to  transfer  primary
liability for $104 million of tax-exempt  pollution  control loan obligations to
Generating  Company  during  2001.  Upon the  transfer of these  obligations  to
Generating  Company,  the  amount  of  Generating  Company's  liability  to  the
Registrant  under the  promissory  note issued as part of the  Transfer  will be
reduced by a similar amount. The pollution control loan obligations  referred to
above  have  maturity  dates  ranging  from  2014 to 2028 and bear  interest  at
variable rates. See further discussion of Generating  Company's  promissory note
to the Registrant below, under "Electric Industry Restructuring" and in Note 2 -
Regulatory Matters under Notes to Financial Statements for further discussion.

During the course of Ameren's resource planning,  several alternatives are being
considered to satisfy  regulatory load  requirements for 2001 and beyond for the
Registrant,  AmerenUE and Resources  Company.  One of these alternatives was for
AmerenUE to transfer its Illinois-based  electric and natural gas businesses and
certain of its Illinois-based distribution and transmission assets and personnel
to the  Registrant  (see Note 2-  Regulatory  Matters  under Notes to  Financial
Statements  for further  discussion).  The assets and related  liabilities  were
proposed to be  transferred  from AmerenUE to the  Registrant at historical  net
book value. In March 2001, Ameren decided it will no longer pursue this transfer
and will be taking the  necessary  action to withdraw  its pending  requests for
regulatory approvals.  Other alternatives being considered include proposals for
the  purchase of 450  megawatts  of capacity  and energy for the summer of 2001,
among other things.  At this time,  management is unable to predict which course
of action it will pursue to satisfy these requirements and their ultimate impact
on the Registrant's financial position, results of operations or liquidity.

The Registrant,  in the ordinary course of business,  explores  opportunities to
reduce  its costs in order to remain  competitive  in the  marketplace.  An area
where the Registrant  focuses its review includes,  but is not limited to, labor
costs.  In the labor area,  over the past two years,  the Registrant has reached
agreements with all of the Registrant's major collective  bargaining units which
will  permit it to manage  its labor  costs  and  practices  effectively  in the
future. The Registrant also explores alternatives to effectively manage the size
of  its  workforce.   These  alternatives   include  utilizing  hiring  freezes,
outsourcing and offering employee separation packages.

Certain of these reduction  alternatives could require nonrecurring  payments of
employee  separation  benefits.  Management is unable to predict to what extent,
these alternatives to reduce its overall cost structure will be executed as well
as determine the impact of these actions on the  Registrant's  future  financial
position, results of operations or liquidity.

                                      -11-

<PAGE>

RATE MATTERS

See Note 2 -  Regulatory  Matters  under  Notes to  Financial  Statements  for a
discussion of rate matters.

ELECTRIC INDUSTRY RESTRUCTURING

Steps taken and being  considered  at the federal and state  levels  continue to
change the  structure  of the  electric  industry  and utility  regulation,  and
encourage increased competition.  At the federal level, the Energy Policy Act of
1992 reduced various  restrictions on the operation and ownership of independent
power  producers and gave the Federal Energy  Regulatory  Commission  (FERC) the
authority to order electric  utilities to provide  transmission  access to third
parties.

During 2000 and in early 2001,  deregulation  laws  established  in the state of
California,  coupled with high energy  prices,  increasing  demands for power by
users in that state,  transmission constraints and limited generation resources,
among other things, negatively impacted several major electric utilities in that
state.   Federal  and  state   regulators  and  legislators  have  proposed  and
implemented,  in part,  different  courses of action to attempt to address these
issues.  The  Registrant  does not maintain  utility  operations in the state of
California,  nor does it provide energy  directly to utilities in that state. At
this  time,  the  Registrant  is  uncertain  what  impact,  if any,  changes  in
deregulation laws will have on future federal and state deregulation laws, which
could directly impact the  Registrant's  future financial  position,  results of
operations or liquidity.

In April 1996,  the FERC issued  Order 888 and Order 889,  which are intended to
promote  competition  in  the  wholesale  electric  market.  The  FERC  requires
transmission-owning   public   utilities,   such  as   AmerenCIPS,   to  provide
transmission  access and service to others in a manner similar and comparable to
that which the utilities have by virtue of ownership.  Order 888 requires that a
single tariff be used by the utility in providing  transmission  service.  Order
888  also  provides  for  the  recovery  of  strandable  costs,   under  certain
conditions, related to the wholesale business.

Order 889 established the standards of conduct and information requirements that
transmission owners must adhere to in doing business under the open access rule.
Under Order 889, utilities must obtain transmission service for their own use in
the same manner their  customers will obtain  service,  thus  mitigating  market
power through control of transmission facilities.  In addition, under Order 889,
utilities must separate their merchant  function  (buying and selling  wholesale
power) from their transmission and reliability functions.

In 1998, the Registrant  joined a group of companies that  originally  supported
the  formation of the Midwest ISO. An ISO operates,  but does not own,  electric
transmission  systems and  maintains  system  reliability  and  security,  while
facilitating  wholesale  and  retail  competition  through  the  elimination  of
"pancaked"  transmission  rates.  The Midwest ISO is regulated by the FERC.  The
FERC conditionally  approved the formation of the Midwest ISO in September 1998.
The Illinois Commerce Commission (ICC) has authorized the Registrant to join the
Midwest ISO.

In December 1999,  the FERC issued Order 2000 relating to Regional  Transmission
Organizations  (RTOs) that would meet certain  characteristics  such as size and
independence.  RTOs,  including  ISOs,  are entities that ensure  comparable and
non-discriminatory  access to regional electric transmission systems. Order 2000
calls on all transmission owners to join RTOs.

Following the  announcements of Commonwealth  Edison and Illinois Power of their
intent  to  withdraw  from  the  Midwest  ISO and  join the  Alliance  RTO,  the
Registrant determined that the operational  configuration of the Midwest ISO was
unacceptable  and announced  its  withdrawal in November  2000.  The  Registrant
decided to withdraw to ensure the continued reliable and efficient  operation of
its transmission  system.  As a result of the Registrant's  decision to withdraw
from the Midwest ISO, in the fourth quarter of 2000,  the Registrant  recorded a
pretax  nonrecurring  charge to earnings of $8 million ($5 million  after income
taxes). This charge relates to the Registrant's  estimated  obligation under the
Midwest ISO agreement for costs incurred by the Midwest ISO, plus estimated exit
costs.

In January 2001,  the  Registrant  announced  that it had signed an agreement to
join the Alliance RTO.  Also, in January 2001, the FERC  conditionally  approved
the formation,  including the rate  structure,  of the Alliance RTO. In February
2001,  in a  proceeding  before the FERC,  the  Alliance RTO and the Midwest ISO
reached an agreement  that enables the  Registrant  to withdraw from the Midwest
ISO and to join the Alliance RTO. This settlement  agreement  remains subject to
FERC  approval.  The  Registrant's  transfer  of control  and  operation  of its
transmission assets to the Alliance RTO is also subject to ICC approval. At this
time, the Registrant is unable to determine the impact that

                                      -12-

<PAGE>

its withdrawal  from the Midwest ISO and its  participation  in the Alliance RTO
will have on its future financial condition, results of operations or liquidity.

In December 1997, the Governor of Illinois signed the Electric  Service Customer
Choice and Rate  Relief Law of 1997 (the Law)  providing  for  electric  utility
restructuring  in Illinois.  This  legislation  introduces  competition into the
supply of electric energy at retail in Illinois.

Major provisions of the Law include the phasing-in through 2002 of retail direct
access,  which allows customers to choose their electric  generation  suppliers.
The  phase-in  of retail  direct  access  began on October  1, 1999,  with large
commercial and industrial  customers  principally  comprising the initial group.
The  remaining  commercial  and  industrial  customers  were  offered  choice on
December 31, 2000.  Commercial and industrial customers represent  approximately
45% of the  Registrant's  total sales.  As of December  31, 2000,  the impact of
retail  direct  access  on the  Registrant's  financial  condition,  results  of
operations and liquidity was immaterial. Retail direct access will be offered to
residential customers on May 1, 2002.

In addition,  the Law included a 5% rate decrease for residential customers that
became effective in August 1998. This rate decrease reduced electric revenues by
approximately $11 million annually compared to pre-Law rates, based on estimated
levels of sales and assuming normal weather conditions. (See Note 2 - Regulatory
Matters under Notes to Financial  Statements for further  information.) In 1998,
the Registrant eliminated its Uniform Fuel Adjustment Clause (FAC) as allowed by
the Law,  which has benefited  shareholders  since 1998 (see Note 1 - Summary of
Significant  Accounting Policies under Notes to Financial Statements for further
information).  The Law contains a provision  allowing for the potential recovery
of a portion  of  strandable  costs,  which  represent  costs  that would not be
recoverable in a restructured environment, through a transition charge collected
from customers who choose an alternate electric supplier.  In addition,  the Law
contains a provision  requiring a portion of excess  earnings (as defined  under
the Law) for the years 1998 through 2004 to be refunded to customers. See Note 2
-  Regulatory   Matters  under  Notes  to  Financial   Statements   for  further
information.

In conjunction with another provision of the Law, on May 1, 2000,  following the
receipt of all required state and federal regulatory  approvals,  the Registrant
transferred its electric  generating  assets and liabilities,  at historical net
book  value,  to  Generating  Company in  exchange  for a  promissory  note from
Generating  Company in the principal  amount of $552 million and 1,000 shares of
Generating  Company common stock (the Transfer).  The promissory note has a term
of five years and bears  interest at 7 percent based on a 10-year  amortization.
The transferred  assets represent a generating  capacity of approximately  2,900
megawatts.   Approximately  45  percent  of  the  Registrant's   employees  were
transferred to Generating Company as a part of the transaction.

In conjunction with the Transfer, an electric power supply agreement was entered
into between  Generating Company and its newly created  nonregulated  affiliate,
AmerenEnergy  Marketing  Company  (Marketing  Company),   also  a  wholly  owned
subsidiary of Resources Company. In addition,  Marketing Company entered into an
electric  power supply  agreement  with the  Registrant  to supply it sufficient
energy and capacity to meet its obligations as a public utility through December
31, 2004. A portion of the capacity and energy supplied by Generating Company to
Marketing  Company  will be resold to the  Registrant  for resale to native load
customers  at rates  specified  by the ICC  (which  approximate  the  historical
regulatory  rates for  generation) or to retail  customers  allowed choice of an
electric  supplier  under  state  law at  market  based  prices.  In  turn,  the
Registrant  will bill these  customers at rates which  approximate the costs the
Registrant  incurs for its capacity and energy  supplied by Generating  Company.
For the  eight-month  period  ended  December  31,  2000,  $257  million  of the
Registrant's purchased power was derived under the Power Supply Agreement.

As  a  result  of  the  Transfer,  coupled  with  the  Power  Supply  Agreement,
prospectively  from May 1, 2000  through  December 31,  2004,  the  Registrant's
operating   revenues  will  include   revenues   derived  from  its  traditional
transmission and distribution operations,  as well as those revenues it receives
from its native load customers,  or new customers  allowed choice of an electric
supplier  under  state  law.  Sales  under  certain   wholesale   contracts  and
interchange  sales will no longer be  reflected  in  operating  revenues  of the
Registrant.  Instead,  those revenues will be recorded at Resources Company. The
Registrant's  operating expenses will include those expenses it incurs under its
traditional transmission and distribution operations, as well as purchased power
expenses incurred under the terms of the Power Supply Agreement.

In addition,  as a result of the Transfer,  the  Registrant  incurred a deferred
intercompany tax gain,  which resulted in an additional  deferred tax liability.
An intercompany  tax receivable with Generating  Company was established for the
deferred tax  liability.  This asset and liability will be amortized over twenty
years.  At December 31,  2000,  the  Registrant's  deferred  tax  liability  and
intercompany  tax receivable was $211 million.

                                      -13-

<PAGE>

See Note 2 - Regulatory Matters under Notes to Financial  Statements for further
discussion of the Transfer.

In  summary,  the  potential  negative  consequences  associated  with  electric
industry restructuring could be significant and could include the impairment and
writedown of certain assets,  including plant and net regulatory  assets,  lower
revenues,  reduced profit margins and increased  costs of capital and operations
expenses. Conversely, a deregulated marketplace can provide earnings enhancement
opportunities.  The Registrant  will continue to focus on cost control to ensure
that it maintains a competitive cost structure.  Also, in Illinois,  the actions
of Ameren included the establishment of a nonregulated generating subsidiary and
the  expansion of its  generation  assets,  which  strengthened  its trading and
marketing operations to maintain its current customers and obtain new customers,
and the enhancement of its  information  systems.  The Registrant  believes that
these  actions  position  Ameren  and the  Registrant  well  in the  competitive
Illinois  marketplace.  At this time,  the  Registrant  is unable to predict the
ultimate impact of electric  industry  restructuring on the Registrant's  future
financial condition, results of operations or liquidity.

CONTINGENCIES

See Note 2 -  Regulatory  Matters and Note 11 -  Commitments  and  Contingencies
under Notes to Financial Statements for material issues existing at December 31,
2000.

MARKET RISK RELATED TO FINANCIAL INSTRUMENTS AND COMMODITY INSTRUMENTS

Market  risk  represents  the risk of changes in value of a physical  asset or a
financial  instrument,  derivative or non-derivative,  caused by fluctuations in
market variables (e.g., interest rates, equity prices,  commodity prices, etc.).
The  following  discussion  of  Ameren's,   including  the  Registrant's,   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.  Ameren handles market risks in accordance
with established  policies,  which may include entering into various  derivative
transactions.  In the normal course of business,  Ameren and the Registrant also
face  risks  that are  either  non-financial  or  non-quantifiable.  Such  risks
principally include business,  legal,  operational,  and credit risk and are not
represented in the following analysis.

Ameren's risk management objective is to optimize its physical generating assets
within  prudent  risk  parameters.  Risk  management  policies are set by a Risk
Management  Steering  Committee,  which  is  comprised  of  senior-level  Ameren
officers.

Interest Rate Risk
The  Registrant  is exposed to market risk  through  changes in  interest  rates
through its issuance of both  long-term and  short-term  variable-rate  debt and
fixed-rate  debt,  commercial  paper  and  auction-rate   preferred  stock.  The
Registrant manages its interest rate exposure by controlling the amount of these
instruments it holds within its total capitalization portfolio and by monitoring
the effects of market changes in interest rates.

If interest rates  increase one  percentage  point in 2001, as compared to 2000,
the Registrant's interest expense would increase by approximately $3 million and
net income  would  decrease by  approximately  $2 million.  This amount has been
determined using the assumptions that the Registrant's outstanding variable-rate
debt,  commercial  paper and  auction-rate  preferred  stock, as of December 31,
2000, continued to be outstanding throughout 2001, and that the average interest
rates for these instruments  increased one percent over 2000. The model does not
consider the effects of the reduced level of potential overall economic activity
that would exist in such an environment. In the event of a significant change in
interest  rates,  management  would likely take actions to further  mitigate its
exposure to this market risk.  However,  due to the  uncertainty of the specific
actions that would be taken and their possible effects, the sensitivity analysis
assumes no change in the Registrant's financial structure.

Commodity Price Risk
The  Registrant  is  exposed to changes  in market  prices for  natural  gas and
electricity.  With regard to its natural gas utility business,  the Registrant's
exposure to changing  market prices is in large part  mitigated by the fact that
the  Registrant has a purchased gas  adjustment  clause (PGA) in place.  The PGA
allows the  Registrant to pass on to its customers its prudently  incurred costs
of natural gas.

Since  the  Registrant  does not  have a  provision  similar  to the PGA for its
electric  operations,  purchased power commodity price risk is mitigated in part
due to the fact that the Registrant has entered into a long-term contract with a
supplier for purchased power (see "Electric Industry  Restructuring and Note 2 -
Regulatory Matters under Notes to Financial Statements for further discussion).

                                      -14-

<PAGE>

ACCOUNTING MATTERS

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS 133
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities and requires  recognition of all derivatives as either assets
or liabilities on the balance sheet measured at fair value.  The intended use of
the derivatives and their  designation as either a fair value hedge, a cash flow
hedge,  or a foreign  currency  hedge will determine when the gains or losses on
the  derivatives are to be reported in earnings and when they are to be reported
as a component of other  comprehensive  income in stockholder's  equity. In June
1999,  the FASB issued SFAS 137,  "Accounting  for  Derivative  Instruments  and
Hedging  Activities--Deferral  of the Effective Date of FASB Statement No. 133,"
which  delayed  the  effective  date of SFAS 133 to all fiscal  quarters  of all
fiscal years,  beginning after June 15, 2000. In June 2000, the FASB issued SFAS
No. 138,  "Accounting  for Certain  Derivative  Instruments  and Certain Hedging
Activities - an  amendment of FASB  Statement  No. 133," which  amended  certain
accounting and reporting  standards of SFAS 133. The Registrant is adopting SFAS
133 in the first  quarter of 2001.  As of January 1, 2001,  the adoption of SFAS
133 is not expected to have a material  effect on the Registrant.  However,  the
Derivatives  Implementation Group (DIG), a committee of the FASB responsible for
providing  guidance  on the  implementation  of  SFAS  133,  has not  reached  a
conclusion  regarding the appropriate  accounting  treatment of certain types of
energy  contracts  under SFAS 133. The Registrant is unable to predict when this
issue will ultimately be resolved and the impact the resolution will have on the
Registrant's  future  financial  position,  results of  operations or liquidity.
Implementation   of  SFAS  133  will  likely  increase  the  volatility  of  the
Registrant's earnings in future periods.

EFFECTS OF INFLATION AND CHANGING PRICES

The Registrant's rates for retail electric and gas utility service are generally
regulated by the ICC. Wholesale electric rates are regulated by the FERC.

The current  replacement  cost of the Registrant's  utility plant  substantially
exceeds its recorded historical cost. Under existing regulatory  practice,  only
the historical cost of plant is recoverable  from customers.  As a result,  cash
flows  designed to provide  recovery of historical  costs  through  depreciation
might not be adequate to replace utility plant in future years. In addition, the
impact on common stockholders is mitigated to the extent depreciable property is
financed with debt that is repaid with dollars of less purchasing power.

Changes in gas costs  relating  to retail gas  utility  services  are  generally
reflected in billings to customers through a purchased gas adjustment clause.

Inflation continues to be a factor affecting operations, earnings, stockholder's
equity and financial performance.

SAFE HARBOR STATEMENT

Statements  made in this report  which are not based on  historical  facts,  are
"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, the Registrant is providing
this cautionary  statement to identify important factors that could cause actual
results to differ materially from those anticipated.  The following factors,  in
addition  to  those  discussed  elsewhere  in  this  report  and  in  subsequent
securities  filings,  could cause results to differ  materially  from management
expectations as suggested by such "forward-looking"  statements:  the effects of
regulatory actions,  including changes in regulatory policy; changes in laws and
other governmental  actions; the impact on the Registrant of current regulations
related  to the  phasing-in  of the  opportunity  for some  customers  to choose
alternative energy suppliers in Illinois;  the effects of increased  competition
in the future due to, among other things, deregulation of certain aspects of the
Registrant's  business  at both the state and  federal  levels;  the  effects of
withdrawal  from the Midwest ISO and  membership  in the  Alliance  RTO;  future
market  prices  for  purchased  power  and  natural  gas,  including  the use of
financial  instruments;  average rates for electricity in the Midwest;  business
and economic  conditions;  interest  rates;  weather  conditions;  the impact of
current  environmental  regulations on utilities;  monetary and fiscal policies;
future  wages  and  employee  benefits  costs;  and  legal  and   administrative
proceedings.

                                      -15-

<PAGE>


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

              Information required to be reported by this item is included under
"Market Risk Related to Financial  Instruments  and  Commodity  Instruments"  in
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operations"  under Item 7 herein  and Notes 5 and 12 to the "Notes to  Financial
Statements" under Item 8 herein.

                                      -16-


<PAGE>







                        REPORT OF INDEPENDENT ACCOUNTANTS






To the Board of Directors and  Shareholders  of Central  Illinois Public Service
Company:

In our opinion,  the financial  statements  listed in the index  appearing under
Item 14(a)(1) on Page 36 present fairly, in all material respects, the financial
position of Central  Illinois  Public  Service  Company at December 31, 2000 and
1999, and the results of its operations and its cash flows for each of the three
years in the period ended  December  31, 2000,  in  conformity  with  accounting
principles  generally accepted in the United States of America. In addition,  in
our opinion,  the financial  statement  schedule  listed in the index  appearing
under  14(a)(1)  on Page 36  presents  fairly,  in all  material  respects,  the
information  set  forth  therein  when  read in  conjunction  with  the  related
financial  statements.  These financial  statements and the financial  statement
schedule are the responsibility of the Company's management;  our responsibility
is to  express  an  opinion  on these  financial  statements  and the  financial
statement  schedule  based on our  audits.  We  conducted  our  audits  of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.






/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
St. Louis, Missouri
February 5, 2001

                                      -17-


<PAGE>

ITEM    8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                                  BALANCE SHEET
                      (Thousands of Dollars, Except Shares)

<TABLE>
<CAPTION>

                                                                          December 31,               December 31,
ASSETS                                                                       2000                    1999
------                                                                       ----                    ----
<S>                                                                       <C>                    <C>
Property and plant, at original cost:
   Electric                                                               $1,195,418             $2,422,002
   Gas                                                                       273,573                267,909
                                                                   ------------------       ----------------
                                                                           1,468,991              2,689,911
   Less accumulated depreciation and amortization                            654,897              1,260,582
                                                                   ------------------       ----------------
                                                                             814,094              1,429,329
Construction work in progress                                                  6,558                 43,435
                                                                   ------------------       ----------------
         Total property and plant, net                                       820,652              1,472,764
                                                                   ------------------       ----------------
Investments and other assets:
   Intercompany notes receivable                                             511,701                   -
   Intercompany tax receivable                                               194,975                   -
   Other assets                                                               17,085                 17,722
                                                                   ------------------       ----------------
        Total investments and other assets                                   723,761                 17,722

Current assets:
   Cash and cash equivalents                                                  29,801                 12,536
   Accounts receivable - trade (less allowance for doubtful
         accounts of $1,777 and $1,828, respectively)                        160,996                124,587
   Other accounts and notes receivable                                        25,035                 20,875
   Intercompany notes receivable                                              39,925                   -
   Intercompany tax receivable                                                15,809                   -
   Materials and supplies, at average cost -
      Fossil fuel                                                             22,560                 47,291
      Other                                                                    9,821                 33,931
   Other                                                                       6,240                 10,387
                                                                   ------------------       ----------------
         Total current assets                                                310,187                249,607
                                                                   ------------------       ----------------
Regulatory assets:
   Deferred income taxes                                                          91                 21,520
   Other                                                                      12,450                 20,141
                                                                   ------------------       ----------------
         Total regulatory assets                                              12,541                 41,661
                                                                   ------------------       ----------------
TOTAL ASSETS                                                              $1,867,141             $1,781,754
                                                                   ==================       ================
CAPITAL AND LIABILITIES
Capitalization:
   Common stock, no par value, 45,000,000 shares authorized -
     25,452,373 shares outstanding                                          $120,033               $120,033
   Retained earnings                                                         435,211                414,345
                                                                   ------------------       ----------------
         Total common stockholder's equity                                   555,244                534,378
   Preferred stock not subject to mandatory redemption (Note 6)               80,000                 80,000
   Long-term debt (Note 8)                                                   463,174                493,625
                                                                   ------------------       ----------------
         Total capitalization                                              1,098,418              1,108,003
                                                                   ------------------       ----------------
Current liabilities:
   Current maturity of long-term debt (Note 8)                                30,000                 35,000
   Intercompany notes payable                                                223,320                132,900
   Accounts and wages payable                                                106,739                 82,800
   Accumulated deferred income taxes                                          19,639                 22,621
   Taxes accrued                                                              13,899                 32,145
   Other                                                                      33,448                 39,619
                                                                   ------------------       ----------------
         Total current liabilities                                           427,045                345,085
                                                                   ------------------       ----------------
Commitments and Contingencies (Notes 2 and 11)
Accumulated deferred income taxes                                            273,505                216,661
Accumulated deferred investment tax credits                                   12,965                 32,169
Regulatory liability                                                          34,898                 34,004
Other deferred credits and liabilities                                        20,310                 45,832
                                                                   ------------------       ----------------
TOTAL CAPITAL AND LIABILITIES                                             $1,867,141             $1,781,754
                                                                   ==================       ================

</TABLE>

Notes to Financial Statements.

                                      -18-


<PAGE>
<TABLE>
<CAPTION>


                    CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                               STATEMENT OF INCOME
                             (Thousands of Dollars)

                                                              December 31,          December 31,        December 31,
For the year ended                                                2000                  1999                1998
                                                                  ----                  ----                ----

OPERATING REVENUES:
<S>                                                             <C>                  <C>                   <C>
   Electric                                                     $717,127             $795,476              $721,918
   Gas                                                           176,771              132,646               125,506
                                                             -----------------   ----------------        -----------------
      Total operating revenues                                   893,898              928,122               847,424


OPERATING EXPENSES:
   Operations
      Fuel and purchased power                                   370,434              314,208               230,085
      Gas                                                        110,335               73,352                69,350
      Other                                                      133,557              190,622               179,477
                                                             -----------------    ----------------     -----------------
                                                                 614,326              578,182               478,912
   Maintenance                                                    44,463              103,582                71,542
   Depreciation and amortization                                  61,084               80,557                74,323
   Income taxes                                                   43,580               30,773                45,769
   Other taxes                                                    38,632               40,313                56,834
                                                            -----------------    ----------------     -----------------
      Total operating expenses                                   802,085              833,407               727,380

Operating Income                                                  91,813               94,715               120,044

OTHER INCOME AND DEDUCTIONS:
   Allowance for equity funds used during
      construction                                                   -                     (8)                   16
    Miscellaneous, net                                            27,880                2,030                  (955)
                                                            -----------------    ----------------     -----------------
  Total other income and deductions                               27,880                2,022                  (939)


Income Before Interest Charges                                   119,693               96,737               119,105


INTEREST CHARGES:
   Interest                                                       40,569               42,736                40,039
   Allowance for borrowed funds used during construction            (238)                  21                (1,081)
                                                            -----------------    ----------------     -----------------
      Net interest charges                                        40,331               42,757                38,958
                                                            -----------------    ----------------     -----------------

NET INCOME                                                        79,362               53,980                80,147
                                                            -----------------    ----------------     -----------------

Preferred Stock Dividends                                          3,882                3,833                 3,745
                                                            -----------------    ----------------     -----------------

NET INCOME AFTER PREFERRED
               STOCK DIVIDENDS                                   $75,480              $50,147               $76,402
                                                            =================    ================     =================

</TABLE>


See Notes to Financial Statements.

                                      -19-


<PAGE>


                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                             STATEMENT OF CASH FLOWS
                             (Thousands of Dollars)

<TABLE>
<CAPTION>


                                                              December 31,          December 31,        December 31,
For the year ended                                               2000                   1999                1998
                                                                 ----                   ----                ----
<S>                                                              <C>                  <C>                   <C>
Cash Flows From Operating:
   Net income                                                    $79,362              $53,980               $80,147
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                             61,084               80,557                74,323
        Allowance for funds used during construction                (238)                  29                (1,097)
        Deferred income taxes, net                                 2,665              (18,562)              (10,801)
        Deferred investment tax credits, net                         524               (2,488)               (5,712)
        Changes in assets and liabilities, net of transfer:
           Receivables, net                                      (40,569)             (31,362)               (7,137)
           Materials and supplies                                 (4,965)               5,616               (15,310)
           Accounts and wages payable                             24,092               24,000               (30,562)
           Taxes accrued                                         (18,246)              18,944                (2,668)
           Other, net                                            (41,385)              34,948                42,161
                                                     --------------------    ------------------    --------------------
Net Cash Provided By Operating Activities                         62,324              165,662               123,344

Cash Flows From Investing:
   Construction expenditures                                     (41,321)             (95,302)              (68,848)
   Allowance for funds used during construction                      238                  (29)                1,097
                                                     --------------------    ------------------    --------------------
Net Cash Used In Investing Activities                            (41,083)             (95,331)              (67,751)

Cash Flows From Financing:
   Dividends on common stock                                     (54,614)             (90,342)              (72,285)
   Dividends on preferred stock                                   (3,882)              (3,833)               (4,002)
   Redemptions -
      Short-term debt                                                -                (46,700)              (18,266)
      Long-term debt                                             (87,000)             (60,000)              (64,000)
    Issuances -
      Long-term debt                                              51,100                  -                  85,000
      Intercompany notes payable                                  90,420              132,900                   -
                                                     --------------------    ------------------    --------------------
Net Cash Used In Financing Activities                             (3,976)             (67,975)              (73,553)

Net Change In Cash And Cash Equivalents                           17,265                2,356               (17,960)
Cash And Cash Equivalents At Beginning Of Year                    12,536               10,180                28,140
                                                     --------------------    ------------------    --------------------
Cash And Cash Equivalents At End Of Year                         $29,801              $12,536               $10,180
=======================================================================================================================
Cash paid during the periods:
-----------------------------------------------------------------------------------------------------------------------
   Interest (net of amount capitalized)                          $41,946              $39,140               $40,269
   Income taxes                                                  $57,938              $30,998               $61,953
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION:
In  the  second  quarter  of  2000,  the  Registrant  transferred  its  electric
generating  assets and  liabilities,  at historical  net book value,  to a newly
created  nonregulated  company,   AmerenEnergy  Generating  Company  (Generating
Company),  a subsidiary of  AmerenEnergy  Resources  Company,  in exchange for a
promissory note from Generating  Company in the principal amount of $552 million
and 1,000 shares of  Generating  Company  common  stock.  The  transaction  also
resulted  in  a  deferred  intercompany  tax  gain  liability  and  related  tax
receivable from Generating  Company in the amount of $219 million.  See Note 2 -
Regulatory Matters under Notes to Financial Statements for further information.

See Notes to Financial Statements.

                                      -20-


<PAGE>




                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY



STATEMENT OF RETAINED EARNINGS
------------------------------
(Thousands of Dollars)

--------------------------------------------------------------------------------
Year Ended December 31,
                                   2000               1999               1998
--------------------------------------------------------------------------------
Balance at Beginning of Period   $414,345          $455,337            $451,477
--------------------------------------------------------------------------------
  Add:
  Net income                       79,362            53,980              80,147
--------------------------------------------------------------------------------
                                  493,707           509,317             531,624
--------------------------------------------------------------------------------
  Deduct:
  Common stock dividends           54,614            90,342              72,285
  Preferred stock dividends         3,882             4,630               4,002
--------------------------------------------------------------------------------
                                   58,496            94,972              76,287
--------------------------------------------------------------------------------
 Balance at End of Period        $435,211          $414,345            $455,337
--------------------------------------------------------------------------------









SELECTED QUARTERLY INFORMATION  (Unaudited)
--------------------------------
(Thousands of Dollars)

--------------------------------------------------------------------------------
                         Operating    Operating        Net            Net Income
                         Revenues   Income (Loss)    Income         (Loss) After
Quarter Ended                                         (Loss)           Preferred
                                                                 Stock Dividends
--------------------------------------------------------------------------------
March 31, 2000           $255,327    $ 35,734       $ 26,332          $ 25,339
March 31, 1999            207,772      24,709         14,315            13,347
June 30, 2000             195,119      22,185         19,904            19,067
June 30, 1999             221,929      29,981         20,680            19,763
September 30, 2000        219,248      30,994         31,828            30,801
September 30, 1999        279,327      53,845         43,283            42,326
December 31, 2000  (a)    224,204       2,900          1,298               273
December 31, 1999  (b)    219,094     (13,820)       (24,298)          (25,289)


(a)  The fourth  quarter of 2000 included a  nonrecurring  charge related to the
     withdrawal  from the Midwest ISO that  reduced net income $5 million.  (See
     Note 2 - Regulatory Matters under Notes to Financial Statements for further
     information.)
(b)  The fourth  quarter of 1999  included  a charge  for coal  supply  contract
     terminations  that  reduced  net  income  $31  million.   (See  Note  11  -
     Commitments  and  Contingencies  under Notes to  Financial  Statements  for
     further information.)

Other  changes in  quarterly  earnings are due to the effect of weather on sales
and other factors that are characteristic of public utility operations.

See Notes to Financial Statements.

                                      -21-



<PAGE>



CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000

NOTE 1 - Summary of Significant Accounting Policies

Basis of Presentation

Central  Illinois  Public Service  Company  (AmerenCIPS or the  Registrant) is a
subsidiary of Ameren  Corporation  (Ameren),  which is the parent company of the
following   operating   companies:   the  Registrant,   Union  Electric  Company
(AmerenUE),  and AmerenEnergy  Generating Company (Generating Company), a wholly
owned subsidiary of AmerenEnergy  Resources Company (Resources Company).  Ameren
is a registered  holding company under the Public Utility Holding Company Act of
1935 (PUHCA) formed in December 1997 upon the merger of CIPSCO Incorporated (the
Registrant's  former  parent) and  AmerenUE  (the  Merger).  Both Ameren and its
subsidiaries  are subject to the regulatory  provisions of PUHCA.  The operating
companies are engaged principally in the generation, transmission,  distribution
and sale of electric energy and the purchase,  distribution,  transportation and
sale of natural gas in the states of Illinois and Missouri.  Contracts among the
companies--dealing with jointly-operated generating facilities,  interconnecting
transmission  lines,  and the exchange of electric  power--are  regulated by the
Federal  Energy  Regulatory  Commission  (FERC) or the  Securities  and Exchange
Commission (SEC). Administrative support services are provided to the Registrant
by a separate Ameren subsidiary,  Ameren Services Company. The Registrant serves
325,000  electric and 175,000 gas  customers in a 20,000  square-mile  region of
central  and  southern  Illinois.  The  Registrant  also has a 20%  interest  in
Electric Energy,  Inc. (EEI),  which is accounted for under the equity method of
accounting.  EEI owns  and/or  operates  electric  generating  and  transmission
facilities  in  Illinois  that  supply  electric  power  primarily  to a uranium
enrichment plant located in Paducah, Kentucky.

In  conjunction  with the Illinois  Electric  Service  Customer  Choice and Rate
Relief  Law of 1997 (the  Law),  on May 1, 2000,  following  the  receipt of all
required state and federal regulatory approvals,  the Registrant transferred its
electric  generating  assets and  liabilities,  at historical net book value, to
Generating  Company (the Transfer) (see Note 2 - Regulatory  Matters for further
discussion).

Regulation
In addition to the SEC, the  Registrant  is  regulated by the Illinois  Commerce
Commission (ICC) and the FERC. The accounting policies of the Registrant conform
to U.S. generally accepted accounting principles (GAAP). See Note 2 - Regulatory
Matters for further information.

Property and Plant
The cost of  additions  to, and  betterments  of, units of property and plant is
capitalized.  Cost includes labor, material,  applicable taxes and overheads. An
allowance for funds used during  construction is also added for the Registrant's
regulated  assets.  Maintenance  expenditures  and  the  renewal  of  items  not
considered units of property are charged to income,  as incurred.  When units of
depreciable  property are  retired,  the original  cost and removal  cost,  less
salvage value, are charged to accumulated depreciation.

Depreciation
Depreciation  is provided  over the  estimated  lives of the various  classes of
depreciable  property by applying composite rates on a straight-line  basis. The
provision for depreciation in 2000,  1999, and 1998 was  approximately 3% of the
average depreciable cost.

Fuel and Gas Costs
Prior to the Transfer,  the cost of fuel for electric generation is reflected in
base rates with no provision  for changes to be made  through a fuel  adjustment
clause.  (See Note 2 - Regulatory Matters for further  information.)  Changes in
gas costs  are  generally  reflected  in  billings  to gas  customers  through a
purchased gas adjustment clause.

Cash and Cash Equivalents
Cash  and  cash  equivalents  include  cash on hand  and  temporary  investments
purchased with an original maturity of three months or less.

                                      -22-


<PAGE>


Income Taxes
The Registrant is included in the  consolidated  federal income tax return filed
by Ameren. Income taxes are allocated to the individual companies based on their
respective  taxable  income or loss.  Deferred  tax assets and  liabilities  are
recognized  for the tax  consequences  of  transactions  that have been  treated
differently  for financial  reporting and tax return  purposes,  measured  using
statutory tax rates.

Investment  tax  credits  utilized in prior  years were  deferred  and are being
amortized over the useful lives of the related properties.

Allowance for Funds Used During Construction
Allowance  for  funds  used  during  construction  (AFC) is a  utility  industry
accounting  practice  whereby the cost of borrowed  funds and the cost of equity
funds (preferred and common stockholders' equity) applicable to the Registrant's
construction  program are  capitalized as a cost of  construction.  AFC does not
represent a current source of cash funds.  This accounting  practice offsets the
effect on earnings of the cost of  financing  current  construction,  and treats
such financing  costs in the same manner as  construction  charges for labor and
materials.

Under  accepted  ratemaking  practice,  cash  recovery  of AFC, as well as other
construction  costs,  occurs when  completed  projects are placed in service and
reflected in customer  rates.  The AFC rates used were 6% during 2000, 5% during
1999 and 6% during 1998.

Unamortized Debt Discount, Premium and Expense
Discount, premium, and expense associated with long-term debt are amortized over
the lives of the related issues.

Revenue
The  Registrant  accrues an estimate of electric  and gas  revenues  for service
rendered, but unbilled, at the end of each accounting period.

Energy Contracts
The  Emerging  Issues Task Force of the  Financial  Accounting  Standards  Board
(EITF)  Issue  98-10,   "Accounting  for  Energy  Trading  and  Risk  Management
Activities" became effective on January 1, 1999. EITF 98-10 provides guidance on
the  accounting  for energy  contracts  entered into for the purchase or sale of
electricity,  natural  gas,  capacity  and  transportation.  The EITF  reached a
consensus in EITF 98-10 that sales and purchase  activities being performed need
to be classified as either trading or nontrading. Furthermore, transactions that
are determined to be trading activities would be recognized on the balance sheet
measured at fair value,  with changes in fair market value included in earnings.
Prior to the Transfer,  AmerenEnergy,  Inc., an energy  marketing  subsidiary of
Ameren,  entered into contracts for the sale and purchase of energy on behalf of
the Registrant  (see Note 2 - Regulatory  Matters for further  discussion of the
Transfer).  Virtually  all  of  AmerenEnergy's  transactions  on  behalf  of the
Registrant  were considered  nontrading  activities and were accounted for using
the accrual or settlement method, which represents industry practice. Subsequent
to the  Transfer,  the  Registrant  no longer  owns any  generation  assets  and
receives all of its power under the power  supply  agreement  with  AmerenEnergy
Marketing Company (see Note 2 - Regulatory  Matters),  which is accounted for on
the settlement basis. See Note 13 - Statement of Financial  Accounting Standards
No. 133 for information related to adoption of a new standard in 2001.

Software
Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" became effective on January 1, 1999. SOP
98-1  provides  guidance  on  accounting  for the  costs  of  computer  software
developed or obtained for internal  use.  Under SOP 98-1,  certain  costs may be
capitalized and amortized over some future period.

Evaluation of Assets for Impairment
Statement of Financial  Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of"
prescribes  general  standards for the recognition and measurement of impairment
losses. The Registrant determines if long-lived assets are impaired by comparing
their  undiscounted  expected  future cash flows to their  carrying  amount.  An
impairment loss is recognized if the undiscounted expected future cash flows are
less  than the  carrying  amount  of the  asset.  SFAS 121  also  requires  that
regulatory  assets  which are no longer  probable  of  recovery  through  future
revenues be charged to  earnings  (see Note 2 -  Regulatory  Matters for further
information). As of December 31, 2000, no impairment was identified.

                                      -23-


<PAGE>



Use of Estimates
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 and disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.

NOTE 2 - Regulatory Matters

Illinois Electric Restructuring
In December 1997, the Governor of Illinois signed the Electric  Service Customer
Choice and Rate  Relief Law of 1997 (the Law)  providing  for  electric  utility
restructuring  in Illinois.  This  legislation  introduces  competition into the
supply of electric energy at retail in Illinois.

Under the Law,  retail  direct  access,  which allows  customers to choose their
electric generation suppliers,  will be phased in over several years. Access for
commercial and industrial  customers occurred over a period from October 1999 to
December  2000,  and access for  residential  customers  will occur after May 1,
2002.

As a  requirement  of the Law,  in March 1999,  the  Registrant  filed  delivery
service tariffs with the ICC. These tariffs would be used by electric  customers
who choose to purchase their power from alternate suppliers. In August 1999, the
ICC issued an order  approving the delivery  services  tariffs,  with an allowed
rate of return on equity of 10.45%.  The  Registrant  and AmerenUE filed a joint
petition for rehearing of that order requesting the ICC to alter its conclusions
on a number of issues.  In January 2000,  the ICC issued an order  resolving the
issues set for  rehearing.  In December  2000, the Registrant and AmerenUE filed
revised  Illinois  delivery  service  tariffs  with the ICC.  The purpose of the
filing  was to  update  financial  information  that was used to  establish  the
initial  rates and to propose new rates.  Additionally,  the filing  establishes
tariffs for  residential  customers who may choose to purchase  their power from
alternate  suppliers  beginning  in May 2002.  These  tariffs are subject to ICC
approval.  The  Registrant  expects  that the ICC will issue its  decision  with
respect to the tariffs in early 2002.

The Law included a 5%  residential  electric rate decrease for the  Registrant's
electric  customers,  effective  August  1,  1998.  This rate  decrease  reduced
electric  revenues  by  approximately  $7  million in 1999.  Under the Law,  the
Registrant was subject to an additional 5%  residential  electric rate decreases
in 2000 and is subject to an additional 5% residential electric rate decrease in
2002, to the extent its rates exceed the Midwest  utility  average at that time.
In 2000, the Registrant's Illinois electric rates were below the Midwest utility
average.

As a  result  of the  Law,  the  Registrant  filed a  proposal  with  the ICC to
eliminate the electric fuel  adjustment  clause for Illinois  retail  customers,
thereby  including  historical  levels  of fuel  costs  in base  rates.  The ICC
approved the Registrant's filing in early 1998.

The Law also contains a provision  requiring  that  one-half of excess  earnings
from the Illinois jurisdiction for the years 1998 through 2004 to be refunded to
the  Registrant's  customers.  Excess earnings are defined as the portion of the
two-year average annual rate of return on common equity in excess of 1.5% of the
two-year average of an Index, as defined in the Law. The Index is defined as the
sum of the  average  for the twelve  months  ended  September  30 of the average
monthly yields of the 30-year U.S. Treasury bonds,  plus prescribed  percentages
ranging from 4% to 7%. Filings must be made with the ICC on, or before, March 31
of each year 2000 through  2005.  The  Registrant  did not record any  estimated
refunds to Illinois customers in 2000.

In conjunction with another provision of the Law, on May 1, 2000,  following the
receipt of all required state and federal regulatory  approvals,  the Registrant
transferred its electric  generating  assets and liabilities,  at historical net
book  value,  to  Generating  Company in  exchange  for a  promissory  note from
Generating Company in the principal amount of $552 million, $40 million of which
is a current asset at December 31, 2000, and 1,000 shares of Generating  Company
common stock (the Transfer). The promissory note bears interest at 7 percent and
has  a  term  of  five  years  payable  based  on a  10-year  amortization.  The
transferred  assets  represent   generating   capacity  of  approximately  2,900
megawatts.   Approximately  45  percent  of  the  Registrant's   employees  were
transferred to Generating Company as a part of the transaction.  The significant
components of the net assets transferred are as follows:

                                      -24-

<PAGE>



(Thousands of dollars)
Cash                                                          $   6,387
Other receivable - intercompany                                  26,000
Material and supplies                                            53,806
Other current assets                                              5,522
Property and plant, net                                         635,031
                                                  ----------------------

Total assets transferred                                      $ 726,746
                                                  ----------------------


Accounts payable                                              $   6,541
Other current liabilities                                         3,351
Other deferred credits                                            1,804
Deferred investment tax credits                                  19,728
Deferred tax liabilities, net                                   143,696
                                                  ----------------------

Total liabilities transferred                                 $ 175,120
                                                  ----------------------


Net assets transferred                                        $ 551,626
                                                  ----------------------

In conjunction with the Transfer, an electric power supply agreement was entered
into between  Generating Company and its newly created  nonregulated  affiliate,
AmerenEnergy  Marketing  Company  (Marketing  Company),   also  a  wholly  owned
subsidiary of Resources Company. In addition,  Marketing Company entered into an
electric  power supply  agreement  with the  Registrant  to supply it sufficient
energy and capacity to meet its obligations as a public utility through December
31, 2004 (the Power  Supply  Agreement).  A portion of the  capacity  and energy
supplied  by  Generating  Company  to  Marketing  Company  will be resold to the
Registrant  for resale to native load  customers  at rates  specified by the ICC
(which approximate the historical  regulatory rates for generation) or to retail
customers allowed choice of an electric supplier under state law at market based
prices.  In turn,  the  Registrant  will bill  these  customers  at rates  which
approximate the costs the Registrant incurs for its capacity and energy supplied
by Marketing  Company.  For the eight-month period ended December 31, 2000, $257
million of the  Registrant's  purchased power was derived under the Power Supply
Agreement.

As  a  result  of  the  Transfer,  coupled  with  the  Power  Supply  Agreement,
prospectively  from May 1, 2000  through  December 31,  2004,  the  Registrant's
operating   revenues  will  include   revenues   derived  from  its  traditional
transmission and distribution operations,  as well as those revenues it receives
from its native load customers,  or new customers  allowed choice of an electric
supplier  under  state  law.  Sales  under  certain   wholesale   contracts  and
interchange  sales will no longer be  reflected  in  operating  revenues  of the
Registrant.  Instead,  those revenues will be recorded at Resources Company. The
Registrant's  operating expenses will include those expenses it incurs under its
traditional transmission and distribution operations, as well as purchased power
expenses incurred under the terms of the Power Supply Agreement.

In addition, as a result of the transaction,  the Registrant incurred a deferred
intercompany tax gain,  which resulted in an additional  deferred tax liability.
An intercompany  tax receivable with Generating  Company was established for the
deferred tax  liability.  This asset and liability will be amortized over twenty
years.  At December 31,  2000,  the  Registrant's  deferred  tax  liability  and
intercompany tax receivable was $211 million.

Other  provisions  of the Law  include  (1)  potential  recovery of a portion of
strandable  costs,  which  represent  costs which would not be  recoverable in a
restructured  environment,  through a transition charge collected from customers
who choose  another  electric  supplier;  (2) a mechanism to securitize  certain
future revenues; and (3) a provision relieving the Registrant of the requirement
to file  electric  rate cases or  alternative  regulatory  plans,  following the
consummation of the Merger to reflect the effects of net merger savings.

In August 1999,  the Registrant  filed a transmission  system rate case with the
FERC.  This  filing  was  primarily  designed  to  implement  rates,  terms  and
conditions  for  transmission  service for wholesale  customers and those retail
customers who choose other  suppliers as allowed under the Law. In January 2000,
the  Registrant  and other  parties to the rate case  entered  into a settlement
agreement  resolving all issues  pending  before the FERC. In May 2000, the FERC
approved the settlement and allowed the settlement  rates to become effective as
of the first quarter of 2000.

                                      -25-

<PAGE>

The  provisions of the Law could also result in lower  revenues,  reduced profit
margins and increased costs of capital and operations expense. At this time, the
Registrant is unable to determine the impact of the Law on its future  financial
condition, results of operations or liquidity.

Gas
In February  1999,  the ICC  approved an $8 million  annual  rate  increase  for
natural gas service. The increase became effective in February 1999.

AmerenUE Transfer
The  Registrant  and  AmerenUE  have  filed  requests  with  various  regulatory
agencies,  including the ICC, Missouri Public Service Commission (MoPSC) and the
SEC, seeking  authorization to transfer AmerenUE's  Illinois-based  electric and
natural  gas  businesses  and  certain of its  Illinois-based  distribution  and
transmission  assets and  personnel  to the  Registrant.  The  distribution  and
transmission assets and related liabilities were proposed to be transferred from
AmerenUE to the  Registrant at  historical  net book value.  In March 2001,  the
Registrant decided it will no longer pursue this transfer and will be taking the
necessary action to withdraw its pending requests for regulatory approvals.

Midwest ISO
In 1998, the Registrant  joined a group of companies that  originally  supported
the formation of the Midwest  Independent  System Operator (Midwest ISO). An ISO
operates,  but does not own, electric  transmission systems and maintains system
reliability and security,  while  facilitating  wholesale and retail competition
through the  elimination of "pancaked"  transmission  rates.  The Midwest ISO is
regulated by the FERC.  The FERC  conditionally  approved  the  formation of the
Midwest ISO in September 1998. The ICC has authorized the Registrant to join the
Midwest ISO.

In December 1999,  the FERC issued Order 2000 relating to Regional  Transmission
Organizations  (RTOs) that would meet certain  characteristics  such as size and
independence.  RTOs,  including  ISOs,  are entities that ensure  comparable and
non-discriminatory  access to regional electric transmission systems. Order 2000
calls on all transmission owners to join RTOs.

Following the  announcements of Commonwealth  Edison and Illinois Power of their
intent  to  withdraw  from  the  Midwest  ISO and  join  the  Alliance  Regional
Transmission  Organization  (Alliance  RTO), the Registrant  determined that the
operational  configuration of the Midwest ISO was unacceptable and announced its
withdrawal in November 2000.  The  Registrant  decided to withdraw to ensure the
continued  reliable and efficient  operation of its  transmission  system.  As a
result of the  Registrant's  decision to withdraw  from the Midwest  ISO, in the
fourth quarter of 2000, the Registrant  recorded a pretax nonrecurring charge to
earnings of $8 million ($5 million after income  taxes).  This charge relates to
the Registrant's  estimated obligation under the Midwest ISO agreement for costs
incurred by the Midwest ISO, plus estimated exit costs.

In January 2001,  the  Registrant  announced  that it had signed an agreement to
join the Alliance RTO.  Also, in January 2001, the FERC  conditionally  approved
the formation,  including the rate  structure,  of the Alliance RTO. In February
2001,  in a  proceeding  before the FERC,  the  Alliance RTO and the Midwest ISO
reached an agreement  that enables the  Registrant  to withdraw from the Midwest
ISO and to join the Alliance RTO. This settlement  agreement  remains subject to
FERC  approval.  The  Registrant's  transfer  of control  and  operation  of its
transmission assets to the Alliance RTO is also subject to ICC approval. At this
time, the Registrant is unable to determine the impact that its withdrawal  from
the  Midwest  ISO and its  participation  in the  Alliance  RTO will have on its
future financial condition, results of operations or liquidity.

Regulatory Assets and Liabilities
In accordance  with SFAS 71, the Registrant has deferred  certain costs pursuant
to actions of its regulators, and is currently recovering such costs in electric
rates charged to customers.

                                      -26-

<PAGE>



At December 31, the Registrant had recorded the following  regulatory assets and
regulatory liability:
-----------------------------------------------------------------------------
(In Millions)
                                           2000                         1999
-----------------------------------------------------------------------------
Regulatory Assets:
  Income taxes                              $ -                          $22
  Unamortized loss on reacquired debt         6                            7
  Other                                       6                           13
-----------------------------------------------------------------------------
Regulatory Assets                           $12                          $42
-----------------------------------------------------------------------------
Regulatory Liability:
  Income taxes                              $35                          $34
-----------------------------------------------------------------------------
Regulatory Liability                        $35                          $34
-----------------------------------------------------------------------------

Income Taxes:  See Note 9 - Income Taxes.
Unamortized Loss on Reacquired Debt: Represents losses related to refunded debt.
These amounts are being  amortized over the lives of the related new debt issues
or the remaining lives of the old debt issues if no new debt was issued.

The Registrant continually assesses the recoverability of its regulatory assets.
Under  current  accounting  standards,  regulatory  assets  are  written  off to
earnings  when it is no longer  probable  that such  amounts  will be  recovered
through future revenues.

NOTE 3 - Related Party Transactions

The  Registrant  has  transactions  in the normal  course of business with other
Ameren  subsidiaries.  These  transactions  are  primarily  comprised  of  power
purchases and sales,  including power  purchases  derived under the Power Supply
Agreement between the Registrant and Marketing Company, and services received or
rendered.   Intercompany  receivables  included  in  other  accounts  and  notes
receivable were  approximately $8 million and $12 million,  respectively,  as of
December 31, 2000 and 1999. Intercompany payables included in accounts and wages
payable totaled approximately $75 million and $35 million,  respectively,  as of
December 31, 2000 and 1999.

In  addition,  the  Registrant  has the  ability to borrow  funds from Ameren or
AmerenUE or invest funds through a regulated money pool  agreement.  At December
31, 2000 and 1999,  the Registrant had  outstanding  intercompany  borrowings of
$197 million and $133 million,  respectively,  through the regulated money pool.
See Note 7 - Short-Term Borrowings for further information.

In  conjunction   with  the  Transfer,   the  Registrant   incurred  a  deferred
intercompany tax gain,  which resulted in an additional  deferred tax liability.
An intercompany  tax receivable with Generating  Company was established for the
deferred tax  liability.  This asset and liability will be amortized over twenty
years.  At December 31,  2000,  the  Registrant's  deferred  tax  liability  and
intercompany tax receivable was $211 million.

NOTE 4 - Targeted Separation Plan

In July 1998,  Ameren offered  separation  packages to employees whose positions
were  eliminated  through a targeted  separation  plan  (TSP).  During the third
quarter of 1998, a nonrecurring, pretax charge of $7 million was recorded, which
reduced  earnings  $4  million,  representing  the  Registrant's  share of costs
incurred to implement the TSP.

NOTE 5 - Concentration of Risk

Market Risk
The  Registrant  is  exposed to changes  in market  prices for  natural  gas and
electricity.  With regard to its natural gas utility business,  the Registrant's
exposure to changing  market prices is in large part  mitigated by the fact that
the  Registrant has a purchased gas  adjustment  clause (PGA) in place.  The PGA
allows the  Registrant to pass on to its customers its prudently  incurred costs
of natural gas.

Since  the  Registrant  does not  have a  provision  similar  to the PGA for its
electric  operations,  purchased power commodity price risk is mitigated in part
due to the fact that the Registrant has entered into a long-term contract with a
supplier for  purchased  power (see Note 2 - Regulatory  Matters  under Notes to
Financial Statements for further discussion).

                                      -27-

<PAGE>

Credit Risk
Credit risk represents the loss that would be recognized if counterparties  fail
to perform as contracted.  The  Registrant's  financial  instruments  subject to
credit risk consist primarily of trade accounts receivables. The risk associated
with trade  receivables is mitigated by the large number of customers in a broad
range of industry groups comprising the Registrant's  customer base. No customer
represents greater than 10 percent of the Registrant's accounts receivable.  The
Registrant's  revenues  are  primarily  derived  from sales of  electricity  and
natural gas to customers in Illinois.

NOTE 6 - Preferred Stock

At  December  31,  2000 and  1999,  the  Registrant  had 4.6  million  shares of
authorized  preferred stock. There were 2 million shares of cumulative preferred
and 2.6 million shares of preferred  without par value  (aggregate  stated value
not to exceed $65 million) authorized.

Outstanding   preferred  stock  is  entitled  to  cumulative  dividends  and  is
redeemable at the prices shown in the following table:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Preferred Stock Not Subject to Mandatory Redemption:
( Dollars in Millions)
--------------------------------------------------------------------------------
                                  Redemption Price                December 31,
                                    (per share)         2000             1999
Par value $100 Series--
4.00% Series - 150,000 shares      $101.00              $15               $15
4.25% Series - 50,000 shares        102.00                5                 5
4.90% Series - 75,000 shares        102.00                8                 8
4.92% Series - 50,000 shares        103.50                5                 5
5.16% Series - 50,000 shares        102.00                5                 5
1993 Auction  - 300,000 shares      100.00-note(a)       30                30
6.625% Series - 125,000 shares      100.00               12                12

--------------------------------------------------------------------------------
Total Preferred Stock OUTSTANDING
Not Subject to
Mandatory Redemption                                    $80               $80
--------------------------------------------------------------------------------

(a) Dividend rates, and periods during which such rates apply, vary depending on
the  Registrant's  selection of certain defined  dividend  period  lengths.  The
average dividend rate during 2000 was 4.86%.

--------------------------------------------------------------------------------

NOTE 7 - Short-Term Borrowings

Short-term  borrowings of the Registrant consist of commercial paper (maturities
generally  within 1-45 days) and bank loans.  At December 31, 2000 and 1999, the
Registrant had no outstanding short-term borrowings.

At  December  31,  2000,  the  Registrant  had  committed  bank lines of credit,
aggregating  $25 million  (all of which was unused and  available  at such date)
which make  available  interim  financing at various rates of interest  based on
LIBOR,  the bank  certificate of deposit rate, or other options.  These lines of
credit are renewable annually at various dates throughout the year.

Also, the Registrant has the ability to borrow up to approximately  $914 million
from Ameren or AmerenUE through a regulated money pool agreement.  The regulated
money pool was established to coordinate and provide for certain short-term cash
and working capital requirements and is administered by Ameren Services Company.
Interest is calculated at varying rates of interest depending on the composition
of internal  and external  funds in the  regulated  money pool.  At December 31,
2000, the Registrant had $197 million of intercompany borrowings outstanding and
$727 million available through the regulated money pool.

                                      -28-


<PAGE>



NOTE 8 - Long-Term Debt

Long-term debt outstanding at December 31, was:
--------------------------------------------------------------------------------
(In Millions)                                     2000               1999
--------------------------------------------------------------------------------
First Mortgage Bonds  - note (a)
--------------------------------------------------------------------------------
 6.00% Series Z paid in 2000                      $ -                $25
 6.73% Series 1997-2 due 2001                      20                 20
 6 3/4% Series Y due 2002                          23                 23
 6 3/8% Series Z due 2003                          40                 40
 6.49% Series 1995-1 due 2005                      20                 20
 7.05% Series 1997-2 due 2006                      20                 20
 7 1/2% Series X due 2007                          50                 50
 7.61% Series 1997-2 due 2017                      40                 40
 6.125% Series due 2028                            60                 60
 Other  5.375% - 6.99% due 2001 through 2008       40                 50
--------------------------------------------------------------------------------
                                                  313                348
--------------------------------------------------------------------------------
Pollution Control Loan Obligations
--------------------------------------------------------------------------------
  1990 Series B 7.60% paid in 2000                  -                 32
  1990 Series A 7.60% paid in 2000                  -                 20
  2000 Series A due 2014 - note (b)                51                  -
  1993 Series C-1 due 2026 - note (b)              35                 35
  1993 Series C-2  5.70% due 2026                  25                 25
  1993 Series A 6 3/8% due 2028                    35                 35
  Other  4.13% - 5.90% due 2028                    35                 35
--------------------------------------------------------------------------------
                                                  181                182
--------------------------------------------------------------------------------
Unamortized Discount and Premium on Debt           (1)                (1)
--------------------------------------------------------------------------------
Maturities Due Within One Year                    (30)               (35)
--------------------------------------------------------------------------------
Total Long-Term Debt                             $463               $494
--------------------------------------------------------------------------------
(a)  At December  31,  2000,  substantially  all of the  property  and plant was
     mortgaged  under,  and  subject  to liens  of,  the  respective  indentures
     pursuant to which the bonds were issued.
(b)  Interest  rates,  and the  periods  during  which  such rates  apply,  vary
     depending on the Registrant's  selection of certain defined rate modes. The
     average interest rates for the year 2000 are as follows:
                  1993 Series C-1           4.19%
                  2000 Series A             4.34%

Maturities of long-term debt through 2005 are as follows:
--------------------------------------------------------------------------
(In Millions)                                            Principal Amount
--------------------------------------------------------------------------
                                      2001                       $30
                                      2002                        33
                                      2003                        45
                                      2004                         -
                                      2005                        20
--------------------------------------------------------------------------

NOTE 9 - Income Taxes

Total income tax expense for 2000  resulted in an  effective  tax rate of 36% on
earnings before income taxes (36% in 1999 and 1998).

Principal reasons such rates differ from the statutory federal rate:
--------------------------------------------------------------------------------
                                          2000          1999             1998
--------------------------------------------------------------------------------
Statutory federal income tax rate           35%           35%              35%
Increases (decreases) from:
  Depreciation differences                  (2)            -               (3)
  Amortization of investment tax credit     (1)           (3)              (2)
  State income tax                           4             5                5
  Other                                      -            (1)               1
--------------------------------------------------------------------------------
Effective income tax rate                   36%           36%              36%
--------------------------------------------------------------------------------

                                      -29-

<PAGE>



Income tax expense components:
--------------------------------------------------------------------------------
(In Millions)                            2000             1999             1998
--------------------------------------------------------------------------------
Taxes currently payable (principally
  federal):
Included in operating expenses          $ 42             $ 52             $ 60
--------------------------------------------------------------------------------
                                        $ 42             $ 52             $ 60
--------------------------------------------------------------------------------
Deferred taxes (principally federal):
Included in operating expenses--
     Depreciation differences           $(13)            $ (7)            $(10)
     Other                                16              (12)              (1)
--------------------------------------------------------------------------------
                                        $  3             $(19)            $(11)
--------------------------------------------------------------------------------
Deferred investment tax credits,
  Amortization
Included in operating expenses          $ (1)            $ (2)            $ (3)
--------------------------------------------------------------------------------
Total income tax expense                $ 44             $ 31             $ 46
--------------------------------------------------------------------------------

In accordance with SFAS 109,  "Accounting for Income Taxes," a regulatory asset,
representing the probable recovery from customers of future income taxes,  which
is expected to occur when temporary differences reverse, was recorded along with
a  corresponding   deferred  tax  liability.   Also,  a  regulatory   liability,
recognizing  the lower  expected  revenue  resulting  from reduced  income taxes
associated  with amortizing  accumulated  deferred  investment tax credits,  was
recorded.  Investment  tax credits have been  deferred  and will  continue to be
credited to income over the lives of the related property.

The Registrant  adjusts its deferred tax  liabilities for changes enacted in tax
laws or rates.  Recognizing  that  regulators will likely reduce future revenues
for  deferred  tax  liabilities  initially  recorded  at rates in  excess of the
current  statutory rate,  reductions in the deferred tax liability were credited
to the regulatory liability.

Temporary  differences  gave  rise to the  following  deferred  tax  assets  and
deferred tax liabilities at December 31:
--------------------------------------------------------------------------------
(In Millions)                                  2000                     1999
--------------------------------------------------------------------------------
Accumulated Deferred Income Taxes:
  Accelerated depreciation                    $ 86                      $216
  Capitalized taxes and expenses                63                        78
  Regulatory liabilities, net                  (32)                      (29)
  Prepayments                                  (25)                      (15)
  Deferred benefit costs                       (10)                      (11)
  Deferred intercompany tax gain               211                         -
--------------------------------------------------------------------------------
Total net accumulated deferred
income tax liabilities                        $293                      $239
--------------------------------------------------------------------------------

NOTE 10 - Retirement Benefits

On January 1, 1999,  the AmerenUE and the  AmerenCIPS  defined  benefit  pension
plans combined to form the Ameren  Retirement  Plans (Ameren Plans).  The Ameren
Plans cover substantially all employees of the Registrant. Benefits are based on
the employees' years of service and compensation. The Ameren Plans are funded in
compliance with income tax regulations  and federal  funding  requirements.  The
Registrant,  along with other  subsidiaries  of Ameren,  is a participant in the
Ameren Plans and is responsible  for its  proportional  share of the costs.  The
Registrant's share of the pension costs for 2000 and 1999 were $1 million and $6
million,  respectively,  of which approximately 23% and 20%, respectively,  were
charged to construction  accounts.  Pension costs for the AmerenCIPS'  plans for
the year  1998 were $9  million,  of which  approximately  19% were  charged  to
construction accounts.

                                      -30-

<PAGE>

Components of Net Periodic Pension Benefit Cost:
-------------------------------------------------------------------------
(In Millions)                                                  1998
-------------------------------------------------------------------------
Service cost                                                  $  8
Interest cost                                                   17
Expected return on plan assets                                 (22)
Amortization of prior service cost                               1
Special termination benefit charge                               5
-------------------------------------------------------------------------
Net periodic benefit cost                                     $  9
-------------------------------------------------------------------------

In addition to providing  pension  benefits,  the  Registrant  provides  certain
health care and life  insurance  benefits for retired  employees.  On January 1,
2000, the AmerenUE and AmerenCIPS  postretirement medical benefit plans combined
to form the Ameren Postretirement  Benefit Plans (Ameren  Postretirement Plans).
The  Ameren  Postretirement  Plans  cover  substantially  all  employees  of the
Registrant. The Ameren Postretirement Plans are funded in compliance with income
tax regulations and federal funding requirements. The ICC allows the recovery of
postretirement  benefit costs in rates to the extent that such costs are funded.
The Registrant, along with other subsidiaries of Ameren, is a participant in the
Ameren Postretirement Plans and is responsible for its proportional share of the
costs. The Registrant's share of the  postretirement  benefit costs for 2000 was
$5 million,  of which  approximately 20% were charged to construction  accounts.
The Registrant's  postretirement plan information for 1999 and 1998 is presented
separately.

The Registrant's  postretirement  benefit costs in 1999 and 1998 were $3 million
and $6 million,  respectively, of which 10% and 20%, respectively,  were charged
to  construction  accounts.   Following  is  the  plan  information  related  to
AmerenCIPS' plans as of December 31:



Funded Status of Postretirement Benefit Plans:
-------------------------------------------------------------------------
 (In Millions)                                                 1999
-------------------------------------------------------------------------
Change in benefit obligation
  Net benefit obligation at beginning of year                  $152
  Service cost                                                    3
  Interest cost                                                   9
  Actuarial (gain)/loss                                         (22)
  Benefits paid                                                  (4)
-------------------------------------------------------------------------
  Net benefit obligation at end of year                         138

Change in plan assets *
  Fair value of plan assets at beginning of year                128
  Actual return on plan assets                                   10
  Employer contributions                                          1
  401(h) transfer                                                 -
  Benefits paid                                                  (4)
-------------------------------------------------------------------------
  Fair value of plan assets at end of year                      135
Funded status - deficiency                                        3
Unrecognized net actuarial gain                                  75
Unrecognized net transition obligation                          (71)
-------------------------------------------------------------------------
Postretirement benefit liability at December 31                $  7
-------------------------------------------------------------------------
* Plan assets  consist  principally  of common  stocks,  bonds and money  market
instruments.

                                      -31-

<PAGE>

Components of Net Periodic Postretirement Benefit Cost:
--------------------------------------------------------------------------------
(In Millions)                                          1999             1998
--------------------------------------------------------------------------------
Service cost                                            $3               $3
Interest cost                                            9               10
Expected return on plan assets                          (9)              (8)
Amortization of:
      Transition obligation                              6                5
      Actuarial gain                                    (6)              (4)

--------------------------------------------------------------------------------
Net periodic benefit cost                               $3               $6
--------------------------------------------------------------------------------

Assumptions for the Obligation Measurements:
--------------------------------------------------------------------
                                                       1999
--------------------------------------------------------------------
Discount rate at measurement date                     7.75%
Expected return on plan assets                         8.5%
Medical cost trend rate - initial                        -
                                    - ultimate        5.25%
Ultimate medical cost trend rate expected in year      2000
--------------------------------------------------------------------

NOTE 11 - Commitments and Contingencies

The  Registrant  is  engaged  in a  capital  program  under  which  expenditures
averaging approximately $64 million,  including AFC, are anticipated during each
of the next five years.

The Registrant has existing contracts with pipeline and natural gas suppliers to
provide, transport and store natural gas for distribution.  Gas-related contract
cost  commitments  for 2001  through 2005 are  estimated to total $105  million.
Total  delivered  natural gas costs were $110 million for 2000,  $73 million for
1999, and $69 million for 1998.

In the fourth  quarter of 1999,  the  Registrant  and two of its coal  suppliers
executed agreements to terminate their existing coal supply contracts, effective
December 31, 1999. Under these  agreements,  the Registrant has made termination
payments to the suppliers totaling  approximately $52 million. These termination
payments were recorded as a  nonrecurring  charge in the fourth quarter of 1999,
equivalent to $31 million, after income taxes. Total pretax fuel cost savings of
$27 million were realized in 2000 by Ameren.

The  Registrant  is  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 fault,
legality of original  disposal,  or ownership of a disposal site. The Registrant
has been  identified  by the  federal  or  state  governments  as a  potentially
responsible party at several contaminated sites including one site that has been
listed on the National Priorities List.

The Registrant owns or is otherwise  responsible  for 13 manufactured  gas plant
(MGP)  sites in  Illinois.  The ICC  permits the  recovery  of  remediation  and
litigation  costs  associated with former MGP sites located in Illinois from the
Registrant's  Illinois  electric  and  natural  gas  utility  customers  through
environmental adjustment clause rate riders. To be recoverable,  such costs must
be  prudently  and properly  incurred  and are subject to annual  reconciliation
review by the ICC. Through  December 31, 2000, the total costs deferred,  net of
recoveries from insurers and environmental adjustment clause rate riders, was $6
million.

In addition, the Registrant's operations,  or that of its predecessor companies,
involve the use,  disposal  and, in  appropriate  circumstances,  the cleanup of
substances regulated under environmental  protection laws. Expenditures relating
to such  activities  are not expected to have a material  adverse  effect on the
Registrant's financial position, results of operation or liquidity.

The International  Union of Operating  Engineers Local 148 and the International
Brotherhood  of Electrical  Workers Local (IBEW) 702 filed unfair labor practice
charges with the National Labor Relations Board (NLRB), relating to the legality
of the 1993  lockout of both unions by  AmerenCIPS.  The NLRB issued  complaints
against the Registrant  concerning its lockout.  Both unions sought, among other
things, back pay and other benefits for the period of the lockout. At that time,
the  Registrant  estimated  the amount of back pay and other  benefits  for both
unions to be approximately $17 million.  In August 1998, a three-member panel of
the NLRB  reversed  the May 1996  decision of its  administrative  law judge and
ruled in favor of the  Registrant  holding  that the lockout was lawful.

                                      -32-

<PAGE>


In May 2000,  the U.S.  Court of Appeals for the  District  of Columbia  Circuit
issued a ruling upholding the NLRB's August 1998 decision. In December 2000, the
U.S.  Supreme  Court  denied the  unions'  request  to review the U.S.  Court of
Appeals ruling.  With this action by the U.S.  Supreme Court, the unions have no
further  appeals  available and the  lawfulness of  AmerenCIPS'  1993 lockout is
upheld.

The   Registrant's   union  employees  are  represented  by  the  IBEW  and  the
International   Union  of  Operating   Engineers.   These   employees   comprise
approximately  66% of the  Registrant's  workforce.  Labor  agreements  covering
substantially  all represented  employees of the Registrant  expired in 1999 and
were renewed for a term expiring in 2002.

In December  1996, a lawsuit was filed in the Circuit  Court of Madison  County,
Illinois,  alleging  negligence  on  behalf  of the  Registrant  and  one of its
subcontractors  for injuries arising out of an elevator  accident which occurred
at the  Registrant's'  Newton Power Plant in November  1996.  In October 2000, a
settlement  agreement was entered into between  parties.  The  settlement is the
subject of a  confidentiality  agreement;  however,  the Registrant has adequate
insurance to cover the settlement and the judgment entered in these proceedings.
As such, the final  resolution of this lawsuit will not have a material  adverse
effect  on  the  Registrant's  financial  position,   results  of  operation  or
liquidity.

Regulatory  changes enacted and being considered at the federal and state levels
continue to change the structure of the utility industry and utility regulation,
as well as encourage  increased  competition.  At this time,  the  Registrant is
unable to predict  the impact of these  changes  on the  Registrant's  financial
condition,  results of operations or liquidity.  See Note 2 - Regulatory Matters
for further information.

The Registrant is involved in other legal and administrative  proceedings before
various  courts and  agencies  with  respect to matters  arising in the ordinary
course of business,  some of which involve substantial  amounts.  The Registrant
believes  that  the  final  disposition  of  these  proceedings  will not have a
material  adverse  effect on its  financial  position,  results of operations or
liquidity.

NOTE 12  - Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and Temporary Investments/Short-Term Borrowings
The carrying amounts  approximate fair value because of the short-term  maturity
of these instruments.

Preferred Stock
The fair value is estimated  based on the quoted  market  prices for the same or
similar issues.

Long-Term Debt
The fair  value is  estimated  based on the  quoted  market  prices  for same or
similar  issues or on the current  rates offered to the  Registrant  for debt of
comparable maturities.

Derivative Financial Instruments
Market prices used to determine fair value are based on management's  estimates,
which  take  into   consideration   factors   like  closing   exchange   prices,
over-the-counter prices, time value of money and volatility factors.

Carrying  amounts  and  estimated  fair  values  of the  Registrant's  financial
instruments at December 31:


                                                      2000              1999
--------------------------------------------------------------------------------
(In Millions)                               Carrying   Fair   Carrying    Fair
                                             Amount    Value   Amount     Value
--------------------------------------------------------------------------------
Preferred stock                               $ 80    $ 65      $ 80     $ 66
Long-term debt (including current portion)     493     504       529      528

--------------------------------------------------------------------------------

NOTE 13 - Statement of Financial Accounting Standards No. 133

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS 133
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities and

                                      -33-

<PAGE>

requires  recognition of all  derivatives as either assets or liabilities on the
balance sheet measured at fair value.  The intended use of the  derivatives  and
their  designation as either a fair value hedge, a cash flow hedge, or a foreign
currency hedge will determine when the gains or losses on the derivatives are to
be reported in earnings and when they are to be reported as a component of other
comprehensive income in stockholder's equity. In June 1999, the FASB issued SFAS
137, "Accounting for Derivative Instruments and Hedging  Activities--Deferral of
the Effective  Date of FASB Statement No. 133," which delayed the effective date
of SFAS 133 to all fiscal quarters of all fiscal years, beginning after June 15,
2000.  In June 2000,  the FASB  issued  SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and Certain  Hedging  Activities - an amendment of FASB
Statement No. 133," which amended certain accounting and reporting  standards of
SFAS 133. The  Registrant  is adopting SFAS 133 in the first quarter of 2001. As
of January 1, 2001,  the adoption of SFAS 133 is not expected to have a material
effect on the Registrant. However, the Derivatives Implementation Group (DIG), a
committee of the FASB responsible for providing  guidance on the  implementation
of SFAS 133, has not reached a conclusion  regarding the appropriate  accounting
treatment of certain types of energy contracts under SFAS 133. The Registrant is
unable to predict when this issue will ultimately be resolved and the impact the
resolution will have on the Registrant's future financial  position,  results of
operations or  liquidity.  Implementation  of SFAS 133 will likely  increase the
volatility of the Registrant's earnings in future periods.

NOTE 14 - Segment Information

In 1998,  the  Registrant  adopted SFAS 131,  "Disclosures  about Segments of an
Enterprise  and Related  Information."  AmerenCIPS'  business  segments  provide
electric and gas service in portions of Illinois.

The accounting  policies of the segments are the same as those described in Note
1 - Summary of Significant  Accounting Policies.  Segment data includes a charge
allocating  costs of  administrative  support  services to each of the segments.
These costs are  accumulated in a separate  Ameren  subsidiary,  Ameren Services
Company,  which provides a variety of support  services to the  Registrant.  The
Registrant  evaluates the performance of its segments and allocates resources to
them, based on revenues and operating income.

The table below presents  information  about the reported revenues and operating
income of the Registrant for the years ended December 31:

-----------------------------------------------------------------------
(In Millions)             Electric           Gas            Total
-----------------------------------------------------------------------

-----------------------------------------------------------------------
2000
-----------------------------------------------------------------------
Revenues                   $ 717           $ 177           $ 894
Operating income              77              15              92
-----------------------------------------------------------------------

-----------------------------------------------------------------------
1999
-----------------------------------------------------------------------
Revenues                   $ 795           $ 133           $ 928
Operating income              86               9              95
-----------------------------------------------------------------------

-----------------------------------------------------------------------
1998
-----------------------------------------------------------------------
Revenues                   $ 722           $ 125           $ 847
Operating income             115               5             120
-----------------------------------------------------------------------

Specified items included in segment profit/loss for the year ended December 31:

-----------------------------------------------------------------------
(In Millions)             Electric           Gas            Total
-----------------------------------------------------------------------

-----------------------------------------------------------------------
2000
-----------------------------------------------------------------------
Depreciation, depletion
and amortization expense  $  53             $  8            $  61
-----------------------------------------------------------------------

-----------------------------------------------------------------------
1999
-----------------------------------------------------------------------
Depreciation, depletion
and amortization expense  $  73             $  8            $  81
-----------------------------------------------------------------------

                                      -34-

<PAGE>


--------------------------------------------------------------------------------
1998
--------------------------------------------------------------------------------
Depreciation, depletion
and amortization expense      $  66             $  8            $  74
--------------------------------------------------------------------------------

Specified item related to segment assets as of December 31:

--------------------------------------------------------------------------------
(In Millions)                 Electric            Gas              Total
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets       $  35               $  6            $  41
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1999
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets       $  86               $  9            $  95
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1998
--------------------------------------------------------------------------------
Expenditures for additions
   To long-lived assets       $  60               $  9            $  69
--------------------------------------------------------------------------------


                                    PART III

ITEM    10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

               Any information  concerning  directors required to be reported by
this item is included under "Item (1): Election of Directors" in the AmerenCIPS'
2001  definitive  proxy  statement  filed  pursuant  to  Regulation  14A  and is
incorporated herein by reference.

               Information concerning executive officers required by this item
is reported in Part I of this Form 10-K.


ITEM    11.    EXECUTIVE COMPENSATION.

               Any information  required to be reported by this item is included
under  "Executive  Compensation"  in AmerenCIPS' 2001 definitive proxy statement
filed pursuant to Regulation 14A and is incorporated herein by reference.


ITEM    12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

               Any information  required to be reported by this item is included
under "Security  Ownership" in AmerenCIPS' 2001 definitive proxy statement filed
pursuant to Regulation 14A and is incorporated herein by reference.


ITEM    13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

               Any information  required to be reported by this item is included
under "Item (1):  Election of Directors" in AmerenCIPS'  2001  definitive  proxy
statement  filed  pursuant  to  Regulation  14A and is  incorporated  herein  by
reference.

                                      -35-

<PAGE>


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
               ON FORM 8-K.

    (a) The following documents are filed as a part of this report:

    1.  Financial Statements and Financial Statement Schedule Covered by
        Report of Independent Accountants

                                                                   Pages Herein

        Report of Independent Accountants.............................    17
        Balance Sheet - December 31, 2000 and 1999....................    18
        Statement of Income - Years 2000, 1999, and 1998..............    19
        Statement of Cash Flows - Years 2000, 1999, and 1998..........    20
        Statement of Retained Earnings - Years 2000, 1999, and 1998...    21
        Notes to Financial Statements.................................    22
        Valuation and Qualifying Accounts (Schedule II)
          Years 2000, 1999, and 1998..................................    37
    Schedules  not  included  have  been  omitted  because  they  are  not
    applicable  or the  required  data  is  shown  in  the  aforementioned
    financial statements.


    2.  Exhibits:  See EXHIBITS beginning on Page 39.

    (b) Reports  on Form 8-K.  The  Registrant  filed a report on Form 8-K
        dated January 11, 2001  reporting the recording of a  nonrecurring
        charge in the fourth  quarter of 2000 as a result of its  decision
        to withdraw from the Midwest ISO.

                                      -36-


<PAGE>




                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>




      Col.A                                         Col.B                       Col.C                      Col.D            Col.E
     ------                                        ------                      ------                      -----            ------

                                                                              Additions
                                                                     ---------------------------
                                                                        (1)               (2)
                                                  Balance at         Charged to                                         Balance at
                                                  beginning           costs and       Charged to                          end of
 Description                                      of period           expenses        other accounts     Deductions       period
 -----------                                     ------------        -----------      -------------     ------------    --------
                                                                                                            (Note)
Year ended December 31, 2000
<S>                                               <C>                <C>               <C>               <C>             <C>
Reserves deducted in the balance sheet from
assets to which they apply:

    Allowance for doubtful accounts               $1,827,878         $3,100,000                          $3,151,086      $1,776,792
                                                  ==========         ==========                          ==========      ==========



Year ended December 31, 1999

Reserves deducted in the balance sheet from
assets to which they apply:

    Allowance for doubtful accounts               $1,714,232         $3,400,000                          $3,286,354      $1,827,878
                                                  ==========         ==========                          ==========      ==========




Year ended December 31, 1998

Reserves deducted in the balance sheet from
assets to which they apply:

    Allowance for doubtful accounts               $1,200,000         $4,267,000                          $3,752,768      $1,714,232
                                                  ==========         ==========                          ==========      ==========


</TABLE>

Note:  Uncollectible accounts charged off, less recoveries.

                                      -37-


<PAGE>



                                       SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                        CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                                                      (Registrant)

                                        G. L. RAINWATER
                                        President and Chief Executive Officer

Date March 30, 2001                     By   /s/ Steven R. Sullivan
    ---------------                 -------------------------------------------
                                         (Steven R. Sullivan, Attorney-in-Fact)

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the date indicated.

                Signature                        Title

/s/ G. L. Rainwater             President, Chief Executive Officer and Director
-------------------------
G. L. RAINWATER                                   (Principal Executive Officer)

/s/ Jerre E. Birdsong                                                 Treasurer
-------------------------
JERRE E. BIRDSONG                                 (Principal Financial Officer)

/s/ Warner L. Baxter                    Vice President, Controller and Director
-------------------------
WARNER L. BAXTER                                 (Principal Accounting Officer)

/s/ Paul A. Agathen                                                    Director
-------------------------
PAUL A. AGATHEN

/s/ Donald E. Brandt                                                   Director
-------------------------
DONALD E. BRANDT

/s/ Charles W. Mueller                                                 Director
-------------------------
CHARLES W. MUELLER



                               By     /s/ Steven R. Sullivan     March 30, 2001
                                     ---------------------------
                                      (Steven R. Sullivan, Attorney-in Fact)

                                      -38-


<PAGE>



                                    EXHIBITS

                             Exhibits Filed Herewith

Exhibit No.                                    Description

     12  - Statement re Computation of Ratio of Earnings to Fixed Charges and
           Preferred Stock Dividend Requirements.

     23  - Consent of Independent Accountants.

     24  - Powers of Attorney.

                                      -39-




<PAGE>



                       Exhibits Incorporated By Reference

             The  following  exhibits   heretofore  have  been  filed  with  the
Securities and Exchange  Commission  (SEC) pursuant to  requirements of the Acts
administered by the  Commission.  Such exhibits are identified by the references
following  the listing of each such  exhibit,  and they are hereby  incorporated
herein by reference.

Exhibit No.                                    Description

 2          -  Agreement and Plan of Merger, dated as of August 11, 1995, by
               and among CIPSCO  Incorporated  (CIPSCO),  Union Electric Company
               d/b/a AmerenUE  (AmerenUE),  Ameren Corporation (Ameren) and Arch
               Merger Inc. (June 30, 1995 Form 10-Q/A (Amendment No. 1), Exhibit
               2(a)).  3.1(i) - Restated  Articles of  Incorporation  of Central
               Illinois Public Service Company d/b/a  AmerenCIPS'  (the Company)
               (March 31, 1994 Form 10-Q, Exhibit 3(b)).

3.2(ii)     -  By-Laws of the Company as amended effective August 26, 1999
               (September 30, 1999 Form 10-Q, Exhibit 3(ii)).

4.1         -  Indenture  of  Mortgage  or Deed of Trust dated  October 1,
               1941, from the Company to Continental  Illinois National Bank and
               Trust  Company  of  Chicago  and Edmond B.  Stofft,  as  Trustees
               (Exhibit  2.01  in File  No.  2-60232).  Supplemental  Indentures
               dated,  respectively September 1, 1947, January 1, 1949, February
               1, 1952,  September  1, 1952,  June 1,  1954,  February  1, 1958,
               January 1, 1959, May 1, 1963,  May 1, 1964,  June 1, 1965, May 1,
               1967,  April 1, 1970,  April 1, 1971,  September 1, 1971,  May 1,
               1972,  December 1, 1973, March 1, 1974, April 1, 1975, October 1,
               1976, November 1, 1976, October 1, 1978, August 1, 1979, February
               1, 1980, February 1, 1986, May 15, 1992, July 1, 1992,  September
               15, 1992, April 1, 1993, and June 1, 1995 between the Company and
               the  Trustees  under the  Indenture  of Mortgage or Deed of Trust
               referred  to above  (Amended  Exhibit  7(b) in File  No.  2-7341;
               Second Amended  Exhibit 7.03 in File No.  2-7795;  Second Amended
               Exhibit 4.07 in File No. 2-9353; Amended Exhibit 4.05 in file No.
               2-9802; Amended Exhibit 4.02 in File No. 2-10944; Amended Exhibit
               2.02  in File  No.  2-13866;  Amended  Exhibit  2.02 in File  No.
               2-14656; Amended Exhibit 2.02 in File No.2-21345; Amended Exhibit
               2.02  in File  No.  2-22326;  Amended  Exhibit  2.02 in File  No.
               2-23569;  Amended  Exhibit  2.02 in  File  No.  2-26284;  Amended
               Exhibit 2.02 in File No.  2-36388;  Amended  Exhibit 2.02 in File
               No. 2-39587;  Amended  Exhibit 2.02 in File No. 2-41468;  Amended
               Exhibit  2.02 in  File  No.  2-43912;  Exhibit  2.03 in File  No.
               2-60232;  Amended  Exhibit  2.02 in  File  No.  2-50146;  Amended
               Exhibit 2.02 in File No. 2-52886;  Second Amended Exhibit 2.04 in
               File No.  2-57141;  Amended  Exhibit  2.04 in File  No.  2-57557;
               Amended Exhibit 2.06 in File No. 2-62564; Exhibit 2.02(a) in File
               No. 2-65914;  Amended  Exhibit  2.02(a) in File No. 2-66380;  and
               Amended  Exhibit 4.02 in File No.  33-3188;  Exhibit 4.02 to Form
               8-K dated May 15,  1992;  Exhibit  4.02 to Form 8-K dated July 1,
               1992;  Exhibit 4.02 to Form 8-K dated September 15, 1992; Exhibit
               4.02 to Form 8-K dated March 30,  1993;  Exhibit 4.03 to Form 8-K
               dated  June 5,  1995;  Exhibit  4.03 to Form 8-K dated  March 15,
               1997;  Exhibit  4.03 to Form 8-K dated June 1, 1997;  and Exhibit
               4.02,  Post-Effective Amendment No. 1 in File No. 333-18473.)

 4.2         - Indenture  dated as of December 1, 1998 from the Company to The
               Bank of New York  relating to Senior  Notes,  5.375% due 2008 and
               6.125% due 2028 (Exhibit 4.03,  Post-Effective Amendment No. 1 to
               File No. 333-18473).

                                      -40-



<PAGE>


Exhibit No.                                    Description

    10.1          - Form of Director's Retirement Income Plan (1990 Form 10-K,
                    Exhibit 10.04).

    10.2          - Form of Excess Benefit Plan (1994 Form 10-K, Exhibit 10.10).

    10.3          - Amendment to Form of Excess Benefit Plan (1995 Form 10-K,
                    Exhibit 10.07).

    10.4          - Form of Special Executive Retirement Plan (1994 Form 10-K,
                    Exhibit 10.11).

    10.5          - Amendment to Form of Special Executive Retirement Plan
                    (1995 Form 10-K, Exhibit 10.09).

    10.6          - Ameren Long-Term Incentive Plan of 1998 (Ameren's 1998 Form
                    10-K, Exhibit 10.1).

    10.7          - Ameren Change of Control Severance Plan (Ameren's 1998 Form
                    10-K, Exhibit 10.2).

    10.8          - Ameren Deferred Compensation Plan for Members of the Ameren
                    Leadership Team as amended and restated effective January 1,
                    2001 (Ameren's 2000 Form 10-K, Exhibit 10.1).

    10.9          - Ameren Deferred Compensation Plan for Members of the Board
                    of Directors (Ameren's 1998 Form 10-K, Exhibit 10.4).

    10.10         - Ameren Executive Incentive  Compensation  Program Elective
                    Deferral  Provisions  for  Members of the Ameren  Leadership
                    Team as  amended  and  restated  effective  January  1, 2001
                    (Ameren's 2000 Form 10-K, Exhibit 10.2).

    10.11         - Asset Purchase Agreement between  AmerenEnergy  Generating
                    Company (Generating  Company) and the Company (June 30, 2000
                    Form 10-Q, Exhibit 10).

    10.12         - Amended Electric Power Supply Agreement between Generating
                    Company and AmerenEnergy Marketing Company (Marketing Co.)
                    (File No. 333-56594, Exhibit 10.2).

    10.13         - Electric Power Supply Agreement between Marketing Co. and
                    the Company (File No. 333-56594, Exhibit 10.3).

    10.14         - Amended Joint Dispatch Agreement among Generating Company,
                    the Company and AmerenUE (File No.333-56594, Exhibit 10.4).

                                      -41-



<PAGE>


                         Exhibits Available Upon Request

             The following instruments defining the rights of holders of certain
unregistered  long-term debt of the Company have not been filed with the SEC but
will be furnished upon request.

                  - Loan  Agreement  dated January 1, 1993,  between the Company
                    and  Illinois   Development   Finance  Authority  (IDFA)  in
                    connection with IDFA's $35,000,000, 6-3/8% Pollution Control
                    Revenue  Refunding  Bonds (Central  Illinois  Public Service
                    Company Project) 1993 Series A, due January 1, 2028.

                  - Loan Agreement dated June 1, 1993, between the Company and
                    IDFA in connection with IDFA's $17,500,000 Pollution Control
                    Revenue  Refunding  Bonds,  1993 Series B-1 due June 1, 2028
                    and $17,500,000  Pollution  Control Revenue Refunding Bonds,
                    1993 Series B-2 due June 1, 2028.

                  - Loan  Agreement  dated August 15, 1993,  between the Company
                    and IDFA in  connection  with IDFA's  $35,000,000  Pollution
                    Control Revenue  Refunding Bonds, 1993 Series C-1 due August
                    15, 2026 and $25,000,000 Pollution Control Revenue Refunding
                    Bonds, 1993 Series C-2 due August 15, 2026.

                  - Loan Agreement dated March 1, 2000,  between the Company and
                    IDFA in  connection  with the IDFA's  $51,100,000  Pollution
                    Control Revenue Refunding Bonds (AmerenCIPS Project)
                    Series 2000A due March 1, 2014.

Note:    Reports of the Company on Forms 8-K, 10-Q and 10-K are on file with the
         SEC under File Number 1-3672.

         Reports of Ameren on Forms 8-K,  10-Q and 10-K are on file with the SEC
         under File Number 1-14756.

                                      -42-