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, 2001
                                       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
21,  2002  determined  by trader  derived  valuations  based on  current  market
conditions on a spread basis (excluding Preferred Stock for which prices are not
publicly available): $29,168,750.

     Shares of Common Stock without par value, outstanding as of March 21, 2002:
25,452,373 shares (all owned by Ameren Corporation).

                      Documents incorporated by references.

     Portions of the registrant's definitive proxy statement for the 2002 annual
meeting are incorporated by reference into Part III.

<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

PART I  Page
<S>   <C>  <C> <C>                                                          <C>

Item   1    -  Business
                    General................................................   1
                    Capital Program and Financing..........................   2
                    Rates and Regulation...................................   2
                    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).......   7

PART II

Item   5    -  Market for Registrant's Common Equity and Related
                    Stockholder Matters....................................   7
Item   6    -  Selected Financial Data.....................................   7
Item   7    -  Management's Discussion and Analysis of Financial Condition
                    and Results of Operations..............................   8
Item   7A   -  Quantitative and Qualitative Disclosures about Market Risk..  17
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>......  36
Item 11     -  Executive Compensation<F2>..................................  36
Item 12     -  Security Ownership of Certain Beneficial Owners
                    and Management<F2>.....................................  36
Item 13     -  Certain Relationships and Related Transactions<F2>..........  36

PART IV

Item 14 -   Exhibits, Financial Statement Schedules and Reports on Form 8-K  37

SIGNATURES     ............................................................  39
EXHIBITS       ............................................................  40

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

<PAGE>



                                     PART I

ITEM 1. BUSINESS.

                                     GENERAL

     Central  Illinois Public Service  Company  (AmerenCIPS or the Company) 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  Company  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  Company.   For  additional
information on the Company's business organization,  see Note 1 to the "Notes to
Financial Statements" under Item 8 herein.

     The Company, 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 Company furnishes
electric service in 557 incorporated and unincorporated communities and adjacent
suburban and rural  areas.  The Company  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 Company supplies  electric service to about 325,000 customers and
natural gas service to about 170,000 customers.

     The AmerenCIPS  service  territory is predominantly  made up of small towns
and rural areas. The territory served by the Company,  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 Company  transferred all of its electric
generating assets totalling 2,860 megawatts of capacity 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 note 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 five generating  stations  located in Newton,  Coffeen,
Meredosia,  Grand  Tower and  Hutsonville,  Illinois  along with  related  fuel,
supply,  transportation,  maintenance  and labor  agreements  and other  rights,
assets and liabilities  related to the generation of electricity by the Company.
Seven  hundred  and  fifty  employees,  or  approximately  45% of the  Company's
workforce were also  transferred to Generating  Company as part of the Transfer.
As a result  of the  Transfer,  the  Company's  business  has  been  exclusively
electric and gas utility  transmission and distribution  operations since May 1,
2000.  For  additional  information  on the Transfer  including the power supply
arrangement the Company 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 2001,  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 2000 and 1999 were 80%
and 85%, respectively.

                                       1
<PAGE>

     The Company  employed 899 persons at December 31, 2001. For  information on
labor agreements and other labor matters, see Note 10 to the "Notes to Financial
Statements" under Item 8 herein.

     For additional information regarding the Company'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 Company'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, 6, 7 and 10 to the "Notes to  Financial  Statements"
under Item 8 herein.

     Financing  Restrictions.  The Mortgage  Indenture of AmerenCIPS 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.  The most restrictive of these
requirements,  at December  31,  2001,  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, 2001,  the 60% limitation
would  permit the  issuance of  approximately  $78 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 $10 million of additional first mortgage bonds as of March 15, 2002.
The "net  earnings" of  AmerenCIPS  for the year ended  December 31, 2001,  were
equal to 2.68 times the interest for one year on the  aggregate  amount of bonds
outstanding under the Mortgage Indenture at December 31, 2001.

     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, 2001,  the "gross  income  available  for  interest" of  AmerenCIPS
equalled  1.93  times  the  sum of the  annual  interest  charges  and  dividend
requirements on all such funded debt,  notes and preferred stock  outstanding at
December 31, 2001.  Such "gross income  available  for interest" was  sufficient
under the test to  support  the  issuance  of about $157  million of  additional
preferred  stock  (assuming an annual  dividend rate on such preferred  stock of
8.00%).


                              RATES AND REGULATION

     Rates. Rates that the Company is allowed to charge for its services are the
single most important item influencing the Company's financial position, results
of operations and liquidity.  The Company is highly regulated and the regulation
of the rates the Company  charges its  customers is  determined,  in large part,
outside of the Company's control by governmental organizations. Decisions by

                                       2
<PAGE>

these  organizations  are  influenced by many  factors,  including the Company's
recent cost of providing service,  the Company's quality of service,  regulatory
staff  knowledge and  experience,  economic  conditions and social and political
views. Decisions made by these organizations regarding the Company's rates could
have  a  material  impact  on  the  Company's  financial  position,  results  of
operations and liquidity.

     For the year 2001,  approximately 90% of the Company's  electric  operating
revenues were based on rates regulated by the Illinois Commerce Commission (ICC)
and 10% were regulated by the Federal Energy Regulatory Commission (FERC) of the
U. S.  Department of Energy.  The Company's gas operating  revenues for the year
2001 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.

     General  Regulatory  Matters.  The Company 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
Company 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 Company 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  Company,  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  Company,  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 Company into compliance.  The Company
believes  that  it is in  material  compliance  with  existing  regulations.  In
connection  with the  Transfer,  the Company 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  (styled as Zachary  Donaldson et al. v.
Central  Illinois  Public Service Company et al.) was filed in the Circuit Court
for the Seventh Judicial Circuit,  Sangamon County, Illinois against the Company
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 Company's 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 the Company, upheld the plaintiffs' verdict. On
February 22,  2002,  the Illinois  Supreme  Court,  on an appeal by the Company,
affirmed the Illinois  Appellate  Court's  decision  upholding  the  plaintiffs'
verdict.  On March 15, 2002, the Company  petitioned the Illinois  Supreme Court
for a  rehearing  of its  decision.  AmerenCIPS'  payment  of the  $3.2  million
plaintiffs'  verdict (plus interest) will not have a material  adverse effect on
its financial position, results of operations or liquidity. However, the Company
believes  that the Illinois  Supreme  Court's  decision may result in additional
complaints  being filed against  AmerenCIPS in connection  with its  Taylorville
manufactured  gas plant site seeking  damages on the same or similar  grounds as
alleged in the Donaldson complaint.  The Company is unable to predict the number
of such complaints which may be filed, the amount of damages which may be sought
or the extent,  if any, to which the Illinois  Supreme  Court's  decision on the
Donaldson complaint will be judicially determined to apply to other complaints.

                                       3
<PAGE>

     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  Company is unable to predict  the  extent,  if any,  to which the
Illinois  Supreme Court's  decision on the Donaldson  complaint  described above
will effect the outcome of this lawsuit.  However, the Company believes that the
final  resolution of this lawsuit will not have a material adverse effect on its
financial position, results of operations or liquidity.

     See Note 10 to the "Notes to Financial  Statements" under Item 8 herein for
a further discussion of environmental matters.


                                 INDUSTRY ISSUES

     The  Company  is facing  issues  common  to the  electric  and gas  utility
industries  which have  emerged  during the past  several  years.  These  issues
include:

          o    the potential for more intense competition;

          o    the potential for changes in the structure of regulation;

          o    changes in the  structure  of the industry as a result of changes
               in federal and state laws, including the formation of unregulated
               generating entities;

          o    on-going  consideration of additional  changes of the industry by
               federal and state authorities;

          o    continually   developing   environmental  laws,  regulations  and
               issues;

          o    public concern about the siting of new facilities;

          o    proposals for demand side management programs; and

          o    global climate issues.

The  Company 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 10 to
the "Notes to Financial Statements" under Item 8 herein.

ITEM 2. PROPERTIES.

     For   information   on  the  Company's   construction   program,   electric
transmission  assets  and the  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 10 to
the "Notes to Financial Statements" under Item 8 herein.

     The Company currently owns 20% of the common stock of Electric Energy, Inc.
(EEI),  and its  affiliate,  AmerenUE,  owns 40% of such stock.  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 February 2002, the Company received the required approval from the

                                       4
<PAGE>

FERC and  notified  the ICC of its  intent  to  transfer  its 20%  common  stock
interest in EEI to its affiliate,  AmerenEnergy  Resources Company.  No approval
from the ICC is required for this transfer.  The transfer,  which is expected to
occur  before  mid-year  2002,  will  complete  the process of  achieving a full
divestiture of all electric  generating capacity that had been owned directly or
indirectly by the Company.  The transaction will be in the form of a dividend by
the Company to Ameren of the common stock in EEI, the value of which is recorded
on AmerenCIPS'  books as $1.8 million,  and in turn, an in-kind  contribution of
such stock by Ameren to AmerenEnergy Resources Company. The remaining 40% of the
common stock of EEI is held 20% each by Kentucky  Utilities Company and Illinova
Generating Company.

     As of December 31, 2001,  the Company  owned  approximately  1,900  circuit
miles of electric  transmission  lines.  The  Company  also owned 4,900 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 Company include distribution lines,  underground cable, office
buildings, warehouses, garages and repair shops.

     The Company  plans in 2002 to transfer its  principal  office  building and
related leasehold  interests located in Springfield,  Illinois to its affiliate,
CIPSCO Investment  Company,  at net book value of approximately $4.7 million. In
March 2002,  the Company filed a notice of transfer of the office  building with
the ICC. The transfer  will be  implemented  as soon as possible  after a 30 day
notice period has expired at the ICC.  After the transfer,  the Company plans to
continue to use a portion of the office  building  for its  principal  executive
office, pursuant to a lease with CIPSCO Investment Company.

     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.

ITEM 3. LEGAL PROCEEDINGS.

     The  Company 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.  The Company
believes  that  the  final  disposition  of  these  proceedings  will not have a
material adverse effect on its financial position, results of operations or
liquidity.

     Included  in these  proceedings  are a number  of  lawsuits  that  name the
Company,  AmerenUE or Ameren,  along with numerous other parties,  as defendants
which were filed by plaintiffs  claiming varying degrees of injury from asbestos
exposure.  More than twenty such lawsuits are pending,  most of which were filed
in the Circuit Court of Madison County, Illinois. The Company received notice of
the first lawsuit in March 2001 with notice of the others occurring generally in
the fourth  quarter of 2001 and the first  quarter of 2002.  The number of total
defendants named in each case is large with more than forty parties named in all
except four of the lawsuits.  The claims filed against AmerenCIPS,  AmerenUE and
Ameren allege injury from asbestos  exposure  during  plaintiffs'  activities at
certain of the companies' electric generating plants (in the case of AmerenCIPS,
its former plants which are now owned by Generating  Company).  In each lawsuit,
the plaintiff seeks  unspecified  damages in excess of $50,000,  which typically
would be shared among the named defendants.

     For additional  information on legal and  administrative  proceedings,  see
"Rates and 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 10 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

                                       5

<PAGE>

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 Company 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:

          o    the  effects  of  regulatory   actions,   including   changes  in
               regulatory policy;
          o    changes in laws and other governmental actions;
          o    the impact on the Company of current  regulations  related to the
               phasing-in  of the  opportunity  for  some  customers  to  choose
               alternative energy suppliers in Illinois;
          o    the effects of increased  competition in the future due to, among
               other things,  deregulation  of certain  aspects of the Company's
               business at both the state and federal levels;
          o    the  effects  of  participation  in  a  FERC  approved   Regional
               Transmission  Organization (RTO), including activities associated
               with the Midwest  Independent  System Operator  (Midwest ISO) and
               the Alliance RTO;
          o    future  market  prices  for  purchased  power  and  natural  gas,
               including the use of financial  and  derivative  instruments  and
               volatility of changes in market prices;
          o    average rates for electricity in the Midwest;
          o    business and economic conditions;
          o    the impact of the adoption of new accounting standards;
          o    interest rates and the availability of capital;
          o    actions of rating agencies and the effects of such actions;
          o    weather conditions;
          o    the impact of current environmental  regulations on utilities and
               the  expectation  that  more  stringent   requirements   will  be
               introduced  over time,  which could  potentially  have a negative
               financial effect;
          o    monetary and fiscal policies;
          o    future wages and employee benefits costs;
          o    cost  and  availability  of  transmission  capacity  required  to
               satisfy energy sales made by the Company; and
          o    legal and administrative proceedings.


                                       6
<PAGE>
INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF
REGULATION S-K:
                      Age At                                  Date First Elected
         Name        12/31/01   Present Position                   or Appointed
         ----        --------   ----------------                   -------------


Gary L. Rainwater       55      President, Chief Executive Officer     1/1/98
                                and Director                          12/2/97
Paul A. Agathen         54      Senior Vice President                10/12/01
                                and Director                         12/31/97
Warner L. Baxter        40      Senior Vice President                 8/30/01
                                and Director                          4/22/99
Daniel F. Cole          48      Senior Vice President                10/12/01
Garry L. Randolph       53      Senior Vice President                10/12/01
Thomas R. Voss          54      Senior Vice President                  6/1/99
                                and Director                         10/12/01
David A. Whiteley       45      Senior Vice President                10/12/01
Jerre E. Birdsong       47      Vice President                       10/12/01
                                and Treasurer                        12/31/97
Michael J. Montana      55      Vice President                        4/28/98
Gilbert W. Moorman      58      Vice President                         6/1/88
Craig D. Nelson         48      Vice President                        4/28/98
Steven R. Sullivan      41      Vice President, General Counsel
                                and Secretary                         11/7/98
Martin J. Lyons         35      Controller                           10/22/01

     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  and Mr.  Lyons,  each of the  above-named
executive  officers has been  employed by the Company or an  affiliate  for more
than  five  years  in  executive  or  management  positions.  Mr.  Sullivan  was
previously  employed by Anheuser Busch Companies,  Inc. Mr. Lyons was previously
employed by PricewaterhouseCoopers LLP.

                                     PART II

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

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

ITEM 6.  SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>

For the Years Ended
December 31 (In Thousands)                   2001         2000(a)         1999           1998           1997
-------------------------                    ----         ------          ----           ----           ----
<S>                                      <C>            <C>            <C>           <C>            <C>
Operating revenues                       $  840,311     $  893,898     $  932,901    $  855,570     $  858,439
Operating income                             43,179         91,813         94,715       120,044        102,495
Net income                                   45,309         79,362         53,980        80,147         38,620
Preferred stock dividends                     3,627          3,882          3,833         3,745          3,715
Net income after preferred
  stock dividends                            41,682         75,480         50,147        76,402         34,905
Common stock dividends                       33,028         54,614         90,342        72,285         43,300
As of December 31,
Total assets                             $1,782,921     $1,867,141     $1,781,754    $1,764,397     $1,788,707
Long-term debt                              579,077        463,174        493,625       528,446        558,474
Total common stockholder's equity           563,750        555,244        534,378       575,370        572,759

</TABLE>

(a)  On May 1, 2000,  AmerenCIPS  transferred its electric generating assets and
     related liabilities,  at net book value, to AmerenEnergy Generating Company
     (Generating Company),  in exchange for a subordinated  promissory note from
     Generating Company in the principal amount of $552 million and 1,000 shares
     of Generating Company's common stock.

                                       7
<PAGE>

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

OVERVIEW

Central  Illinois  Public  Service  Company  (AmerenCIPS  or the  Company)  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  Company  and  CIPSCO
Investment Company (CIC), becoming subsidiaries of Ameren (the Merger).

On May 1, 2000,  the Company  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).  As a result of the Transfer, the Company's
operating  revenues  only  include  revenues and  expenses  associated  with its
transmission  and  distribution  operations.  In addition,  sales under  certain
wholesale  contracts and interchange  sales are no longer reflected in operating
revenues of the Company  after May 1, 2000.  Purchased  power  subsequent to May
2000  reflects an electric  power  supply  agreement  with  Resources  Company's
marketing  subsidiary,  AmerenEnergy  Marketing Company (Marketing  Company)(the
Power Supply Agreement). (See "Electric Industry Restructuring" below and Note 2
-  Regulatory   Matters  under  Notes  to  Financial   Statements   for  further
discussion.)  The  Company  also has a 20% common  stock  interest  in  Electric
Energy,   Inc.  (EEI).  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.  The Company buys 20% of
the excess generating output of EEI and sells this output as interchange  sales.
See  "Liquidity and Capital  Resources"  below for a discussion of the Company's
plans to transfer its common stock interest in EEI to Resources Company.

Ameren Services Company (Ameren Services), a wholly-owned  subsidiary of Ameren,
provides  shared  support  services  for  Ameren  and all  Ameren  subsidiaries,
including  the  Company.  Charges  are based upon the actual  costs  incurred by
Ameren Services, as required by PUHCA.

RESULTS OF OPERATIONS

Earnings
Earnings for 2001, 2000 and 1999, were $42 million, $75 million and $50 million,
respectively.  Earnings fluctuated over the three-year period, primarily due to:
the rate of sales growth,  weather  variations,  electric rate  reductions,  the
Transfer,  gas rate changes,  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,  changes in  interest  expense and changes in income and
property taxes.

In 2000,  the  Company  recorded  an $8 million  unusual  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
Statements for further information). In 1999, the Company 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  10  -
Commitments and  Contingencies  under Notes to Financial  Statements for further
information.

Electric Operations
Electric Revenues                      Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                         2001         2000        1999
--------------------------------------------------------------------------------
Rate variations                      $  -         $ -          $(7)
Effect of abnormal weather              6          (11)        (16)
Growth and other                       (7)          10           9
Interchange sales                     (46)         (82)         88
--------------------------------------------------------------------------------
                                     $(47)        $(83)        $74
--------------------------------------------------------------------------------

Electric  revenues for 2001 decreased $47 million compared to 2000 primarily due
to a decrease in  interchange  and wholesale  sales as a result of the Transfer.
The decreases in interchange  sales and wholesale  sales (included in Growth and
other) were  partially  offset by an increase in  commercial  sales of 7% and an
increase in  industrial  sales of 37%  primarily  due to a new electric  service
industrial customer contract effective August 2000.

                                       8
<PAGE>
Electric  revenues for 2000 decreased $83 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%,  resulting  primarily from the new electric service contract that became
effective August 2000.

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.

Interchange  revenues for 2001,  2000 and 1999 included sales to related parties
of $21 million, $45 million and $62 million,  respectively. See Note 3 - Related
Party Transactions under Notes to Financial Statements for further information.

Fuel and Purchased Power                         Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                                  2001          2000        1999
--------------------------------------------------------------------------------
Fuel:
    Generation                                $(57)         $(110)        $17
    Price                                        -             (5)        (18)
    Generation efficiencies and other            -             (4)         (7)
    Coal contract termination payments           -            (52)         52
Purchased power                                120            227          40
--------------------------------------------------------------------------------
                                               $63            $56         $84
--------------------------------------------------------------------------------

Fuel and purchased  power costs for 2001 increased $63 million  compared to 2000
primarily as a result of increased  purchased  power under the provisions of the
Power Supply Agreement,  partially offset by decreased generation resulting from
the Transfer.

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.

Fuel and purchased  power costs for 1999 increased $84 million  compared to 1998
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 prices.

Fuel and purchased power costs for 2001,  2000 and 1999 included  purchases from
related parties of $433 million, $290 million and $36 million, respectively. See
Note 3 - Related  Party  Transactions  under Notes to Financial  Statements  for
further information.

In 1999,  the  Company  and two of its coal  suppliers  executed  agreements  to
terminate  their  existing coal supply  contracts  effective  December 31, 1999.
Under these agreements,  the Company made termination  payments to the suppliers
totaling  approximately $52 million. These termination payments were recorded as
an unusual charge in the fourth  quarter of 1999. See Note 10 - Commitments  and
Contingencies under Notes to Financial Statements for further information.

Gas Operations
Gas revenues in 2001 decreased $7 million compared to 2000 primarily as a result
of lower  residential and commercial  sales resulting from unusually warm winter
weather.  Gas revenues in 2000 increased $44 million  compared to 1999 primarily
due to higher gas costs recovered through the Company's purchased gas adjustment
clause  and  higher  residential  and  commercial  sales as a result  of  colder
weather.  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 Company's  purchased gas adjustment
clause.  These 1999 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.

                                       9
<PAGE>

Gas costs for 2001 were  comparable  to 2000.  Gas costs for 2000  increased $37
million  compared to 1999  primarily  due to higher  retail sales and higher gas
prices.  Gas costs for 1999 increased $4 million  compared to 1998 primarily due
to higher gas prices, partially offset by lower total sales.

Other Operating Expenses
Other operating expenses consisted primarily of wages,  employee benefits costs,
professional  services  costs and  expenses  associated  with  support  services
provided by Ameren Services.  Other operating expense variations in 1999 through
2001 reflected  recurring factors such as growth,  inflation,  labor and benefit
variations, the Transfer, and charges for estimated costs relating to withdrawal
from the Midwest ISO as discussed below.

Other operating expenses in 2001 decreased $9 million compared to 2000 primarily
due to lower labor costs  resulting  from the Transfer,  partially  offset by an
increase in employee benefit costs resulting from increasing  healthcare  costs,
changes in actuarial  assumptions  and the  investment  performance  of employee
benefit plans' assets.  Other operating expenses in 2000,  excluding the Midwest
ISO-related  unusual charge discussed  below,  decreased $65 million 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 in
1999  increased  $11  million  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-related  information system costs. These increases were partially offset by
a reduced  workforce,  coupled  with the fact that 1998  expenses  included  the
charge for a targeted employee separation plan.

Other  operating  expenses  provided  by Ameren  Services  for the  years  ended
December  31,  2001,  2000 and 1999,  totaled $54  million,  $52 million and $60
million,  respectively.  See Note 3 - Related Party  Transactions under Notes to
Financial Statements for further information.

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

Maintenance  expenses  decreased  $15  million  in 2001  compared  to  2000  and
decreased $59 million in 2000 compared to 1999 primarily due to decreased  power
plant  maintenance  costs  resulting  from the  Transfer.  Maintenance  expenses
increased $32 million in 1999 compared to 1998 primarily due to increased  power
plant maintenance.

Depreciation and amortization  expense decreased $12 million in 2001 compared to
2000 and  decreased  $24  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 primarily due
to increased depreciable property.

Taxes
Income taxes for 2001  decreased $17 million  compared to 2000  primarily due to
lower pretax income.  Income tax expense from  operations for 2000 increased $13
million compared to 1999 due to a higher pretax income.  Income tax expense from
operations for 1999  decreased $15 million  compared to 1998 due to lower pretax
income.

Other taxes for 2001  decreased  $15 million  compared to 2000  primarily due to
lower  property and payroll taxes as a result of the  Transfer.  Other taxes for
2000 were  comparable to 1999.  Other tax expense for 1999 decreased $17 million
compared to 1998  primarily  due to a decrease  in gross  receipts  taxes.  This
decrease was 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 $13 million in 2001 compared to 2000 and increased
$26 million in 2000  compared to 1999  primarily  due to  intercompany  interest
income earned on a promissory note receivable from Generating  Company generated
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. Miscellaneous, net increased $3 million in 1999 compared to
1998 primarily due to losses on the disposal of property realized in 1998.

                                       10
<PAGE>

Interest
Interest expense  decreased $1 million in 2001 compared to 2000 primarily due to
a decrease in the  amortization  of a loss on reacquired  debt in 2001 and lower
interest rates.  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 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 partially  offset by the redemption of short-term  debt(See
Note 6 - Short-Term  Borrowings under Notes to Financial  Statements for further
information).

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating  activities  totaled $96 million for 2001 compared to
$62  million  for 2000 and $166  million for 1999.  Cash  provided by  operating
activities  increased  from 2000 to 2001  primarily due to the  fluctuations  in
working capital  requirements  including a decrease in trade  receivables due to
lower  sales,  an increase in taxes  accrued,  resulting  from the timing of tax
payments,   and  a  decrease  in  deferred   income  taxes  resulting  from  the
amortization of the intercompany deferred tax liability related to the Transfer.
Cash provided by operating  activities decreased from 1999 to 2000 primarily due
to  fluctuations  in  depreciation  and  amortization  and deferred income taxes
resulting  from the  Transfer.  See Note 2 - Regulatory  Matters  under Notes to
Financial Statements for further discussion.

Cash flows  provided by  investing  activities  totaled $39 million for the year
ended  December 31, 2001.  Cash flows used in investing  activities  totaled $41
million  and $95  million  for the  years  ended  December  31,  2000 and  1999,
respectively. Cash flows provided by investing activities increased from 2000 to
2001 primarily due to the collection of funds for a portion of the  intercompany
promissory  note  receivable   relating  to  the  Transfer.   Expenditures   for
constructing new or improving existing facilities were $51 million,  $41 million
and $95 million for 2001, 2000 and 1999,  respectively.  See "Electric  Industry
Restructuring"  and  Note  2 -  Regulatory  Matters  under  Notes  to  Financial
Statements  for  further  discussion.  Cash flows used in  investing  activities
decreased  from 1999 to 2000  primarily due to lower  construction  expenditures
related to the Transfer.

Capital  expenditures  are expected to approximate  $59 million in 2002. For the
five-year period 2002 through 2006,  construction  expenditures are estimated to
approximate $400 million. The Company and AmerenUE are considering the potential
transfer of AmerenUE's  Illinois-based electric and gas business to the Company,
which would impact future capital expenditure and resource requirements.

In the ordinary course of business,  the Company evaluates several strategies to
enhance its financial  position,  earnings and liquidity.  These  strategies may
include potential acquisitions,  divestitures,  opportunities to reduce costs or
increase  revenues,  and  other  strategic  initiatives  in  order  to  increase
shareholder  value.  The  Company  is unable to predict  which,  if any of these
initiatives will be executed,  as well as the impact these  initiatives may have
on the Company's future financial position, results of operations or liquidity.

Cash flows used in financing  activities  were $140 million for 2001 compared to
$4 million  for 2000 and $68 million  for 1999.  During 2001 the Company  issued
$150 million of long-term  debt,  that along with other funds was used to redeem
$223 million of  intercompany  notes payable and $30 million of long-term  debt.
During 2000, the Company issued $51 million of long-term debt and $90 million of
intercompany  notes and redeemed $87 million of long-term debt. During 1999, the
Company  issued $133  million of  intercompany  notes  payable and  redeemed $60
million of long-term debt and $47 million of short-term debt.

In December  2001,  the  interest  rate mode on the  Company's  three  series of
variable rate tax-exempt  pollution control  indebtedness  totaling $104 million
was  converted to fixed rates ranging from 5% to 5.95% with  maturities  through
2028.

In April 2001,  the Company filed with the  Securities  and Exchange  Commission
(SEC) a shelf  registration  statement on Form S-3 for the offering from time to
time of senior notes in one or more series with an offering  price not to exceed
$250 million. The SEC declared the registration statement effective in May 2001.
In June 2001,  the  Company  issued  $150  million  of the senior  notes with an
interest  rate of 6.625% and due June 2011.  Until the release date as described
in the  registration  statement,  the senior  notes will be secured by a related
series of the Company's first mortgage bonds. The proceeds of these senior notes
were used to repay  short-term  debt,  a portion of which was  incurred to repay
first mortgage bonds maturing in June 2001.

                                       11
<PAGE>

The  Company  plans to  continue  utilizing  short-term  debt to support  normal
operations and other  temporary  requirements.  The Company is authorized by the
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, 2001,  the Company had committed  bank lines of credit  aggregating
$25 million,  all of which were unused and  available at such date.  These lines
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  December
31, 2001, the Company had no outstanding short-term borrowings.

The Company  has the ability to borrow up to  approximately  $831  million  from
Ameren or from two of Ameren's other subsidiaries, AmerenUE and Ameren Services,
through a regulated  money pool  agreement as of December  31,  2001.  The total
amount  available to the Company at any given time from the regulated money pool
is reduced by the amount of  borrowings  by  AmerenUE  or Ameren  Services,  but
increased to the extent  AmerenUE or Ameren  Services  have surplus funds or the
availability of other external borrowing  sources.  The regulated money pool was
established  to coordinate and provide for certain  short-term  cash and working
capital  requirements  of the  Company,  AmerenUE  and  Ameren  Services  and is
administered  by Ameren  Services.  Interest is  calculated  at varying rates of
interest  depending on the  composition  of internal  and external  funds in the
regulated  money pool.  For the years  ended  December  31,  2001 and 2000,  the
average  interest  rates for the  regulated  money  pool were  3.95% and  6.29%,
respectively.  At December 31, 2001, the Company had $24 million of intercompany
receivables  outstanding and $257 million  available through the regulated money
pool. See Note 6 - Short-Term Borrowings under Notes to Financial Statements for
further information.

The following table summarizes the Company's committed credit availability as of
December 31, 2001:
                                     Amount of commitment expiration per period
--------------------------------------------------------------------------------
(In Millions)                     Total amounts    Less than    1 - 3     4 - 5
                                    committed       1 year      years     years
--------------------------------------------------------------------------------
Lines of credit (a)                   $  25         $  25       $   -       -
Other commercial commitments (a)        831           631         200       -
                                  ----------------------------------------------
 Total commercial commitments         $ 856         $ 656       $ 200       -
--------------------------------------------------------------------------------
See Note 6 -  Short-Term  Borrowings  under Notes to  Financial  Statements  for
further discussion.

The following  table  summarizes  the Company's  contractual  obligations  as of
December 31, 2001:

--------------------------------------------------------------------------------
(In Millions)                         Less than      1 - 3      4 - 5
                                       1 year        years      years
--------------------------------------------------------------------------------
Long-term debt (a)                    $ 33          $  45       $ 40
Other long-term obligations (b)         39             44         32
Total cash contractual obligations    $ 72          $  89       $ 72
--------------------------------------------------------------------------------
(a)  See Note 7 -Long-Term Debt under Notes to Financial Statements for further
     discussion.
(b)  Represents purchase contracts for natural gas.

During  2001,  an excess  earnings  complaint  was filed  against the  Company's
affiliate, AmerenUE, by the Missouri Public Service Commission (MoPSC) staff. As
a result of the  uncertainty  created by the complaint as well as other factors,
in 2001, Standard and Poor's rating agency changed its outlook for the Company's
long-term  debt and preferred  stock from stable to negative.  Also during 2001,
Fitch rating agency  downgraded the ratings on the Company's  long-term debt and
preferred stock. Moody's rating agency rating and outlook remained unchanged. As
of December 31, 2001,  the ratings of the Company by these rating  agencies were
as follows:
--------------------------------------------------------------------------------
                                      Moody's     Standard & Poor's     Fitch
--------------------------------------------------------------------------------

     First Mortgage Bonds               A1               A+               A
     Unsecured Debt                     A2               A                A-
     Preferred Stock                  Baa1               A-             BBB+
--------------------------------------------------------------------------------

A decrease  in the  Company's  ratings  may reduce its access to capital  and/or
increase the costs of borrowings resulting in a negative impact on earnings.

In February  2002, the Company  received the required  approval from the Federal
Energy   Regulatory   Commission  (FERC)  and  notified  the  Illinois  Commerce
Commission  (ICC) of its intent to transfer its 20% common stock interest in EEI

                                       12
<PAGE>

to its affiliate,  Resources  Company.  No approval from the ICC is required for
this transfer.  The transfer,  which is expected to occur before  mid-year 2002,
will  complete  the process of  achieving  a full  divestiture  of all  electric
generating  capacity that had been owned  directly or indirectly by the Company.
The  transaction  will be in the form of a dividend  by the Company to Ameren of
the common stock in EEI, the value of which is recorded on the  Company's  books
at $1.8 million, and in turn, an in-kind contribution of such stock by Ameren to
Resources Company.

RATE MATTERS

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

ELECTRIC INDUSTRY RESTRUCTURING

Federal
Steps taken and being  considered  at the federal and state  levels  continue to
change the  structure of the electric  industry and utility  regulation.  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 FERC the
authority to order electric utilities to provide transmission access to third
parties.

Order 888 and Order 889, issued by the FERC, 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 stranded 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 Company and AmerenUE  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.

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.

In the  fourth  quarter  of 2000,  the  Company  and  AmerenUE  announced  their
intention  to withdraw  from the Midwest ISO and to join the  Alliance  RTO. The
Company  recorded a pretax  charge to earnings  of $8 million ($5 million  after
taxes),  which related to the Company's  estimated  obligation under the Midwest
ISO agreement for costs  incurred by the Midwest ISO, plus estimated exit costs.
In 2001, the Company and AmerenUE announced that they had signed an agreement to
join the Alliance RTO. In a proceeding before the FERC, the Alliance RTO and the
Midwest ISO reached an  agreement  that would enable the Company and AmerenUE to
withdraw  from the Midwest ISO and to join the  Alliance  RTO.  This  settlement
agreement  was  approved  by the  FERC.  In July  2001,  the FERC  conditionally
approved the  formation,  including  the rate  structure,  of the Alliance  RTO.
However,  on  December  20,  2001,  the FERC issued an order that  reversed  its
position and rejected the  formation  of the  Alliance  RTO.  Instead,  the FERC
granted RTO status to the Midwest ISO and ordered the Alliance Companies and the
Midwest ISO to discuss how the Alliance RTO business model could be accommodated
within  the  Midwest  ISO.  The  Alliance  Companies  have  filed a request  for
rehearing  with the FERC urging it to reverse the findings of its December  2001
order. To preserve its right to a judicial appeal,  the Alliance  Companies have
also filed a petition for review with the United States Circuit Court of Appeals
for the  District of Columbia.  On February 19, 2002,  as required by the FERC's
December 2001 order, the Alliance  Companies filed a status report with the FERC
regarding  the  progress  that had been  made to fold  the  Alliance  Companies'
business  plan under the umbrella of the Midwest ISO. It was reported that while
the Alliance  Companies believed they had reached an agreement in principle with
the Midwest ISO  regarding  the  functions  and  operational  relationship,  the
Midwest ISO reversed its  position  which caused the Alliance  Companies to have
concerns  about  whether an  agreement  can be reached with the Midwest ISO. The
Alliance  Companies  indicated  in their  report  that  they were  committed  to

                                       13
<PAGE>

continue  pursuing  negotiations  with the  Midwest  ISO,  but also  stated that
ultimately  a  resolution  may have to occur at the FERC.  The  Midwest ISO also
filed a status  report with the FERC  pursuant to the December  2001 order.  The
Midwest ISO indicated in its report that in spite of the significant effort made
by both parties,  a solution to the challenges of integration that is acceptable
to the Alliance  Companies,  the Midwest ISO and its  stakeholders  had not been
reached.  On March 6,  2002,  the  Alliance  Companies  and  National  Grid (the
managing member of the  transmission  company formed by the Alliance  Companies)
filed a motion for a  declaratory  order with the FERC asking for  approval of a
proposed division of responsibilities between National Grid and the Midwest ISO.
It also sought approval for the Alliance Companies to purchase services from the
Midwest ISO at  incremental  costs and asked the FERC to endorse the rate design
and revenue distribution  methodology that it approved in 2001, adjusted to take
into account that it would now apply to a single RTO. At this time,  the Company
continues to evaluate  its  alternatives  and is unable to determine  the impact
that  the  FERC's  December  2001  ruling  will  have  on its  future  financial
condition, results of operations or liquidity.

Illinois
In December 1997, the Governor of Illinois signed the Electric  Service Customer
Choice and Rate Relief Law of 1997 (the  Illinois  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 Illinois Law included the  phasing-in  through 2002 of
retail direct access, which allows customers to choose their electric generation
supplier.  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 represented approximately
55% of the  Company's  total sales  during 2001.  As of December  31, 2001,  the
impact of retail direct access on the Company's financial condition,  results of
operations or liquidity was immaterial.  Retail direct access will be offered to
residential customers on May 1, 2002.

Under the Illinois  Law, the Company is subject to a  residential  electric rate
decrease of up to 5% in 2002, to the extent its rates exceed the Midwest utility
average at that time. In 2001, the Company's  Illinois electric rates were below
the Midwest utility average.

The Illinois Law also contains a provision  allowing for the potential  recovery
of a  portion  of  stranded  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
Illinois  Law  contains a provision  requiring a portion of excess  earnings (as
defined  under the Illinois  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  Illinois  Law, on May 1, 2000,
following the receipt of all required  state and federal  regulatory  approvals,
the Company  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  (the
Transfer). The promissory note has a term of five years and bears interest at 7%
based on a 10-year amortization. The transferred assets represented a generating
capacity of approximately  2,900 megawatts.  Approximately  45% of the Company'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 Marketing  Company.  In addition,  Marketing
Company  entered into the Power Supply  Agreement  with the Company 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 Company 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 the Illinois Law at market based prices. In
turn, the Company will bill these customers at rates which approximate the costs
the Company incurs for its capacity and energy  supplied by Generating  Company.
For the years ended  December 31, 2001 and 2000,  $413 million and $257 million,
respectively,  of the  Company's  power was  purchased  through the Power Supply
Agreement.

As a result of the  Transfer,  the  Company's  operating  revenues  only include
revenues  and  expenses   associated  with  its  traditional   transmission  and
distribution  operations.  In addition,  sales under certain wholesale contracts
and  interchange  sales are no longer  reflected  in  operating  revenues of the
Company after May 1, 2001.

                                       14
<PAGE>

As a result of the Transfer,  the Company  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 is being  amortized  over twenty years.  At
December 31, 2001,  the Company's  deferred tax liability and  intercompany  tax
receivable was $195 million,  including the current  portion of $18 million.  At
December  31,  2000,  the  Company's  deferred tax  liability  and  intercompany
receivable was $211 million  including the current  portion of $16 million.  See
Note 2 -  Regulatory  Matters  under Notes to Financial  Statements  for further
discussion of the Transfer.

The Company's  intercompany  note receivable from Generating  Company related to
the Transfer totaled  approximately $462 million,  including the current portion
of $43 million,  at December 31, 2001. At December 2000, the  intercompany  note
receivable from Generating Company related to the Transfer totaled approximately
$552 million including the current portion of $40 million. Intercompany interest
income for the year ended December 31, 2001, 2000 and 1999 totaled approximately
$37 million, $27 million and nil, respectively.

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

CONTINGENCIES

See Note 2 -  Regulatory  Matters and Note 10 -  Commitments  and  Contingencies
under Notes to Financial Statements for material issues existing at December 31,
2001.

ACCOUNTING MATTERS

In January 2001, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative  Instruments and Hedging Activities."
The impact of that  adoption was  immaterial to the Company.  In June 2001,  the
Derivatives  Implementation Group (DIG), a committee of the FASB responsible for
providing  guidance  on the  implementation  of SFAS 133,  reached a  conclusion
regarding  the  appropriate  accounting  treatment  of  certain  types of energy
contracts under SFAS 133. Specifically, the DIG concluded that power purchase or
sales  agreements  (both  forward  contracts and option  contracts)  may meet an
exception  for  normal  purchases  and sales  accounting  treatment  if  certain
criteria are met. This guidance was effective beginning July 1, 2001 and did not
have a  material  impact  on  the  Company's  financial  condition,  results  of
operations or liquidity  upon  adoption.  In October and again in December 2001,
the DIG revised this guidance,  with the revisions effective April 1,  2002. The
Company  does not expect the  impact of the DIG's  revisions  to have a material
effect on the Company's financial condition,  results of operations or liquidity
upon adoption.

In September  2001, the DIG issued guidance  regarding the accounting  treatment
for fuel  contracts  that  combine a forward  contract  and a  purchased  option
contract.  The DIG concluded that contracts  containing both a forward  contract
and a  purchased  option  contract  are not  eligible  to qualify for the normal
purchases and sales  exception  under SFAS 133. This guidance is effective as of
April 1, 2002. The Company  continues to evaluate the impact of this guidance on
its future financial  condition,  results of operations and liquidity;  however,
the impact is not expected to be material.

In July 2001, the FASB issued SFAS No. 141,  "Business  Combinations,"  and SFAS
No. 142,  "Goodwill and Other  Intangible  Assets."  SFAS 141 requires  business
combinations to be accounted for under the purchase method of accounting,  which
requires  one  party  in the  transaction  to be  identified  as  the  acquiring
enterprise  and for that party to allocate the purchase  price to the assets and
liabilities of the acquired enterprise based fair market value. It prohibits use
of the pooling-of-interests method of accounting for business combinations. SFAS
141 was effective for all business  combinations  initiated after June 30, 2001,
or  transactions  completed  using the purchase method after June 30, 2001. SFAS
142 requires  goodwill  recorded in the  financial  statements  to be tested for
impairment at least  annually,  rather than amortized over a fixed period,  with
impairment  losses recorded in the income  statement.  SFAS 142 became effective
for the  Company as of  January  1,  2002.  SFAS 141 and SFAS 142 did not have a
material effect on the Company's  financial  position,  results of operations or
liquidity upon adoption.

In addition,  in July 2001, the FASB issued SFAS No. 143,  "Accounting for Asset
Retirement  Obligations."  SFAS 143 requires an entity to record a liability and
corresponding   asset  representing  the  present  value  of  legal  obligations
associated  with the  retirement  of tangible,  long-lived  assets.  SFAS 143 is
effective  for fiscal years  beginning  after June 15, 2002.  At this time,  the
Company is assessing the impact of SFAS 143 on its financial  position,  results
of operations and liquidity upon adoption.


                                       15

<PAGE>

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 addresses the financial  accounting and
reporting for the  impairment or disposal of  long-lived  assets and  supersedes
SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." SFAS 144 retains the guidance  related to calculating
and  recording  impairment  losses,  but adds  guidance  on the  accounting  for
discontinued  operations,  previously accounted for under Accounting  Principles
Board Opinion No. 30. SFAS 144 was adopted by the Company on January 1, 2002 and
did not have a material effect on the Company's financial  position,  results of
operations or liquidity upon adoption.

EFFECTS OF INFLATION AND CHANGING PRICES

The Company'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  Company'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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 Company'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 Company also face
risks that are either non-financial or non-quantifiable.  Such risks principally
include  business,  legal,  and operational  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 Company 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 Company 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 2002, as compared to 2001,
the Company's  interest expense would increase by approximately $0.3 million and
net income  would  decrease  by  approximately  $0.3  million.  This  amount was
determined  using the assumptions that the Company's  outstanding  variable-rate
debt,  commercial  paper and  auction-rate  preferred  stock, as of December 31,
2001, continued to be outstanding throughout 2002, and that the average interest
rates for these instruments  increased one percent over 2001. 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 Company's financial structure.

                                       16
<PAGE>

Credit Risk
Credit risk represents the loss that would be recognized if counterparties  fail
to perform as contracted.  The Company's physical and financial  instruments are
subject  to credit  risk  consisting  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 Company's  customer base. No
customer represents greater than 10% of the Company's accounts  receivable.  The
Company's  revenues are primarily  derived from sales of electricity and natural
gas to customers in Illinois.

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

Since the Company 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 Company has entered into the Power Supply  Agreement for purchased
power.  See  "Electric  Industry  Restructuring"  above and Note 2 -  Regulatory
Matters under Notes to Financial Statements for further discussion.

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 Company 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 Company 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
Company's  business  at both the  state  and  federal  levels;  the  effects  of
participation in a FERC approved RTO, including  activities  associated with the
Midwest ISO and the Alliance RTO;  future market prices for purchased  power and
natural gas,  including  the use of financial  and  derivative  instruments  and
volatility of changes in market  prices;  average rates for  electricity  in the
Midwest;  business  and economic  conditions;  the impact of the adoption of new
accounting standards; interest rates and the availability of capital; actions of
rating agencies and the effects of such actions; weather conditions;  the impact
of current environmental  regulations on utilities and the expectation that more
stringent  requirements  will be introduced over time,  which could  potentially
have negative financial effects;  monetary and fiscal policies; future wages and
employee benefits costs; cost and availability of transmission capacity required
to  satisfy  energy  sales  made by the  Company;  and legal and  administrative
proceedings.


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

     Information  required  to be  reported  by  this  item  is  included  under
"Quantitative  and Qualitative  Disclosures  about Market Risk" in "Management's
Discussion and Analysis of Financial Conditions and Results of Operations" under
Item 7 herein and Notes 4 and 11 to the "Notes to  Financial  Statements"  under
Item 8 herein.

                                       17
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.






                        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 37 present fairly, in all material  respects,  the financial
position of Central  Illinois  Public  Service  Company at December 31, 2001 and
2000, and the results of its operations and its cash flows for each of the three
years in the period ended  December  31, 2001,  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 Item 14(a)1 on Page 37 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 1, 2002

                                       18
<PAGE>

<TABLE>
<CAPTION>

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

                                                                  December 31,        December 31,
ASSETS                                                                 2001               2000
-----                                                                  ----               ----
<S>                                                                <C>                  <C>
Property and plant, at original cost:
   Electric                                                          $ 1,224,391        $ 1,195,418
   Gas                                                                   279,815            273,573
                                                                   --------------      -------------
                                                                       1,504,206          1,468,991
   Less accumulated depreciation and amortization                        693,303            654,897
                                                                   --------------      -------------
                                                                         810,903            814,094
Construction work in progress                                             11,058              6,558
                                                                   --------------      -------------
         Total property and plant, net                                   821,961            820,652
                                                                   --------------      -------------

Investments and other assets:
   Intercompany notes receivable (Note 3)                                418,981            511,701
   Intercompany tax receivable (Note 3)                                  176,602            194,975
   Other assets                                                           16,916             17,085
                                                                   --------------      -------------
         Total investments and other assets                              612,499            723,761

Current assets:
   Cash and cash equivalents                                              25,632             29,801
   Accounts receivable - trade (less allowance for doubtful
         accounts of $1,497 and $1,777, respectively)                    119,064            160,996
   Other accounts and notes receivable (Note 3)                           60,742             25,035
   Intercompany notes receivable (Note 3)                                 42,720             39,925
   Intercompany tax receivable (Note 3)                                   18,373             15,809
   Materials and supplies, at average cost -
      Fossil fuel                                                         33,165             22,560
      Other                                                                9,212              9,821
   Other                                                                   7,133              6,240
                                                                   --------------      -------------
         Total current assets                                            316,041            310,187
                                                                   --------------      -------------
Regulatory assets:
   Deferred income taxes                                                      -                  91
   Other                                                                  32,420             12,450
                                                                   --------------      -------------
         Total regulatory assets                                          32,420             12,541
                                                                   --------------      -------------
Total Assets                                                         $ 1,782,921        $ 1,867,141
                                                                   ==============      =============

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                                                     443,865            435,211
   Accumulated other comprehensive income                                  (148)                 -
                                                                   --------------      -------------
         Total common stockholder's equity                               563,750            555,244
                                                                   --------------      -------------
   Preferred stock not subject to mandatory redemption (Note 5)           80,000             80,000
   Long-term debt (Note 7)                                               579,077            463,174
                                                                   --------------      -------------
         Total capitalization                                          1,222,827          1,098,418
Current liabilities:
   Current maturity of long-term debt (Note 7)                            33,000             30,000
   Intercompany notes payable (Note 3)                                        -             223,320
   Accounts and wages payable (Note 3)                                   114,380            106,739
   Accumulated deferred income taxes                                      19,559             19,639
   Taxes accrued                                                          23,140             13,899
   Other                                                                  31,380             33,448
                                                                   --------------      -------------
         Total current liabilities                                       221,459            427,045
                                                                   --------------      -------------
Commitments and contingencies (Notes 2 and 10)
Accumulated deferred income taxes (Note 3)                               255,441            273,505
Accumulated deferred investment tax credits                               11,904             12,965
Regulatory liability                                                      35,775             34,898
Other deferred credits and liabilities                                    35,515             20,310
                                                                   --------------      -------------
Total Capital and Liabilities                                        $ 1,782,921        $ 1,867,141
                                                                   ==============      =============
                                                                   ==============      =============
</TABLE>

See Notes to Financial Statements.

                                       19

<PAGE>
<TABLE>
<CAPTION>

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

                                                       December 31,  December 31,  December 31,
For the year ended                                        2001          2000          1999
                                                          ----          ----          ----
<S>                                                     <C>          <C>         <C>
OPERATING REVENUES:
 Electric (Note 3)                                      $ 669,667    $ 717,127    $ 800,255
 Gas                                                      170,151      176,771      132,646
 Other                                                        493         -            -
                                                        ----------   ----------   ----------
  Total operating revenues                                840,311      893,898      932,901


OPERATING EXPENSES:
 Operations
  Fuel and purchased power (Note 3)                       433,330      370,434      314,208
  Gas                                                     110,623      110,335       73,352
  Other (Note 3)                                          124,654      133,557      190,622
                                                        ----------   ----------   ----------
                                                          668,607      614,326      578,182
 Maintenance                                               29,269       44,463      103,582
 Depreciation and amortization                             48,900       61,084       85,336
 Income taxes                                              26,334       43,580       30,773
 Other taxes                                               24,022       38,632       40,313
                                                        ----------   ----------   ----------
  Total operating expenses                                797,132      802,085      838,186
                                                        ----------   ----------   ----------

OPERATING INCOME                                           43,179       91,813       94,715

OTHER INCOME AND (DEDUCTIONS):
 Allowance for equity funds used during construction         -            -              (8)
 Miscellaneous, net (Note 3)                               41,219       27,880        2,030
                                                        ----------   ----------   ----------
  Total other income and (deductions)                      41,219       27,880        2,022
                                                        ----------   ----------   ----------

INCOME BEFORE INTEREST CHARGES                             84,398      119,693       96,737

INTEREST CHARGES:
 Interest (Note 3)                                         39,266       40,569       42,736
 Allowance for borrowed funds used during construction       (177)        (238)          21
                                                        ----------   ----------   ----------
  Net interest charges                                     39,089       40,331       42,757
                                                        ----------   ----------   ----------

NET INCOME                                                 45,309       79,362       53,980

PREFERRED STOCK DIVIDENDS                                   3,627        3,882        3,833
                                                        ----------   ----------   ----------


NET INCOME AVAILABLE FOR COMMON
SHAREHOLDER                                             $  41,682    $  75,480    $  50,147
                                                        ==========   ===========  ==========
                                                        ==========   ===========  ==========
</TABLE>


See Notes to Financial Statements.

                                       20
<PAGE>

<TABLE>
<CAPTION>

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


                                                        December 31,           December 31,           December 31,
For the year ended                                          2001                   2000                   1999
                                                            ----                   ----                   ----
<S>                                                 <C>                     <C>                    <C>

Cash Flows From Operating:
   Net income                                        $     45,309            $     79,362          $     53,980
   Adjustments to reconcile net income to net cash
      Provided by operating activities:
        Depreciation and amortization                      48,900                  61,084                85,336
        Allowance for funds used during construction         (177)                   (238)                   29
        Deferred income taxes, net                        (17,078)                  2,665               (18,562)
        Deferred investment tax credits, net               (1,061)                    524                (2,488)
        Changes in assets and liabilities, net of
        transfer:
           Receivables, net                                 6,225                 (40,569)              (31,362)
           Materials and supplies                          (9,996)                 (4,965)                5,616
           Accounts and wages payable                       7,641                  24,092                24,000
           Taxes accrued                                    9,241                 (18,246)               18,944
           Other, net                                       7,318                 (41,385)               30,169
                                                     --------------------    ------------------    --------------------
Net cash provided by operating activities                  96,322                  62,324               165,662

Cash Flows From Investing:
   Construction expenditures                              (50,618)                (41,321)              (95,302)
   Allowance for funds used during construction               177                     238                   (29)
   Intercompany notes receivable                           89,925                       -                     -
                                                     --------------------    ------------------    --------------------
Net cash provided by (used in) investing activities        39,484                 (41,083)              (95,331)

Cash Flows From Financing:
   Dividends on common stock                              (33,028)                (54,614)              (90,342)
   Dividends on preferred stock                            (3,627)                 (3,882)               (3,833)
   Redemptions -
      Short-term debt                                           -                       -               (46,700)
      Long-term debt                                      (30,000)                (87,000)              (60,000)
      Intercompany notes payable                         (223,320)                      -                     -
   Issuances -
      Long-term debt                                      150,000                  51,100                     -
      Intercompany notes payable                                -                  90,420               132,900
                                                     --------------------    ------------------    --------------------
Net cash used in financing activities                    (139,975)                 (3,976)              (67,975)
                                                     --------------------    ------------------    --------------------

Net change in cash and cash equivalents                    (4,169)                 17,265                 2,356
Cash and cash equivalents at beginning of year             29,801                  12,536                10,180
                                                     --------------------    ------------------    --------------------
Cash and cash equivalents at end of year             $     25,632            $     29,801          $     12,536

Cash paid during the periods:
   Interest (net of amount capitalized)              $     38,081            $     41,946          $     39,140
   Income taxes                                            33,239                  57,938                30,998



-----------------------------------------------------------------------------------------------------------------------
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION:
In the second quarter of 2000, the Company  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. 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.

                                       21
<PAGE>
<TABLE>
<CAPTION>


                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                    STATEMENT OF COMMON STOCKHOLDER'S EQUITY
                             (Thousands of Dollars)


                                         December 31,  December 31, December 31,
For the year ended                         2001          2000          1999
                                           ----          ----          ----
<S>                                     <C>          <C>            <C>

Common stock                             $ 120,033    $ 120,033      $ 120,033

Retained earnings
   Beginning balance                       435,211      414,345        455,337
   Net income                               45,309       79,362         53,980
   Common stock dividends                  (33,028)     (54,614)       (90,342)
   Preferred stock dividends                (3,627)      (3,882)        (4,630)
                                         ----------   ----------     ----------
                                           443,865      435,211        414,345


Accumulated other comprehensive income
   Beginning balance                           -          -              -
   Change in current period                  (148)        -              -
                                         ----------   ----------     ----------
                                             (148)        -              -
                                         ----------   ----------     ----------
Total common stockholder's equity        $563,750     $ 555,244      $ 534,378
                                         ==========   ==========     ==========

Comprehensive income, net of tax
   Net income                            $ 45,309     $  79,362      $  53,980
   Unrealized net loss on derivative
    hedging instruments                      (148)        -              -
                                         ----------   ----------     ----------
                                         $ 45,161     $  79,362      $  53,980
                                         ==========   ==========     ==========
</TABLE>

                                       22
<PAGE>

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001

NOTE 1 - Summary of Significant Accounting Policies

Basis of Presentation

Central  Illinois  Public  Service  Company  (AmerenCIPS  or the  Company)  is a
subsidiary of Ameren  Corporation  (Ameren),  which is the parent company of the
following operating companies:  the Company,  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
Company's  former  parent)  and  AmerenUE  (the  Merger).  Both  Ameren  and its
subsidiaries  are subject to the regulatory  provisions of PUHCA. The affiliated
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 Company by
a separate Ameren  subsidiary,  Ameren Services Company (Ameren  Services).  The
Company is principally  engaged in the  transmission,  distribution  and sale of
electric energy and natural gas to 325,000 electric and 170,000 gas customers in
a 20,000 square-mile region of central and southern Illinois.

The Company also has a 20% common stock 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.  The Company  continues to buy 20% of the excess  generating output of
EEI and sells the output as interchange sales.

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

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

Property and Plant
The costs of additions to, and  betterments  of, units of property and plant are
capitalized.  Costs include labor, material,  applicable taxes and overheads. An
allowance  for funds used during  construction  is also added for the  Company's
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 2001,  2000, and 1999 was  approximately 3% of the
average depreciable cost.

Fuel, Purchased Power and Gas Costs
The cost of fuel for electric generation and purchased power costs are reflected
in base rates with no  provision  for  changes in such cost to be  reflected  in
billings to customers 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.

                                       23
<PAGE>

Income Taxes
The Company is included in the  consolidated  federal income tax return filed by
Ameren. As a subsidiary of Ameren,  the Company could be considered  jointly and
severably  liable for assessments of additional tax on the  consolidated  group.
Income taxes are allocated to the individual companies based on their respective
taxable  income or loss.  The  Company's  provision  for  income  taxes has been
presented based on federal and state taxes the Company would have presented on a
stand-alone  company basis.  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 Company's
regulated  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 were 4 % during 2001, 6% during 2000
and 5% during 1999.

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

Energy Contracts
Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities"  became effective on January 1,
2001.  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 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
stockholders'  equity.  See Note 4 - Risk  Management and  Derivative  Financial
Instruments for further information.

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  Company.  See Note 2 -  Regulatory  Matters for further  discussion  of the
Transfer.  Virtually all of AmerenEnergy's transactions on behalf of the Company
were considered  nontrading  activities and were accounted for using the accrual
or settlement method. Subsequent to the Transfer, the Company no longer owns any
generation assets and receives all of its power under the power supply agreement
with  AmerenEnergy  Marketing Company (the Power Supply Agreement) (see Note 2 -
Regulatory  Matters  for further  information),  which is  accounted  for on the
settlement basis.

Evaluation of Assets for Impairment
SFAS 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 Company  determines if long-lived assets
are impaired by comparing their undiscounted expected future cash flows to their

                                       24
<PAGE>

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, 2001, no impairment was identified.

In August 2001, the Financial  Accounting Standards Board (FASB) issued SFAS No.
144,  "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144
addresses the financial  accounting and reporting for the impairment or disposal
of  long-lived  assets and  supersedes  SFAS 121.  SFAS 144 retains the guidance
related to calculating and recording impairment losses, but adds guidance on the
accounting  for  discontinued   operations,   previously   accounted  for  under
Accounting  Principles Board Opinion No. 30. SFAS 144 was adopted by the Company
on January 1, 2002 and did not have a material effect on the Company's financial
position, results of operations or liquidity.

Asset Retirement Obligations
In addition,  in July 2001, the FASB issued SFAS No. 143,  "Accounting for Asset
Retirement  Obligations."  SFAS 143 requires an entity to record a liability and
corresponding   asset  representing  the  present  value  of  legal  obligations
associated  with the  retirement  of tangible,  long-lived  assets.  SFAS 143 is
effective  for fiscal years  beginning  after June 15, 2002.  At this time,  the
Company is assessing the impact of SFAS 143 on its financial  position,  results
of operations and liquidity upon adoption.

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.

New Accounting Pronouncements
In July 2001, the FASB issued SFAS No. 141,  "Business  Combinations,"  and SFAS
No. 142,  "Goodwill and Other  Intangible  Assets."  SFAS 141 requires  business
combinations to be accounted for under the purchase method of accounting,  which
requires  one  party  in the  transaction  to be  identified  as  the  acquiring
enterprise  and for that party to allocate the purchase  price to the assets and
liabilities of the acquired enterprise based fair market value. It prohibits use
of the pooling-of-interests method of accounting for business combinations. SFAS
141 was effective for all business  combinations  initiated after June 30, 2001,
or  transactions  completed  using the purchase method after June 30, 2001. SFAS
142 requires  goodwill  recorded in the  financial  statements  to be tested for
impairment at least  annually,  rather than amortized over a fixed period,  with
impairment  losses recorded in the income  statement.  SFAS 142 became effective
for the  Company  on  January  1,  2002.  SFAS  141 and  SFAS 142 did not have a
material effect on the Company's  financial  position,  results of operations or
liquidity upon adoption.

Reclassifications
Certain  reclassifications  have been made to prior years' financials statements
to conform with 2001 reporting.

NOTE 2 - Regulatory Matters

Illinois Electric Restructuring
In December 1997, the Governor of Illinois signed the Illinois Law providing for
electric  utility  restructuring  in  Illinois.   This  legislation   introduces
competition into the supply of electric energy at retail in Illinois.

Under the Illinois 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 Illinois Law, in March 1999, the Company 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%.  In December  2000, the Company 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. In December 2001, the ICC issued an
Order approving the delivery service tariffs,  with an allowed rate of return on
equity of 11.35%.

                                       25
<PAGE>

Under the Illinois  Law, the Company is subject to a  residential  electric rate
decrease of up to 5% in 2002, to the extent its rates exceed the Midwest utility
average at that time. In 2001, the Company's  Illinois electric rates were below
the Midwest utility average.

The Illinois 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 Company'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 Illinois 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 Company did not record any
estimated refunds to Illinois customers in 2001.

In  conjunction  with another  provision  of the  Illinois  Law, on May 1, 2000,
following the receipt of all required  state and federal  regulatory  approvals,
the Company  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.  As of
December 31, 2001,  $462 million of the promissory note was outstanding of which
$43 million was a current  asset.  As of December 31, 2000,  $552 million of the
promissory  note was  outstanding  including the current portion of $40 million.
The  promissory  note bears  interest at 7% and has a term of five years payable
based on a 10-year amortization.  The transferred assets represented  generating
capacity of approximately  2,900 megawatts.  Approximately  45% of the Company's
employees were  transferred to Generating  Company as a part of the transaction.
The significant components of the net assets transferred are as follows:

(Millions of dollars)
Cash                                              $        6
Other receivable - intercompany                           26
Material and supplies                                     54
Other current assets                                       6
Property and plant, net                                  635
                                       ----------------------

Total assets transferred                          $      727
                                       ----------------------


Accounts payable                                  $        6
Other current liabilities                                  3
Other deferred credits                                     2
Deferred investment tax credits                           20
Deferred tax liabilities, net                            144
                                       ----------------------

Total liabilities transferred                     $      175
                                       ----------------------


Net assets transferred                            $      552
                                       ----------------------

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 the
Power  Supply  Agreement  with the  Company 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 Company 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 Company will bill these
customers  at rates  which  approximate  the costs the  Company  incurs  for its
capacity and energy supplied by Marketing Company.  For the years ended December
31, 2001 and 2000, $413 million and $257 million, respectively, of the Company's
purchased power was derived under the Power Supply Agreement.

As a result  of the  Transfer  and the Power  Supply  Agreement,  the  Company's
operating revenues  subsequent to May 1, 2000 only include revenues and expenses
associated with its transmission and distribution operations. In addition, sales
under  certain  wholesale  contracts  and  interchange  sales  will no longer be
reflected in operating revenues of the Company after May 1, 2000.

                                       26
<PAGE>

As a result of the transfer,  the Company  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, 2001,  the Company's  deferred tax liability and  intercompany  tax
receivable  was $195 million  including the current  portion of $18 million.  At
December  31,  2000,  the  Company's  deferred tax  liability  and  intercompany
receivable was $211 million including the current portion of $16 million.

The Company's  intercompany  note receivable from Generating  Company related to
the Transfer totaled approximately $462 million including the current portion of
$43 million at December  31,  2001.  At December  2000,  the  intercompany  note
receivable from Generating Company related to the Transfer totaled approximately
$552 million including the current portion of $40 million. Intercompany interest
income for the year ended December 31, 2001, 2000 and 1999 totaled approximately
$37 million, $27 million and nil, respectively.

Other provisions of the Illinois Law include (1) potential recovery of a portion
of stranded  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 Company 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 Company 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 Illinois Law. In January 2000,  the
Company 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.

The provisions of the Illinois Law could also result in lower revenues,  reduced
profit margins and increased  costs of capital and operations  expense.  At this
time,  the Company is unable to determine  the impact of the Illinois 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.

Midwest ISO and Alliance RTO
In 1998, the Company 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.

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.

In the  fourth  quarter  of 2000,  the  Company  and  AmerenUE  announced  their
intention  to withdraw  from the Midwest ISO and to join the  Alliance  RTO. The
Company  recorded a pretax  charge to earnings  of $8 million ($5 million  after
taxes),  which related to the Company's  estimated  obligation under the Midwest
ISO agreement for costs  incurred by the Midwest ISO, plus estimated exit costs.
In 2001, the Company and AmerenUE announced that they had signed an agreement to
join the Alliance RTO. In a proceeding before the FERC, the Alliance RTO and the
Midwest ISO reached an  agreement  that would enable the Company and AmerenUE to
withdraw  from the Midwest ISO and to join the  Alliance  RTO.  This  settlement
agreement  was  approved  by the  FERC.  In July  2001,  the FERC  conditionally
approved the  formation,  including  the rate  structure,  of the Alliance  RTO.
However,  on  December  20,  2001,  the FERC issued an order that  reversed  its
position and rejected the  formation  of the  Alliance  RTO.  Instead,  the FERC
granted RTO status to the Midwest ISO and ordered the Alliance Companies and the
Midwest ISO to discuss how the Alliance RTO business model could be accommodated
within  the  Midwest  ISO.  At  this  time,   the  Company  is  evaluating   its
alternatives,  including the possible appeal of the December 2001 order,  and is
unable to determine  the impact that the FERC's  latest  ruling will have on its
future financial condition, results of operations or liquidity.

                                       27
<PAGE>

Regulatory Assets and Liabilities
In accordance  with SFAS No. 71 "Accounting  for the Effects of Certain Types of
Regulation,"  the Company has deferred  certain costs pursuant to actions of its
regulators,  and is currently recovering such costs in electric rates charged to
customers.
At December  31, the Company had recorded the  following  regulatory  assets and
regulatory liability:
--------------------------------------------------------------------------------
(In Millions)                                        2001             2000
--------------------------------------------------------------------------------
Regulatory Assets:
 Recoverable costs - contaminated facilities (a)     $ 26             $  6
 Unamortized loss on reacquired debt (b)                6                6
--------------------------------------------------------------------------------
Regulatory Assets                                    $ 32             $ 12
--------------------------------------------------------------------------------
Regulatory Liability:
  Income taxes (c)                                   $ 36             $ 35
--------------------------------------------------------------------------------
Regulatory Liability                                 $ 36             $ 35
--------------------------------------------------------------------------------
(a) Represents the recoverable portion of accrued environmental site
liabilities.
(b) 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.
(c) See Note 8 - Income Taxes.

The Company  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.  However,  as noted in the above  paragraphs,  electric
industry  restructuring  legislation may impact the recoverability of regulatory
assets in the future.

NOTE 3 - Related Party Transactions

The Company 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 Company and Marketing  Company,  and services  received or rendered.
Intercompany power purchases totaled $433 million,  $290 million and $36 million
for 2001,  2000 and 1999,  respectively.  Intercompany  power sales  totaled $21
million,  $45 million and $62  million  for 2001,  2000 and 1999,  respectively.
Intercompany  receivables  included in other accounts and notes  receivable were
approximately $38 million and $8 million,  respectively, as of December 31, 2001
and 2000.  Intercompany  payables included in accounts and wages payable totaled
approximately $87 million and $75 million, respectively, as of December 31, 2001
and 2000.

In  addition,  the Company has the  ability to borrow up to  approximately  $831
million  from Ameren or from two of  Ameren's  other  subsidiaries,  AmerenUE or
Ameren  Services,  through a regulated  money pool  agreement as of December 31,
2001.  The total  amount  available  to the  Company  at any given time from the
regulated  money  pool is reduced by the amount of  borrowings  by  AmerenUE  or
Ameren  Services,  but increased to the extent  AmerenUE or Ameren Services have
surplus funds and the  availability  of other external  borrowing  sources.  The
regulated  money pool was  established  to  coordinate  and  provide for certain
short-term  cash and working capital  requirements of the Company,  AmerenUE and
Ameren Services and is administered by Ameren  Services.  Interest is calculated
at varying  rates of interest  depending  on the  composition  of  internal  and
external  funds in the regulated  money pool.  For the years ended  December 31,
2001 and 2000,  the average  interest  rates for the  regulated  money pool were
3.95% and 6.29%,  respectively.  For the years ended December 31, 2001, 2000 and
1999 intercompany  interest expense totaled approximately $4 million, $8 million
and $3 million,  respectively. At December 31, 2001, the Company had $24 million
of intercompany  receivables  outstanding and $257 million available through the
regulated  money pool.  At December  31,  2000,  the Company had $197 million of
intercompany  money  pool  borrowings  outstanding.  See  Note  6  -  Short-Term
Borrowings for further information.

Other operating  expenses consist  primarily of wages,  employee benefits costs,
professional  services  costs and  expenses  associated  with  support  services
provided by Ameren Services.  Support  services  provided by Ameren Services are
based on actual costs  incurred.  For each of the years ended December 31, 2001,
2000 and 1999 other operating  expenses  provided by Ameren Services totaled $54
million, $52 million and $60 million, respectively.

In conjunction with the Transfer,  the Company 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

                                       28
<PAGE>

years.  At  December  31,  2001,  the  Company's   deferred  tax  liability  and
intercompany  tax receivable was $195 million  including the current  portion of
$18 million.  At December 31, 2000,  the  Company's  deferred tax  liability and
intercompany  tax receivable was $211 million  including the current  portion of
$16 million.

The Company's  intercompany  note receivable from Generating  Company related to
the Transfer totaled approximately $462 million including the current portion of
$43 million at December 31, 2001.  The Company's  intercompany  note  receivable
from  Generating  Company  related to the Transfer  totaled  approximately  $552
million  including  the current  portion of $40 million at  December  31,  2000.
Intercompany interest income recorded in miscellaneous,  net for the years ended
December 31, 2001, 2000 and 1999, totaled approximately $37 million, $27 million
and nil, respectively.

NOTE 4 - Risk Management and Derivative Financial Instruments

The Company handles market risks in accordance with established policies,  which
may include entering into various derivative transactions.  In the normal course
of  business,  the  Company  also faces risks that are either  non-financial  or
non-quantifiable. 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.

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

Since the Company 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 Company has entered into a long-term  contract with a supplier for
purchased  power  through the Power  Supply  Agreement.  See Note 2 - Regulatory
Matters for further discussion.

Credit Risk
Credit risk represents the loss that would be recognized if counterparties  fail
to perform as contracted.  The Company' physical and financial  instruments are
subject to credit risk  consisting of trade accounts  receivable.  The Company'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
Company's  customer  base.  No  customer  represents  greater  than  10%  of the
Company's accounts receivable. The Company's revenues are primarily derived from
sales of electricity and natural gas to customers in Illinois.

Derivative Financial Instruments
In January 2001, the Company  adopted SFAS No. 133,  "Accounting  for Derivative
Instruments   and   Hedging   Activities."   In  June  2001,   the   Derivatives
Implementation  Group (DIG), a committee of the FASB  responsible  for providing
guidance on the  implementation of SFAS 133, reached a conclusion  regarding the
appropriate accounting treatment of certain types of energy contracts under SFAS
133.  Specifically,  the DIG concluded that power  purchase or sales  agreements
(both  forward  contracts and option  contracts)  may be accounted for as normal
purchases  and sales if certain  criteria are met.  This  guidance was effective
beginning  July 1,  2001,  and did not have a material  impact on the  Company's
financial  condition,  results of  operations  or liquidity  upon  adoption.  In
October and again in December  2001,  the DIG revised  this  guidance,  with the
revisions  generally  effective  April 1, 2002.  The Company does not expect the
impact  of the  DIG's  revisions  to have a  material  effect  on the  Company's
financial condition, results of operations, or liquidity upon adoption.

In September  2001, the DIG issued guidance  regarding the accounting  treatment
for fuel  contracts  that  combine a forward  contract  and a  purchased  option
contract.  The DIG concluded that contracts  containing both a forward  contract
and a  purchased  option  contract  are not  eligible  to qualify for the normal
purchases and sales  exception  under SFAS 133. This guidance is effective as of
April 1, 2002. The Company  continues to evaluate the impact of this guidance on
its future financial  condition,  results of operations and liquidity;  however,
the impact is not expected to be material.

                                       29
<PAGE>

NOTE 5 - Preferred Stock

At December 31, 2001 and 2000,  the Company 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)        2001         2000
                                                            ----         ----
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 (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 Company's selection of certain defined dividend period lengths.  The average
dividend rate during 2001 was 3.63%.

--------------------------------------------------------------------------------
NOTE 6 - Short-Term Borrowings

Short-term  borrowings of the Company  consist of commercial  paper  (maturities
generally  within 1-45 days) and bank loans.  At December 31, 2001 and 2000, the
Company had no outstanding short-term borrowings.

At  December  31,  2001,  the  Company  had  committed  bank  lines  of  credit,
aggregating  $25 million,  all of which were unused and  available at such date.
These lines 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 Company has the ability to borrow up to  approximately  $831  million
from  Ameren,  AmerenUE  or Ameren  Services  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.  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, 2001,  the Company had no  intercompany  borrowings
outstanding  and $257 million  available  through the regulated  money pool. See
Note 3 - Related Party Transactions for further information.

                                       30
<PAGE>

NOTE 7 - Long-Term Debt

Long-term debt outstanding at December 31, was:
--------------------------------------------------------------------------------
(In Millions)                                                 2001       2000
--------------------------------------------------------------------------------
First Mortgage Bonds (a)
--------------------------------------------------------------------------------
 6.73% Series 1997-2 paid in 2001                             $ -         $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
 6.625% Series due 2011                                       150           -
 7.61% Series 1997-2 due 2017                                  40          40
 6.125% Series due 2028                                        60          60
 Other  5.375% - 6.99% due 2002 through 2008                   30          40
--------------------------------------------------------------------------------
                                                              433         313
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Pollution Control Loan Obligations
--------------------------------------------------------------------------------
  2000 Series A 5.5% due 2014 (b)                              51          51
  1993 Series C-1 5.95% due 2026 (b)                           35          35
  1993 Series C-2  5.70% due 2026                              25          25
  1993 Series A 6 3/8% due 2028                                35          35
  1993 Series B-1 5% due 2028 (b)                              17          17
  1993 Series B-2 5.90% due 2028                               18          18
--------------------------------------------------------------------------------
                                                              181         181
Unamortized Discount and Premium on Debt                       (2)         (1)
Maturities Due Within One Year                                (33)        (30)
--------------------------------------------------------------------------------
Total Long-Term Debt                                         $579        $463
--------------------------------------------------------------------------------

(a)      At December 31, 2001, 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)      Variable rate tax-exempt pollution control indebtedness was converted
         to long-term fixed rates.


Maturities of long-term debt through 2006 are as follows:

-------------------------------------------------------
(In Millions)                        Principal Amount
-------------------------------------------------------
                             2002                 $33
                             2003                  45
                             2004                   -
                             2005                  20
                             2006                  20
------------------------------------------------------

                                       31
<PAGE>

NOTE 8 - Income Taxes

Total income tax expense for 2001  resulted in an  effective  tax rate of 38% on
earnings before income taxes (36% in 2000 and 1999).

Principal reasons such rates differ from the statutory federal rate:
--------------------------------------------------------------------------------
                                                 2001     2000     1999
--------------------------------------------------------------------------------
Statutory federal income tax rate                 35%      35%      35%
Increases (decreases) from:
  Depreciation differences                         -       (2)       -
  Amortization of investment tax credit           (1)      (1)      (3)
  State income tax                                 5        4        5
  Other                                           (1)       -       (1)
--------------------------------------------------------------------------------
Effective income tax rate                         38%      36%      36%
--------------------------------------------------------------------------------

Income tax expense components:
--------------------------------------------------------------------------------
(In Millions)                                    2001     2000     1999
--------------------------------------------------------------------------------
Taxes currently payable (principally
  federal):
Included in operating expenses                   $44      $42      $52
Included in other income -
Miscellaneous, net                                 2        -        -
--------------------------------------------------------------------------------
                                                  46       42       52
--------------------------------------------------------------------------------

Deferred taxes (principally federal):
Included in operating expenses--
     Depreciation differences                    (19)     (13)      (7)
     Other                                         2       16      (12)
--------------------------------------------------------------------------------
                                                 (17)       3      (19)
--------------------------------------------------------------------------------

Deferred investment tax credits,
  Amortization
Included in operating expenses                    (1)      (1)      (2)
--------------------------------------------------------------------------------
Total income tax expense                        $ 28     $ 44     $ 31
--------------------------------------------------------------------------------

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 Company 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)                                                  2001       2000
--------------------------------------------------------------------------------
Accumulated deferred income taxes:
  Accelerated depreciation                                     $ 88       $ 86
  Capitalized taxes and expenses                                 62         63
  Regulatory liabilities, net                                   (33)       (32)
  Prepayments                                                    (6)       (25)
  Deferred benefit costs                                         (8)       (10)
  Deferred intercompany tax gain                                172        211
--------------------------------------------------------------------------------
Total net accumulated deferred income tax liabilities          $275       $293
--------------------------------------------------------------------------------

                                       32
<PAGE>

NOTE 9 - Retirement Benefits

Ameren has defined  benefit plans  covering  substantially  all employees of the
Company. Benefits are based on the employees' years of service and compensation.
Ameren's Plans are funded in compliance  with income tax regulations and federal
funding requirements. The Company, along with other subsidiaries of Ameren, is a
participant in Ameren's Plans and is responsible for its  proportional  share of
the costs. The Company's share of the pension costs for 2001, 2000 and 1999 were
$0.6 million,  $1 million and $6 million,  respectively,  of which approximately
20%, 23% and 20%, respectively, were charged to construction accounts.

In addition to providing pension  benefits,  the Company 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 Company.
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 Company,  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 Company's share of the postretirement benefit costs for 2001 and 2000
was $10 million and $5 million,  respectively,  of which  approximately  20% and
20%,  respectively,   were  charged  to  construction  accounts.  The  Company's
postretirement plan information for 1999 is presented separately.


The Company's postretirement benefit costs in 1999 were $3 million, of which 10%
were charged to construction accounts.

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

NOTE 10 - Commitments and Contingencies

The  Company  is  engaged  in a capital  program  under  which  expenditures  of
approximately  $400 million,  including AFC, are anticipated  over the next five
years.  The Company and  AmerenUE  are  considering  the  potential  transfer of
AmerenUE's  Illinois-based  electric and gas business to the Company which could
impact future capital expenditure and resource requirements.

The Company has existing  contracts  with  pipeline and natural gas suppliers to
provide, transport and store natural gas for distribution.  Gas-related contract
cost  commitments  for 2002  through 2006 are  estimated to total $115  million.
Total  delivered  natural gas costs were $111 million for 2001, $110 million for
2000 and $73 million for 1999.

In 1999,  the  Company  and two of its coal  suppliers  executed  agreements  to
terminate  their existing coal supply  contracts,  effective  December 31, 1999.
Under these agreements,  the Company made termination  payments to the suppliers
totaling  approximately $52 million. These termination payments were recorded as
an unusual  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 Company 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  Company  has been
identified  by the federal or state  governments  as a  potentially  responsible
party at several  contaminated  sites. As part of the Transfer,  the Company has
contractually  agreed to  indemnify  Generating  Company for  remediation  costs
associated with  pre-existing  environmental  contamination  at the sites of the
Company's former coal plants.

                                       33
<PAGE>

The Company 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 certain  former MGP sites  located in Illinois  from the
Company'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, 2001, the total costs deferred,  net of
recoveries from insurers and environmental  adjustment  clause rate riders,  was
$27 million.

In addition,  the Company'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
Company's financial position, results of operation or liquidity.

The Company's union employees are represented by the  International  Brotherhood
of Electrical Workers and the International Union of Operating Engineers.  These
employees  comprise   approximately  65%  of  the  Company's  workforce.   Labor
agreements  covering  substantially  all  represented  employees  of the Company
expire on June 30, 2002.

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 Company is unable
to predict the impact of these  changes on the  Company's  financial  condition,
results of operations or liquidity.  See Note 2 - Regulatory Matters for further
information.

The Company 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 Company
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 11  - 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  Company  for debt of
comparable maturities.

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

                                                      2001              2000
--------------------------------------------------------------------------------
(In Millions)                                  Carrying  Fair   Carrying   Fair
                                                Amount   Value   Amount    Value
--------------------------------------------------------------------------------
Long-term debt (including current portion)       $612    $621    $493      $504
Preferred Stock                                    80      69      80        65
--------------------------------------------------------------------------------

NOTE 12 - Segment 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,  which provides a variety of support  services to the Company.
The Company evaluates the performance of its segments and allocates resources to
them, based on revenues and operating income.


                                       34
<PAGE>

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

---------------------------------------------------------------
(In Millions)             Electric       Gas        Total
---------------------------------------------------------------
---------------------------------------------------------------
2001
---------------------------------------------------------------
Revenues                $  670        $  170        $  840
Operating income            36             7            43
----------------------------------------------------------------
----------------------------------------------------------------
2000
----------------------------------------------------------------
Revenues                $  717        $  177        $  894
Operating income            77            15            92
----------------------------------------------------------------
----------------------------------------------------------------
1999
----------------------------------------------------------------
Revenues                $  800        $  133        $  933
Operating income            86             9            95
----------------------------------------------------------------

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

--------------------------------------------------------------------------------
(In Millions)                          Electric      Gas          Total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense           $  41         $  8         $  49
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense           $  53         $  8         $  61
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1999
--------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense           $  77         $  8         $  85
--------------------------------------------------------------------------------

Specified item related to segment assets as of December 31:

--------------------------------------------------------------------------------
(In Millions)                          Electric      Gas          Total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets                $  41         $ 10         $  51
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets                $  35         $  6         $  41
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1999
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets                $  86         $  9         $  95
--------------------------------------------------------------------------------

                                       35
<PAGE>

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

--------------------------------------------------------------------------------
                                                              Net
                                                          Income/(Loss)
Quarter Ended                      Operating     Net       Available for
                        Operating   Income/    Income/      Common
                        Revenues    (Loss)      (Loss)     Stockholder
-------------------------------------------------------------------------------
March 31, 2001          $ 261,455   $ 10,770    $ 10,875    $  9,900
March 31, 2000            255,327     35,734      26,332      25,339
June 30, 2001             169,636      9,549       9,938       9,037
June 30, 2000             195,119     22,185      19,904      19,067
September 30, 2001        229,267     23,978      25,255      24,353
September 30, 2000        219,248     30,994      31,828      30,801
December 31, 2001         179,953     (1,118)       (759)     (1,608)
December 31, 2000  (a)    224,204      2,900       1,298         273

(a)  The  fourth  quarter of 2000  included  an  unusual  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.)

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


                                    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'  2002
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'  2002 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'  2002  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' 2002 definitive proxy statement
filed pursuant to Regulation 14A and is incorporated herein by reference.

                                       36
<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........................      18
          Balance Sheet - December 31, 2001 and 2000...............      19
          Statement of Income - Years 2001, 2000, and 1999.........      20
          Statement of Cash Flows - Years 2001, 2000, and 1999.....      21
          Statement of Common Stockholder's
           Equity - Years 2001, 2000, and 1999.....................      22
          Notes to Financial Statements............................      23
          Valuation and Qualifying Accounts (Schedule II)
          Years 2001, 2000, and 1999...............................      38

     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 40.

     (b) Reports on Form 8-K.  The Company filed no reports on Form 8-K during
         the fourth quarter of 2001.


                                       37
<PAGE>

<TABLE>
<CAPTION>



                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

           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)
<S>                                            <C>                <C>            <C>               <C>            <C>

Year ended December 31, 2001

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

    Allowance for doubtful accounts             $1,776,792        $6,145,000                       $6,424,541     $1,497,251
                                                ==========        ==========                       ==========     ==========
Year ended December 31, 2000

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
                                                ==========        ==========                       ==========     ==========



Note:  Uncollectible accounts charged off, less recoveries.

</TABLE>

                                       38
<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)

Date   March 28, 2002                  By    /s/ G. L. Rainwater
       --------------                    --------------------------------
                                                 G. L. Rainwater
                                         President and Chief Executive Officer

     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                           Date
              ---------                 -----                           ----

     /s/ Gary L. Rainwater        President, Chief Executive      March 28, 2002
     ------------------------     Officer and Director
         Gary L. Rainwater        (Principal Executive Officer)


     /s/ Warner L. Baxter         Senior Vice President and       March 28, 2002
     ------------------------     Director
         Warner L. Baxter         (Principal Financial Officer)


     /s/ Martin J. Lyons          Controller                      March 28, 2002
     ------------------------     (Principal Accounting Officer)
         Martin J. Lyons

     /s/ Paul A. Agathen          Senior Vice President and       March 28, 2002
     ------------------------     Director
         Paul A. Agathen

     /s/ Thomas R. Voss           Senior Vice President and       March 28, 2002
     ---------------------        Director
         Thomas R. Voss

     /s/ Charles W. Mueller       Director                        March 28, 2002
     ------------------------
         Charles W. Mueller


                                       39
<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.

                       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 (U.S. Bank Trust National Association and Patrick
                    J. Crowley are successor 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,
                    June 1, 1995, March 15, 1997, June 1, 1997, December 1, 1998
                    and June 1, 2001 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

                                       40
<PAGE>


Exhibit No.                        Description
-----------                        -----------

                    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;
                    Exhibit 4.2, in File No. 333-59438; and Exhibit 4.1 to June
                    30, 2001 Form 10-Q.)

     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 4.4, in File No.
                    333-59438).

    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         - 2nd Amended Electric Power Supply Agreement between
                    Generating Company and Marketing Co. (Ameren March 31, 2001
                    Form 10-Q, Exhibit 10.1).

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

                                       41
<PAGE>

Exhibit No.                        Description
----------                         -----------

    10.15         - Amended Electric Power Supply Agreement between Marketing
                    Co. and AmerenCIPS (Ameren March 31, 2001 Form 10-Q,
                    Exhibit 10.2).

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

    10.17         - Alliance Agreement establishing the Alliance Independent
                    Transmission System Operator, Inc., Alliance Transmission
                    Company, LLC and Amendment to admit the Company and AmerenUE
                    (Ameren June 30, 2001 Form 10-Q, Exhibit 10.1).


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

          Reports of AmerenUE  on Forms 8-K,  10-Q and 10-K are on file with the
          SEC under File Number 1-2967.

          Information regarding  AmerenEnergy  Generating Company on Form S-4 is
          on file with the SEC under File  Number  333-56594  and its Forms 8-K,
          10-Q and 10-K are being filed under the same File Number.




                                       42

<PAGE>

                                                                      EXHIBIT 12

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                  COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                    AND PREFERRED STOCK DIVIDEND REQUIREMENTS

<TABLE>
<CAPTION>


                                                       Year Ended December 31,
                                        -------------------------------------------------------

                                          1997       1998       1999       2000       2001
                                          ----       ----       ----       ----       ----

                                                 Thousands of Dollars Except Ratios

<S>                                     <C>        <C>        <C>        <C>        <C>

Net Income                               $38,620    $80,147    $53,980    $79,362    $45,309
Add- Extraordinary items net of tax       24,853          -          -          -          -
                                         -------    -------    -------    -------    -------
Net income from continuing                63,473     80,147     53,980     79,362     45,309
operations

   Taxes based on income                  33,922     45,412     30,763     43,661     28,245
                                        ---------   --------   --------   --------   --------

Net income before income taxes            97,395    125,559     84,743    123,023     73,554
                                        ---------   --------   --------   --------   --------


Add- fixed charges:
   Interest on long term debt             32,271     37,260     38,223     28,935     33,523
   Other interest                          2,875      1,647      3,373      8,497      4,750
   Amortization of net debt premium,
    discount, expenses and losses          1,643      1,132      1,139      2,880        993
                                        ---------   --------   --------   --------   --------
Total fixed charges                       36,789     40,039     42,735     40,312     39,266
                                        ---------   --------   --------   --------   --------

Earnings available for fixed charges     134,184    165,598    127,478    163,335    112,820
                                        =========   ========   ========   ========   ========
                                        =========   ========   ========   ========   ========

Ratio of earnings to fixed charges          3.64       4.13       2.98       4.05       2.87
                                        =========   ========   ========   =========  ========
                                        =========   ========   ========   =========  ========


Earnings required for preferred
dividends:
   Preferred stock dividends               3,715      3,745      3,833      3,882      3,627
   Adjustment to pre-tax basis             1,985      2,122      2,185      2,135      2,260
                                        ---------   --------   --------   --------   --------
                                           5,700      5,867      6,018      6,017      5,887

Fixed charges plus preferred stock
  dividend requirements                   42,489     45,906     48,753     46,329     45,153
                                        =========   ========   ========   ========   ========
                                        =========   ========   ========   ========   ========

Ratio of earnings to fixed charges
  plus preferred stock dividend
  requirements                              3.15       3.60       2.61       3.52       2.49
                                        =========   ========   ========   ========   ========
                                        =========   ========   ========   ========   ========

</TABLE>

<PAGE>

                                                                      Exhibit 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS


We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statements  on Form S-3 (Nos.  333-59438,  33-59674  and  33-45506)  of  Central
Illinois Public Service Company of our report dated February 1, 2002 relating to
the financial statements and financial statement schedule, which appears in this
Form 10-K.



/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
St. Louis, Missouri
March 28, 2002