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, 2002
                                       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).

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ( ). No (X).

     As of June 28, 2002,  Ameren  Corporation  held all 25,452,373  outstanding
shares of common stock,  without par value,  of Central  Illinois Public Service
Company.  The  aggregate  market  value of the  voting  preferred  stock held by
non-affiliates  of Central  Illinois  Public  Service  Company at June 28, 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) was $28,200,000.

     Shares of Common Stock without par value, outstanding as of March 21, 2003:
25,452,373 shares (all owned by Ameren Corporation).

                      Documents incorporated by references.

     Portions of the registrant's definitive proxy statement for the 2003 annual
meeting are incorporated by reference into Part III.

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<TABLE>
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                                                           TABLE OF CONTENTS

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PART I

Item 1     Business
                General.........................................................................................................  1
                Capital Program and Financing...................................................................................  3
                Rates and Regulation............................................................................................  3
                Industry Issues.................................................................................................  4
                Available Information...........................................................................................  4
Item 2     Properties...........................................................................................................  5
Item 3     Legal Proceedings....................................................................................................  5
Item 4     Submission of Matters to a Vote of Security Holders..................................................................  6

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................................................  9
Item 6     Selected Financial Data..............................................................................................  9
Item 7     Management's Discussion and Analysis of Financial Condition and Results of Operations................................ 10
Item 7A    Quantitative and Qualitative Disclosures about Market Risk........................................................... 23
Item 8     Financial Statements and Supplementary Data.......................................................................... 24
Item 9     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................................. 48

PART III

Item 10    Directors and Executive Officers of the Registrant................................................................... 48
Item 11    Executive Compensation............................................................................................... 48
Item 12    Security Ownership of Certain Beneficial Owners and Management....................................................... 48
Item 13    Certain Relationships and Related Transactions....................................................................... 48
Item 14    Controls and Procedures.............................................................................................. 48

PART IV

Item 15    Exhibits, Financial Statement Schedules and Reports on Form 8-K...................................................... 49


SIGNATURES...................................................................................................................... 54

CERTIFICATIONS.................................................................................................................. 54

EXHIBIT INDEX................................................................................................................... 57

</TABLE>

          This  Form  10-K  contains  "forward-looking  statements"  within  the
     meaning of Section 21E of the Securities  Exchange Act of 1934, as amended.
     Forward-looking  statements  should be read with the cautionary  statements
     and  important  factors  included in this Form 10-K at pages 6 and 22 under
     the heading "Forward-Looking  Statements."  Forward-looking  statements are
     all statements  other than statements of historical  fact,  including those
     statements  that  are  identified  by the use of the  words  "anticipates,"
     "estimates,"  "expects,"  "intends,"  "plans,"  "predicts,"  "projects" and
     similar expressions.

<PAGE>

                                     PART I

ITEM 1. BUSINESS.

GENERAL

     Central  Illinois  Public Service  Company,  headquartered  in Springfield,
Illinois,  operates as  AmerenCIPS  and is a  wholly-owned  subsidiary of Ameren
Corporation  (Ameren).  We operate a  rate-regulated  electric  and  natural gas
transmission  and  distribution  business.  We were  incorporated in Illinois in
1902.  We supply  electric  and gas  utility  service to portions of central and
southern  Illinois  having an estimated  population of 820,000 within an area of
approximately   20,000  square  miles.  We  furnish   electric  service  in  557
incorporated  and  unincorporated  communities  and adjacent  suburban and rural
areas.  We  also  furnish  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.  We supply
electric  service to about  325,000  customers  and natural gas service to about
170,000 customers.

     Our service  territory  is  predominantly  made up of small towns and rural
areas.  Our  territory is located in 66 counties in  Illinois,  that are devoted
principally to agriculture and diversified industrial operations. Key industries
include  petroleum  and  petrochemical   industries,   food  processing,   metal
fabrication and coal mining.

     When we refer to  AmerenCIPS,  our, we or us, we are  referring  to Central
Illinois Public Service Company.

     Ameren is a public utility holding  company  registered with the Securities
and Exchange  Commission  (SEC) under the Public Utility  Holding Company Act of
1935 (PUHCA), as amended,  and is headquartered in St. Louis,  Missouri.  Ameren
was incorporated in Missouri on August 7, 1995. On December 31, 1997,  following
the receipt of all required approvals,  CIPSCO  Incorporated  (CIPSCO) and Union
Electric Company combined with the result that the common shareholders of CIPSCO
and Union Electric Company became the common  shareholders of Ameren, and Ameren
became  the owner of 100% of the  common  stock of Union  Electric  Company  and
CIPSCO's  operating  subsidiaries:  Central  Illinois Public Service Company and
CIPSCO  Investment  Company.  Ameren  completed its  acquisition of CILCORP Inc.
(CILCORP)  on  January  31,  2003 and of Medina  Valley  Cogen  (No.  4), LLC on
February 4, 2003 from The AES Corporation  (AES). See CILCORP  Acquisition below
for further  information.  In addition to us, Ameren's primary  subsidiaries and
our affiliates are as follows:

o    Union  Electric   Company,   which  operates  a   rate-regulated   electric
     generation,  transmission  and  distribution  business and a rate-regulated
     natural gas  distribution  business in Missouri  and  Illinois as AmerenUE.
     AmerenUE was  incorporated in Missouri in 1922 and is successor to a number
     of companies,  the oldest of which was organized in 1881. It is the largest
     electric  utility in the State of Missouri  and  supplies  electric and gas
     service in parts of central and eastern  Missouri and west central Illinois
     having  an  estimated   population  of  2.6  million   within  an  area  of
     approximately  24,500 square  miles,  including the greater St. Louis area.
     AmerenUE  supplies  electric  service to about 1.2  million  customers  and
     natural gas service to about 130,000 customers.
o    Central Illinois Light Company, a subsidiary of CILCORP,  which operates, a
     rate-regulated   transmission  and  distribution   business,   an  electric
     generation business, and a rate-regulated natural gas distribution business
     in Illinois.  AmerenCILCO was incorporated in Illinois in 1913. It supplies
     electric  and gas utility  service to portions of central and east  central
     Illinois  in an  area  of  approximately  3,700  and  4,500  square  miles,
     respectively.  AmerenCILCO  supplies  electric  service  to  about  200,000
     customers and natural gas service to about 205,000  customers.  See CILCORP
     Acquisition below for further information.
o    AmerenEnergy  Resources Company (Resources Company),  which consists of non
     rate-regulated  operations.  Subsidiaries include  AmerenEnergy  Generating
     Company  (Generating  Company)  that operates non  rate-regulated  electric
     generation  in  Missouri  and  Illinois,   AmerenEnergy  Marketing  Company
     (Marketing  Company),  which  markets  power  for  periods  over one  year,
     AmerenEnergy  Fuels and Services  Company,  which procures fuel and manages
     the related risks for Ameren's affiliated companies and AmerenEnergy Medina
     Valley Cogen (No. 4), LLC, which  indirectly owns a 40 megawatt,  gas-fired
     electric co-generation  plant.  On February  4, 2003, Ameren completed  its
     acquisition of AES Medina Valley Cogen (No. 4), LLC from AES and renamed it
     AmerenEnergy  Medina  Valley Cogen (No.  4), LLC.  See CILCORP  Acquisition
     below for  further  information.  Generating  Company was  incorporated  in
     Illinois in March 2000 in conjunction  with the Illinois  Electric  Service
     Customer  Choice  and Rate  Relief  Law of 1997 (the  Illinois  Law).  This
     Illinois Law provides for electric  utility  restructuring  and  introduces
     competition  into  the  retail  supply  of  electric  energy  in  Illinois.
     Generating Company commenced  operations on May 1, 2000 when we transferred
     to  Generating

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     Company all of the  following:  our  generating  assets,  consisting of the
     generating facilities described below under Item 2. Properties; all related
     fuel,   supply,   transportation,   maintenance   and   labor   agreements;
     approximately 45% of our employees;  and some other related rights,  assets
     and liabilities. See below for further information regarding this transfer.
o    Ameren Services Company (Ameren Services),  incorporated in Missouri, which
     provides administrative,  accounting,  legal,  engineering,  executive, and
     other support services to Ameren and all of its subsidiaries;
o    AmerenEnergy,  Inc.,  which serves as a power marketing and risk management
     agent for AmerenUE and  Generating  Company for  transactions  of primarily
     less than one year;
o    Electric  Energy,  Inc.  (EEI),  which  operates  electric  generation  and
     transmission facilities in Illinois that supply electric power primarily to
     a uranium enrichment plant located in Paducah,  Kentucky.  Ameren has a 60%
     ownership  interest  in EEI and  consolidates  it for  financial  reporting
     purposes.  On April 30, 2002, we transferred  our 20% common stock interest
     in EEI to Ameren in the form of a non-cash dividend of common stock in EEI.
     The book value of our  investment  in EEI was $1.8  million.  Subsequently,
     Ameren contributed such stock to Resources Company. This transfer completed
     the process of  achieving a full  divestiture  of all  electric  generating
     capacity that had been owned  directly or indirectly by us. Our  affiliate,
     AmerenUE  currently  owns 40% of the common stock of EEI. The remaining 40%
     of the common stock of EEI is held 20% each by Kentucky  Utilities  Company
     and Illinova Generating Company.

     For  additional  information  regarding the  acquisition of CILCORP and AES
Medina  Valley  Cogen (No.  4) LLC,  see  Recent  Developments  in  Management's
Discussion and Analysis of Financial  Condition and Results of Operations  under
Item 7 and Notes 1 and 15 to our Financial Statements under Item 8.

     In accordance with the Illinois Law, on May 1, 2000,  following the receipt
of all required state and federal  regulatory  approvals,  we transferred all of
our electric  generating assets totaling 2,860 megawatts of capacity and related
liabilities,  at  historical  net book value,  to a newly  created  nonregulated
affiliate,  Generating 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 us  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 us.
Seven hundred and fifty employees,  or approximately 45% of our workforce,  were
also transferred to Generating  Company as part of the Transfer.  As a result of
the  Transfer,  our  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 we entered
into to meet our  public  utility  obligations,  see  Overview  in  Management's
Discussion and Analysis of Financial  Condition and Results of Operations  under
Item 7 and Notes 1, 2 and 3 to our Financial Statements under Item 8.

     For the year  2002,  80% (2001 - 80%,  2000 - 80%) of our  total  operating
revenues was derived from the sale of electric  energy and 20% (2001 - 20%, 2000
- 20%) from the sale of natural gas.

     We  employed  878  persons at  December  31,  2002.  For  information  on a
voluntary  retirement  program offered in December 2002 and labor agreements and
other labor matters,  see Outlook - Labor Agreements in Management's  Discussion
and Analysis of Financial  Condition and Results of Operations  under Item 7 and
Notes 8 and 12 to our Financial Statements under Item 8.

CILCORP Acquisition

     On January 31,  2003,  after  receipt of the  necessary  regulatory  agency
approvals   and   clearance   from  the   Department   of   Justice   under  the
Hart-Scott-Rodino  Antitrust  Improvements Act, Ameren completed its acquisition
of all of the  outstanding  common  stock of  CILCORP  from AES.  CILCORP is the
parent company of Peoria,  Illinois-based  Central Illinois Light Company, which
operated as CILCO. With the acquisition,  CILCO became an Ameren subsidiary, but
remains a separate  utility  company,  operating as AmerenCILCO.  On February 4,
2003,  Ameren also completed its acquisition of AES Medina Valley Cogen (No. 4),
LLC (Medina  Valley),  which indirectly owns a 40 megawatt,  gas-fired  electric
co-generation  plant.  With the acquisition, Medina Valley became a wholly-owned
subsidiary of Resources Company and was renamed AmerenEnergy Medina Valley Cogen
(No.  4), LLC.  The CILCORP and  AmerenEnergy  Medina  Valley Cogen (No. 4), LLC
financial  statements  will  be  included  in  Ameren's  consolidated  financial
statements effective with the January and February 2003 acquisition dates.

     Ameren acquired  CILCORP to complement its existing  Illinois  electric and
gas  operations.  The  purchase  included  CILCO's  rate-regulated  electric and
natural gas  businesses in Illinois  serving  approximately  200,000 and 205,000

                                       2

<PAGE>

customers, respectively, of which approximately 150,000 are combination electric
and gas  customers.  CILCO's  service  territory  is  contiguous  to our service
territory.  CILCO  also  has a non  rate-regulated  electric  and gas  marketing
business  principally  focused in the Chicago,  Illinois  region.  Finally,  the
purchase includes approximately 1,200 megawatts of largely coal-fired generating
capacity, most of which is expected to become non rate-regulated in 2003.

     The total  purchase price was  approximately  $1.4 billion and included the
assumption of CILCORP and Medina  Valley debt and preferred  stock at closing of
approximately  $900  million,   with  the  balance  of  the  purchase  price  of
approximately $500 million paid with cash on hand. The purchase price is subject
to certain  adjustments  for  working  capital  and other  changes  pending  the
finalization  of CILCORP's  closing  balance  sheet.  The cash  component of the
purchase  price came from Ameren's  issuances in September  2002 of 8.05 million
common shares and in early 2003 of 6.325 million common shares.

     For  additional   information   regarding  our  business  operations,   see
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations under Item 7 and Note 1 to our Financial Statements under Item 8.


CAPITAL PROGRAM AND FINANCING

     For  information on our capital  program and financial  needs see Liquidity
and Capital  Resources  in  Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations under Item 7 and Notes 3, 6, 7 and 12 to our
Financial Statements under Item 8.


RATES AND REGULATION

Rates

     Rates that we are  allowed to charge for our  services  are the single most
important item  influencing  our financial  position,  results of operations and
liquidity.  We are  highly  regulated.  The rates we charge  our  customers  are
determined by governmental  organizations.  Decisions by these organizations are
influenced by many factors,  including our recent cost of providing service, our
quality  of  service,  regulatory  staff  knowledge  and  experience,   economic
conditions and social and political views. Decisions made by these organizations
regarding  our rates  could have a material  impact on our  financial  position,
results of operations and liquidity.

     For the year 2002,  approximately  91% of our electric  operating  revenues
were based on rates regulated by the Illinois  Commerce  Commission (ICC) and 9%
on rates regulated by the Federal Energy Regulatory  Commission  (FERC). Our gas
operating  revenues for the year 2002 were based on rates regulated  exclusively
by the ICC. For information on rate matters in these  jurisdictions,  see Note 2
to our Financial Statements under Item 8.

General Regulatory Matters

     As a subsidiary of Ameren, a holding company  registered with the SEC under
the PUHCA, we are subject to the regulatory  provisions of the PUHCA,  including
provisions  relating to the issuance of securities,  sales and  acquisitions  of
securities  and utility  assets,  affiliate  transactions,  financial  reporting
requirements,  and the services  performed by Ameren  Services and  AmerenEnergy
Fuels and Services Company.  Issuance of short-term and long-term debt and other
securities  by Ameren and issuance of debt having a maturity of twelve months or
less by AmerenCIPS,  AmerenUE and AmerenCILCO are subject to approval by the SEC
under the PUHCA.

     We are subject to regulation by the ICC as to rates,  service,  issuance of
equity  securities,  issuance  of debt  having a  maturity  of more than  twelve
months, mergers, and various other matters. We are also subject to regulation by
the FERC as to rates and charges in connection with the wholesale sale of energy
and transmission in interstate commerce,  mergers,  affiliate transactions,  and
certain other matters.

     For information on regulatory matters in these jurisdictions, including the
current  status of electric  transmission  matters  pending before the FERC, see
Liquidity  and Capital  Resources  in  Management's  Discussion  and Analysis of
Financial  Condition  and Results of  Operations  under Item 7 and Note 2 to our
Financial Statements under Item 8.

                                       3

<PAGE>

Environmental Matters

     Certain  of our  operations,  are  subject  to  federal,  state  and  local
environmental  regulations  relating to the safety and health of personnel,  the
public and the environment,  including the identification,  generation, storage,
handling,  transportation,  disposal, record keeping, labeling, reporting of and
emergency response in connection with hazardous and toxic materials,  safety and
health standards, and environmental protection requirements, including standards
and limitations  relating to the discharge of air and water pollutants.  Failure
to comply with those statutes or regulations could have material adverse effects
on us,  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 us into compliance.  We believe we are in material
compliance with existing  regulations.  In connection with the Transfer, we have
agreed to indemnify  Generating Company for environmental claims relating to the
transferred generating facilities for events or occurrences arising prior to May
1, 2000.

     For  additional  discussion  of  environmental  matters,  see Liquidity and
Capital Resources in Management's Discussion and Analysis of Financial Condition
and Results of Operations  under Item 7 and Note 12 to our Financial  Statements
under Item 8.

Electric and Gas Supply

     We acquire all of our electric supply from Marketing  Company under a fixed
price contract that currently  expires at the end of 2004, which we plan to seek
to extend to the end of 2006. See Note 2 to our Financial  Statements under Item
8 for further  information about an electric power supply agreement that we have
with Marketing Company.

     We acquire our gas supply from  various  sources and are allowed to collect
through  rates any  change  in gas  costs.  See Notes 2 and 12 to our  Financial
Statements, under Item 8 for further information under Item 8.


INDUSTRY ISSUES

     We are 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  regional
          transmission organizations;
     o    numerous troubled  companies within the energy sector and their impact
          on energy marketing and access to the capital markets;
     o    on-going  consideration  of  additional  changes  of the  industry  by
          federal and state authorities;
     o    continually developing environmental laws, regulations and issues;
     o    proposals for demand-side management programs; and
     o    global climate issues.

     We are monitoring  these issues and are unable to predict at this time what
impact, if any, these issues will have on our operations, financial condition or
liquidity.  For additional  information,  see Outlook in Management's Discussion
and Analysis of Financial  Condition and Results of Operations  under Item 7 and
Notes 2 and 12 to our Financial Statements under Item 8.

AVAILABLE INFORMATION

     We  make  available  free  of  charge  through  Ameren's  Internet  website
(http://www.ameren.com)  our annual  report on Form 10-K,  quarterly  reports on
Form 10-Q,  current  reports on Form 8-K, and any  amendments  to those  reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 as soon as reasonably  practicable after we electronically file such
reports with, or furnish it to, the SEC. This  information,  for our affiliates,
Ameren, AmerenUE, CILCORP, AmerenCILCO and Generating Company, is also available
through Ameren's Internet website.

                                       4

<PAGE>

     We also make available free of charge through Ameren's Internet website the
code of business conduct for directors, officers and employees of Ameren and its
subsidiaries, including us, referred to as Ameren's Corporate Compliance Policy.
This document is also available in print upon written request to Secretary, P.O.
Box 66149, St. Louis, Missouri 63166-6149.


ITEM 2. PROPERTIES.

     For information on our construction  program,  electric transmission assets
and the Transfer,  see General under Item 1, Results of Operations and Liquidity
and Capital  Resources  in  Management's  Discussion  and  Analysis of Financial
Condition  and Results of  Operations  under Item 7 and Note 2 to our  Financial
Statements under Item 8.

     Ameren is a member of MAIN (Mid-America  Interconnected  Network), which is
one of the ten regional electric reliability councils organized for coordinating
the planning and  operation of the nation's  bulk power  supply.  MAIN  operates
primarily in Wisconsin, Michigan, Illinois and Missouri.

     Ameren's bulk power system is operated as an  Ameren-wide  control area and
transmission  system under the FERC approved  amended joint  dispatch  agreement
between  AmerenUE,  Generating  Company  and  us.  The  amended  joint  dispatch
agreement  provides a basis upon  which  AmerenUE  and  Generating  Company  can
participate  in the  coordinated  operation of AmerenUE's  and our  transmission
facilities with  AmerenUE's and Generating  Company's  generating  facilities in
order to achieve  economies  consistent with the provision of reliable  electric
service and an equitable  sharing of the benefits and costs of that  coordinated
operation.  In 2002, Ameren had more than 30  interconnections  for transmission
service and the exchange of electric energy, directly and through the facilities
of others. Our Illinois-based affiliate,  AmerenCILCO,  is currently expected to
continue to operate as a separate  control area. As such, its generating  plants
will not be jointly  dispatched  with the generating  plants owned by Generating
Company and AmerenUE. AmerenCILCO is a transmission owning member of the Midwest
Independent  System  Operating  (Midwest  ISO)  and has  transferred  functional
control  of  its  system  to  the  Midwest  ISO.  Transmission  service  on  the
AmerenCILCO transmission system is provided pursuant to the terms of the Midwest
ISO open access  transmission  tariff on file with the FERC. For  information on
AmerenUE's and our participation in the Midwest ISO, see Note 2 to our Financial
Statements under Item 8.

     As of December 31, 2002,  we owned  approximately  1,900  circuit  miles of
electric  transmission  lines.  We also  operate  one  propane-air  plant,  four
underground gas storage fields and 4,900 miles of natural gas  transmission  and
distribution mains. Our other properties include distribution lines, underground
cable, warehouses, garages and repair shops.

     In 2002, we transferred our principal office building and related leasehold
interests located in Springfield,  Illinois to our affiliate,  CIPSCO Investment
Company, at net book value of approximately $4.7 million. Since the transfer, we
continue to use a portion of the office  building  for our  principal  executive
office, pursuant to a lease with CIPSCO Investment Company.

     Substantially  all of our  property is subject to the direct  first lien of
the indenture  securing our first mortgage bonds. On May 1, 2000, we transferred
all of our generating  facilities and related assets to Generating Company. As a
part of this Transfer,  our generating property and plant were released from the
lien  of the  indenture  securing  our  first  mortgage  bonds.  For  additional
information on this Transfer, see General section under Item 1 and Note 2 to our
Financial Statements under Item 8.


ITEM 3. LEGAL PROCEEDINGS.

     We are  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. We believe that the final
disposition of these proceedings, except as otherwise noted in this report, will
not have a  material  adverse  effect  on our  financial  position,  results  of
operations or liquidity.

     For additional  information on legal and  administrative  proceedings,  see
Rates  and  Regulation  under  Item  1,  Liquidity  and  Capital  Resources  and
Regulatory  Matters  in  Management's   Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations  under Item 7, and Notes 2 and 12 to our
Financial Statements under Item 8.

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<PAGE>

FORWARD-LOOKING STATEMENTS

     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,  we are  providing  this
cautionary  statement to identify some 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,  including  monetary  and
     fiscal policies;
o    the impact on us of current  regulations  related  to the  opportunity  for
     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 our business at both the state
     and federal levels;
o    the  effects of  participation  in a  FERC-approved  Regional  Transmission
     Organization, including activities associated with the Midwest ISO;
o    availability and future market prices for purchased power,  electricity and
     natural gas, including the use of financial and derivative  instruments and
     volatility of changes in market prices;
o    the cost of  commodities,  such as natural  gas, and our ability to recover
     such increased cost;
o    average  rates for  electricity  in the  Midwest;
o    business and economic conditions;
o    the impact of the adoption of new accounting  standards on the  application
     of appropriate technical accounting rules and guidance;
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   strategic   initiatives,   including   acquisitions   and
     divestitures;
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    future wages and employee  benefit costs,  including  changes in returns of
     benefit plan assets;
o    disruptions of the capital  markets or other events making Ameren's and our
     access to necessary capital more difficult or costly;
o    cost and  availability  of  transmission  capacity  required to satisfy our
     energy sales; and
o    legal and administrative proceedings.

     Given these  uncertainties,  undue  reliance  should not be placed on these
forward-looking statements.  Except to the extent required by federal securities
laws,   we  undertake   no   obligation   to  publicly   update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter of 2002.

                                       6

<PAGE>

INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF
REGULATION S-K:
                     Age At        Present Position           Date First Elected
      Name          12/31/02    and Business Experience          or Appointed
      ----          --------    -----------------------       ------------------

Gary L. Rainwater      56       President, Chief Executive           1/1/98
                                Officer and Director                12/2/97

Mr. Rainwater was elected Executive Vice President of AmerenCIPS in January 1997
and  was  named  to his  present  position  in  December  1997.  Before  joining
AmerenCIPS, he worked for AmerenUE for 17 years, beginning his career in 1979 as
an engineer.  He was named General Manager - Corporate Planning in 1988 and Vice
President  in 1993.  Mr.  Rainwater  is also an  officer at various of our other
affiliates, including President and Chief Operating Officer of Ameren.

Paul A. Agathen        55       Senior Vice President               10/12/01
                                and Director                        12/31/97

Mr.  Agathen  was  employed by  AmerenUE  in 1975 as an  attorney.  He was named
General Attorney of AmerenUE in 1982, Vice President,  Environmental  and Safety
in 1994 and  Senior  Vice  President  in 1996.  He was  elected  to his  present
position at AmerenCIPS in 2001. Mr. Agathen is also an officer at various of our
other affiliates.

Warner L. Baxter       41       Senior Vice President                8/30/01
                                and Director                         4/22/99

From  1983  to  1995,  Mr.  Baxter  was  employed  by  Price   Waterhouse   (now
PricewaterhouseCoopers  LLP).  Mr. Baxter  joined  AmerenUE in 1995 as Assistant
Controller.  He was promoted to  Controller  of AmerenUE in 1996 and was elected
Vice  President  and  Controller  of AmerenUE and Ameren in 1998. He was elected
Vice  President and  Controller of AmerenCIPS in 1999. Mr. Baxter was elected to
his present  position at  AmerenCIPS  in 2001.  Mr. Baxter is also an officer at
various of our other  affiliates,  including  Senior Vice President,  Finance of
Ameren.

Daniel F. Cole         49       Senior Vice President               10/12/01

Mr. Cole is a Senior Vice President of AmerenCIPS. AmerenUE employed Mr. Cole in
1976 as an engineer. He was named AmerenUE's  Manager--Resource Planning in 1996
and General  Manager--Corporate  Planning in 1997. In 1998, Mr. Cole was elected
as Vice President of Corporate Planning of Ameren Services. Mr. Cole was elected
to his present  position at AmerenCIPS  in 2001.  Mr. Cole is also an officer at
various of our other affiliates.

Garry L. Randolph      54       Senior Vice President               10/12/01

Mr. Randolph was elected as an officer of AmerenCIPS in 2001. He was employed by
AmerenUE in 1977 as an engineer and elected Vice President,  Nuclear  Operations
in 1992, Vice President and Chief Nuclear Officer in 1997, Senior Vice President
and Chief Nuclear  Officer in 2000,  and Senior Vice  President--Generation  and
Chief Nuclear Officer in 2001. Mr. Randolph is also an officer at various of our
other affiliates.

Thomas R. Voss         55       Senior Vice President                6/1/99
                                and Director                        10/12/01

Mr. Voss began his career with AmerenUE in 1969 as an engineer. After four years
of military service, he returned to AmerenUE and from 1975 to 1988, held various
positions  including district manager and distribution  operating  manager.  Mr.
Voss was elected Vice  President of AmerenCIPS in 1998.  Mr. Voss was elected to
his  present  position  at  AmerenCIPS  in 1999.  Mr. Voss is also an officer at
various of our other affiliates.

David A. Whiteley      46       Senior Vice President               10/12/01

Mr.  Whiteley  began his career with AmerenUE in 1978 as an engineer and in 1993
was named  manager of  transmission  planning  and later  manager of  electrical
engineering and  transmission  planning.  In 2000, Mr. Whiteley was elected Vice
President of Ameren Services  responsible for engineering and  construction  and
later energy delivery technical services. He was elected to his present position
at  AmerenCIPS in 2001.  Mr.  Whitely is also an officer at various of our other
affiliates.

                                       7

<PAGE>

Jerre E. Birdsong      48       Vice President                      10/12/01
                                and Treasurer                       07/01/93

Mr.  Birdsong  joined  AmerenUE  in 1977 as an  economist.  He was  promoted  to
Assistant  Treasurer  in  1984,  Manager  of  Finance  in 1989  and in 1993  was
appointed  Treasurer.  He was  appointed  Treasurer of  AmerenCIPS  in 1997.  In
addition to being Treasurer, he was elected to the position of Vice President in
2001.  Mr.  Birdsong  is also an officer  at  various  of our other  affiliates,
including Vice President and Treasurer of Ameren.

J.L. Davis             55       Vice President                       2/1/03

Mr. Davis joined AmerenCIPS in 1972 as Assistant  Engineer in the gas department
and held various other positions until being named Manager of the Gas department
in 1989.  Effective with the completion of the merger of AmerenCIPS and AmerenUE
in 1997,  Mr. Davis was named Vice  President  Gas  Operations  and  Engineering
Support for Ameren  Services.  In 2003,  Mr. Davis was elected Vice President of
AmerenCIPS.

Martin J. Lyons        36       Vice President                       2/14/03
                                and Controller                      10/22/01

Mr. Lyons was appointed as Controller of AmerenCIPS in October 2001. In addition
to being  Controller,  he was elected to the position of Vice President in 2003.
He was  previously  employed by  PricewaterhouseCoopers  LLP for 13 years,  most
recently  as  partner.  Mr.  Lyons is also an  officer  at  various of our other
affiliates, including Vice President and Controller of Ameren.

Michael J. Montana*    56       Vice President                       4/28/98

Mr.  Montana  joined  AmerenUE  as an  engineer  in 1971 and had also  served as
Purchasing  Department Buyer from 1973 to 1976, executive assistant from 1976 to
1984,  manager of Industrial  Relations  from 1984 to 1988 and Vice President of
Industrial  Relations  from  1988 to  1995  of  AmerenUE.  He was  elected  Vice
President of Ameren  Services in 1997 and Vice  President of AmerenCIPS in 1998.
Mr. Montana was elected as an officer of Generating Company in November 2000.

Gilbert W. Moorman*    59       Vice President                       6/1/88

Mr. Moorman joined  AmerenCIPS as assistant  engineer in relay system protection
in 1968.  He has since  held a series of  positions  with  AmerenCIPS  including
planning  engineer,  power system analyst,  manager of system operations and was
elected Vice President of Power Supply in 1988.

Craig D. Nelson        49       Vice President                       4/28/98

Mr. Nelson joined  AmerenCIPS in 1979 as a tax accountant and was later promoted
to income tax supervisor.  He assumed positions of increasing responsibility and
became  Treasurer and Assistant  Secretary in 1989,  Vice  President,  Corporate
Services  in 1996  which  position  he later  relinquished.  He  served  as Vice
President, Merger Coordination at Ameren Services and AmerenCIPS in 1998. He was
elected Vice President, Corporate Planning, Ameren Services in 1999.

Steven R. Sullivan     42       Vice President Regulatory
                                Policy, General Counsel
                                and Secretary                       11/7/98

Mr. Sullivan was elected Vice President, General Counsel and Secretary of Ameren
in 1998. He was  previously  employed by Anheuser  Busch  Companies,  Inc. as an
attorney  from 1995 to 1998.  Mr.  Sullivan is also an officer at various of our
other affiliates,  including Vice President  Regulatory Policy,  General Counsel
and Secretary of Ameren.

--------------
*These individuals retired in 2003.

                                       8

<PAGE>

All  officers  are  elected  or  appointed  annually  by the Board of  Directors
following  the  election  of such Board at the annual  meeting of  stockholders.
Except  for  Mr.  Steven  R.  Sullivan  and Mr.  Martin  J.  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, as an attorney, by Anheuser Busch Companies, Inc. Mr. Lyons
was previously employed, as an accountant, by PricewaterhouseCoopers LLP.


<TABLE>
<CAPTION>

                                     PART II

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

     There is no market for our Common Stock since all shares are owned by our
     parent, Ameren.


ITEM 6. SELECTED FINANCIAL DATA.
<S>                                   <C>             <C>               <C>              <C>                <C>
======================================================================================================================
For the Years Ended
December 31 (in millions)                2002            2001              2000(a)           1999              1998
----------------------------------------------------------------------------------------------------------------------
Operating Revenues                     $  824          $  840            $  894            $  933            $  856
Operating Income                           47              43                91                95               120
Net Income                                 26              46                79                54                80
Preferred stock dividends                   3               4                 4                 4                 4
Net income after preferred
stock dividends                            23              42                75                50                76
Common Stock dividends                     62              33                54                90                72

As of December 31,
Total assets                           $1,697          $1,783            $1,867            $1,782            $1,764
Long-term debt                            534             579               463               494               528
Total common stockholder's
equity                                    512             564               555               534               575
========================================================================================================================
</TABLE>

(a)  On May 1, 2000, we transferred our electric  generating  assets and related
     liabilities,  at net book value, to Generating  Company,  in exchange for a
     subordinated  promissory  note from  Generating  Company  in the  principal
     amount of $552  million.

                                       9

<PAGE>


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

OVERVIEW

     Central  Illinois  Public Service  Company,  headquartered  in Springfield,
Illinois,  operates as  AmerenCIPS  and is a  wholly-owned  subsidiary of Ameren
Corporation (Ameren). Our principal business is the rate-regulated  transmission
and  distribution  of  electricity  and  the  distribution  of  natural  gas  to
residential, commercial, industrial and wholesale users in Illinois. Ameren is a
public  utility  holding  company  registered  with the  Securities and Exchange
Commission  (SEC) under the Public Utility  Holding  Company Act of 1935 (PUHCA)
and is headquartered in St. Louis, Missouri.  Ameren's principal business is the
generation,  transmission and distribution of electricity,  and the distribution
of natural gas to residential, commercial, industrial and wholesale users in the
central United States.  In addition to us, Ameren's  principal  subsidiaries and
our affiliates are as follows:

o    Union  Electric   Company,   which  operates  a   rate-regulated   electric
     generation,  transmission and distribution  business,  and a rate-regulated
     natural gas distribution business in Missouri and Illinois as AmerenUE.
o    Central  Illinois  Light Company,  a subsidiary of CILCORP Inc.  (CILCORP),
     which operates a rate-regulated  transmission and distribution business, an
     electric generation business and a rate-regulated  natural gas distribution
     business in Illinois as  AmerenCILCO.  Ameren  completed its acquisition of
     CILCORP on January  31,  2003 from The AES  Corporation  (AES).  See Recent
     Developments for further information.
o    AmerenEnergy  Resources Company (Resources Company),  which consists of non
     rate-regulated  operations.  Subsidiaries include  AmerenEnergy  Generating
     Company  (Generating  Company)  that operates non  rate-regulated  electric
     generation  in  Missouri  and  Illinois,   AmerenEnergy  Marketing  Company
     (Marketing  Company),  which  markets  power  for  periods  over one  year,
     AmerenEnergy  Fuels and Services  Company,  which procures fuel and manages
     the related risks for  Ameren-affiliated  companies and AmerenEnergy Medina
     Valley Cogen (No.4),  LLC, which  indirectly owns a 40 megawatt,  gas-fired
     electric co-generation  plant.  On February  4, 2003, Ameren completed  its
     acquisition  of AES Medina  Valley Cogen (No. 4), LLC (Medina  Valley) from
     AES and renamed it  AmerenEnergy  Medina  Valley  Cogen (No.  4), LLC.  See
     Recent  Developments for further  information.  Generating Company supplies
     electric power to Marketing Company which, in turn,  supplies us with power
     under a power supply agreement (Power Supply Agreement).
o    AmerenEnergy,  Inc.  (AmerenEnergy),  which serves as a power marketing and
     risk management agent for  Ameren-affiliated  companies for transactions of
     primarily less than one year.
o    Electric  Energy,  Inc.  (EEI),  which  operates  electric  generation  and
     transmission  facilities in Illinois.  On April 30, 2002, after we received
     the required approval from the Federal Energy Regulatory  Commission (FERC)
     and notified the Illinois Commerce Commission (ICC), we transferred our 20%
     common stock  interest in EEI to Ameren in the form of a non-cash  dividend
     of common  stock in EEI. The book value of our  investment  in EEI was $1.8
     million. Subsequently,  Ameren contributed such stock to Resources Company.
     This transfer  completed the process of achieving a full divestiture of all
     electric  generating capacity that had been owned directly or indirectly by
     us. AmerenUE also owns a 40% interest in EEI.
o    Ameren Services  Company (Ameren  Services),  which provides shared support
     services to Ameren and its  subsidiaries,  including us.  Charges are based
     upon the actual  costs  incurred  by Ameren  Services,  as  required by the
     PUHCA.

     When we refer to  AmerenCIPS,  our, we or us, we are  referring  to Central
Illinois  Public  Service  Company.  All tabular dollar amounts are in millions,
unless otherwise indicated.

     On  May  1,  2000,  we  transferred  our  electric  generating  assets  and
liabilities, at historical net book value, to Generating Company (the Transfer).
As a result of the Transfer,  our operating  revenues only include  revenues and
expenses  associated  with our  transmission  and  distribution  operations.  In
addition,  sales under certain wholesale  contracts and interchange sales are no
longer  reflected in our operating  revenues after May 1, 2000.  Purchased power
subsequent  to May 2000  reflects  the  electric  Power  Supply  Agreement  with
Marketing  Company.  See Note 2 - Rate and  Regulatory  Matters to our Financial
Statements for further discussion.

     Our results of  operations  and  financial  position  are  impacted by many
factors,  including  both  controllable  and  uncontrollable  factors.  Weather,
economic  conditions,  and the  actions  of key  customers  or  competitors  can
significantly impact the demand for our services.  Our results are also impacted
by seasonal  fluctuations  caused by winter heating and summer  cooling  demand.
With nearly all of our revenues  directly subject to regulation by various state
and federal agencies,  decisions by regulators can have a material impact on the
price we charge for our

                                       10

<PAGE>

services.  We  principally  utilize  electric  power  and  natural  gas  in  our
operations.  The prices for these commodities can fluctuate significantly due to
the world economic and political environment, weather and many other factors. We
do not have a purchased  power  recovery  mechanism in Illinois for our electric
utility  business,  but we do have a gas  cost  recovery  mechanism  for our gas
utility  business.  In addition,  our electric rates in Illinois are largely set
through 2006. We employ  various risk  management  strategies in order to try to
reduce our exposure to commodity risks and other risks inherent in our business.
The reliability of our transmission and distribution  systems,  and the level of
operating and  administrative  costs and capital investment are key factors that
we seek to control in order to optimize  our results of  operations,  cash flows
and financial position.


RESULTS OF OPERATIONS

Earnings Summary

     Our net income for 2002, 2001 and 2000 was $26 million, $46 million and $79
million, respectively. Net income in 2002 included a voluntary retirement charge
of $9 million,  net of taxes, for a voluntary employee retirement  program.  See
Other Operating Expenses- Restructuring Charges below for further information.

     The  following  table  reconciles  our net income to net  income  excluding
voluntary  retirement  charges for the years ended  December 31, 2002,  2001 and
2000:

================================================================================
                                                    2002        2001        2000
--------------------------------------------------------------------------------

Net income                                          $ 26         $ 46       $ 79
Voluntary retirement charges, net of taxes             9            -          -
--------------------------------------------------------------------------------
Net income excluding voluntary retirement charges   $ 35         $ 46       $ 79
================================================================================

     Excluding  the  charges  discussed  above,  our net  income in 2002 was $35
million  (2001 - $46 million;  2000 - $79  million).  The decrease in net income
from  2001 to 2002 was  primarily  due to  higher  employee  benefit  costs  ($3
million,  net of taxes), an increase in our  environmental  reserve ($2 million,
net of taxes) and increased  tree trimming  expenses ($1 million,  net of taxes)
that resulted in increased operations and maintenance expenses. The decrease was
also  attributable  to an  increase in other  taxes ($2  million,  net of taxes)
related  to  revised  property  tax  adjustments  in  2001.  In  addition,  less
intercompany  interest  was  received  on the  Generating  Company  subordinated
promissory  note,  associated  with the Transfer,  as a result of a lower amount
outstanding ($4 million,  net of taxes),  and earnings from EEI decreased in the
third  quarter of 2002 due to the transfer of our common  stock  interest in EEI
($1 million, net of taxes), which resulted in lower other income and deductions.
These  decreases  were  partially  offset by an increase in electric  margin ($4
million,  net of taxes).  See  Electric  Operations  for more  information.  The
decrease was also slightly offset by reduced  injuries and damages  expenses due
to resolution of cases that resulted in lower  operations  expenses ($4 million,
net of taxes).  The decrease  from 2000 to 2001 was  primarily  due to decreased
electric margin ($67 million,  net of taxes). This decrease was partially offset
by lower  operations and  maintenance  expenses ($15 million,  net of taxes) and
lower  depreciation  expense ($7 million,  net of taxes) also resulting from the
Transfer.  In addition  there was an increase in other income and deductions ($7
million,  net of taxes) as a result of  intercompany  interest  received  on the
Generating  Company  subordinated  promissory note related to the Transfer.  See
Note 2 - Rate and  Regulatory  Matters to our Financial  Statements  for further
discussion of the Transfer.

Recent Developments

CILCORP Acquisition

     On January 31,  2003,  after  receipt of the  necessary  regulatory  agency
approvals   and   clearance   from  the   Department   of   Justice   under  the
Hart-Scott-Rodino  Antitrust  Improvements Act, Ameren completed its acquisition
of all of the  outstanding  common  stock of  CILCORP  from AES.  CILCORP is the
parent company of Peoria,  Illinois-based  Central Illinois Light Company, which
operated as CILCO. With the acquisition,  CILCO became an Ameren subsidiary, but
remains a separate  utility  company,  operating as AmerenCILCO.  On February 4,
2003,  Ameren also completed its acquisition of Medina Valley,  which indirectly
owns  a  40  megawatt,   gas-fired  electric   co-generation   plant.  With  the
acquisition,  Medina  Valley  became  a  wholly-owned  subsidiary  of  Resources
Company, and was renamed

                                       11

<PAGE>

AmerenEnergy  Medina  Valley Cogen (No.  4), LLC.  The CILCORP and  AmerenEnergy
Medina  Valley  Cogen (No.  4), LLC  financial  statements  will be  included in
Ameren's  consolidated  financial  statements  effective  with the  January  and
February 2003 acquisition dates.

     Ameren acquired  CILCORP to complement its existing  Illinois  electric and
gas  operations.  The  purchase  included  CILCO's  rate-regulated  electric and
natural gas  businesses in Illinois  serving  approximately  200,000 and 205,000
customers, respectively, of which approximately 150,000 are combination electric
and gas  customers.  CILCO's  service  territory  is  contiguous  to our service
territory.  CILCO  also  has a non  rate-regulated  electric  and gas  marketing
business  principally  focused in the Chicago,  Illinois  region.  Finally,  the
purchase includes approximately 1,200 megawatts of largely coal-fired generating
capacity, most of which is expected to become non rate-regulated in 2003.

     The total  purchase price was  approximately  $1.4 billion and included the
assumption of CILCORP and Medina  Valley debt and preferred  stock at closing of
approximately  $900  million,   with  the  balance  of  the  purchase  price  of
approximately  $500 million paid with Ameren's cash on hand.  The purchase price
is subject to certain  adjustments for working capital and other changes pending
the  finalization of CILCORP's  closing balance sheet. The cash component of the
purchase  price came from Ameren's  issuances in September  2002 of 8.05 million
common shares and in early 2003 of 6.325 million common shares.

Credit Ratings

     In April 2002, as a result of  AmerenUE's  then pending  Missouri  electric
earnings  complaint case and the CILCORP  transaction and related  assumption of
debt,  credit rating agencies placed Ameren's and its  subsidiaries'  debt under
review.  Following the completion of the acquisition of CILCORP in January 2003,
Standard & Poor's lowered the ratings of Ameren Corporation, AmerenUE and us and
increased the ratings of Generating Company. At the same time, Standard & Poor's
changed the outlook assigned to all of Ameren's ratings to stable.  Moody's also
lowered  Ameren's and  AmerenUE's  ratings  subsequent  to the  acquisition  and
changed the outlook on these ratings to stable.  These  actions were  consistent
with the actions the ratings agencies disclosed they were considering  following
Ameren's announcement of the CILCORP acquisition.

     As of February  2003,  the ratings by Moody's and Standard & Poor's were as
follows:

================================================================================
                                          Moody's              Standard & Poor's
--------------------------------------------------------------------------------
Ameren Corporation:
     Issuer/Corporate credit rating         A3                             A-
     Unsecured debt                         A3                           BBB+
     Commercial paper                      P-2                            A-2

AmerenUE:
     Secured debt                           A1                             A-
     Unsecured debt                         A2                           BBB+
     Commercial paper                      P-1                            A-2

AmerenCIPS:
     Secured debt                           A1                             A-
     Unsecured debt                         A2                           BBB+

Generating Company:
     Unsecured debt                      A3/Baa2                           A-
================================================================================

     Standard & Poor's  increased the ratings of CILCORP and CILCO subsequent to
the acquisition of these entities by Ameren.  As of February 2003, the unsecured
debt ratings of CILCORP  were BBB+ and Baa2 from  Standard & Poor's and Moody's,
respectively.  The  secured  debt  ratings  of  AmerenCILCO  were A- and A2 from
Standard & Poor's and Moody's,  respectively.  Standard & Poor's assigned stable
outlooks to the ratings.  Moody's also assigned a stable  outlook to the ratings
for CILCORP and AmerenCILCO.

     Any  adverse  change in our  ratings,  Ameren's or  AmerenUE's  ratings may
reduce our access to capital and/or  increase the costs of borrowings  resulting
in a negative  impact on earnings.  A credit rating is not a  recommendation  to
buy, sell or hold securities and should be evaluated  independently of any other
rating.  Ratings  are  subject  to  revision  or  withdrawal  at any time by the
assigning rating organization.

                                       12

<PAGE>

Electric Operations

     The  following  table  represents  the  favorable  (unfavorable)  impact on
electric  margin versus the prior periods for the years ended  December 31, 2002
and 2001:

================================================================================
                                                2002                   2001
--------------------------------------------------------------------------------
Operating Revenues:
Effect of abnormal weather (estimate)           $14                   $   6
Growth and other (estimate)                     (23)                     31
Wholesale sales                                  -                      (38)
Interchange sales                                -                      (46)
--------------------------------------------------------------------------------
Total variation in electric operating revenues  $(9)                  $ (47)
--------------------------------------------------------------------------------
Fuel and Purchased Power:
Generation                                      $ -                   $  57
Purchased power                                  15                    (120)
--------------------------------------------------------------------------------
Total variation in fuel and purchased power     $15                   $ (63)
--------------------------------------------------------------------------------
Change in electric margin                       $ 6                   $(110)
================================================================================

     Electric  margin  increased $6 million for the year ended December 31, 2002
compared  to  2001  primarily  due to  more  favorable  weather  conditions  and
decreased   purchased   power  costs   attributable   to  lower  energy  prices.
Weather-sensitive residential sales increased 4% during 2002 as compared to 2001
resulting from warmer summer weather. Partially offsetting the favorable weather
were lower  industrial  sales that declined 3% for the year and lower commercial
sales that  declined 2% for the year due to the impact of the soft economy along
with certain industrial customers electing to switch to our affiliate, Marketing
Company, as their energy supplier.

     During 2002, we adopted the provisions of Emerging Issues Task Force (EITF)
Issue No. 02-3, "Issues Involved in Accounting for Derivative Contracts Held for
Trading  Purposes and Contracts  Involved in Energy Trading and Risk  Management
Activities,"  that required  revenues and costs  associated  with certain energy
contracts to be shown on a net basis in the income statement.  Prior to adopting
EITF 02-3 and the rescission of EITF Issue No. 98-10,  "Accounting for Contracts
Involved  in Energy  Trading and Risk  Management  Activities,"  our  accounting
practice was to present all settled energy purchase or sale contracts within our
power risk management  program on a gross basis in Operating Revenues - Electric
and in Operating  Expenses - Fuel and Purchased Power.  This meant that revenues
were  recorded  for the  notional  amount of the  power  sale  contracts  with a
corresponding  charge to income for the costs of the energy that was  generated,
or for the notional amount of a purchased power  contract.  Upon adoption,  EITF
02-3  requires  that prior periods also be netted to conform to the current year
presentation.  Adoption of EITF 02-3 did not have any impact on operating or net
income  for any  period or  stockholder's  equity.  We did not have any of these
energy  contracts to be netted for 2002 or 2001.  SFAS No. 133,  "Accounting for
Derivative  Instruments  and Hedging  Activities" was adopted on January 1, 2001
and therefore, no netting was required for the year ended December 31, 2000.

     Electric  margin  decreased  $110 million for year ended  December 31, 2001
compared  to 2000  primarily  due to an increase in  purchased  power  partially
offset by  decreases in  wholesale  and  interchange  sales  resulting  from the
Transfer.  Purchased  power costs  increased  primarily as a result of increased
purchased power under the Power Supply Agreement.  Sales under certain wholesale
contacts and interchange sales are no longer reflected in our operating revenues
after May 1, 2000.  See Note 2 - Rate and  Regulatory  Matters to our  Financial
Statements for further information about the Transfer.

Gas Operations

     Our gas margin  increased $4 million in 2002 compared to 2001 due to an $11
million decrease in gas costs attributable to lower natural gas prices and lower
purchases,  partially  offset by a $7  million  decrease  in gas  revenues.  Gas
revenues  decreased  primarily due to warmer winter weather in the first several
months  of 2002  and  lower  gas  costs  recovered  through  the  purchased  gas
adjustment clause.

     Gas  margin  decreased  $7  million  in 2001  compared  to 2000 due to a $7
million  decrease  in gas  revenues  primarily  due  to  lower  residential  and
commercial sales resulting from unusually warm winter weather. Gas costs in 2001
were comparable to 2000.

                                       13

<PAGE>

Other Operating Expenses

Other Operations and Maintenance

     Other  operations  and  maintenance  expenses in 2002  increased $7 million
compared to 2001  primarily  due to higher  employee  benefit  costs  related to
increasing healthcare costs and investment  performance of employee benefit plan
assets ($5 million), higher tree trimming costs ($2 million),  increased routine
repair  costs ($2  million)  and an  increase in the  environmental  reserve ($3
million), partially offset by the receipt of insurance reimbursements related to
litigation  settlements ($7 million).  Other operations and maintenance expenses
in 2001  decreased  $24 million  compared to 2000  primarily  due to lower labor
costs ($17 million) and power plant  maintenance  costs ($15 million)  resulting
from the  Transfer,  partially  offset by an increase in employee  benefit costs
resulting from  increasing  healthcare  costs and the investment  performance of
employee benefit plan assets ($4 million).

     Ameren Services provided services to us including wages,  employee benefits
and professional services that were included in other operations and maintenance
expenses.  See Note 3 - Related Party  Transactions to our Financial  Statements
for further information.

Restructuring Charges

     A charge of $14 million was incurred in 2002 related to Ameren's  voluntary
retirement  program based on voluntary  retirements of  approximately  70 of our
employees and additional  employees  providing  support  functions to us through
Ameren Services. These costs consisted primarily of special termination benefits
associated  with our portion of Ameren's  pension  and  post-retirement  benefit
plans.  Most of the employees who voluntarily  retired will leave Ameren and our
company  by  March  2003.  See  Note 8 -  Voluntary  Retirement  Charges  to our
Financial Statements for further information.

Depreciation and Amortization

     Depreciation  and  amortization  expenses  increased  $2  million  in  2002
compared  to 2001  primarily  resulting  from  distribution  related  additions.
Depreciation and amortization expenses decreased $12 million in 2001 compared to
2000  due to  decreased  depreciable  property,  primarily  resulting  from  the
Transfer.

Income Taxes

     Income taxes  decreased $10 million for 2002 compared to 2001 and decreased
$17 million for 2001 compared to 2000 primarily due to lower pretax income.

Other Taxes

     Other tax expense for 2002 increased $4 million  compared to 2001 primarily
due to revised property tax assessments in the prior year. Other tax expense for
2001 decreased $15 million  compared to 2000 primarily due to lower property and
payroll taxes as a result of the Transfer.

Other Income and Deductions

     Other income and deductions  (excluding income taxes) decreased $11 million
in 2002 compared to 2001 primarily due to less intercompany interest received on
the  Generating  Company  subordinated  promissory  note as a result  of a lower
amount outstanding ($6 million),  lower earnings from EEI due to the transfer of
our 20% common stock interest in EEI to Resources  Company on April 30, 2002 ($2
million) and a decrease in  contributions  in aid of construction  ($4 million).
Other income and deductions  (excluding  income taxes)  increased $15 million in
2001 compared to 2000 primarily due to  intercompany  interest  income earned on
the  Generating  Company  subordinated  promissory  note  ($11  million)  and an
increase in contributions in aid of construction ($4 million). See Note 2 - Rate
and  Regulatory  Matters  and  Note 9 -  Miscellaneous,  Net  to  our  Financial
Statements for further information.

Interest

     Interest  expense  increased $2 million in 2002 compared to 2001  primarily
due to an increase  in  interest  expense on  long-term  debt  related to a $150
million issuance of long-term debt in 2001 (see Liquidity and Capital  Resources
below for further information), partially offset by a decrease in other interest
expense  primarily due to less  intercompany  borrowings  from the utility money
pool in 2002 compared to 2001. Interest expense decreased $1 million

                                       14

<PAGE>

in 2001 compared to 2000 primarily due to a decrease in the amortization of loss
on reacquired debt in 2001 along with lower interest rates.


LIQUIDITY AND CAPITAL RESOURCES

Operating

     Cash provided by operating  activities decreased $24 million to $96 million
in 2002  primarily  due to  decreases  in Accounts  and Wages  payable and other
changes in working  capital,  lower  contributions  in aid of  construction  and
greater  pension  funding.  Cash provided by operating  activities  totaled $120
million for 2001  compared to $62 million for 2000.  Cash  provided by operating
activities  increased  from 2000 to 2001  primarily due to the  fluctuations  in
working capital requirements  including an increase in taxes accrued,  resulting
from the timing of tax payments,  a decrease in trade  receivables  due to lower
sales and a decrease in deferred income taxes resulting from the amortization of
the intercompany  deferred tax liability  related to the Transfer.  See Note 2 -
Rate and  Regulatory  Matters and Note 8 - Voluntary  Retirement  Charges to our
Financial Statements for further discussion.

     Our tariff-based  gross margins continue to be our principal source of cash
from operating activities. Our diversified retail customer mix of rate-regulated
residential,  commercial and  industrial  classes and a commodity mix of gas and
electric  service  provide a  reasonably  predictable  source of cash flows.  In
addition,  we plan to utilize  short-term debt to support normal  operations and
other temporary capital requirements.

Pension Funding

     Ameren made cash contributions  totaling $31 million to its defined benefit
retirement plan during 2002. Our share of the cash contribution made in 2002 was
approximately $4 million, which includes our portion related to Ameren Services.
At December  31,  2002,  Ameren  recorded a minimum  pension  liability  of $102
million,  net  of  taxes,  which  resulted  in a  charge  to  Accumulated  Other
Comprehensive Income (OCI) and a reduction to stockholders' equity. Our share of
the minimum pension liability was approximately $13 million, net of taxes.

     Based on the performance of plan assets through  December 31, 2002,  Ameren
expects to be required under the Employee Retirement Income Security Act of 1974
(ERISA) to fund  approximately  $150 million to $175  million  annually in 2005,
2006 and 2007 in order to maintain minimum funding levels for its pension plans.
In addition, Ameren estimates the pension funding for CILCORP to be less than $1
million in 2003 and approximately $5 million in 2004. We expect our share of the
funding in 2005, 2006 and 2007 to be $21 million to $24 million annually,  which
includes our share  related to employees of Ameren  Services.  These amounts are
estimates  and may change based on actual stock market  performance,  changes in
interest rates and any pertinent changes in government regulations.  At December
31, 2002,  Ameren's Net Benefit Obligation was $1,587 million and its Fair Value
of Plan Assets was $1,059 million.  See Benefit Plan Accounting under Accounting
Matters - Critical Accounting Policies below.

Investing

     Our  net  cash  used  in  investing  activities  was  $7  million  in  2002
representing  construction  expenditures for various distribution line upgrades,
partially offset by receipts on our intercompany note receivable from Generating
Company. Cash flows provided by investing activities totaled $16 million for the
year ended December 31, 2001.  Cash flows used in investing  activities  totaled
$41  million  for the year ended  December  31,  2000.  Cash flows  provided  by
investing  activities  increased  from 2000 to 2001 primarily due to receipts on
our intercompany  promissory note receivable from Generating Company relating to
the  Transfer,   partially  offset  by  increased   construction   expenditures.
Expenditures  for  constructing  new or improving  existing  facilities were $57
million for 2002 (2001 - $50 million; 2000 - $41 million). See Note 2 - Rate and
Regulatory Matters to our Financial Statements for further discussion.

     For the five-year period 2003 through 2007,  construction  expenditures are
estimated to approximate $170 million, of which $28 million is expected in 2003.
This estimate  includes  capital  expenditures for transmission and distribution
related activities.

                                       15

<PAGE>

Environmental

     We are subject to various environmental  regulations by federal, state, and
local authorities.  From the beginning phases of siting and development,  to the
ongoing  operation of existing or new electric  transmission,  and  distribution
facilities,  our activities involve compliance with diverse laws and regulations
that  address  impacts  to air  and  water,  special,  protected,  and  cultural
resources (such as wetlands,  endangered species,  and  archeological/historical
resources),  chemical and waste  handling,  and noise  impacts.  Our  activities
require complex and often lengthy  processes to obtain  approvals,  permits,  or
licenses for new, existing,  or modified facilities.  Additionally,  the use and
handling of various chemicals or hazardous materials (including wastes) requires
preparation of release  prevention plans and emergency response  procedures.  As
new laws or  regulations  are  promulgated,  we assess their  applicability  and
implement the necessary modifications to our facilities or their operations,  as
required.

     See Note 12 - Commitments and Contingencies to our Financial Statements for
further discussion of environmental matters.

Financing

     Our cash flows used in financing activities were $98 million for 2002, $140
million in 2001 and $4 million in 2000. Our principal  financing  activities for
the  three  year  period   included  the   redemptions  of  long-term  debt  and
intercompany notes payable,  as well as payments of dividends,  partially offset
by the issuance of long-term debt.

     We are  authorized by the SEC under the PUHCA to have up to $250 million of
short-term unsecured debt instruments outstanding at any time.

Short-Term Debt and Liquidity

     Short-term  debt typically  consists of borrowings  under Ameren's  utility
money pool  agreement  but,  from time to time,  may also consist of  commercial
paper and bank loans (maturities generally within 1 to 45 days). At December 31,
2002, Ameren and its subsidiaries had committed credit  facilities,  expiring at
various dates between 2003 and 2005, totaling $695 million. This amount includes
$15 million of our committed  bank lines of credit and $680 million of committed
credit  facilities at Ameren and AmerenUE.  We access these combined  facilities
through  Ameren's utility money pool  arrangement.  AmerenUE and Ameren Services
may also borrow under this  arrangement.  These committed credit  facilities are
also used to  support  AmerenUE's  commercial  paper  program  under  which $250
million  was  outstanding  at  December  31,  2002.  Based on  commercial  paper
outstanding  at December 31, 2002,  $445 million was unused and available  under
these committed credit  facilities and available to us through the utility money
pool.

     Subject to the  receipt of  regulatory  approval,  which is being  pursued,
AmerenCILCO  will  participate in Ameren's  utility money pool  arrangement.  At
December 31, 2002,  CILCO had committed credit  facilities,  expiring at various
dates during 2003, totaling $60 million.

     In July 2002,  Ameren entered into new committed credit agreements for $400
million  in  revolving  credit  facilities  to be  used  for  general  corporate
purposes,  including  support of commercial paper programs.  We may access these
new credit  facilities  through the utility money pool.  The $400 million in new
facilities  includes a $270 million 364-day revolving credit facility and a $130
million 3-year revolving credit facility.  The 3-year facility has a $50 million
sub-limit  for the  issuance of letters of credit.  These new credit  facilities
replaced AmerenUE's former $300 million revolving credit facility. These amounts
are included in the total committed credit  facilities of $695 million mentioned
above.

     In addition to committed credit  facilities,  a further source of liquidity
for Ameren is available cash and cash equivalents.  At December 31, 2002, Ameren
had $628 million of cash,  all of which was  available for borrowing by us under
the utility money pool. In early 2003, Ameren paid a total of approximately $500
million of cash on hand to acquire CILCORP and Medina Valley.

     We  rely on  access  to  short-term  and  long-term  capital  markets  as a
significant  source of funding for capital  requirements  not  satisfied  by our
operating cash flows.  The inability by us to raise capital on favorable  terms,
particularly  during  times  of  uncertainty  in  the  capital  markets,   could
negatively impact our ability to maintain and grow our businesses.  Based on our
current credit  ratings,  we believe that we will continue to have access to the

                                       16

<PAGE>

capital markets.  However,  events beyond our control may create  uncertainty in
the capital  markets such that our cost of capital would increase or our ability
to access the capital markets would be adversely affected.

     The following table summarizes available borrowing capacity under committed
lines of credit  and  credit  agreements  as of  December  31,  2002:

                                    Amount of commitment expiration per period
================================================================================
                                   Total    Less than   1 - 3    4 - 5   After 5
                                 committed   1 year     years    years    years
--------------------------------------------------------------------------------
Lines of credit                      $ 15     $ 15      $  -       -        -
Other commercial commitments(a)       680      550       130       -        -
--------------------------------------------------------------------------------
Total                                $695     $565      $130       -        -
================================================================================
(a) Available through utility money pool borrowings.

   The following table summarizes our contractual obligations as of December
   31, 2002:

================================================================================
                                   Total    Less than   1 - 3    4 - 5   After 5
                                             1 year     years    years    years
--------------------------------------------------------------------------------
Long-term debt                       $581     $ 45      $ 20     $ 70     $446
Other long-term obligations (a)        93       40        45        8       -
--------------------------------------------------------------------------------
Total cash contractual obligations   $674     $85       $65      $78      $446
================================================================================
(a) Represents purchase contracts for natural gas.

Credit Agreement Provisions and Covenants

     Our financial  agreements  include customary default  provisions that could
impact the continued  availability  of credit or result in the  acceleration  of
repayment.  Many of Ameren's and its  subsidiaries'  committed credit facilities
require the borrower to represent,  in connection  with any borrowing  under the
facility that no material adverse change has occurred since certain dates.  None
of our,  Ameren's or AmerenUE's  financing  arrangements  contains credit rating
triggers with the exception of certain  ratings  triggers  within  AmerenCILCO's
financing arrangements.

     Covenants in Ameren's  committed credit facilities  require the maintenance
of the  percentage  of total debt to total  capital  of 60% or less for  Ameren,
AmerenUE and us. As of December 31, 2002, this ratio was approximately  50%, 43%
and 50% for Ameren,  AmerenUE and us,  respectively.  Ameren's  committed credit
facilities also include indebtedness cross default provisions that could trigger
a default under these  facilities in the event any subsidiary of Ameren (subject
to definition in the underlying credit  agreements),  other than certain project
finance subsidiaries, defaults on indebtedness in excess of $50 million.

     Most of Ameren's and its subsidiaries'  committed credit facilities include
provisions  related  to the  funded  status  of  Ameren's  pension  plan.  These
provisions  either require Ameren to meet minimum ERISA funding  requirements or
limit the unfunded  liability  status of the plan. Under the most restrictive of
these provisions  impacting Ameren's  facilities totaling $400 million, an event
of default  will  result if the  unfunded  liability  status (as  defined in the
underlying  credit  agreements) of Ameren's pension plan exceeds $300 million in
the aggregate.  Based on the most recent valuation report available to Ameren at
December  31,  2002,  which  was  based on  January  2002  asset  and  liability
valuations, the unfunded liability status (as defined) was $31 million. While an
updated  valuation  report will not be available  until the second half of 2003,
Ameren  believes  that the unfunded  liability  status of its pension  plans (as
defined)  could exceed $300 million based on the  investment  performance of the
pension  plan assets and  interest  rate  changes  since  January 1, 2002.  As a
result,  Ameren may need to renegotiate  the facility  provisions,  terminate or
replace the  affected  facilities,  or fund any  unfunded  liability  shortfall.
Should Ameren elect to terminate these facilities, we believe we would otherwise
have sufficient liquidity to manage our short-term funding requirements.

     At December 31, 2002,  Ameren and its  subsidiaries,  including us, were in
compliance with their credit agreement provisions and covenants.

Off-Balance Sheet Arrangements

     At  December  31,  2002,  neither  Ameren,  nor  any of  its  subsidiaries,
including  us, had any  off-balance  sheet  financing  arrangements,  other than
operating  leases  entered  into in the ordinary  course of business.  We do not
expect to engage in any significant  off-balance sheet financing arrangements in
the near future.

                                       17

<PAGE>

Long-Term Debt

     The following  table  summarizes our issuances and redemptions of long-term
debt for the three years ended December 31, 2002,  2001 and 2000. For additional
information  related to the terms and uses of these issuances and the sources of
funds and terms for  redemptions,  see Note 7 - Long-Term  Debt to our Financial
Statements.

================================================================================
                                              Month        2002     2001    2000
--------------------------------------------------------------------------------
Issuances -                              Issued/Redeemed
--------------------------------------------------------------------------------
Long-term debt
  6.625% Senior secured notes, due 2011        June        $ -      $150     $ -
  Pollution control revenue bonds              March         -        -       51
--------------------------------------------------------------------------------
  Total long-term debt issuances                           $ -      $150     $51
--------------------------------------------------------------------------------

Redemptions -
--------------------------------------------------------------------------------
Long-term debt
  First mortgage bonds                        Various      $33      $ 30     $35
  Environ. improvement bonds, 1990A Series     April         -         -      20
  Environ. improvement bonds, 1990B Series     April         -         -      32
--------------------------------------------------------------------------------
  Total long-term debt redemptions                         $33      $ 30     $87
================================================================================

     We expect to fund maturities of long-term debt and contractual  obligations
through a combination of cash flow from  operations and funds received under the
Generating Company subordinated promissory note receivable.

     To issue first  mortgage  bonds and  preferred  stock,  we must comply with
earnings tests  contained in our respective  mortgage  indenture and Articles of
Incorporation.  For the issuance of additional first mortgage bonds,  generally,
earnings  coverage of twice the annual interest  charges on first mortgage bonds
outstanding  and to be  issued  is  required.  Generally,  for the  issuance  of
additional  preferred stock,  earnings coverage of one and one-half times annual
interest charges and preferred stock dividends is required under our Articles of
Incorporation. The ability to issue such securities in the future will depend on
coverages at that time.  At December 31, 2002,  we had and expect to continue to
have adequate coverage ratios for anticipated requirements.

     In May 2001, a shelf  registration filed by us with the SEC on Form S-3 was
declared effective. This registration statement enables us to offer from time to
time senior  secured  notes in one or more series with an offering  price not to
exceed $250 million.  In June 2001, we issued $150 million of the senior secured
notes under the shelf registration  statement.  At February 13, 2003, the amount
remaining on the shelf registration statement was $100 million.

     In December  2001,  the interest  rate mode on our 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.

                                       18

<PAGE>

OUTLOOK

     We believe  there will be  challenges to earnings in 2003 and beyond due to
industry-wide trends and company-specific  issues. The following are expected to
put pressure on earnings in 2003 and beyond:

o    Weak economic conditions, which impact native load demand,
o    The adverse effects of rising employee  benefit costs and higher  insurance
     costs, and
o    An assumed return to more normal weather patterns.

     In late 2002, Ameren announced the following actions to mitigate the effect
of these challenges:

o    A voluntary  retirement  program  that was  accepted by  approximately  550
     Ameren  employees,   including   approximately  70  of  our  employees  and
     additional  employees  providing  support  functions  to us through  Ameren
     Services,
o    Modifications to retiree employee benefit plans to increase co-payments and
     limit Ameren's overall cost,
o    A  wage  freeze  in  2003  for  all  management  employees,  including  our
     employees, and
o    Reductions of 2003 expected capital expenditures.

     We are pursuing a gas rate increase of  approximately  $16 million annually
in  Illinois.   Ameren  is  also  considering   additional  actions,   including
modifications to active employee benefits, further staffing reductions and other
initiatives.

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

Labor Agreements

     Certain of our employees are represented by the  International  Brotherhood
of Electrical Workers (IBEW). These employees comprise  approximately 70% of our
workforce.  Labor agreements covering substantially all employees represented by
the IBEW expire by June 2003. We cannot predict what issues may be raised by the
collective bargaining units and, if raised, whether negotiations concerning such
issues will be successfully concluded.


REGULATORY MATTERS

Illinois

     See Note 2 - Rate and Regulatory Matters to our Financial Statements.

Federal - Electric Transmission

    See Note 2 - Rate and Regulatory Matters to our Financial Statements.

                                       19

<PAGE>


ACCOUNTING MATTERS

Critical Accounting Policies

     Preparation  of  the  financial   statements  and  related  disclosures  in
compliance  with  generally   accepted   accounting   principles   requires  the
application of appropriate  technical accounting rules and guidance,  as well as
the use of estimates.  Our  application  of these  policies  involves  judgments
regarding many factors, which, in and of themselves, could materially impact the
financial  statements  and  disclosures.  A future change in the  assumptions or
judgments applied in determining the following matters, among others, could have
a material  impact on future  financial  results.  In the table  below,  we have
outlined  those  accounting   policies  that  we  believe  are  most  difficult,
subjective or complex:

<TABLE>

<S>                                                    <C>
Accounting Policy                                       Uncertainties Affecting Application
-----------------                                       ------------------------------------

Regulatory Mechanisms and Cost Recovery
                                                        o  Regulatory environment, external regulatory
   We defer costs as regulatory assets in                  decisions and requirements
   accordance with SFAS 71 and make                     o  Anticipated future regulatory decisions and their
   investments that we assume we will be able              impact
   to collect in future rates.                          o  Impact of deregulation and competition on
                                                           ratemaking process and ability to recover costs
</TABLE>

   Basis for Judgment
   We determine that costs are recoverable based on previous rulings by state
   regulatory authorities in jurisdictions where we operate or other factors
   that lead us to believe that cost recovery is probable.


<TABLE>
<S>                                                    <C>
Environmental Costs
                                                        o  Extent of contamination
   We accrue for all known environmental                o  Responsible party determination
   contamination, where remediation can be              o  Approved methods for cleanup
   reasonably estimated, but some of our                o  Present and future legislation and governmental
   operations have existed for over 100 years              regulations and standards
   and previous contamination may be                    o  Results of ongoing research and development
   unknown to us.                                          regarding environmental impacts

</TABLE>

   Basis for Judgment
   We determine the proper amounts to accrue for environmental contamination
   based on internal and third party estimates of clean-up costs in the context
   of current remediation standards and available technology.


<TABLE>
<S>                                                    <C>
Unbilled Revenue
                                                        o  Projecting customer energy usage
   At the end of each period, we estimate,              o  Estimating impacts of weather and other usage-
   based on expected usage, the amount of                  affecting factors for the unbilled period.
   revenue to record for services that have been
   provided to customers, but not billed. This
   period can be up to one month.

</TABLE>
   Basis for Judgment
   We determine the proper amount of unbilled revenue to accrue each period
   based on the volume of energy delivered as valued by a model of billing
   cycles and historical usage rates and growth by customer class for our
   service area, as adjusted for the modeled impact of seasonal and weather
   variations based on historical results.

                                       20

<PAGE>
<TABLE>
<S>                                                    <C>
Benefit Plan Accounting
                                                        o  Future rate of return on pension and other plan assets
   Based on actuarial calculations, we accrue           o  Interest rates used in valuing benefit obligations
   costs of providing future employee benefits          o  Healthcare costs trend rated
   in accordance with SFAS 87, 106, and 112.            o  Timing of employee retirements
   See Note 11 - Retirement Benefits to our
   Financial Statements.

</TABLE>

   Basis for Judgment
   We utilize a third party consultant to assist us in evaluating and recording
   the proper amount for future employee benefits. Our ultimate selection of the
   discount rate, healthcare trend rate and expected rate of return on pension
   assets is based on our review of available current, historical and projected
   rates, as applicable.


Impact of Future Accounting Pronouncements

   See Note 1 - Summary of Significant Accounting Policies to our Financial
   Statements.


EFFECTS OF INFLATION AND CHANGING PRICES

     Our rates for retail electric and gas utility services are regulated by the
ICC.  Non-retail electric rates are regulated by the FERC. Our Illinois electric
rates are  legislatively  fixed through January 1, 2007.  Inflation  affects our
operations, earnings, stockholder's equity and financial performance.

     In Illinois, there are no provisions for adjusting rates for changes in the
costs of purchased  power.  We transferred  our generating  assets to Generating
Company  in May 2000 and rely  exclusively  on  purchased  power to  supply  our
electric  customers.  See Note 2 - Rate and Regulatory  Matters to our Financial
Statements  for  further  information.  In  Illinois,  changes  in gas costs are
generally   reflected  in  billings  to  gas  customers  through  purchased  gas
adjustment clauses.  See discussion below under Commodity Price Risk for further
information.


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,  etc.).  The following  discussion of
Ameren's,   including  our  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 our  company  also face  risks that are either
non-financial or  non-quantifiable.  Such risks  principally  include  business,
legal and operational risks and are not represented in the following discussion.

     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

     We are exposed to market risk through changes in interest rates  associated
with both long-term and short-term  variable-rate  debt and fixed-rate debt, and
auction-rate   preferred   stock.  We  manage  our  interest  rate  exposure  by
controlling   the  amount  of  these   instruments  we  hold  within  our  total
capitalization  portfolio  and by  monitoring  the effects of market  changes in
interest rates.

     Utilizing  our debt  outstanding  at December 31, 2002,  if interest  rates
increased by 1%, our annual  interest  expense and  dividend on preferred  stock
would  increase by  approximately  $0.3 million and net income would decrease by
approximately  $0.3  million.  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 our exposure to this market risk.
However,  due to

                                       21

<PAGE>

the  uncertainty of the specific  actions that would be taken and their possible
effects, the sensitivity analysis assumes no change in our financial structure.

Commodity Price Risk

     We are exposed to changes in market  prices for  natural gas and  purchased
power. With regard to our natural gas utility business, our exposure to changing
market  prices is in large part  mitigated  by the fact that we have a purchased
gas  adjustment  clause in place in Illinois.  This gas cost recovery  mechanism
allows us to pass on to our retail  customers  our prudently  incurred  costs of
natural gas.

     With regard to our exposure to commodity  price risk for  purchased  power,
such price risk is  mitigated  in part due to the fact that we have entered into
the Power Supply Agreement for purchased power.

Equity Price Risk

     We, along with other  subsidiaries of Ameren, are a participant in Ameren's
defined benefit plans and post-retirement  benefit plans and are responsible for
our   proportional   share  of  the   costs.   Ameren's   costs   of   providing
non-contributory  defined benefit retirement and  post-retirement  benefit plans
are  dependent  upon a number  of  factors,  such as the rates of return on plan
assets,   discount  rate,  the  rate  of  increase  in  health  care  costs  and
contributions  made to the plans.  The market value of Ameren's  plan assets has
been  affected by declines in the equity  market  since 2000 for the pension and
post-retirement  plans.  As a  result,  at  December  31,  2002  Ameren  and its
subsidiaries,  including us, recognized an additional  minimum pension liability
as  prescribed  by SFAS  No.  87,  "Employers'  Accounting  for  Pensions."  The
liability  resulted in a reduction to equity as a result of a charge to Ameren's
OCI of $102  million,  net of taxes.  Our  portion of this charge to OCI was $13
million,  net of taxes.  The  amount of the  liability  was the  result of asset
returns experienced  through 2002, interest rates and Ameren's  contributions to
the plans  during 2002.  In future  years,  the  liability  recorded,  the costs
reflected  in net  income  or OCI,  or cash  contributions  to the  plans  could
increase  materially  without a recovery in equity markets in excess of Ameren's
assumed return on plan assets. If the fair value of the plan assets were to grow
and exceed the accumulated  benefit obligations in the future, then the recorded
liability  would be  reduced  and a  corresponding  amount  of  equity  would be
restored in the Balance Sheet. See Liquidity and Capital Resources - Operating.


FORWARD-LOOKING STATEMENTS

     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,  we are  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    the cost of  commodities,  such as natural  gas, and our ability to recover
     such increased cost;
o    changes in laws and other  governmental  actions,  including  monetary  and
     fiscal policies;
o    the impact on us of current  regulations  related  to the  opportunity  for
     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 our business at both the state
     and federal levels;
o    the  effects of  participation  in a  FERC-approved  Regional  Transmission
     Organization,  including activities associated with the Midwest Independent
     System Operator;
o    availability and future market prices for purchased power,  electricity 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;

                                       22

<PAGE>

o    the impact of the adoption of new accounting  standards on the  application
     of appropriate technical accounting rules and guidance;
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   strategic   initiatives,   including   acquisitions   and
     divestitures;
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    future wages and employee  benefit costs,  including  changes in returns of
     benefit plan assets;
o    disruptions of the capital  markets or other events making Ameren's and our
     access to necessary capital more difficult or costly;
o    cost and  availability  of  transmission  capacity  required to satisfy our
     energy sales; and
o    legal and administrative proceedings.

     Given these  uncertainties,  undue  reliance  should not be placed on these
forward-looking  statements.  Except  to the  extent  required  by  the  federal
securities  laws, we undertake no  obligation  to publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise.



ITEM 7A.  QUANTITATIVE AND QUALITIATIVE 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 and  Note 13 - Fair  Value  of  Financial  Instruments  to our  Financial
Statements under Item 8.

                                       23

<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 15(A)(1) on Page 49 present fairly, in all material respects, the financial
position of Central  Illinois  Public  Service  Company at December 31, 2002 and
2001,  and the results of their  operations and their cash flows for each of the
three years in the period ended December 31, 2002, 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 15(A)(2) on Page 49 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 13, 2003


                                       24

<PAGE>
<TABLE>
<CAPTION>

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                                  BALANCE SHEET
                                  (In millions)

                                                                                                December 31,    December 31,
                                                                                                    2002            2001
                                                                                                -----------     ------------
<S>                                                                                             <C>            <C>
ASSETS:
Property and plant, net (Note 4)                                                                    $ 835           $ 822
Investments and other assets:
   Intercompany notes receivable - Generating Company (Note 3)                                        373             419
   Intercompany tax receivable - Generating Company (Note 3)                                          162             177
   Other assets                                                                                         7              17
                                                                                                -----------     ------------
         Total investments and other assets                                                           542             613
                                                                                                -----------     ------------
Current assets:
   Cash and cash equivalents                                                                           17              26
   Accounts receivable - trade (less allowance for doubtful
         accounts of $1 and $1, respectively)                                                          53              38
   Unbilled revenue                                                                                    74              81
   Intercompany notes receivable (Note 3)                                                              16              24
   Miscellaneous accounts and notes receivable (Note 3)                                                22              37
   Current portion of intercompany notes receivable - Generating Company (Note 3)                      46              43
   Current portion of intercompany tax receivable - Generating Company (Note 3)                        13              18
   Materials and supplies, at average cost                                                             41              42
   Other current assets                                                                                 7               7
                                                                                                -----------     ------------
         Total current assets                                                                         289             316
                                                                                                -----------     ------------
Regulatory assets                                                                                      31              32
                                                                                                -----------     ------------
Total Assets                                                                                      $ 1,697         $ 1,783
                                                                                                ===========     ============

CAPITAL AND LIABILITIES:
Capitalization:
   Common stock, no par value, 45.0 shares authorized -
     25.5 shares outstanding                                                                      $   120            $ 120
   Retained earnings                                                                                  405              444
   Accumulated other comprehensive income                                                             (13)               -
                                                                                                -----------     ------------
      Total common stockholder's equity                                                               512              564
                                                                                                -----------      ------------
   Preferred stock not subject to mandatory redemption (Note 5)                                        80               80
   Long-term debt, net (Note 7)                                                                       534              579
                                                                                                -----------     ------------
         Total capitalization                                                                       1,126            1,223
                                                                                                -----------     ------------
Current liabilities:
   Current maturities of long-term debt (Note 7)                                                       45               33
   Accounts and wages payable (Note 3)                                                                 87              114
   Accumulated deferred income taxes                                                                    -               20
   Taxes accrued                                                                                       32               23
   Other current liabilities                                                                           26               31
                                                                                                -----------     ------------
         Total current liabilities                                                                    190              221
                                                                                                -----------     ------------
Commitments and contingencies (Notes 1, 2 and 12)
Accumulated deferred income taxes (Note 3)                                                            282              255
Accumulated deferred investment tax credits                                                            13               12
Regulatory liabilities                                                                                 15               36
Other deferred credits and liabilities                                                                 71               36
                                                                                                -----------     ------------
Total Capital and Liabilities                                                                     $ 1,697          $ 1,783
                                                                                                ===========     ============

See Notes to Financial Statements.

</TABLE>

                                       25

<PAGE>
<TABLE>
<CAPTION>
                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                               STATEMENT OF INCOME
                                  (In millions)


                                                                                 Year Ended December 31,
                                                                  --------------------------------------------------
                                                                       2002              2001               2000
                                                                  -------------     -------------      -------------
<S>                                                              <C>               <C>                 <C>
OPERATING REVENUES:
   Electric (Note 3)                                                     $ 661             $ 670              $ 717
   Gas                                                                     163               170                177
                                                                  -------------     -------------      -------------
      Total operating revenues                                             824               840                894
                                                                  -------------     -------------      -------------

OPERATING EXPENSES:
   Fuel and purchased power (Note 3)                                       418               433                370
   Gas                                                                     100               111                111
   Other operations and maintenance (Note 3)                               161               154                178
   Voluntary retirement and other restructuring charges (Note 8)            14                 -                  -
   Depreciation and amortization                                            51                49                 61
   Income taxes                                                              5                26                 44
   Other taxes                                                              28                24                 39
                                                                  -------------     -------------      -------------
      Total operating expenses                                             777               797                803
                                                                  -------------     -------------      -------------

OPERATING INCOME                                                            47                43                 91

OTHER INCOME AND (DEDUCTIONS):
   Allowance for equity funds used during construction                       1                 -                  -
   Miscellaneous, net -
     Miscellaneous income (Notes 3 and 9)                                   33                44                 29
     Miscellaneous expense (Note 9)                                         (2)               (1)                (1)
     Income taxes                                                          (12)               (1)                 -
                                                                  -------------     -------------      -------------
      Total other income and (deductions)                                   20                42                 28
                                                                  -------------     -------------      -------------


INTEREST CHARGES                                                            41                39                 40
                                                                  -------------     -------------      -------------


NET INCOME                                                                  26                46                 79

PREFERRED STOCK DIVIDENDS                                                    3                 4                  4
                                                                  -------------     -------------      -------------

NET INCOME AFTER PREFERRED STOCK DIVIDENDS                                $ 23              $ 42               $ 75
                                                                  =============     =============      =============

See Notes to Financial Statements.
</TABLE>

                                       26

<PAGE>
<TABLE>
<CAPTION>

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                             STATEMENT OF CASH FLOWS
                                  (In millions)

                                                                                  Year Ended December 31,
                                                                   --------------------------------------------------
                                                                        2002             2001                2000
                                                                   -------------     -------------      -------------
<S>                                                               <C>               <C>                 <C>
Cash Flows From Operating:
   Net income                                                           $ 26            $ 46                 $ 79
   Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                                    51              49                   61
         Amortization of debt issuance costs and premium/discounts         1               1                    3
         Allowance for funds used during construction                      1               -                    -
         Deferred income taxes, net                                      (15)            (17)                   3
         Deferred investment tax credits, net                              1              (1)                   -
         Voluntary retirement and other restructuring charges             14               -                    -
         Changes in assets and liabilities:
               Receivables, net                                            7              30                  (41)
               Materials and supplies                                      1             (10)                  (5)
               Accounts and wages payable                                (33)              7                   24
               Taxes accrued                                              25               9                  (18)
               Assets, other                                              33              (6)                  12
               Liabilities, other                                        (16)             12                  (56)
                                                                  -------------     -------------      -------------
Net cash provided by operating activities                                 96             120                   62
                                                                  -------------     -------------      -------------

Cash Flows From Investing:
   Construction expenditures                                             (57)            (50)                 (41)
   Allowance for funds used during construction                           (1)              -                    -
   Intercompany notes receivable                                          51              66                    -
                                                                  -------------     -------------      -------------
Net cash provided by (used in) investing activities                       (7)             16                  (41)
                                                                  -------------     -------------      -------------

Cash Flows From Financing:
   Dividends on common stock                                             (62)            (33)                 (54)
   Dividends on preferred stock                                           (3)             (4)                  (4)
   Redemptions:
      Long-term debt                                                     (33)            (30)                 (87)
      Intercompany notes payable                                           -            (223)                   -
   Issuances:
      Long-term debt                                                       -             150                   51
      Intercompany notes payable                                           -               -                   90
                                                                  -------------     -------------      -------------
Net cash used in financing activities                                    (98)           (140)                  (4)
                                                                  -------------     -------------      -------------

Net change in cash and cash equivalents                                   (9)             (4)                  17
Cash and cash equivalents at beginning of year                            26              30                   13
                                                                  -------------     -------------      -------------
Cash and cash equivalents at end of year                                $ 17            $ 26                 $ 30
                                                                  ===========       =============     ==============

Cash paid during the periods:
   Interest                                                             $ 40            $ 38                 $ 42
   Income taxes, net                                                      14              33                   58

</TABLE>

See Notes to Financial Statements.

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION:
In the second quarter of 2000, we transferred our 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 -
Rate and Regulatory Matters to our Financial Statements for further information.

                                       27

<PAGE>
<TABLE>
<CAPTION>

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                    STATEMENT OF COMMON STOCKHOLDER'S EQUITY
                                  (In millions)



                                                                   December 31,      December 31,       December 31,
                                                                        2002               2001              2000
                                                                   -------------      -------------     -------------
<S>                                                               <S>                <S>               <S>

Common stock                                                           $ 120              $ 120             $ 120

Retained earnings
   Beginning balance                                                     444                435               414
   Net income                                                             26                 46                79
   Common stock dividends                                                (62)               (33)              (54)
   Preferred stock dividends                                              (3)                (4)               (4)
                                                                   -------------      -------------     -------------
                                                                         405                444               435
                                                                   -------------      -------------     -------------

Accumulated other comprehensive income
   Beginning balance - minimum pension liability                           -                  -                 -
   Change in minimum pension liability in current period                 (13)                 -                 -
                                                                -------------      -------------     -------------
                                                                         (13)                 -                 -
                                                                -------------      -------------     -------------


Total common stockholder's equity                                      $ 512              $ 564             $ 555
                                                                =============      =============     =============


Comprehensive income, net of taxes
   Net income                                                          $  26               $ 46              $ 79
   Minimum pension liability adjustment, net of income taxes of
        $(9), $-, and $-, respectively                                   (13)                 -                 -
                                                                -------------      -------------     -------------
           Total comprehensive income, net of taxes                     $ 13               $ 46              $ 79
                                                                =============      =============     =============

See Notes to Financial Statements.

</TABLE>


                                       28

<PAGE>

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31, 2002


NOTE 1 - Summary of Significant Accounting Policies

General

     Central  Illinois  Public Service  Company,  headquartered  in Springfield,
Illinois,  operates as  AmerenCIPS  and is a  wholly-owned  subsidiary of Ameren
Corporation (Ameren). Our principal business is the rate-regulated  transmission
and  distribution  of  electricity  and  the  distribution  of  natural  gas  to
residential, commercial, industrial and wholesale users in Illinois. Ameren is a
public  utility  holding  company  registered  with the  Securities and Exchange
Commission  (SEC) under the Public Utility  Holding  Company Act of 1935 (PUHCA)
and is headquartered in St. Louis, Missouri.  Ameren's principal business is the
generation,  transmission and distribution of electricity,  and the distribution
of natural gas to residential, commercial, industrial and wholesale users in the
central United States.  In addition to us, Ameren's  principal  subsidiaries and
our affiliates are as follows:

o    Union  Electric   Company,   which  operates  a   rate-regulated   electric
     generation,  transmission and distribution  business,  and a rate-regulated
     natural gas distribution business in Missouri and Illinois as AmerenUE.
o    Central  Illinois Light Company is a subsidiary of CILCORP Inc.  (CILCORP),
     which operates a rate-regulated  transmission and distribution business, an
     electric generation business and a rate-regulated  natural gas distribution
     business in Illinois as  AmerenCILCO.  Ameren  completed its acquisition of
     CILCORP on January 31, 2003 from The AES Corporation  (AES).  See Note 15 -
     Subsequent Event for further information.
o    AmerenEnergy  Resources Company (Resources Company),  which consists of non
     rate-regulated  operations.  Subsidiaries include  AmerenEnergy  Generating
     Company  (Generating  Company)  that operates  Ameren's non  rate-regulated
     electric  generation  in  Missouri  and  Illinois,  AmerenEnergy  Marketing
     Company (Marketing Company), which markets power for periods over one year,
     AmerenEnergy  Fuels and Services  Company,  which procures fuel and manages
     the related risks for  Ameren-affiliated  companies and AmerenEnergy Medina
     Valley Cogen (No. 4), LLC, which  indirectly owns a 40 megawatt,  gas-fired
     electric  co-generation  plant. On February 4, 2003,  Ameren  completed its
     acquisition  of AES Medina  Valley Cogen (No. 4), LLC (Medina  Valley) from
     AES and renamed it AmerenEnergy  Medina Valley Cogen (No. 4), LLC. See Note
     15 - Subsequent Event for further information.  Generating Company supplies
     electric power to Marketing Company which, in turn,  supplies us with power
     under a power supply agreement (Power Supply Agreement).  See Note 2 - Rate
     and Regulatory Matters for more information on the Power Supply Agreement.
o    AmerenEnergy,  Inc.  (AmerenEnergy),  which serves as a power marketing and
     risk management agent for  Ameren-affiliated  companies for transactions of
     primarily less than one year.
o    Electric  Energy,  Inc.  (EEI),  which  operates  electric  generation  and
     transmission  facilities in Illinois.  On April 30, 2002, after we received
     the required approval from the Federal Energy Regulatory  Commission (FERC)
     and notified the Illinois Commerce  Commission  (ICC),  transferred our 20%
     common stock  interest in EEI to Ameren in the form of a non-cash  dividend
     of common  stock in EEI. The book value of our  investment  in EEI was $1.8
     million. Subsequently,  Ameren contributed such stock to Resources Company.
     This transfer  completed the process of achieving a full divestiture of all
     electric  generating capacity that had been owned directly or indirectly by
     us. AmerenUE also owns a 40% interest in EEI.
o    Ameren Services  Company (Ameren  Services),  which provides shared support
     services to Ameren and its  subsidiaries,  including us.  Charges are based
     upon the actual  costs  incurred  by Ameren  Services,  as  required by the
     PUHCA.

     When we refer to  AmerenCIPS,  our, we or us, we are  referring  to Central
Illinois  Public  Service  Company.  All tabular dollar amounts are in millions,
unless otherwise indicated.

     On  May  1,  2000,  we  transferred  our  electric  generating  assets  and
liabilities, at historical net book value, to Generating Company (the Transfer).
See Note 2 - Rate and Regulatory Matters for further discussion.

     Our accounting policies conform to generally accepted accounting principles
in the United States (GAAP).  Our financial  statements  reflect all adjustments
(which include normal,  recurring adjustments)  necessary, in our opinion, for a
fair  presentation of our results.  The  preparation of financial  statements in
conformity  with  GAAP  requires

                                       29

<PAGE>

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.  Certain  reclassifications have been
made to prior years' financial statements to conform to 2002 reporting.

     Our accounting policies conform to generally accepted accounting principles
in the United States (GAAP).  Our financial  statements  reflect all adjustments
(which include normal,  recurring adjustments)  necessary, in our opinion, for a
fair  presentation of our results.  The  preparation of financial  statements in
conformity  with  GAAP  requires   management  to  make  certain  estimates  and
assumptions.  Such estimates and assumptions  affect reported  amounts of assets
and liabilities 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.
Certain reclassifications have been made to prior years' financial statements to
conform to 2002 reporting.

Regulation

     We are subject to regulation by the ICC, the FERC and the SEC. See Note 2 -
Rate and Regulatory Matters for further information.

     In accordance with Statement of Financial  Accounting  Standards (SFAS) No.
71 "Accounting for the Effects of Certain Types of Regulation," we defer certain
costs pursuant to actions of our regulators  and are currently  recovering  such
costs in rates charged to customers.

     At December 31, 2002 and 2001,  we had recorded  the  following  regulatory
assets and regulatory liabilities:



================================================================================
2002                                                                        2001
--------------------------------------------------------------------------------
Regulatory  Assets:  Recoverable costs - contaminated  facilities(a)(d)  $26 $26
Unamortized       loss       on       reacquired       debt(b)(d)       5      6
--------------------------------------------------------------------------------
Regulatory                    Assets                   $31                   $32
--------------------------------------------------------------------------------
Regulatory        Liabilities:        Income        taxes(c)       $15       $36
================================================================================
(a)  Represents  the   recoverable   portion  of  accrued   environmental   site
liabilities,  which is primarily  collected  from our electric and gas customers
through our revenue riders in Illinois.
(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 10 - Income Taxes
for amortization period. Represents unamortized portion of investment tax credit
and federal excess taxes.
(d) These assets do not earn a return.

     We continually assess the  recoverability of our 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.   Electric   industry   restructuring   legislation   may  impact  the
recoverability of regulatory assets in the future.

Property and Plant

     The cost of additions to and  betterments of units of property and plant is
capitalized.  Cost includes labor, material,  applicable taxes and overheads. An
allowance   for  funds  used   during   construction   is  also  added  for  our
rate-regulated  assets.  Maintenance  expenditures  and the renewal of items not
considered units of property are expensed as incurred. When units of depreciable
property are retired,  the original cost and removal cost,  less salvage  value,
are  charged to  accumulated  depreciation.  See  Accounting  Changes  and Other
Matters relating to SFAS No. 143, "Accounting for Asset Retirement  Obligations"
and Note 4 - Property and Plant, Net for further information.

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 2002, 2001 and 2000 was  approximately  3% of the
average depreciable cost.

                                       30

<PAGE>

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  our
rate-regulated   construction   expenditures   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 9% during 2002, 4% during 2001
and 6% during 2000.

Impairment of Long-Lived Assets

     We  evaluate  long-lived  assets for  impairment  when events or changes in
circumstances  indicate  that  the  carrying  value  of such  assets  may not be
recoverable. The determination of whether impairment has occurred is based on an
estimate of undiscounted cash flows attributable to the assets, as compared with
the carrying value of the assets. If impairment has occurred,  the amount of the
impairment  recognized is determined by estimating  the fair value of the assets
and  recording a provision  for loss if the  carrying  value is greater than the
fair value.  See Accounting  Changes and Other Matters  related to SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets."

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.

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

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

     Interchange  revenues  included in Operating  Revenues - Electric  were $35
million for the year ended  December  31, 2002 (2001 - $35  million;  2000 - $81
million). See Emerging Issues Task Force (EITF) Issue No. 02-3, "Issues Involved
in Accounting for Derivative  Contracts Held for Trading  Purposes and Contracts
Involved in Energy  Trading and Risk  Management  Activities"  discussion  under
Accounting Changes and Other Matters below for further information.

Purchased Power

     Purchased  power included in Operating  Expenses - Purchased Power was $418
million for the year ended  December 31, 2002 (2001 - $433 million;  2000 - $313
million).  See EITF 02-3 discussion under  Accounting  Changes and Other Matters
below for further information.

Fuel and Gas Costs

     In Illinois, there are no provisions for adjusting rates for changes in the
costs of purchased  power.  We transferred  our generating  assets to Generating
Company  in May 2000 and rely  exclusively  on  purchased  power to  supply  our
electric  customers.  See  Note 2 - Rate  and  Regulatory  Matters  for  further
information.  In  Illinois,  changes  in gas costs are  generally  reflected  in
billings to gas customers through our purchased gas adjustment clause.

                                       31

<PAGE>

Excise Taxes

     Excise taxes on our  Illinois gas customer  bills are imposed on us and are
recorded gross in Operating  Revenues and Other Taxes.  Excise taxes recorded in
Operating Revenues and Other Taxes for the year ended December 31, 2002 were $13
million  (2001 - $12 million;  2000 - $17 million).  Excise taxes  applicable to
Illinois electric customer bills are imposed on the consumer and are recorded as
tax collections payable and included in Taxes Accrued on the Balance Sheet.

Income Taxes

     We are  included in the  consolidated  federal  income tax return  filed by
Ameren. As a subsidiary of Ameren, we could be considered  jointly and severably
liable for assessments of additional tax on the consolidated group. Income taxes
are  allocated  to us based on our taxable  income or loss.  Our  provision  for
income taxes has been  presented  based on federal and state taxes we 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.

Accounting Changes and Other Matters

     In January  2001,  we adopted  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities." The impact of that adoption was immaterial
to us.

     In January 2002, we adopted 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 on fair market  value.  SFAS 142
requires  goodwill  and  indefinite-lived  intangible  assets  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  141 and SFAS 142 did not  have  any  effect  on our  financial
position, results of operations or liquidity upon adoption.

     We are adopting  SFAS 143 in the first  quarter of 2003.  SFAS 143 provides
the accounting  requirements  for asset retirement  obligations  associated with
tangible,  long-lived assets.  SFAS 143 requires us to record the estimated fair
value of legal obligations associated with the retirement of tangible long-lived
assets in the period in which the  liabilities  are incurred and to capitalize a
corresponding  amount as part of the book value of the related long-lived asset.
In subsequent  periods,  we are required to adjust asset retirement  obligations
based on changes in estimated  fair value,  and the  corresponding  increases in
asset book values are  depreciated  over the useful  life of the related  asset.
Uncertainties  as to the  probability,  timing or cash flows  associated with an
asset retirement obligation affect our estimate of fair value.

     We  have  determined  that  certain  asset  retirement  obligations  exist.
However,  we are unable to estimate the fair value of those obligations  because
the  probability,  timing or cash  flows  associated  with the  obligations  are
indeterminable.  We do not believe that these obligations,  when incurred,  will
have a material adverse impact on our financial position,  results of operations
or liquidity.

     Historically,  we  have  included  an  estimated  cost of  dismantling  and
removing plant from service upon retirement. This practice is currently required
by regulators in the jurisdictions in which we operate.  As a result,  though we
are still  assessing the impact of SFAS 143 on our  rate-regulated  depreciation
methodology,  we do not  believe  any such  impact  will  affect our  results of
operations.  However,  if we are  required  to remove  accrued  dismantling  and
removal costs from accumulated depreciation,  where they are currently embedded,
our asset and liability balances could be materially increased.

     On January 1, 2002,  we adopted SFAS 144.  SFAS 144 addresses the financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 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, "Reporting the Results of Operations

                                       32

<PAGE>

- Reporting the Effects of a Segment of a Business,  and Extraordinary,  Unusual
and Infrequently  Occurring Events and Transactions."  SFAS 144 did not have any
effect on our financial position, results of operations or liquidity for 2002.

     In June 2002, the Financial  Accounting  Standards Board (FASB) issued SFAS
No. 146,  "Accounting for Costs  Associated  with Exit or Disposal  Activities."
SFAS 146 requires an entity to recognize, and measure at fair value, a liability
for a cost associated  with an exit or disposal  activity in the period in which
the  liability  is  incurred  and  nullifies  EITF  Issue No.  94-3,  "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (Including  Certain Costs Incurred in a  Restructuring)."  SFAS 146 is
effective for exit or disposal  activities that are initiated after December 31,
2002.

     During 2002, we adopted the provisions of EITF 02-3 that required  revenues
and costs associated with certain energy contracts to be shown on a net basis in
the income  statement.  Prior to adopting  EITF 02-3 and the  rescission of EITF
Issue No. 98-10,  "Accounting for Contracts  Involved in Energy Trading and Risk
Management  Activities,"  our  accounting  practice  was to present  all settled
energy purchase or sale contracts within our power risk management  program on a
gross basis in Operating  Revenues - Electric  and in Operating  Expenses - Fuel
and  Purchased  Power.  This meant that  revenues were recorded for the notional
amount of the power sale contracts with a corresponding charge to income for the
costs  of the  energy  that  was  generated,  or for the  notional  amount  of a
purchased power contract.

     In October  2002,  the EITF reached a consensus to rescind EITF No.  98-10.
The effective date for the full  rescission of EITF 98-10 was for fiscal periods
beginning after December 15, 2002, with early adoption  permitted.  In addition,
the EITF  reached  a  consensus  in  October  2002  that  all  SFAS 133  trading
derivatives  (subsequent to the rescission of EITF 98-10) should be shown net in
the income statement,  whether or not physically settled. This consensus applies
to  all  energy  and  non-energy  related  trading  derivatives  that  meet  the
definition  of a  derivative  pursuant to SFAS 133. We have  adopted and applied
this  guidance  to 2002 and 2001  which  had no impact  on  previously  reported
earnings or stockholder's  equity.  The adoption of EITF 02-3, the rescission of
EITF 98-10 and the related transition  guidance did not result in the netting of
energy  contracts  and did not have an impact on  earnings.  For the years ended
December  31,  2002  and  2001  our  trading   activities  were  not  considered
derivatives and therefore, were not netted.


NOTE 2 - Rate and Regulatory Matters

Illinois Electric

     In  2002,  all of  our  Illinois  residential,  commercial  and  industrial
customers had choice in electric suppliers.

     As a  provision  of the  legislation  related to the  restructuring  of the
Illinois  electric  industry  (the  Illinois  Law),  a rate  freeze is in effect
through January 1, 2007. As a result of this extension  through January 1, 2007,
we expect to seek to renew or extend the Power Supply  Agreement  between us and
Marketing  Company through the same period.  A renewal or extension of the Power
Supply  Agreement  will depend on compliance  with  regulatory  requirements  in
effect at the time,  and we cannot  predict  whether  we will be  successful  in
securing a renewal or extension of this agreement.

     In October 2002,  we and AmerenUE  filed with the ICC a proposal to suspend
collection of transition charges associated with the Illinois Law for the period
commencing June 2003 until at least June 2005. The Illinois Law allows a utility
to collect  transition  charges from  customers  that elect to move from bundled
retail  rates  to  market-based  rates.  Utilities  have the  right  to  collect
transition  charges  throughout the transition period that ends January 1, 2007.
The  suspension of  collection  of transition  charges is not expected to have a
material impact on either AmerenUE or us.

     Under the Illinois  Law, we were  subject to a  residential  electric  rate
decrease  of up to 5% in 2002 to the  extent  our  rates  exceeded  the  Midwest
utility average.  In 2002, 2001 and 2000 our Illinois  electric rates were below
the Midwest  utility average and therefore were not subject to any electric rate
decrease due to this provision of the Illinois Law.

     The  Illinois  Law also  contains a provision  requiring  that  one-half of
excess earnings from the Illinois  jurisdiction  for the years 1998 through 2006
to be refunded to our 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

                                       33

<PAGE>

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%.  Our  average  rate of return on common  equity  for the two year
average at December  31, 2002 was 6% as compared to the average  index of 12.6%.
No refunds  are  expected to be required  for the period  April 1, 2002  through
March 31, 2003.  No refunds were  required for the periods April 1, 2001 through
May 31, 2002, or April 1, 2000 through March 31, 2001.

     In accordance  with another  provision of the Illinois Law, on May 1, 2000,
following the receipt of all required state and federal regulatory approvals, we
transferred our 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,
2002,  $419 million (2001 - $462 million) of the promissory note was outstanding
including  the  current  portion  of  $46  million  (2001  - $43  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 our employees
were  transferred  to  Generating  Company  as a part  of the  transaction.  The
significant components of the net assets transferred are as follows:

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

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  non-regulated  affiliate,
Marketing   Company   (Generating-Marketing    Agreement),   both   wholly-owned
subsidiaries of Resources Company. Subsequently,  Marketing Company entered into
the Power Supply  Agreement with our company to supply us sufficient  energy and
capacity to meet our obligations as a public utility through  December 31, 2004.
The  Power  Supply  Agreement  and  the  Generating-Marketing  Agreement  may be
terminated  upon at least one year's  notice  given by either  party,  but in no
event can either agreement be terminated prior to December 31, 2004. As a result
of the extension  through January 1, 2007 of the electric rate freeze related to
the  Illinois  Law,  we  expect  to seek to renew or  extend  the  Power  Supply
Agreement  through the same  period.  A renewal or extension of the Power Supply
Agreement will depend on compliance  with  regulatory  requirements in effect at
the time,  and we cannot  predict  whether we will be  successful  in securing a
renewal or  extension  of this  agreement.  A portion of the capacity and energy
supplied by  Generating  Company to  Marketing  Company will be resold to us for
resale  to our  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.  We are obligated to pay a capacity charge per megawatt hour per year to
Marketing  Company or the greater of our forecasted peak demand or actual demand
plus sales at  market-based  rates.  We are also  subject to energy  charges per
megawatt  hour for all energy  sales  other than  sales at  market-based  rates.
Charges are paid  monthly.  There are no production  payments  linked to initial
issuance or  refinancing  of debt.  Due to the  Generating-Marketing  Agreement,
Generating  Company  bears the operating  risks,  including  plant  performance,
operations, maintenance, efficiency, employee retention and other matters. There
are no guarantees, bargain purchase options or other terms that may convey to us
the  right to use the  property,  plant and  equipment  of  Generating  Company.

                                       34

<PAGE>

Through the Power Supply  Agreement,  we purchased $392 million of power for the
year ended December 31, 2002 (2001 - $413 million; 2000 - $313 million).

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

     As a result of the Transfer,  we 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, 2002,  our deferred tax liability and  intercompany  tax receivable
was $175 million (2001 - $195  million),  including  the current  portion of $13
million (2001 - $18 million).

     Our  intercompany  note receivable  from Generating  Company related to the
Transfer totaled approximately $419 million (2001 - $462 million), including the
current  portion of $46  million  (2001 - $43  million) at  December  31,  2002.
Intercompany  interest  income for the year ended  December  31,  2002,  totaled
approximately $31 million (2001- $37 million; 2000 - $27 million).

Federal - Electric Transmission

Regional Transmission Organization

     In December  1999,  the FERC issued  Order 2000  requiring  all  utilities,
subject to FERC  jurisdiction,  to state their intentions for joining a regional
transmission  organization  (RTO). RTOs are independent  organizations that will
functionally  control the  transmission  assets of utilities and are designed to
improve the wholesale power market.  Beginning in January 2001, we and AmerenUE,
along with several other utilities, sought approval from the FERC to participate
in an RTO known as the  Alliance  RTO.  We had  previously  been a member of the
Midwest  Independent  System Operator (Midwest ISO) and recorded a pretax charge
to earnings in 2000 of $8 million ($5 million, net of taxes) for an exit fee and
other costs when we left that organization.  We believed the for-profit Alliance
RTO business model was superior to the not-for-profit Midwest ISO business model
and provided us with a more equitable return on our transmission assets.

     In late 2001,  the FERC issued an order that  rejected the formation of the
Alliance  RTO and  ordered the  Alliance  RTO  companies  and the Midwest ISO to
discuss how the  Alliance RTO business  model could be  accommodated  within the
Midwest  ISO. In April 2002,  after the  Alliance  RTO and Midwest ISO failed to
reach an  agreement,  and after a series of filings by the two parties  with the
FERC,  the FERC  issued a  declaratory  order  setting  forth  the  division  of
responsibilities  between the Midwest ISO and National Grid (the managing member
of the transmission  company formed by the Alliance  companies) and approved the
rate design and the revenue  distribution  methodology  proposed by the Alliance
companies.  However,  the FERC denied a request by the  Alliance  companies  and
National Grid to purchase  certain  services from the Midwest ISO at incremental
cost rather than  Midwest  ISO's full tariff  rates.  The FERC also  ordered the
Midwest ISO to return the exit fee paid by us and  AmerenUE to leave the Midwest
ISO,  provided  we and  AmerenUE  return to the Midwest ISO and agree to pay our
proportional  share of the  startup  and  ongoing  operational  expenses  of the
Midwest ISO.  Moreover,  the FERC required the Alliance  companies to select the
RTO in which they will participate within thirty days of the order.

     Following the April 2002 FERC order, we and AmerenUE have made filings with
the FERC  indicating  that we would  return  to the  Midwest  ISO  through a new
independent transmission company,  GridAmerica LLC, that was agreed to be formed
by us and AmerenUE,  along with  subsidiaries  of  FirstEnergy  Corporation  and
NiSource  Inc.  Upon receipt of final FERC  approval the  definitive  agreements
establishing  GridAmerica,  a  subsidiary  of  National  Grid will  serve as the
managing  member of GridAmerica and will manage the  transmission  assets of the
three  companies and  participate  in the Midwest ISO on behalf of  GridAmerica.
Other  Alliance  RTO  companies  announced  their  intentions  to  join  the PJM
Interconnection  LLC (PJM) RTO. On July 25, 2002, the Ameren  companies  filed a
motion with the FERC requesting that it condition the approval of the choices of
other  Illinois  utilities  to join the PJM RTO on Midwest ISO and PJM  entering
into an agreement addressing  important  reliability and rate-barrier issues. On
July 31, 2002,  the FERC issued an order  accepting the formation of GridAmerica
as an independent  transmission company under the Midwest ISO subject to further
compliance  filings ordered by the FERC. The FERC also issued an order accepting
the elections  made by the other  Illinois  utilities to join the PJM RTO on the
condition  PJM and  Midwest  ISO  immediately  begin a process  to  address  the
reliability and rate-barrier  issues raised by us and other market  participants
in previous filings.

                                       35

<PAGE>

     The  compliance  filing  to  facilitate  the  formation  and  operation  of
GridAmerica  as an independent  transmission  company within the Midwest ISO, as
contemplated in the July 31, 2002 order of the FERC, was conditionally  accepted
by the FERC in an  order  issued  December  19,  2002.  In the  order,  the FERC
approved  the return of the $6 million  exit fee paid by us to leave the Midwest
ISO with interest once GridAmerica becomes operational.  The FERC also approved,
subject to further  filings,  reimbursement  of $36  million to the  GridAmerica
companies  for  expenses  incurred  to form the  Alliance  RTO.  GridAmerica  is
scheduled to become operational in spring 2003.

     Until the  reliability and  rate-barrier  issues are resolved as ordered by
the FERC,  and the  tariffs and other  material  terms of our  participation  in
GridAmerica,  and GridAmerica's  participation in the Midwest ISO, are finalized
and approved by the FERC,  we are unable to predict the impact that on-going RTO
developments  will have on our  financial  condition,  results of  operations or
liquidity.

Standard Market Design Notice of Proposed Rulemaking (NOPR)

     On July 31, 2002,  the FERC issued a Standard  Market Design NOPR. The NOPR
proposes  a number of  changes  to the way the  current  wholesale  transmission
service and energy  markets are operated.  Specifically,  the NOPR calls for all
jurisdictional  transmission  facilities  to be placed  under the  control of an
independent   transmission   provider  (similar  to  an  RTO),  proposes  a  new
transmission  service tariff that provides a single form of transmission service
for all users of the  transmission  system,  including  bundled retail load, and
proposes  a new  energy  market  and  congestion  management  system  that  uses
locational  marginal  pricing as its basis.  On November 15, 2002,  we filed our
initial  comments  on the NOPR with the FERC  expressing  our  concern  with the
potential  impact of the  proposed  rules in their  current form on the cost and
reliability  of service  to retail  customers.  We also  proposed  that  certain
modifications  be made to the  proposed  rules in order to protect  transmission
owners  from the  possibility  of trapped  transmission  costs that might not be
recoverable from ratepayers as a result of inconsistent  regulatory policies. We
filed additional comments on the remaining sections of the NOPR during the first
quarter of 2003.  Until the FERC  issues a final rule,  management  is unable to
predict  the  ultimate  impact on our  future  financial  position,  results  of
operations or liquidity.

Illinois Gas

     In November 2002, we filed a request with the ICC to increase rates for gas
service by approximately $16 million annually. The ICC has until October 2003 to
render a decision on this request.


NOTE 3 - Related Party Transactions

     We have  transactions  in the normal course of business with Ameren and its
other  subsidiaries.   These  transactions  are  primarily  comprised  of  power
purchases  and  sales,   as  well  as  other  services   received  or  rendered.
Intercompany  power purchases under the Power Supply  Agreement and from EEI, an
affiliate,  totaled  $418  million for the year ended  December 31, 2002 (2001 -
$433 million; 2000 - $331 million). See Note 2 - Rate and Regulatory Matters for
more information about the Power Supply Agreement.

     We have the ability to borrow from Ameren and  AmerenUE,  through a utility
money pool  agreement.  Ameren  Services  administers the utility money pool and
tracks internal and external funds separately.  Internal funds are surplus funds
contributed to the money pool from participants.  The primary source of external
funds for the utility money pool at December 31, 2002 was AmerenUE's  commercial
paper program.  Through the utility money pool, we can access  committed  credit
facilities  at Ameren and  AmerenUE  which  totaled $680 million at December 31,
2002.  These  facilities  are in addition  to our own $15  million in  committed
credit  facilities.  The total amount available to us at any given time from the
utility money pool is reduced by the amount of borrowings by our  affiliates but
increased to the extent Ameren,  AmerenUE or Ameren  Services have surplus funds
and  the  availability  of  other  external  borrowing  sources.  Surplus  funds
providing  additional  liquidity  available to us through the utility money pool
totaled $628 million at December 31, 2002, of which  approximately  $500 million
was used by Ameren for the  acquisition  of CILCORP  and Medina  Valley in early
2003. The  availability of funds is also determined by funding  requirements and
limits  established by the PUHCA.  We, along with AmerenUE and Ameren  Services,
rely on the utility money pool to coordinate and provide for certain  short-term
cash and  working  capital  requirements.  Borrowers  receiving a loan under the
utility  money  pool  agreement  must repay the  principal  amount of such loan,
together  with accrued  interest.  Interest is  calculated  at varying  rates of
interest  depending on the  composition  of internal  and external  funds in the
utility money pool. The average interest rate for the utility money pool for the
year ended  December  31,  2002 was 1.68% (2001 - 3.95%).  Based on  outstanding
commercial paper as of

                                       36

<PAGE>

December 31, 2002,  we had the ability to borrow up to $445 million  through the
utility money pool,  which was in addition to available cash balances at Ameren.
At December 31, 2002, we had $16 million in intercompany receivables outstanding
(December 31, 2001 - $24 million) through the utility money pool.

     Subject to the  receipt of  regulatory  approval,  which is being  pursued,
AmerenCILCO  will  participate in Ameren's  utility money pool  arrangement.  At
December 31, 2002,  CILCO had committed credit  facilities,  expiring at various
dates during 2003, totaling $60 million.

     Support  services  provided by Ameren Services,  including wages,  employee
benefits and professional  services, are based on actual costs incurred. For the
year ended  December  31, 2002,  support  services  provided by Ameren  Services
included in Operating  Expenses - Other  Operations and Maintenance  totaled $61
million (2001 - $54 million; 2000 - $52 million).

     As of December 31, 2002, intercompany receivables included in Miscellaneous
Accounts  and  Notes  Receivable  were  approximately  $28  million  (2001 - $38
million).  As of December 31, 2002,  intercompany  payables included in Accounts
and Wages Payables totaled approximately $63 million (2001 - $87 million).

     We  incurred  a  deferred  intercompany  tax  gain,  which  resulted  in an
additional  deferred tax liability when we transferred  our electric  generating
assets and liabilities at historical net book value to Generating Company in May
2000. 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, 2002, our deferred tax liability and  intercompany
tax  receivable  was $175 million (2001 - $195  million),  including the current
portion of $13 million (2001 - $18 million).

     Our intercompany note receivable from Generating  Company was approximately
$419 million (2001 - $462 million)  including the current portion of $46 million
(2001 - $43 million) as of December 31, 2002. Our  intercompany  interest income
recorded  in  Miscellaneous  Income was  approximately  $31 million for the year
ended December 31, 2002 (2001 - $37 million; 2000 - $27 million).

NOTE 4 - Property and Plant, Net

At December 31, 2002 and 2001, property and plant, net consisted of the
following:

================================================================================
                                                       2002              2001
--------------------------------------------------------------------------------
Property and plant, at original cost:
  Electric                                           $1,248            $1,219
  Gas                                                   290               280
  Other                                                  15                 5
--------------------------------------------------------------------------------
                                                     $1,553            $1,504
   Less accumulated depreciation and amortization       732               693
--------------------------------------------------------------------------------
                                                        821               811
Construction work in progress:
  Other                                                  14                11
--------------------------------------------------------------------------------
Property and plant, net                               $ 835              $822
================================================================================


                                       37

<PAGE>

NOTE 5 - Preferred Stock

     At December  31, 2002 and 2001,  we 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 option of the issuer,  at the prices shown in the  following
table as of December 31, 2002 and 2001:

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

Preferred stock not subject to
mandatory redemption:(a)

                                   Redemption Price
         Shares                      (per share)           2002             2001
--------------------------------------------------------------------------------
With par value of $100 per share -
4.00% Series 150,000                  $101.00              $15              $15
4.25% Series  50,000                   102.00                5                5
4.90% Series  75,000                   102.00                8                8
4.92% Series  50,000                   103.50                5                5
5.16% Series  50,000                   102.00                5                5
1993 Auction  300,000                  100.00(b)            30               30
6.625% Series 125,000                  100.00               12               12
--------------------------------------------------------------------------------
Total preferred stock outstanding not
subject to mandatory  redemption                           $80              $80
================================================================================
(a)  Generally,  for  the  issuance  of  additional  preferred  stock,  earnings
     coverage of one and one-half  times annual  interest  charges and preferred
     stock  dividends  is  required  under our  Articles  of  Incorporation.  At
     December 31, 2002, we had and expect to continue to have adequate  coverage
     ratios for anticipated requirements.
(b)  Dividend  rates,  and the  periods  during  which  such rates  apply,  vary
     depending on our selection of certain defined dividend period lengths.  The
     average dividend rate during 2002 was 2.35%.


NOTE 6 - Short-Term Borrowings

     Short-term  borrowings  typically  consist  of  borrowings  under  Ameren's
utility  money  pool  agreement  but,  from time to time,  may also  consist  of
commercial paper and bank loans  (maturities  generally within 1 to 45 days). We
had committed bank lines of credit totaling $15 million at December 31, 2002. At
December 31, 2002, we had no outstanding short-term borrowings.

     At December 31, 2002, Ameren had committed credit  facilities,  expiring at
various dates between 2003 and 2005, totaling $695 million. This amount includes
$15 million of our committed  bank lines of credit and $680 million of committed
credit  facilities at Ameren and AmerenUE.  We access these combined  facilities
through  Ameren's utility money pool  arrangement.  AmerenUE and Ameren Services
may also borrow under this  arrangement.  These committed credit  facilities are
also used to  support  AmerenUE's  commercial  paper  program  under  which $250
million  was  outstanding  at  December  31,  2002.  Based on  commercial  paper
outstanding  at December 21, 2002,  $445 million was unused and available  under
these committed credit  facilities and available to us through the utility money
pool. See Note 3 - Related Party Transactions for further information  regarding
the utility money pool.

     Subject to the  receipt of  regulatory  approval,  which is being  pursued,
AmerenCILCO  will  participate in Ameren's  utility money pool  arrangement.  At
December 31, 2002,  CILCO had committed credit  facilities,  expiring at various
dates during 2003, totally $60 million.

     Certain  of our and  Ameren's  financing  arrangements  contain  provisions
which, among other things,  limit our ability to encumber or sell assets,  merge
with  other  entities  or permit to exist  restrictions  on our  ability  to pay
dividends  or make other  payments to  affiliates.  Ameren's  credit  agreements
contain a covenant which requires Ameren, AmerenUE and us to maintain a ratio of
total   indebtedness  to  total  capital  of  60%  or  less.  Certain  of  these
arrangements  contain  material  adverse  change  clauses  which could limit our
ability to borrow  under such  facilities  or to access  borrowing  under  these
facilities  through  the  utility  money  pool.  In  addition,  Ameren's  credit
agreements  contain  indebtedness cross default provisions which could trigger a
default under these facilities in the

                                       38

<PAGE>

event any subsidiary of Ameren  (subject to definition in the underlying  credit
agreements)  other  than  certain  project  finance  subsidiaries   defaults  in
indebtedness  in excess of $50  million.  None of our,  Ameren's  or  AmerenUE's
financing  arrangements  contains credit  rating  triggers with the exception of
certain ratings triggers within AmerenCILCO's financing arrangements.

     Most of Ameren's and its subsidiaries'  committed credit facilities include
provisions  related  to the  funded  status  of  Ameren's  pension  plan.  These
provisions  either require Ameren to meet minimum ERISA funding  requirements or
limit the unfunded  liability  status of the plan. Under the most restrictive of
these provisions  impacting Ameren's  facilities totaling $400 million, an event
of default  will  result if the  unfunded  liability  status (as  defined in the
underlying  credit  agreements) of Ameren's pension plan exceeds $300 million in
the aggregate.  Based on the most recent valuation report available to Ameren at
December  31,  2002,  which  was  based on  January  2002  asset  and  liability
valuations, the unfunded liability status (as defined) was $31 million. While an
updated  valuation  report will not be available  until the second half of 2003,
Ameren  believes  that the unfunded  liability  status of its pension  plans (as
defined)  could exceed $300 million based on the  investment  performance of the
pension  plan assets and  interest  rate  changes  since  January 1, 2002.  As a
result,  Ameren may need to renegotiate  the facility  provisions,  terminate or
replace the  affected  facilities,  or fund any  unfunded  liability  shortfall.
Should Ameren elect to terminate these facilities, we believe we would otherwise
have sufficient liquidity to manage our short-term funding requirements.

     At December 31, 2002,  Ameren and its  subsidiaries,  including us, were in
compliance with all such provisions.


NOTE 7 - Long-Term Debt

     The following table  summarizes our long-term debt  outstanding at December
31, 2002 and 2001:

================================================================================
                                                          2002            2001
--------------------------------------------------------------------------------
First mortgage bonds (a)
--------------------------------------------------------------------------------
   6 3/4% Series Y paid in 2002                         $  -              $ 23
   6.94% Series 97-1 paid in 2002                          -                 5
   6.96% Series 97-1 paid in 2002                          -                 5
   6 3/8% Series Z due 2003                               40                40
   6.99% Series 97-1 due 2003                              5                 5
   6.49% Series 95-1 due 2005                             20                20
   7.05% Series 97-2 due 2006                             20                20
   7 1/2% Series X due 2007                               50                50
   5.375% Series due 2008                                 15                15
   6.625% Series due 2011                                150               150
   7.61% 1997 Series due 2017                             40                40
   6.125% Series due 2028                                 60                60
--------------------------------------------------------------------------------
                                                         400               433
--------------------------------------------------------------------------------
Pollution control revenue bonds
--------------------------------------------------------------------------------
      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)               (2)
--------------------------------------------------------------------------------
Maturities due within one year                           (45)              (33)
--------------------------------------------------------------------------------
Total long-term debt                                    $534              $579
================================================================================

(a)  At December 31,  2002,  a majority of the property and plant was  mortgaged
     under,  and  subject to the lien of, the  indenture  pursuant  to which the
     bonds were issued.  Our first mortgage bond indenture  contains  provisions
     that restrict the issuance of additional bonds.  These provisions  restrict
     future first mortgage bond issuance to 60% of unused net bondable  property
     and previously  retired bonds.  In addition,  net earnings must be at least
     twice that of first  mortgage bond interest to be able to issue  additional
     bonds under the  indenture.  Our indenture also requires a certain level of
     maintenance  capital  expenditures.  At  December  31,  2002,  we  were  in
     compliance with all such provisions.
(b)  Variable rate tax-exempt  pollution control indebtedness that was converted
     to long-term fixed rates.

                                       39

<PAGE>

The following  table  summarizes  maturities  of long-term  debt at December 31,
2002:

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

--------------------------------------------------
           2003                               $45
           2004                                 -
           2005                                20
           2006                                20
           2007                                50
        Thereafter                            446
==================================================
   Total                                     $581
==================================================

     In July 2002,  Ameren entered into new committed credit agreements for $400
million  in  revolving  credit  facilities  to be  used  for  general  corporate
purposes,  including  support of commercial paper programs.  We may access these
new credit  facilities  through the utility money pool.  The $400 million in new
facilities  includes a $270 million 364-day revolving credit facility and a $130
million 3-year revolving credit facility.  The 3-year facility has a $50 million
sub-limit  for the  issuance of letters of credit.  These new credit  facilities
replaced AmerenUE's former $300 million revolving credit facility.

     In May 2001,  a shelf  registration  statement  filed by us with the SEC on
Form S-3 was declared effective. This registration statement enables us to offer
from time to time senior notes in one or more series with an offering  price not
to exceed $250 million.  In June 2001, we issued $150 million of senior  secured
notes due June 2011 with an interest  rate of 6.625%.  Until the release date as
described in the senior secured note indenture, the senior secured notes will be
secured by our related  series of first  mortgage  bonds.  The proceeds of these
senior secured notes were used to repay short-term debt and first mortgage bonds
maturing in June 2001. At December 31, 2002,  the amount  remaining on the shelf
registration statement was $100 million.

     In December  2001,  the interest  rate mode on our 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.

     We expect to fund maturities of long-term debt and contractual  obligations
through a combination of cash flow from  operations and funds received under the
Generating Company note receivable.

     At  December  31,  2002,  neither  Ameren,  nor  any of  its  subsidiaries,
including us, had any off-balance sheet financing arrangements. We do not expect
to engage in any significant  off-balance  sheet  financing  arrangements in the
near future.

     Amortization  of debt  issuance  costs and any premium or  discounts  of $1
million  for the year ended 2002 (2001 - $1  million;  2000 - $3  million)  were
included in interest expense in the income statement.


NOTE 8 - Voluntary Retirement Charges

     Voluntary retirement charges were $14 million ($9 million, net of taxes).

     In  December  2002,  approximately  550 Ameren  employees,  which  included
approximately  70 of our employees and additional  employees  providing  support
functions to us through Ameren Services, accepted a voluntary retirement program
that was offered to approximately  1,000 of Ameren's 7,400  employees.  Eligible
employees  had to be age 50 or over,  regular,  full-time  employees and have at
least 10 years of service  with Ameren.  While we expect to realize  significant
long-term  savings as a result of this  program,  we incurred a pretax charge of
$14 million ($9 million, net of taxes) in December 2002 related to the voluntary
retirement  program.  These costs  consisted  primarily  of special  termination
benefits associated with Ameren's pension and post-retirement benefit plans.

                                       40

<PAGE>

NOTE 9 - Miscellaneous, Net

     Miscellaneous,  net for the years ended  December 31,  2002,  2001 and 2000
consisted of the following:

================================================================================
                                          2002              2001           2000
--------------------------------------------------------------------------------

Miscellaneous income:
   Interest and dividend income            $31               $37            $26
   Equity in earnings of subsidiary          1                 2              2
   Contribution in aid of construction       -                 4              -
   Other                                     1                 1              1
--------------------------------------------------------------------------------
Total miscellaneous income                 $33               $44            $29
--------------------------------------------------------------------------------


Miscellaneous expense:
   Other                                   $(2)              $(1)           $(1)
--------------------------------------------------------------------------------
Total miscellaneous expense                $31               $43            $28
================================================================================


NOTE 10 - Income Taxes

     Total income tax expense for 2002  resulted in an effective tax rate of 39%
on earnings before income taxes (38% in 2001 and 36% in 2000).

     Principal reasons such rates differ from the statutory federal rate for the
years ended December 31, 2002, 2001 and 2000 were as follows:

================================================================================
                                          2002              2001           2000
--------------------------------------------------------------------------------
Statutory federal income tax rate          35%               35%            35%
Increases (decreases) from:
  Depreciation differences                   1                -             (2)
  Amortization of investment tax credit     (3)              (1)            (1)
  State income tax                           6                5              4
  Other                                      -               (1)             -
--------------------------------------------------------------------------------
Effective income tax rate                  39%               38%            36%
================================================================================

     Components  of income tax expense for the years ended  December  31,  2002,
2001 and 2000 were as follows:

================================================================================
                                          2002              2001           2000
--------------------------------------------------------------------------------
Taxes currently payable (principally
  federal):
Included in operating expenses             $21               $44            $42
Included in other income                    12                 1              -
--------------------------------------------------------------------------------
                                            33                45             42
--------------------------------------------------------------------------------

Deferred taxes (principally federal):
Included in operating expenses--
     Depreciation differences              (13)              (19)           (13)
     Other                                  (2)                2             16
--------------------------------------------------------------------------------
                                           (15)              (17)             3
--------------------------------------------------------------------------------

Deferred investment tax credits,
  amortization
Included in operating expenses              (1)               (1)            (1)
--------------------------------------------------------------------------------
Total income tax expense                   $17               $27           $ 44
================================================================================

     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,

                                       41

<PAGE>

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.

     We adjust our deferred tax  liabilities  for changes enacted in tax laws or
rates.  Recognizing  that  regulators  will probably  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, 2002 and 2001:

--------------------------------------------------------------------------------
                                                         2002              2001
--------------------------------------------------------------------------------
Accumulated deferred income taxes:
  Accelerated depreciation                              $ 105             $  88
  Capitalized taxes and expenses                           58                62
  Regulatory liabilities, net                             (15)              (33)
  Prepayments                                              (9)               (6)
  Deferred benefit costs                                   (1)               (8)
  Deferred intercompany tax gain                          153               172
  Accumulated other comprehensive income                   (9)                -
--------------------------------------------------------------------------------
Total net accumulated deferred income tax liabilities   $ 282             $ 275
================================================================================


NOTE 11 - Retirement Benefits

     Ameren has defined benefit and post-retirement plans covering substantially
all of our employees.

Pension

     Pension  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.  We, along with other subsidiaries
of Ameren,  are a  participant  in Ameren's  plans and are  responsible  for our
proportional  share of the costs. Our share of the pension costs for 2002 was $3
million (2001- $0.6 million; 2000 - $1 million) of which approximately 24% (2001
- 20%; 2000 - 23%) were charged to construction accounts.

     Ameren made cash  contributions  totaling  $31 million to Ameren's  defined
benefit retirement plans during 2002. Our share of the cash contribution made in
2002 was approximately $4 million,  which included our portion related to Ameren
Services.  At December 31, 2002,  Ameren recorded a minimum pension liability of
$102 million,  net of taxes,  which  resulted in a charge to  Accumulated  Other
Comprehensive Income (OCI) and a reduction in stockholders' equity. Our share of
the minimum pension liability was approximately $13 million, net of taxes. Based
on the performance of plan assets through  December 31, 2002,  Ameren expects to
be required under the Employee  Retirement  Income  Security Act of 1974 to fund
$150  million  to $175  million  annually  in  2005,  2006  and 2007 in order to
maintain  minimum  funding  levels.  In addition,  Ameren  estimates the pension
funding  for  CILCORP to be less than $1 million  in 2003 and  approximately  $5
million in 2004. We expect our share of the funding in 2005, 2006 and 2007 to be
$21  million  to $24  million  annually,  which  includes  our share  related to
employees of Ameren  Services.  These amounts are estimates and may change based
on actual stock market performance, changes in interest rates and any changes in
government  regulations.  At December 31, 2002,  Ameren's Net Benefit Obligation
was $1,587 million and its Fair Value of Plan Assets was $1,059 million.

     Ameren's  assumptions  for  actuarial  present  value of projected  benefit
obligations during 2002, 2001 and 2000 were as follows:

================================================================================
                                       2002            2001             2000
--------------------------------------------------------------------------------
Discount rate at measurement date      6.75%           7.25%            7.50%
Expected return on plan assets         8.50%           8.50%            8.50%
Increase in future compensation        3.75%           4.25%            4.50%
================================================================================

                                       42

<PAGE>

Post-Retirement

     Ameren's  funding policy for  post-retirement  benefits is to annually fund
the Voluntary Employee Beneficiary  Association trusts (VEBA) with the lesser of
net periodic cost or the amount deductible for federal income tax purposes.  We,
along with other  subsidiaries of Ameren,  are a participant in the VEBA,  which
covers  substantially  all  of  our  employees,  and  are  responsible  for  our
proportional share of the costs. Our share of the post-retirement  benefit costs
for 2002  was $12  million  (2001-  $10  million;  2000 - $5  million)  of which
approximately  27% (2001 - 20%) were charged to construction  accounts.  The ICC
allows the recovery of post-retirement benefit costs in rates to the extent that
such costs are funded.

     Ameren's  assumptions  for  the  post-retirement  benefit  plan  obligation
measurements  for the  years  ended  December  31,  2002,  2001 and 2000 were as
follows:

================================================================================
                                       2002             2001            2000
--------------------------------------------------------------------------------
Discount rate at measurement date     6.75%            7.25%            7.50%
Expected return on plan assets        8.50%            8.50%            8.50%
Medical cost trend rate (initial)    10.00%            5.25%            5.00%
Medical cost trend rate (ultimate)    5.25%            5.25%            5.00%
================================================================================

NOTE 12 - Commitments and Contingencies

     As a result of issues  generated  in the course of daily  business,  we are
involved  in  legal,  tax and  regulatory  proceedings  before  various  courts,
regulatory  commissions  and  governmental  agencies,   some  of  which  involve
substantial  amounts of money.  We believe that the final  disposition  of these
proceedings  except  as  otherwise  disclosed  in this  report  and Notes to our
Financial Statements,  will not have an adverse material effect on our financial
position, results of operations or liquidity.

Capital Expenditures

     We  estimate  our  capital  expenditures  over the next five  years will be
approximately   $170  million,   including   allowance  for  funds  used  during
construction   and  capitalized   interest.   This  estimate   includes  capital
expenditures for transmission and distribution related activities.

     Our capital program is subject to periodic review and revision,  and actual
capital  costs may vary from the above  estimate  because of  numerous  factors.
These  factors  include  changes in  business  conditions,  revised  load growth
estimates,  changes in  environmental  regulations,  increasing  costs of labor,
equipment, and materials, and cost of capital.

Fuel Purchase Commitments

     We have  existing  contracts  with  pipeline  and natural gas  suppliers to
provide, transport and store natural gas for distribution.  Gas-related contract
cost commitments are  approximately  $40 million for 2003, $23 million for 2004,
$22 million for 2005, $7 million for 2006 and $1 million for 2007.

Leases

     We lease various facilities, office equipment and operating equipment under
operating  leases.  As of December 31, 2002,  rental expense,  included in Other
Operations and Maintenance  expenses,  totaled approximately $10 million (2001 -
$9 million; 2000 - $5 million).

Environmental Matters

     We are subject to various environmental  regulations by federal, state, and
local authorities.  From the beginning phases of siting and development,  to the
ongoing  operation of existing or new  electric  transmission  and  distribution
facilities,  our activities involve compliance with diverse laws and regulations
that address  emissions and impacts to air and water,  special,  protected,  and
cultural    resources    (such   as   wetlands,    endangered    species,    and
archeological/historical  resources),  chemical  and waste  handling,  and noise
impacts.  Our activities  require complex and often lengthy  processes to obtain
approvals,  permits,  or licenses  for new,  existing,  or modified  facilities.

                                       43

<PAGE>

Additionally,  the use and handling of various chemicals or hazardous  materials
(including  wastes)  requires   preparation  of  release  prevention  plans  and
emergency response  procedures.  As new laws or regulations are promulgated,  we
assess their  applicability  and implement the  necessary  modifications  to our
facilities or their operations,  as required.  The more significant  matters are
discussed below.

Remediation

     We are  involved in a number of  remediation  actions to clean up hazardous
waste sites as required by federal and state law.  Such  statutes  require  that
responsible  parties fund remediation  actions regardless of fault,  legality of
original  disposal,  or ownership of a disposal site. We have been identified by
the federal or state  governments as a potentially  responsible party at several
contaminated  sites. As part of the Transfer,  we have  contractually  agreed to
indemnify  Generating Company for remediation costs associated with pre-existing
environmental contamination at the sites of our former coal plants.

     We own or are otherwise  responsible for 13 former  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  our  Illinois   electric  and  natural  gas  utility   customers   through
environmental  adjustment  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,  2002,  the  total  costs  deferred,  net of
recoveries  from insurers and  environmental  adjustment  rate riders,  were $26
million.

     On July 30, 2002, the Illinois Attorney General's Office advised us that it
would be commencing an enforcement  action concerning an inactive waste disposal
site near  Coffeen,  Illinois,  which is the  location  of a  disposal  facility
permitted by the IEPA to receive fly ash from Generating Company's Coffeen power
plant.  The  Illinois  Attorney  General also  notified the disposal  facility's
current and former owners as to the proposed  enforcement  action.  The Attorney
General  advised  that it may  initiate an action  under  CERCLA to recover past
costs incurred at the site ($.3 million) and to obtain a declaratory judgment as
to liability for future costs.  Neither  Generating  Company,  nor us, the prior
owner of the Coffeen power plant,  owned or operated the disposal  facility.  We
believe  that  this  matter  will  not have a  material  adverse  effect  on our
financial position, results of operations or liquidity.

     In addition, our operations, or that of our predecessor companies,  involve
the use, disposal and, in appropriate  circumstances,  the cleanup of substances
regulated under  environmental  protection  laws. We are unable to determine the
impact these actions may have on our financial  position,  results of operations
or liquidity.

Labor Agreements

     Certain of our employees are represented by the  International  Brotherhood
of Electrical Workers (IBEW). These employees comprise  approximately 70% of our
workforce.  Labor agreements covering substantially all employees represented by
the IBEW expire by June 2003. We cannot predict what issues may be raised by the
collective bargaining units and, if raised, whether negotiations concerning such
issues will be successfully concluded.

Asbestos-Related Litigation

     We, along with Ameren and  AmerenUE,  have been named,  along with numerous
other  parties,  in a number  of  lawsuits  which  have  been  filed by  certain
plaintiffs claiming varying degrees of injury from asbestos exposure.  Most have
been filed in the Circuit Court of Madison County, Illinois. The number of total
defendants  named in each case is significant  with as many as 110 parties named
in a case to as few as six. However,  the average number of parties is 54 in the
cases that are currently pending.

     The claims filed against the Ameren  companies  allege injury from asbestos
exposure during the  plaintiffs'  activities at the Ameren  companies'  electric
generating plants (in the case of AmerenCIPS,  our 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.  A total of 121 such  lawsuits  have been filed  against  the Ameren
companies  of  which 45 are  pending,  14 have  been  settled  and 62 have  been
dismissed.

                                       44

<PAGE>

Regulation

     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, we are
unable to predict the impact of these changes on our future financial  position,
results of operations or liquidity. See Note 2 - Rate and Regulatory Matters for
further information.


NOTE 13 - 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 us for debt of  comparable
maturities.

     Carrying amounts and estimated fair values of our financial  instruments at
December 31, 2002 and 2001 were as follows:

================================================================================
                                                   2002             2001
--------------------------------------------------------------------------------
                                            Carrying   Fair    Carrying  Fair
                                             Amount    Value    Amount   Value
--------------------------------------------------------------------------------
Long-term debt (including current portion)    $579     $625      $612     $621
Preferred stock                                 80       72        80       69
================================================================================

                                       45

<PAGE>

NOTE 14 - Segment Information

     Our  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 us. We evaluate
the  performance  of our  segments  and  allocate  resources  to them,  based on
revenues and operating income.

     The table below  summarizes  information  about the  reported  revenues and
operating  income of our company for the years ended December 31, 2002, 2001 and
2000:

================================================================================
                            Electric              Gas                 Total
--------------------------------------------------------------------------------
2002
--------------------------------------------------------------------------------
Revenues                     $ 661               $ 163               $ 824
Operating income                39                   8                  47
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
Revenues                     $ 670               $ 170               $ 840
Operating income                36                   7                  43
--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Revenues                    $  717              $  177               $ 894
Operating income                77                  14                  91
================================================================================

     Specified items included in segment profit/loss for the year ended December
31, 2002, 2001 and 2000:

================================================================================
                               Electric          Gas           Total
--------------------------------------------------------------------------------
2002
--------------------------------------------------------------------------------
Depreciation, depletion
  and amortization expense      $  43           $  8           $ 51
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
Depreciation, depletion
  and amortization expense      $  41           $  8           $ 49
--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Depreciation, depletion
  and amortization expense      $  53           $  8           $ 61
================================================================================

     Specified item related to segment assets as of December 31, 2002,  2001 and
2000:

================================================================================
                               Electric          Gas           Total
--------------------------------------------------------------------------------
2002
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets         $  48           $  9           $ 57
--------------------------------------------------------------------------------
2001
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets         $  41           $  9           $ 50
--------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets         $  35           $  6           $  41
================================================================================

                                       46

<PAGE>

Note 15 - Subsequent Event

     On January 31,  2003,  after  receipt of the  necessary  regulatory  agency
approvals   and   clearance   from  the   Department   of   Justice   under  the
Hart-Scott-Rodino  Antitrust  Improvements Act, Ameren completed its acquisition
of all of the  outstanding  common  stock of  CILCORP  from AES.  CILCORP is the
parent company of Peoria,  Illinois-based  Central Illinois Light Company, which
operated as CILCO. With the acquisition,  CILCO became an Ameren subsidiary, but
remains a separate  utility  company,  operating as AmerenCILCO.  On February 4,
2003,  Ameren also completed its  acquisition of Medina Valley which  indirectly
owns  a  40  megawatt,   gas-fired  electric   co-generation   plant.  With  the
acquisition,  Medina  Valley  became  a  wholly-owned  subsidiary  of  Resources
Company,  and was renamed as AmerenEnergy  Medina Valley Cogen (No. 4), LLC. The
CILCORP and AmerenEnergy  Medina Valley Cogen (No. 4), LLC financial  statements
will be included in Ameren's  consolidated  financial  statements effective with
the January and February 2003 acquisition dates.

     Ameren  acquired  CILCORP  to  complement  its  existing  Illinois  gas and
electric operations.  The purchase includes CILCO's rate-regulated  electric and
natural gas  businesses in Illinois  serving  approximately  200,000 and 205,000
customers, respectively, of which approximately 150,000 are combination electric
and gas  customers.  CILCO's  service  territory  is  contiguous  to our service
territory.  CILCO  also  has a non  rate-regulated  electric  and gas  marketing
business  principally focused in the Chicago,  Illinois   region.  Finally,  the
purchase includes approximately 1,200 megawatts of largely coal-fired generating
capacity, most of which is expected to become non rate-regulated in 2003.

     The total  purchase  price was  approximately  $1.4  billion  and  included
Ameren's  assumption of CILCORP and Medina  Valley debt and  preferred  stock at
closing of approximately $900 million, with the balance of the purchase price of
approximately  $500 million paid with Ameren's cash on hand.  The purchase price
is subject to certain  adjustments for working capital and other changes pending
the  finalization of CILCORP's  closing balance sheet. The cash component of the
purchase  price came from Ameren's  issuances in September  2002 of 8.05 million
common shares and in early 2003 of 6.325 million common shares.


SELECTED QUARTERLY INFORMATION  (Unaudited)
--------------------------------


================================================================================
                                                                         Net
                                                                   Income/(Loss)
Quarter Ended                          Operating         Net       Available for
                         Operating      Income/        Income/         Common
                         Revenues       (Loss)         (Loss)       Stockholder
--------------------------------------------------------------------------------
March 31, 2002            $ 215          $  3          $  2            $  1
March 31, 2001              261            11            11              10
June 30, 2002               187            11             8               7
June 30, 2001               170             9            10              10
September 30, 2002          224            27            24              23
September 30, 2001          229            24            25              24
December 31, 2002  (a)      198             6            (8)             (8)
December 31, 2001           180            (1)            -              (2)
================================================================================

(a)  Amounts include  voluntary  retirement  charges of $14 million ($9 million,
     net of  taxes).  See Note 8 -  Voluntary  Retirement  Charges  for  further
     information.

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


                                       47

<PAGE>


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE.

          None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Information  concerning  directors  required to be reported by this item is
included  under Item (1):  Election of  Directors in our 2003  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.

     Information  required  to be  reported  by  this  item  is  included  under
Executive  Compensation in our 2003 definitive proxy statement filed pursuant to
Regulation 14A and is incorporated herein by reference.


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

     Information required to be reported by this item is included under Security
Ownership in our 2003  definitive  proxy  statement filed pursuant to Regulation
14A and is incorporated herein by reference.

     We do not have  any  equity  compensation  plans  under  which  our  equity
securities are authorized for issuance.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Information  required to be  reported  by this item is included  under Item
(1): Election of Directors in our 2003 definitive proxy statement filed pursuant
to Regulation 14A and is incorporated herein by reference.


ITEM 14.  CONTROLS AND PROCEDURES

     Within  90 days  prior  to the  date  of this  report,  we  carried  out an
evaluation,  under the  supervision  and with  participation  of our management,
including  our Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as
amended.  Based upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that our  disclosure  controls and procedures are
effective  in  timely  alerting  them  to  material   information   relating  to
AmerenCIPS, which is required to be included in our periodic SEC filings.

     There have been no significant changes in our internal controls or in other
factors which could  significantly  affect internal  controls  subsequent to the
date we carried out our evaluation.

                                       48

<PAGE>
<TABLE>
<CAPTION>
                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
          ON FORM 8-K.

     (A)  Financial Statements:

     (1)  Financial  Statements of Central Illinois Public Service Company which
          are required to be filed by Item 8 of this report.

                                                                                               Pages Herein
                                                                                               ------------
<S>      <C>                                                                                        <C>

            Report of Independent Accountants...............................................         24
            Balance Sheet - December 31, 2002 and 2001......................................         25
            Statement of Income - Years Ended December 31, 2002, 2001, and 2000.............         26
            Statement of Cash Flows - Years Ended December 31, 2002, 2001, and 2000.........         27
            Statement of Common Stockholder's Equity -
            Years Ended December 31, 2002, 2001 and 2000....................................         28
            Notes to Financial Statements...................................................         29
</TABLE>
<TABLE>
<CAPTION>

     (2)  Financial Statement Schedule

          The following  schedule,  for the years ended December 31, 2002,  2001
     and 2000, should be read in conjunction with the  aforementioned  financial
     state- ments (schedules not included have been omitted because they are not
     applicable  or the required data is shown in the  aforementioned  financial
     statements).


                                                                                               Pages Herein
                                                                                               ------------
<S>        <C>                                                                                      <C>

 Report of  Independent  Accountants on Financial
     Statement Schedule.....................................................................         24

     Valuation and Qualifying Accounts (Schedule II)........................................         53

</TABLE>

     (3)  Exhibits filed with this report are listed on the Exhibit Index.

     (B)  Reports on Form 8-K.

          We filed a report on Form 8-K dated  November 27, 2002  regarding  the
     filing of a request with the ICC for an increase in gas rates.

     (C)  Exhibits.

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

     3.1(i)         Restated Articles of Incorporation of Central Illinois
                    Public Service Company d/b/a AmerenCIPS (AmerenCIPS)
                    (March 31, 1994 Form 10-Q, Exhibit 3(b)).

     3.2(ii)   **   By-Laws of AmerenCIPS as amended effective January 21, 2003.

     4.1            Indenture of Mortgage or Deed of Trust dated October 1,
                    1941, from AmerenCIPS 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).

                                       49

<PAGE>

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

     4.2            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  AmerenCIPS  and the Trustees under the Indenture of
                    Mortgage  or Deed of Trust  referred to above as Exhibit 4.1
                    (Amended  Exhibit 7(b) in File No.  2-7341;  Second  Amended
                    Exhibit 7.03 in File No. 2-7795; Second Amended Exhibit 4.07
                    in File No. 2-9353; Amended Exhibit 4.05 in file No. 2-9802;
                    Amended  Exhibit 4.02 in File No.  2-10944;  Amended Exhibit
                    2.02 in File No.  2-13866;  Amended Exhibit 2.02 in File No.
                    2-14656;  Amended Exhibit 2.02 in File  No.2-21345;  Amended
                    Exhibit 2.02 in File No.  2-22326;  Amended  Exhibit 2.02 in
                    File No. 2-23569;  Amended Exhibit 2.02 in File No. 2-26284;
                    Amended  Exhibit 2.02 in File No.  2-36388;  Amended Exhibit
                    2.02 in File No.  2-39587;  Amended Exhibit 2.02 in File No.
                    2-41468;  Amended Exhibit 2.02 in File No. 2-43912;  Exhibit
                    2.03 in File No.  2-60232;  Amended Exhibit 2.02 in File No.
                    2-50146;  Amended Exhibit 2.02 in File No.  2-52886;  Second
                    Amended  Exhibit 2.04 in File No.  2-57141;  Amended Exhibit
                    2.04 in File No.  2-57557;  Amended Exhibit 2.06 in File No.
                    2-62564;  Exhibit  2.02(a)  in  File  No.  2-65914;  Amended
                    Exhibit  2.02(a) in File No.  2-66380;  and Amended  Exhibit
                    4.02 in File No. 33-3188; Exhibit 4.02 to Form 8-K dated May
                    15,  1992;  Exhibit  4.02 to Form 8-K  dated  July 1,  1992;
                    Exhibit 4.02 to Form 8-K dated  September 15, 1992;  Exhibit
                    4.02 to Form 8-K dated March 30, 1993;  Exhibit 4.03 to Form
                    8-K dated June 5, 1995; Exhibit 4.03 to Form 8-K dated March
                    15,  1997;  Exhibit  4.03 to Form 8-K  dated  June 1,  1997;
                    Exhibit 4.2, in File No. 333-59438;  and Exhibit 4.1 to June
                    30, 2001 Form 10-Q.)

     4.3            Indenture  dated as of December 1, 1998 from  AmerenCIPS  to
                    The Bank of New York  relating to Senior  Notes,  5.375% due
                    2008 and 6.125% due 2028 (File No. 333-59438, Exhibit 4.4).

    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 Corporation (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 Transfer Agreement between AmerenEnergy Generating
                    Company (Generating Company) and AmerenCIPS (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).

                                       50

<PAGE>

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

       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
                    AmerenCIPS (File No. 333-56594, Exhibit 10.3).

       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,
                    AmerenCIPS  and  Union   Electric   Company  d/b/a  AmerenUE
                    (AmerenUE) (File No. 333-56594, Exhibit 10.4).

       10.17        Amended and Restated Appendix I ITC Agreement dated February
                    14, 2003 between the Midwest Independent Transmission System
                    Operator,   Inc.   (Midwest   ISO)   and   GridAmerica   LLC
                    (GridAmerica) (Ameren 2002 Form 10-K, Exhibit 10.17).

       10.18        Amended and Restated Limited  Liability Company Agreement of
                    GridAmerica  dated February 14, 2003 (Ameren 2002 Form 10-K,
                    Exhibit 10.18).

       10.19        Amended  and   Restated   Master   Agreement  by  and  among
                    GridAmerica,    GridAmerica   Holdings   Inc.,   GridAmerica
                    Companies  and  National  Grid USA dated  February  14, 2003
                    (Ameren Form 10-K, Exhibit 10.19).

       10.20        Amended  and  Restated  Operation  Agreement  by  and  among
                    AmerenUE,  AmerenCIPS,  American  Transmission Systems Inc.,
                    Northern  Indiana  Public  Service  Company and  GridAmerica
                    dated  February  14, 2003  (Ameren  2002 Form 10-K,  Exhibit
                    10.20).


       12.2   **    Statement  of  Computations  of Ratio of  Earnings  to Fixed
                    Charges and Preferred Stock Dividend Requirements.

       23.1   **    Consent of Independent Accountants.

       99.1   **    Certificate of Chief Executive  Officer  required by Section
                    906 of the Sarbanes-Oxley Act of 2002.

       99.2   **    Certificate of Chief Financial  Officer  required by Section
                    906 of the Sarbanes-Oxley Act of 2002.

--------------------
*         Management compensatory plan or arrangement.
**        Filed herewith.

                                       51

<PAGE>




                         Exhibits Available Upon Request

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

          Loan Agreement dated January 1, 1993,  between AmerenCIPS 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  AmerenCIPS  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  AmerenCIPS 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  AmerenCIPS 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.

          Reports of AmerenEnergy Generating Company on Forms 8-K, 10-Q and 10-K
          are on file with the SEC under File Number 333-56594.

          Reports of CILCORP Inc. on Forms 8-K, 10-Q and 10-K are on file with
          the SEC under File Number 1-8946.

          Reports Central Illinois Light Company on Forms 8-K, 10-Q and 10-K are
          on file with the SEC under File Number 1-2732.

                                       52

<PAGE>
<TABLE>
<CAPTION>

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000



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


                                                                           Additions
                                                                  ---------------------------
                                                                     (1)             (2)
<S>                                            <C>              <C>            <C>                  <C>                <C>
                                                Balance at        Charged to                                             Balance at
                                                beginning         costs and       Charged to                               end of
                                                of period         expenses      other accounts        Deductions           period
                                                ----------        ----------    --------------        ----------         ----------
                                                                                                        (Note)
Year ended December 31, 2002

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

    Allowance for doubtful accounts            $1,497,251         $5,487,000                          $5,724,449          $1,259,802
                                               ==========         ==========                          ==========          ==========




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

</TABLE>


Note:  Uncollectible accounts charged off, less recoveries.

                                       53

<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 24, 2003            By      /s/ Gary L. Rainwater
                                   -------------------------------------------
                                             Gary. 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 24, 2003
       Gary L. Rainwater      Officer and Director
                              (Principal Executive Officer)

   /s/ Warner L. Baxter       Senior Vice President and         March 24, 2003
---------------------------   Director
       Warner L. Baxter       (Principal Financial Officer)


   /s/ Martin J. Lyons        Vice President and Controller     March 24, 2003
---------------------------   (Principal Accounting Officer)
       Martin J. Lyons


   /s/ Paul A. Agathen        Senior Vice President             March 24, 2003
---------------------------   Director
       Paul A. Agathen


   /s/ Thomas R. Voss         Senior Vice President and         March 24, 2003
---------------------------   Director
       Thomas R. Voss


   /s/ Charles W. Mueller     Director                          March 24, 2003
---------------------------
       Charles W. Mueller


                                 CERTIFICATIONS

     I, Gary L. Rainwater, certify that:

     1.   I have reviewed  this annual  report on Form 10-K of Central  Illinois
Public Service Company;

     2.   Based on my knowledge,  this annual report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3.   Based on my knowledge,  the financial statements,  and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4.   The registrant's  other  certifying  officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

                                       54

<PAGE>

                           CERTIFICATIONS (CONTINUED)

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6.   The registrant's other certifying officer and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.



Date:  March 24, 2003                        /s/ Gary L. Rainwater
                                  ----------------------------------------------
                                                 Gary L. Rainwater
                                                 Chief Executive Officer

     I, Warner L. Baxter, certify that:

     1.   I have reviewed  this annual  report on Form 10-K of Central  Illinois
Public Service Company;

     2.   Based on my knowledge,  this annual report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3.   Based on my knowledge,  the financial statements,  and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4.   The registrant's  other  certifying  officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officer and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

                                       55

<PAGE>

                           CERTIFICATIONS (CONTINUED)

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

     6.   The registrant's other certifying officer and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.



Date:  March 24, 2003                       /s/ Warner L. Baxter
                                 -----------------------------------------------
                                                Warner L. Baxter
                                                Chief Financial Officer

                                       56

<PAGE>




                                  EXHIBIT INDEX


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

  3.1(i)       Restated  Articles of  Incorporation  of Central  Illinois Public
               Service  Company d/b/a  AmerenCIPS  (AmerenCIPS)  (March 31, 1994
               Form 10-Q, Exhibit 3(b)).

  3.2(ii)  **  By-Laws of AmerenCIPS as amended effective January 21, 2003.

  4.3          Indenture  of Mortgage  or Deed of Trust  dated  October 1, 1941,
               from AmerenCIPS 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).

   4.4         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  AmerenCIPS  and the Trustees under the Indenture of
               Mortgage  or Deed of  Trust  referred  to above  as  Exhibit  4.1
               (Amended Exhibit 7(b) in File No. 2-7341;  Second Amended Exhibit
               7.03 in File No. 2-7795;  Second Amended Exhibit 4.07 in File No.
               2-9353;  Amended Exhibit 4.05 in file No. 2-9802; Amended Exhibit
               4.02  in File  No.  2-10944;  Amended  Exhibit  2.02 in File  No.
               2-13866;  Amended  Exhibit  2.02 in  File  No.  2-14656;  Amended
               Exhibit 2.02 in File No.2-21345; Amended Exhibit 2.02 in File No.
               2-22326;  Amended  Exhibit  2.02 in  File  No.  2-23569;  Amended
               Exhibit 2.02 in File No.  2-26284;  Amended  Exhibit 2.02 in File
               No. 2-36388;  Amended  Exhibit 2.02 in File No. 2-39587;  Amended
               Exhibit 2.02 in File No.  2-41468;  Amended  Exhibit 2.02 in File
               No. 2-43912;  Exhibit 2.03 in File No.  2-60232;  Amended Exhibit
               2.02  in File  No.  2-50146;  Amended  Exhibit  2.02 in File  No.
               2-52886; Second Amended Exhibit 2.04 in File No. 2-57141; Amended
               Exhibit 2.04 in File No.  2-57557;  Amended  Exhibit 2.06 in File
               No. 2-62564; Exhibit 2.02(a) in File No. 2-65914; Amended Exhibit
               2.02(a) in File No. 2-66380; and Amended Exhibit 4.02 in File No.
               33-3188;  Exhibit  4.02 to Form 8-K dated May 15,  1992;  Exhibit
               4.02 to Form 8-K dated  July 1,  1992;  Exhibit  4.02 to Form 8-K
               dated  September  15, 1992;  Exhibit 4.02 to Form 8-K dated March
               30, 1993;  Exhibit  4.03 to Form 8-K dated June 5, 1995;  Exhibit
               4.03 to Form 8-K dated March 15,  1997;  Exhibit 4.03 to Form 8-K
               dated June 1,  1997;  Exhibit  4.2,  in File No.  333-59438;  and
               Exhibit 4.1 to June 30, 2001 Form 10-Q.)

      4.3      Indenture  dated as of  December 1, 1998 from  AmerenCIPS  to The
               Bank of New York  relating to Senior  Notes,  5.375% due 2008 and
               6.125% due 2028 (File No. 333-59438, Exhibit 4.4).

     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  Corporation  (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).

                                       57

<PAGE>

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

     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 Transfer Agreement between AmerenEnergy  Generating Company
               (Generating  Company)  and  AmerenCIPS  (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
               AmerenCIPS (File No. 333-56594, Exhibit 10.3).

     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,
               AmerenCIPS and Union Electric  Company d/b/a AmerenUE  (AmerenUE)
               (File No. 333-56594, Exhibit 10.4).

     10.21     Amended and Restated  Appendix I ITC Agreement dated February 14,
               2003  between  the  Midwest   Independent   Transmission   System
               Operator,  Inc.  (Midwest ISO) and GridAmerica LLC  (GridAmerica)
               (Ameren 2002 Form 10-K, Exhibit 10.17).

     10.22     Amended and  Restated  Limited  Liability  Company  Agreement  of
               GridAmerica  dated  February  14,  2003  (Ameren  2002 Form 10-K,
               Exhibit 10.18).

     10.23     Amended and Restated Master  Agreement by and among  GridAmerica,
               GridAmerica  Holdings  Inc.,  GridAmerica  Companies and National
               Grid USA dated  February  14,  2003  (Ameren  Form 10-K,  Exhibit
               10.19).

     10.24     Amended and Restated  Operation  Agreement by and among AmerenUE,
               AmerenCIPS,  American Transmission Systems Inc., Northern Indiana
               Public Service  Company and  GridAmerica  dated February 14, 2003
               (Ameren 2002 Form 10-K, Exhibit 10.20).

     12.2  **  Statement of  Computations  of Ratio of Earnings to Fixed Charges
               and Preferred Stock Dividend Requirements.

     23.1  **  Consent of Independent Accountants.
     99.1  **  Certificate of Chief Executive Officer required by Section 906 of
               the Sarbanes-Oxley Act of 2002.
     99.2  **  Certificate of Chief Financial Officer required by Section 906 of
               the Sarbanes-Oxley Act of 2002.

--------------------
*         Management compensatory plan or arrangement.
**        Filed herewith.

                                       58

<PAGE>

                         Exhibits Available Upon Request

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

          Loan Agreement dated January 1, 1993,  between AmerenCIPS 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  AmerenCIPS  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  AmerenCIPS 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  AmerenCIPS 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.

       Reports of AmerenEnergy Generating Company on Forms 8-K, 10-Q and 10-K
       are on file with the SEC under File Number 333-56594.

       Reports of CILCORP Inc. on Forms 8-K, 10-Q and 10-K are on file with the
       SEC under File Number 1-8946.

       Reports Central Illinois Light Company on Forms 8-K, 10-Q and 10-K are on
       file with the SEC under File Number 1-2732.

                                       59

<PAGE>

                                                                 Exhibit 3.2(ii)


                                                             BYLAWS

                                                           AS AMENDED
                                                       TO AND INCLUDING
                                                       JANUARY 21, 2003

                                                       CENTRAL ILLINOIS
                                                        PUBLIC SERVICE
                                                            COMPANY

<PAGE>

                                     BYLAWS
                                       OF
                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY



                                    ARTICLE I
                              SHARES AND TRANSFERS

     Section 1. Each holder of duly paid shares of the Company shall be entitled
to a certificate or certificates stating the number and class of shares owned by
such holder.  Such certificates  shall be signed by the appropriate  officers of
the Company (which, in the absence of contrary action by the Board, shall be the
President or any Vice President and the Secretary or any Assistant  Secretary of
the Company); shall be sealed with the corporate seal of the Company, which seal
may  be  facsimile;  and  shall  be  countersigned  by  a  Transfer  Agent,  and
countersigned  and  registered  by a  Registrar,  appointed  by the Board.  If a
certificate  is  countersigned  by  a  Transfer  Agent  and   countersigned  and
registered by a Registrar,  other (in each case) than the Company  itself or its
employee,  the signature of either or both of such officers of the Company,  and
the countersignature of any such Transfer Agent or its officer or employee,  may
be facsimiles. In case any officer of the Company, or any officer or employee of
a Transfer Agent,  who has signed or whose  facsimile  signature has been placed
upon any such  certificate  shall  cease to be an officer  of the  Company or an
officer or an employee of the Transfer  Agent,  as the case may be,  before such
certificate  is issued,  the  certificate  may be issued by the Company with the
same effect as if such officer of the Company or such officer or employee of the
Transfer  Agent  had  not  ceased  to be  such  at the  date  of  issue  of such
certificate.

     Section 2. Shares  shall be  transferable  only on the books of the Company
and upon proper  endorsement  and surrender of the  outstanding  certificate  or
certificates  representing such shares.  If an outstanding  certificate shall be
lost,  destroyed or stolen,  the holder thereof may have a new certificate  upon
producing  evidence  satisfactory  to the Company of such loss,  destruction  or
theft and upon  furnishing to the Company,  the Transfer Agent and the Registrar
indemnity deemed sufficient by the Company.

     Section 3.  Notwithstanding the foregoing provisions of this Article I, the
Board of Directors may also provide by resolution that some or all of any or all
classes and series of its shares shall be uncertificated  shares,  provided that
such  resolution  shall not apply to shares  represented by a certificate  until
such certificate is surrendered to the Company.  Except as otherwise provided by
statute, the rights and obligations of the holders of uncertificated  shares and
the rights and obligations of the holders of certificates representing shares of
the same class and series shall be identical.


                                       -2-

<PAGE>


                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS

     Section 1. The  annual  meeting  of the  shareholders  shall be held on the
fourth  Tuesday in April of each year (or if such day shall be a legal  holiday,
then upon the next  succeeding  day not a legal  holiday) or upon such other day
determined by resolution  of the Board of  Directors.  Each such regular  annual
meeting shall be held at such time and at such  location,  within or without the
State of  Illinois,  as the  Board of  Directors  shall  order.  At such  annual
meeting,  a board of directors shall be elected and such other business shall be
transacted as may properly come before such meeting.

     Section  2.  Special  meetings  of the  shareholders  may be  called by the
President,  by the Board of Directors, by the holders of not less than one-fifth
of all the  outstanding  shares  entitled  to vote on the  matter  for which the
meeting is called,  or in such other manner as may be provided by statute.  Each
such special meeting shall be held at such location, within or without the State
of Illinois, as the Board of Directors shall order.

     Section 3.  Written  notice of the place,  day and hour of each  meeting of
shareholders and, in the case of a special meeting,  the purpose or purposes for
which  the  meeting  is  called,  shall be given to each  shareholder  of record
entitled to vote at such meeting. Such notice shall be sent by mail to each such
shareholder,  at the address of such shareholder as it appears on the records of
the  Company,  not less than ten days or more than sixty days before the date of
the meeting,  except in cases where some other  special  method of notice may be
required by  statute,  in which case the  statutory  method  shall be  followed.
Notice of any  meeting  of the  shareholders  may be waived by any  shareholder.
Attendance of a shareholder  (either in person or by proxy) at any meeting shall
constitute  waiver of notice  thereof  unless the  shareholder  (in person or by
proxy,  as the case may be) at the meeting objects to the holding of the meeting
because proper notice was not given.

     Section  4.  At  any  shareholders'   meeting  a  majority  of  the  shares
outstanding and entitled to vote on the matter  (excluding such shares as may be
owned by the  Company)  must be  represented  (either  in person or by proxy) in
order  to  constitute  a  quorum  for  consideration  of  such  matter,  but the
shareholders  represented at any meeting, though less than a quorum, may adjourn
the  meeting  to some other day or sine die.  If a quorum is present  (either in
person or by proxy) at a  shareholders'  meeting,  the  affirmative  vote of the
holders of the  majority of shares  represented  at the meeting and  entitled to
vote on a matter  shall  be the act of the  shareholders,  unless  the vote of a
greater  number or voting by classes shall be required by law or the Articles of
Incorporation.

     Section 5. The President and Secretary of the Company shall act as Chairman
and  Secretary,   respectively,   of  each  shareholders'  meeting,  unless  the
shareholders represented at the meeting shall otherwise decide.

                                      -3-

<PAGE>

     Section 6. (a) (1)  Nominations  of persons  for  election  to the Board of
Directors  of the Company and the proposal of business to be  considered  by the
stockholders  may be made at an annual meeting of  stockholders  (a) pursuant to
the  Company's  notice of meeting,  (b) by or at the  direction  of the Board of
Directors  or (c) by any  stockholder  of the Company who was a  stockholder  of
record at the time of giving  of'  notice  provided  for in this  Bylaw,  who is
entitled to vote at the meeting and who complies with the notice  procedures set
forth in this Bylaw.

     (2)  For  nominations  or other  business to be properly  brought before an
annual  meeting by a stockholder  pursuant to clause (c) of paragraph (a) (1) of
this Bylaw,  the stockholder must have given timely notice thereof in writing to
the Secretary of the Company and such other  business must otherwise be a proper
matter for stockholder  action.  To be timely,  a stockholder's  notice shall be
delivered to the Secretary at the principal executive offices of the Company not
later than the close of business  on the 60th day nor earlier  than the close of
business on the 90th day prior to the first  anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is more than 30 days before or more than 60 days after such  anniversary
date,  notice by the  stockholder  to be timely must be so delivered not earlier
than the close of business on the 90th day prior to such annual  meeting and not
later  than the  close of  business  on the  later of the 60th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such  meeting is first made by the  Company.  In no event  shall the
public  announcement of an adjournment of an annual meeting  commence a new time
period  for the  giving of a  stockholder's  notice  as  described  above.  Such
stockholder's  notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director,  all information
relating to such person that is required to be  disclosed  in  solicitations  of
proxies  for  election of  directors  in an election  contest,  or is  otherwise
required,  in each case pursuant to Regulation 14A under the Securities Exchange
Act of  1934,  as  amended  (the  "Exchange  Act")  and Rule  14a-11  thereunder
(including  such person's  written consent to being named in the proxy statement
as a nominee  and to  serving  as a director  if  elected);  (b) as to any other
business  that the  stockholder  proposes to bring before the  meeting,  a brief
description  of the  business  desired to be brought  before  the  meeting,  the
reasons for conducting such business at the meeting and any material interest in
such business of such  stockholder  and the beneficial  owner,  if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such  stockholder,  as they appear on the  Company's
books,  and of such beneficial  owner and (ii) the class and number of shares of
the Company which are owned  beneficially  and of record by such stockholder and
such beneficial owner.

     (3)  Notwithstanding  anything in the second  sentence of paragraph (a) (2)
of this Bylaw to the  contrary,  in the event that the number of directors to be
elected to the Board of Directors  of the Company is  increased  and there is no
public  announcement  by the Company  naming all of the nominees for director or
specifying  the size of the increased  Board of Directors at least 70 days prior
to the first anniversary of the preceding year's annual meeting, a stockholder's
notice  required by this Bylaw shall also be  considered  timely,  but only with
respect to nominees for any new positions created by such increase,  if it shall
be delivered to the Secretary at the principal  executive offices of the Company
not later than the close of business on

                                      -4-

<PAGE>

the 10th day following the day on which such public  announcement  is first made
by the Company.

          (b)  Only such  business  shall be conducted  at a special  meeting of
stockholders  as shall have been  brought  before the  meeting  pursuant  to the
Company's notice of meeting. Nominations of persons for election to the Board of
Directors may be made at a special  meeting of  stockholders  at which directors
are to be elected  pursuant to the Company's  notice of meeting (1) by or at the
direction of the Board of Directors or (2) provided  that the Board of Directors
has  determined  that  directors  shall  be  elected  at  such  meeting,  by any
stockholder  of the Company who is a stockholder of record at the time of giving
of notice  provided  for in this  Bylaw,  who shall be  entitled  to vote at the
meeting and who complies with the notice  procedures set forth in this Bylaw. In
the event the Company calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors,  any such  stockholder
may  nominate a person or persons  (as the case may be),  for  election  to such
position(s)   as  specified  in  the  Company's   notice  of  meeting,   if  the
stockholder's  notice  required  by  paragraph  (a) (2) of this  Bylaw  shall be
delivered to the Secretary,  at the principal  executive  offices of the Company
not earlier  than the close of  business  on the 90th day prior to such  special
meeting  and not later than the close of  business  on the later of the 60th day
prior to such special  meeting or the 10th day following the day on which public
announcement  is  first  made of the  date  of the  special  meeting  and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event  shall the public  announcement  of an  adjournment  of a special  meeting
commence a new time period for the giving of a stockholder's notice as described
above.

          (c)  (1) Only such persons who are  nominated in  accordance  with the
procedures  set forth in this Bylaw shall be eligible to serve as directors  and
only such business shall be conducted at a meeting of stockholders as shall have
been brought  before the meeting in accordance  with the procedures set forth in
this  Bylaw.   Except  as  otherwise  provided  by  statute,   the  Articles  of
Incorporation or these Bylaws,  the chairman of the meeting shall have the power
and duty to  determine  whether a  nomination  or any  business  proposed  to be
brought  before  the  meeting  was made or  proposed,  as the  case  may be,  in
accordance  with the  procedures  set forth in this Bylaw and,  if any  proposed
nomination  or business is not in  compliance  with this Bylaw,  to declare that
such defective proposal or nomination shall be disregarded.

     (2)  For  purposes  of  this  Bylaw,   "public   announcement"  shall  mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Company with the Securities and Exchange  Commission  pursuant to Section 13, 14
or 15(d) of the Exchange Act.

     (3)  Notwithstanding the foregoing  provisions of this Bylaw, a stockholder
shall also comply with all applicable  requirements  of the Exchange Act and the
rules and  regulations  thereunder with respect to the matters set forth in this
Bylaw.  Nothing  in this  Bylaw  shall be  deemed to affect  any  rights  (a) of
stockholders to request  inclusion of proposals in the Company's proxy statement
pursuant  to Rule  14a-8  under the  Exchange  Act or (b) of the  holders of any
series of Preferred Stock to elect directors under specified circumstances.

                                      -5-

<PAGE>

                                   ARTICLE III
                               BOARD OF DIRECTORS

     Section 1. The business  and affairs of the Company  shall be managed by or
under the  direction of the Board of Directors  consisting of not less than four
or more than fifteen  members.  The exact number of directors within the minimum
and maximum limitations  specified in the preceding sentence shall be fixed from
time to time by the Board of  Directors  pursuant to a  resolution  adopted by a
majority  of the entire  Board of  Directors.  The Board of  Directors  shall be
elected at each annual meeting of the  shareholders,  but, if for any reason the
election shall not be held at an annual meeting,  it may be subsequently held at
any special  meeting of the  shareholders  after  proper  notice.  Directors  so
elected  shall  hold  office  until  the  next  succeeding   annual  meeting  of
shareholders or until their respective successors,  willing to serve, shall have
been  elected and  qualified.  Any vacancy  occurring  in the Board of Directors
arising between  meetings of shareholders by reason of an increase in the number
of  directors  or  otherwise  may be filled by a majority  of the members of the
Board.

     Section  2. A meeting of the Board of  Directors  shall be held on the same
date as the annual meeting of shareholders in each year, at the same place where
such  annual  meeting  shall have been held or at such  other  place as shall be
determined  by the Board.  Regular  meetings  of the Board shall be held in such
place,  within or without the State of Illinois,  and on such dates each year as
shall be  established  from  time to time by the  Board.  Notice  of every  such
regular  meeting of the Board,  stating the place,  day and hour of the meeting,
shall be given to each  director  personally,  or by telegraph or other  written
means of  electronic  communication,  or by  depositing  the  same in the  mails
properly  addressed,  at least two days before the date of such meeting.  Except
where  required by statute,  neither the business to be  transacted  at, nor the
purpose of, any regular or special meeting of the Board need be specified in the
notice or waiver of notice of such meeting.

     Section 3. Special  meetings of the Board of Directors may be called at any
time by the President,  or by a Vice President,  when acting as President, or by
any two directors.  Notice of such meeting,  stating the place,  day and hour of
the  meeting  shall be given  to each  director  personally  in  writing,  or by
telegraph or other written means of electronic  communication,  or by depositing
the same in the mails  properly  addressed,  or  orally  promptly  confirmed  by
written notice in any one of the aforesaid forms, not less than the day prior to
the date of such meeting.

     Section  4.  Notice  of any  meeting  of the  Board  may be  waived  by any
director.  Attendance  of a director at any meeting shall  constitute  waiver of
notice of such meeting except where a director attends a meeting for the express
purpose of objecting to the  transaction of any business at the meeting  because
the meeting is not lawfully called or convened.

     Section 5. A majority of the Board of Directors  shall  constitute a quorum
for the  transaction  of business  at any meeting of the Board,  but less than a
majority of the Board may adjourn the meeting to some other day or sine die. The
act of the majority of the  directors  present at a meeting at which a quorum is
present shall be the act of the Board unless the vote of

                                      -6-

<PAGE>

a greater number or the vote of any class of directors  shall be required by the
Articles of Incorporation. The President of the Company shall act as Chairman at
each meeting of the Board but, in the President's  absence, one of the directors
present at the meeting  who shall have been  elected for the purpose by majority
vote of those directors in attendance  shall act as Chairman;  and the Secretary
of the Company, or in the Secretary's stead, an Assistant Secretary shall act as
Secretary  at each such  meeting.  The members of the Board shall  receive  such
compensation as the Board may from time to time by resolution determine.


                                   ARTICLE IV
                      COMMITTEES OF THE BOARD OF DIRECTORS

     Section 1. A majority  of  directors  may appoint  committees,  standing or
special, from time to time from among members of the Board, and confer powers on
such  committees  and revoke such powers and  terminate  the  existence  of such
committees at its pleasure.

     Section 2.  Meetings of any  committee may be called in such manner and may
be held at such times and places as such committee may by resolution  determine,
provided  that a  meeting  of any  committee  may be  called  at any time by the
President  of  the  Company.  Members  of  all  committees  shall  receive  such
compensation  as the  Board of  Directors  may from  time to time by  resolution
determine.

     Section  3.  Each  committee  shall  have  such  authority  of the Board of
Directors as shall be granted to it by the Board; provided, however, a committee
may not take any action not permitted to be taken by a committee pursuant to the
Business Corporation Act of 1983, as amended from time to time.



                                    ARTICLE V
                                    OFFICERS

     Section 1. There shall be elected by the Board of Directors (if practicable
at its first  meeting  after the annual  election of directors in each year) the
following  principal  officers,   namely:  A  President,  such  number  of  Vice
Presidents  as the Board may from time to time  decide  upon (any one or more of
whom may be designated as Executive  Vice  President,  Senior Vice  President or
otherwise),  a Secretary,  a Treasurer  and a  Controller.  References  in these
Bylaws to Vice  Presidents  shall  include any such  Executive  Vice  President,
Senior Vice President or other Vice President,  however  denominated.  The Board
may in its discretion also elect such other officers as may from time to time be
provided  for by the  Board.  Any two or more  offices  may be held by the  same
person. All officers, unless sooner removed, shall hold their respective offices
until the first  meeting  of the Board of  Directors  after the next  succeeding
annual election of directors and until their successors, willing to serve, shall
have been  elected,  but any  officer,  including  any officer  appointed by the
President as provided in Section 2 of this Article V, may

                                      -7-

<PAGE>

be removed from office at the pleasure of the Board.  Election or appointment of
an officer shall not of itself create contract rights.

     Section  2. The  President  shall be the  chief  executive  officer  of the
Company  and shall have the general  management  and  direction,  subject to the
control of the Board of Directors, of the business of the Company, including the
power to appoint and to remove and  discharge  any and all  assistant  officers,
agents and  employees  of the Company not elected or  appointed  directly by the
Board of  Directors.  The President may execute for and on behalf of the Company
any contracts,  deeds,  mortgages,  leases,  bonds, or other instruments and may
accomplish  such  execution  either under or without the seal of the Company and
either individually or with the Secretary, any Assistant Secretary, or any other
officer or person thereunto  authorized by the Board of Directors,  according to
the  requirements of the form of the  instrument.  The President shall have such
other powers and duties as usually  devolve upon the president of a corporation,
and such further powers and duties as may from time to time be prescribed by the
Board of  Directors.  The  President may delegate any part of the duties of that
office to one or more of the Vice Presidents of the Company.

     Section 3. Each of the Vice Presidents shall have such powers and duties as
may be  prescribed  for  such  office  by the  Board of  Directors  or as may be
prescribed  for or  delegated  to  such  officer  by the  President.  Each  Vice
President  may execute for and on behalf of the  Company any  contracts,  deeds,
mortgages,  leases,  bonds, or other instruments in each case in accordance with
the authority therefor granted by the President or the Board of Directors, which
authority may be general or confined to specific  instances.  Such execution may
be  accomplished  either  individually  or with  any  other  officer  or  person
thereunto  authorized by the  President or the Board of Directors,  according to
the  requirements of the form of the instrument.  In the absence or inability of
the President or in case of the President's  death,  resignation or removal from
office,  the powers and duties of the President shall  temporarily  devolve upon
such one of the Vice  Presidents  as the Board  shall have  designated  or shall
designate for the purpose and the Vice  President so  designated  shall have and
exercise  all the powers  and duties of the  President  during  such  absence or
disability or until the vacancy in the office of President shall be filled. Each
Vice  President  may delegate any part of the duties of that office to employees
of the Company under such Vice President's supervision.

     Section  4.  The  Secretary  shall  attend  all  meetings  of the  Board of
Directors,  shall keep a true and faithful  record thereof in proper books to be
provided for that purpose,  and shall have the custody and care of the corporate
seal, records,  minutes and stock books of the Company. The Secretary shall also
act as  Secretary  of all  shareholders'  meetings,  and keep a record  thereof,
except  to the  extent  some  other  person  may have  been  selected  to act as
Secretary by such  meeting.  The Secretary  shall keep a suitable  record of the
addresses of shareholders, shall have general charge of the stock transfer books
of the Company,  and shall, except as may be otherwise required by statute or by
the  Bylaws,  sign,  issue and  publish all  notices  required  for  meetings of
shareholders  and for meetings of the Board of Directors.  The  Secretary  shall
sign all share  certificates,  bonds and mortgages,  and all other documents and
papers to which the Secretary's signature may be necessary or appropriate, shall
affix the seal,  and shall  have such other  powers  and duties as are  commonly
incidental to the office of Secretary or as may be  prescribed  for or

                                      -8-

<PAGE>

delegated to that office by the Board of  Directors,  by the  President,  or, if
authorized by the Board or the President to prescribe such powers and duties, by
a Vice  President.  The  Secretary  may  delegate any part of the duties of that
office to employees of the Company under the Secretary's supervision.

     Section 5. The Treasurer shall have charge of, and be responsible  for, the
collection,  receipt,  custody and disbursement of the funds of the Company, and
the  deposit  of its  funds  in the name of the  Company  in such  banks,  trust
companies or safety vaults as the Board of Directors may direct which  direction
may be general or confined to specific  depositories.  The Treasurer  shall have
custody of such books, receipted vouchers and other papers and records as in the
practical  business  operations  of the Company  shall  naturally  belong in the
office or custody of the  Treasurer  or as shall be placed in the custody of the
Treasurer by the Board of Directors, by the President,  or, if authorized by the
Board or the President, by a Vice President. The Treasurer shall have such other
powers and duties as are  commonly  incidental  to the office of Treasurer or as
may be prescribed for or delegated to that office by the Board of Directors,  by
the President, or, if authorized by the Board or the President to prescribe such
powers and duties, by a Vice President.  The Treasurer may be required to give a
bond to the Company for the faithful  discharge of the  Treasurer's  duties,  in
such form and in such amount and with such  sureties as shall be  determined  by
the Board of Directors.  The Treasurer may delegate any part of the  Treasurer's
duties to employees of the Company under the Treasurer's supervision.

     Section 6. The Controller shall be the principal  accounting officer of the
Company.  Except as  otherwise  provided in these Bylaws and except as otherwise
provided by the Board of Directors,  the Controller  will be responsible for the
direction of the auditing  organization  of the Company (other than the Internal
Audit function), the establishment and maintenance of accounting procedures, the
interpretation of all financial statements and accounting reports of the Company
and  functional  supervision  over the records of all other  departments  of the
Company  pertaining  to  revenues,  expenses,  moneys,  securities,  properties,
materials and supplies.  The Controller  shall have such other powers and duties
as are commonly  incidental  to the office of Controller or as may be prescribed
for or delegated to the Controller by the Board of Directors,  by the President,
or, if  authorized  by the Board or the  President to prescribe  such powers and
duties,  by a Vice  President.  The Controller may be required to give a bond to
the Company for the faithful discharge of the Controller's  duties, in such form
and in such amount and with such sureties as shall be determined by the Board of
Directors.  The Controller may delegate any part of the  Controller's  duties to
employees of the Company under the Controller's supervision.

     Section 7. The Assistant Vice Presidents, Assistant Secretaries,  Assistant
Treasurers  and  Assistant  Controllers  shall,  respectively,  assist  the Vice
Presidents,  the  Secretary,  the Treasurer and the Controller of the Company in
the  performance of the respective  duties  assigned to such principal  officers
and, in assisting the  respective  principal  officer,  each  assistant  officer
shall,  for such  purposes,  have the same  powers as the  respective  principal
officer.  The  powers  and  duties of any  principal  officer  shall,  except as
otherwise  ordered  by the  Board of  Directors,  temporarily  devolve  upon the
respective assistant in case of the absence,  disability,  death, resignation or
removal from office of such principal officer.

                                      -9-

<PAGE>

                                   ARTICLE VI
                                  MISCELLANEOUS

     Section 1. The funds of the  Company  shall be  deposited  to its credit in
such banks or trust companies, as the Board of Directors from time to time shall
approve,  which approval may be general or confined to specific instances.  Such
funds shall be  withdrawn  only on checks or drafts of the Company or by direct,
wire or other  electronic  transfer of funds for the  purposes of the Company in
accordance with procedures relating to signatures and authorizations by officers
of the Company  which are approved by the Board of Directors  from time to time,
which approval may be general or confined to specific instances.

     Section 2. No debts shall be contracted  except for current expenses unless
authorized  by the  Board  of  Directors,  and no  bills  shall  be  paid by the
Treasurer  unless audited and approved by the Controller or by some other person
or committee authorized by the Board of Directors to audit and approve bills for
payment.

     Section 3. All  distributions  to shareholders  and all acquisitions by the
Company of its own shares shall be authorized by the Board of Directors.

     Section  4.  The  fiscal  year of the  Company  shall  close  at the end of
December annually.

     Section  5. All or any  shares  of stock  of any  corporation  owned by the
Company may be voted at any meeting of the  shareholders of such  corporation by
the  President,  any Vice  President  or the  Secretary  of the Company upon any
question  that may be  presented at such  meeting,  and any such officer may, on
behalf of the Company,  waive any notice of the calling of such meeting required
by any statute or Bylaw and consent to the holding of any such  meeting  without
notice. The President,  any Vice President or the Secretary of the Company shall
have  authority to give to any person a written proxy in the name of the Company
and under its corporate seal to vote at any meeting of the  shareholders  of any
corporation all or any shares of stock of such corporation  owned by the Company
upon any  question  that may be presented  at such  meeting,  with full power to
waive any notice of the calling of such meeting required by any statute or Bylaw
and to consent to the holding of any such meeting without notice.

     Section  6. (a) The  Company  shall  indemnify  any  person who was or is a
party,  or is  threatened  to be made a party to,  any  threatened,  pending  or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that such person is or was a director, officer, employee or agent of
the  Company,  or who is or was  serving  at the  request  of the  Company  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action,  suit or proceeding,  if
such person acted in good faith and in a manner such person reasonably  believed
to be in, or not opposed to, the best interests of the Company and, with respect
to any criminal action or proceeding,  if such person had no reasonable cause to
believe such person's conduct

                                      -10-

<PAGE>

was unlawful.  The  termination  of any action,  suit or proceeding by judgment,
order,  settlement,  conviction,  or  upon  a plea  of  nolo  contendere  or its
equivalent,  shall not, of itself,  create a presumption that the person did not
act in good faith and in a manner which such person reasonably believed to be in
or not opposed to the best  interests  of the Company  and,  with respect to any
criminal action or proceeding,  that the person had reasonable  cause to believe
that such person's conduct was unlawful.

     (b)  The Company shall  indemnify  any person who was or is a party,  or is
threatened to be made a party to, any threatened, pending or completed action or
suit by or in the right of the  Company to  procure a  judgment  in its favor by
reason of the fact that such person is or was a director,  officer,  employee or
agent of the  Company,  or is or was  serving at the request of the Company as a
director, officer, employee or agent of another corporation,  partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably  incurred by such person in connection  with the defense
or settlement of such action or suit, if such person being  indemnified acted in
good faith and in a manner  such  person  reasonably  believed  to be in, or not
opposed to, the best interests of the Company,  provided that no indemnification
shall be made with  respect  to any  claim,  issue,  or matter as to which  such
person has been adjudged to have been liable to the Company, unless, and only to
the  extent  that,  the court in which  such  action or suit was  brought  shall
determine upon application that,  despite the adjudication of liability,  but in
view of all the  circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.

     (c)  To the extent  that a  director,  officer,  employee or agent has been
successful,  on the merits or otherwise,  in the defense of any action,  suit or
proceeding  referred  to in  paragraph  (a) or (b),  or in defense of any claim,
issue or matter  therein,  such person  shall be  indemnified  against  expenses
(including  attorneys' fees) actually and reasonably  incurred by such person in
connection therewith.

     (d)  Any  indemnification  under  paragraph (a) or (b) (unless ordered by a
court) shall be made by the Company  only as  authorized  in the specific  case,
upon a determination that indemnification of the director,  officer, employee or
agent is proper in the circumstances  because such person has met the applicable
standard of conduct set forth in paragraph (a) or (b). Such determination  shall
be made (1) by the Board of Directors by a majority vote of a quorum  consisting
of directors who were not parties to such action, suit or proceeding,  or (2) if
such a  quorum  is not  obtainable,  or,  even if  obtainable,  if a  quorum  of
disinterested  directors so directs,  by independent  legal counsel in a written
opinion, or (3) by the shareholders of the Company.

     (e)  Expenses  incurred in  defending a civil or criminal  action,  suit or
proceeding  may be paid by the  Company in advance of the final  disposition  of
such action, suit or proceeding,  upon receipt of an undertaking by or on behalf
of the  director,  officer,  employee  or agent to repay such amount if it shall
ultimately be determined  that such person is not entitled to be  indemnified by
the Company as authorized in this Section 6.

     (f)  The indemnification and advancement of expenses provided by or granted
under the other subsections of this Section 6 shall be effective with respect to
acts,  errors or omissions

                                      -11-

<PAGE>

occurring  prior to, on or  subsequent  to the date of adoption  hereof and such
indemnification shall not be deemed exclusive of any other rights to which those
seeking  indemnification  or  advancement  of expenses may be entitled under any
Bylaw, agreement, vote of shareholders or disinterested directors, or otherwise,
both as to action by a director,  officer,  employee  or agent in such  person's
official  capacity  and as to action in  another  capacity  while  holding  such
office.

     (g)  The Company  may  purchase  and  maintain  insurance  on behalf of any
person who is or was a director,  officer,  employee or agent of the Company, or
who is or was  serving at the  request of the  Company as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other  enterprise,  against  any  liability  asserted  against  such  person and
incurred by such person in any such  capacity,  or arising out of such  person's
status as such,  whether or not the  Company  would have the power to  indemnify
such person against such liability under the provisions of this Section 6.

     (h)  If the  Company  has paid  indemnity  or has  advanced  expenses  to a
director,   officer,   employee  or  agent,   the  Company   shall   report  the
indemnification  or advance in  writing to the  shareholders  with or before the
notice of the next shareholders' meeting.

     (i)  For  purposes of this  Section 6  references  to "the  Company"  shall
include,  in  addition to the  surviving  corporation,  any merging  corporation
(including any corporation having merged with a merging corporation) absorbed in
a merger  which,  if its separate  existence had  continued,  would have had the
power and  authority to indemnify  its  directors,  officers,  and  employees or
agents,  so that any person who was a  director,  officer,  employee or agent of
such  merging  corporation,  or was  serving  at the  request  of  such  merging
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,  joint venture, trust or other enterprise,  shall stand in the same
position  under the  provisions  of this Section 6 with respect to the surviving
corporation  as such person would have with respect to such merging  corporation
if its separate existence had continued.

     (j)  For purposes of this Section 6, references to "other enterprise" shall
include employee benefit plans, and references to "serving at the request of the
Company" shall include any service as a director,  officer, employee or agent of
the Company  which  imposes  duties on, or involves  services by such  director,
officer,  employee,  or agent with  respect to an  employee  benefit  plan,  its
participants, or beneficiaries. A person who acted in good faith and in a manner
such person reasonably  believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Company" as referred to in this
Section 6.

     (k)  The indemnification and advancement of expenses provided by or granted
under  this  Section 6 shall,  unless  otherwise  provided  when  authorized  or
ratified,  continue  as to a person  who has ceased to be a  director,  officer,
employee, or agent and shall inure to the benefit of the heirs,  executors,  and
administrators of that person.

                                      -12-

<PAGE>


                                   ARTICLE VII
                          AMENDMENT OR REPEAL OF BYLAWS

     These Bylaws may be added to, amended or repealed by the Board of Directors
at any regular or special meeting of the Board.




                                      -13-

<PAGE>
                                                                    Exhibit 23.1



                       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 13, 2003 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 24, 2003



<PAGE>

                                                                    Exhibit 99.1




                                   CERTIFICATE
                                 furnished under
                 Section 906 of the Sarbanes-Oxley Act of 2002.

     I, Gary L. Rainwater,  chief executive  officer of Central  Illinois Public
Service  Company,  hereby  certify  that  to  the  best  of  my  knowledge,  the
accompanying  Report of Central Illinois Public Service Company on Form 10-K for
the fiscal year ended December 31, 2002 fully complies with the  requirements of
Section  13(a)  or  15(d)  of the  Securities  Exchange  Act of  1934  and  that
information  contained in such Report fairly presents, in all material respects,
the financial  condition and results of  operations of Central  Illinois  Public
Service Company.




                                                    /s/ Gary L. Rainwater
                                                --------------------------------
                                                        Gary L. Rainwater
                                                        Chief Executive Officer

Date:  March      , 2003

<PAGE>

                                                                    Exhibit 99.2





                                   CERTIFICATE
                                 furnished under
                 Section 906 of the Sarbanes-Oxley Act of 2002.

     I, Warner L. Baxter,  chief  financial  officer of Central  Illinois Public
Service  Company,  hereby  certify  that  to  the  best  of  my  knowledge,  the
accompanying  Report of Central Illinois Public Service Company on Form 10-K for
the fiscal year ended December 31, 2002 fully complies with the  requirements of
Section  13(a)  or  15(d)  of the  Securities  Exchange  Act of  1934  and  that
information  contained in such Report fairly presents, in all material respects,
the financial  condition and results of  operations of Central  Illinois  Public
Service Company.




                                                    /s/ Warner L. Baxter
                                                --------------------------------
                                                        Warner L. Baxter
                                                        Chief Financial Officer

Date:  March      , 2003