Regulatory Reform to Support New Infrastructure Steve Kidwell MARC 2010 June 7, 2010

1 Key Messages Utilities are an important contributor to the economies of their states Infrastructure investment needs are growing – significantly States are addressing this fact in their legal & regulatory frameworks More needs to be done

2 AmerenUE’s Contribution to the MO Economy Over 4,400 direct jobs in 32 MO counties $350 million annual Missouri payroll Over 20,000 indirect jobs Over 100 Missouri businesses $160 million in annual taxes Over $600 million annual capital investment

3 AmerenUE has a significant Missouri presence 4,423 Employees (Oct. 2009)* 4,423 direct UE employment in 32 MO counties 3,899 workers live in 59 MO counties Serve 57 MO counties $1.4 billion annual operations (8-year avg.) $638m capital expenditures $345m MO payroll $372m operations and maintenance $320 million annual taxes to Missouri jurisdictions (2008) ≈$160m company-paid (corporate taxes plus employee withholdings) ≈$160m customer-paid (pass through) and distributed Generation and distribution infrastructure Nearly 10,000 MW generating capacity 1.2 million electric and 127,000 natural gas customers 122,300 electric line miles and 3,100 miles of gas distribution lines Supports Missouri contractors $190m annually to contract services for cap. exp. $46m annually to transmission & distribution contractors Support ≈1,260 contractor employees annually *AmerenUE only, excludes Ameren Services allocation DEVELOPMENT STRATEGIES

4 New utility investment creates jobs $100 Million Capital Expenditures by AmerenUE Jobs: 1,970 Taxes: $4 million Output: $233 million Earnings: $67 million Assumes 12% of capital expenditures goes toward payroll based on actual AmerenUE data; construction multiplier applied Total economic activity generated (i.e. wages, operations, capital expenses, etc.) DEVELOPMENT STRATEGIES

5 Example: Aging Distribution Facilities Significant facilities installed in timeframe due to air-conditioning Facilities have worked well but are reaching end of life, creating reliability and maintenance concerns Major facility replacement cost plans will have significant new, annual capital budget impacts – ─Aging substation/relay equipment: $20-25M annually ─Aging downtown gridded network: $15M annually ─Aging overhead facilities: $26M annually Roughly a 10% increase in capital expense needs, without anything else…

6 Many states are addressing these issues Oklahoma: Capital Investment Rider Illinois: ComEd rider for system modernization Texas: HB 989 authorizes infrastructure riders California: PG&E Distribution Reliability Improvement Program Many states (~16) allow some form of transmission cost pass-through Several states (~8) support renewable investment with adjustment mechanisms