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The New CEO's

Michael G. Morris
Fortnightly Magazine - June 2004

Growth Association, the United Way of Greater St. Louis, and the Urban League of Metropolitan St. Louis, US Bank, and a member of Civic Progress.
Earlier in Career: Joined Union Electric Co. in 1979. Elected executive vice president of AmerenCIPS in 1997. Became president and CEO of AmerenCIPS in late 1997. Assumed responsibility for Ameren's non-regulated generating subsidiary in May 2000. Served as president and COO of Ameren Corp. since September 2001. Assumed the position of chairman and CEO Jan. 1, 2004.

The Company

Market Cap End of 2003: $7.5 billion
Revenue 2003: $4.6 billion
Net Income 2003: $524 million
Employees: 7,650

What are the top issues that you hope to resolve at the company in 2004?

The top priority for us this year is to complete the Illinois Power acquisition. I don't know that I would call it an issue so much as an initiative. But [we want] to get that done before the end of the year and then begin to integrate it or bring it into our system, and at the same time complete the integration of Cilco.

How do you hope to grow earnings in your business, and by how much?

Primarily by investing in the basic utility business. With the acquisitions that we have done with Cilco and Illinois Power, we have created a foundation of a substantially larger company than we were before. … We think there are more costs that still can be taken from this business. Earnings growth in the 3- to 5-percent range is what we see long term.

Your request to transfer 550 MW of unregulated generation to the regulated Ameren subsidiary has drawn criticism. How do you respond?

Fist of all, it isn't something that we asked to do. It's something that was requested by the Missouri Public Service Commission as it really gets to the issue of how the state of Missouri wants the state to structure their business. They would prefer that the utilities own their own generation to supply their load. Over the past several years, all of the generation that we had built, we had built only on the unregulated side of our business. So, to have sufficient generation on the regulated side, the Missouri staff, as part of a rate negotiation, asked that we transfer the generation. There was a competitive bidding process done prior to going into the negotiations in that rate case. That was one of the reasons that the Missouri staff asked us to transfer the generation was that it was lower cost than other options. We are currently waiting on FERC approval, which should happen about June.

Still, do you think this process of transferring unregulated generation to regulated generation is anti-competitive?

No, I don't. Thinking of it from a competitive point of view, really, I was indifferent. In fact, the people in the unregulated generation business would prefer to keep the generation that we are transferring in the unregulated business. This wasn't being done because we couldn't sell the power anywhere else. We have been very successful in selling all the