Ameren Missouri Vigorously Defends Its Strong Environmental Record

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Jan 12, 2011, 03:13 ET

ST. LOUIS, Jan. 12, 2011 /PRNewswire/ -- Ameren Missouri, an operating company of Ameren Corporation (NYSE: AEE), strongly disputes allegations that the company violated Clean Air Act requirements as claimed in a lawsuit filed today on behalf of the U.S. Environmental Protection Agency (USEPA). The USEPA's allegations are related to the New Source Review (NSR) provisions of the federal Clean Air Act. This lawsuit follows USEPA's January 2010 issuance of a Notice of Violation. Ameren Missouri is one of approximately 60 U.S. electric utilities to receive such a notice since the 1990s and one of many that have faced such a lawsuit.

NSR requires electric utilities to undergo pre-construction review for environmental controls if the utilities propose to build new generating units. NSR also applies if utilities modify their existing units by making certain types of non-routine physical or operational changes that result in a significant increase in emissions.

The lawsuit filed today asserts that projects at Ameren Missouri's Rush Island coal-fired power plant were not performed, consistent with NSR requirements.

However, the NSR program does not apply to projects that constitute routine maintenance. All the Ameren Missouri projects, cited by USEPA, fall into the classification of routine maintenance, including project repair and replacement activities; projects that did not cause an emissions increase; projects that were necessary to respond to demand growth on a utility system; and modification projects to switch plants to low-sulfur coal, which provided environmental benefits. Ameren Missouri's overall emissions are trending down, not up, while customers' demand for electricity has increased by 50 percent since the 1990s. The company operates its system to meet the generation demands and needs of its customers.

In addition to denying the validity of the allegations, Ameren Missouri believes USEPA's position has the potential to impose significant costs on Ameren customers, especially during these tough economic times. "We are proud of Ameren Missouri's environmental record, and we strongly disagree with the assertions made by USEPA in the complaint," said Warner L. Baxter, president and chief executive officer of Ameren Missouri. "Many of the cited projects were actually undertaken by Ameren Missouri to expand our efforts to reduce emissions. We have cut emissions at every plant, significantly improving air quality in the region. We are disappointed that the USEPA has decided to take this action."

"We have a commitment to supply affordable, safe, reliable energy to our customers and to plan for the growth of future demand," said Mark Birk, vice president, Power Operations, Ameren Missouri. "Clearly this becomes very difficult when onerous regulation and lawsuits, like this one, make existing generation much more expensive to operate and create greater uncertainty in planning for our customers' energy needs in the future."

Ameren Missouri, considered a national utility leader in pollution control, reduced its mass emissions of sulfur dioxide (SO2) by 61 percent and mass emissions of nitrogen oxide (NOx) by 75 percent between 1990 and 2009 (See the Emission Reduction Track Record Chart at the end of this release.) The company has been particularly effective in developing innovative techniques to lower NOx emission levels at its coal-fired power plants, which serve as national models for the utility industry.

Since the late 1970s, the company has improved particulate collection to the point that Ameren Missouri is collecting approximately 99 percent of all particulate emissions from the stacks of its plants.

In addition, the company proactively installed a scrubber at its coal-fired plant in Portage des Sioux north of St. Louis---at a cost of approximately $600 million to remove sulfur compounds from the Sioux Plant's combustion gases before those gases are discharged into the atmosphere. The scrubber is expected to eliminate almost all sulfur dioxide emissions from the plant.

"We have been, and will continue to be, good environmental stewards, as evidenced by our strong track record for reducing emissions for decades," said Birk, who pointed out that Missouri, in enacting state regulations to implement the Clean Air Act, expressly adopted a broad definition of "routine maintenance."

Birk added, "State regulations have appropriately applied a commonsense understanding of permitting requirements so that Missouri utilities could respond to customer energy needs quickly and efficiently."

The company stated that the ultimate resolution of this litigation could take several years.

Serving 1.2 million electric and 126,000 natural gas customers over 20,000 square miles in Missouri, Ameren Missouri's residential electric rates are nearly 35 percent below the national average and the lowest among investor-owned utility companies in Missouri. The Ameren companies serve 2.4 million electric customers and nearly one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.

Forward-looking Statements

Statements in this release not based on historical facts are considered "forwardlooking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forwardlooking 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 release as well as those discussed under Risk Factors in Union Electric Company's Form 10K for the year ended December 31, 2009 and otherwise in our filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forwardlooking statements:

regulatory or legislative actions, including changes in regulatory policies and ratemaking determinations, such as the outcome of our pending electric and natural gas rate proceedings and the rehearings or appeals related to our 2009 and 2010 electric rate orders, and future rate proceedings or legislative actions that seek to limit or reverse rate increases;
changes in laws and other governmental actions, including monetary and fiscal policies;
changes in laws or regulations that adversely affect the ability of electric distribution companies and other purchasers of wholesale electricity to pay their suppliers, including us;
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, and the implementation of deregulation;
increasing capital expenditure and operating expense requirements and our ability to recover these costs in a timely fashion in light of regulatory lag;
the effects of participation in the Midwest Independent Transmission System Operator, Inc.;
actions of credit rating agencies and the effects of such actions;
generation, transmission, and distribution asset construction, installation and performance;
impairments of longlived assets, intangible assets, or goodwill;
the impact of current environmental regulations on utilities and power generating companies and the expectation that more stringent requirements, including those related to greenhouse gases, other emissions and energy efficiency, will be enacted over time, which could limit or terminate the operation of certain of our generating facilities, increase our costs, result in an impairment of our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect; and
legal and administrative proceedings.

Given these uncertainties, undue reliance should not be placed on these forwardlooking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forwardlooking statements to reflect new information or future events.

SOURCE Ameren Missouri