An Ameren Corporation (AEE) unit − Ameren Illinois Company or Ameren Illinois − received approval from the Illinois Senators to modernize the state's natural gas infrastructure. This would lead the utility to invest $330 million more in its natural gas delivery system over 10 years.
Per the plan, Ameren claims that a typical residential user utilizing 785 therms a year is expected to incur about a penny a day more for gas delivery services over a ten-year period.
The latest modernization plan will enable Ameren Illinois to serve customers better while paying heed to the safety and reliability of the transmission and distribution system. Ameren Illinois needs to file an annual plan with the Illinois Commerce Commission and provide details on the development of the project.
Ameren Illinois distributes energy to 1.2 million electric and 806,000 natural gas customers in downstate Illinois. Although the Senate has passed the act, the plan now heads to Governor Pat Quinn's desk for final consent.
During the first quarter of 2013, Ameren Illinois’ earnings surged 14.8% year over year to $31.0 million. The increase in earnings reflects higher electric and natural gas sales volumes owing to normal winter temperatures in first-quarter 2013, relative to warmer-than-normal first-quarter 2012 temperature. Additionally, new rates for electric transmission and the absence of a required donation related to the implementation of formula rates in Ill. in 2013, benefited earnings.
St. Louis based Ameren Corporation is a holding company which generates and distributes electricity and natural gas to residential, commercial, industrial and wholesale end markets in Mo. and Ill. Through its utility subsidiaries, the company distributes electricity to 2.4 million customers and natural gas to approximately 1 million customers in Mo. and Ill.
Ameren currently has a Zacks Rank #3 (Hold). The utility is subject to the vagaries of weather. A particularly warm winter or cool summer could adversely affect the performance of the company's utility operations.
There are other stocks in the energy space that are worth considering now. These include Zacks Ranked #1 (Strong Buy) CPFL Energia S.A. (CPL) and Companhia Paranaense de Energia (ELP), and Zacks Ranked #2 (Buy) DTE Energy Company (DTE).
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