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Ameren Transmission Company of Illinois (“ATXI”), a wholly owned subsidiary of Ameren Corp. (AEE - Analyst Report), has received approval from the Illinois Commerce Commission (“ICC”) for construction of most of the 400-mile Illinois River transmission project.

The commission has sanctioned a certificate of public convenience and necessity (CPCN) for seven of nine proposed segments on the route and three of nine proposed bulk substations.

The remaining portions were not approved due to lack of time and evidence to determine the most cost-effective route. ATXI plans to request a rehearing for the routing of the remaining segments that were not approved.

The project has already received the nod from the Federal Energy Regulatory Commission and the Midcontinent Independent System Operator, Inc. To date, this $1.1 billion Illinois Rivers transmission project is the largest for Ameren. The project consists of a new 345-kilovolt transmission line crossing the Mississippi River near Quincy, Ill., and continues east across Illinois to the Indiana border.

The CPCN provides the authority to construct or modify new generating stations or high-voltage transmission lines. Last month, Electric Transmission Texas (“ETT”) – a joint venture between the subsidiaries of American Electric Power Co. Inc. (AEP - Analyst Report) and MidAmerican Energy Holdings Company – and Sharyland Utilities L.P. have jointly requested the Public Utility Commission of Texas (PUCT) to amend their CPCN to construct the Cross Valley Project. The Cross Valley Project is a proposed 345-kilovolt transmission line.

An important part of Ameren Illinois' service reliability strategy is implementation of the Electric Infrastructure Modernization Act that was recently passed by the Illinois General Assembly. Per the company's Modernization Action Plan, Ameren Illinois will invest $643 million over the next 10 years to replace and refurbish underground distribution cables, fortify utility poles, and install new technologies that will quickly detect power outages and enable services to be restored faster.

This approval allows the company to make a major investment that will create jobs, enable the delivery of renewable energy while improving the reliability and efficiency of the electric power grid. Also, the project would give a significant boost to the Illinois economy over the next five years.

Ameren’s stable and regulated electric power operations in the Midwest generate a relatively stable and growing earnings stream. The future growth will be guided by improved plant operations, a focus on cost management, and installation of emissions reduction equipment at its generation plants. However, predominantly coal-based generation assets and weak second quarter results remain matters of concern. The company presently retains a short-term Zacks Rank #3 (Hold).

Among the stocks worth considering in the space are Huaneng Power International, Inc. (HNP - Snapshot Report) and Alliant Energy Corp. (LNT - Snapshot Report). While Huaneng Power carries a Zacks Rank #1 (Strong Buy), Alliant Energy holds a Zacks Rank #2 (Buy).

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