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Ameren Illinois, a subsidiary of Ameren Corporation (AEE - Analyst Report), has presented a $625 million infrastructure improvement and modernization plan, spanning over 10 years, to the Illinois Commerce Commission. The Modernization Action Plan initiative will benefit customers through improved service reliability and a greater potential for energy savings. However, the main objective of the plan is creation of jobs. Besides providing its modernization plan, the company also demarcated some of the program’s expenses.
The company identified that out of this $625 million, it plans to spend about $258 million in system improvement and modernization to improve service reliability. It sets aside approximately $169 million for automated intelligent switching devices, sensors and microprocessor-based relays that will help in detecting problems more quickly and also prevent and limit the size and duration of other outages.
The Ameren subsidiary also includes about $174 million to install more automated “smart” meters, roughly $7 million to develop a modern training center and modernize an existing training center, approximately $11 million to install equipment that will allow maintenance of efficient distribution system voltage and the balance $6.5 million to install an advanced management system for the electricity distribution system.
This 10-year plan will outstrip the required 450 additional jobs by 2015. Job creation will begin in 2012 and will increase until the peak year has been reached. Apart from the new additions, Ameren Illinois currently has openings for more than 200 full-time positions.
Ameren Corporation is a holding company which operates in the generation and distribution of electricity and natural gas to residential, commercial, industrial and wholesale end-markets in Missouri and Illinois. We are encouraged by the company’s consistent performance across its solid base of stable utility operations in the Midwestern market, as well as its focus on cost minimization, and its strong balance sheet.
However, the predominantly coal-based generation assets and pending regulatory cases evoke some concern. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
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