1. Why PJM? Presentation to Federal Energy Regulatory Commission
Kathryn L. Patton, Sr. Vice President and General Counsel
June 26, 2002

2. Operational Reasons For IP Joining PJM
IP has 345 kV Interconnections with 4 Utilities: Ameren, AEP, ComEd and TVA
Imports for Native Load:
50% of Imports for Illinois Power’s Native Load Came from ComEd and AEP
Exports:
60% of Exports were Delivered to the ComEd and AEP Systems
19% of Exports from IP System Served Load in PJM
25% of Exports from IP system Served Load in ComEd and AEP Service Territories

3. IP CE AEP TVA Interconnections Ameren MECS CILCo CWLP LGEE SIPC EEI
200
2812 IP
CILCo
AEP
572
937
287
CWLP
307
11250
280
230
409
LGEE
Ameren
TVA
SIPC
EEI

4. Imports for Native Load From Source Transmission System
OTHER
3.0%
CINERGY
1.9%
WISCONSIN
ELECTRIC
3.5%
CILCO
2.1%
AEP
17.0%
TVA
24.5%
COMMONWEALTH
EDISON
33.1%
AMEREN
10.4%
LG&E
4.5%
Based on Year 2000 Actuals

5. Exports From Illinois Power Transmission System by Transmission Ties
AEP
41.1%
COMMONWEALTH
EDISON
19.0%
AMEREN
18.7%
TVA
14.6%
MIDAMERICAN
3.8%
SIPC
1.6%
LG&E
0.3%
CILCO
0.7%
CWLP
0.2%
Based on Year 2000 Actuals

6. Exports by Load Served (Ultimate Sink Transmission System)
MIDAMERICAN
5.5%
AMEREN
3.0%
OTHER
13.9%
SOUTHERN
COMPANY
1.4%
WISCONSIN
ELECTRIC
3.1%
ENTERGY
9.6%
AEP
10.6%
COMMONWEALTH
EDISON
14.2%
TVA
19.3%
PJM
19.4%
Based on Year 2000 Actuals

7. Customer Value of PJM Membership
Liquid and Competitive Market
Access to Diverse Supply from Historic Supply Sources
Encourages New Generation
Promotes Retail Access
Lower Administration Charges in Long Term
Timing of Start-Up Much Sooner
Transmission Service By End of 2002
Full LMP/Market Implementation by End of 2003

8. Other Benefits to IP of Joining PJM
Transparent and Robust Market
Experienced Operator
Has Been Up and Running for a Number of Years
Already Worked through Start-Up Problems
Efficient Stakeholder Process
All Transmission Owners Offer Retail Choice
Rate Design Doesn’t Shift Costs to Others
Results in Greater Opportunity to Recover Transmission Revenue Requirement
Quick Start-Up

9. Why Not MISO? Strands Illinois Power:
IPs Only Strong Interconnection With MISO Is Ameren, and Ameren Has No ATC Either Into or Out of IP For This Summer
Historic Supply Is Not Sourced From Ameren
Generation Exports Don’t Serve Ameren
Inefficient Stakeholder Process
Few Transmission Owners Offer Retail Choice
Rate Design Results in Cost Shift and Traps Generation in MISO (discouraging new generation)
Market Start-Up Delayed Until Late 2004/Early 2005

10. Why Not MISO? Inexperienced Operator Numerous Start-up Problems
Inaccurate ATC
OASIS Frequently Down
Slow Response to Service Requests
Slow Response to Customer Inquiries
Over 55 FERC Tariff Change Filings in Last 1 ½ Years
Killed Liquidity at Cinergy Hub, which was One of the Most Liquid Trading Points in Industry
Degradation of Service from Pre-MISO

11. Illinois Power’s Commitment
Illinois Power is Fully Committed to Joining PJM
Will Join as a Transmission Owner, or
Part of Independent Transmission Company
Illinois Power Does Not Intend to Spend Any More Money Toward Start-Up of an RTO Until FERC Issues a Final and Unequivocal Order.
Illinois Power Already Spent $6.5 million to Leave MISO and $7.5 million to Develop ARTO. Annual Net Income for Transmission is Only ~ $7.9 Million/Year.