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IOWA ELECTRIC, IOWA SOUTHERN FILE MERGER PLAN

 CEDAR RAPIDS, Iowa, June 4 /PRNewswire/ -- Iowa Electric Light and Power Company (IE) of Cedar Rapids and Iowa Southern Utilities Company (IS) of Centerville, today filed applications for regulatory authorization to merge the two utilities. The utilities serve a combined total of 325,000 electric and 170,000 natural gas retail customers as well as 32 resale customers in more than 550 Iowa communities. The two natural gas and electric utilities are the principal subsidiaries of IES Industries Inc. (NYSE: IES) (IES) of Cedar Rapids. These natural gas and electric services are provided in 73 counties across Iowa.
 "The merger of these companies is expected to provide benefits of a minimum of $15 million annually, in 1993 dollars, within five years," said Robert J. Latham, vice president of corporate affairs and planning at IES Industries. "The present value of the benefits of this merger for the first 10 years is estimated to be a minimum of $110 million. The primary sources of these benefits are from electric generation and transmission planning. These benefits will ultimately be realized by our customers through the regulatory process.
 "The merger will also provide greater certainty about the future for the customers, the communities we serve and our employees," Latham said. "In addition to the dollar benefits, we recognize that our customers want greater certainty on price and service quality expectations, as they plan for their energy needs."
 The applications will be reviewed by several regulatory bodies, including the Iowa Utilities Board and the Federal Energy Regulatory Commission. The merger is also subject to approval of the holders of two series of outstanding preferred stock of IE. IES hopes to have the merger completed by the end of 1993, following regulatory authorizations.
 IES was formed in 1991 by the merger of IE Industries Inc. and Iowa Southern Inc., the parent companies of IE and IS, respectively. Since that time utility functions and organizations of the utilities have been consolidated on a systematic basis, in an effort to realize merger benefits and provide utility service more efficiently using the best practices of each utility.
 There are no proposed changes in natural gas or electric prices for customers of either utility in this application for merger. As in IE's acquisition of Union Electric Company's Iowa service territory, current prices are proposed to continue. The long-term expectations are for cost-based pricing among customer classes and aggressive promotion of energy efficiency and demand-side management programs. Any changes in prices would require further regulatory approval.
 In the applications for regulatory authorizations to complete this merger, IES' active Iowa economic development efforts were cited. IES' environmental programs and aggressive demand-side management activities have received national recognition, as noted in the filings.
 Lee Liu is chairman, president and chief executive officer of IE and IS. He will assume those responsibilities for the new utility. The utility operations are currently provided through an Energy Delivery and Nuclear Group and a Generation and Engineering Group. Finance, accounting, human resources, planning and numerous other functions have already been consolidated. The current organizational structure is expected to continue as the structure of the merged utility.
 Headquarters for the combined utility will be in Cedar Rapids. The offices in Centerville will continue as a center for administrative and customer service activities. No significant changes in employment are expected as a direct result of this merger. Current programs for productivity improvements are expected to continue.
 The new utility is provisionally named IES Utilities. A name for the new utility is under review.
 IES INDUSTRIES INC.
 Electric Service Facts
 Iowa Iowa IES
 Electric(a) Southern Utilities
 Cities served retail 370 166 536
 Counties served retail 53 24 68
 Resale customers 24 8 32
 Operating revenue (000s) $397,491 $117,708 $515,199
 Energy sales (000s Kwh) 6,872,677 3,735,610 10,608,287
 Number of customers
 year-end
 Residential 184,356 67,672 252,028
 Rural 11,985 14,183 26,168
 Commercial 32,741 12,898 45,639
 Industrial 654 197 851
 Other 351 135 486
 Total number of customers 230,087 95,085 325,172
 Net peak load (kw) 1,095,363 491,078 1,586,441
 (date) (8/10/92) (8/10/92) (8/10/92)
 Transmission Miles
 345 kV 36 61 97
 161 kV 291 312 603
 115 kV 355 0 355
 69 and 34 kV 2,340 620 2,960
 13.8 kV and below 10,822 3,373 14,195
 Total 13,844 4,366 18,210
 Fuel Supply (percents)
 Coal 24.0 72.0 43.0
 Purchases 37.0 28.0 33.0
 Nuclear 39.0 00.0 24.0
 Other 00.0 00.0 00.0
 -- 100.0 100.0 100.0
 Principal Generating Company Net KW Major Fuel
 Stations(b) Capability
 Duane Arnold
 Energy Center Iowa Electric 360,500 Nuclear
 Ottumwa Iowa Electric/
 Iowa Southern 339,800 Coal
 Prairie Creek Iowa Electric 234,000 Coal
 Burlington Iowa Southern 211,800 Coal
 Marshalltown/Peaking
 Turbines Iowa Electric 156,000 Oil
 Sutherland Iowa Electric 143,000 Coal
 Neal No. 3 Iowa Southern 144,200 Coal
 Sixth Street Iowa Electric 66,000 Coal
 Grinnell Iowa Southern 47,200 Natural
 Gas
 Diesel/Hydro Stations Iowa Electric/
 Iowa Southern 12,200 Oil
 Total principal
 generating capacity -- 1,714,700 --
 Net purchased capacity(c) Iowa Electric/
 Iowa Southern 271,880 Oil
 Total capacity -- 1,986,580 --
 (a) Includes acquisition of Union Electric's Iowa service territory.
 (b) Reflects accredited capacity for the 1993 summer.
 (c) Includes a 15 percent reserve capacity obligation for the Union Electric and Ottumwa Hydro contracts.
 NATURAL GAS SERVICE FACTS
 Iowa Iowa IES
 Electric Southern Utilities
 Cities served 156 35 191
 Counties served retail 46 15 58
 Operating revenue (000s) $109,096 $30,359 $139,455
 Energy sales (000s Dkthms) 28,041 8,994 37,035
 Number of customers
 year-end
 Residential 111,739 34,818 146,557
 Commercial 16,675 4,161 20,836
 Industrial and other 351 69 420
 Total number of customers 128,765 39,048 167,813
 Maximum Daily load (Dkthms) 187,132 66,552 253,684
 (date) (1/15/92) (1/15/92) (1/15/92)
 COMPANY INFORMATION
 Iowa Iowa IES
 Electric Southern Utilities
 Number of commercial offices 18 18 --
 Office locations Ames(a) Albia --
 Atlantic Burlington --
 Cedar Rapids(a) Centerville --
 Creston(a) Chariton --
 De Witt Columbus Junction --
 Fairfield Corydon --
 Fort Madison Creston(a) --
 Garner Grinnell --
 Iowa Falls Leon --
 Jefferson Mt. Ayr --
 Keokuk Mt. Pleasant --
 Knoxville Newton(a) --
 Manchester Osceola --
 Marshalltown(a) Ottumwa(a) --
 Muscatine Sigourney --
 Sibley Wapello --
 Spirit Lake(a) Washington(a) --
 Storm Lake Wellman --
 Full-time employees 1,924 545 2,469
 Part-time employees 52 25 77
 (a) denotes district office (Creston is a shared facility)
 -0- 6/4/93
 /CONTACT: Robert J. Latham of IES Industries, 319-398-7676/
 (IES)


CO: IES Industries, Inc. ST: Iowa IN: UTL SU: TNM

AL -- MN004 -- 5368 06/04/93 10:30 EDT
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Date:Jun 4, 1993
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