FOR IMMEDIATE RELEASE:
  
          PEORIA, IL . . .  October 29, 1996 . . . CILCORP Inc.
  (NYSE & CSE: CER) announced today that its Board of
  Directors has adopted a shareholder rights plan designed to
  encourage anyone seeking to acquire the Company to negotiate
  with the Board and to ensure fair and equal treatment for
  all shareholders.  The Board has declared the rights as a
  non-cash dividend to stockholders of record as of the close
  of business on November 12, 1996.
  
     Robert O. Viets, President and Chief Executive Officer,
  said the Board of Directors took today's action as part of
  its fiduciary responsibility to shareholders, and emphasized
  that he is not aware of any effort to acquire control of the
  Company.
  
     Under the shareholder rights plan, shareholders will
  receive one right for each share of common stock of the
  Company held, and that right will entitle the holder to buy,
  under certain circumstances, one-hundredth of a share of
  preferred stock.  The rights will trade with the Company's
  common shares and will not be separately tradable and
  exercisable unless a person or group were to acquire 15
  percent or more of the Company's outstanding common stock,
  or announce a tender or exchange offer that would result in
  the acquisition of 15 percent or more of the Company's
  outstanding stock.
  
     CILCORP Inc. can redeem the rights at $.001 per right
  before they become exercisable.  The rights will expire at
  the close of business on November 12, 2006.  Details of  the
  plan are outlined in materials that will be mailed to
  shareholders shortly after the record date.
  
     The Company said the shareholder rights plan has no
  present tax consequences and does not affect earnings or the
  way its shares are traded.
  
     In adopting the plan, CILCORP Inc. joins more than
  1,500 American public companies, including nearly half of
  the Fortune 500 companies and a substantial number of
  investor-owned  utilities, which have adopted shareholder
  rights plans.
  
  FOR ADDITIONAL INFORMATION, CONTACT:
  Gary A. Ebeling 
  Director-Investor Relations
  (309) 675-8810