December 9, 1998


Members of the Financial Community:


Attached is a press release  announcing the decision of Illinois Power Company's
Board  of   Directors   to  exit  the  nuclear   business  and  proceed  with  a
quasi-reorganization  that will affect  reported 1998  financial  results.  Also
included in the release are an update of the  Company's  securitization  efforts
and an affirmation of Illinova's growth strategy.

The  Board's   decisions  to  exit  the  nuclear   business  and  to  execute  a
quasi-reorganization  are consistent  with the strategy the Company has outlined
over the past several  months.  While this decision is a  significant  financial
milestone  for the Company,  we must still  complete  work on several  important
issues  before  finalizing  the detailed  accounting  entries,  including,  most
significantly,  the size and amortization of a regulatory asset and the value of
the  Company's  fossil  generation.   Future  financial  results  will  also  be
influenced by the specific exit strategy  ultimately chosen by the Board and the
timing of its implementation.

Please also note the  attached  invitation  to attend one of two  meetings to be
hosted by Illinova next Wednesday, December 16, in New York.

Please contact Bob Schultz  (217-424-8780),  Eric Weekes  (217-362-7635),  Cindy
Steward  (217-362-7633),  Greg  Gudeman  (217-424-8715)  or me if you  have  any
questions.

Sincerely,



/s/ Larry F. Altenbaumer
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Larry F. Altenbaumer