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Two regulatory decisions in Illinois and Pennsylvania this week paved the way for utilities to power through with new infrastructure upgrades. As the economy oozes upwards, smart grid and energy efficiency projects can create leaner, greener utilities. Let's take a closer look at this week's three winners.

The Illinois advantage

On Wednesday, the Illinois House of Representatives overturned Gov. Pat Quinn's veto of a bill allowing regulated utilities to (at least partially) pass on "smart" infrastructure investment costs to consumers.

Ameren (NYSE: NEE  ) and Exelon (NYSE: EXC  ) both operate utilities in the Prairie State, and both have been longtime backers of Senate Bill 9.

"Members of the General Assembly have been steadfast in calling for the development of an energy delivery system that meets today's needs and prepares the state for future economic growth," said Richard J. Mark, president and CEO of Ameren Illinois, in a statement. "I want to thank the Illinois Senate and House of Representatives for their support. This action will benefit consumers, create jobs, and inject new life into economies in Central and Southern Illinois."

Jobs may be a political talking point, but Ameren is most interested in capital expenditures. The utility plans to spend $640 million by 2023 for much-needed repairs, as well as increasingly efficient technology. Ameren Illinois will replace cables and strengthen power poles, but it will also install smart grids and deploy new technology to more quickly detect and isolate grid outages.

Ameren expects its overall rate base to enjoy a 7% compound annualized growth rate over the next four years, but Mark made clear that consumers won't be left out to dry. In 2014, Ameren estimates that delivery rates for its residential customers should drop by around $30 million.

Source: Ameren Q1 2013 Earnings Presentation 

Exelon has also been expectantly awaiting Senate Bill 9's approval. During its latest earnings call, CEO Christopher Cane noted, "Once enacted on, we can start executing our plan of grid modernization included in the installation of the smart meters and improving the reliability of the infrastructure."

Exelon noted in its latest quarterly SEC filing that if the bill becomes law by June 15, ComEd (its Illinois utility) would speed up its smart meter installation plans. While Ameren didn't divulge financial estimates, Exelon calculates that Senate Bill 9 will add $25 million in operating revenues for 2013, with an additional $65 million for 2014. Concurrently, ComEd would up capital expenditures spending by $25 million this year and $40 million for 2014.

Powering Pennsylvania
Heading east, PPL (NYSE: PPL  ) announced Thursday that the Pennsylvania regulators have approved a new "Distribution System Improvement Charge" for its 1.4 million customers.

The charge will hit bills on July 1 and will equal 0.44% of a consumer's monthly distribution charges. Average residential users can expect a $0.20 increase in their monthly bills. Those pennies will add up to cover more than $135 million in new facilities and equipment this year, with more than $700 million in planned capital expenditures for the next five years.

"The distribution system improvement charge allows us to address system reliability issues and provide strong customer service by investing more in our delivery system," said Dennis Urban, finance and regulatory affairs VP for PPL Electric Utilities. "With the new charge, we can more efficiently plan our work and make system improvements to strengthen reliability and better serve our customers."

PPL's Pennsyvania win is significant, but it's also been making major moves across the pond in the United Kingdom, where more than half its Q1 earnings originated. Both PPL and National Grid benefit from international diversity with stable regulatory environments. The U.K. recently approved eight years of price controls, allowing the utilities to focus on efficiency with predictable profits.

Intelligent energy
From Illinois Gov. Pat Quinn to the AARP, there are plenty of people upset about rate increases. But approvals in both states slotted funds toward progressive projects that will ultimately benefit the public. Ameren, Exelon, and PPL have managed to swim through regulatory waters, and they'll emerge as smarter, more sustainable utilities.

As the nation moves increasingly toward clean and efficient energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.

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