Business Description
Ameren Corporation is a public utility holding company headquartered in St. Louis, Missouri, operating through its subsidiaries, Ameren Missouri and Ameren Illinois. The company provides electric generation, transmission, and distribution services, as well as natural gas distribution services . Ameren's primary revenue driver is its electric services, with significant contributions from both Ameren Missouri and Ameren Illinois .
- Electric Services - Provides electric generation, transmission, and distribution services through Ameren Missouri and Ameren Illinois, serving as the primary revenue driver for the company.
- Ameren Missouri Electric - Operates a rate-regulated electric generation, transmission, and distribution business in Missouri.
- Ameren Illinois Electric Distribution - Manages rate-regulated electric transmission and distribution businesses in Illinois.
- Natural Gas Services - Offers natural gas distribution services through Ameren Missouri and Ameren Illinois.
- Ameren Missouri Natural Gas - Operates a rate-regulated natural gas distribution business in Missouri.
- Ameren Illinois Natural Gas - Provides rate-regulated natural gas distribution services in Illinois.
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Q3 2024 Summary
What went well
- Ameren anticipates approximately $1.5 billion in customer benefits from clean energy tax credits related to solar, battery storage, nuclear, and wind over the next 10 years in Missouri alone, enhancing customer value and supporting clean energy investments.
- Regulatory proceedings in Illinois are progressing favorably, with all intervenors supporting the approval of Ameren's revised multiyear grid plan, which is expected to drive significant infrastructure investments and rate base growth.
- Ameren has a robust pipeline of investment opportunities exceeding $55 billion, including potential additional load growth from data centers and economic development projects, indicating strong future earnings growth potential.
What went wrong
- The retirement of Rush Island Energy Center resulted in Ameren incurring significant costs, including a $64 million settlement with the Department of Justice, which could negatively impact financials.
- Uncertainty regarding EPA regulations and greenhouse gas rules could affect Ameren's capital expenditure plans and operations, potentially leading to increased costs or delays.
- Ameren plans to issue approximately $300 million of common equity in 2024 and an additional $155 million in 2025, which could result in dilution for existing shareholders.
Q&A Summary
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2025 Earnings Guidance
Q: How confident are you in 2025 growth guidance?
A: We have strong conviction in our ability to grow long term, aiming to deliver within the 6% to 8% EPS CAGR target for 2024 to 2028. Despite regulatory proceedings, we are confident we can adjust our plans to hit our guidance and deliver at or above the midpoint ,. -
Load Growth Opportunities
Q: Can you elaborate on potential large load customer agreements?
A: We have significant interest from potential customers, particularly data centers, representing tens of thousands of megawatts of new demand. We're working methodically with parties representing 7 gigawatts of demand. As load forecasts grow, we'll consider additional resources in our upcoming Integrated Resource Plan update in February , ,. -
Transmission Project Acceleration
Q: Can you discuss acceleration of MISO transmission projects?
A: Our MISO Tranche 1 projects will see construction between 2026 and 2030, and Tranche 2.1 projects are slated for 2032 to 2034. We aim to accelerate these where possible. These projects offer customer benefits ranging from 1.3 to 5.6 times the portfolio cost, reducing customer costs over time ,. -
Capital Expenditure and Financing
Q: How does increased capital impact your equity needs?
A: We continue to focus on our $21.9 billion capital plan, updating for various factors. Our financing plan remains consistent, with a focus on the $300 million equity program, largely done for 2024. We maintain our ratings and consolidated equity ratio around 40%. -
Legislative Priorities
Q: What are your priorities for the 2025 Missouri legislative session?
A: We're considering expanding PISA to cover generation assets, extending its sunset date, and advocating for a right of first refusal on transmission. These policies support infrastructure investments, reliability, and affordability as we meet the needs of prospective customers. -
Operating Cost Reductions
Q: What efficiencies are you pursuing to reduce O&M?
A: We're implementing cost reductions totaling $0.05, expecting $0.03 in Missouri and $0.01 in Illinois Natural Gas in Q4. We're focusing on headcount, discretionary spend, spans and layers, and simplification to drive efficiencies and reduce overhead costs. -
Impact of Election Results
Q: How does the recent election affect your plans?
A: Our strategy remains unchanged. We foresee less likelihood of corporate tax increases, which is positive for customers. We'll engage with policymakers regarding clean energy tax provisions in the IRA, emphasizing the importance of tax credits valued at about $1.5 billion for our customers in Missouri over the next 10 years. -
Earnings Growth Basis
Q: Will EPS growth be based on 2025 guidance?
A: Yes, our historical practice is to update based on the midpoint of the 2025 guidance, which is $4.95. That would be our expectation. -
Service Territory Interest
Q: Is one territory more attractive to new customers?
A: We have data center interest in both states, with about 65% in Missouri and 35% in Illinois. Earnings impact differs due to regulatory structures; in Missouri, we also earn on incremental generation, while in Illinois, earnings come from transmission or distribution investments. -
Regulatory Proceedings
Q: Any thoughts on scheduled oral arguments for the grid plan?
A: It's normal to have oral arguments over remaining differences. The Administrative Law Judge's proposed order gives us confidence in where the commission may land in December.
Key Metrics
Revenue by Segment - Quarter |
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Q3 2024 |
Q2 2024 |
Q1 2024 |
Q4 2023 |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Executive Team
Questions to Ask Management
- Given the recent election results and potential shifts in tax policy, how might changes to the Inflation Reduction Act's clean energy tax credits and transferability provisions affect your planned investments in renewable generation, and what strategies are you considering to mitigate any financial risks associated with these potential legislative adjustments?
- With the retirement of the Rush Island Energy Center and the planned issuance of approximately $470 million in securitized utility tariff bonds, can you elaborate on any potential challenges you foresee in executing the securitization, and how this will impact your balance sheet and credit ratings?
- Considering the significant potential load growth from new and expanding customers totaling several gigawatts, what specific generation resources are you planning to add to meet this demand, and how do you intend to balance the substantial capital investments required with maintaining affordability for existing customers?
- You mentioned implementing O&M reductions and efficiency programs to manage costs; could you provide more detail on these initiatives, how they are being achieved, and whether these cost savings are sustainable over the long term without compromising service reliability?
- As you prepare for the 2025 Missouri legislative session, what are the key legislative initiatives you are advocating for, such as extending PISA to cover generation assets or pursuing right of first refusal on transmission projects, and how essential are these outcomes to your ability to execute your growth strategy and meet your earnings targets?
Past Guidance
Q3 2024 Earnings Call
- Issued Period: Q3 2024
- Guided Period: FY 2025
- Guidance:
- 2024 Earnings Guidance: $4.55 to $4.69 per share .
- 2025 Earnings Guidance: $4.85 to $5.05 per share, with a midpoint increase of 7.1% over 2024 .
- Long-term Earnings Growth: 6% to 8% compound annual growth rate from 2024 through 2028 .
- Capital Investment: More than $55 billion over the coming decade .
- Infrastructure Investment: $3 billion invested year-to-date .
- Equity Issuance: Approximately $300 million in 2024 .
Q2 2024 Earnings Call
- Issued Period: Q2 2024
- Guided Period: FY 2024
- Guidance:
- Earnings Per Share (EPS) Guidance: $4.52 to $4.72 per share .
- Earnings Growth Rate: 6% to 8% compound annual growth rate from 2024 through 2028 .
- Rate Base Growth: 8.2% compound annual growth .
- Dividend Yield: 3.4% .
Q1 2024 Earnings Call
- Issued Period: Q1 2024
- Guided Period: FY 2024
- Guidance:
- Earnings Guidance: $4.52 to $4.72 per share .
- Operations and Maintenance (O&M) Expenses: Flat compared to 2023 .
- Equity Issuance: Approximately $300 million in 2024 .
- Long-term Growth: 6% to 8% compound annual earnings growth rate from 2024 through 2028 .
Q4 2023 Earnings Call
- Issued Period: Q4 2023
- Guided Period: FY 2024
- Guidance:
- Earnings Per Share (EPS) for 2024: $4.52 to $4.72 per share, 6.2% growth over 2023 .
- Compound Annual Earnings Per Share Growth: 6% to 8% from 2024 through 2028 .
- Rate Base Growth: 8.2% compound annual growth from 2023 through 2028 .
- Capital Expenditures: $21.9 billion from 2024 through 2028 .
- Dividend Growth: In line with long-term earnings growth, payout ratio 55% to 65%, 58% in 2024 .
- Weather-Normalized Kilowatt Hour Sales: 1% increase for residential/commercial, 4% for industrial in 2024 .
- Operations and Maintenance Expenses: Flat in 2024 compared to 2023 .
- Equity Issuance: Approximately $300 million in 2024 .
Latest news
Recent developments and announcements about AEE.
Corporate Leadership
Board Change
Steven O. Vondran has been elected to the Ameren board of directors, effective January 1, 2025. He is currently the President and CEO of American Tower Corporation .