Q3 2024 Summary
Published Feb 7, 2025, 7:58 PM UTC- 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.
- 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.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +5% | Primarily driven by increased electric revenues under constructive regulatory frameworks and higher infrastructure investments, partially offset by lower natural gas consumption. Market conditions allowed for modest growth in off-system sales, supporting overall revenue expansion. |
Cost of Goods Sold | -63% | Reflects substantially lower fuel and purchased power costs and improved operational efficiencies. Favorable market conditions also contributed to lower natural gas procurement costs, underscoring a significant YoY drop in overall COGS. |
Net Income | -8% | Despite revenue growth, higher operating expenses (including interest costs and certain maintenance outlays) and unfavorable weather in certain service areas constrained net income. Company-specific factors, such as lower recovery of certain costs under regulatory mechanisms, further impacted profitability. |
EPS (Diluted) | -10% | EPS declined more than net income due to the combined effect of higher expenses and an increased share count, which diluted per-share results. These factors overshadowed the positive impact of improved rate base investments, leading to a YoY decrease in diluted earnings per share. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
EPS | FY 2024 | $4.52–$4.72 | $4.55–$4.69 | no change |
Equity issuance | FY 2024 | no prior guidance | $300 million | no prior guidance |
EPS | FY 2025 | no prior guidance | $4.85–$5.05 | no prior guidance |
Equity issuance | FY 2025 | no prior guidance | $600 million ($155 million secured) | no prior guidance |
Long-term EPS growth | 2024–2028 | no prior guidance | 6%–8% CAGR | no prior guidance |
Rate base growth | 2024–2028 | no prior guidance | 8.2% CAGR | no prior guidance |
Capital investment | 2024–2028 | no prior guidance | $21.9 billion | no prior guidance |
Capital investment pipeline | Next decade | no prior guidance | $55 billion | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Data center and industrial load growth | Consistently highlighted as a major growth driver (Q2, Q1, Q4), with a 250 MW data center project and other industrial loads ramping up. | Robust demand, ~75% from data centers. ~350 MW of new load announced, mostly in Missouri. | Recurring topic with expanding pipeline of opportunities. |
Additional generation resources | Previously emphasized renewables, simple-cycle gas, and battery storage to meet increasing load. Castle Bluff often mentioned (Q2, Q1, Q4). | Need for 350 MW of capacity; IRP update planned in early 2025; Castle Bluff prep underway. | Recurring focus: more details on resource mix and timeline. |
Large-scale transmission expansions | Tranches 1–2 thoroughly discussed in earlier calls with ~$10B+ total potential and staggered approvals (Q2, Q1, Q4). | Tranche 2.1 portfolio (~$3.6B) in Missouri/Illinois; in service by 2032–34. Overlaps with Tranche 1. | Consistent discussions; more specific timeline and cost details added. |
$55 billion capital investment pipeline | Regularly cited as a major investment plan covering renewables, transmission, and supporting reliability (Q2, Q1, Q4). | Emphasized as robust, not yet including further incremental generation; ~$5B for LRTP expansions. | Ongoing priority with potential upside from future load growth. |
EPS growth guidance within 6% to 8% | Consistently reiterated guidance, with a goal to deliver at or above midpoint (Q2, Q1, Q4). | Reaffirmed 6%–8% CAGR; aiming to stay above the midpoint. | Stable outlook with continued confidence. |
O&M cost management initiatives | Continuous improvement and cost reductions addressed in earlier calls, with notable second-half 2024 savings (Q2, Q1, Q4). | Heightened focus on cost cuts, headcount management, and simplifying operations. | Recurring theme; increased emphasis on efficiency. |
Regulatory risk and approvals in Illinois | Ongoing discussions on multiyear rate plans, grid investment plans, and partial rehearings (Q2, Q1, Q4). | ALJ recommended $315M cumulative revenue increase; ICC decision expected by December 2024. | Consistent topic with continuing rate case updates. |
Equity issuances and potential shareholder dilution | Mentioned in Q1 (planned $300M in 2024) and Q4 2023 (~$300M for 2024, $600M/year beyond); little mention in Q2. | About $300M in 2024; forward sales agreements of $230M already settled. | Reintroduced in Q3; aligns with prior guidance except for minimal Q2 mention. |
Coal ash regulations | Q2 2024 call indicated minimal concern as issues were largely addressed years ago. No Q1/Q4 references. | No direct mention in Q3 2024. | No current mention; previous topic seen as resolved. |
Rush Island Energy Center litigation | Progressing toward resolution across Q2, Q1, Q4 calls; costs range from ~$20M to ~$120M, with court-ordered retirement in Oct 2024. | Settlement in principle with DOJ; $64M mitigation programs pending court approval. | Continuing coverage; settlement reached. |
New EPA regulations impacting coal retirements | Previously discussed potential forced retirements, co-firing needs, and CCS readiness (Q2, Q1). No Q4 reference. | Likely court stays on new GHG rules; no major plan changes. | Ongoing but with uncertain regulatory outcomes. |
PISA legislation extension in Missouri | Sustained advocacy in Q2/Q1; session ended without finalizing extension, but had strong support. | Aiming to expand PISA to generation assets; next legislative session in 2025. | Recurring legislative focus; no final outcome yet. |
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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.